GPM Constructions Pty Limited v Baker

Is leave to appeal required?

1. The original Notice of Appeal did not indicate that leave to appeal was sought. During the hearing on 2 March 2018, counsel for the builder was asked if an amendment was sought to seek leave to appeal. The builder submitted that its primary submission was that leave was not required as it was only pursuing questions of law. The builder did, however, indicate that as a fall-back submission it would seek leave to appeal to the extent necessary, if its primary submission was not accepted. It indicated that its submissions in this regard would not travel beyond its written submissions and the arguments made in the hearing thus far.
2. On this basis, we decided to grant leave to the builder to amend the Notice of Appeal to seek leave to the extent necessary. This was dated and received on 9 March 2018, after oral argument had been completed. This set out various findings said to have been made in error for which leave to appeal was sought. The builder, however, accepted that it did not seek thereby to travel beyond the arguments and submissions previously put.
3. We note that in its submissions such findings were challenged within the compass of the original grounds of appeal contained in the Amended Grounds of Appeal dated 9 February 2018 and this is how we shall deal with them. When considering an application for leave to appeal from a decision of the Consumer and Commercial Division, the Appeal Panel is required to be satisfied of the matters set out in cl 12 of Schedule 4 to the Civil and Administrative Tribunal Act 2013 (NSW) ("the NCAT Act") before leave can be granted.
4. In its amended Notice of Appeal dated 9 March 2018, the builder, in respect of its application for leave to appeal, stated that the Decision was against the weight of the evidence. In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban) the Appeal Panel considered the meaning of the phrase "against the weight of evidence" in cl12(b) of Schedule 4 to the NCAT Act, and stated at [77]: The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach (citations omitted).
5. We deal with the question of leave to appeal in respect of each of the grounds dealt with below.

Grounds of Appeal

1. The builder's grounds of appeal are contained in its Amended Grounds of Appeal dated 6 February 2018, repeated in its amended Notice of Appeal dated 9 March 2018. Some of the grounds of appeal were abandoned at the hearing of the appeal. We will deal with the individual grounds of appeal separately using the numbering in the Amended Grounds of Appeal document. If a ground of appeal is not referred to, that ground has been abandoned.

Grounds 1-4, 6

1. It is convenient to deal with these grounds, which are in the following terms, together: 1. The Tribunal erred in finding that the contract was at an end (by performance) by or shortly after 4 December 2014 (and in circumstances where the owner contended that the contract had been determined by conduct and not by performance) [J29], [31]. 2. The Tribunal erred in finding (in the alternative to 1) that the contract was abandoned as at 4 December 2014 or shortly after 4 December 2014: [J35]. 3. The Tribunal failed to provide proper reasons for the findings in grounds 1 and 2 above. 4. There was no evidence to support the findings referred to in grounds 1 and 2 above. 6. The Tribunal erred in finding that the respondent was entitled to damages.
2. The issue of the status of the contract and the homeowner's entitlement to damages for defective work was dealt with by the Senior Member at paragraphs [29]-[39] of the Decision. The Senior Member found that the contract was at an end because the contract had been performed: [29]. The Senior Member was of the view that the facts established that there were no further obligations on the parties to perform further work under the contract: [29]. The Senior Member noted that there was no dispute between the parties, that the building was not watertight, and that all defects had not been rectified as at 6 December 2014, being the final day of compliance set by the Department of Fair Trading Work Order: [30]. Inspector Christy observed on 5 November 2014 that not all defects had been rectified and there had been non-compliance with the Work Order: [30].
3. According to the Senior Member "the builder's failure to make the building watertight by 11 December 2014 cannot give rise to an open-ended defects liability period": [31]. The Senior Member was satisfied that there was non-compliance with architectural instruction 57 to rectify defects and that the contract, after the builder attempted, and failed, to rectify all defects, was at an end after 11 December 2014 as there was nothing to perform under the contract: [31].
4. Whilst it was noted that the builder did make an email inquiry of 11 December - "can GPM come and rectify the leak?" - the Senior Member stated: Such inquiry does not amount to a unilateral amendment by the builder, somehow extending the contract (nor does it preclude the homeowner from enforcing her statutory rights pursuant to s.18B of the Act). The builder has had an opportunity to comply with the terms of the contract by 6 December 2014, and he failed to rectify all defects. It cannot follow that the builder's email of 11 December 2014 gives rise to a unilateral extension, depriving the homeowner of her rights to enforce her statutory or contractual rights. (para [32] Decision)
5. At paragraph [33] of the Decision, the Senior Member went through the history of the unsuccessful attempts by the builder to rectify the leaks and make the building watertight between August and December 2014. The conclusion reached by the Senior Member was in the following terms (paragraph [34] and following): 34. I am satisfied that the builder was given every opportunity to rectify the defects and that the defects liability ended when the builder removed its tools and returned the site to the homeowner's possession as at 4 December 2014. The contract, and in particular clauses M13 and M14, were spent and no further works were to be undertaken pursuant to the contract. 35. If I am wrong and the contract was not at an end, in the alternative I find that the parties, as at 4 December 2014, evinced an intention not to be bound by the terms of the contract. There was no attendance at site between December 2014 and April 2016 when the homeowner commenced proceedings. I have had regard to the authority of Ryder v Frohlich [2014] NSWCA 472. Whether there is abandonment is a matter of fact to be inferred from an objective assessment of the conduct of the parties. … 36. I find that the time elapsed between the builder's attendance at site and the commencement of proceedings, is the time relevant to consider whether the parties "manifested an intention to perform the contract". In my view, they did not. I reject the builder's contention that the email "is it possible for GPM to come on-site ASAP to rectify this leak?" is capable of being interpreted as an ongoing intention to be bound by the contract, in the absence of any further correspondence or performance. 37. The parties took no steps to further perform or terminate the contract and I find that the contract was either determined or abandoned, on or shortly after 4 December 2014. 38. In any event, whether the contract ended or was abandoned is of little consequence in assessing the damages for defective work. Once the contract is at an end, the homeowner is entitled to enforce a claim for damages for defective work (whether under contract or statute). 39. Similarly, whether the contract was abandoned or determined does not detract from determining the issue which is the primary focus of the builder's submission: did the homeowner fail to mitigate her loss?

The builder's submissions

1. The builder submitted that the homeowner had claimed at first instance that the contract was not abandoned but determined by the conduct of the parties (and, as a consequence, future performance was abandoned in favour of accrued rights). The builder submitted that the Tribunal had thereby determined the matter on a basis for which the homeowner had not contended. The builder thereby submitted that it had suffered procedural unfairness.
2. In any event, the builder submitted that the Tribunal's finding that the contract was abandoned was not open to it. In particular, the builder submitted that the request by the builder on 11 December 2014 to come on-site to rectify the defects is capable of being interpreted as, and should have been interpreted as, an ongoing intention to be bound by the contract.
3. The builder submitted that the finding that there "were no further obligations on the parties to perform further work under the contract" was wrong. This was so because the defects liability period was on-foot and, under clause M14.1, there was an ongoing contractual obligation upon the builder to rectify defects, both after the defect liability period and until the defects were rectified. Accordingly, it was wrong of the Senior Member to conclude that the obligation to rectify under clause M14.1 was "spent".
4. In conclusion, the builder submitted: There was no mutual determination of the contract by conduct, performance or otherwise. The contract remained on-foot. The builder wished to return to site and carry out further rectification. This is also supported by the fact that the builder did not issue an invoice for payment of the retention until after the proceedings were commenced. In circumstances where the contract remained on-foot, there was no entitlement to sue for defective work: Brewarrina Shire Council v Beckhouse Civil Pty Ltd [2005] NSWCA 248 at [65].
5. In oral argument it was submitted by the builder that the contract put an obligation upon the builder to return to the site to rectify any defective or incomplete work and that the failure of the homeowner to permit the builder to so return to the site had the effect of destroying any causal link between the defective work and any damage she may have suffered. To understand this submission it is necessary to turn to the terms of the contract.
6. The relevant provision of the contract in this case is clause M13. That clause provides: Contractor's obligations during and after defects liability period 1. If there is any remaining *defect or incomplete work, or the Contractor becomes aware by instruction from the Architect or from its own observations of any *defect or incomplete work during the defects liability period, it must *promptly return to the *site and correct the defect or finalise the incomplete work. This obligation continues until the *defect is rectified or the incomplete work is finalised, and does not come to an end when the defects liability period is over. 2. The Architect cannot give the first instruction to correct an outstanding *defect or to finalise any incomplete work after the end of the defects liability period, unless it is for the rectification of a latent *defect and the final certificate has not been issued.

The homeowner's submissions

1. The homeowner accepted that the Tribunal's finding that "the facts establish that there were no further obligations upon the parties to perform further work under the contract" (see [29] of the Decision) was different from the finding contended by the homeowner. However, the homeowner contended that such a conclusion did not cause the builder to suffer any substantial miscarriage of justice. The builder would not have mounted any different case.
2. The homeowner submitted that the finding of abandonment must be understood in the context of the argument as developed by the homeowner before the Tribunal. The argument put by the homeowner was that on or shortly after 4 December 2014 future performance was abandoned, not that the contract was abandoned in its entirety. These submissions were ultimately accepted by the Tribunal and underpinned the conclusions of the Tribunal, according to the homeowner. According to the homeowner, there were sufficient reasons given, based upon evidence before the Tribunal, to justify this finding.
3. The homeowner further submitted that the defective works in question were both breaches of contract and of the warranties in Part 2C of the Home Building Act 1989 (NSW) ("HB Act") for which the homeowner has a remedy, regardless of whether the contract has been determined. Even if there was a wrong conclusion on the determination of the contract (which for the reasons above is denied), the remedy of a money order granted by the Tribunal in relation to the defects was and remains available.

Consideration

1. It is sufficient to dispose of these grounds of appeal by considering the correctness of the homeowner's last submission that the homeowner has a remedy for breaches of contract and of the warranties in Part 2C of the HB Act, regardless of whether the contract has been determined or not. For the reasons which follow, we accept this submission.
2. In support of the proposition that in circumstances where the contract remained on-foot, there was no entitlement to sue for defective work, the builder relies on one authority, namely, Brewarrina Shire Council v Beckhouse Civil Pty Ltd [2005] NSWCA 248 (Brewarrina Shire Council) at [65].
3. Brewarrina Shire Council was a case involving council commissioned works for the upgrade of levees on the banks of the Barwon River in north-western New South Wales. In that case, the contractor (Beckhouse) remained entitled to possession of the works and had no obligation to deliver the work to the council until the date for practical completion. Consequently, the council had no right to take possession of the work while the contract remained on foot. The defects liability period commenced on the date of practical completion. Beckhouse was obliged to rectify any defects or omissions in the work existing at practical completion. Prior to the 14th day after the expiration of the defects liability period, the superintendent could direct Beckhouse to rectify any additional defect in the work existing at the date of practical completion or which became apparent prior to the expiration of the defects liability period. Ipp JA (with whom Hodgson JA and McColl JA agreed) stated as follows: [66] An important part of the Council's case at trial was that Beckhouse at no stage achieved practical completion of either Separable Portion A or B. Master Macready upheld this assertion and, for reasons that are later set out, I have come to the same conclusion. [67] Accordingly, as at the judgment date, the Council rightly denied that practical completion had been achieved. But, it continued - at that stage - to hold Beckhouse to contractual obligations to perform the work. Thus, on the Council's contention, at the date of judgment, the work remained in Beckhouse's possession; the Council, in effect, having refused to accept possession. [68] While, on this assumption (the Contract still being on-foot), the Council may have been entitled to claim damages for the delay arising out of Beckhouse's failure to achieve practical completion by the date for practical completion, it could not sue Beckhouse for defective or incomplete work. As long as the Council maintained that the Contract was alive and had not been terminated, and held Beckhouse to its obligation to complete the work in accordance with the specification, on its contention the work remained lawfully in Beckhouse's possession. In other words, it was an inevitable incident of the Council's argument that the work had not been delivered to and accepted by the Council (Beckhouse - on the Council's argument - being in possession of and obliged to complete the work). While the work was in Beckhouse's possession, the Council suffered no loss by reason of defective or incomplete work; the work, not being in the Council's possession, did not at that stage form part of its patrimony. [69] This situation would have changed if the Contract was terminated. When that occurred, the work (in its defective and incomplete state) was handed over to the Council. At that stage, the Council suffered loss by being in possession of defective and incomplete work.
4. The situation here is quite different. As the Tribunal noted, the architect issued instruction A1-048 dated 27 March 2014 certifying practical completion to have occurred on that date. Further, the Tribunal at [10] of the Decision stated the following: The builder returned to the site on a number of occasions and attempted to rectify water ingress issues. He attended site on 4 December 2016 and removed all the tools from the site and gave possession of the site to the homeowner on or about 6 December 2014.
5. The builder did not return to site thereafter and when the homeowner commenced proceedings on 22 April 2016 seeking damages for defective work for breach of statutory warranties and for breach of contract, the homeowner had been in possession of the site since 6 December 2014. Accordingly, in our view, given that the homeowner was in possession of the building and was not contending that the work had not been delivered to her, there was no impediment to the homeowner contending that she had suffered loss by reason of defective or incomplete work based on the authority of Brewarrina Shire Council.
6. As we understand the submission, the builder's contention was that the builder had an entitlement to return to the site to complete defective work, and such entitlement continued until the defect was rectified, even if the builder had previously failed to rectify those defects despite being given a reasonable opportunity to do so. In other words, the homeowner was obliged to let the builder back on-site if she believed any defects still had to be rectified and that obligation on the homeowner continued so long as the homeowner believed there was further work to be performed. There are a number of difficulties with this submission.
7. First, there is no express obligation on the homeowner to permit the builder to return to site whenever the homeowner discovers outstanding incomplete work or defective work in need of rectification after the builder had previously failed to rectify those defects despite being given a reasonable opportunity to do so. Second, to imply such an obligation upon the homeowner could, in certain circumstances, be uncommercial and unreasonable. For example, the homeowner may be dissatisfied with the method proposed by the builder to rectify defective work or the homeowner may have lost confidence in the builder's ability to be able to rectify the work after the builder had previously failed to rectify those defects. Nevertheless, it would be unreasonable and onerous to require the homeowner to permit the builder to come back on-site, potentially for repeated times, to perform further work. Third, such a construction appears inconsistent with clauses M11.1 and M12.2, which are in the following terms: M11.1 If the contractor fails to correct a *defect or finalise any incomplete *necessary work within the time nominated under clause M11 or fails to show reasonable cause for the failure together with a timetable for correcting the problem that is acceptable to the architect, the owner may use another person to correct the problem at the cost of the contractor. M12.2 If the owner is required to use another person to rectify a problem, the owner is entitled to make a *claim to adjust the contract.
8. Once defects are notified, they must be rectified in the time specified, or, if no time is specified, within 10 working days after written notice. On any view, this time had passed.
9. The right to engage a third party to rectify defective work is plainly inconsistent with an obligation to continue to revert to the builder to rectify defective work. We note that the Senior Member was satisfied that there was non-compliance with architectural instruction 57 to rectify defects and that the builder had been given a reasonable opportunity to rectify the defects. This would have enlivened the right to use another person to rectify the defects under clause M12.1.
10. When the above matters were pointed out during the hearing, counsel for the builder clarified his submissions. He indicated that he was not suggesting that the contract required the homeowner to have the builder return to site to rectify defects in all cases after the defects liability period had ended, but only when it was reasonable. The difficulty with this submission is that it confuses the builder's obligation under the contract to rectify defects in the defects liability period so as to bring the works into conformance with the contract with the homeowner's duty at law to mitigate any loss or damage that the homeowner might suffer in consequence of the builder's breach.
11. It will always be necessary for the plaintiff to show that the carrying out of rectification work is necessary and reasonable (see Bellgrove v Eldridge (1954) 90 CLR 613 at 619; West Point Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253 at [45]) and that a homeowner must mitigate his or her loss by acting reasonably, including, where appropriate, to allow the defaulting builder an opportunity to rectify. However, it would not seem necessary in order to give business efficacy to the contract to imply such a term.
12. In our opinion, the proper construction of the contract is that where the homeowner, after the defects liability period has ended, discovers outstanding incomplete work or defective work the subject of previous notification to the builder, the homeowner may require the builder to return to site to perform rectification work, but that the homeowner is not obliged to do so. In this case, the homeowner was not contractually obliged to seek to have the builder return to site after 11 December 2014 to deal yet again with the ongoing water leaks which the builder otherwise failed to rectify.
13. Accordingly, after 11 December 2014 there was no contractually mandated procedure by which the defects in question had to be rectified by the builder before contractual damages could be claimed which may be the case in other circumstances and contracts: see, eg, Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302; (2010) 26 BCL 335 cited by the homeowner. However, as Ball J stated in The Owners - Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067 (The Owners - Strata Plan No 76674) at [44], the homeowner is required to give the builder an opportunity to minimise the damages it must pay by rectifying the defects, except where it is reasonable to refuse to give the builder that opportunity or where the builder has repudiated the contract by refusing to conduct any repairs: citing J Bailey, Construction Law, (Vol II, 2011, Informa Law) at [14.109]; Cassidy v Engwirda Construction Co (No 2) [1968] Qd R 159 (reversed on other grounds in Cassidy v Engwirda Construction Co (No 2) [1968] QWN 47 (HC); (1968) 42 ALJR 168).
14. We will return to the issue of mitigation below.
15. In the result, when the homeowner did not seek to have the builder return to site to perform any further rectification work, the builder could no longer be under any effective obligation to do so by reason of a direction under M11. Otherwise, the time for the builder to perform its obligation to construct the works in accordance with the contract had passed. Seen in this light, we see no error in the conclusion of the Senior Member that "after 11 December 2014 there was nothing to perform under the contract": [31]. Further, we see no error arising from any conclusion concerning the status of the contract that would prevent the homeowner from recovering damages for breach.
16. We also reject the submission that the Senior Member failed to provide proper reasons for these conclusions or that there was no evidence to support them. There also was no denial of procedural fairness by the Senior Member in the making of these conclusions. It is plain that these conclusions were within the overall nature of the homeowner's submissions that the contract was determined by the conduct of the parties and they could not have reasonably taken the builder by surprise or have caused the builder to have mounted any different case. Counsel for the builder did not put to us any possible different case or submission that would have been made.
17. In light of our conclusions above, it is not necessary for us to consider the Senior Member's findings with respect to abandonment of the contract. Whether or not the contract was abandoned after 4 December 2014 is irrelevant to the claim for damages or a money order and cannot assist the builder in its appeal.
18. We reject grounds 1-4 and ground 6.

Ground 5

1. Ground 5 is in the following terms: The Tribunal failed to find that the Owner failed to mitigate her loss.

The builder's submissions

1. The builder referred to the decision of The Owners - Strata Plan No 76674. In that case Justice Ball set out the relevant principles as follows: [44] 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. Often, of course, the building contract itself requires the owner to repair defects or sets out a procedure by which defects are to be made good: see, eg, Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302; (2010) 26 BCL 335. But, even if it does not, the owner is required to give the builder an opportunity to minimise the damages it must pay by rectifying the defects, except where its refusal to give the builder that opportunity is reasonable or where the builder has repudiated the contract by refusing to conduct any repairs: see J Bailey, Construction Law, (Vol II, 2011, Informa Law) at [14.109]; Cassidy v Engwirda Construction Co (No 2) [1968] Qd R 159 (reversed on other grounds in Cassidy v Engwirda Construction Co (No 2) [1968] QWN 47 (HC); (1968) 42 ALJR 168). That obligation may be an aspect of the duty to mitigate, since 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. [45] … 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 … [46] It is for the defendants to prove that the plaintiff has acted unreasonably. It is not for the plaintiff to prove it acted reasonably … [47] The obligation not to act unreasonably does not come to an end once court proceedings are commenced. Once there is a dispute concerning whether the plaintiff failed to mitigate its loss, or failed to act reasonably in some other respect, the plaintiff is entitled to have a question tested in court; and the fact that it does so is not itself evidence that it has failed to act reasonably. … [48] In the present case, the claim is for breach of the warranty implied by the Act. However, it was not suggested by the party that any different principles apply for that reason.
2. The builder relied upon its submissions with respect to grounds 1-4 and ground 5 in support of the alleged failure of the homeowner to mitigate her loss. Relevantly, the submissions that went to this point were as follows: 1. by email dated 11 December 2014, the builder sought access to the site in order to rectify further reports of leaks but the homeowner did not respond to this. 2. the builder was subsequently refused access on a number of occasions. 3. it was submitted that the builder attended the site to rectify defects after 5 November 2014 and did rectify the roof in accordance with the original design, however, the scope of rectification now required was only specified and agreed to during the hearing. 4. it was submitted that the finding that by 11 December 2014 the builder had demonstrated itself to be unwilling or unable to rectify leaks in the roof in a manner to satisfy the homeowner's expert, Mr Hall, or the Office of Fair Trading ("OFT'') is inconsistent with the evidence which is accepted by the homeowner and the Tribunal.

Consideration

1. As noted by Ball J, one factor relevant to mitigation is what attempts the builder has made to repair the defects in the past. The Tribunal set out 11 points of history concerning the builder's previous attempts to rectify defects on-site as follows (at [33]): (1) Following architect issued instruction A1-049 (defects list) dated 27 March 2014, GPM's Angelo Venuto visited the site to inspect the defects but failed to discuss how and when the defects would be rectified. Although still an employee of GPM, Mr Venuto was not called to give evidence. I accept Ms Baker's evidence (the affidavit of Yolanne Baker, B38 of Joint Tender Bundle) in this regard. Mr Venuto was on-site every day during the construction process and was integral to the rectification process. All communications between the parties involved Mr Venuto and yet he provided no affidavit to support the builder's case. I find that had Mr Venuto been called, his evidence would not have assisted the builder's case. (2) GPM advised that it would provide the applicant's husband with an updated work sequence proposal as per Brendan Connor's email of 6 May 2014, but failed to do so. (3) In May 2014 GPM requested access to the site but because her husband, a pilot, was absent and could not attend Ms Baker refuses access (see email to architect). (4) On 6 June 2014 the builder informs the architect that the owners are not permitted to bring a third party to site to repair the defects, effectively prohibiting the Owner from rectifying defective work. (5) On 25 June 2014 the parties attended a meeting following issue of architectural instruction A1051 and A1051A requiring GPM to rectify the defects list by 31 July 2014. GPM returned to site but failed to complete all defects set out in A1-051. (6) On 1 August 2014 the parties met, yet again discussing outstanding defects. No further defects are rectified by GPM. (7) In about August 2014 the Owner notified GPM of additional leaks following heavy rainfall. (8) On 19 August 2014 a private certifier fails to issue an occupation certificate because water penetration is evident and several external walls require additional flashing (see tab 28). (9) On 22 August 2014 Ms Baker issues a complaint against GPM to the Office of Fair Trading (OFT). (10) On 5 November 2014 the parties meet on-site and the OFT requires the following rectification work to be undertaken by 6 December 2014: "investigate and rectify the water leaks in and to the western courtyard; investigate and rectify the roof leaks; turn up the roof sheeting; investigate and rectify leaks to courtyard and 6 further defects" (see p.44 of the Joint Tender Bundle). (11) On 4 December 2014 GPM last attends site."
2. The Tribunal noted that there was no dispute between the parties that the building was not watertight and that all defects had not been rectified as at 6 December 2014, being the final day of compliance ordered by the OFT Order: [30]. Failure to comply with such an order is obviously a serious matter. The builder attempted to argue that it may have complied with the OFT order because it did perform some work after 5 November 2014 and the leak discovered after 4 December 2014 may have been a new leak. We reject this submission.
3. The Tribunal noted that the OFT required by 6 December 2014 that the builder "investigate and rectify the water leaks in and to the western courtyard; investigate and rectify the roof leaks … and rectify leaks to courtyard": 33. Such rectification work necessarily requires the builder to make the building watertight. The Tribunal found, however, that despite the previous rectification work of the builder the building was not watertight. This means that aspects of the OFT order had not been complied with by 6 December 2014. At 160 the Tribunal found that the contractor did not comply with the work order and we see no basis for overturning this finding which was not the subject of any express challenge on appeal.
4. The Tribunal returned to the issue of mitigation at [158] and following. It relevantly stated that given the history of the failed attempts by the builder to rectify defects by 11 December 2014, there was a basis to support a finding that the builder was given ample opportunity to return to site by that date to rectify the defects, but it had not done so. This finding was not challenged by the builder and is obviously a significant matter in considering whether it was reasonable not to call upon the builder to try again to rectify the outstanding defects.
5. The next relevant issue identified by Ball J is whether, in the light of the builder's conduct, the homeowner has reasonably lost confidence in the willingness and ability of the builder to do the work. The Tribunal at [20] found that the builder was either unwilling or unable to rectify leaks in the roof in a manner to satisfy the homeowner, the homeowner's expert, Mr Hall, or the OFT inspector Mr Christy. Any challenge to this finding would require leave.
6. To grant leave to appeal we need to be satisfied that this finding was "against the weight of evidence": see cl 12(b) of Schedule 4 to the NCAT Act. In our opinion, this has not been demonstrated. In particular, in light of the history of failed attempts to rectify the defects summarised at [33] of the Decision and the matters referred to at [159] (set out below), the finding was open to the Tribunal.
7. The Tribunal continued at [159]-[160] as follows: 159. Despite the fact that s.48MA of the Act provides that I am to have regard to the principle of rectification of the defective work by the responsible party is the preferred outcome, I must balance that principle with Ms Baker's evidence which is that: (1) Reiterating the facts and circumstances in paragraphs 29 and following, the Applicant and the builder, over a series of months during 2014, attempted to come to an agreement when the builder would return to site to do rectification work. It became apparent that the builder was either unwilling or unable to rectify the work in a proper and workmanlike manner, particularly in respect of the roof. While there were multiple emails exchanged, the builder did not offer to return to the site to fix the defects set out in the Department of Fair Trading Work Order, but offered to attend the site meetings. At one such meeting Mr Venuto stormed out. (2) I prefer the Applicant's evidence, that although there are no statutory impediments that the builder return to site, the builder is licensed and trading. The relationship has irretrievably broken down. (3) The builder did not put forward a plan to rectify the work but instead instructed solicitors to refute the architectural instruction A1-50 to rectify defects. 160. Despite Work Orders issued by the Department of Fair Trading, the builder only returned once in July 2014 to repair some of the defective work and thereafter the builder did not return. Some of the defects identified by the inspector and the architect remain outstanding. Despite the fact that s.48A of the Act provides that I have to consider the principle that rectification of the defective work by the responsible party is the preferred outcome, I must balance that principle with the evidence: (1) Mr Venuto did not return to rectify the work and found it difficult to work with the Owners, this supports a finding the relationship between the parties is fraught (see Warren v Kavanagh [2015] NSWCATCD 140). (2) The contractor did not comply with the departmental work order. (3) The parties would not agree on a method of rectification mainly because the builder refused to follow the Hall method. (4) The builder has not been on-site since 2014."
8. Finally, the Tribunal stated (at [162]): I am of the view that the builder has not taken sufficient steps to rectify all defects and this militates against a work order.
9. It is clear that the Tribunal came to the conclusion that the homeowner by 11 December 2014 had reasonably lost confidence in the willingness and ability of the builder to do the work. In our consideration of grounds 7 to 11 below, we reject the builder's challenge to this finding. In the result, in light of all the Tribunal's findings, in our opinion there was no error in the Tribunal's conclusion that the homeowner had not failed to mitigate her loss by calling upon the builder to return to site and rectify the defects.
10. For completeness, we refer to the remaining specific submissions made in support of this ground of appeal as summarised by us previously. The builder referred to its email dated 11 December 2014 and to the fact that the homeowner did not respond to this. This email needs to be seen in the context that the builder did not put forward a plan to rectify the work but instead instructed solicitors to refute the architectural instruction A1-50 to rectify defects. Given the history up to 11 December 2014, this email cannot, in our opinion, cast doubt upon the Tribunal's conclusion that at this time, and even after the email of 11 December 2014, the homeowner had reasonably lost confidence in the willingness and ability of the builder to rectify the defects, particularly with regard to the water penetration.
11. Second, it was submitted that the builder was subsequently refused access on a number of occasions. We cannot accept this submission. It was based upon the evidence from the builder's representative, Brendan Connor, in his statement that "from that point onwards, the applicant continually refused GPM access". No specifics are given nor is any direct evidence provided about any incident in particular. When this was pointed out to Counsel for the builder, he accepted that it was open, on this vague evidence, for the Tribunal to conclude that all that was being referred to is the failure of the homeowner to reply to the email of 11 December 2014.
12. This is particularly so when one has regard for the evidence of Ms Baker that she "was not obstructive or uncooperative with allowing GPM to access the site". "It is only since the commencement of this proceeding that Peter Oreb [builder's representative] has said words to the effect of, 'we may be willing to undertake work to rectify alleged defects resulting from the architect's design.'" Even this communication does not evidence the builder being refused access to site following a subsequent request to come back on-site.
13. The Tribunal found that there was no evidence of communications between the parties in the period from 11 December 2014 to 22 April 2016, either from Ms Baker to make arrangements for GPM to attend the property, or from GPM to request access to the property. We see no basis for overturning this finding, which was not the subject of any express challenge on appeal.
14. Third, it was submitted that the scope of rectification required was only adduced and agreed to during the hearing. This may be true, but it does not detract from the primary responsibility which rested on the builder to ensure that the building was watertight, particularly by 11 December 2014, given the length of time since practical completion and the intervention of the OFT. It does not cause us to doubt the Tribunal's finding with respect to mitigation.
15. We reject ground 5.

Grounds 7-11

1. Grounds 7 to 11 state as follows: 7. The Tribunal erred in failing to make an order pursuant to s.48O(1)(c) of the Home Building Act 1989. 8. The Tribunal took account of irrelevant considerations (and failed to take into account relevant considerations) in exercising its discretion not to make a money order pursuant to s.48O of the Home Building Act 1989. 9. The Tribunal erred in failing to consider and determine the builder's submission that the Owner waived her right to rectification by failing to respond to the builder's request for access so as to carry out rectification work and/or by abandoning the contract. 10. The Tribunal exercised its discretion in such an unreasonable way that no reasonable Tribunal could have. 11. The Tribunal failed to provide proper reasons for not making a work order under s.48O(1)(c) of the Home Building Act 1989.
2. The Tribunal dealt with the issue of the making of a work order under s.48O(1)(c) of the HB Act in conjunction with the submission that the homeowner had failed to mitigate her loss. The reasons in support of the Tribunal's conclusion that a money order ought to be made instead of a work order can be found at [155]-162] and have been summarised already above.

The builder's submissions

1. The builder's submissions encompassed a number of aspects and it is convenient to deal with them in turn in the following areas: 1. leave to appeal certain findings of fact; 2. the Tribunal's exercise of its discretion to make a money order; 3. section 79U of the Fair Trading Act 1987 ("FT Act") and the failure to provide proper reasons; 4. ground 9.

Leave to appeal certain findings of fact

1. First, the builder challenged the finding at [34] that the builder took no further steps to return to the site after 4 December 2014 in light of the email dated 11 December 2014 where the builder asked to "come on site ASAP to rectify the leak". This misstatement is plainly of no consequence. The Tribunal refers to this email at [31] so it is clear it has not been overlooked. We decline to grant leave to appeal this finding.
2. Second, the builder challenged the finding at [158] that "the builder has neither the expertise nor the inclination to return and to rectify defective work as found, particularly in respect of the roofing defects". With respect to the question of inclination, reference was made to various visits to site between July and December 2014 and statements of intention to fix the defects. With respect to the question of expertise, reference was made to the statement from counsel for the homeowner that there was "no practical reason why the builder cannot come back and do the work".
3. To grant leave to appeal we need to be satisfied that this finding was "against the weight of evidence": see cl 12(1)(b) of Schedule 4 to the NCAT Act . In our opinion, this has not been demonstrated. In particular, in light of the history of failed attempts to rectify the defects summarised at [33] of the Decision and the matters referred to at [159], the finding was open to the Tribunal.
4. Third, the builder challenged the finding at [158] that "the builder was given ample opportunity to return to site, and has not done so", on the basis that the builder had returned to site. The Tribunal expressly based this finding on its reasons at [33]. When one considers those reasons it is clear that the finding in question is that the builder was given ample opportunity to return to site to rectify the nominated defects, including by 6 December 2014, but it has not done so. The evidence at [33] fully supports such a finding. We decline to grant leave to appeal this finding.
5. Fourth, the builder challenged the finding at 159 that the relationship had "irretrievably broken down" based upon counsel for the homeowner stating that there is "no practical reason why the builder cannot come and do the work". We are unable to conclude that this finding was against the weight of the evidence. Given the evidence referred to at [159]-[160] this finding was open to the Tribunal. We decline to grant leave to appeal this finding.
6. Finally, the builder challenged the finding at [160] that, despite the OFT order, the builder only returned once in July 2014 and thereafter did not return, on the basis that the builder did return after this date. We accept the homeowner's submission that this was intended to be a reference to December 2014 not July 2014. First, the OFT order was not issued until November 2014, and, at [33], the Tribunal refers to the builder returning to site on 4 December 2014. This misstatement is plainly of no consequence. We decline to grant leave to appeal this finding.
7. In the result, we decline to grant leave to the builder to appeal the above findings of fact. For the reasons given we are not satisfied that these findings were "against the weight of the evidence" or that "the evidence in its totality preponderates against the conclusion found by the Tribunal at first instance" or that the builder may have suffered a substantial miscarriage of justice. It follows that the circumstances necessary for the grant of leave are not made out and leave to appeal should be refused: see Sch 4 cl 12 and Collins v Urban at [65]-[77].

The Tribunal's exercise of its discretion to make a money order

1. The builder contends that the Tribunal's exercise of its discretion to make a money order miscarried because, in exercising that discretion, the Tribunal: 1. took into account certain irrelevant considerations; and 2. failed to give appropriate weight to various facts.
2. The builder referred to the following six matters which it submitted should have led to the making of a work order: 1. the homeowner gave evidence under cross-examination that the builder "always promptly sought to respond to issues raised"; 2. the homeowner gave evidence that all the initially notified defects, being the defects identified during the initial defects liability period "were rectified to the satisfaction of the architect within that period"; 3. the homeowner gave evidence under cross-examination that the builder made a genuine attempt in late November and early December 2014 to fix defects in the rectification order; 4. counsel for the homeowner had submitted that there is "no practical reason why the builder cannot come and do the work"; 5. the cost to the builder would be less than that which a third party would charge the homeowner; and 6. the money order included a significant amount for preliminaries when a significant proportion of these would be incurred by the homeowner in any event when the next stage of the work was carried out. This was because the contract in question with the builder was only to lock-up stage.
3. While we return to the above matters later in our reasons, it is convenient at this point to note that some of the above evidence or submissions need to be seen in the wider context in which they were made. First, the homeowner's evidence needs to be seen in the context of some of her other evidence critical of the builder and summarised in the Decision at [159(1) and (2)].
4. Second, the quotation from counsel for the homeowner also needs to be seen in the wider context of the exchange between counsel and the Tribunal. It is clear that the reference to there being no practical reason why the builder could not return was a reference to the builder still being licensed and not being bankrupt. Counsel reiterated the owner's position that the relationship had irretrievably broken down and that a work order was inappropriate.
5. Next, the builder submitted that the factor taken into account at 160 that the parties could not agree on a method of rectification was not a relevant consideration given that Mr Hall accepted he was not a specialist roofer and he had not addressed roofing in his report or in the conclave and Mr Hall's scope was not ultimately accepted by the Tribunal.
6. Finally, the builder submitted that the indicia relied upon by the Tribunal to decline to make a work order was contrary to the decision in Christopher Shepherd and Melanie Shepherd v GMK Development Services Pty Ltd [2015] NSWCATCD 53 (Christopher Shepherd). In particular, the builder referred to the findings of the Tribunal at [40], which are as follows: In exercising my discretion in relation to the appropriate orders to make pursuant to s.48O of the HB Act, I consider the following issues: (1) I am not persuaded by the applicants' arguments that the respondents' reluctance to accept liability and return to rectify defects until the late stage of these proceedings is a reason for making a money order. The respondent is entitled to assert its opinions as to liability, particularly where proceedings have commenced or appear likely to commence. That is, I find it equally reasonable for a builder to either deny liability where that may be a rational position, or to attempt to compromise settlement, where that is a rational position. (2) In this case, the respondent did take a certain stance in relation to some of the items claimed, and I have found the respondent was not liable in some items, particularly with regards to the roofing works. That was therefore reasonable behaviour for the respondent to adopt. (3) Once the parties had obtained their expert evidence prior to the hearing, the respondent, on maintaining its legal position that it was not liable (which itself is quite reasonable with a hearing approaching), did offer to return and complete certain works, and to reconsider whether it was liable for other works: see the respondent's brief written submissions. (4) Apart from the main dispute (at least in money terms) involving the water ingress / sub-floor ventilation / floor timber damage, the remaining items are relatively straightforward, although nevertheless serious, particularly the blowing of the timber joists and associated floor deflection. It cannot be submitted (and of course it has not been submitted) that the respondent's work was so obviously incompetent or negligent that it should not be permitted to return to perhaps compound the defects. (5) The applicants have made it quite clear through their statements that they have essentially lost faith in the respondent, essentially because they assert the respondent's failure to accept liability has resulted in their new home not being properly completed for several years. No doubt that is sufficient explanation for their impatience and irritation, but I am not satisfied it is sufficient reason of itself to order the respondent to make a monetary payment. (6) The scope of the works required is in my opinion sufficiently clearly set out in the various expert reports, including those of Mr Wallace, Mr Bullivant, Mr Swindale and Mr Olbrecht, as to make an appropriate work order, the contents of which are sufficiently clear as to enable the parties to assert the works are complete or not, or are to a satisfactory standard or not. (7) There is no real difference in convenience, as far as I can determine on the evidence before me, between the builder returning to rectify the works or the applicants or the respondent be required to engage alternate contractors. In fact, on further consideration in that regard, it would appear there would be less additional disruption and effort if a work order was made rather than a monetary order.

Consideration

1. Some of the relevant principles involved in this issue are as follows.
2. The principles applicable to the Appeal Panel intervening in circumstances of an alleged miscarriage in the exercise of a discretion are those set out in House v R [1936] HCA 40; (1936) 55 CLR 499 (House v R). Section 48MA of the HB Act provides: 48MA Rectification of defective work is preferred outcome in proceedings A court or Tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.
3. The Appeal Panel in Leung v Alexakis [2018] NSWCATAP 11 (Leung) decided there was a discretion to be exercised under s 48O(1) which permits the Tribunal to make an order for compensation, an order in the nature of a work order or some other order of the type set out therein: at [139]. The Appeal Panel at [132] referred to what the Minister for Fair Trading said on 6 May 2014 during the Second Reading Speech for the Home Building Amendment Act, 2014 (by which s 48MA was enacted): (1) A homeowner should not to be permitted to unreasonably refuse a builder access to a building site to rectify defective work; (2) s 48MA was intended to ensure that, at least, "builders" who were liable to a person for defective work, should be able to return to carry out necessary rectification work if they are willing; and (3) the amendments were to "further support the timely and cost-effective resolution of disputes".
4. As stated by the Appeal Panel in Kurmond Homes Pty Ltd v Marsden [2018] NSWCATAP 23 (Kurmond Homes) at [32] "the Minister made clear s48MA was to operate as a preference, not an absolute right. It was to prevent unreasonable refusal of a homeowner to permit access to a building site to a builder who was willing to carry out rectification work". It further stated the following: 41. While not appropriate to seek to define all circumstances that might justify a court or Tribunal making an order that departs from the preferred outcome, it is necessary to give some consideration to the nature of the obligation imposed on the court or Tribunal by s 48MA. 42. First, the principle, by its terms, only applies "in determining a building claim involving an allegation of defective residential building work or specialist work". It is not expressed to apply where, for example, the building claim only involves an allegation of incomplete residential building work or specialist work. That is not to suggest s 48O does not otherwise permit a work order in respect of work found to be incomplete. 43. Second, s 48MA is directed towards the remedy or "outcome" to be provided by the court or Tribunal where a claimant establishes the responsible party has carried out defective residential building work or specialist work. In this sense, it is not properly described as a "presumption". Rather, it is a remedy to be "preferred" to other forms of order which the court or Tribunal might make. 44. Third, while s 48MA provides the court or Tribunal "is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome", the section does not mandate that a work order must be made in all cases. Further, the section does not confine the form of orders that may be made under s 48O, including an order that defective work be rectified by the responsible party engaging another person to carry out that work on behalf of the responsible party. 45. Fourth, the term "preferred" is not defined. The HB Act and Regulations do not specify circumstances in which the preferred outcome is not to be adopted. However, guidance as to the meaning of "preferred" and the circumstances that would justify an order for a different outcome is found in the second reading speech where the Minister for Fair Trading makes clear that the purpose of the amendment was to: [the appeal panel then quotes those parts of the speech referred to above]. 46. That is, in deciding what order should be made, a court or Tribunal may consider whether there is a reasonable basis for any objection raised by the homeowner to the builder being permitted to rectify the defective work, the terms of any order, whether the builder is willing to return and whether such an order would support a timely and cost effective resolution of the dispute.
5. The Appeal Panel in Kurmond Homes at [59]-[60] also concluded that a failure to comply with a rectification order issued under s 48E of the HB Act by officers of the Department of Fair Trading is a relevant factor, particularly where the defect in question is significant. It follows from the fact that it is a relevant consideration whether or not the builder is being unreasonably refused access to the site to perform rectification work that the statement by Ball J in The Owners - Strata Plan No 76674 at [45] is relevant to deciding whether or not to make a work order under s 48O of the HB Act, as follows: 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 …
6. In Warren v Kavanagh [2015] NSWCATCD 140 at [60] the Tribunal declined to make a work order where the circumstances suggested that "fraught relations" existed between the parties and neither party was requesting the builder to undertake the rectification work.
7. It is our opinion it could not be said that the failure of the builder to agree to rectify the roof in accordance with the wishes of and initial method of Mr Hall was an irrelevant consideration. It was not suggested that Mr Hall's method, even if not ultimately adopted by the Tribunal, was clearly unreasonable, or too expensive a method. Further, communications concerning his proposal could provide some indication of the genuineness or willingness of the builder to perform rectification work. It could also be seen as relevant in conjunction with the evidence that the builder did not put forward any work method with respect to rectifying the roof, despite a request by the architect at the time. In any event, it is clear that this factor only played a small part in the reasoning of the Tribunal. Consequently, we are not convinced on this ground alone that the discretion miscarried.
8. The submission below, that the cost to the builder would be less than that which a third party would charge the homeowner, would have had more force if it was supported by specific evidence. It cannot be assumed in every case that the cost to the builder will be less than that of a third party. For example, the builder may have to wholly contract the work out to a third party. In any event, the Tribunal had no evidence as to the extent to which the cost to the builder would be less than that which a third party would charge the homeowner. Absent evidence in support, this submission on its own does not take the matter further than the principle set out in s 48MA of the HB Act, which the Tribunal plainly had in mind. Certainly, without evidence, the significance of any cost differential cannot be evaluated.
9. With respect to the submission that the amount allowed for preliminaries could have been avoided if the builder performed the rectification work, when completing stage 2 of the works, the homeowner submitted that this submission was not made below. The builder was unable to dispute this. This raises the question as to whether the principle in Coulton v Holcombe 162 CLR 1 (Coulton) applied. The builder submitted that no evidence could have been given which could have possibly prevented the point from succeeding. We disagree.
10. Evidence could have been given from the proposed builder or a cost consultant that it would not be possible to reduce the amount for preliminaries if the rectification work was combined with completing stage 2, or alternatively, any such discount would not be significant. We are not convinced, on the evidence as led below, that there was no possibility whatsoever of such evidence being able to be led. There is also a timing issue that may affect sequencing and completion of components of work.
11. In the result, in our opinion the principle in Coulton prevents the builder from raising this point on appeal.
12. In oral addresses, the builder made a further submission based upon section 79U(1) of the FT Act. We discuss this section in detail below. The submission was, as we understood it, that s 79U(1) required the Tribunal to take account of the fact that further work, being stage 2 and completion of the building, was required after the rectification work was completed when deciding to make a money order which included a significant sum for preliminaries, even if not raised by the parties. Further, the failure to take account of this fact meant the Tribunal's exercise of discretion miscarried, including because the Tribunal ought not to have been satisfied that its money order was "fair and equitable".
13. We reject this submission. Implicit in the principle in Coulton is the proposition, which we adopt, that what order is "fair and equitable", at least in the case where the parties are legally represented, must have regard to the manner in which the parties have conducted the case before the Tribunal. While the Tribunal must be satisfied that an order is fair and reasonable - a matter somewhat unremarkable where a discretion is to be exercised - particular factors are only mandatory considerations if they are material in the circumstances of the case. This is a question of fact. It follows that if neither party contends a particular fact is material, the Tribunal may proceed on that basis unless there is reason to conclude to the contrary. Absent the issue being raised by the builder's legal representatives, s 79U(1) does not require the Tribunal to take account of this matter. Further, or alternatively, the principle in Coulton still operates to preclude on appeal the builder from now raising this issue.
14. Finally, the mere fact of further work being necessary to complete the building, absent any submission or evidence on the matter, including from either of the costs experts who gave evidence, cannot be of any significant relevance for the exercise of the discretion in question.
15. Next, there is the submission that the discretion miscarried because of the failure to give due weight to the evidentiary matters referred to above or that the Tribunal proceeded upon the wrong principle. The evaluation of this ground requires a consideration of the facts as found by the Tribunal (the Appeal Panel having rejected the attempts by the builder to overturn some of these facts on appeal) and those factors in favour of and against the making of a work order.
16. We note the following factors relied upon by the Tribunal as being relevant in this case: 1. over a series of months between practical completion on 27 March 2014 and 6 December 2014 the builder attended the site and attempted, but failed, to ensure the building was watertight despite numerous requests and instructions to do so; 2. thereafter, the builder returned possession of the site to the homeowner, did not return and, apart from the email of 11 December 2014, had no further communication with the homeowner until the commencement of the proceedings in 2016. 3. the builder was given ample opportunity to rectify the defects, but did not; 4. the builder did not take sufficient steps to rectify all defects and this militates against a work order; 5. Ms Baker's evidence, accepted by the Tribunal, was that: 1. she and the builder, over a series of months during 2014, attempted to come to an agreement as to when the builder would return to site to do rectification work; 2. It became apparent that the builder was either unwilling or unable to rectify the work in a proper and workmanlike manner, particularly in respect of the roof; 3. while there were multiple emails exchanged, the builder did not offer to return to the site to fix the defects set out in the Department of Fair Trading Work Order, but offered to attend the site meetings; 4. at one such meeting Mr Venuto stormed out. 1. the builder has neither the expertise nor the inclination to return to rectify the defective work, particularly in respect of the roofing defects; 2. the homeowner had reasonably lost confidence in the builder's willingness and ability to rectify the work in a proper and workmanlike manner; 3. although there are no statutory impediments to the builder returning to site, the builder being licensed and trading, the relationship has irretrievably broken down; 4. the builder did not put forward a plan to rectify the work, despite the architect's request that it do so, but instead instructed solicitors to refute the architectural instruction A1-50 to rectify defects; 5. despite Work Orders issued by the Department of Fair Trading, requiring compliance by 6 December 2014, the builder repaired some of the defective work but did not comply with the orders by the required date; 6. some of the defects identified by the inspector and the architect remained outstanding; 7. Mr Venuto did not return to rectify the work and found it difficult to work with the Owners; 8. the relationship between the parties was fraught; 9. the parties did not agree on a method of rectification mainly because the builder refused to follow the Hall method; 10. the builder has not been on-site since December 2014.
17. Each of the above matters was relevant to the question of whether or not a work order, as opposed to a money order, should be made. We note that some of the findings made above establish some of the factors which have been held to be of relevance previously. The relevant decisions have been summarised by us above when stating the applicable principles. These factors appear to us to have particular significance in supporting the order made by the Tribunal below.
18. Overall, the matters referred to above, relied upon by the Tribunal, establish that it was open to it to make a money order rather than a work order, notwithstanding the matters otherwise brought to our attention by the builder in this appeal. A difficulty with the matters relied upon by the builder is that there was no evidence that the cost to the builder of carrying out the work itself was substantially less than the amount which has been awarded and there was no evidence to which we have been referred which would suggest that the builder could more quickly remedy the defective works than would occur if the homeowner engaged an independent contractor to do so: see Kurmond Homes at [43].
19. The extensive reference to Christopher Shepherd does not demonstrate that the Tribunal applied the wrong principle. It is clear that the conclusions in that case demonstrate different factual circumstances and different factual findings to that before the Tribunal. It does not demonstrate any conflict with the conclusion of the Tribunal below that no work order should be made. The Tribunal here has made significantly different findings and had significantly different evidence before it.
20. As the High Court makes clear in House v R, it is not sufficient to demonstrate that the Appeal Panel might take a different view of the facts. What must be demonstrated is the application of a wrong principle, the considering of extraneous or irrelevant matters in exercising the discretion, the mistaking of facts, or the making of a conclusion which is manifestly wrong or plainly unjust. In this case, no such error has been established, nor is it otherwise apparent. We reject this ground of appeal.

Section 79U (1) of the FT Act and the provision of proper reasons

1. The builder submitted that "it is not clear from the reasons what factors were really taken into account when making a money order (certain parts of the evidence are referred to; some are not)". We reject this ground and the submission. We have summarised above and quoted the essential aspects of the Tribunal's reasoning which reveal the factors taken into account in not making a work order. The Tribunal has made sufficiently clear what factors were taken into account in deciding not to make a work order and the Tribunal did not fail to provide proper reasons in this regard.
2. Second, the builder relied upon s 79U(1) to submit that "the Tribunal was obliged to turn its mind to, and be satisfied, that the order which it made will be 'fair and equitable to all the parties to the claim'" and to provide reasons for that finding. The builder submitted that the Tribunal did neither of these things and as such the exercise of its discretion miscarried. "The order which the Tribunal made was neither fair nor equitable for the reasons [already summarised above by us above on the question of whether the exercise of the Tribunal's discretion miscarried]".
3. Section 48O of the HB Act provides the order-making power for the Tribunal to resolve building claims under that Act. This section is in the following terms: 48O Powers of Tribunal (1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate: (a) an order that one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, (b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings, (c) an order that a party to the proceedings: (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or (ii) do or perform, or refrain from doing or performing, any specified act, matter or thing. (2) The Tribunal can make an order even if it is not the order that the applicant asked for. (3) Sections 79R and 79T-79V of the Fair Trading Act 1987 apply, with any necessary modifications, to and in respect of the determination of a building claim.
4. The Appeal Panel in Leung noted that the provisions of s 79U of the FT Act apply because of s 48O(3) of the HB Act. Section 79U of the FT Act provides as follows: 79U Matters to be considered by Tribunal when making orders (cf CC Act 1998, s 13) (1) When making any orders under this Division, the Tribunal must be satisfied that the orders will be fair and equitable to all the parties to the claim. (2) Without limiting subsection (1), when determining whether or not to make an order under this Division, the Tribunal is to take the following factors into consideration if they are material to the particular circumstances of the case: …
5. The builder did not submit that any of the factors listed in s 79U(2) of the FT Act were relevant to the particular circumstances of this case. It did submit that there was no inconsistency between s 48MA of the HB Act and s 79U of the FT Act. In Leung, it was unnecessary to determine whether s 48MA was a section that otherwise modified the manner in which s 79U was to apply: at [21]. It is also unnecessary for us to determine this question. Nevertheless, we are inclined to the view that s 48MA is a section that otherwise modified the manner in which s 79U of the FT Act applied, meaning that the Tribunal must give effect to the "preference" for a work order, and cannot decline to do so because it is not satisfied that to follow s 48MA would be "fair and equitable to all parties to the claim".
6. By section 62(3) of the NCAT Act the Tribunal was required to provide a written statement which covered its findings of fact, referring to the evidence on which those findings were based, the Tribunal's understanding of the applicable law and the reasoning process which led the Tribunal to the conclusions made. It is clear that the Tribunal has complied with this statutory provision.
7. The submission of the builder in substance was that in circumstances where s 79U(1) of the FT Act required the Tribunal to be satisfied that a required statutory criterion was met, it was incumbent upon the Tribunal to expressly deal with that matter and explain the reasons for coming to the required conclusion. In this regard the builder relied upon the principle that "if a Tribunal Member does not deal with an issue that was before him or her for determination that will be an error of law": Rathchime Pty Ltd v Willat [2017] NSWCATAP 87 at [70], citing Yates Property Corporation Pty Ltd (In Liquidation) v Darling Harbour Authority 24 NSWLR 156 at 186.
8. The nature and extent of the reasons required are variable, depending on the circumstances of the particular case: Collins v Urban at [57]; TAG Aviation Pty Ltd v Kirk [2017] NSWCATAP 41 at [28]. In the present case, the Tribunal had to consider whether to issue a work order under s 48O(1)(c) of the HB Act, or a money order under s 48O(1)(a), taking into account s 48MA and its statement that rectification of the defective work by the responsible party is the preferred outcome.
9. This involved the Tribunal in the exercise of a wide discretion. By the terms of s 48O, the Tribunal was to be guided by what it "considers appropriate". It had to assess whether the particular facts of the case made it appropriate to make a money order notwithstanding the statement of the preferred outcome in s 48MA. The Tribunal did this by setting out in detail the relevant facts and factors which justified the making of a money order rather than a work order.
10. In reaching its conclusions, it is clear from s 48O(3) that the Tribunal was required to have regard to s 79U which applied (with any necessary modifications) in the Tribunal exercising its discretion.
11. Section 79U of the FT Act was considered by the Appeal Panel in Curtis v Potter & Co Pty Ltd t/as The Africa Safari Co [2016] NSWCATAP 196 as follows: 68. The nature and extent of such a power was considered by Hope JA in State Rail Authority of New South Wales v Consumer Claims Tribunal (1988) 14 NSWLR 473 in the context of the provisions of s 23(2) of the previously repealed Consumer Claims Tribunal Act 1974 (NSW) (CCT Act). That section was in the following terms: (2) In exercising its powers under subsection (1) (a), (b), (c) or (d) a consumer claims Tribunal shall make such an order as is, in its opinion, fair and equitable to all the parties to the proceeding before it. 69. Of that section, Hope JA said at p 477B: ... I would respectfully agree with the conclusion reached by Yeldham J in Fairey Australasia Pty Ltd v Joyce [1981] 2 NSWLR 314 at 321 that the Tribunal is not concerned with "palm tree justice'' and with the conclusion of Hunt J in Jet 60 Minute Cleaners Pty Ltd v Brownette [1981] 2 NSWLR 232 at 236, that save in relation to the selection with the form of order the Tribunal must act in accordance with and apply the general law in determining the claim which has been made to it. 70. His Honour then said at p 477G: Whether there is ... a claim or obligation is to be determined by applying the general law. It is only where the Tribunal proposes to make an order in favour of the claimant that in some cases the form of the order in his favour is to be determined according to the opinion of the Tribunal as to what is fair and equitable to all parties. 71. Unlike s 23(2) of the CCT Act, s 79U(1) of the FT Act is not confined to particular types of orders that might be made. However, as with the CCT Act, the FT Act does not displace the requirement for claims to be determined in accordance with the general law. Rather, as Hope JA found in State Rail, once liability and an entitlement to a remedy is established, s79U provides scope to fashion the form of orders in a manner that "will be fair and equitable to all parties to the claim". 72. Consequently, in our opinion the Tribunal was required to have regard to the respective rights of the parties arising under the relevant law. This included assessing what was the loss or damage suffered because of the conduct of the respondent. Thereafter, the Tribunal was required to be satisfied the orders proposed to be made were fair and equitable as required by s 79U of the FT Act.
12. We are of the opinion that when considering the appropriate order to make in respect of the determination of a building claim, there is no dichotomy between the expression "orders as it considers appropriate" and an order the Tribunal considers "fair and equitable to all parties".
13. First, an appropriate order can only be made in a building claim under s 48O of the HB Act. However, that power is to be exercised having regard to the requirement otherwise applicable under s 79U of the FT Act when making orders in respect of consumer claims, as necessarily modified: see s 48O(3) of the HB Act.
14. Second, the "fair and equitable" criterion does not permit the Tribunal to deny an order to which a plaintiff would otherwise be entitled under the general law. The wide discretion under s 48O(1) of the HB Act must be exercised in accordance with the law, taking proper account of relevant considerations having regard to the provisions and purposes of the legislation in question, of which those in s 79U may be relevant. To provide coherence to the operation of s 48O, satisfaction that an order is appropriate under either s 48O or s 79U(1), must imply that any necessary and sufficient condition has also been satisfied for the making of such an order under the other provision. This necessarily is the effect of the statement in s 48O(3) that s 79U(1) applies "with any necessary modifications to and in respect of the determination of a building claim".
15. Accordingly, if the Tribunal has properly exercised its discretion in deciding to make a money order under s 48O(1)(a) of the HB Act, then this must necessarily imply that the condition in s 79U(1) of the FT Act also has been satisfied by the Tribunal. We note that the builder did not submit that there was any different issue in particular that arose for consideration under s 79U(1) compared with s 48O. The builder merely relied on its previous contentions to submit that the Tribunal should not have been satisfied that its order was "fair and equitable". It was unable to explain how s 79U(1) could properly lead to a different outcome or any different consideration of the question as to what order should be made. The builder below made no submissions with respect to s 79U(1), thereby implying, correctly in our view, that it did not add anything to s 48O(1).
16. Hence, at least in this case, the Tribunal's reasons for being satisfied that it was "appropriate" to make a money order under s 48O(1)(a) of the HB Act equally stood as its reasons for being satisfied that such an order was "fair and equitable" under s 79U(1) of the FT Act. Sufficient reasons were provided to demonstrate the reasoning process of the Tribunal in respect of the discretion under both s 48O(1) of the HB Act and s 79U(1) of the FT Act. In our opinion, at least in this case, it was not necessary for the Tribunal to make specific reference to s 79U(1) of the FT Act.
17. We reject ground 11.
18. Lastly, in respect of ground 9, this ground was neither referred to in the builder's written submissions nor during its oral addresses. We assume it is a reference back to the submission that the contract was on foot and the homeowner was contractually obliged to let the builder return to site to perform rectification work. We refer to our previous reasons dealing with grounds 1-4 and 6 where we deal with this submission. For these reasons we reject this ground of appeal.
19. Accordingly, it follows that the appeal on grounds 7-11 fails.

Ground 12

1. Ground 12 is as follows: The Tribunal erred in allowing the Owner $9,681.87 in relation to the light boxes (J [68]). The Tribunal failed to provide proper reasons, identified the wrong issue, took into account irrelevant considerations and made finding absent the evidentiary support.
2. The builder also sought leave to appeal from the finding of the Tribunal that the light boxes were not built in accordance with the plans and specifications. The Tribunal dealt with the question of the light boxes at [41]-[70].
3. The Tribunal referred to the following evidence of Mr Hall: 1. that the builder applied "non-compliant paint coating to the light box frames": [44]. 2. that the contract provided for installation of the relevant steel frames to meet the corrosion, protection and durability requirements of AS NZS 2699.3-2002: [43]. 3. that subsequent attempts by the builder to rectify external steel surfaces did not provide for coating of the steel in accordance with this standard: [44].
4. The Tribunal also referred to the expert opinion of Mr Christy, the inspector of the OFT: [46]. Mr Christy stated that the light boxes showed evidence of corrosion as early as November 2014. The Tribunal quoted from the inspector's requirement of the builder that it provide documentation that the window boxes which are showing signs of surface rust have had applied to them "international paint" which "is equivalent to galvanising".
5. The Tribunal noted Mr Hall's opinion that the steelwork is not adequately protected and is not painted "equivalent to galvanising": [47]. The Tribunal also noted that the builder claimed that the contract did not call for "galvanised paint": [48] and that the builder claimed that it applied product "which is a galvanising paint system": [48].
6. The Tribunal said that it was the homeowner's case that the paint used by the builder does not adequately protect the light boxes and is not painted "equivalent to galvanising": [47]. The Tribunal found that the light boxes were not built in accordance with the plans and specifications: [53]. The Tribunal identified the specification in respect of steel corrosion resistance which it set out at [54]: …conform to the following atmospheric corrosivity category as defined in ASNZS2312. Atmospheric corrosivity category: D (high). … corrosivity category D requires "stainless steel 316 or 316L or galvanize after fabrication 600 GSM plus organic coating".
7. The Tribunal also referred to the contract provision for corrosion protection of steel lintels within brick and block construction, in accordance with ASNZS2699.3, whereby it was required that the lintels be coated with a "metallic or organic coating of equivalent corrosion resistance": [55]-[56]. The Tribunal noted that Mr Hall was of the opinion that the coating applied was not equivalent to galvanising: [56]. Further, the Tribunal noted that the OFT inspector required documentation to confirm that the lintels' paint was "equivalent to galvanising".
8. The Tribunal referred to the cross-examination of Mr Oreb, the builder's expert, that the first coat was not Dulux Zincanode (as he had certified) but was a Penguard product and the later coating was Dulux Zincanode: [59]. The Tribunal then referred to the evidence of Mr Appleyard, an expert called by the builder, who conceded under cross-examination that in such mixing of different paint systems he could not confirm the integrity of the paint system to "galvanise" standard: [60].
9. After referring to all of this evidence, the Tribunal concluded the light boxes were not galvanised and did not conform with the contract specifications and that they displayed rust: [61]. Consequently, the Tribunal found that there was either a breach of contract and/or a breach of statutory warranties: [65]. Finally, the Tribunal found that the builder should have constructed the light boxes in accordance with the Australian Standard relevant to the question of water resistance: [67].

The builder's submissions

1. On appeal, the builder contended that the homeowner had not established that galvanisation of the light boxes was required under the contract. It relied upon the following evidence: 1. Mr Hall under cross-examination stated: "Contract documents that I've been through are unclear on that finish." 2. When questioned by the Tribunal in cross-examination as to whether galvanisation was required, Mr Hall replied: "No, but it has to be designed for the - to ensure reasonable durability." Further, when asked whether galvanisation was required in the contract specification, Mr Hall answered: "No." 3. Mr Hall further stated in his evidence: "It's my understanding - I can find it, but it will take time - but the builder has installed product possibly in compliance with the specifications." "And if galvanising is required then that may be a variation."
2. Based on the above submission, the builder sought leave to appeal the finding that the light boxes did not comply with the contractual plans and specifications.

Consideration

1. There are three difficulties with the builder's submission. First, apart from a breach of the specification, the Tribunal found a breach of statutory warranties in accordance with Mr Hall's findings: [65]. Mr Hall in his report found that the work was defective and did not provide required corrosion resistance apart from the issue as to whether the specification required galvanisation as the protective system. The builder in its submission has not mounted any challenge to these findings.
2. Further, the finding of breach of statutory warranty was supported by the evidence as referred to and accepted by the Tribunal (which has not been the subject of challenge by the builder in its appeal) as follows: 1. the builder's self-certification that a Dulux corrosion-resistant paint system had been applied was unreliable: [57]-[59]; 2. the builder's expert, Mr Oreb, conceded that corrosion treatment was a mixture of a Penguard product and a Dulux product: [59]; and 3. the builder's expert, Mr Appleyard, conceded that a mixture of the Penguard product and a Dulux product meant that a complete system for corrosion-resistance had not been applied to the steel lintels.
3. Second, the Tribunal was not bound to accept the particular pieces of evidence from Mr Hall, referred to by the builder, as to the effect of the contract and its specifications. At [54] the Tribunal quoted the specification referred to in the contract which stated that the corrosion protection required was to either be stainless steel "or galvanize". The builder did not submit in its appeal that this statement from the contract was incorrect and also did not submit that the finding that the light boxes were not galvanised was incorrect.
4. Third, the Tribunal also referred to the contract provision for corrosion protection of steel lintels within brick and block construction in accordance with ASNZS2699.3, whereby it was required that the lintels be coated with a "metallic or organic coating of equivalent corrosion resistance": [55]-[56]. The Tribunal noted that Mr Hall was of the opinion that the coating applied was not equivalent to galvanising: [56]. This evidence was clearly accepted by the Tribunal. Again, these findings were not challenged by the builder and they support the conclusion that the contract was not complied with because the coating applied was not "equivalent to galvanising".
5. As a result we are not satisfied this finding was against the weight of the evidence or that the builder may have suffered a substantial miscarriage of justice. We therefore decline to grant leave to the builder to appeal this finding. Finally, a review of the Tribunal's reasons shows that the builder has not made out any of its grounds of appeal that sought to suggest that: 1. the Tribunal failed to provide proper reasons; 2. the Tribunal identified the wrong issue; 3. the Tribunal took into account irrelevant considerations; or 4. the Tribunal made findings absent evidentiary support.
6. We reject this ground of appeal.

Ground 13

1. Ground 13 provides: The Tribunal erred in allowing $14,193.96 in relation to the rear patio slab and termite barrier defects (J [76]-[84]). The Tribunal failed to provide proper reasons, identified the wrong issue, took into account irrelevant considerations and made finding absent the evidentiary support.

The builder's submissions

1. The builder submitted that the patio slab is a sub-slab and the fall is always constructed within the tile bed (which was to be done as part of stage 2) for which provision was made in drawing CC-001. For this reason, the builder contended that the finding at [80] that "it is not good building practice to build a slab without the correct fall" misunderstands the builder's contractual obligations.
2. The builder also referred to the architectural request in AI-010 drawing CC-006 REV A that a strip drain was to be installed within the tiling screed. It was contended that the builder constructed the stepdown detail in the patio so the drain and tiling screed could be installed by others as part of the stage 2 work. It was suggested that the stepdown detail and grated drain installation was contrary to the plan CC-001 which shows a fall away from the external kitchen wall.
3. Next, the builder dealt with the question of the termite barrier to the slab. The builder contended that the Tribunal erred in its finding at [79] that the application of chemical spray as a perimeter protection to the slab was not permitted and was contrary to standard AS3660.1-2000. The builder contended that a chemical spray complied with the contract specification at the patio slab joint. It contended that where the Schedule to the specification referred to a requirement for "graded stone" treatment to slab control joints and footing/slab joint areas, this could not apply to the patio slab joint because the application of graded stone is not possible as there is physically no cavity or joint to insert the graded stone.
4. Finally, the builder submitted that it is unreasonable and unnecessary to remove and relay a slab for an outdoor area that has been treated for termite protection in accordance with the contract specification and is going to have tiles laid on top of it as part of stage 2 work by others.
5. The builder sought leave to appeal the above findings.

Consideration

1. It is clear that the builder's submissions involve attacks on findings of fact by the Tribunal, and leave to appeal is required.
2. We deal first with the question of the construction of the patio slab. The contract drawing and specification did provide for falls in the patio slab to drain away from the building. The question was whether such specification was contradicted by reliance on a tile screed to be installed after the slab and the installation of the drain, again by others.
3. In this regard, the Tribunal had before it the opinion of two experts. First, Mr Appleyard, expert for the builder, expressed the opinion that the defective fall could be cured by a tiler applying a screed topping and that that was the intention of the plans and specifications. On the other hand, Mr Hall, expert for the homeowner, gave evidence that it was not good building practice to build a slab without the correct fall and that reliance on a tiling screed to retrospectively correct the fall was not appropriate and contrary to the contract plans and specifications.
4. The Tribunal set out these opinions in its decision and concluded at [80] that the contract specifications did provide for graded paving to even falls to drain away from buildings to drainage outlets without ponding. The Tribunal accepted the opinion of Mr Hall, concluding that the slab was both defective as it fails to direct water away from the building and was contrary to the true intention of the plans and specifications. In doing so, the Tribunal rejected the contrary view of Mr Appleyard that the contract contemplated that the required falls could be provided as part of the tiling process required in a subsequent stage of the work by application of a screed to provide the required falls.
5. In our opinion, the conclusion of the Tribunal was open to it as it was based upon the expert opinion of Mr Hall and the fact that the plans and specifications for the work required the slab to be poured with a fall. In these circumstances, it could not be said that "the evidence in its totality preponderates against the conclusion found by the Tribunal at first instance" or that in consequence thereof the builder may have suffered a substantial miscarriage of justice. It follows that the circumstances necessary for the grant of leave are not made out, and leave to appeal should be refused: see Sch 4 cl 12 and Collins v Urban at [65]-[77].
6. The builder submitted that the Tribunal misconstrued some evidence when it reached these findings; for example, the certificate certifying the slab. These submissions misconstrue what the Tribunal did. It was Mr Appleyard himself, or those who prepared the document at appeal book p 1391, that referenced this certificate to support the builder's position. In any event, as we explained above, this certificate did not form the basis for the conclusion of the Tribunal.
7. Further, and in any event, we note that the Tribunal accepted the evidence of Mr Hall that it was poor building practice to construct the rear patio slab without a fall. The Tribunal found this was contrary to the Building Code of Australia. In such circumstances, irrespective of the position under the contract, this would demonstrate a breach of the relevant statutory warranties provided for in the HB Act including that the works be carried out in a proper and workmanlike manner and comply with all relevant laws.
8. On the question of rectification there was a proposal that a strip drain be installed above the concrete slab. The Tribunal rejected this solution and referred to the joint view of both experts that "it would be difficult to install an adequately sized external strip drain above the existing concrete patio slab": [73]. Again, this conclusion was open to the Tribunal, given the joint view of those experts.
9. We further note, contrary to the submission of the builder to us, that Mr Hall in his 2017 report stated that while the contract provided for a strip drain to be installed adjacent to the door threshold of the lounge room, the patio slab in fact was built without provision for such a drain to be installed later. The Tribunal accepted this at [80] which is a further reason why the slab was defective.
10. Turning then to the question of the termite barrier. First, it is not in dispute that the contract specifications in respect of a termite barrier are contained in S3600.1-2000. Next, the specifications set out a requirement for "graded stone" for slab control joints and footing/slab joints. Mr Hall, expert for the homeowner, provided opinion to the Tribunal that the builder constructed the rear patio slab without a physical termite barrier at the junction of the main floor slab and later installed a temporary chemical barrier in breach of the contract specifications. Mr Hall's opinion was that the slab, in order to comply with the specification, required there to be a properly graded stone termite barrier at the join between the rear patio slab and the main floor slab. The Tribunal accepted this opinion evidence before it: [79].
11. The Tribunal at [77] recorded the submissions of the builder. The submission made was that a termite certification was provided with respect to the termite barrier system and this was accepted by the architect who provided practical completion. It was further recorded that the termite system was also installed to the satisfaction of the Office of Fair Trading, Mr Oreb and Mr Appleyard, but this was disputed by Mr Hall.
12. The homeowner submitted to us that this was the extent of the submission below and this was not disputed by the builder in its submissions on appeal. In particular, the homeowner pointed out that the submission that it was not possible to apply graded stone at the junction between the patio slab and the building slab was not a submission made below and obviously could not have formed part of any cross-examination of Mr Hall. We note that this submission of the homeowner was not disputed by the builder in its submissions in reply.
13. Accordingly, it is not a matter that the builder can now raise on appeal. This is because it could have been dealt with by evidence below, and hence, pursuant to the principle in Coulton, it is not open to the builder to now raise it.
14. In the result, this leaves the evidence of Mr Hall that the builder did not comply with the specification at the junction between the two slabs. In such a case, it was clearly open to the Tribunal to accept Mr Hall's evidence and not accept the mere fact that there had been certification by the architect previously as meaning that there was no defect or failure to comply with the contract's plans and specifications. In such circumstances, we cannot conclude that the finding was against the weight of the evidence or that the finding would cause substantial injustice to the builder. Accordingly, we decline to grant leave to appeal this conclusion of the Tribunal.
15. We also reject the submission that there was a failure to provide proper reasons. The Tribunal's reasons deal with the main points of evidence and set out the reasoning process which led to its conclusion.
16. We reject this ground of appeal.

Ground 14

1. Ground 14 is in the following terms: 14. The Tribunal erred in finding the owner was entitled to $30,843.74 for windows and doors [J104]. The Tribunal failed to provide proper reasons, identified the wrong issue, took into account irrelevant considerations and made finding [sic] absent the evidentiary support.

The builder's submissions

1. In essence, the allegation was that the rear timber doors were defective because the sill was not constructed of an adequate thickness to prevent water entry and the flashing was inadequate. As to the windows, the alleged defect was the absence of sill flashing. There were two expert reports in respect of these defects: one by Mr Hall for the homeowner and one by Mr Appleyard for the builder.
2. The builder's submissions were terse, to say the least. It is worth recording them in full, noting they were not further developed in oral submissions: 70. … On the builder's case it was put that the sill was temporary pending completion of the stage 2 works. As to the windows, it was asserted that the windows have sub-sill flashings which are designed to catch water and drain out of weepholes. 71. The internal flooring had not yet been installed. The work is part of stage 2 (i.e. post-lockup). The builder raised the sill to ensure that it would sit flush when the internal floor finish was installed by others. 72. For the reasons set out above, the Tribunal failed to provide proper reasons, identified the wrong issue, took into account irrelevant considerations and made findings [sic] absent the evidentiary support.

Consideration

1. The Tribunal notes that the above submissions make no reference to the evidence below or the findings of the Tribunal below. The challenge on the Tribunal's conclusion involves a challenge to findings of fact as to whether or not the timber doors and the windows were defective and/or contrary to the contract and its plans and specifications. This requires leave to appeal.
2. The Tribunal dealt with this defect at [85]-[108]. First, the Tribunal has dealt with the evidence before it and set out its reasoning process for coming to the conclusion that it did. We reject any submission that there were inadequate reasons expressed in the Decision. It has not been suggested that any of the Tribunal's summary of the experts' opinions in the Decision was erroneous.
3. The Tribunal accepted Mr Hall's evidence, at [100], that: It was not good building practice not to align the outer face of the door sill with the slab edge at lockup stage. There cannot be an adjustment of the levels at stage 2 of the works. It was the responsibility of the first builder to ensure the water tightness of the building.
4. Further, the Tribunal accepted Mr Hall's evidence that it was not good building practice to construct doors without a sill flashing, again irrespective of stage 2 works by others later. Mr Hall confirmed in his evidence that "it is absolutely standard building practice with any timber sill that a sill flashing is fitted": [100].
5. Next, the Tribunal referred to the evidence of Mr Appleyard, for the builder, to the effect that it was unusual building practice to have a temporary packer under the sill and no sill flashing: [102]. He also confirmed that the architect's instruction shows a sill flush with the concrete slab, and that is not what the builder had constructed.
6. The Tribunal came to its conclusion as follows at [103]: I find on balance that the doors are defective. I accept the opinion of Mr Hall. The door track is too high and sits above the level of the internal flooring, not flush as is required; there is no upturn on the internal edge of the door track to stop water flowing along the door track and into the dwelling; the door track is positioned away from the slab edge, not flush, so vertical risers to prevent water entry under the door track cannot be achieved by stage 2 builders. I reject the opinion of Mr Appleyard because he conceded that, although the builder was required to build to lockup stage, the whole sill needs to be removed, a slab poured, and a sill to be reinstalled.
7. In our opinion, it was open to the Tribunal to accept the opinion of Mr Hall and conclude that the doors were defective. Accordingly, we are unable to conclude that this finding was against the weight of the evidence or would cause the builder substantial injustice. Accordingly, we reject the builder's application for leave to appeal against this finding.
8. Turning then to the windows. The Tribunal dealt with this at [104]-[106]. Again, the Tribunal had the evidence of Mr Hall that the windows were defective with the way in which the sills were installed. The Tribunal referred to the fact that Mr Appleyard conceded that the windows are unorthodox. The Tribunal noted at [104] that Mr Appleyard did not inspect the windows on-site, that he conceded that it was probable from a series of photographs that the water ingress was caused by leaky windows, and that this was indicative of a failure of the window sills. The Tribunal was satisfied that the builder failed to install the window sill flashings properly or at all and that this has caused the predominance of water ingress into the building.
9. In our opinion, this conclusion of the Tribunal was open on the evidence, particularly given the opinion evidence of Mr Hall, which the Tribunal set out in detail at [88]. Consequently, we are not satisfied that the Tribunal's finding was against the weight of evidence or that the builder may otherwise have suffered a substantial miscarriage of justice. Therefore, we decline to grant the builder leave to appeal this finding.
10. We reject this ground of appeal.

Ground 15

1. Ground 15 is in the following terms: 15. The Tribunal erred in allowing $22,570 for the cost of rectifying roofing defects as it was based on a particular method of rectification in circumstances where the parties had agreed and the Tribunal accepted a different method of rectification [J140]. The Tribunal failed to provide proper reasons, identified the wrong issue, took into account irrelevant considerations and made finding [sic] absent the evidentiary support.

The builder's submission

1. The builder contends that during a conclave on the penultimate day of the hearing between Mr Monteith and Mr Appleyard an agreed method for rectifying the roof defects was developed. The builder contends the Tribunal at [129] observed this fact and that the parties by their experts, Mr Monteith and Mr Appleyard, agreed on the work reasonably necessary to rectify the roofing defects.
2. The builder submitted before the Tribunal, as recorded by the Tribunal at [140] that the homeowner had failed to lead any evidence as to the cost of rectification in accordance with the scope agreed by Mr Monteith and Mr Appleyard. The only scope of work which was costed, the builder contended, was by Mr Madden based on the scope proposed by Mr Monteith and Mr Hall (which was not accepted by the Tribunal).
3. However, according to the builder, the Tribunal at [140] purported to quantify the rectification cost by reference to the scope of work that Mr Madden costed, on behalf of the owner, based on some other scope of work. The builder contended that the two scopes of work are completely different. Mr Madden's costing refers to the scope of works which requires all roof sheeting, capping, gutters and accessories to be removed and replaced with new ones. On the other hand, the builder stated, the agreed scope between the experts Mr Monteith and Mr Appleyard concentrates on the problem areas and requires only the sheets, capping etc to be removed and replaced at those particular areas.

The homeowner's submissions

1. The homeowner contended that the builder has misconstrued the effect of the Tribunal's decision. It submitted that whilst there was a scope of works roofing report of Mr Monteith, dated 29 March 2017, which is the "agreed scope" referred to by the builder in its submission, Mr Monteith also produced an addendum to that report, dated 30 March 2017, in which he qualified or even recanted from his previous agreed position with Mr Appleyard. The homeowner contended that the scope of work in the addendum was substantially similar to the scope of work costed by Mr Madden, and, if anything, was a larger scope of work than that costed by Mr Madden. In the result, there was not in fact any "agreement" between the experts.
2. The homeowner contended that what the Tribunal did at [140] was clearly adopt Mr Monteith's previous scope, which was the subject of Mr Madden's costing report which was accepted and allowed for by the Tribunal.

Consideration

1. The sequence of events with respect to the expert reports is as follows. First, there was the expert witness report of Mr Hall, dated 18 September 2015, in which he dealt with the scope of work for rectification of the roof at subparagraph 8.6.15.3. Next, there was the building inspection report of Mr Monteith, dated December 2016, where a scope of work for rectification of the roof was dealt with at paragraphs 5.3-5.7. These two scopes of work were summarised in Toomey Pegg's letter of instruction to Mr Madden, dated 25 January 2017, at [8(f)]. This letter can be referred to as the Monteith/Hall scope of work. This scope of work required removal and replacement of all upper, lower and link roof sheeting, flashings, capping, gutter and accessories, covering an area of 126m2.
2. Mr Madden costed the Monteith/Hall scope of work in relation to the roof, which became annexure C of the joint QS report of Mr Madden and Mr Ludlow, dated 27 March 2017. Mr Monteith then produced a report, titled "Scope of Works - Roofing" and dated 29 March 2017, without addendum in which an agreement was recorded about the scope of rectification required for the roof with Mr Appleyard and referred to by the Tribunal at [129]. This could be referred to as the "29 March 2017 scope". This scope confines the work to select areas of the roof. The 29 March 2017 scope was not the subject of any costing for the builder, neither by Mr Madden nor by Mr Ludlow.
3. Then, Mr Monteith produced an addendum to his previous report dated 29 March 2017. That addendum was dated 30 March 2017 and purported to be an addendum to the previous document being the "Scope of Works Roofing Report". This could be referred to as the "30 March 2017 scope".
4. Relevantly, that addendum stated the following: 1. Subsequent to the preparation of this Scope of Works, I have been informed that the two lower rooves of the property have impediments to prevent the simple removal of head capping and then turning up the head of the roof sheeting. These impediments are concealed within the Colorbond barge / head capping. . . . This affects Item 1.2 above and extends the Scope of Works to accommodate the impediments at the head of the roof sheet. … 2. Take out the roof sheets from the low level of roof approximately 28m2. 3. Take out the roof sheets not previously identified in item 1.1 at number 1 from the north low level roof, approximately 47m2.
5. The effect of this addendum, and the widening of the scope of works, was substantially to put the scope of work back to the original proposed Monteith/Hall scope. Applying Mr Madden's costings, the difference is less than $1000. The Tribunal dealt with the 29 March 2017 scope of work and the 30 March 2017 scope of work in its decision at [129] as follows: On 29 March 2017 the parties by their experts Mr Monteith and Mr Appleyard agreed the existence of defects in the construction and installation of the roofing and gutters and the reasonably necessary works required to rectify the agreed defects. On 30 March 2017 the Monteith addendum report was served, appearing on page 4 of Exhibit B. The defects set out in the addendum report are not agreed.
6. In other words, contrary to the contention in the builder's ground of appeal, at the time of the Decision of the Tribunal there was no agreed position. Then, at [130]-[139], the Tribunal dealt with the differences between the views of Mr Monteith and Mr Appleyard and preferred the position of Mr Monteith. The Tribunal made a number of findings as to there being numerous defects in the construction of the roof.
7. The Tribunal then concluded its position on the roof defects at [140] as follows: As I have found that the builder is liable for defective workmanship in respect of the roof construction, I must assess an amount of damages to be awarded. The builder says the applicant has failed to lead any evidence as to the cost of rectification work required to bring the roof into conformity with the contract. I disagree. The scope of work that Mr Madden (QS) has costed for the applicant in relation to roofing defects is based on Mr Monteith's and Mr Hall's proposed scope of work. The scope of work of Mr Monteith is set out in his report on page 868-869 of the Tender Bundle and is costed by Mr Madden in his report of 21 February 2017. The cost of the scope of work is set out in Mr Madden's "quantum conclave costing number 1" as per Exhibit G2. I find that the construction defect is established and that the method of rectification proposed by Messrs Monteith and Hall is a reasonable scope of work to adopt under the circumstances. Accordingly, I award $22,570 for this head of damage. (Emphasis added)
8. In our opinion, contrary to the contention in the builder's ground of appeal, the Tribunal found that the appropriate method of rectification is the Monteith/Hall scope of work rather than the 29 March 2017 scope, bearing in mind that the 29 March 2017 scope was never finally agreed between the parties. This view is supported by the fact that the Tribunal preferred the evidence of Mr Monteith over Mr Appleyard.
9. It was open to the Tribunal to find that, under the circumstances, the Monteith/Hall scope of work for rectification was a reasonable scope of work to adopt. Its extensive findings as to the existence of numerous defects in the construction of the roof and its preference for Mr Monteith over Mr Appleyard reveal sufficient reasons for this conclusion.
10. The award of $22,570 was appropriately based upon the costing provided by Mr Madden before the Tribunal. Further, the challenge to the Tribunal's conclusion involves a challenge to findings of fact. This requires leave to appeal. Again, we are not satisfied that the decision was against the weight of the evidence or that the builder may otherwise have suffered a substantial miscarriage of justice.
11. Accordingly, we reject the builder's application for leave to appeal against this finding, and this ground of appeal should otherwise be dismissed.

Ground 18

1. Ground 18 is in the following terms: 18. The Tribunal erred in allowing $54,070 for preliminaries [J148]. The Tribunal failed to provide proper reasons, identified the wrong issue, took into account irrelevant considerations and made finding [sic] absent the evidentiary support.

The builder's submissions

1. The builder contended that the Tribunal's award for, and calculation of, preliminaries was in error because the Tribunal failed to take into account that preliminaries would be incurred when the stage 2 works are carried out.

Consideration

1. The homeowner pointed out that neither the scope of stage 2 nor the nature and quantum of preliminaries to be incurred as a result of stage 2 was the subject of evidence or discussion or submission before the Tribunal. The homeowner submitted that to assert that the Tribunal failed to take into account that preliminaries will be incurred when the stage 2 works are carried out is "improper in these circumstances".
2. The builder accepted that it could not establish that the issue had been the subject of any submission below. It certainly did not dispute that it was not the subject of evidence. In fact, the way in which the matter proceeded before the Tribunal (see [147]-[150]) was that Mr Ludlow, costing expert for the builder, put forward a figure for preliminaries based upon the proposed scope of work for rectification as proposed by Mr Appleyard for the builder. This was met by the figures of Mr Madden for preliminaries, cost expert for the homeowner based upon the rectification work proposed by Mr Hall.
3. Neither expert sought to bring into account in any way the fact that preliminaries may be dealt with in stage 2 works, and that this could or should be a basis for reducing or setting off the allowance for preliminaries in the proposed rectification work the subject of the proceedings before the Tribunal. The Tribunal then proceeded to deal with this evidence. It preferred the evidence of Mr Madden as it was more detailed and it was based upon the scope and method of Mr Hall, which was accepted by the Tribunal.
4. The builder attempted to submit that the principle in Coulton did not apply because no evidence could have been led which could have possibly prevented the point from succeeding.
5. This is plainly wrong. On the builder's own submission, an allowance for preliminaries is an allowance for works necessary to ready the site to carry out the substantive work. An assessment of the nature and extent of the works required is fundamental to determining what amount should be allowed, as is an assessment of the reasonable cost to be allowed.
6. It follows that the principle in Coulton prevents the builder from now raising this point on appeal when no evidence or submissions were made before the Tribunal at first instance.
7. We reject this ground of appeal.

Orders

1. The Appeal Panel makes the following orders: 1. Appeal AP 17/48650 is dismissed and leave to appeal is refused. 2. The appellant is to pay the costs of the respondent in both appeals, such costs to be agreed or assessed on an ordinary basis. 3. If either party seeks a different costs order to that in order (2), the following directions apply: 1. The applicant for costs ("costs applicant") must file and serve any costs application, including submissions and any evidence in support, within 7 days of the date of these orders. 2. The respondent to the costs application is to file and serve any submissions and evidence in reply within 14 days from the date of these orders. 3. The costs applicant is to file any submissions in reply within 21 days from the date of these orders. 4. Any submissions are to include submissions on the issue of whether an order should be made pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), dispensing with a hearing of the costs application. 1. In the event an application is made pursuant to order (3), order (2) shall cease to have effect.

---

    ​

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 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: 21 May 2018