Grant v Gillham ; Christopher J Grant Pty Ltd v Gillham

NCAT Appeal Panel|2018-01-29|Before: Christopher J, Mr P

Solicitors: Garden & Montgomerie Solicitors (Respondents) File Number(s): AP 17/42976AP 17/43000 Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 14 September 2017 Before: Member K Rickards File Number(s): HB 16/45839 HB 16/53656

REASONS FOR DECISION

These are appeals against a decision of the Consumer and Commercial Division of the Tribunal given on 14 September 2017 in proceedings under the Home Building Act 1989 (the HB Act) arising from building works carried out to a dwelling on a property in Orange NSW from 2015 to 2016.
The respondents in both appeals are the owners of the property, and are referred to in these reasons as the Owners. Appeal AP 17/43000 is an appeal by Christopher J Grant Pty Ltd (the Company) against the decision to dismiss the Company's application HB 16/45839 seeking an order for payment of the sum of $16,197.48, being payment of three invoices relating to the building work. Appeal AP 17/42976, lodged in the name of Christopher Grant (Mr Grant), is an appeal against the decision in HB 16/53636, which was an application by the Owners against Mr Grant and the Company relating to asserted defects in the building work and other claims for damages.
Both HB 16/45839 and HB 16/53636 were heard together in Orange on 7 July 2017. In HB 16/45839 the Member dismissed the application, finding that the Company was not a party to the contract with the Owners for the residential building works and so could not recover payment of the invoices. In HB 16/53636 the Member dismissed the application as against the Company, and found in part for the Owners, ordering Mr Grant to pay the Owners the amount of $6,514.03. That amount has been paid in trust.

The Decisions under Appeal

The background to the dispute is as follows. The Owners obtained development consent for the proposed extensions and renovations to their property in September 2015, and on 6 October 2015 signed a Residential Building Contract for the sum of $386,280.86 (incl GST). Work commenced in November 2015. On 18 March 2016 the final invoice was issued. On 14 October 2016 the Company lodged its application in the Tribunal for an order for payment by the Owners of $16,197.48, being the adjusted contract price as at the date of practical completion of the building works, taking into account claimed variations, less the payments made by the Owners.
On 1 December 2016 the Owners lodged an application in the Tribunal, naming the Company and Mr Grant as respondents, for payment of $17,479.44. The Owners disputed the claimed variations, and sought compensation in the amount of $16,243.22, being payment of additional amounts for construction of a carport not built by the builder ($2,780.80), loss of amenity because the basement bathroom was not constructed ($5,000.00), compensation for render not being painted ($4,700.00), surplus tiles ($201.60), repairs to patched flooring ($1,165.82), compensation for installation of an inferior and less powerful air conditioner ($3,000.00), and rectification of driveway concrete ($1,897.50).
At the hearing of both applications the Member received the documentary evidence filed by the parties, and heard oral evidence from Mr Grant, Mr Gillham, the owners' building expert Mr David Dillon, and four sub-contractors. The Member noted that the amount claimed by the Company as payable by the Owners was confirmed at $15,774.91.
The Member considered the documentary evidence relating to the contract, which was a standard form Master Builders Association Residential Building Contract BC4. The Member noted that the contract identified the parties as "Owner(s): Mark and Jane Gillham" and "Builder: (Grantbuild) Christopher J Grant", and recorded the builder's licence number as 164394C, noting that that was the current builder's contractor licence issued to "Christopher John Grant". The Member noted the provisions of s 7 of the HB Act, which requires a contract for residential building work for a contract price above $5,000 to contain the names of the parties including the name of the holder of the contractor licence shown on the contractor licence, and the number of the contractor licence. The Member noted that building insurance coverage was required, and that cover was issued on 30 October 2015, 24 days after the date of the contract, in the name of the Company.
The Member's reasons for concluding that the contracting parties were the Owners and Mr Grant were as follows: 16 As set out above, and in compliance with the legislation, the written contract was expressed to be between Mr Grant and the Gillhams. 17 The initial relevant communications which led to the creation of the contract and the subsequent undertaking of the subject work took place personally between the Gillhams and Mr Grant. There is no evidence which during this period of time indicates any involvement of the Company. 18 Various documents which were then sent by Mr Grant to the Gillhams in relation to the subject work prior to the execution of the contract were headed up simply with the title "Grantbuild" and no other details. There was no accompanying wording or other information to indicate that any person or entity other than Mr Grant was dealing with the Gillhams. 19 The evidence of Mr Gillham that he was unaware of the existence of the Company at the time of entering into the contract is accepted as true. 20 There were a number of variations issued under the contract terms. These variations were also issued simply under the title of "Grantbuild" with no other detail. 21 No evidence exists to establish that the Gillhams did know, nor is there evidence which could objectively be seen to indicate that they should have known, that the subject variation work was not continuing to be undertaken under the terms of the contract expressed to be entered into by Mr Grant and the Gillhams, but was instead being done by the Company. 22 The evidence satisfactorily establishes that the only parties with rights pursuant to the contract are Mr Grant and the Gillhams. The Company has no privity of contract in the circumstances of this matter. 23 Further to the above finding, the evidence shows no involvement of the Company in the subject work other than in the issue of insurance cover in its name and does not establish any other entitlement of the Company in respect of the works and materials relating to the variations upon the basis of quantum meruit.
The Member concluded that the Company's claim in HB 16/45839 for the unpaid invoices should be dismissed.
In HB 16/53656, applying the finding that the Company was not a party to the contract, the Member dismissed the claim by the Owners against the Company. The Member then considered the claim by the Owners against Mr Grant for payment of $15,774.91, which they had calculated as: the original contract sum payable of $386,280.86, less the amount paid of $376,522.29, plus agreed variations of $13,505.13, less credits agreed to by the builder of $22,795, plus compensation amounts claimed by the owners of $16,243.22.
The Member accepted the figures as to the contract sum, the amount paid, agreed variations and credits, and then considered each of the amounts claimed as compensation. The Member found the amount payable by Mr Grant to the owners to be $6,514.03, made up as follows: Owed after allowing for variations and Payments under contract $468.31 Loss of bathroom $1,000.00 Paint $400.00 Tiles $201.60 Cyprus Flooring $1,444.12 Air Conditioning Unit $3,000.00

The Member's reasons concluded that both parties had submitted that a costs order should be made in their favour in the event of their claim succeeding, and that neither claim had entirely succeeded. The Member made directions for the making of any application for costs. On 24 January 2018, shortly before the appeal hearing, the Member published reasons for his order that the parties in each of the proceedings were to bear their own costs of the proceedings. The Member's decision on costs is not part of the present appeal.

The Appeal

The appeals were lodged within the time specified in rule 25(4) of the Civil and Administrative Tribunal Rules 2014.
As an internal appeal under s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act), the appeal may be brought as of right on any question of law, or with leave of the Appeal Panel on any other grounds.
The decisions under appeal were made in the Consumer and Commercial Division of the Tribunal. Clause 12 of Sch 4 of the NCAT Act provides that the Appeal Panel may grant leave to appeal only if satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision under appeal was not fair and equitable, or that it was against the weight of the evidence, or because significant new evidence has arisen, being evidence that was not reasonably available at the time of the hearing.
The parties provided, as directed, a joint bundle for the appeal, which included at tab 5 the evidence provided on behalf of the Owners and at tab 6 the evidence provided on behalf of the Company and Mr Grant at first instance. The parties were unable to obtain a copy of the sound recording of the hearing.
By consent, the Company which was a party to the proceedings HB 16/53636, was joined as appellant to the appeal in AP 17/42976. Leave was granted to the appellants to amend the Notice of Appeal in both appeals.

AP 17/43000

In AP 17/43000, the appeal against the dismissal of the Company's claim in HB 16/45839, the amended Grounds of Appeal are that the Member erred in law: 1. in construing the contract as providing that the parties were Christopher Grant as builder and Mark and Jane Gillham as homeowners when, properly construed, the builder under the contract was Christopher J Grant Pty Ltd; 2. in failing to identify and correct misnomers on the contract including that the builder was Christopher Grant when properly construed the builder was the Company, and the Builder's Licence Number was 164394C when properly construed the Builder's Licence Number was 263842C; and 3. in his approach to construing the contract in adopting the wrong test to identify the parties to the contract by asking whether Mark or Jane Gillham knew or should have known that the Company and not Mr Grant was the builder.
The appellants sought leave to appeal on the ground that the decision that the Company was not a party to the contract was against the weight of evidence and otherwise not fair and equitable, for the following reasons: 1. The Company's Australian Business Number (ABN) was listed on the front page of the contract under the heading "Builder"; 2. The Company's trading name "Grantbuild" was listed on the front page of the contract under the heading "Builder"; 3. The "Specification" listed on the front page of the contract was stated to have been prepared by "Grantbuild" which was the Company's trading name; 4. Mr Grant's contractor licence had a condition on it providing that it did not extend to contracts requiring insurance under the Home Building Compensation Fund (HBCF) in circumstances where the work to be performed under the contract was required to be insured under the HBCF; 5. Prior to entering into the contract the Company, by its employee Deborah Holst, had corresponded with the Owners and provided quotations to them under the Company's trading name and by emails that had displayed on them the Company's ABN; 6. The Company entered into a contract of insurance with respect to works to be performed under the contract and obtained a certificate of insurance evidencing such contract of insurance; and 7. Christopher Grant did not, at the time the contract was entered into and thereafter undertake building work in his personal capacity.
The amendments to the Grounds of Appeal removed the grounds related to a quantum meruit claim by the Company.
The appellants sought orders allowing the appeal, quashing the Member's decision, and substituting that decision with an order that the Owners pay the Company $16,197.48.

AP 17/42976

In AP 17/42976, the appeal against the decision in HB 16/53636 to order Mr Grant to pay the Owners the amount of $6,514.03, the amended grounds of appeal are that the Member erred in law: 1. In construing the contract as providing that the parties to that contract were Mr Grant as Builder and the Owners when, properly construed the Builder was the Company; 2. in the alternative to (1), in failing to identify and correct misnomers on the contract including that the builder was Christopher Grant when properly construed the builder was the Company, and the Builder's Licence Number was 164394C when properly construed the Builder's Licence Number was 263842C; 3. in his approach to construing the contract in adopting the wrong test to identify the parties to the contract by asking whether Mark or Jane Gillham knew or should have known that the Company and not Mr Grant was the builder; 4. in awarding the Owners damages for breach of the contract in circumstances where he did not find that Mr Grant had breached any term of the contract; 5. in failing to provide any reasons as to how Mr Grant had breached the contract; 6. in finding that the Owners were entitled to damages when there was no evidence of damage; 7. in making findings as to damage based on what he considered to be "reasonable allowances" and "general knowledge"; and 8. in denying Mr Grant procedural fairness by failing to address Mr Grant's claim that in the event he was found to be the builder under the contract that he was entitled to a reasonable remuneration for work done and services rendered on a quantum meruit basis.
Paragraph (8) of the amended grounds of appeal was not pressed at the hearing of the appeal.
The grounds on which the appellants seek leave to appeal are in the same terms as for AP 17/43000, in paragraph [20] above.
The appellants sought orders allowing the appeal, quashing the Member's decision, and dismissing the Owners' application. In written submissions, the appellants state that the orders sought on the appeals are that the Appeal Panel dismiss the Owners' application, determine that the contract was between the Company and the Owners, and remit the Company's application for rehearing on the question of breach and damages.

Reply to Appeal

The Owners contend that there was no error of law in the Member's findings that the parties to the contract were Mr Grant as Builder and the Owners, and that the Member gave adequate reasons for his decision that the Company had no involvement in the works such that it could recover on a quantum meruit. The Owners contended that leave to appeal should be refused; that the Company was on notice from no later than 1 December 2016 that the Owners disputed the fact that the contract was made with the Company and had the opportunity of varying the points of claim but did not; and that Mr Grant entered into the contract and undertook building work in his personal capacity.

The identity of the contracting parties

The identity of the contracting parties is an issue in both appeals.
It was common ground that the holder of business name "Grantbuild" ABN 22158 369 914, was Christopher J Grant Pty Ltd, and that Mr Grant was the sole shareholder and office holder of Christopher J Grant Pty Ltd.
For the reasons which follow, we conclude that there was no error of law in the Member's conclusion that the contracting parties were the Owners and Mr Christopher Grant, and no basis for the grant of leave to appeal against that conclusion. As a consequence, in appeal AP 17/43000, leave to appeal should be refused and the appeal should be dismissed. For the same reasons, in appeal AP 17/42976, Grounds 1, 2 and 3 have not been made out and leave to appeal against the Member's conclusion that the contracting parties were the Owners and the Company should be refused. The remaining issues in AP 17/42976 concerning the Member's findings as to the compensation payable to the Owners are considered below.

Appellants' submissions

The appellants submit that the identity of parties to a contract is a question of construction of the contract and thus a question of law, relying on authorities including New South Wales Land & Housing Corporation v Australian and New Zealand Banking Group Ltd [2015] NSWSC 176. They submit that the Member erred in law in not finding that properly construed the contract was between the Company and the Owners. In support of that submission the appellants rely on the following: 1. the internal contextual indicators that the builder under the contract was the Company: 1. The uncontroverted evidence that Mr Grant does not carry out business in his personal name; 2. The Company's ABN was listed on the front page of the contract; 3. Mr Grant does not have an ABN; 4. The Company's trading name ("Grantbuild") was listed on the front page of the contract and, next to the words "Specification prepared by" on the front page of the contract, the word "Grantbuild" appears, which was a further reference to the Company and not to Mr Grant personally; 1. The surrounding commercial context relevant to the construction of the contract, being that the work to be performed was required to be insured, and could not have been undertaken lawfully by Mr Grant in his personal capacity, and therefore: 1. it would have been manifestly illogical and commercially unsound and contrary to the purpose and objects of the residential building contract to construe the contract as providing that Mr Grant personally was the builder given that he was unable to lawfully carry out the home building work; 2. it would also have been absurd and commercially illogical for the parties to the contract to have been Mr Grant personally and the Owners given that Mr Grant was unable to obtain insurance under the HBCF; 1. the relevant background facts including that before entering into the contract the Company had corresponded with the Owners by letter and email which displayed the Company's trading name and ABN; 2. post contractual communications including: 1. the subsequent contract of insurance entered into by the Company; 2. the issuing by the Company of a number of invoices to the owners to which they did not demur so far as the identity of the builder was concerned; 3. post-contractual communications by email and letter displaying the trading name "Grantbuild" and ABN.
The appellants submit that the Member erred in having regard to what the Owners knew and what they should have known, the subjective knowledge or views of the contracting parties not being relevant to the construction of a contract.

Respondents' submissions

The Owners submit that the Member correctly determined that the contract was between the Owners and Mr Grant, relying on the written submissions provided to the Member at first instance. Those submissions (tab 10 of the bundle) rely on the following evidence: 1. The front page of the contract, which shows, under the heading "Builder: Details as per the Builders licence", "(Grantbuild) Christopher J Grant", and the licence number of Mr Grant, 164394C; 2. Documents forwarded to the Owners before execution of the contract, being Annexures F, G and H to Mr Gillham's statement. Each has the word "Grantbuild" at the top left hand corner of the front page, and none contains a reference to the Company. Each concludes with the words "Yours faithfully, Chris Grant"; 3. The oral evidence of Mr Gillham that at the time of signing the contract he had never heard of the Company and nor had Mr Grant advised him that he traded as a corporate entity.
The Owners submitted that the HBCF Statement of Cover issued in the name of the Company was not issued until 24 days after the contract was entered into, and has no bearing on the identification of the parties at the time the contract was executed. The submissions refer to s7(1) of the HB Act, requiring the contract to be in writing and signed by or on behalf of the parties, and s7(2) which requires that the contract contain the names of the parties including "the name of the holder of the contractor licence" and "the number of the contractor licence". The Owners submit that the invoices provided some five months after the contract are not relevant to the identity of the contracting parties, and there is no evidence as to whose account money was paid by the Owners.
The Appeal Panel provided the parties the opportunity to make further written submissions after the hearing on the significance of the use of the business name "Grantbuild" and any relevant provisions of the business names legislation, now the Business Names Registration Act 2011 (Cth). The Owners provided submissions dated 12 February 2018, submitting: 1. The insertion of "(Grantbuild) Christopher J Grant" followed by Mr Grant's licence number and an ABN should be distinguished from a situation where only a business name has been inserted in the contract; 2. The addition of those words and the signature of Mr Grant without any suggestion that he was signing in his capacity as director of the Company would confirm to a reasonable person in the position of the owners that they were in fact contracting with Mr Grant; 3. The decision of Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 on which the appellant relies is distinguishable, based on: 1. the Owners' inexperience in the building trade and the onus on the builder to comply with the HB Act; 2. the differences in how correspondence was addressed; 1. the Company had not amended the application in HB 16/45839 despite the Owners claiming from 1 December 2016 when they filed HB 16/53656 that they had contracted with Mr Grant.
No submissions have been received from the appellants.

Consideration and findings

The principles applicable to determination of the identity of contracting parties arise from the objective theory of contract. The test is what a reasonable observer would conclude from the objective evidence of the communications that led to the entry into the contract, together with the background facts known to the parties: Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154.
There is debate as to the extent to which it is permissible to have regard to subsequent communications for the purpose of deciding with whom a contract was entered. In Pethybridge at [59] Campbell JA summarised the issues: 59 There was some argument about whether it was permissible to have regard to subsequent communications for the purpose of deciding with whom the contract was entered. The present state of the law throughout Australia on whether and if so when it is possible to use post-contractual conduct as an aid to construction of the contract is not yet settled: see the authorities cited in Cheshire and Fifoot's Law of Contract, 8th Australian edition, p 392-393; Cross on Evidence, 7th Australian edition, para [39290]; Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289 at 318 [109], per Kirby J. The more restrictive view, favoured in this Court, is that subsequent communications cannot be looked to as an aid to construction of a contract, but can be looked to as an aid to deciding whether a contract has been entered into at all: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 163-164, [2001] NSWCA 61 at [25]-[26]; Magill v National Australia Bank Ltd (2001) Aust Contract R 90-131 at 91,609-91,610, [2001] NSWCA 221 at [50]-[53] per Ipp AJA (with whom Meagher and Heydon JJA agreed); Walker v Andrew (2002) 20 ACLC 1476 at 1483-1484, 116 IR 380 at 388, [2002] NSWCA 214 at [39]; Independent Timber Importers v Mercantile Mutual Insurance (2002) 12 ANZ Ins Cas 61-543 at 76,367, [2002] NSWCA 304 at [17]; El-Mir v Risk [2005] NSWCA 215 at [66]. It was argued that, in the present case, even on that more restrictive view, it is permissible to look to the subsequent communications, because the question of whether the contract was entered into with the Appellant, or with Torpoint, is, in substance, no different to a question of whether there was a contract entered into with the Appellant at all. It is not necessary to form a view about the correctness of the argument I have just mentioned. That is because, even if one did look to the subsequent communications, they would not lead to any different conclusion.
In Tomko v Palasty [2007] NSWCA 258 the Court of Appeal acknowledged that the extent to which subsequent conduct of the parties is admissible to determine the existence and nature of contractual arrangements remains open. Basten JA (with whom Mason P agreed) held (at [13]-[14]) that post contractual conduct could constitute admissions by a party. Einstein J (with whom Mason P also agreed) held at [68] that evidence of subsequent communications could constitute an admission by conduct of the existence or non-existence of a subsisting contract, where an issue concerns whether a particular person was a party to that contract.
Subsequent decisions of the Court of Appeal have drawn a distinction between contract wholly in writing, and a contract not wholly in writing: see, for example, County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193; Lym International Pty Ltd v Marcolongo [2011] NSWCA 303. In Suncorp Metway Insurance Ltd v Owners Corporation SP 64487 [2009] NSWCA 223 the court had regard to post contract documents including records of progress payments and correspondence with the local council and various suppliers; however, Sackville AJA (with whom Campbell and Macfarlan JJA agreed) noted at [59] that documentation more or less contemporaneous with any building contract is likely to have greater probative value on the question of the identity of the contracting parties than post-contractual documentation bearing on the question of who actually carried out the work, particularly where the contemporaneous material points strongly in one direction and the later documentation is not unequivocal.
Applying those principles, there was no error of law in the Member having regard to what was recorded on the written contract, the communications and documents in relation to the building work prior to the execution of the contract, and to some of the post-contractual documentation. The Member's reasons do not in terms identify the test as stated in Pethybridge and the other authorities, however when read as a whole they confirm his reliance on the objective circumstances and the communications leading to the contract and the terms of the contract itself. There was, in his approach to the issue, no error of law of the kind identified in John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13], namely applying a wrong principle of law, or having regard to irrelevant considerations.
The Member accepted Mr Gilham's evidence that he was unaware of the existence of the Company at the time of entering into the contract. Had that been the sole basis for the Member's conclusion that it was Mr Grant and not the Company that was the contracting party, that would have been an error, it being settled that the subjective belief of any of the parties cannot be taken into account, in accordance with the objective theory of contract, other than to the extent that that belief has been manifested in words and actions that are known to the other contracting party: Tomko at [60]. However, when the Member's reasons are read as a whole, it is apparent that the Member relied on that finding to reject the proposition that the prior correspondence incorporating references to "Grantbuild" was indicative that the contract was entered into between the Owners and the Company. If the Owners were not aware of the existence of the Company they could not have understood the significance of the name "Grantbuild", and the fact that "Grantbuild" was a trading name of the Company was not a background fact mutually known to the parties.
The Company seeks leave to appeal, on the grounds outlined at paragraph [20] above. The question of whether a particular person is a party to a contract is a matter of mixed fact and law: Lym International per Basten JA at [127]. In considering whether the Member erred in his consideration of the evidence, the agreed bundle establishes that the Member had before him the following evidence: 1. Pre-contractual documents: Mr Gilham's statement annexed two emails in September 2015 between the owners and Deborah Holst containing queries as to aspects of the proposed building work. Those emails, also provided as annexures to Mr Grant's statement, conclude "Kind Regards, Deborah Holst", and cite ABN 22158369914, with phone numbers for Ms Holst and "Chris". Annexures F, G and H are quotations dated 22 September 2015 (for concrete and earthworks), 28 September 2015 (Revision 2, inclusive of earthworks, concreting, carport, email advice and excludes basement bathroom), and 28 September 2015 (Revision 3, inclusive of earthworks, concreting, carport, email advice and basement bathroom). Mr Grant's statement annexed a quotation dated 16 September 2015 which he described as the first quote. All the quotations show the logo "Grantbuild" on the front page, and conclude "Yours faithfully, Chris Grant". None show an ABN, and none contain a reference to the Company either by name or ACN; 2. The written contract: the information inserted in the standard form contract as recorded by the Member is set out at [8] above. The printed contract requires the Builder to provide "details as per the Builder's licence"; and has space for the insertion of "Licence No:" and "ABN No:". As noted above, Mr Grant's contractor licence number was inserted, and the ABN 22158 369 914 was inserted. The address of the Builder is "xxx Lords Place Orange" (which we note is the business address recorded on the contractor licences held by Mr Grant and the Company, and the Company's principal place of business in the ASIC extract). The Specification is identified as "Quotation Revision 3" dated 28 September 2015. The contract is signed by Mr Grant and witnessed by Deborah Holst; 3. Post-contractual communications include the insurance cover, variations and invoices. The HBCF Statement of Cover dated 30 October 2015 is in the name of the Company, specifying that the work is to be carried out by the Company, citing the Company's contractor licence number. The variation requests were sent to the owners by Ms Holst, whose emails included the word "Grantbuild", the ABN, the contractor licence numbers of Mr Grant and the Company, and phone numbers. The variations dated 18 November 2015-15 March 2016 have "Grantbuild" at the top of the page, and the word "Grantbuild at the foot of the page. Some invoices are included in the bundle (19 January 2016, 29 February 2016, 15 March 2016), all of which include at the top right hand corner "Grantbuild", "Christopher J Grant Pty Ltd", and the ABN, bank account details for "Grantbuild", and a payment advice section "To: Christopher J Grant Pty Ltd Attention: Christopher Grant".
The appellants placed considerable weight on the consistent use of the business name "Grantbuild" in the pre-contractual communications. However, as was the case in Pethybridge at [57], that business name is equally consistent with it being either a corporation or a natural person that is the entity carrying on business under that name. Registration of the business name would not of itself establish that it was the corporation that was the contracting party. The Business Names Registration Act 2011 (Cth) has, as one of its objects, "to ensure that if an entity carries on a business under a business name, those who engage or propose to engage with that business can identify the entity and how the entity may be contacted": s16(1)(a). The statement in s17 of that Act of the consequences of registration of a business name does not include any presumption analogous to the former s24 of the Business Names Act 1962 (NSW) to the effect that tender of the extract from the Business Names Register would be prima facie evidence as to the person carrying on business under the business name. As noted in Pethybridge at [55], that prima facie evidence could in any event be overcome by evidence as to who was actually carrying on business under a particular business name.
The appellants submit that the inclusion on the contract documents of "Christopher J Grant" and not the Company name, and Mr Grant's contractor licence number rather than that of the Company, was in error. However, having regard to the requirement to focus on the objective evidence of the communications between the parties, we do not consider that the subjective intention of Mr Grant is relevant. New South Wales Land & Housing Corporation v Australian and New Zealand Banking Group Ltd [2015] NSWSC 176, on which the appellants relied, does not assist in that regard, for two reasons. First, in that case the contractual documents referred to "NSW Land and Housing Department trading as Housing NSW" when there was no such entity in existence (the actual entity being "NSW Land and Housing Corporation"), whereas here there was a "Christopher J Grant" with that particular contractor licence number in existence. Secondly, to the extent that the appellants submit that the Member erred in not rectifying the contract to correct the error (as Kunc J indicated in New South Wales Land & Housing Corporation v Australian and New Zealand Banking Group Ltd he would have done in that case had it been necessary), the appellants have not established that such an application was made to the Member, or that the Member would have had the power to grant such a remedy under the HB Act or the incorporated provisions of the Fair Trading Act 1987.
The appellants rely on the fact that Mr Grant could not in his personal capacity, given the condition on his contractor licence, have undertaken the building work, and submit that it would therefore have been commercially illogical and unsound for Mr Grant to have been a party to the contract or for the contract to be so construed. The appellants relied on Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, in which the High Court at [35]-[36] reaffirmed that the meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean, considered by reference to the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. That decision, and the decision in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37 on which the appellants also relied, confirm that in the absence of a contrary intention in the contract, a commercial contract should be construed so as to avoid it making commercial nonsense or working commercial inconvenience. However, neither decision concerned the threshold issue of the identity of the contracting parties, both being concerned to construe a specific obligation imposed under the relevant contract. We accept that a consequence of finding that it was Mr Grant personally and not the Company that was the contracting party is that there may have been a failure to comply with obligations under the HB Act. However it is not uncommon for building work to be contracted for otherwise than in conformity with the provisions of the HB Act. The HB Act contains provisions which regulate the consequences of such failures to comply with the HB Act.
The pre-contract emails and quotes, none of which refer to the Company either by name or ACN, and all of which are in the name of Mr Grant personally; and the way in which the written contract was completed; all point to Mr Grant personally being the contracting party. To the extent that it was proper to have regard to the post-contractual communications, those are equivocal: while the insurance was in the name of the Company, and the invoices include some references to the Company, the invoices also refer to "Grantbuild", and the variations continued the pattern of simply naming "Grantbuild". The appellants have not established that the Member's conclusion as to the identity of the contracting parties was made in circumstances where the evidence in its totality preponderated so strongly against that conclusion that it could be said to be against the weight of the evidence, or that the Company or Mr Grant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or was against the weight of the evidence: Collins v Urban [2014] NSWCATAP 17 at [77]-[78].

Assessment of damages

In appeal AP 17/42976 the appellants did not press the challenge to the Member's finding that Mr Grant was to pay the Owners the amount of $201.60 for left over tiles, that amount having been conceded in the Scott Schedule. The challenge is to the Member's findings as to compensation payable for the failure to construct the basement bathroom ($1,000), paint ($400), damage to the cypress flooring ($1,444.12), and installation of the lower capacity air conditioner ($3,000).

Appellants' submissions

The appellants submit that the Member erred in law: 1. In not identifying the relevant term or terms of the contract that Mr Grant was said to have breached and not making a finding as to breach before determining what damages to award; 2. In not giving reasons as to how the appellants had breached any term or terms of the contract; 3. In making findings as to damages in the absence of evidence.
The appellants submit that the Owners' evidentiary case on damages was unsatisfactory, and the Member erred in the following respects: 1. the Member found "no direct evidence" to support the Owners' claim for $5,000 for the loss of the basement bathroom, yet awarded $1,000 on the basis that he considered it reasonable to allow a nominal amount; and $1,000 does not represent a nominal sum; 2. the Member observed that the claim of $3,000 for provision of an air conditioner of lower capacity and shorter warranty than that agreed was simply an estimate, but found that the claimed sum was fair and appropriate "based on general knowledge as to the cost of air conditioning"; 3. there was no evidence to ground the finding that rectification of the cypress flooring would cost $1,444.12; and 4. there was no evidence to support the finding that the claim of $400 for the cost of paint was appropriate, or as to the reduction of $300 for the cost of labour.

Respondents' submissions

In their written submissions the Owners rely on the evidence given at the hearing on behalf of the Owners by Mr Gilham, and Mr Dillon of Westinspect Building Consultants.
In oral submissions the Owners submitted that there were admissions made at the hearing by the witnesses called on behalf of the appellants, including by the plumber who gave evidence that he had told Mr Grant that there was insufficient fall in the basement to permit installation of a bathroom. The Owners concede there was no documentary evidence to confirm the amount of $700 for paint. They rely on provisions in the Revision 3 quotation, and on Mr Dillon's report, to support the claims relating to the flooring and the air conditioner, and also on a number of photographs to support the flooring claim.

Consideration and findings

In addressing the Owners' claim for compensation, the Member referred to the calculation of the amount claimed in Schedule A to their written submissions, which lists each item claimed and the amount. The Member found that the figures as to contract sum, paid amount, agreed variations and credits were accepted as accurate and appropriate based on the evidence. We do not understand that this finding is challenged in the appeal.
The challenge is to the Member's findings on the compensation claimed for the loss of basement bathroom, paint, damage to cypress flooring and the air conditioner, on the basis of both the inadequacy of the reasons given, and the making of findings in the absence of evidence.
Section 62(3) of the NCAT Act requires that a written statement of reasons provided in accordance with that section must set out the findings on material questions of fact, referring to the evidence on which those findings were based; the Tribunal's understanding of the applicable law; and the reasoning processes that lead the Tribunal to the conclusions it made.
The Appeal Panel in Collins v Urban [2014] NSWCATAP 17 discussed the circumstances in which reasons are required, and noted that one reason why reasons are required is so that the findings of fact and legal reasoning of the decision maker at first instance are available to an appellate body by way of written reasons, and that not having findings of fact and legal reasoning explicitly available may render effectively worthless any appeal right.
The required content and detail of reasons will vary according to the nature of the jurisdiction which the body in question is exercising and the particular matter the subject of the decision: Wainohu v New South Wales (2011) 243 CLR 181. The fundamental requirement is that the essential ground or grounds upon which the decision rests should be articulated: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247.
While we are conscious of the need to approach consideration of the Member's reasons fairly, and not with an "eye keenly attuned to the perception of error" (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272), in our view the Member's reasons do not set out his reasoning process, either as to the basis on which he was satisfied that the builder was in breach of the contract for any of the specific items claimed, or as to the quantum of the compensation amounts found. In particular, the Member's reasons do not explain: why he found that an amount of $1,000 for "loss of utility" for not having the basement bathroom was appropriate, in circumstances where there had been a credit for the quoted cost of installation; or why he accepted the amounts of $1,444.12 for the flooring or $3,000 for the air conditioner. There is no reference in the reasons to evidence supporting the finding that the cost of paint was $400. In our view, the essential grounds on which the decision rested have not been articulated.
The failure of the Member to provide adequate reasons for the decision is an error of law: Prendergast [2014] NSWCATAP 69 at [13]. Leave to appeal is not required, and the appeal should be allowed. It is not necessary to address the other grounds of challenge to this aspect of the Member's determination in HB 16/53656.

Outcome of the appeal

In appeal AP 17/43000 leave to appeal should be refused and the appeal dismissed.
In appeal AP 17/42976, Grounds 1, 2, and 3 are unsuccessful. Ground 5 should be upheld. The Owners concede there was no evidence to support the Member's in respect of the cost of the paint. In the absence of the sound recording, in circumstances where Mr Gilham gave oral evidence in support of the Owners' claim, we are not able to be satisfied as to whether or not the finding as to loss of utility for the basement bathroom was made in the absence of any evidence. The findings as to the amounts for the flooring and air conditioner appear to have been based on the relevant parts of Mr Dillon's report. However there is no explanation as to why that evidence, and in particular the amount for the air conditioner, which appears to have been based on Mr Dillon's acceptance of what he was told by the Owners, was accepted. That is a matter that may have been apparent from what took place during the hearing, including the oral evidence and cross-examination. Whether or not it could be said that those were findings for which there was no evidence, so as to constitute an error of law (Prendergast at [13]), the reasons do not explain the grounds on which that part of the decision was made, and the appellants have established an error of law on that basis.
Section 81 of the NCAT Act provides for determination of an internal appeal: 81 Determination of internal appeals (1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following: (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.
The Appeal Panel is conscious that the amount in contest in HB 16/53656 is relatively small. The appellants concede liability to pay $201.60 for the excess tiles; and the amount of $468.31, being the amount owed after allowing for variations and payments under the contract, was not in dispute on the appeal. That means that amount remaining in dispute is $5,844.12. The parties' representatives readily conceded at the appeal hearing that the legal costs already exceed the amounts in dispute.
It would be preferable, if possible, for the Appeal Panel to proceed in accordance with s81(2) of the NCAT Act rather than remit HB 16/53656 for rehearing in the Division. The parties have provided all the documentary evidence that was before the Member at first instance. In his written submissions provided after the hearing the Owners' representative includes statements said to have been part of the oral evidence. However, there is no sound recording and we are not in a position to know what oral evidence was given, including what concessions may have been made in the course of that evidence. In that circumstance, while it would be preferable for the Appeal Panel to deal with the remaining issues in accordance with s81(2) of the NCAT Act, HB 16/53636 should be remitted to the Division for re-hearing and determination of the Owners' claim for damages.
We note that the parties were granted leave to be legally represented on the appeal on the express condition that neither party may seek costs of the appeal. Accordingly we do not need to consider any question concerning the costs of the appeal.
Mr Boncardo, who appeared for the appellants, submitted that the proceedings should not be remitted to the Member who heard the matter previously. Mr Boncardo submitted that the Member had made findings of credit which would give rise to perceptions of prejudgment. Mr Casey, who appeared for the Owners, submitted that requiring the matter to be heard by a different member would further increase the costs which are already out of proportion to the amount in issue.
We note what an Appeal Panel of this Tribunal said in Housing NSW v Hamilton [2015] NSWCATAP 136 at [44]: 44 In our opinion, ordinarily, where an Appeal Panel has decided to remit an application to the Tribunal for reconsideration, the decision about the constitution of the Tribunal should be left to the appropriate Divisional Head who is best placed to take into account listing practicalities, including member availability. A decision to direct that a matter be reconsidered by a differently constituted Tribunal on the basis of a foreshadowed recusal application is not one that should be lightly made.
We will not make the direction sought by the appellants.
The orders of the Appeal Panel are:
AP 17/43000 1. Leave to appeal is refused. 2. The appeal is dismissed.
AP 17/42976 1. The appeal is allowed. 2. Set aside order 2 made on 14 September 2017. 3. Remit the proceedings to the Consumer and Commercial Division for rehearing and determination consistently with these reasons.

ADDENDUM - inserted 24 May 2015 After publication of these reasons the appellants' legal representatives advised the Appeal Panel that written submissions had been provided in accordance with the directions referred to in paragraph [35], and requested the opportunity to address on paragraph [36]. A copy of the submissions was provided. Those submissions had been sent to the Divisional registry, identified by the Divisional matter numbers, and consequently were not received by the Appeals Unit. The submissions refer to the Business Names Registration Act 2011 (Cth) and, relying on the reasoning of Campbell JA in Pethybridge, submit: that, properly construed, the person conducting business under the business name "Grantbuild" was the builder under the contract and that person was the corporation; and that the Member's finding that it was Mr Grant was demonstrably wrong and contrary to the weight of evidence. The Appeal Panel informed the parties' representatives that having read the submissions, we were of the view that there would not have been a different result had we had the submissions, and it did not appear to be necessary to determine whether there would be power to re-open our decision. The parties concurred with our proposal to publish an addendum to our reasons, to record: that the submissions that were provided but not received until after publication of the reasons have been reviewed; and our conclusion that there would not have been a different result had those reasons been available.

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

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

Amendments 24 May 2018 - Addendum inserted at end of Decision. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 May 2018

Business Names Act 1962(NSW)

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