Grbevska & Grbevski v Zac Homes Pty Ltd

CEO of Customs v AMI Toyota Ltd [2000] FCA 1343; (2000) 102 FCR 578 (Full Fed Ct), [2000] FCA 1343

Collins v Urban [2014] NSWCATAP 17

Ferella & Anor v Chief Commissioner of State Revenue [2014] NSWCA 378

FVA v Commissioner for Police, NSW Police Force [2024] NSWCATAP 127

Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179; [1995] HCA 58

Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92

Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22

Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390

Kudrynski v Orange City Council [2024] NSWCA 33

Naylor Parramatta Pty Ltd atf Chan & Naylor Paramatta Trust [2020] NSWCA 62

Orr v Cobar Management Pty Limited (2020) 103 NSWLR 36; [2020] NSWCCA 220

Orr v Hunter Quarries Pty Ltd [2022] NSWCCA 39

Pholi v Wearne [2014] NSWCATAP 78

Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69

Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39

Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223

Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204

1. These reasons relate to an appeal made by Paca Grbevska and Robert Grbevski (the owners) against a decision made by the Tribunal on 14 February 2025 (the decision) in proceedings between the owners and their builder, Zac Homes Pty Ltd (the builder) which were heard by the Tribunal on 4 November 2024. There were two claims before the Tribunal.
2. The first was a claim for damages by the owner against the builder for consequential losses arising from delays in the construction of a duplex, on the owners' land, under a contract between the parties dated 27 August 2021. Following an amendment to their claim, made with leave of the Tribunal at the hearing, the owners claimed damages of $405,902.72.
3. The builder's application sought $132,961.85 said to be payments due, but unpaid, under the contract being $5780.00 with respect to variation 1 (for the costs of removing spoil) and the "Total Fix out Progress Claim" made 14 May 2025.
4. It is important to understand that at the time of the hearing (and now) the contract remained on foot with neither party having taken action to terminate it. The works are yet to reach practical completion.
5. On the owners' application, the Tribunal found, at [82], that work under the contract commenced on 17 October 2022 with the result that it was required to be completed under the contract on 11 September 2023. The Tribunal continued, at [83] of its decision:

"83 As the undisputed facts at the commencement of the hearing were that by 4 November 2024, the Contract was still on foot, the Builder was still in possession of the site and practical completion was not yet achieved, I find that the Builder has failed to complete the works in accordance with Item 6 of Schedule 1 of the Contract and is in breach of statutory warranty of s 18 B(1)(d) by failing to reach practical completion by 11 September 2023."

1. The Tribunal also found that the builder's purported suspension of the works on 3 June 2024 due to alleged non-payment by the owners was not valid, at [80].
2. These key finding by the Tribunal have not been challenged on appeal and are supported by the owners. The builder has not sought to appeal them and is bound by them.
3. The Tribunal went on to consider the various claims for damages for delay advanced by the owners which were summarised at [84]:

(1) Loss of rental income for the original house which was demolished being a loss of rent for 52 weeks from 11 May 2022 to 30 September 2022 at $750 per week (which was the amount of the weekly rent paid by the outgoing tenants) = $39,000

(2) Loss of rental income for the two duplexes to be constructed under the Contract estimated at $1200 each per week (total of $2400 per week) for a period of 46 weeks commencing 26 August 2023 = $110,400

(3) Monthly bank interest for the period 26 August 2023 to 21 August 2024 totalling $164,383.44

(4) Monthly bank interest for the period August 2024 to 31 January 2025 totalling $82,191.72

(5) Cost of mental health professional $4305

(6) Other costs such as legal fees, expert fees and filing fee.

1. The Tribunal went on to find that none of the losses claimed by the owners arose naturally from the delay, but that they were losses which the owners were bound to establish were foreseeable and would have been within the reasonable contemplation of the parties at the time they made the contract, in order for them to be recoverable by the owners under the second limb of the rule in Hadley v Baxendale (1854) 9 Exch 341.
2. The Tribunal then found, that on the evidence before it, each of those claims - excluding costs - were not losses within the reasonable contemplation of the parties at the time they entered the contract. This resulted in the owners not recovering any of the damages they claimed for delay, with their claim being dismissed.
3. The owners are appealing the Tribunal's assessment of damages and the resultant dismissal of their application.
4. The builders claim for the final fix out payment was dismissed because the Tribunal was not satisfied that the stage of construction had been completed, as required by the contract. The owners support this conclusion.
5. The claim for the variation relating to the costs of removal of spoil from the building site was the subject of a factual contest between the parties. The Tribunal accepted the builder's evidence in that regard, and required the owners to pay the builder $5,780.00. The owners are appealing that conclusion.
6. Following that decision the parties made further submissions to the Tribunal, which the Tribunal's orders show were intended to be restricted to costs. After considering these submissions, on 9 May 2025 the Tribunal dispensed with a hearing of the costs application and ordered the builder to pay the owners their expert's costs of $2,500 (the costs decision).
7. In the costs decision the Tribunal noted, at [12]:

"In their submissions on costs the Homeowners set out extensive submissions reiterating the merits of their application which was determined by the orders dated 14 February 2025. They also press for costs associated with ongoing delays. This is not the purpose of the costs application. ... A costs application is not a further application for compensation arising from the substantive dispute between the parties."

1. The owner's notice of appeal was filed on 16 May 2025. This is outside the time required by rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2013 (NSW) (the NCAT Rules), which applies in this case and requires that the appeal be lodged "within 28 days from the day on which the appellant was notified of the decision to be appealed or given reasons for the decision (whichever is the later)." The owners acknowledge that they first became aware of the decision on 14 February 2025 and of the costs decision on 9 May 2025.
2. The appeal, insofar as it relates to the costs decision, is therefore within time. Insofar as it relates to the decision, the appeal was made some two months late.
3. In order to pursue their appeal against the decision the owners therefore require and seek an extension of time.

1. The appeal was heard on 8 September 2025 by AVL. The participation of the builder's representative Mr Zaccazan was disrupted by his failure to comply with the Tribunal's instructions for participation by AVL. Using what appears to have been his mobile phone, he participated in the hearing from on board a commercial airliner and from a gate lounge. This resulted in significant noise disturbance which disrupted the hearing at times. He nonetheless listened in throughout and made submissions.

The principles applicable to applications to extend time

(1) The Tribunal may, of its own motion or on an application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation.

(2) Such an application may be made even though the relevant period of time has expired.

1. The principles to be applied by the Appeal Panel in applications for an extension of time in which to appeal were considered in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 (Jackson). The Appeal Panel relevantly said that in an application for an extension of time to appeal the Appeal Panel will be required to consider, at [22] -

The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include:

(1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant - Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38];

(2) The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision - Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success - Jackamarra at [7];

(3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider:

(a) The length of the delay;

(b) The reason for the delay;

(c) The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and

(d) The extent of any prejudice suffered by the respondent (to the appeal),

- Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and

(4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59].

1. Jackson has been followed in many cases since it was decided.

1. The delay in the owners appealing the decision is a considerable one. The owners' explanation for the delay is that when they received the decision, they did not understand that it was dismissing their claim in its totality, but thought they were being given an opportunity to provide further updated details of their claim when seeking costs. This they did in their submissions to the Tribunal of 28 February 2025. It resulted in the Tribunal, in the costs decision, saying that they had pressed claims that did not belong in costs submissions.
2. The owners say, it was only when they received the costs decision, that they realised the full import of the decision - being dismissed - and of both the decision and the costs decision together. They filed their notice of appeal with alacrity, within days from receiving the costs decision.
3. The owner's explanation for the delay in appealing against the decision requires one to accept that they misunderstood the decision in a fundamental way. Having had the opportunity to see and assess them in the course of argument before us, it is clear that they have little or no understanding of the legal process. It is foreign to them. They displayed little insight into the reasoning underlying the decision. They also have significant difficulty in acknowledging legitimate views other than their own. While it is difficult to understand how they misconstrued the decision as they did, we accept that they genuinely did not understand its full import until they received the costs decision.

1. Mr Zaccarzan, who represented to builder, did not identify any prejudice to the builder as result of the owners delay in lodging the appeal. We accept that is the case.

1. As is explained in detail below, we consider that owners have a fairly arguable case with respect to whether they may have suffered a substantial miscarriage of justice as a result of the Tribunal making a decision against the weight of evidence, concerning their claim for damages resulting from bank interest and charges incurred during the periods of delay. Their prospects of success with respect to the balance of the appeal is poor.

1. As a result of that consideration, we shall extend time for the appeal so that the notice of appeal filed on 16 May 2025 and amended on 27 June 2025 was made within time.

1. Section 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) states:

"Any internal appeal may be made":

(a) "in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel", and

(b) "in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds".

1. Clause 12 of Schedule 4 to the NCAT Act states with respect to decisions made in the Consumer and Commercial Division - as is the case here - that:

An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:

(a) the decision of the Tribunal under appeal was not fair and equitable, or

(b) the decision of the Tribunal under appeal was against the weight of evidence, or

(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. A question of law may include, not only an error in ascertaining the legal principle or in applying it to the facts of the case, but also in taking into account an irrelevant consideration or not having regard to a relevant consideration. This includes not making a finding on a central issue that is required to be made out in order to claim an entitlement to relief: see CEO of Customs v AMI Toyota Ltd [2000] FCA 1343; (2000) 102 FCR 578 (Full Fed Ct), [2000] FCA 1343 at [45], applying the statement of principle in Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179; [1995] HCA 58.
2. An appellant to an internal appeal brought under s 80(2)(b) of the NCAT Act must identify with precision a question of law said to be raised by the appeal: Ferella & Anor v Chief Commissioner of State Revenue [2014] NSWCA 378 at [6], [22]; Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 at [13].
3. Whether a question is one of law must be approached as a matter of substance: Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92 at [62](6), [94], [203]; Kudrynski v Orange City Council [2024] NSWCA 33 at [50]. In Orr v Cobar Management Pty Limited (2020) 103 NSWLR 36; [2020] NSWCCA 220 (Cobar) at [109], Bathurst CJ and Bell P (as the Chief Justice then was) said, with Garling, Johnson and Lonergan JJ agreeing:

"Those questions of law should be, in our opinion, what are sometimes described as 'pure questions of law.' They should not draw the Court of Criminal Appeal into questions of fact. Moreover, they must be questions whose character as a question of law can be recognised on the face of the question, and not depend upon the answer given to the question. This does not include a question which may ultimately disclose an error of law depending on an analysis of the facts but where this cannot be known without scrutiny of the facts."

1. In Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 at [24]- [40], the Appeal Panel set out the principles concerning questions of law within s 80 of the NCAT Act. An appellant is required to identify a pure question of law which then becomes the subject matter of the appeal: Wilson v Chan & Naylor Parramatta Pty Ltd atf Chan & Naylor Paramatta Trust [2020] NSWCA 62 at [4] and [11]; Orr v Hunter Quarries Pty Ltd [2022] NSWCCA 39 at [12], [14]; Cobar.
2. Examples of pure questions of law include:

(1) Denial of procedural fairness (Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13](4)) (Prendergast); FVA v Commissioner for Police, NSW Police Force [2024] NSWCATAP 127 at [83]- [84]).

(2) A constructive failure to exercise jurisdiction, which includes the failure to consider and address a material issue raised by a party in the proceedings that is within the jurisdiction of the Tribunal to determine (Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165 at [8]- [12] and [413]). This category of error also includes a failure by the Tribunal to engage with a clearly articulated argument put to it.

(3) The construction of a statute or contract arrived at by the Tribunal at first instance was wrong in some identified way.

(4) Acting on the application of the wrong legal principle which materially affected the outcome (Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734 at [38]- [53]).

(5) No evidence to support a factual finding (Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [91]).

(6) A failure to provide adequate reasons for decision.

1. The circumstances in which the Appeal Panel may grant leave to appeal from a decision made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act:

An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:

(a) the decision of the Tribunal under appeal was not fair and equitable, or

(b) the decision of the Tribunal under appeal was against the weight of evidence, or

(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. The principles governing an application for leave to appeal under the NCAT Act are well established and repeated in many decisions of the Appeal Panel, often quoting Collins v Urban [2014] NSWCATAP 17 (Collins v Urban). The Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice because:

(1) the decision of the Tribunal under appeal was not fair and equitable; or

(2) the decision of the Tribunal under appeal was against the weight of evidence; or

(3) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. In Collins v Urban, the Appeal Panel stated at [76], that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where:

"... there was a 'significant possibility' or a 'chance which was fairly open' that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance."

1. Even if an appellant from a decision of the Consumer and Commercial Division requiring leave to appeal has satisfied the requirements of cl 12(1) of Sch 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act. The appellant must demonstrate something more than the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32].
2. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve:

(1) Issues of principles;

(2) Questions of public importance or matters of administration or policy which might have general application;

(3) An injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;

(4) A factual error that was unreasonably arrived at and clearly mistaken; or

(5) The Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.

1. In respect of a self-represented, non-legally trained appellant, grounds of appeal should be considered generally (subject to procedural fairness considerations) to determine whether a question of law has been raised: Prendergast at [12]; Cominos v Di Rico [2016] NSWCATAP 5 at [13].
2. An appeal is not an opportunity for a losing party to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].

1. Having reviewed the owners amended grounds of appeal we think they raise one question of law only. We have characterised that as whether the Tribunal failed to exercise jurisdiction by not determining a live issue before it, namely the owners request for orders requiring the builder to complete construction of the duplexes in accordance with the contract?
2. Otherwise, with respect to the Tribunal's assessment of damages we understand the appeal to be seeking leave to appeal on the grounds that the owners have suffered a substantial miscarriage of justice because the Tribunal's conclusion with respect to their various damages claims were against the weight of evidence before the Tribunal and not fair and equitable.
3. Finally, the owners seek leave to appeal against the Tribunal's conclusions with respect to the builder's claim for Variation 1, which required them to pay the builder $5780.00 on the same grounds.

1. In considering the appeal we had the following material before us.

(1) From the owners:

(a) Original notice of appeal filed 16 May 2025 with attached bundle (not numbered).

(b) Owners bundle of documents (tabbed 1 to 36) filed on 6 June 2025.

(c) Amended notice of appeal filed 27 June 2025 with attachments.

(d) Two folders of documents including submission being-

(i) Volume 1, with 58 Tabs; and

(ii) Volume 2 with 17 Tabs (including a transcript of the hearing below).

(e) Submissions in reply dated 18 July 2025.

(2) From the builder:

(a) Reply to the appeal filed 6 June 2025.

(b) Bundle of documents filed 23 July 2025 tabbed A to F including submissions.

1. Among the documents relied on by the owners were documents created after the Tribunal hearing, which were said to prove their ongoing and continuing losses as a result of the duplexes not being completed. We did not allow that material in as evidence in the appeal, as those losses were not before the member below.

1. In the decision, at [13], the Tribunal wrote -

"13 The Homeowners confirmed they sought damages flowing from the Builder's breach of the Contract, to complete the works to practical completion within the agreed contract period of 44 weeks. The Homeowners confirmed they did not seek any work order just a money order."

1. The owners disputed this, saying that they had always sought an order that the builder complete the works as required by the contract. They pointed to their points of claim dated 2 August 2024 which included the following -

"Seeking Order: Payment of damages for delays in building work, loss of rental from existing house (...), loss of interest incurred past the 44 week build period (..., clause 6 Build Period HIA Contract). Liquidation damages (sic) amount is unreasonably low at $10 per day, it should be $2400 per week (rental loss). Seeking order for a fixed term completion date by end of October 2024 due to financial hardship and potential loss of current building loan funds. Order for Zac Home to place all available trades on job. Order to include completion inclusive of Colourbond fence at no extra costs, retaining walls as agreed and OC's all submitted and provided..." (our underlining)

1. The owners relied on the underlined portions of the paragraph to demonstrate they were asking for the building work to be completed. This plainly was not the Tribunal's member's understanding.
2. We have reviewed the transcript of the hearing prepared by the owners and confirmed its relative accuracy with the audio recording of the hearing. The transcript bears page numbers only; no line numbers. When the transcript refers to the "Applicant Grbevska" it is referring to the female owner.
3. Early in the hearing the Tribunal spoke to the parties about the prospects of settlement of their mutual claims. The prospects not being good, the Member then turned to confirming the materials before her and seeking clarity from the parties about the orders they were seeking. This led to the Tribunal giving the owners leave to amend their claim to include their loss of interest claimed up till the date of hearing. The email setting out details of that amendment made no mention of an order requiring the works to be completed under the contract.
4. At the bottom of p 5 of the transcript the following interchange occurred (at 0:17:52 of the audio) -

Member: ... Now, before we start the evidence study, the claim from the homeowners is for the money order of $405,972. ls that correct?

Applicant Grbevska: Yes. Nothing more, nothing less.

Applicant Grbevska: I'm sorry, that's just approximate. I mean, I was just being really fair.

Member: Okay. But you've got the breakdown.

Applicant Grbevska: Yes, I have. And I've provided proof.

Member: Yes, I've seen that in your documents. Are you asking for a work order?

Applicant Grbevska: What's the work order?

Member: Work order is for the builder to return to do the work.

Applicant Grbevska: Well, Mr Zaccazan did. He did commend some work. We were overseas and our neighbour did tell us that after I've submitted the documents to NCAT, I believe it was made in the claim to forward.

Member: Are you asking the tribunal to make an order for the builder to do any work or are you only asking for a order? What are you asking for?

Applicant Grbevska: Well, don't know. l I've asked Mr Zaccazan whether he wants to finish this project. He has told us that he does want to complete it. He keeps asking us for money, and that means progress payment six of seven, so we are near the end. But I don't think Mr Zaccazan realises that he actually owes us money because we're way ahead.

Member: Okay. So because one of the problems which I need to highlight to you is that this contract doesn't look like its been terminated by anybody.

Applicant Grbevska: It's not, hasn't been?

Member: You've got a contract.

Applicant Grbevska: Yes.

Member: And it's got in there a whole set of provisions of how you go about doing the contract, and your remedies usually flow from how that contract is terminated. But the contract things, I know I did see something. It's still on foot?

Respondent Zaccazan: It's still on foot.

Applicant Grbevska: Yes, that's correct. We have not ended it. Neither has Mr Zaccazan, even though he has threatened multiple times to terminate the contract. He has also told us multiple times that the contract is null and void, so it doesn't exist.

Member: But in terms of the proceedings today, are both parties saying that the contract is still on foot?

Applicant Grbevska: Yes.

Respondent Zaccazan: Correct.

Member: And you are, okay. But practical completion hasn't been reached?

Applicant Grbevska: No. And we have not been provided

Member: Okay, but as of today it's not reached, And who's got possession of the site?

Respondent Zaccazan: Zac Homes.

Member: Okay, because the costs, you're seeking compensation in terms of funding costs, but you're also seeking completion costs? Okay?

Applicant Grbevska: Sorry, I wasn't sure how, I've got a statement that I was going to read out, like summarising everything so that I remember. I know I've got a statement there, but I was just in the mind frame that I was going to read it all out. We do want Mr Zaccazan to complete it. It was only on the 9th of October a few weeks back that he actually said that we might be at PCI mid-November and completion in January of 2025. I did send several emails prior to that to Mr Zaccazan demanding that they complete the project by the 31st of October because our loan has ended, And as of this month, we're not able to make those loan repayments ...

1. Then, on page 7, the Member again confirmed that the contract remained on foot and that practical completion has not been reached. At 0:22:30 on the audio she cautioned that -

... Look, there are lots of legal issues. I don't know if either party has had legal advice, but I know you have a practical problem that you've got a house and things have gone... I don't want to use the word wrong, but things have broken down a little bit between the parties. I think it's probably a fair assessment. But the legal remedies that flow from when the contract's still on foot are very limited because the Contract... It's when the contract's terminated and the parties take those steps under the contract to finish it that you can make claims for completion costs and those sorts of things because losses and things haven't crystallised yet because it's ongoing. And things like incomplete works or might still be done by the builder. Any defects, there is a defect liability period after practical completion where small things get attended to. So it might... It could be premature to have these proceedings at this point.

1. Then, shortly thereafter, the Member again asked:

Member: ... . So the orders that are being sought by the homeowners are just the payment of $405,000. You're not seeking a specific work order, or are you?

Applicant Grbevska: Well, if we can agree for them to complete it, because Mr Zaccazan has advised us that the contract is current, that he does want to complete this project. If he says that he doesn't want to, then obviously we need those funds to get someone else to complete it.

Responded Zaccazan: Technically, the job's on hold because there's a breach notice.

Member: Well, you suspended it by notice a while ago but then you've gone back on site. So have you unsuspended it?

Responded Zaccazan: We are continuing the works but there's still money owed.

1. Thereafter the hearing proceeded on that basis. At no time did either owner ask the Tribunal to make an order requiring the builder to complete the works.
2. The Tribunal Member repeatedly alluded to the difficulty created by the fact that the contract was still on foot, and the need for both parties to obtain proper legal advice. At p 15 of the transcript reference is made to a quantity surveyor's report obtained by the owners which estimated the values of the uncompleted work at $315,400. The following interchange occurred:

Member: You've asked ... why have you done a quantity survey? Your $315,000 talks about the value of the work that you say hasn't been completed. Is that right?

Applicant Grbevska: That's correct. What I'm referencing is that according to the expert he stated that there was $315,400 of building works uncompleted. so my question was has that been completed?

Member: Okay so you're not asking for a money order for $315,000?

Applicant Grbevska: No. That's how much work is outstanding. I'm sorry you asked me whether that's in addition to...

Member: Normally you would get somebody to value the work that hasn't been completed if you were claiming completion costs against them. That's not what you're claiming. You're claiming...

Applicant Grbevska: I'm claiming my own personal losses.

1. Again, no mention was made by the owners that they were seeking an order for the works to be completed. That was the case throughout the hearing, where both parties adopted the position that the contract was on foot and the work was ongoing.
2. In those circumstances we do not accept that the owners sought an order for the builder to complete the works under the contract at the hearing. While one may read their initial points of claim as seeking an order to that effect, no such order was sought at the hearing or in their submissions.
3. There is therefore, no error in the Tribunal not dealing with the issue of a work order not being made.

1. The owners claimed loss of rental on both duplexes during the delay period beyond the date for practical completion fixed in the contract. The Tribunal referred to the rule in Hadley v Baxendale (1854) 9 Exch 341 and said, at [90] -

"90 The loss claimed must be of a type that (1) arises naturally, which is in the usual course of things, from the breach; or (2) is of a type that may have reasonably have been supposed to be in the contemplation of both parties at the time they made the contract as the probable result of the breach. This is often referred to as the 2 [second] limb of the principle of Hadley v Baxendale."

"96 I do not consider that loss of rent for the duplexes arise naturally from the Builder's breach and therefore this claim is not within the first limb of Hadley v Baxendale. The Homeowners must prove on the balance of probabilities that the claim falls within the second limb, by establishing that the Builder knew or reasonably should have known at the time the Contract was entered into on about 27 August 2021 that the dwellings were being constructed for the purpose of rental income".

"97 I have considered the Homeowners' evidence presented in their documents, their own witness statements and their oral evidence given at the hearing and their cross examination of Mr Zaccazan".

"98 In terms of the loss of rental of the 2 duplexes, the Homeowners may have intended for both duplexes to be rented at market rentals once completed. However, in order to be a loss within the second limb of Hadley v Baxendale, the Homeowners must be able to establish on the evidence at the requisite standard of proof that the Builder knew or should have reasonably known that the purpose of the construction was to rent out the properties as an investment".

"99 In rejecting a claim for compensation for loss of rental, the Appeal Panel held in Bui v DB Homes Australia Pty Ltd [2017] NSWCATAP 218 at [28]":

"The appellants did not establish, at first instance, that this type of loss was foreseen by the parties. In the words of Hadley v Baxendale, this damage was not "in the contemplation of both parties" (at 151). It cannot be assumed that the mere fact someone is building a granny flat is for the purposes of rental".

"100 Similarly, just because the Homeowners are building a pair of duplexes it does not necessarily establish that they were was for the purposes of rental properties".

"101 The Tribunal is not satisfied on the balance of probabilities that the Builder knew or should reasonably have known at the time of entering the Contract that the residential premises were being constructed for the purpose of renting".

"102 It follows that I find that there is a lack of evidence before the Tribunal to establish on the balance of probabilities that a loss of rental for the duplexes was reasonably in the contemplation of both parties at the time the Contract was entered into which was on 27 August 2021. Accordingly, the Tribunal dismisses this part of the claim".

1. The owners say that this conclusion was both unfair and inequitable and contrary to the weight of evidence. They claim to have suffered a substantial miscarriage of justice as a result.
2. During the appeal hearing we repeatedly asked the owners to point us towards the evidence, that was before the Tribunal at the time of the hearing, which demonstrated that the builder was aware, or ought to have been aware, that they intended to rent out the duplexes when complete. Despite making numerous assertions supportive of their position, they could not point to any evidence before the Tribunal which demonstrated that the potential for them to suffer such losses was within the reasonable contemplation of the builder. On our review of the evidence that was before the Tribunal, we have been unable to find any evidence which put the builder on notice. The reality is that, perhaps as a result of ignorance or the lack of legal advice, the owners evidence did not address these issues in their evidence.
3. As a consequence, we think that the Tribunal's conclusion that there was insufficient evidence to demonstrate that loss of rent was within the reasonable contemplation of the parties was open to it and consistent with the weight of the evidence. The conclusion is fair and equitable.
4. Therefore, leave to appeal against this aspect of the Tribunal's decision is refused.

1. The owners seek leave to appeal against the decision of the Tribunal dismissing their claim for loss of rental on the house which was on the site before construction. The Tribunal found, at [79] that the building period under the contract commenced on 17 October 2022. The contract was signed on 27 August 2021.
2. There was evidence before the Tribunal that the house on the site had been partially demolished by the builder in March 2022.
3. With respect to this claim the Tribunal wrote:

104 In terms of the loss of rental of the original house, as the evidence of the Homeowners was that the contract for sale for the purchase of the property was settled with vacant possession, and the tenant had vacated by the time of settlement, the loss of rental of this property could not have been a loss in the contemplation of either party at the time the Contract was signed as no tenant was living at the property at the date of the Contract. Nor was there any evidence that it was proposed to find a new tenant.

105 This claim for compensation is refused on the basis that it does not fall within the second limb of Hadley v Baxendale.

1. In order to obtain leave to appeal the owners must demonstrate that this conclusion was either unfair and inequitable or contrary to the weight of evidence and that they have suffered a substantial miscarriage of justice as a result.
2. The owners could not point to any evidence before the Tribunal which would have alerted the builder to there being a real possibility that they intended to rent out the original house, noting that it had to be demolished before the works began. Indeed, there is no evidence that this was the owners' intention at the time of the contract.
3. While the owners did point to there being evidence before the Tribunal concerning the early demolition, which the Tribunal did not refer to, that evidence (if accepted) would not have materially affected the Tribunal's conclusion that loss of rent on the original house was not within the reasonable contemplation of the parties. The Tribunal's failure to refer to that evidence was immaterial.
4. Leave to appeal against this aspect of the Tribunal's decision is refused.

Bank interests and charges incurred during periods of delay

1. With respect to this claim the Tribunal wrote -

106 This claim is for all interest paid by the Homeowners in the period from 26 August 2023 to the end of January 2025. This loss does not arise naturally from the Builder's breach and would need to fall within the second limb of Hadley v Baxendale to succeed. However, the Tribunal is not satisfied that this is a loss that is attributable to a breach by the Builder.

107 The Homeowners rely on the evidence of the interest figures and calculation in their "Damages Claim" at Tab 4 and a small number of documents in that Tab to demonstrate they have loan facilities with monthly interest payments.

108 In the document titled Damages Claim, they claim all interest paid in the period 26 August 2023 to 21 August 2024 which totals $161,383.44. In the amended claim dated 3 November 2024 they seek additional interest charges at the total monthly rate of $13,698.62 for the period August 2024 - January 2025 which is an additional $82,191.72.

109 The Homeowners have not put into evidence copies of the terms and conditions of the loan facilities. However, it can be safe to assume that the loan obligations were that the Homeowners were liable to pay interest every month for the term of the loan. This is what their monthly obligation would have been irrespective of whether the duplexes were constructed in accordance with the contracted building period or not. There was no evidence that any part of the interest amounts included a default margin interest rate because construction had not taken place in accordance with the building period. Even if there was such an interest charge, it would have needed to be in the reasonable contemplation of the Builder at the time the contract was signed to fall within the second limb of Hadley v Baxendale.

1. The owners say that the dismissal of their interest claim was both unfair and inequitable and contrary to the weight of evidence. They claim to have suffered a substantial miscarriage of justice as a result.
2. We think that there is merit to the owners' submissions in this regard.
3. A reading of the contract between the parties reveals that the owners disclosed the source for all funds for construction was to be borrowed from a lender.
4. In an email dated 1 August 2020 the female owner advised the builder's sales representative that:

"Just wanted to get back to you. We are hoping to get pre-approval by possibly the end of the week. We revisited the numbers and they look good so hence heading towards having pre-approval soon".

...

1. In his statement of 2 August 2024, the male owner wrote:

"...We told [the sales representative] that we need to stay within our budget and our preapproved loan".

1. The female owner's statement said the same thing.
2. The Tribunal made no reference to any of this evidence. It was relevant to the likelihood that the owners might suffer damage, by having to pay interest and bank charges as a result of delays in construction. The issue was whether this was within the reasonable contemplation of the parties at the time they entered into the contract.
3. The Tribunal was correct in finding that the owners would have been obliged to make the mortgage payments irrespective of whether or not the construction was delayed. While it was delayed, however, they were deprived of the benefits of occupation and ownership: a real loss to them. Whether this be not having a place to live or to rent out, they would nonetheless be suffering a loss resulting from the builder's breach, for which they should entitled to damages.
4. One way of addressing that loss is to calculate the interest charges they have paid during the delays caused by the builder and recompense the owners for that loss.
5. In this regard, we think the Tribunal's conclusions not fair and equitable as they fail to acknowledge the real loss suffered by the owners and deprived them of any compensation for that loss, on the basis that they were bound to make the mortgage payments anyway. Having to make such payments during periods of delay without enjoying the benefits of a completed construction is a real and significant detriment.
6. If greater weight were given to the evidence, or, indeed, to the terms of the contract itself, there is a real and substantial chance that the Tribunal would have found in favour of the owners on their claim for interest.
7. We think the Tribunal's conclusions with respect to claims for loss of interest are mistaken. As a result, we will grant leave to appeal against the decision to dismiss their claim for damages for the interest and related bank charges they have incurred and will allow their appeal in that regard.

1. The owners claimed the costs of mental health fees incurred as a result of the stress and difficulty associated with their dealing with the builder relating to the construction contract.
2. The Tribunal dismissed their claim writing -

"111 In terms of the mental health professional fee, there is no evidence that this was a loss in the contemplation of both parties at the time the Contract was signed, nor is there sufficient evidence to establish on the balance of probabilities that this loss was a result of the breach of the Builder."

1. We agree with that analysis by the Tribunal.
2. When discussing this claim during the hearing the following interchange occurred (Transcript p 19) -

"Member: Usually you can't claim non-economic loss. I know you've paid for it, but it's a physical, mental injury".

"Member: That's fine, but I just wanted to put it on the record".

"Member: You've got bills?"

"Applicant Grbevska: Yes, I have. I've attached the bills there on that same tab".

"Member: Okay, yes".

"Application Grbevska: And by the way, that is ongoing as well".

"Member: Yep. Have they provided a report or just an invoice"?

"Applicant Grbevska: No, no report. And just to be honest, I don't really want to share something like that: It's very personal".

"Member: Okay".

1. The owners did not press their claim for mental health fees before the Tribunal. To now do so, before the Appeal Panel, is a waste of everyone's time and a breach of the owners duties under s 36 of the NCAT Act to co-operate with the Tribunal in giving effect to the guiding principle of the NCAT Act, of facilitating " the just, quick and cheap resolution of the real issues in the proceedings."
2. Leave to appeal with respect to mental health professional fees is refused.

Leave to appeal the order that the owners pay variation 1

1. Builder's variation 1 (BV01) was issued by the builder to the owners on about 7 November 2022 for $5780.00 for removal of additional spoil from the site.
2. The owners signed this variation but have refused to pay for it. They claim that they signed under duress, being threats by the builder to suspend the works.
3. In the decision the Tribunal wrote:

40 The Homeowners have consistently contested liability for BV01 on the basis that no evidence has been provided by the Builder that the spoil was removed to prove the amount claimed, despite their repeated requests for that evidence. The Homeowners contended that they signed BV01 under duress.

41 Additional spoil was located on site by the Builder, but the Homeowners arranged for it to be removed at their cost.

1. The builder held a different view which the Tribunal summarised at [48(9)] onwards -

(9) On 17 October 2022 site excavation and benching was completed;

(10) On 4 November 2022 the Builder informed the Homeowners that additional excavation spoil had to be removed from site and a building variation was issued for $5780 - BV01;

(11) The Homeowners did not sign BV01 under duress as they claim;

(12) Further contaminated spoil was also required to be removed from site, which the Builder issued BVO2 on 17 November 2022 for, but the Homeowners arranged for their own contractor to do this work;

(13) The soil the subject of BV02 was different to the spoil removed under BV01;

1. The owners took issue with the builder's assertions and produced evidence - including photographs - before the Tribunal said to demonstrate their case. Having reviewed the evidence, the Tribunal found -

115 I am satisfied from the evidence presented at the hearing that Building Variation no 1 for $5780 dated 4 November 2022 (at page 161 of PJZ1) was a variation issued by the Builder under clause 18 of the Contract, that the Homeowners signed it and as such it was due and payable by the Homeowners at the time of the next progress payment. The Homeowners have refused to pay the sum of $5780 (or any part of it) on the basis that they signed it under duress and the Builder has never established that the work was done.

116 I am satisfied from the email from the Builder's office to one of the Homeowners dated 4 November 2022 (at page 158 of PJZ 1) that the work was required and the estimated cost from the contractor was $5780. I am satisfied from the oral evidence of the Mr Zaccazan that the work was done and invoiced by the contractor in the sum of $5780.

117 I find that the Homeowners are liable to pay BV 01 and make an order for this amount.

1. It can be seen that there was a real contest between the parties as to the facts and circumstances relating to BV01. The Tribunal resolved the dispute before it by accepting the builder's version of those events, which was inconsistent with that of the owners.
2. In seeking leave to appeal that decision the owners must establish that they may have suffered a substantial miscarriage of justice because the Tribunal's conclusion with respect to their various damages claims were against the weight of evidence before the Tribunal or not fair and equitable. There reasons for doing so are, essentially, that they disagree with the Tribunal conclusions, and that their version of events is correct. They have not pointed to any piece of evidence before the Tribunal that demonstrates which version of events is correct.
3. The owners do point to evidence of other people's adverse reviews and opinions of the builder - all hearsay - which they seek to rely on to cast doubt on the integrity and credit of the builder and that of its representative. The Tribunal disregarded this material which we agree is not probative.
4. The Tribunal's acceptance of the builder's version of events was clearly open to it, was not against the weight of the evidence and was fair and equitable given the Tribunal's findings of fact.
5. Leave to appeal against the decision with respect to BV01 is therefore refused.

1. The owners have been successful in their appeal in one respect only: with regard to claiming damages relating to wasted payments of bank interest and related losses.
2. The owners invited us to redetermine that issue on appeal, but at the same time wanted to amend the claim to reflect their interest and related losses to date. Were we to do so it would be necessary to (a) amend their application to the Tribunal, (b) allow the filing of fresh evidence relating to their losses, and (c) reconvene and hold a hearing with respect to those losses. On the other hand, not allowing the owners to amend their claim to include their interest and related losses to date may result in further additional litigation.
3. The issues can be dealt with more cheaply and efficiently dealt with by remitting the owners' claim for interest and related losses for further hearing in the Consumer and Commercial Division with new evidence allowed.
4. Regarding costs of the appeal, the parties are directed to consult the Consumer and Commercial Division Guideline on Costs. We note that the parties were not legally represented, which severely restricts the costs that may be recovered. We will make orders to be observed if either party wishes to seek costs.
5. Finally, we urge all parties to obtain legal advice before this matter proceeds further.

(1) Extend time for the appeal so that the notice of appeal filed on 16 May 2025 and amended on 27 June 2025 was made within time.

(2) Leave to appeal with respect to the appellants' claim for interest payments wasted and related losses is granted. Otherwise, leave to appeal is refused.

(3) The appeal is allowed with respect to application number 2024/00222460.

(4) Order 3 made by the Tribunal on 14 February 2025 is set aside and the application is remitted to the Tribunal for an assessment of damages relating to wasted payments of bank interest and related losses.

(5) The appeal with respect to application number 2024/00391462 is dismissed.

(6) If any party wishes to claim costs of the appeal -

(a) Any application for costs is to be filed and served within 14 days of publication of these reasons supported by submissions on costs

(b) Submissions in response to that application not to exceed 1000 words are to be filed within a further 14 days.

(c) Any submissions in reply from the costs applicant (not exceeding 500 words) are to be filed within a further 7 days.

(d) Bother parties submissions are to address whether the Tribunal can dispense with a hearing of the costs issues and determine them without a hearing on the papers.

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.

File number(s) under appeal corrected to 2024/00391462