HIA INSURANCE SERVICES PTY LTD v KOSTAS [2009] NSWCA 292

Court of Appeal (NSW)|2009-09-16|Before: Spigelman CJ, Allsop P, Basten JA, Rothman J

[Azzopardi v Tasman UEB Industries Ltd] (1985) 4 NSWLR 139

[B & L Linings Pty Ltd v Chief Commissioner of State Revenue] [2008] NSWCA 187

[Bahadori v Permanent Mortgages Pty Ltd] [2008] NSWCA 150; 72 NSWLR 44

[Brenmar Building Co v University of Newcastle] (NSWCA unrep, 12 December 1977)

[Brown v The Repatriation Commission] [1985] FCA 194; (1985) 7 FCR 302

[Chapman v Taylor] [2004] NSWCA 456; (2005) Aust Contract Rep 90-205

[Crook v Consumer, Trader and Tenancy Tribunal of New South Wales] [2003] NSWCA 370; 59 NSWLR 300

[Custom Credit Corporation Ltd v Commercial Tribunal of New South Wales] (1993) 32 NSWLR 489

[Director-General, Department of Ageing, Disability and Home Care v Lambert] [2009] NSWCA 102

[Dobell v Blue Haven Pools & Spas Pty Ltd] [2009] NSWCA 77

[Douglas v New South Wales Land and Housing Corporation] [2008] NSWCA 315

[Dranichnikov v Minister for Immigration and Multicultural Affairs] (2003) 77 ALJR 1088

[GPT RE Ltd v Belmorgan Property Development Pty Ltd] [2008] NSWCA 256

[Grygiel v Baine] [2005] NSWCA 218

[Health Care Complaints Commission v Karalasingham] [2007] NSWCA 267

[HIA Insurance Services Pty Ltd v Kostas] [2008] NSWCA 297

[Kalokerinos v HIA Insurance Services Pty Ltd] [2004] NSWCA 312

[The King v War Pensions Entitlement Appeal Tribunal; Ex parte Bott] [1933] HCA 30; 50 CLR 228

[Kostas v HIA Insurance Services Pty Ltd] [2005] NSWCTTT 345

[Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd] [1989] HCA 23; 166 CLR 623

[Maconachie v Kullenberg] [2005] NSWCA 294

[McNamara v Consumer Trader and Tenancy Tribunal] [2005] HCA 55; 221 CLR 646

[Merchant Service Guild of Australasia v Newcastle and Hunter River Steamship Co Ltd (No 1)] [1913] HCA 76; (1913) 16 CLR 591

[Mine Subsidence Board v Vervoon] [2008] NSWCA 280

[Minister Administering the Crown Lands Act v Bathurst Local Aboriginal Council] [2009] NSWCA 138

[Obieta v Consumer, Trader and Tenancy Tribunal (NSW)] [2009] NSWCA 220

[Ruhamah Property Co Ltd v Federal Commissioner of Taxation] [1928] HCA 22; 41 CLR 148

[Scicluna v New South Wales Land and Housing Corporation] [2008] NSWCA 277

[Seltsam Pty Ltd v McNeill] [2006] NSWCA 158; 4 DDCR 1

[Smith v Collings Homes Pty Ltd] [2004] NSWCA 75

[Technical Products Pty Ltd v State Government Insurance Office (Qld)] [1989] HCA 24; 167 CLR 45

[Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council] [2007] NSWCA 300; 71 NSWLR 230

[TNT Skypak International (Aust) Pty Ltd v Commissioner of Taxation] [1988] FCA 119; (1988) 82 ALR 175

[Vetter v Lake Macquarie City Council] [2001] HCA 12; 202 CLR 439

[XCO Pty Ltd v Commissioner of Taxation (Cth)] [1971] HCA 37; 124 CLR 343

(1) Allow the appeal and set aside the orders and declarations made in the Common Law Division on 30 October 2007.[][](2) In lieu thereof,[](a) dismiss the summons filed by the plaintiffs on 22 July 2005;[](b) order the plaintiffs to pay the costs of the first defendant in the Common Law Division.[][](3) Order the first and second respondents to pay the appellant's costs in this Court.[][](4) Grant the respondents an indemnity certificate under the [Suitors' Fund Act 1951] (NSW) in respect of the appeal.

HIA INSURANCE SERVICES PTY LTD t/as HOME OWNERS WARRANTY v Peter KOSTAS & ANOR

On 5 August 1999 the respondents ("the owners") engaged Sydney Construction Co Pty Ltd to undertake substantial renovations of their home. By June 2000 disputes had arisen in relation to variations of the contract, indecision on the part of the owners as to materials, and allegations of defective building work. On 29 June 2000 the owners sought to terminate the contract and, a week later, made a claim on the appellant ("HIA"), as the insurer responsible for the builder's work. Following refusal of the claim, on 12 September 2000 the owners commenced proceedings against HIA and the builder in the Consumer, Trader and Tenancy Tribunal ("the Tribunal").

After proceedings were discontinued against the builder and continued between HIA and the owners on the issue of whether there had been a lawful termination of the contract, the Tribunal held that the owners had repudiated the contract with the builder. The owners commenced proceedings in the Common Law Division pursuant to s 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) ("the CTTT Act"), but also invoking the judicial review jurisdiction of the Court under s 69 of the Supreme Court Act 1970 (NSW). Rothman J set aside the decision of the Tribunal on the basis that a number of its decisions with respect to questions of law had been made in error. His Honour made a declaration that the termination of the contract by the owners had been "lawful and effective" and remitted the matter to the Tribunal for the hearing and determination of any remaining issue. HIA appealed to this Court against his Honour's characterisation of the issues before him as properly invoking the right of statutory appeal under the CTTT Act.

(i) whether an interlocutory decision of the Tribunal with respect to a matter of law is capable of constituting the subject matter of an appeal under s 67;

(ii) whether a decision "with respect to a matter of law" includes a decision with respect to a question of mixed fact and law;

(iii) whether an appellate court, once having established an erroneous decision with respect to a matter of law, is entitled to determine any other question of fact or law or mixed fact and law in order to make appropriate orders disposing of an appeal under s 67;

(iv) the extent to which a trial judge or Tribunal must have expressly identified questions for decisions with respect to a matter of law, and

(v) whether the primary judge, on appeal, had identified decisions made by the Tribunal with respect to matters of law.

(per Basten JA, Spigelman CJ and Allsop P agreeing):

1 The language of the statute indicates that the right of appeal was not intended to be restricted to final orders, disposing of the proceedings before the Tribunal: [1], [24], [97]-[104].

Custom Credit Corporation Ltd v Commercial Tribunal of New South Wales (1993) 32 NSWLR 489; Kalokerinos v HIA Insurance Services Pty Ltd [2004] NSWCA 312; Chapman v Taylor [2004] NSWCA 456; (2005) Aust Contract Rep 90-205; Grygiel v Baine [2005] NSWCA 218; Maconachie v Kullenberg [2005] NSWCA 294; Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150; 72 NSWLR 44, referred to.

(per Spigelman CJ and Basten JA, Allsop P agreeing):

2. The words "with respect to" are to be construed as limiting the scope of a statutory appeal under s 67 of the CTTT Act so as to exclude a decision with respect to a matter of fact. Accordingly, in the case of a decision that incorporates a mixture of fact and law, it is necessary to separately identify a legal aspect of that decision in order to bring an appeal: [9]-[17], [24], [107]-[110].

XCO Pty Ltd v Commissioner of Taxation (Cth) [1971] HCA 37; 124 CLR 343; Technical Products Pty Ltd v State Government Insurance Office (Qld) [1989] HCA 24; 167 CLR 45, referred to.

(per Spigelman CJ and Basten JA, Allsop P agreeing)

3. An appellate court, whether by virtue of the operation of s 75A of the Supreme Court Act or otherwise, is not entitled to exercise a jurisdiction which, in permitting a reconsideration of factual issues, travels beyond the specific matter which was the subject of an appeal, namely the decision with respect to a matter of law: [18]-[22], [24], [111]-[128].

Vetter v Lake Macquarie City Council [2001] HCA 12; 202 CLR 439; Crook v Consumer, Trader and Tenancy Tribunal of New South Wales [2003] NSWCA 370; 59 NSWLR 300; Smith v Collings Homes Pty Ltd [2004] NSWCA 75; Kalokerinos v HIA Insurance Services Pty Ltd [2004] NSWCA 312; Grygiel v Baine [2005] NSWCA 218; Maconachie v Kullenberg [2005] NSWCA 294; Health Care Complaints Commission v Karalasingham [2007] NSWCA 267; Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300; 71 NSWLR 230; B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; GPT RE Ltd v Belmorgan Property Development Pty Ltd [2008] NSWCA 256; Scicluna v New South Wales Land and Housing Corporation [2008] NSWCA 277; Douglas v New South Wales Land and Housing Corporation [2008] NSWCA 315; Minister Administering the Crown Lands Act v Bathurst Local Aboriginal Council [2009] NSWCA 138; Obieta v Consumer, Trader and Tenancy Tribunal (NSW) [2009] NSWCA 220, referred to.

4. Decisions made impliedly, or which necessarily formed part of the decision-making process, may constitute the subject matter of an appeal under s 67 of the CTTT Act, even if the Tribunal's reasons were silent, only if it is demonstrated that the issue was disputed between the parties, and was in fact either resolved by the Tribunal, or treated as irrelevant: [129]-[131].

Merchant Service Guild of Australasia v Newcastle and Hunter River Steamship Co Ltd (No 1) [1913] HCA 76; (1913) 16 CLR 591; The King v War Pensions Entitlement Appeal Tribunal; Ex parte Bott [1933] HCA 30; 50 CLR 228; Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; Smith v Collings Homes Pty Ltd [2004] NSWCA 75, referred to.

5. It is necessary to examine the context of the Tribunal's reasoning and decision-making process in order to determine whether an implicit decision of the Tribunal can constitute one with respect to a matter of law. A decision may be made on a question with respect to a matter of law, even if the parties did not raise the issue: [26].

(per Basten JA, Spigelman CJ and Allsop P agreeing):

6. The decisions of the Tribunal identified by the primary judge did not constitute decisions with respect to matters of law. Accordingly, the errors asserted on the part of the Tribunal were not capable of invoking the appellate jurisdiction of the Supreme Court under s 67 of the CTTT Act: [1], [24], [132]-[159].

Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139, cited.

7. Whilst a factual finding made in the absence of supporting material will involve an error of law and thus support judicial review, it does not form a basis for a statutory appeal under s 67 of the CTTT Act: [1], [137].

8. A finding of fact made in the absence of supporting evidence may or may not amount to or involve a decision on a question with respect to a matter of law, depending on the context of that aspect of the Tribunal's reasoning and approach: [27].

HIA INSURANCE SERVICES PTY LTD t/as HOME OWNERS WARRANTY v Peter KOSTAS & ANOR

1 SPIGELMAN CJ: I have had the advantage of reading the judgment of Basten JA in draft. I gratefully adopt his Honour's outline of the facts and issues and of the legislation and relevant case law. Subject to the following observations, I agree with his Honour's reasons.

2 As Basten JA indicates, the preponderance of authority in this Court is adverse to the propositions advanced by the respondents in their Notice of Contention. I do not repeat the extracts collected by his Honour. I wish to outline the textual and contextual considerations which support that line of authority.

3 The first step is to identify the subject matter of the appeal for which s 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 ("the CTTT Act") provides. That subject matter is found in s 67(1) which refers to an "appeal ... against the decision". The use of the definite article indicates that the "decision" is that outlined earlier in the subsection in the clause "decides a question with respect to a matter of law", being the "decision" about which the party to the proceedings is dissatisfied.

4 The jurisdiction conferred upon the Supreme Court, now the District Court, was to 'decide' the very same question as the Tribunal had 'decided'. That is made clear by s 67(3) which sets out the powers that the Court may exercise "[a]fter deciding the question the subject of such an appeal".

5 As Basten JA indicates, it is significant that s 66 and s 67 are in parallel terms. Section 66 provides for the Tribunal to refer a matter in the very same circumstances as an appeal may be brought under s 67. The "question" that can be referred is "a question ... with respect to a matter of law", being a "question" which has 'arisen' in the proceedings. (See s 66(2) and (3).)

6 The scope of the concept of "a matter of law" is expressly extended by the provision found in both s 66(5) and s 67(8) that "[a] reference ... to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal". These subsections extend the subject matter of the appeal to include a fact finding exercise with respect to jurisdictional facts. In this respect, the position is equated to that which would arise in the exercise of the supervisory jurisdiction preserved by s 65(2) and (3)(a). However, this extension does not arise in the present case.

7 The subject matter of the appeal is, accordingly, a decision of a specified character that must in fact be a 'decision'. However, as Basten JA indicates, the statute has been interpreted to extend to an implicit decision.

8 Furthermore, what has been 'decided' has to answer the description of "a question". As the parallel provision in the referral power indicates in s 66(2), the "question" must have 'arisen' in the course of proceedings before the Tribunal.

9 The final and most significant aspect of s 67(1) is the use of the words "with respect to". As Basten JA indicates these words are capable of having a wide connotation. They do not, however, necessarily have such a connotation.

10 The Consumer, Trader and Tenancy Tribunal replaced the pre-existing Fair Trading Tribunal and the Residential Tribunal. It has a diverse range of functions, as its very title suggests, pursuant to legislation with respect to consumer credit, fair trading, home building, residential tenancies, strata schemes, retirement villages, motor dealers, travel agents, etc.

11 By s 8(3) of the CTTT Act, one of the matters to which the Minister is to have regard when determining the qualifications and skills for a person to be appointed as a member of the Tribunal is whether that person has relevant expertise in one or more areas of the Tribunal's jurisdiction. It is noteworthy that members of the Tribunal, other than the Chairperson, do not have to have any legal qualifications.

12 The parallel provisions for referral of questions and for appeal, found in s 66 and s 67, serve one of the of the CTTT Act's objects, stated in s 3(d): "to ensure the quality and consistency of the Tribunal's decision-making".

13 The interpretation of s 67 must also take into account s 3(c) which provides that one of the objects of the Act is: "to enable proceedings to be determined in an informal, expeditious and inexpensive manner". This is of significance because the broader the scope of an appeal the less likely that the proceedings will be "expeditious and inexpensive".

14 The legislative scheme recognises that Tribunal members may have no legal qualifications and provides for an appeal to a court, now the District Court, with respect to legal questions that have been the subject of a "decision". Nevertheless, fact finding, including the drawing of inferences from primary facts, as well as the formation of any evaluative judgment for which a particular legislative scheme may call, was intended to remain the exclusive preserve of the Tribunal.

15 All facts necessary to decide the question of law must either expressly or implicitly have been found by the Tribunal, which must also have drawn any necessary inference. In this respect, the Court on appeal may need to distinguish inferences from implications. An implication is "included in what is expressed", whereas an inference is "something additional to the statements". (Merchant Service Guild of Australasia v Newcastle and Hunter River Steamship Co Ltd (No 1) [1913] HCA 76; (1913) 16 CLR 591 at 624.)

16 In the present context, the words "with respect to" are, in my opinion, words of limitation, rather than words indicating that the requisite relationship was intended to be wide ranging. The limitation was intended to make it clear that no appeal lies with respect to a matter of fact.

17 Consistently with this interpretation, in the case of a decision that incorporates a mixture of fact and law, it is necessary to separately identify a legal aspect of that decision in order to either make a reference under s 66 or to lodge an appeal under s 67.

18 Furthermore, it is not consistent with the above analysis to adopt the respondents' submission that in some manner s 67(3)(a) entitles the Court on appeal to exercise a jurisdiction which travels beyond the specific matter which was the subject of appeal, namely the decision on a question with respect to a matter of law.

19 There is no analogous power in s 66(3), when the matter comes before the Court on referral. The power in s 67(3)(a) is intended to ensure the expeditious disposal of proceedings when the Court on appeal answers the question, the subject of the appeal, in a manner different to the Tribunal and the substituted answer would, as a matter of law, have required the Tribunal to make a particular order if it had answered the question correctly at the time of the Tribunal's decision.

20 The contrast between s 67(3) and s 66(3), together with the use of mandatory terminology, identifying the order that "should have been made by the Tribunal" reinforces the conclusion that the subject matter of the appeal is the "matter of law" itself and not other matters connected to that matter. The primacy intended to be given to the Tribunal as the finder of fact and the maker of any evaluative judgment requires the jurisdiction provision in s 67(1) and the provision conferring power in s 67(3) to be understood as a single coherent and congruent scheme.

21 The above analysis is specific to the statute under consideration. A number of the cases to which reference was made in submissions concerned other legislative schemes which employed similar language, such as "on a question of law" or "involving a question of law", etc. Decisions on other legislative schemes must be used with care. The context will be of significance particularly when loose terminology, such as "with respect to", has been employed.

22 As indicated above, the composition of the Tribunal is a relevant consideration. The above analysis may be different in the case of an appeal from a judicial decision-maker. Furthermore, the specific powers that are conferred upon the Court, should it uphold an appeal, will often be a significant indicator of the scope of the appeal.

24 ALLSOP P: I have had the advantage of reading the reasons of Basten JA and the observations of the Chief Justice in draft. I agree with the orders proposed by Basten JA. Subject to the following qualifications I agree with the reasons of Basten JA. I also agree with the observations of the Chief Justice.

25 The first qualification is that I would prefer not to express a view as to the comparative likelihood of a decision on a question with respect to a matter of law being found in an interlocutory or final decision.

26 The second qualification is that the extent to which a decision on a question with respect to a matter of law is, and can be seen to be, implicit in a decision on the reasoning process of the Tribunal is not amenable to convenient definition. For instance, whether or not a finding is "underpinned" by a legal question or whether an issue was in dispute, and the significance of the answers to such questions will often only be able to be illuminated with clarity by examination of the context and decision in question. For example, it would be possible for a decision to be made on a question with respect to a matter of law, even if the parties did not raise the issue. The lack of proffering of the issue by the parties may lead to other complaints, but it would not necessarily mean that a decision on a question with respect to a matter of law did not exist.

27 The third qualification, which is related to the second, is that the question whether a "no evidence" ground falls within the expression "a decision on a question with respect to a question of law" may depend upon the circumstances. A finding of fact made in the absence of supporting evidence is an error of law. This will usually support judicial review proceedings to the extent that an error of law is a ground for such review. Such a finding may or may not amount to or involve "a decision on a question with respect to a matter of law". Whether it does or not may depend upon the context of that aspect of the Tribunal's reasoning and approach.

Identifying decisions with respect to matters of law

Consideration of decisions identified by the primary judge

(a) clause 27 of the contract was not relevant to the dispute

(b) there was some (or any) evidence of claims for extension of time

(d) whether the notices of 4 May and 12 May 2000 given by the owners were ineffective and contrary to the requirements of the contract

(e) whether there was evidence inconsistent with the occurrence of a suspension of work without reasonable cause by the builder

(f) whether there was evidence inconsistent with the evidence of Mr Rappoport that the builder had failed to proceed diligently

29 On 5 August 1999 the respondents (hereafter "the owners") engaged a builder to undertake substantial renovations on their home. The builder was Sydney Construction Co Pty Ltd, of which the principal was Mr Turrisi. By June 2000 substantial disputes had arisen in relation to contract variations, indecision on the part of the owners as to materials and allegations of defective building work. On 29 June 2000 the owners sought to terminate the contract and, a week later, made a claim on the appellant ("HIA"), as the insurer responsible for the builder's work.

30 The insurance claim, not having been dealt with within 45 days, was deemed to have been refused and, on 12 September 2000 the owners commenced proceedings against HIA and the builder in the Consumer, Trader and Tenancy Tribunal ("the Tribunal").

31 For some four years, the proceedings in the Tribunal progressed through various stages, including an unsuccessful mediation and an unsuccessful attempt to obtain agreement amongst the experts. On 9 November 2004 the Tribunal made orders which involved the proceedings being discontinued against the builder and proceeding between HIA and the owners on the issue of whether there had been a lawful termination of the contract.

32 The Tribunal is established under the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) ("the CTTT Act"). The objects of the Act include that of enabling proceedings to be determined "in an informal, expeditious and inexpensive manner": s 3(c). Whether that object was fully realised in the present case may be doubted. On 25 May 2005 the Tribunal held that the owners had repudiated the contract with the builder: Kostas v HIA Insurance Services Pty Ltd [2005] NSWCTTT 345. On 22 July 2005, the owners commenced proceedings in the Common Law Division pursuant to s 67 of the CTTT Act, but also invoking the judicial review jurisdiction of the Court under s 69 of the Supreme Court Act 1970 (NSW). Correctly, for the purposes of the judicial review proceedings, the Tribunal was joined as a party both in this Court and in the Court below: Dobell v Blue Haven Pools & Spas Pty Ltd [2009] NSWCA 77, at [19].

33 For the purpose of the judicial review proceedings, the summons alleged that the owners had been deprived of procedural fairness, though the complaint was not particularised. With respect to the statutory appeal, a schedule to the summons identified some 21 separate grounds of appeal. Little (if any) attempt was made to comply with the requirements of the CTTT Act, limiting appeals to a decision of the Tribunal "with respect to a matter of law": CTTT Act, s 67(1).

34 The summons was heard by Rothman J over three days in June 2006. Judgment was delivered on 30 October 2007: Kostas v HIA Insurance Services Pty Ltd [2007] NSWSC 315. His Honour set aside the decision of the Tribunal made on 25 May 2005 and made a declaration that the termination of the contract by the owners on 29 June 2000 was "lawful and effective". The matter was remitted to the Tribunal to hear and determine any remaining issue.

35 The procedural difficulties did not diminish when the matter was brought to this Court. The notice of appeal appeared to identify more than 50 errors on the part of the primary judge. However, on 14 August 2008, an amended notice of appeal was filed reducing the grounds to 19, although some included a number of succinctly identified sub-grounds.

36 Noting the nature of the proceedings in the Supreme Court, his Honour stated that the summons sought "the quashing of the Tribunal findings and the substitution of findings to the opposite effect" or alternatively remittal to the Tribunal: at [30]. His Honour noted that HIA had challenged the jurisdiction of the Court to hear an appeal from an interlocutory decision, claimed that the findings of the Tribunal were effectively beyond challenge, that there had been no denial of natural justice and that if there were such, it caused no injustice or detriment to the owners: at [31]. His Honour continued at [32]:

"In order to determine these issues it is necessary for the Court to examine all of the evidence before the Tribunal during every stage of the proceedings below, the agreement between the parties effected on 8 and 9 November 2004, the evidence to which the Tribunal could properly pay regard, the construction of the Contract and whether, on the basis of the material to which the Tribunal could have regard and otherwise, there was, as a matter of law, a valid termination of the Contract and, if so, whether the Tribunal has erred in law."

37 Whether it was correct to identify the matter for consideration by the Court in such a broad manner may be doubted; what is unfortunate is that it was not until the concluding paragraphs of the judgment that his Honour attempted to identify the questions of law decided by the Tribunal from which an appeal lay: at [160]. Because, as will be noted below, that was the extent of the subject matter of the appeal before the Court, it is convenient to set out the questions so identified, although the terms in which they were formulated will require some further explanation:

"(i) The clauses of the Contract relevant to the dispute did not include Clause 27;

(ii) There was some (or any) evidence of claims for extension of time;

(iii) The uncontroverted and uncontested evidence of Mr Paul Rappoport did not support a lawful termination of the Contract by Mr and Mrs Kostas;

(iv) The notice[s] [given] by Mr and Mrs Kostas on 4 May and 12 May 2000 were ineffective in law and contrary to the requirements of the Contract;

(v) There was evidence inconsistent with the occurrence of a suspension of work without reasonable cause by Sydney Construction;

(vi) There was evidence inconsistent with the uncontested and uncontroverted evidence of Mr Paul Rappoport that Sydney Construction had failed to proceed diligently with the work."

38 His Honour identified a further question of law, namely "whether the conduct of Mr and/or Mrs Kostas was unlawful, in that it was inconsistent with their rights under common law and/or inconsistent with the Contract": [164]. That question may have been intended to be a separate or different question, but arguably was merely the logical conclusion to the answers given to the questions raised at [160]. Thus, his Honour continued at [165]:

"The errors of law occurred in determining that question by: incorrectly construing the Contract (the failure to pay regard in Clause 24 to 'suspension' and 'proceeding diligently'); in determining the relevant clauses of the Contract and failing to have regard to all relevant matters (Clause 27); and, in determining the necessary facts [relevant?] to such a question in the total absence of evidence supporting those findings."

39 The question of procedural fairness was raised with respect to reliance apparently placed by the Tribunal on the affidavit of the principal of the building company, Mr Turrisi. His Honour found it unnecessary to determine that question: at [166].

40 His Honour also discussed findings with respect to the credibility of Mr and Mrs Kostas. However, in his conclusions he found it unnecessary to determine whether any erroneous decision on a question of law was raised by that discussion. (Although Mrs Kostas has been a party to all the proceedings, Mr Kostas was the only owner identified as a party to the contract.)

41 Under the heading "Conclusion" his Honour stated at [170]:

"There are a number of decisions of the Tribunal with respect to questions of law where the Tribunal is in error. Correction of those decisions requires the following findings:

(i) The Contract was due to be completed on or before 1 July 2000;

(ii) No extension of time beyond 1 July 2000 had been effected;

(iii) There were, as at 4 May 2000, 12 May 2000 and 21 May 2000, works for which payment had been made, but that had not been completed and/or were defective;

(iv) Sydney Construction had suspended works without reasonable cause;

(v) Sydney Construction had not, as at 4 May 2000, 12 May 2000 and 21 May 2000, proceeded diligently with the work;

(vi) The notice[s] of 4 May 2000, 12 May 2000 and 16 May 2000 were effective and valid notices under Clause 24 of the Contract relating to failure to proceed diligently with the work and to the suspension of work without reasonable cause;

(vii) The notice of 21 June 2000 did not waive non-compliance and required an undertaking the effect of which was that Sydney Construction would remedy the defective work and proceed diligently with the works."

42 The background to the "decisions" identified at [160] and the "findings" at [170] requires further explanation, first by reference to the provision of the contract and, secondly, by reference to the facts.

43 The contractual framework within which the issues arose included a number of elements. The key provision for the purposes of the specific issue determined by the Tribunal (the purported termination by the owners) was cl 24 of the contract, which identified the circumstances in which the owners were entitled to terminate the contract. A similar right was conferred on the builder (referred to in the contract as "the contractor") by cl 25.

44 Clause 24, so far as it dealt with termination due to the fault of the contractor, was in the following terms:

is unable or unwilling to complete the work or abandons the work;

suspends the work before completion without reasonable cause;

... if the contractor is a company, goes into liquidation or receivership;

fails to proceed diligently with the work;

fails to remedy defective work or remove faulty or unsuitable materials which substantially affect the work; or

without reasonable cause fails to comply with an order or direction of a public authority with respect to defective or incomplete work, which would substantially affect the quality and/or progress of the work,

the owner may, if such default can be remedied, notify the contractor in writing that unless the default is remedied within 10 working days or such longer period as specified, the owner will end the contract.

If the contractor does not comply with the owners request within the time allowed, or if the default cannot be remedied, the owner may end this contract by giving written notice to that effect to the contractor.

...

If the reasonable cost of completion of the work exceeds that which would have been otherwise due under the contract the difference will be a debt payable by the contractor to the owner. Should the reasonable cost of completion be less than otherwise due under the contract the difference will be a debt payable to the contractor.

Until completion of the work the contractor will not be entitled to any further payment under this contract. However, nothing contained in this clause may take away any right the contractor may have to payment under the dispute resolution procedure in Clause 26.

...

A notice required under this Clause must be given in accordance with Clause 27."

45 Clause 25 was in similar form, entitling the contractor to give a notice to the owner seeking to have a default remedied within 10 days, including for failure to pay a progress payment due under the contract and failure to perform any work or supply any materials "which prevents the Contractor from continuing with the work under the Contract or otherwise obstructs the Contractor from performing the work". As with cl 24, a notice under cl 25 "must be given" in accordance with cl 27.

"If the contract requires or permits a party to give a notice, consent, or other communication in writing to the other part it must be given by either [sic]:

leaving it with a person, apparently over the age of 16, at the party's business or residential address; or

certified mail to the last known address of the other party; or

facsimile transmission to the last known facsimile number of the other party.

A notice which is not handed to the other party is taken to have been received 3 working days after being posted, or the following day if left or transmitted by facsimile."

47 Clause 23 provided for circumstances in which the contractor was entitled to suspend the work. So far as relevant it read:

"If the owner, without reasonable and substantial cause:

...

fails to pay a progress payment or any other amount due to the contractor within the time allowed;

fails to perform any work or supply materials as specified in Clause 15 which prevents the contractor from continuing with the work under the contract;

the contractor may without prejudice to any other rights under the contract, suspend the work by giving written notice to the owner in accordance with Clause 27 (Giving of notices) specifying the reason.

If the owner remedies the default, the contractor must recommence the work within 10 working days unless the contractor has ended the contract under Clause 25."

48 The original contract price was $330,000, with progress payments to be made in six stages: cl 11. There was provision for variation, either at the request of the owner or of the contractor: cl 12. To be contractually effective, any notice of variation was to be provided by the contractor to the owner and signed and dated by both parties, to constitute acceptance. A progress payment was required to be paid by the owners when a particular stage of the work had been completed and was "free of apparent defects".

49 Clause 4 of the contract provided for the date on which work must commence and cl 5 provided that the contractor must diligently proceed and complete the work within 30 weeks of the commencement date. Clause 6 provided for extensions of time in the following circumstances:

inclement weather or conditions resulting from inclement weather,

...

any act or omission of the owner;

...

the unavailability of materials necessary for the continuation of the work, unless due to the fault of the contractor;

suspension of the work by a contractor under Clause 23; or

any other matter, cause or thing beyond the control of the contractor,

the contractor will be entitled to a reasonable extension of time to complete the work. Both the contractor and owner must take all reasonable steps to minimise any delay to the work.

If the contractor wishes to claim an extension of time, the contractor must notify the owner in writing of the cause and estimated length of the delay within 10 working days of the occurrence of the event or, in the case of a variation, from the date of agreement to the variation.

If the owner does not, within a further 10 working days, notify the contractor in writing that the extension of time sought is unreasonable, the completion date for the contract will be extended by the period notified to the owner.

If the owner gives the contractor written notice disputing the extension of time claimed, and no agreement can be reached on the time to be allowed, the dispute must be dealt with in accordance with the dispute resolution procedure (Clause 26)."

50 The contract also provided for the handling of disputes. If either party considered that a dispute had arisen in relation to any matter covered by the contract, "that person must give to the other party written notice of the items of dispute": cl 26. If the dispute were not resolved by negotiation or mediation, either party "may give written notice to the other party advising that they intend to resolve the matter through" the appropriate tribunal or court. The final paragraph of cl 26 stated:

"Even if a dispute has arisen the parties must, unless acting in accordance with an express provision of this contract, continue to perform their obligations under the contract so that the work is completed satisfactorily within the agreed time."

51 Contrary to the views of the trial judge, it is not necessary, nor appropriate, to examine all of the evidence before the Tribunal.

52 In broad terms the matters for determination by the Tribunal required it to address the following issues:

(a) had there been variations to the contract in March and May 2000?

(b) had there been extensions of time to complete the works in March and May 2000?

(d) if so, was the failure to pay "without reasonable and substantial cause"?

(e) were the owners, in June 2000, entitled to terminate the contract under cl 24?

(f) had either party repudiated the contract, as at 21 June 2000?

53 On 28 April 2000 the owners received two documents from the builder. One was a request for variations to the contract and the other a claim for progress payment 5. On 1 May 2000, the owners refused to agree to the variations, either because they did not consider them true variations to the contract, or because the amounts claimed were excessive. In response to the progress payment claim, they advised the builder that "before payment is due the following works must be completed", followed by a list of 43 items.

54 The letter from the owners of 1 May was followed by a letter from their solicitors dated 4 May 2000, stating in part:

1. been unable and unwilling to complete the works that are the subject of the building contract;

2. suspended work previously without reasonable cause; and

3. failed to proceed diligently with the work.

Unless the breaches of the Home Building Contract dated 5 August 1999 are remedied by you within 10 working days our clients will end that contract in accordance with clause 24 of the contract."

55 The letter of 4 May repeated the statement in the earlier letter to the effect that progress payment 5 was not due because some 42 items of work had not been completed. It further referred to the three variations sought on 28 April and stated their clients' instructions that the variations were "due to your fault and our clients are therefore not liable for the cost of those variations". A copy of the letter was sent to HIA.

56 In respect of the listed items, the Tribunal noted in its reasons at [16]:

"The cross-examination of Mr Kostas, apart from its effect on his credibility, shows that of the 42 items on the list, only some 8 would fall into the category of work to be attended to by the Builder under the contract. The cross-examination also shows that within a few days 5 of these items had been attended to. Further progress was by then conditional upon the supply by the Owners of windows and other items leading to lock-up, as well as the air-conditioning."

57 On 4 May 2000, the builder responded to the owners' solicitors stating in part:

"We confirm that due to the constant indecisive changes, variations to contract, postponed material deliveries from your clients, works are constantly delayed. This is Evident in the amount of approved extension of time claimed by our company (in access [sic] of 20 weeks). A further claim of extension of time has been placed in order of 10 weeks to a set back with the selection and supply of aluminum [sic] windows by your client.

In reference to your claims mentioned in you're [sic] correspondence; 'failed to proceed diligently with the work'; Sydney Construction Company has performed all works and responsibilities in the best of its ability to full fill [sic] the agreed contractual duty. Constant hindrance imposed on subcontractors by your clients caused Sydney Construction Company, to suspend works for one complete week to initiate a new site policy."

58 There was then a response in relation to each of the 42 items listed in the owners' letter, noting that the progress payment had been reduced from $60,000 to $36,500 by the exclusion of windows and external render, which were to be completed by the owners. The letter further noted that the variations had been signed and approved by the owners before commencement of the works. On the basis of a failure to pay a progress payment, the letter threatened a suspension of work from 8 May 2000.

59 On 10 May, the builder's solicitors wrote to the owners' solicitors stating that they had advised their client that it was entitled to suspend forthwith the work for failure of the owners to pay for the variations and on account of their failure to "perform work and supply materials which has prevented our client from continuing the work under the Contract". The letter sought payment by 12 noon on 12 May 2000 in order to avoid suspension of the work pursuant to cl 23. By letter dated 12 May 2000, the owners' solicitors raised a number of matters in respect of which there were clearly disputes between the parties. The letter concluded:

"In so far as the 42 items identified in our letter dated 4 May 2000 have not been completed, remedied or rectified, that notice is continuing.

In addition to those issues, we hereby give SCC [the builder] notice that it has failed to rectify defective works undertaken and is required to do so now.

Unless those breaches of the Home Building Contract dated 5 August 1999 are remedied by SCC within 10 working days of the notice, Kostas will end that contract in accordance with clause 24 of the contract."

60 The Tribunal noted the failure to provide details of the additional defective works referred to in the penultimate paragraph of the letter of 12 May, concluded that details were required and found that the notice of 12 May was "not a valid notice": at [18].

61 On 16 May 2000, the builder's solicitors set out in detail their client's position in relation to the matters in dispute, including progress claim 5. They stated at par 1.2 that they had reviewed the definition of work contemplated by stage 5 and advised their client that "apart from completion of the fixout joinery, all other work referred to in your correspondence is either not within the scope of the works or comes within stage 6". The request for payment was withdrawn and was to be made "as soon as the fixout has been completed". The letter asserted that work continued to be undertaken, even though the owners had failed to make payments in accordance with the agreement and that the extensions of time requested meant that it was significantly ahead of schedule: par 4.1.

62 The owners' solicitors appear to have sent a further letter dated 16 May 2000, referred to by the Tribunal at [19], parts at least of which were set out by the primary judge at [53]. It does not appear to have been before this Court.

63 On 22 May 2000 the owners wrote directly to the builder noting that wooden doors and door jams would be delivered on site on that day, "ready for installation on Tuesday 23/05/00". The letter noted that all cement rendering had been completed and that ceramic tiles would be delivered on 24 May 2000. A complaint was made that columns had been delivered on 2 May and had still not been installed and that a time schedule had not been provided, despite numerous requests, one being required immediately "so that all materials supplied by the owners can be supplied when required".

64 There appears to have been further correspondence between the parties which is not before this Court and, according to the manner in which the matter was dealt with in the Tribunal, was not material. On 29 June 2000 the owners' solicitors wrote to the builder's solicitors terminating the contract in accordance with cl 24. It was that notice which the Tribunal held to be ineffective because the entitlement to give such notice was conditional upon an earlier notice having been given, if the default could be remedied, requiring that the default be remedied within 10 working days. The notices relied upon as having that effect were the letters of 4 May and 12 May, each of which had been held by the Tribunal not to have constituted a valid notice for the purposes of cl 24.

65 In determining whether the owners had validly terminated the contract, the first issue addressed by the Tribunal was the date for completion. The significance of this issue was indirect: the completion date was important with respect to an argument that the builder had repudiated by virtue of its dilatory conduct (discussed at [26]) and to the asserted unwillingness or inability of the builder to complete the works within the specified period: see [19] and [27].

66 The Tribunal referred to two claims for extensions of time, being those made on 31 March and 23 May 2000. Prior to those extensions, the anticipated finishing date had been identified as 15 July 2000 in a request for an extension of time dated 24 January 2000 and bearing the builder's signature and the owners' signatures. The period claimed, as initialled by both parties, was reduced from 14 weeks to 12 weeks, so that the anticipated completion date was arguably 1 July, rather than 15 July. However, the first contested claim, being that of 31 March 2000, somewhat ambiguously sought allowance for a total of 87 working days (15 weeks), but identified only 17 days and noted an anticipated finishing date of 1 August 2000. The 17 days identified involved two periods of five days delay in relation to particular items, together with seven days for wet weather. The claim was signed by the builder, but not by the owner.

67 The second contested claim for an extension of time, dated 23 May 2000, was even less clear. It claimed a period of 16 weeks extension, with an anticipated finishing date of 13 September 2000. Four different bases were given for the claimed delays. The first involved nine "rain days", seven of which occurred in March and five of which were included in the earlier claim. The second basis involved backfill of sewer trenches and was quantified at three days. The third basis involved a variation with respect to guttering and structural steel, said to have been discussed at a site meeting on 9 February 2000 and involving 10 working days. It appeared to duplicate, at least for five days, one of the items identified in the 31 March extension claim. The fourth basis of claim concerned delays caused by the owners' selection of windows and was calculated as a period of 12 working weeks (60 days). Whether there was any overlap or double counting was unclear.

68 One feature of the claim of 23 May 2000 was that it carried a signature of neither the builder nor the owner.

69 The Tribunal noted that the owners denied that they had been served with those claims for extension of time, as asserted by the builder. The Tribunal considered the evidence of Mr Kostas in that respect to be unsatisfactory, accepted the statement of the builder that claims had been sent to the owners and concluded that they had been received. Accordingly, it concluded that the builder had notified the owners in writing of the relevant claims, for the purposes of cl 6 of the contract and that, the owners not having notified the builder in writing that the extension sought was unreasonable, the completion date for the contract was extended for the period notified to the owners, pursuant to the automatic operation of cl 6.

70 With respect to the notice served on 4 May 2000, the Tribunal noted that the general complaints of inability or unwillingness to complete the works, suspension of the work "previously" without reasonable cause and failure to proceed diligently, were not made good, for the reasons given at [14]:

"The contract had already run well beyond the time originally contemplated, but that time had been extended by consent. I consider that the consent of the Owners in January 2000 waives any complaint which could have been made about prior delays. What delays had occurred since then which could justify a Notice, at the date the contract had 4 months to run?"

71 Although expressed in the terms of a rhetorical question, it was clearly intended to be answered in the negative. His Honour treated the right to terminate on such grounds as equivalent to a general law right based on an inference of repudiation and referred to a passage in the judgment of Brennan J in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; 166 CLR 623 at 643 which, including references to other authorities also noted by the Tribunal, read as follows:

"Delay will amount to repudiation if the defaulting party 'evinces an intention no longer to be bound by the contract ... or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way': Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620 at 625-626; Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17 at 33, 40. If the inference to be drawn from the circumstances is that the defaulting party intends to perform an essential promise after some minor delay, repudiation cannot be inferred; but if the inference is that the defaulting party intends so to delay performance that the promisee will be substantially deprived of the benefit of the promise, repudiation can be inferred. The inference is not lightly drawn: Progressive Mailing House Pty Ltd v Tabali Pty Ltd, at 32."

72 No complaint is made about this statement of legal principle.

73 The Tribunal also considered the separate complaint as to the 42 items which had not been completed. It provided an assessment of the factual situation, namely that five of the items were attended to within a few days, leaving only three outstanding, as noted at [56] above. It continued at [17]:

"The position therefore is that as at the date of the first notice, the contract still had 4 months or so to run, and major progress with the works was dependent upon action by the Owners. The Builder was on site attending to the matters complained of which were within his responsibility. To pick up the words of Brennan J, I consider that it should be said that the inference to be drawn here is that after a minor delay, the Builder intended to proceed with its essential promises."

74 The Tribunal then turned to the letter of 12 May 2000 and in particular the terms identified at [59] above. In addition to the 42 items identified in the earlier letter, reference was made to additional issues involving defective work which had not been rectified. The Tribunal dealt with the failure to provide details at [18] in the following terms:

"How can the Builder attend to the notice? The only reasonable conclusion from the notice is that the Owners were of the opinion that there were some defective works in addition to those they had previously enumerated. What were those works? How was the Builder to attend to them?"

75 The Tribunal then referred to submissions for the owners which either did not deal with those "vital questions" or relied upon authority concerned with a notice with respect to failure to proceed diligently. The Tribunal continued:

"Lack of diligence is a general concept, not capable of particularisation. Defective works are so capable. Where there is an allegation of defective work, then I consider that an owner is required to give details of the defects alleged in a notice so that the Builder can attend to them. Accordingly, I find that the notice of 12 May was not a valid notice."

76 The Tribunal noted that the owners may well have formed a similar view in relation to the notice of 12 May, because they gave a further notice dated 16 May 2000: at [19].

77 The significance of the letter of 16 May for present purposes is unclear. Although it was referred to by the primary judge (for example at [124]) it was only in passing, and no finding was based upon it. The substance of the letter as set out by the primary judge at [53] concerned "variation 11", which was claimed to be part of the original contract, and claimed that the action taken by the builder in removing certain works that fell within the terms of the variation, constituted further evidence that the builder was "unable and unwilling to complete works which are the subject of the building contract". The Tribunal concluded that it was "unable to draw the conclusion that [the actions of the builder] evidence an inability or unwillingness to complete": at [19].

78 There being no challenge to that finding (and arguably, as discussed below, no challenge would have been available) no further consideration of it is required.

79 As noted above at [64], the Tribunal concluded that the notice of 29 June 2000, purporting to terminate the contract for failure to rectify defaults, was not effective, because there had been no relevant failure to rectify identified defective work and the more general assertions of unwillingness or inability to perform and failure to proceed diligently with the work, had not been made good.

80 It appears that the owners had also claimed repudiation on a more general basis, other than by reliance upon cl 24 of the contract. The Tribunal identified the relevant issues in the following terms:

"26. Had the Builder by its conduct repudiated the contract? As I have found above, there were at most some 3 items requiring rectification by the time that the 'notice' of 4 May was received by the Builder. There is no other evidence of a refusal to rectify; the contract had 4 months still to run and there is no evidence upon which I could find that there was insufficient time to attend to the outstanding items in that period. Accordingly, I do not accept the submissions on their behalf that there was a refusal to rectify from which I should conclude that there was repudiation.

27. It is then submitted that the Builder refused to complete the works. Consideration of this issue must start from the position that by agreed variations and by the failure to dispute the claims for extension of time, the contract had been extended to the end of September. What evidence is there of inaction by the Builder in May and June 2000 from which an inference of refusal to complete could be drawn?"

81 The Tribunal then set out the claims of both parties that the other was responsible for the delays and inactivity in May and June 2000. It dealt with the matter on the basis that, as the owners were "asserting that they are entitled to the benefits of the insurance policy, .... [they] are required to prove that the Builder was in breach": at [31]. There is no challenge to that legal proposition. The Tribunal concluded that the owners "have not proven a case that the Builder, from its own fault, failed to achieve lock up by 29 June 2000": at [31]. The Tribunal then dismissed a claim that, by not being on site, the builder had "abandoned the works". Whilst acknowledging that the evidence was unsatisfactory, the Tribunal concluded that the documents annexed to Mr Kostas' affidavit "show real attempts by the Builder to have the Owners attend to the matters outstanding on their part to enable the builder to proceed": at [32]. The Tribunal rejected the owners' assertion that "by its conduct the Builder repudiated the contract": at [33].

82 In the concluding paragraphs of the reasons, the Tribunal accepted the submission on behalf of the appellant that the owners' conduct in serving "an ill-founded notice of termination is itself repudiatory": at [34]-[37].

83 A survey of statutory appeal provisions, restricted in some way to legal error, suggests that they fall within three broad categories. The categories can be identified by reference to different forms of statutory language, although there are more variations than the categorisation would suggest.

84 The first and broadest category of appeal arises where the right of appeal is given from a decision that "involves a question of law", being language which permits "the whole case, and not merely the question of law" to be the subject of the appeal: see Brown v The Repatriation Commission [1985] FCA 194; (1985) 7 FCR 302 at 303 (referring to Ruhamah Property Co Ltd v Federal Commissioner of Taxation [1928] HCA 22; 41 CLR 148 and subsequent authorities).

85 The second category is exemplified by provisions which permit an appeal "on a question of law from a decision of" a tribunal. In such cases, it is the appeal which must be on a question of law, that question being not merely a qualifying condition to ground an appeal but the sole subject matter of the appeal, to which the ambit of the appeal is confined: Brown v The Repatriation Commission at 304; TNT Skypak International (Aust) Pty Ltd v Commissioner of Taxation [1988] FCA 119; (1988) 82 ALR 175 at 178.

86 The third and narrowest category is one restricted to "a decision of a Tribunal on a question of law", in which case it is not sufficient to identify some legal error attending the judgment or order of the Tribunal; rather it is necessary to identify a decision by the Tribunal on a question of law, that decision constituting the subject matter of the appeal.

87 This taxonomy, and the statutory provisions and case law supporting it, was explained by this Court in B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187 at [47]- [70] (Allsop P, Giles JA agreeing); Director-General, Department of Ageing, Disability and Home Care v Lambert [2009] NSWCA 102 at [58]- [59].

At a glance

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