[1990] HCA 33
Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385
Source
Original judgment source is linked above.
Catchwords
[1990] HCA 33
Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385
Judgment (35 paragraphs)
[1]
Introduction
The builder formulated the following questions as constituting questions of law in relation to amended grounds of appeal 1 to 6 of the notice of appeal:
1. question 1: was there a relevant inconsistency between clause 4 and special condition 11 insofar as the right of termination is concerned?
2. question 2: was there a waiver of any reliance by the builder on clause 4.1 to terminate the contract?
3. question 3: was there a breach of the contract capable of giving rise to a right of termination in favour of the builder in accordance with clause 4.1 of the contract?
4. question 4: was there sufficient evidence capable of satisfying the Tribunal for an order for compensation in the sum of $72,000?
5. question 5: if the answer to question 4 is yes, did the Tribunal err and should the figure have been a lesser amount no greater than $39,000?
[2]
Consideration
The interpretation of a statute or contract is directed to the ascertainment of the document's actual and true meaning. When the document is properly construed, there is only one correct meaning. It is for this reason that the proper construction of a statute or contract is a question of law: Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385; [2020] FCAFC 50 (Bianco Walling) at [66] (Flick, White and Perry JJ).
Recently the Appeal Panel has decided that a conclusion of mixed fact and law cannot be challenged on an appeal as a question of law under s 80(2)(b) of the NCAT Act except in the circumstances where it can be determined that the conclusion proceeded from a misdirection of law: Jain v Dr N Kalokerinos Pty Ltd [2023] NSWCATAP 141 at [91]. This is to be distinguished from the wrong application of the correct principles to the facts that would be an error of mixed fact and law and an appeal would not lie on a question of law: Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734 (Bimson) at [42]-[45] (Beech-Jones J).
In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33 (Bond) at 355-356 Mason J (with Brennan J at 365 agreeing) made the following observations:
"The question whether there is any evidence of a particular fact is a question of law. …
But it is said that "[t]here is no error of law simply in making a wrong finding of fact": …
…
On the other hand, there are statements in the English cases which support a "no sufficient evidence" test in the context of judicial review of findings of fact: …. It remains to be seen whether these statements convey any more than a "no probative evidence" test. So far no occasion has arisen to determine whether this is the case and, if so, whether the statements are to be seen as expressing what is or should be the law of Australia on the topic." (citations omitted)
[3]
Conclusion
We are satisfied that each of questions 1 to 3 raise a question of law and accordingly the builder has an appeal as of right under s 80(2)(b) of the NCAT Act in respect of these questions for the following reasons:
1. as to questions 1 and 3, this is a question of law within the principles of Bianco Walling at [66] because they involve the interpretation of the contract;
2. as to question 2, this is a question of law within the principles of Bimson at [42]-[45] because it involves consideration of whether the conclusion of waiver of reliance by the builder on clause 4.1(d) to terminate the contract proceeded from a misdirection of law.
We are not satisfied that each of questions 4 and 5 raise a question of law and accordingly the builder does not have an appeal as of right under s 80(2)(b) of the NCAT Act in respect of these questions for the following reasons:
1. as to question 4, this is a not question of law within the principles of Bond at 355-356 because it is clear from the Tribunal Decision at [35] and [37] that the Tribunal relied on some evidence in determining the amount of damages;
2. as to question 5, this is not question of law as it involves the contention that the Tribunal made a wrong finding of fact.
[4]
The nature of an appeal under s 80(2)(b) of the NCAT Act
In Bimson at [40]-[41], Beech-Jones J made the following observations when considering an appeal under a statute which conferred a right of appeal "on a ground that involves a question of law alone":
"[40] This leads to the second proposition, namely that, ultimately it is incumbent on the parties contending that a question of law was decided erroneously, to identify the question and to do so in abstract terms. Thus in Williams v R [1986] HCA 88; 161 CLR 278 at 287 ("Williams"), Gibbs CJ stated:
"... there is 'a question of law alone' if the question of law can be stated and considered separately from the facts which it may be connected in a given case." (see also 314 per Wilson and Dawson JJ.)
[41] If that task is undertaken, then the consequential questions that will arise are whether the lower court or tribunal either answered that question or proceeded on an assumption concerning that answer, whether its answer or assumption was correct or incorrect, and whether that answer or assumption was material to the outcome, in the sense that it could have affected the outcome (see Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 per Mason CJ; Mark Aronson and Matthew Groves Judicial Review of Administrative Action (Thomson Reuters, 5th ed, 2013, at [4.270]))."
The Appeal Panel has determined that, except when it conducts a new hearing under s 80(3), an appeal under s 80(1) of the NCAT Act involves a rehearing in the sense of conducting a rehearing on the materials before the Tribunal to determine whether the order that is the subject of the appeal is the result of some legal, factual or discretionary error and, in some cases, has power to receive additional evidence. Although the appeal is described as being "by way of rehearing", it does not call for a fresh hearing and the Appeal Panel does not hear the witnesses again": Yuen v Thom [2016] NSWCATAP 243 at [14]-[22].
We consider that the approach in Bimson at [40]-[41] should be applied in determining whether the Tribunal made an error on a question of law under s 80(2)(b) of the NCAT Act. If we are satisfied that the Tribunal made one or more material errors of law, then it will be necessary to determine whether to undertake a rehearing on the material before the Appeal Panel or remit the proceedings for further consideration by the Tribunal.
We consider that the approach in Collins at [76], [77] and [84] should be followed in determining whether leave to appeal against the money order should be granted. If leave to appeal should be granted, then it will be necessary to determine whether to undertake a rehearing on the material before the Appeal Panel or remit the proceedings for further consideration by the Tribunal.
[5]
The issues for determination in the appeal
It is convenient to deal with the builder's questions by addressing question 1 first, followed by questions 3 and 2, and then questions 4 and 5 together.
The following issues arise for determination in this appeal or may arise for determination depending on the outcome of anterior issues:
1. issue 1: was there a relevant inconsistency between clause 4 and special condition 11 insofar as the right of termination is concerned?
2. issue 2: was there a breach of the contract capable of giving rise to a right of termination in favour of the builder in accordance with clause 4.1 of the contract?
3. issue 3: was there a waiver of any reliance by the builder on clause 4.1 to terminate the contract?
4. issue 4: whether the builder should be granted leave to appeal against the money order, and if so whether the appeal should be allowed and that order should be set aside;
5. issue 5: the costs of the appeal.
[6]
Issue 1: was there a relevant inconsistency between cl 4 and special condition 11 insofar as right of termination concerned?
[7]
Introduction
Before considering this issue, it is appropriate to summarise the submissions of the parties.
[8]
The builder's appeal submissions
In the builder's appeal submissions, the builder made the following submissions:
1. it drew attention to the principles for the construction of a commercial contract and where a specific term prevails over a general one;
2. properly construed, special condition 11 does not purport to occupy the same territory as clause 4. It serves a different purpose and there are good reasons for this:
1. first, the phrase "In accordance with this contract" in special condition 11 is one which is apt to invite coherence rather than conflict between the provisions having regard to the definitions of "contract" and "contract documents" in clause 1;
2. secondly, special condition 11, in its clear terms, conferred on the builder other rights in the event that there was non-provision of the required items "by commencement of the build" which went beyond a right to terminate, whereas non-compliance with clause 4.1 within the "initial period" only gave rise to a right to terminate";
3. thirdly, whilst both clause 4.2 and special condition 11 would permit termination at any time before construction work commenced, the termination rights were attended by different conditions. So far as non-compliance could be shown to have occurred within the "initial period" within the requirements in clause 4.1, it was open to the builder to terminate "by giving the owner a written notice to that effect". Whilst that notice would be required to comply with clause 23 of the "General Conditions", it is arguable that it need not comply with clause 27, which is concerned with termination for "substantial breach". It is apparent that some aspects of the clause 4.1 obligation on the owner are characterised as capable of constituting substantial breaches by clause 27.2, but that does not gainsay the ability of the builder to rely on the separate right to terminate pursuant to clause 4.2 without having regard to the scheme in clause 27.3. Again, it gives an entirely coherent operation to the contract (given the fact that the clause 4.2 right to terminate may only be relied on before "physical commencement of the building works") if the right to terminate for this under clause 27 continues to inhere in the builder despite some commencement of work, having regard to the centrality of the owner's payment obligations (which is plain from clause 27.2's non-exhaustive identification of substantial breaches by the owner). This also dovetails neatly with the construction of special condition 11, whereby the right to terminate conferred "in accordance with the contract" is to be understood as a reference to the mechanism for termination in clause 27. In this regard, one can readily envisage a circumstance where the builder does not, within the "initial period" receive the information required. They could elect to immediately terminate under clause 4.2 in that scenario. There may be reasons why the builder may wish to reserve to itself that right to immediate termination and may choose to exercise it (for example, the economics of the contract may have shifted dramatically during the "initial period"). Alternatively, the builder could elect to rely on special condition 11 and give a notice under clause 27.3 which would enable termination by the builder only if the owner's breach remained unremedied after "10 working days";
4. fourthly, the earlier provision of information required by clause 4 of the "General Conditions" is a matter of utility to the builder and the clause thus serves a commercial purpose beyond special condition 11. It enables the builder to ascertain more expeditiously whether, first, the purported owner does indeed own the property or have an entitlement to build on the site (noting clause 4.1(a)) and, secondly, whether the purported owner will have the financial means to perform its obligations (with respect to payment) under the construction contract (noting clause 4.1(c) and (d)). This has the potential to avoid the builder incurring costs in relation to contract administration and communications with 'owners' who are not going to proceed to engage the builder;
5. fifthly, whilst there is an overlap between the obligation in clauses 4.1(c) and 4.1(d) and that in special condition 11 subpara 1, and between clause 4.1(a) and special condition 11 subpara 2, the balance of special condition 11 does not overlap with clause 4 of the "General Conditions". This supports the contention that these clauses are not inconsistent, rather they operate harmoniously and cumulatively to give the builder a degree of flexibility prior to the commencement of construction works;
1. it follows that, in those circumstances, there was no conflict of the kind identified by the Tribunal in the Decision.
[9]
The owner's appeal submissions
In the owner's appeal submissions, the owner made the following submissions:
1. he drew attention to the principles for the construction of a commercial contract and where a specific term prevails over a general one;
2. there was a direct conflict between special condition 11 and clause 4.1(a) and 4.1(d): namely that those clauses stipulated different timeframes for the owner to provide the same documents to the builder;
3. the builder in the builder's appeal submissions demonstrates the incoherence and confusion that would result between the parties if both special condition 11 and clause 4.1 of the contract can operate according to their terms, namely the right to terminate the contract under clause 4.2 for breach of clause 4.1(a) and under clause 27 for breach of clause special condition 11.2 where both terms contain the same obligation. There is no reason why the parties would have objectively intended to confer on the builder such disparate and conflicting rights to terminate the contract for the same "breach" by the owner.
[10]
The builder's appeal submissions in reply
In the builder's appeal submissions in reply, the builder made the following submissions:
1. the owner in the owner's appeal submissions places undue reliance on the alleged identity of documents required by the different clauses and that they were to be provided by different points in time. While this is so, this is not determinative of the constructional issue in light of the proposition that the identification of a conflict is a matter of last resort;
2. there is no "incoherence and confusion" that follow as a consequence of the builder's construction, but this is not made out in the circumstances. That parties might have contemplated different regimes of rights within a construction contract is not unusual. Moreover, there are sound reasons why the parties would have conferred different rights in respect of the owner's breach.
[11]
Consideration
Recently in Willis Australia Ltd v AMP Capital Investors Ltd [2023] NSWCA 158 (Willis Australia) at [49] the New South Wales Court of Appeal (Ward P; Beech-Jones JA; Griffiths AJA) summarised the settled principles relating to the construction of commercial contracts:
"[49] The principles are identified in cases such as Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]-[52] per French CJ, Nettle and Gordon JJ and Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 644; [2017] HCA 12 at [16] per Kiefel, Bell and Gordon JJ. They may be summarised as follows:
(1) The rights and liabilities of the parties are determined objectively by reference to the contract's text, context (as a whole) and purpose.
(2) It is necessary to ask what a reasonable businessperson would have understood the terms of a commercial contract to mean, which requires consideration of the language used by the parties, the circumstances addressed by the contract and the commercial purpose or objects to be secured by it.
(3) Ordinarily, this process of construction is possible by reference to the contract alone and, if an expression in the contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to alter its plain meaning.
(4) Recourse to such events, circumstances and external things may be necessary to identify the commercial purpose or objects of the contract or where there is a constructional choice.
(5) Each of the events, circumstances and external things to which recourse may be had is objective but those events, circumstances and external things need to be known to the parties or assist in establishing the purpose or object of the transaction, including its history, background and context and the market in which the parties were operating.
(6) Evidence of the parties' statements and actions reflecting their actual intentions and expectations are inadmissible.
(7) Unless a contrary intention is indicated in the contract, a Court is entitled to approach the task of construction on the assumption that the parties intended to produce a commercial result, in the sense that a commercial contract should be construed so as to avoid it "making commercial nonsense or working commercial inconvenience" (citing Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35])."
In Rivat Pty Ltd v B & N Elomar Engineering Pty Ltd [2007] NSWSC 638; (2007) NSW Conv R 56-186 (Rivat) at [41]-[47] Hamilton J considered the principles to resolve an asserted conflict between a general clause and a special condition in a contract for the sale of land:
"[41] There are two well known principles of construction that are relevant to the determination of this question.
[42] The first principle is that, to arrive at the true interpretation of a document, a clause must not be considered in isolation, but must be considered in the context of the whole of the document. …
[43] The second principle is that, in case of inconsistency between typed provisions and printed provisions forming part of a standard form used in a written contract, the written provisions will prevail. …
…
[47] In my view, what flows from these principles is that, whilst clearly inconsistent provisions of the printed form must be treated as excluded by the typed provisions, the operation of the printed clauses should be preserved so far as is possible. The Court should not lightly accede to a submission that the typed provision covers the field and excludes in whole the corresponding printed clause, if parts of that provision can coexist with the typed clause and still be given effect. …" (citations omitted)
In NEXTracker Inc v ACN 003 905 093 Pty Ltd (formerly RCR O'Donnell Griffin Pty Ltd) (In Liquidation) [2019] NSWSC 1604 (NEXTracker) at [26] Ball J considered the principles applicable to the construction of negotiated additions to a standard form contract:
"[26] … where the parties have negotiated additions to a standard form contract and there is an inconsistency between the standard terms and the added ones, greater weight will normally be given to the added terms: …. That principle reflects the obvious fact that the words specifically chosen by the parties are more likely to reflect their intentions than the words of a standard form which they have chosen to incorporate into their contract."
Having regard to the principles in Willis Australia at [49], Rivat at [41]-[47] and NEXTracker) at [26], we do not consider that special condition 11.1 and clause 4.1(d) were inconsistent for the following reasons:
1. clause 4.1 when read with item 7 of Schedule 1 imposed an obligation on the owner to provide the information in clauses 4.1(a) and (e) and if applicable the information in clauses 4.1(b), (c), (d), (f) and (g) within 90 days of 11 October 2021, failing which the builder could pursuant to clause 4.2 terminate the contract at any time prior to physical commencement of the building works;
2. special condition 11 imposed an obligation on the owner to complete the steps or provide the information in special condition 11.1 to 11.5 by the commencement of the building works, failing which the builder could take one of the three following steps:
1. review the contract;
2. adjust the contract price if required; or
3. if the breach constituted a substantial breach within clause 27.2 serve a notice of breach under clause 27.3 and if the breach was not remedied within 10 working days, pursuant to clause 27.4 terminate the contract;
1. the commencement of the building works as specified in clause 12.1 was to occur within 20 working days of the later of the receipt by the builder of all necessary building permits and planning approvals for the building works to commence and the information to be provided by the owner pursuant to clause 4.1;
2. the obligation in clause 4.1(d) is not the same as the obligation in special condition 11.1. Pursuant to clause 4.1(d), where it applied, the owner was required to give to the builder "written advice from the lending body that the amount of finance, when added to the owner's own available funds, is sufficient to pay the contract price, and the building works may commence". Pursuant to special condition 11.1, where it applied, the owner was required to provide to the builder a "letter of commencement from the lending body" which on its proper construction referred to a letter from the lending body that the loan facility had commenced;
3. further, unlike special condition 14 which is expressed to be an amendment of clause 12.1, special condition 11 is not expressed to be an amendment of clause 4.1.
In summary, not only were the obligations in special condition 11.1 and clause 4.1(d) different, they were to be satisfied at different times, and where there was non-compliance by the owner different rights were conferred on the builder.
The Tribunal in the Decision at [13]-[14] implicitly found that special condition 11.1 covered the field and excluded the operation of clause 4.1(d). We are satisfied that the Tribunal in making this finding made an error law, and should have found that special condition 11.1 did not exclude the operation of clause 4.1(d). This error was material in that the Tribunal relevantly in the Decision at [16] on the basis of its finding of its exclusion relevantly was not satisfied that the owner was in breach of clause 4.1(d).
[12]
Issue 2: was there a breach of the contract capable of giving rise to a right of termination in favour of the builder in accordance with clause 4.1 of the contract?
[13]
Introduction
Because of its finding that special condition 11.1 covered the field and excluded in whole clause 4.1(d), the Tribunal did not consider whether the obligation in clause 4.1(d) on its proper construction was dependent on the builder procuring development consent for the building works.
As we found that special condition 11.1 did not exclude the operation of clause 4.1(d), it is necessary to consider this question on undertaking a rehearing.
Before considering this issue, it is appropriate to summarise the submissions of the parties.
[14]
The builder's appeal submissions
In the builder's appeal submissions, the builder did not address this issue.
[15]
The owner's appeal submissions
In the owner's appeal submissions, the owner submitted that he was not in breach of clause 4.1(d) because his lending body could not provide the written advice required by clause 4.1(d) unless and until the builder had obtained development consent for the building works, which it had not yet obtained as at 17 May 2022, and he had notified the builder that his lending body could not provide such written advice unless and until the development consent had been obtained.
[16]
The builder's appeal submissions in reply
In the builder's appeal submissions in reply, the builder submitted that no proper basis had been advanced as a matter of construction of the contract as to why strict insistence on the performance of clause 4.1(d) should be understood to be conditional on the performance of the development consent obligations under clause 5. Indeed, if that were so then it would seriously undermine the value of clause 4 to the builder.
[17]
Consideration
The owner's appeal submissions appeared to place reliance on the prevention principle.
In MP Water Pty Ltd v Veolia Water Australia Pty Ltd (No 3) [2021] NSWSC 1023 at [268]-[272], Williams J explained the prevention principle:
"[268] The "prevention principle" precludes a party from insisting on the performance of a contractual obligation by the other party if the first party's wrongful conduct is the cause of the other party's non-performance: Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151 ("Probuild") at [114] (McColl JA, Beazley ACJ and Macfarlan JA agreeing); Bensons Property Group Pty Ltd v Key Infrastructure Australia Pty Ltd [2021] VSCA 69 (Bensons) at [101]-[112].
[269] Whilst there is some debate about the juridical basis for the principle, the weight of authority favours the view that it is a manifestation of an implied obligation for each party to co-operate in doing all that is necessary on its part for the carrying out of their contract, by which they have agreed to do something that cannot be done unless both parties concur in doing it: Probuild at [114].
[270] Irrespective of whether the prevention principle is to be applied by reference to breach of an implied obligation to co-operate, the principle has two elements: wrongful conduct and the consequences of that wrongful conduct: Bensons at [109]-[111].
[271] The conduct that is said to be wrongful must be assessed by reference to the terms of the contract: Bensons at [111]-[112].
[272] If the two elements referred to above are satisfied, the operation of the prevention principle may nevertheless be modified or excluded by contract: Probuild at [117]."
We are not satisfied that the prevention principle has any application on the question of the proper construction of clause 4.1(d). It was not necessary for compliance with clause 4.1(d) for the owner to have development consent for the building works. The construction of this subclause was not dependent on whether a lending body might require this development consent before it would provide the specified written advice.
It follows that, subject to the issue of whether the builder waived compliance with clause 4.1(d), we are satisfied that the owner was in breach of clause 4.1(d) as at 17 May 2022 when it received the notice of termination.
[18]
Issue 3: was there a waiver of any reliance by the builder on clause 4.1 to terminate the contract?
[19]
Introduction
Because of its finding that special condition 11.1 covered the field and excluded the operation of clause 4.1(d), the Tribunal was not satisfied that this issue arose. However, if it had arisen, then the Tribunal would have decided that the builder waived compliance with clause 4.1(d).
As we found that special condition 11.1 did not exclude the operation of clause 4.1(d), it is necessary to consider this question on undertaking a rehearing.
Before considering this issue, it is appropriate to summarise the submissions of the parties.
[20]
The builder's appeal submissions
In the builder's appeal submissions, the builder made the following submissions:
1. it drew attention to the principles for determining whether there is an election by affirmation;
2. there was no finding by the Tribunal, nor was one open on the evidence, that the owner had detrimentally relied on the communication in April 2022 by which it was said to have elected to affirm the contract (or to have otherwise "waived" its right to terminate under clause 4 of the contract). It follows that it was open to it to revoke any affirmation of the contract, and it did so by its conduct on 17 May 2022 when it issued a termination notice.
[21]
The owner's appeal submissions
In the owner's appeal submissions, the owner made the following submissions:
1. it drew attention to the principles for determining whether there is a waiver;
2. the particular conduct by the builder after the expiry of the "initial period" which communicated to him its decision to "waive" compliance with the timeframe for the provision of documents under clause 4.1 of the contract was as follows:
1. issuing the footings variation on 11 February 2022;
2. issuing the delay variation on 9 March 2022; and
3. continuing to progress the development application, including providing further information to the Council on 29 and 30 March 2022;
1. the builder did not give to him reasonable notice (or any notice at all) of its decision to "retract" or "revoke" the waiver at any time prior to its purported termination of the contract on 17 May 2022.
[22]
The builder's appeal submissions in reply
In the builder's appeal submissions in reply, the builder made the following submissions:
1. the footings variation occurred on 11 February 2022 prior to the expiry of the "initial period";
2. continuing to progress the development application was equivocal;
3. the delay variation was consistent with continued performance of the contract, but was not inherently inconsistent with the exercise of the right to terminate.
[23]
Consideration
In Willis Australia the appeal concerned whether the appellant tenant had exercised, and was bound by, an option to take a lease over premises by issuing a notice to the first respondent landlord stating that it desired to take a new lease of the premises. Clause 20.4 of the lease provided for the exercise of the option by the tenant by issuing a notice to the landlord by a specified date, and providing a bank guarantee to the landlord by that date (clause 20.4(e)). Clause 17.4 of the lease provided, "A provision of or a right created under this lease may not be waived or varied except in writing signed by the party or parties to be bound." The primary judge concluded that the tenant had exercised its option under clause 20.4 and was bound to take the new lease. The primary judge also found that the landlord could waive the timely provision of the bank guarantee, but did not find that it had done so.
Ground 3(c) in the appeal raised the issue of whether, if the provisions of clause 20.4 were capable of waiver, they were only capable of waiver if the provisions of clause 17.4 of the lease were complied with, requiring writing signed by the parties to be bound and those additional provisions were not complied with. The New South Wales Court of Appeal (Ward P; Beech-Jones JA; Griffiths AJA) at [105] relevantly held:
"[105] … Clause 17.4 might apply, however, to the condition in cl 20.4(e) on the basis that it constitutes a "provision" within the meaning of cl 17.4. But even under this analysis, for the waiver of this provision to be valid it would be necessary for the waiver to be in writing and signed by both parties who are affected by the purported waiver. This requirement was not satisfied and accordingly, the purported waiver was invalid and of no effect. Ground 3(c) should be upheld."
Having regard to the principles in Willis Australia at [105], we are satisfied that the builder did not waive compliance by the owner with clause 4.1(d) of the contract for the following reasons:
1. there was no relevant difference between the terms of clause 17.4 of the lease in Willis Australia and clause 42.1 of the contract so far as the requirement that the waiver be in writing;
2. the prior written consent of the parties as required by clause 42.1 of the contract for the waiver by the builder of compliance with clause 4.1(d) by the owner was not obtained.
[24]
Issue 4: whether the builder should be granted leave to appeal against the money order, and if so whether the appeal should be allowed and that order should be set aside
[25]
Introduction
By questions 4 and 5 the builder seeks leave to appeal against the quantum of damages payable for breach of the contract found by the Tribunal.
Before considering this issue, it is appropriate to summarise the submissions of the parties.
[26]
The builder's appeal submissions
In the builder's appeal submissions, the builder made the following submissions:
1. there was not sufficient evidence before the Tribunal from which it could reasonably and safely have determined an award for damages. What was relied on was merely an email which asserted that construction costs had risen by a given amount. The veracity of that assertion was not established before the Tribunal, and it was inappropriate for the Tribunal to have assumed it offered a safe basis to assess damages. The owner bore the onus on his damages case, no reason was put forward as to why it could not have properly proved its loss in the circumstances;
2. alternatively, the reliance on an email indicating that costs of building the house had increased by $72,000 reveals a fundamental error, in that the premise of the damages award was to put the owner in the position he would have been in had it performed the contract. A consequence of that performance would have been the acceptance of the increased costs it proposed in the sum of $32,975. That would have had the effect of reducing the damage said to have been sustained by reason of what was held to be its wrongful repudiation of the contract.
[27]
The owner's appeal submissions
In the owner's appeal submissions, the owner made the following submissions:
1. as to question 4, the information contained in the builder's email was sufficient to quantify the loss and damage he suffered by reason of its repudiation of the contract;
2. as to question 5, the builder did not make any submission to the Tribunal below that his claimed damages of $72,000 should be reduced by an amount of $32,975 to take into account the increased cost it proposed to construct the building works. He would be prejudiced if the builder were now to raise that issue for the first time on this appeal.
[28]
The builder's appeal submissions in reply
In the builder's appeal submissions in reply, the builder submitted question 5 could be raised on appeal because it raised a question of law.
[29]
Question 4
We are not satisfied that the builder has established that it may have suffered a substantial miscarriage of justice within cl 12(1) of Sch 4 of the NCAT Act by reason of the Tribunal relying on the builder's email in determining the additional cost of the construction of the building works by reason of its breach of the contract.
Even if we had been satisfied that the builder may have suffered a substantial miscarriage of justice, then having regard to the matters in Collins at [84(2)], we would not have exercised the discretion under cl 12(1) of Sch 4 of the NCAT Act to grant leave to appeal against the money order.
[30]
Question 5
In Coulton v Holcombe (1986) 162 CLR 1 at 8; [1986] HCA 33 (Coulton) the plurality of the High Court of Australia (Gibbs CJ, Wilson, Brennan and Dawson JJ) noted the following principle:
"… in a recent decision of six Justices of this Court (University of Wollongong v. Metwally [No. 2]) the Court said:
"it is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so."" (citation omitted)
The principle in Coulton has been applied by the Appeal Panel on many occasions: see, for example, Naish aka Khosroabadi v NSW Land and Housing Corporation [2023] NSWCATAP 99 at [21].
Having regard to the principle in Coulton, we are satisfied that the builder should not be permitted to raise question 5 in this appeal.
[31]
Introduction
The parties submitted that if the appeal was allowed and the issue of whether the builder was precluded from exercising its right to terminate the contract in reliance on the breach of clause 4.1(d) by the owner on the grounds that it was in breach of its obligation to act in good faith and/or it acted unconscionably, then they would wish to make submissions on the costs of the appeal.
[32]
Consideration
Rule 38A deals with costs in internal appeals, and relevantly provides:
38A Costs in internal appeals
…
(2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
For the purpose of r 38A of the NCAT Rules the amount claimed or in dispute is the amount in dispute on appeal, not the amount in dispute in the proceedings at first instance: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [57].
We are satisfied that r 38A(2) of the NCAT Rules is applicable to this appeal because the amount in dispute in the appeal is more than $30,000. It follows that the position of each party paying their own costs specified in s 60(1) of the NCAT Act is not applicable to the proceedings.
The builder has been successful in the appeal. We are satisfied that the owner should pay its costs of the appeal.
However, having regard to our decision in this appeal and the position of the parties, we have decided to make procedural orders in respect of the costs of the appeal.
[33]
The disposition of the appeal
As we have found that the builder has been successful on issues 1 to 3, we have decided that the appeal should be allowed pursuant to s 81(1)(a) of the NCAT Act and the money order should be set aside pursuant to s 81(1)(c) of the NCAT Act.
As the Tribunal did not determine the issues of whether the builder was precluded from exercising its right to terminate the contract in reliance on the breach of clause 4.1(d) by the owner on the grounds that it was in breach of its obligation to act in good faith and/or it acted unconscionably, they should be remitted to the Consumer and Commercial Division of the Tribunal as originally constituted on the basis of the evidence of the parties and such further evidence as the Tribunal may allow pursuant to s 81(1)(e) of the NCAT Act.
[34]
Orders
We make the following orders:
1. the appeal is allowed;
2. order 1 made on 11 May 2023 is set aside;
3. the issues of whether the appellant was precluded from exercising its right to terminate the contract in reliance on the breach of clause 4.1(d) by the respondent on the grounds that it was in breach of its obligation to act in good faith and/or it acted unconscionably are remitted to the Consumer and Commercial Division of the Tribunal as originally constituted on the basis of the evidence of the parties and such further evidence as the Tribunal may allow;
4. the respondent is to pay the appellant's costs of the appeal as agreed or assessed under the applicable costs legislation;
5. if any party wishes to make an application to vary order (4) above, the applicant (the costs applicant) must file and serve a costs application, including submissions limited to three pages and any evidence in support, on or before 14 days from the date of this decision;
6. the respondent to the costs application is to file and serve any submissions limited to three pages and any evidence in reply on or before 28 days from the date of this decision;
7. the costs applicant is to file any submissions limited to two pages in reply on or before 35 days from the date of this decision;
8. the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted rather than the application being determined on the papers.
[35]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 31 July 2023
NEXTracker Inc v ACN 003 905 093 Pty Ltd (formerly RCR O'Donnell Griffin Pty Ltd) (In Liquidation) [2019] NSWSC 1604
Rivat Pty Ltd v B & N Elomar Engineering Pty Ltd [2007] NSWSC 638; (2007) NSW Conv R 56-186
Thomas and Naaz Pty Ltd (ACN 101 491 703) v Chief Commissioner of State Revenue [2022] NSWCATAP 220
Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40
Willis Australia Ltd v AMP Capital Investors Ltd [2023] NSWCA 158
Yuen v Thom [2016] NSWCATAP 243
Texts Cited: None cited
Category: Principal judgment
Parties: Hunter Homes Pty Ltd (Appellant)
Christopher Layzell (Respondent)
Representation: Counsel:
N Simpson (Appellant)
D Robertson (Respondent)
The hearing of the appeal
On 24 July 2023, we heard the appeal. The builder was represented by Mr N Simpson, a barrister. The owner was represented by Mr D Robertson, a barrister.
We referred to the necessity to identify a question of law in a notice of appeal as explained in recent authorities: Thomas and Naaz Pty Ltd (ACN 101 491 703) v Chief Commissioner of State Revenue [2022] NSWCATAP 220 at [58]-[59]; Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 (Thomas and Naaz CA) at [26] (Leeming JA) (with Meagher JA at [1] and Griffiths AJA at [75] agreeing).
The builder in response formulated questions which it submitted were questions of law in relation to amended grounds 1 to 6 of the notice of appeal. The owner submitted that these formulated questions did not raise a question of law. We indicated we would deal with this issue in our decision.
The builder relied on the following documents:
1. a bundle of documents filed on 22 June 2023 comprising "Appellant's Written Outline of Submissions" dated 21 June 2023 (the builder's appeal submissions) together with its evidence before the Tribunal;
2. "Appellant's Written Reply Submissions" dated 12 July 2023 (the builder's appeal submissions in reply).
The owner relied on a bundle of documents filed on 7 July 2023 comprising "Respondent's outline of submissions" dated 4 July 2023 (the owner's appeal submissions) together with his evidence and submissions in chief and in reply before the Tribunal.
The builder and the owner each made oral submissions in which they substantially repeated their written submissions.
At the conclusion of the hearing, we reserved our decision.
The scope and nature of internal appeals
Part 6 Division 2 (ss 80-81) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) contains provisions dealing with internal appeals. Section 80 deals with the making of internal appeals, and provides:
80 Making of internal appeals
(1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made.
Note. Internal appeals are required to be heard by the Tribunal constituted as an Appeal Panel. See section 27(1).
(2) Any internal appeal may be made -
(a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and
(b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds.
(3) The Appeal Panel may -
(a) decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and
(b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances.
Section 81 deals with the determination of internal appeals, and provides:
81 Determination of internal appeals
(1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following -
(a) the appeal to be allowed or dismissed,
(b) the decision under appeal to be confirmed, affirmed or varied,
(c) the decision under appeal to be quashed or set aside,
(d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it,
(e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel.
(2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act:
12 Limitations on internal appeals against Division decisions
(1) An Appeal Panel may grant leave under section 80(2)(b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because -
(a) the decision of the Tribunal under appeal was not fair and equitable, or
(b) the decision of the Tribunal under appeal was against the weight of evidence, or
(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
Note. Under section 80 of this Act, a party to proceedings in which a Division decision that is an internally appealable decision is made may appeal against the decision on a question of law as of right. The leave of the Appeal Panel is required for an internal appeal on any other grounds.
In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where:
"… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance." (emphasis in original)
In Collins, the Appeal Panel at [77], without seeking to be exhaustive in any way, stated the authorities establish that:
1. if there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" within cl 12(1)(a) of Sch 4 of the NCAT Act;
2. the decision under appeal can be said to be "against the weight of evidence" within cl 12(1)(b) of Sch 4 of the NCAT Act where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act.
In Collins, the Appeal Panel at [84] summarised the general principles which govern the granting of leave to appeal:
"[84] The general principles derived from these cases can be summarised as follows:
(1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45];
(2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve:
(a) issues of principle;
(b) questions of public importance or matters of administration or policy which might have general application; or
(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;
(d) a factual error that was unreasonably arrived at and clearly mistaken; or
(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed,
BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45];
(3) In relation to an application for leave to appeal relating to a question of practice and procedure, the application is to be approached with the restraint applied by an appellate court when reviewing such decisions, especially if the application is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21] and the authorities cited there."
Rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) relevantly provides that, in the case of an appeal from a decision of the Tribunal, an internal appeal must be lodged within 28 days from the day on which the appellant was notified of the decision to be appealed or given reasons for the decision.