Hanicog Pty Ltd v Belle Lifestyle Homes Australia Pty Ltd [2025] NSWCATCD 146;

Escape Media Pty Limited v Lawler [2018] NSWCATAP 17

Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6

Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41

Ireland v WG Riverview Pty Ltd [2019] NSWCA 307; 101 NSWLR 658

Marks v GIO Australia Holding Ltd [1998] HCA 69; (1988) 196 CLR 494

Sydney Water Corporation v Makucha and Ors [2010] NSWSC 114

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165

Weatherill v Bartlett [2017] NSWCA 175

Williams v Pisano (2015) 299 FLR 172; [2015] NSWCA 177

Belle Lifestyle Homes Australia Pty Ltd (First Respondent)

1. This decision is concerned with the two applications, namely:

(1) An application lodged on 6 May 2024 by the applicant, Hanicog Pty Ltd (Hanicog), against Belle Lifestyle Homes Australia Pty Ltd (Belle) (the First Application) - this application has been allocated file number 2024/00168545; and

(2) An application lodged on 6 May 2024 by Hanicog against Julian Varndell (the Second Application) - this application has been allocated file number 2024/00168529.

1. Mr Varndell is the director of Belle.
2. In a document described as "amended orders sought by the homeowner", Hanicog has set out a plethora of orders which is seeks - a total of 21 orders. Somewhat unhelpfully, it is not made clear whether those orders are sought additionally or alternatively to each other.
3. The relief sought by Hanicog relates to an agreement by Belle to make a payment to a person or entity engaged by Hanicog to act as its agent in relation to a building contract between Hanicog and Belle. The agreement with the agent and the payment to the agent pursuant to the agreement were not disclosed to Hanicog until after the payment was made. Hanicog did not know about the agreement to make the payment prior to it entering into the building contract with Belle. In these circumstances, Hanicog contends that the payment was a secret commission obtained by the agent in breach of fiduciary obligations owed to Hanicog.
4. Hanicog also alleges that there are defects in the building works performed by Belle. Additionally, Hanicog alleges that Belle did not achieve practical completion by the time stipulated in the building contract.
5. The relevant building works were for the construction of residential premises at Penrith in NSW.
6. A final hearing of both Applications took place on 13 February 2025.
7. The evidence relied on by the parties was assembled in 2 folders which were marked Ex J1.
8. An additional affidavit of Mr Varndell was read which was marked Ex R1. Two additional documents were tendered by the respondents which were marked respectively Ex R2 and Ex R3.
9. Following the hearing, directions were made for the provision of written submissions. The last of these submissions was received on 17 March 2025.
10. The affidavit evidence relied upon by both the applicant and respondents contains much matter which is argumentative. This has made it difficult to identify the real issues for determination. Parties and their legal representatives ought to be reminded that that they are more likely to discharge their duties under s 36(3) of the Civil and Administrative Tribunal Act 2013 (NSW) if affidavit evidence is confined to factual matters and argumentative matter is reserved for submissions. As the High Court observed in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [35], evidence of lay witnesses' opinions "tends to distract attention from the real issues".
11. For the reasons set out below, Mr Varndell's affidavit evidence contained various opinions which I have not accepted. It should not be taken from this, however, that I did not find him to be an honest witness. In my opinion, he presented as an honest witness. However, it is regrettable that his affidavit evidence contained much in the way of opinions and conclusions which are matters for the Tribunal to determine and not a lay witness.
12. For completeness, I also note that Mr Manna and Mr Ranieri also presented as honest witnesses.

1. Section 48K(1) of the HBA provides that the Tribunal has jurisdiction to hear and determine a building claim in which the amount claimed does not exceed $500,000.
2. Section 48A defines "building claim" very broadly as follows:

"building claim" means a claim for--

(a) the payment of a specified sum of money, or

(b) the supply of specified services, or

(c) relief from payment of a specified sum of money, or

(d) the delivery, return or replacement of specified goods or goods of a specified description, or

(e) a combination of two or more of the remedies referred to in paragraphs (a)-(d),

that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services, but does not include a claim that the regulations declare not to be a building claim.

1. Having regard to the nature of the relief sought by the applicant, I am satisfied that the Tribunal has jurisdiction to hear and determine the Applications pursuant to section 48K of the HBA.

18B Warranties as to residential building work

(1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work -

(a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract,

(b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new,

(c) a warranty that the work will be done in accordance with, and will comply with, this or any other law,

(d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time,

(e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling,

(f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment.

48MA Rectification of defective work is preferred outcome in proceedings

A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.

1. Sections 27 and 28 of the Fair Trading Act 1987 (NSW) (FTA) provide for the application of the Australian Consumer Law (relevantly comprising Schedule 2 to the Competition and Consumer Act 2010 (Cth)) as in force from time to time as a law of New South Wales, its reference as the ACL (NSW) and its inclusion as part of the FTA.
2. Section 18(1) of the ACL (NSW) provides:

18 Misleading or deceptive conduct

(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Relevant legal principles - defective or non-compliant building work

1. Where it is alleged that a builder's works are in breach of the statutory warranties, the question of whether there is liability on the part of the builder for remedial works is to be determined by reference to the principles derived from Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613.
2. The application of the principles derived from Bellgrove v Eldridge to a claim based on breach of the statutory warranties was helpfully summarised by Hammerschlag J in Bruno Pisano v Georgia Dandris (2014) 17 BPR 33,583; [2014] NSWSC 1070 as follows:

[62] Where a builder breaches a building contract with an owner by departing from the specifications, the measure of damage is the cost, in excess of any amount of the contract price unpaid, of reasonable and necessary work to make it conform to the contract plus consequential losses suffered by reason of the breach: Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 at 618.

[63] The rule is subject to the qualification that not only must the work undertaken be necessary to produce conformity but it must be a reasonable course to adopt. What remedial work is both necessary and reasonable in any particular case is a question of fact: Bellgrove v Eldridge at 619; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 at 288.

...

[65] A plaintiff bears the onus of proving its loss. The fact that quantification may be a difficult exercise does not relieve the court of the obligation to do its best: Fink v Fink [1946] HCA 54; (1946) 74 CLR 127.

[66] There is no issue that the quantum of damages for breach of the warranties is the amount which is reasonable and necessary to:

(a) remedy work which has not been performed in a proper and workmanlike manner;

(b) provide materials which are suitable for the purpose for which they are to be used; and

(b) expend so as to result in a dwelling that is reasonably fit for occupation as a dwelling.

1. His Honour's comments addressed the appropriate measure of damages where there has been a breach of the statutory warranties. In respect of a building claim, the Tribunal has a discretion to either award damages or order that rectification work be carried out: see sections 48O and 48MA of the HBA. Irrespective of the form of the compensation which is determined to be appropriate, Hammerschlag J's observations apply to determining the appropriate scope and method of rectification - the question remains as to what work is reasonable and necessary to make the building works conform to the statutory warranties.
2. While there was an appeal by one of the defendants from Hammerschlag J's decision in Pisano v Dandris, the Court of Appeal did not disturb his Honour's statement of the relevant principles as set out above. Indeed, this aspect of his Honour's decision was endorsed by the Court of Appeal. Emmett JA said at [97] in Williams v Pisano (2015) 299 FLR 172; [2015] NSWCA 177:

[97] Breach of a contractual warranty gives rise to an entitlement for damages measured by reference to the amount that is required to put the claimant in the position in which the claimant would have been had the warranty been performed. That is the measure of damages that the primary judge considered and determined in arriving at the figure for which judgment was entered against [the owner-builder].

1. In determining what works are reasonable and necessary to bring about conformity with the contract, the High Court said in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 at [17]:

"The qualification ... is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt." The example which the Court in [Bellgrove v Eldridge] gave of unreasonableness was the following:

No one would doubt that where pursuant to a building contract calling for the erection of a house with cement rendered external walls of second-hand bricks, the builder has constructed the walls of new bricks of first quality the owner would not be entitled to the cost of demolishing the walls and re-erecting them in second-hand bricks.

That tends to indicate that the test of "unreasonableness" is only to be satisfied by fairly exceptional circumstances.

Relevant legal principles - payment of secret commissions to an agent

1. The principles relating to the payment of secret commissions to an agent by a person having dealings with the principal of the agent were conveniently distilled by the Full Court of the Federal Court in Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 at [190]- [193].
2. In Grimaldi, the Court said:

[190] One of the better known descriptions of bribes and secret commissions is that of Slade J in Industries & General Mortgage Co at 575. It warrants quotation:

[A] bribe means the payment of a secret commission, which only means (i) that the person making the payment makes it to the agent of the other person with whom he is dealing; (ii) that he makes it to that person knowing that that person is acting as the agent of the other person with whom he is dealing; and (iii) that he fails to disclose to the other person with whom he is dealing that he has made that payment to the person whom he knows to be the other person's agent.

[191] Though secret commissions commonly are paid by way of gift, they may in fact have been earned by the fiduciary for services rendered to the payer, notwithstanding that the fiduciary is acting in the matter at the same time for his or her principal: "[an] agent must not take remuneration from the other side without both disclosure to and consent of his principal": Rhodes v Macalister (1923) 29 Com Cas 19 at 27. While secret commissions usually take the form of money payments, they need not necessarily do so. Of present relevance, they may, for example, take the form of a gift of shares: see eg Eden v Ridsdale's Railway Lamp & Lighting Co [1889] UKLawRpKQB 107; (1889) 23 QBD 368.

[192] While secret commissions often are given with the corrupt purpose of influencing, such is not a necessary characteristic of them in civil proceedings. As Lawrence Collins J observed in Daraydan Holdings Ltd v Solland International Ltd [2005] Ch 119 at [53]:

In proceedings against the payer of the bribe there is no need for the principal to prove (a) that the payer of the bribe acted with a corrupt motive; (b) that the agent's mind was actually affected by the bribe; (c) that the payer knew or suspected that the agent would conceal the payment from the principal; (d) that the principal suffered any loss or that the transaction was in some way unfair; the law is intended to operate as a deterrent against the giving of bribes.

[193] Finally, as both of the above quotations make plain, the payer of a secret commission to a person known to be acting in the matter on behalf of another, is taken to have assumed the risk of the payee having not obtained his or her principal's informed consent to receipt of the payment: Grant v Gold Exploration and Development Syndicate [1899] UKLawRpKQB 220; [1900] 1 QB 233 at 249. Knowing that the payee is acting on another's behalf is sufficient of itself to attract liability, unless full disclosure is made by the payer or "agent" and consent is given by the principal to the payment. Importantly, the payer's liability does not turn on his or her knowing or suspecting that the agent has not received the principal's informed consent to the payment: Daraydan Holdings at [53]; Bartram & Sons Ltd (1904) 90 LT 357 at 359-360.

[emphasis added]

1. Where there has been a payment of a secret commission to an agent, both the agent and the maker of the payment are jointly and severally liable to the principal to account for the amount of the secret commission as money had and received: Daraydan Holdings Ltd v Solland International Ltd [2005] Ch 119; [2004] EWHC 622 (Ch) at [54].

1. On about 28 May 2021, Mr Manna, the director of Hanicog, commenced communications with Michal Owen in relation to the construction of residential premises situated at Penrith in NSW: Ex J1 p 26 [2].
2. On 9 June 2021, Mr Owen sent an email to Mr Manna in which he proposed to provided consultancy and management services in relation to the construction of the residential premises. Mr Owen stated that Mr Manna had "both [his] commitment and honesty that [he] will work tirelessly to produce two dwellings for [Mr Manna] on this site for the least amount of money". Mr Owen also stated that it "would be our honour to be able to progress your project through the initial design and approval process, then get the best build price for you...": Ex J1 p 40.
3. On 29 June 2021, Mr Owen sent an email to Mr Manna in which he stated that he had incorporated MFH Project Management Pty Ltd t/a Mortgage Free Homes (MFH): Ex J1 p 41.
4. On 10 February 2022, MFH issued an invoice to Hanicog for the payment of $3,500 for what was described in the invoice as a "project management fee": Ex J1 p 44. On 11 February 2022, MFH issued an invoice to Hanicog for the payment of $11,000 for what was described in the invoice as a "commitment fee": Ex J1 p 45.
5. The above amounts were paid by Hanicog and on 16 February 2022, Mr Owen sent an email to Mr Manna in which he thanked Hanicog for selecting MFH "to design and construct your first Sydney based co-living development": Ex J1 p 46. The email continued that the next steps would involve:

(1) MFH asking Belle to prepare a quotation for the building works;

(2) Belle preparing a building contract to be entered into between Hanicog and Belle; and

(3) MFH being Hanicog's project manager "through the building phase".

1. In the email referred to above, Mr Owen stated: "We will work as a team with [Belle] to deliver your property in the timeframe as contracted ready for tenants to move into the dwellings on completion".
2. On or about 25 February 2022, Belle agreed to make a payment to MFH. Mr Varndell, the director of Belle, states that this was in consideration of MFH "bringing the Penrith Project to Belle Lifestyle Homes, and to be integrated into future projects co-ordinated by MFH": Ex J1 p 404 [10]. Mr Varndell describes this payment as a "marketing/finder's fee". Hanicog describes it as a secret commission. In setting out the Tribunal's factual findings, I will refer to it as the Payment.
3. It is accepted that the Payment was not disclosed to Hanicog by either Belle or Mr Owen until after Hanicog entered into the contract with Belle (see further below in relation to entry into the contract): Ex J1 p 406 [25].
4. The agreement to make the Payment by Belle to MFH was formalised in a written agreement between MFH and Belle described as a "license agreement" and which Mr Varndell states was entered into on or about 25 February 2022 (License Agreement): Ex J1 p 406 [24]. In the License Agreement, MFH was referred to as the licensor and Belle was referred to as the licensee. Payments by Belle to MFH under the agreement were referred to as "license fees": Ex J1 pp 485-503.
5. Clause 4 of the License Agreement provided that Belle was to pay a license fee to MFH "as each progress payment is required to be paid by the owner under the building contract to the licensee until the license fee is paid in full under each building contract": Ex J1 p 491. It appears that the License Agreement was contemplated to apply to every building contract where Belle was recommended or introduced to the owner by MFH. In other words, it did not only apply to the Building Contract between Hanicog and Belle.
6. Schedule 1 of the Building Contract stated that the license fee was to be "10% of each Building Contract Price": Ex J1 p 503.
7. There is a dispute between the parties as to whether the Payment was to be 8% or 10% of the contract price for the Building Contract. Mr Varndell states that it was 8%: Ex J1 p 406 [21]. However, he does not explain why there was a departure from the percentage stated in the License Agreement. I do not accept Mr Varndell's evidence in this respect. I find that amount of the Payment agreed between Belle and MFH was in accordance with the License Agreement, ie, 10% of the contract price of $1,064,635, being $106,463.50.
8. On 23 March 2022, Belle provided Hanicog with a construction tender which stated that the "tender price to build your new home is $1,064,635": Ex J1 pp 472-484. The construction tender also stated that Belle builds for MFH under a licensing agreement. While the construction tender disclosed the existence of a contractual relationship between Belle and MFH, it did not disclose the Payment by Belle to MFH.
9. On or about 20 April 2022, Hanicog as the owner and Belle as the builder entered into a contract described as a residential building contract for new dwelling (the Building Contract): Ex J1 pp 426-471.
10. The Building Contract stated the contract price to be $1,064,635.
11. The Building Contract included a document described as "Representation by Agent" (Representation): Ex J1 p 459. The Representation stated that Hanicog and Belle agreed that Mr Owen of MFH was appointed as agent for Hanicog and that Mr Owen was to provide instructions to Belle as required by the Building Contract. The Representation was signed by Mr Owen, Mr Varndell and Mr Manna.
12. Mr Varndell states in his affidavit evidence that the Payment was "not related to the Penrith Project": Ex J1 p 406 [25]. I understand his reference to the Penrith Project to be to the building works which Belle contracted to perform pursuant to the Building Contract. I do not accept Mr Varndell's evidence that the Payment was not related to the Building Contract. Even if it was contemplated that there would be a payment by Belle to MFH in respect of every building contract where they worked together, that does not mean that the Payment was not related to the specific building contract between Belle and Hanicog. The amount of the payment was determined as a percentage of the contract price for the building contract between Belle and Hanicog. Mr Varndell also gives evidence that the Payment was in consideration of, at least in part, MFH "bringing the Penrith Project to Belle": Ex J1 p 404 [10]. I therefore find that the Payment was directly in relation to the Building Contract.
13. Mr Varndell gives evidence that the sum of $47,585.40 was paid by Belle to Mr Owen and MFH: Ex J1 p 407 [33]; Ex R1. A payment of 442,585.40 was made on or about 2 August 2022. A further payment of $5,000 was made on or about 29 November 2022. Ex R1 contains bank statements which evidence that payments in these amounts were made. I accept Mr Varndell's evidence that the sum of $47,585.40 was paid by Belle to MFH. In other words, the full amount of the Payment in the sum of $106,463.50 was not made.
14. Mr Manna gives evidence that he first became aware of the agreement between Belle and MFH in relation to the Payment at a site meeting which occurred on 6 December 2022: Ex J1 p 30 [22]. I accept that this is when Mr Manna first became aware of the agreement in relation to the Payment.
15. On 8 December 2022, Mr Varndell sent at email to Mr Owen which gave notice of Belle's intention to terminate the License Agreement: Ex J1 p 504.
16. On 21 April 2023, a site meeting occurred at which Mr Varndell stated that practical completion had been reached: Ex J1 p 32 [29].
17. A dispute then developed between the parties as to whether practical completion had been reached, especially in relation to the subfloor ventilation: Ex J1 pp 32-36; pp 412-414.
18. On 5 October 2023, Hanicog took possession of the works: Ex J1 p 36 [47].

Hanicog's claim for Belle to account for the secret commission paid to MFH

1. Mr Varndell states in his affidavit evidence that the agreement in relation to the Payment was "solely a business arrangement" between MFH and Belle and that neither MFH nor Belle were required to disclose this arrangement to Hanicog: Ex J1 pp 587-588 [12]. Mr Varndell's affidavit evidence as to his opinion in this respect is an example of the argumentative matter with which the affidavit evidence, of both parties, is replete.
2. I do not accept Mr Varndell's opinion that there was no requirement to disclose the agreement in relation to the Payment to Hanicog.
3. Mr Owen was engaged by Hanicog to provide it with consultancy and management services. He pledged both his "commitment and honesty" to achieve the outcome which Hanicog was seeking "for the least amount of money". Mr Owen was then appointed as Hanicog's agent under the Building Contract. If Mr Varndell was not aware that Mr Owen of MFH was to be appointed as Hanicog's agent when the License Agreement was entered into, he certainly became aware of this when the Building Contract was entered into as he signed the Representation which formed part of the Building Contract.
4. An agent stands in a fiduciary position in relation to their principal.
5. In Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41 at 67, Gibbs CJ said:

A person who occupies a fiduciary position may not use that position to gain a profit or advantage for himself, nor may he obtain a benefit by entering into a transaction in conflict with his fiduciary duty, without the informed consent of the person to whom he owes the duty.

The archetype of a fiduciary is of course the trustee, but it is recognized by the decisions of the courts that there are other classes of persons who normally stand in a fiduciary relationship to one another - eg, partners, principal and agent, director and company, master and servant, solicitor and client, tenant-for-life and remainderman.

[emphasis added]

1. In procuring the Payment from Belle, Mr Owen and MFH placed themselves in a position of conflict between their duty to act in the best interests of Hanicog in identifying and recommending a builder and managing the building project on behalf of Hanicog, on the one hand, and their interest in receiving an undisclosed payment from the builder which they recommended to Hanicog, on the other hand. As observed by Mason J in Hospital Products at 104, by quoting a passage of Judge Learned Hand, such a conflict was to be avoided "in order to deprive [a fiduciary] of any inducement that will affect his absolute and disinterested loyalty" to the principal. If Mr Owen and MFH were to place themselves in such a position of conflict, they were obliged to disclose the matter to Hanicog and obtain its informed consent, which they did not do.
2. I note that the Representation stated that Mr Owen of MFH was appointed as Hanicog's agent whereas the License Agreement is between MFH and Belle. Irrespective of whether the payments by Belle were made directly to Mr Owen or to MFH, this placed Mr Owen in a breach of his fiduciary obligations. Mr Owen could not obtain indirectly, through a company which he had incorporated, a benefit which he could not obtain directly as such a benefit, whether obtained directly or indirectly, created a conflict between his fiduciary duty to Hanicog and his own interests. As White J explained in Sydney Water Corporation v Makucha and Ors [2010] NSWSC 114 at [59]:

The rules in relation to bribes and secret commissions are a particular application of the general principle that a fiduciary (the agent) must not, without the informed consent of the principal, place himself or herself in a position where his or her duty and interest may conflict.

1. When the payments were made to Mr Owen, or alternatively to MFH, Mr Varndell knew that Mr Owen had been appointed as Hanicog's agent. He knew, or should have known, that this meant that Mr Owen and MFH owed duties to Hanicog. He knew that neither the payments nor the agreements to make the payments were disclosed to Hanicog. I accept his evidence that he subjectively believed that there was no requirement to disclose the payments to Hanicog, however, for the reasons I have given, he was mistaken in this respect. As the Full Court observed in Grimaldi at [189], the law relating to the payments of secret commissions to a person occupying a fiduciary position has been settled for well over a century.
2. By reference to what was stated in Daraydan and repeated by the Full Court in Grimaldi at [192] (see [26] above), there no need for Hanicog to prove: (a) that Belle acted with a corrupt motive; (b) that Mr Owen's or MFH's mind was actually affected by the payments; (c) that Hanicog knew or suspected that the Mr Owen or MFH would conceal the payments from Hanicog; or (d) that Hanicog suffered any loss or that the transaction was in some way unfair.
3. In circumstances where:

(1) the payments by Belle to Mr Owen and MFH were in relation to a transaction between Hanicog and Belle in respect of which Mr Owen and MFH owed fiduciary duties to Hanicog;

(2) Belle, through its director Mr Varndell, knew that Mr Owen was appointed as Hanicog's agent in relation to the Building Contract; and

(3) the payments were not disclosed to Hanicog and Hanicog did not give informed consent to the payments,

I consider the payments to be a secret commission in the sense discussed by the Full Court in Grimaldi.

1. It therefore follows that Belle is liable to account to Hanicog for the amount of the payments made to Mr Owen and MFH.
2. Hanicog seeks an order for the payment of the amount agreed to be paid by Belle, namely, $106,463.50. However, in Daraydan it was stated that there should be an accounting for the amount of the secret commission and I have not been provided with any authority stating that the accounting should be for the amount agreed to be paid by way of a secret commission as opposed to the actual amount paid.
3. I will accordingly make an order that Belle is to pay Hanicog the amount of $47,585.40, being the amount of the secret commission paid to Mr Owen and MFH.

1. Hanicog claims that Mr Varndell and Belle engaged in misleading conduct in contravention of s 18 of the ACL in failing to disclose the agreement to make the Payment to Hanicog.
2. In my opinion, the claim based on misleading conduct cannot succeed for two fundamental reasons.
3. First, Hanicog cannot make a claim for Belle to account for the amount of the secret commission and for damages for any actual loss. It must elect between the two remedies: Daraydan at [54]. It appears to me that in seeking both that Belle account for the amount of the secret commission and damages under the ACL, Hanicog is seeking two mutually exclusive remedies inconsistently with the principle stated in Daraydan.
4. Secondly, and more fundamentally, Hanicog has not established any loss suffered as a result of any misleading conduct.
5. Even if Hanicog were able to establish that there was misleading conduct on the part of Mr Varndell and Belle, it has not established any loss in the relevant sense. It is well established in the case law that the loss which is compensable for a claim based on misleading conduct under the ACL is the prejudice or detriment which a claimant has suffered as a result of acting in reliance on the misleading conduct.
6. As McHugh, Hayne and Callanan JJ explained in Marks v GIO Australia Holding Ltd [1998] HCA 69; (1988) 196 CLR 494 at [48]:

[48] A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted.

1. This principle has been stated in many cases including Weatherill v Bartlett [2017] NSWCA 175 at [21]- [22]; Ireland v WG Riverview Pty Ltd [2019] NSWCA 307; 101 NSWLR 658 at [83]; Escape Media Pty Limited v Lawler [2018] NSWCATAP 17 at [26]- [28].
2. Adopting the language used by the Appeal Panel in Escape Media Pty Limited v Lawler at [28], Hanicog has not shown how it was "worse off" as a result of any misleading conduct on the part of the respondents. That is because it has not shown that it could have entered into a contract that was more favourable or advantageous to it than the Building Contract for the carrying out of the building works which it wished to be carried out.
3. If there was misleading conduct, Hanicog would need to show "what would probably have happened but for the contravening conduct" to establish compensable loss (see Weatherill v Bartlett at [21]). It has not done so.
4. For the above reasons, the Tribunal concludes that the claim for misleading conduct cannot be established.
5. In view of the above conclusion, as the only basis for the application against Mr Varndell in the Second Application is alleged misleading conduct in contravention of the ACL, it is appropriate to dismiss the Second Application.

Hanicog's claims based on alleged defective work

1. Hanicog claims that the works performed by Belle were defective in respect of the subfloor ventilation, subfloor grading, downpipes and wall panels.
2. Hanicog has not presented independent expert evidence in relation to its claims based on alleged defective work. While I accept that independent expert evidence is not mandatory to establish a claim for defective or incomplete work, in the present circumstances the absence of such evidence has meant that the Tribunal is left with assertions and counter-assertions in the lay affidavit evidence.
3. The evidence before the Tribunal does not permit me to identify precisely whether the building work carried out by Belle departed from the contractual specifications and requirements and, if so, precisely in what respect.
4. As stipulated in Bellgrove v Eldridge and the authorities which have followed it, as discussed above, that is the threshold issue that needs to be determined in respect of any claim for defective or incomplete building works. I am unable to satisfy myself, on the basis of the evidence before the Tribunal, that Belle's work was defective or incomplete by reference to the contractual specifications and requirements.

Hanicog's claims based on alleged late completion of the works

1. As with the claim for defective or incomplete work, the claim based on late completion of work is also based on assertions and counter-assertions in the lay affidavit evidence. I am unable to satisfy myself, on the basis of the evidence before the Tribunal, that Belle failed to complete the works in accordance with the Building Contract.

1. Both the applicant and respondents seek costs. In the interests of procedural fairness, the parties should have an opportunity to make submissions in relation to costs after having had an opportunity to consider the Tribunal's reasons for decision. I will make directions giving effect to this.

1. For the above reasons, the Tribunal makes the following orders:

(1) In respect of the application allocated file number 2024/00168545, the respondent, Belle Lifestyle Homes Australia Pty Ltd, is to pay to the applicant, Hanicog Pty Ltd, the amount of $47,585.40 immediately.

(2) In respect of the application allocated file number 2024/00168529, the application is dismissed.

(3) In the event that a party wishes to bring a costs application, such application must be lodged in the Tribunal and served on the costs respondent within 14 days of the date of these orders and attaching submissions (limited to 5 pages) and any documents relied upon in support of the application.

(4) The costs respondent will have 14 days after the receipt of the costs application to lodge in the Tribunal and serve on the costs applicant its submissions (limited to 5 pages) and documents, if any, relied upon in response to the costs application.

(5) The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties' written submissions and attached documents, if any, without the need for a hearing.

(6) Subject to the parties' submissions, the Tribunal will determine any costs application made on the basis of the papers lodged in the Tribunal and without a hearing.

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.