Hutchings v Hope

Introduction

1. This appeal relates to two home building applications filed in the Consumer and Commercial Division of the Tribunal.
2. The first was application HB 17/46747. In that application the applicant was Mr Hope, the respondent in this appeal. Mr Hope had carried out residential building work for Mr and Mrs Hutchings, the appellants in this appeal. He claimed money for work done.
3. The second application was brought by the appellants. They asserted the builder had failed to comply with his obligations under a fixed-price building contract dated 21 May 2014 (written agreement) by which the respondent agreed to carry out residential building works for a total of $300,000. The appellants contended that they had overpaid the respondent and were entitled to recover an amount of $17,537.86 and that the builder had carried out defective work.
4. The proceedings were heard by the Tribunal on 6 and 7 June 2018. On 31 October 2018, the Tribunal made orders and published reasons for decision (reasons). The Tribunal's orders were as follows: 1. In matter HB 17/46747 the Tribunal determines that Matthew Hutchings and Victoria Hutchings owe the sum of $145,147.77 to John Laurence Hope. 2. In matter HB 17/38121 the Tribunal determines that John Laurence Hope is liable for defects to the value of $25,002.63. 3. Matthew Hutchings and Victoria Hutchings are to pay the sum of $120,145.14 to John Laurence Hope within 28 days of the date of this decision.
5. In making its decision, the Tribunal reached the following conclusions: 1. The written agreement asserted by the appellants dated 21 May 2014 was a sham, entered into for the sole purpose of obtaining finance for the building works from the appellants' bank, the Commonwealth Bank of Australia, and was not valid: reasons at [60]-[61]. 2. Having considered the warranties found in clause 5.0 of the written agreement and having compared those with the warranties implied under section 18B of the Home Building Act 1989 (NSW) (HB Act), the Tribunal concluded that a limitation period of 6 years under the Limitation Act 1969 (NSW) (Limitation Act) applies to such warranties to the extent they do not partly or wholly overlap with the statutory warranties found in s 18B: reasons at [73]. However, to the extent breach is asserted in respect of an express warranty and that express warranty is in the same terms as the warranties implied by section 18B, the applicable limitation periods are 6 years and 2 years respectively (as found in s 18E of the HB Act) depending on whether the defect is a major defect or not: reasons at [75]-[80]. Consequently, the Tribunal dismissed those claims of the appellants categorised as non-major defects as those claims were out of time. 3. In respect of the claim by the respondent builder, it would appear the Tribunal awarded a quantum meruit: reasons at [90]. This occurred in circumstances where the respondent did not have home owners warranty insurance in respect of the work undertaken by him. The absence of insurance gave rise to an issue in the proceedings concerning whether it was necessary for the Tribunal to make a finding that it was "just and equitable" to award a quantum meruit having regard to s 94 of the HB Act.: See e.g. appellants/homeowners' submissions at first instance - Tab 7 of the Agreed Bundle (AB) filed in the appeal at page 93.
6. The appellants filed a notice of appeal dated 26 November 2018. The appeal was lodged in time.

Grounds of Appeal

1. The appellants raised five grounds of appeal. These were: 1. The Tribunal failed to discharge its statutory function and made an error of law by failing to address or determine the issue of whether the respondent builder was entitled to payment in the absence of a policy of insurance as required by Part 6 of the Home Building Act, 1989. 2. In determining the respondent builder's claim on a quantum meruit the Tribunal failed to discharge its statutory function and made an error of law, or alternatively failed to provide reasons by failing to address or determine the issue of whether or not the amount claimed by an awarded (sic) to the respondent was reasonable. 3. In determining the respondent builder's claim on a quantum meruit any finding that the amount determined was reasonable was not one that was reasonably open on the whole of the evidence. 4. The Tribunal erred in law in determining that the applicable limitation to apply to the appellant owners' claim for defective workmanship was 2 years in relation to certain defects where the claims were for breach of the express terms of a contract entered into between the appellant owners and the respondent builder. 5. The Tribunal has erred in law in finding that the written and executed contract for the residential building works was a sham where that finding was not reasonably open on the whole of the evidence.
2. The appellants did not seek leave to appeal on grounds other than questions of law.
3. The appeal was listed for call over on 11 December 2018. At that time the Tribunal made directions for the parties to file and serve all evidence relied on for the purpose of the appeal together with a transcript of the hearing if that was to be relied upon. The parties did not file all relevant evidence, nor did they file a transcript as directed.
4. The parties also filed written submissions in the appeal.
5. The parties were represented by Counsel at the hearing of the appeal. Mr Davie appeared for the appellants. Mr Carolan appeared for the respondent.
6. We do not propose to set out all the submissions which the parties made in this appeal as it is unnecessary to do so. Rather, we will deal with those submissions on issues about which we should make a determination and will do so in the context of various concessions made by the parties' Counsel at the hearing of the appeal.

Consideration

1. There is a right of appeal on a question of law from a decision in the Consumer and Commercial Division: see s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). The issues identified, at least in part, raise questions of law.
2. We propose to deal with this appeal under the following headings: 1. Adequacy of reasons. 2. Does the limitation period in s 18E of the HB Act in respect of claims for breach of statutory warranty alter the limitation found in s 14(1) of the Limitation Act permitting a party to a contract to commence proceedings for breach of a term of that contract within six years from the date a cause of action accrues?

Adequacy of reasons

1. The Tribunal determined the respondent was entitled to be paid a net amount of $120,145.14: see order 3 made 31 October 2018. The Tribunal did so having determined that: 1. the respondent had paid to other contractors, suppliers and tradespeople a total of $317,935.37: reasons at [120]; 2. the respondent was entitled to recover a total of $62,177.50, calculated at $85 per hour x 665 hours, plus GST: reasons at [122]; 3. the appellants were entitled to have deducted from this sum the amount of $25,002.63 in connection with defective work as found by the Tribunal: reasons at [123]; and 4. the appellants had, in fact, paid the builder $234,965.00: reasons at [122].
2. The appellants assert inadequacy of reasons in a number of respects. These include: 1. The respondent did not have insurance. A submission was made in connection with s 94 of the HB Act that the respondent should not be entitled to recover. The appellants say this submission was not dealt with by the Tribunal and no determination was made under s 94(1A) that it was just an equitable that the respondent be entitled to recover money in respect of the work on a quantum meruit basis: Appellants' Submissions (AS) at paragraphs 1-9. 2. The Tribunal failed to make any findings that the remuneration claimed by way of a quantum meruit was reasonable: AS paragraphs 10-14. In this regard, the appellants point to the fact that while the Tribunal appeared to rely on the documents D, E and F annexed to the statement of Mr Hope dated 30 October 2017 (AB 509 and following), the Tribunal's reasoning process does not explain how a finding could be made as to the total reasonable cost payable to the builder in circumstances where: 1. the document being Annexure D purported to be a summary of particular invoices which the builder asserted he had paid; 2. of the total claim made by the respondent for monies paid to other contractors and suppliers, the Tribunal was only satisfied "that legible evidence has been provided of payments totalling $133,983.90": reasons at [114]; and 3. otherwise, while the Tribunal was "satisfied that numerous additional payments had been made", the Tribunal found those payments "cannot be accurately quantified because of the poor state of the evidence provided": reasons at [115].
3. Similarly, the appellants say there was no explanation provided by the Tribunal about why the remuneration of the builder for 665 hours at a rate of $85 per hour was determined to be reasonable.
4. In addition to the above, at the hearing of the appeal, the parties were asked by the Appeal Panel whether the Tribunal had made any findings about whether there was a contract at all, albeit on different terms to the written agreement, and if so what was the date and what were the terms of that contract (on the assumption the written agreement was a sham).
5. As to what was the agreement between the parties, the appellants maintained the Tribunal was in error in concluding the written agreement was a sham, a matter to which we will return below. On the other hand, the respondent's position identified to the Appeal Panel was that there was an oral contract entered into between the parties on 25 February 2014 as evidenced by paragraph 6 of the statement of Mr Hope dated 30 October 2017 at AB 495. This agreement, as reflected in the respondent's written submissions to the Tribunal at first instance (see paragraphs 2-4 of those submissions: AB 80), was on terms that the builder would charge an hourly rate of $85.00 plus GST. Otherwise, there was no fixed price agreement.
6. However, both parties agreed that the Tribunal's reasons did not explain whether the Tribunal had reached a conclusion that there was no agreement whatsoever or whether it had simply concluded the written agreement was unenforceable because it was a sham.
7. In our view a determination on this issue was relevant for a number of reasons, including the following.
8. As stated above, at [60]-[61] the Tribunal concluded that the contract was a sham and "was not a valid building contract executed by the parties". No express findings were made about when an alternative contract was entered into and what were all the terms of that contract.
9. On the other hand, the Tribunal said at [54]: It is possible to make a number of findings given a degree of agreement between the parties. The evidence demonstrates that it was agreed that one of the owners (Mrs Hutchings as it turned out) would obtain an owner/builder's permit and that the owners would conduct certain of the works themselves including certain works which were time and labour consuming. Some works would not be included in the builder's scope of work.
10. Then at [112] the Tribunal said: The owners have not effectively disputed or challenged the builder's claims and submissions in Annexure "F", preferring instead to rely on the primary submission that the contract was a fixed price contract. In this regard it is significant that it is not disputed that Mrs Hutchings was overseeing the works and responding to the builder's and contractors' questions and requests for instructions.
11. These statements would tend to suggest the Tribunal was satisfied that there was a contract with the respondent. Such a conclusion is supported by the fact the Tribunal, without any other identified evidence of reasonableness, appears to have accepted a rate of $85.00 per hour for the services provided by the respondent, such rate being the hourly rate the respondent says was agreed in the conversation on 25 February 2014.
12. Likewise, the Tribunal proceeded to analyse Clause 8.0 (erroneously noted as Clause 5.0) of the written agreement, consider the statutory warranties and consider the legislative scheme by which various limitation periods are imposed: reasons at [62]-[74]. This analysis of the written agreement is wholly irrelevant unless it is accepted that the written agreement, at least in part, recorded the terms of a contract between the parties.
13. Finally, at [74] the Tribunal said: Again for clarity, in my opinion having determined that the contract was not a sham, the owners may rely on and the builder is bound by express warranties (vii) and (viii).
14. Even if the words "not a sham" are an incorrect statement of the Tribunal's conclusion (being directly contrary to the findings at [61] and [62]), what follows is a finding that the parties are bound by express warranties, in addition to and separate from any statutory warranty found in s 18B of the HB Act, suggesting there was a contract, at least partly in writing. Although, on this aspect, it does not appear that the fact of those warranties was relevant to the Tribunal's decision, the Tribunal analysing the defects claim in terms of whether the particular defects were major or minor defects as that term is used in s 18E of the HB Act.
15. In short, the Tribunal's analysis appears confined to: 1. the issue of whether a fixed price for the works was agreed; 2. whether particular provisions of the written agreement (which was found to be a sham) might otherwise provide a right of action that could be brought outside the time limitation found in s 18E of the HB Act; 3. what amounts were time-barred as claims for breach of statutory warranty, but otherwise does not address whether a contract was entered into between the parties and, if so, when and on what terms.
16. This gives rise to a number of problems, which include the following.
17. First, if there was a contract, the appellants, as homeowners, are entitled to enforce its terms. Sections 10 and s 94 of the HB Act merely prevent enforcement by the respondent.
18. If there was a contract, any loss or damage suffered by the appellants was a matter which needed to be brought to account in determining the remuneration of the builder. In this regard, it may have been inappropriate to allow the builder any remuneration for items of defective work, depending on the nature and extent of any breaches and how the contract required these breaches to be treated.
19. Secondly, the fact of the contract and its terms may have been relevant to determining the reasonableness of the remuneration claimed. Findings concerning any agreed rates in a contract between the parties, even if a contract is unenforceable at the suit of a builder, may be relevant to the issue of reasonable remuneration to be awarded on a quantum meruit basis: Pavey & Matthews Pty Ltd v Paul (1986) 162 CLR 221 per Deane J at 257. On the other hand, if there was in fact no such agreement and no other evidence of reasonableness then the Tribunal may have been incorrect to award a quantum meruit where the respondent had failed to prove by appropriate evidence the amount of reasonable remuneration to which he was entitled.
20. Thirdly, at a more basic level, in concluding that the contract is a sham, the Tribunal has not explained how it analysed various documentary evidence presented by the parties and not clearly stated whether there was in fact a contract but on different terms to the written agreement. In this regards there were documents, including the quotation dated 21 March 2014 (AB 14), passing between the parties or recording negotiations on price, scope and other terms, as well as verbal communications before the written agreement was signed on 21 May 2014.
21. Inferentially, the Tribunal appears to have concluded that the respondent, in concert with the appellants, intended to deceive the bank by misrepresenting there was a fixed price contract and/or that the costs of an agreed scope of works had been determined so as to permit the bank to make financing decisions. However, in the context of offer, acceptance and consideration in the formation of a binding contract, the absence of reasons explaining what the Tribunal found the parties in fact agreed (if anything) makes it impossible to evaluate whether the ultimate finding that the contract was a sham is correct and/or was reasonably available to the Tribunal.
22. To understand this point, it is useful to set out the principles applicable in determining what constitutes a sham. In Lewis v Condon; Condon v Lewis [2013] NSWCA 204 Leeming JA said at [62] and following: 57. It is well-recognised that "sham" is an ambiguous term and uncertainty surrounds its meaning and application in various legal contexts: Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 453; Raftland Pty Ltd v Federal Commissioner of Taxation [2008] HCA 21; (2008) 238 CLR 516 at [35]. It is necessary to use the term precisely. 58. The essence of a sham for present purposes is as stated by the High Court in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 at [46]: "[Sham] refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences." 59. That is to say, it is essential that there be an intention that the true transaction is different from that which would ordinarily be attributed to the transaction on the face of the documents. As Lord Wilberforce put it, "to say that a document or transaction is a 'sham' means that while professing to be one thing, it is in fact something different": WT Ramsay v Inland Revenue Commissioners [1982] AC 300 at 323. 59. Basic to the legal notion of sham is that it is a confined and exceptional aspect of the process of giving legal meaning to a document, as Professor Conaglen has pointed out ("Sham Trusts" (2008) 67 CLJ 176 at 206): "The relevance of the sham doctrine, and the difference between it and normal processes of construction, lies in the fact that it justifies the court in ignoring (as opposed to construing) the usual primary material regarding that transaction, and focusing its attention instead on all other material factors which indicate the arrangement that the parties in fact intended." 60. Basic to the legal notion of sham is that it is a confined and exceptional aspect of the process of giving legal meaning to a document, as Professor Conaglen has pointed out ("Sham Trusts" (2008) 67 CLJ 176 at 206): "The relevance of the sham doctrine, and the difference between it and normal processes of construction, lies in the fact that it justifies the court in ignoring (as opposed to construing) the usual primary material regarding that transaction, and focusing its attention instead on all other material factors which indicate the arrangement that the parties in fact intended." 61. That echoes the words of Windeyer J in Scott v Commissioner of Taxation (Cth) (No 2) (1966) 40 ALJR 265 at 279: "The difficult and debatable philosophic questions of the meaning and relationship of reality, substance and form are for the purposes of our law generally resolved by asking did the parties who entered into the ostensible transaction mean it to be in truth their transaction, or did they mean it to be, and in fact use it as, merely a disguise, a facade, a sham, a false front ... concealing their real transaction." 62. The sham doctrine is thus one of those relatively rare doctrines in the law where legal meaning is given to a document by reference to a subjective intention. Other examples are a plea of non est factum at law and a claim for rectification in equity. All these doctrines "must necessarily be kept within narrow limits", for all subtract from the objective theory of contractual obligation, and if unchecked would cause "serious mischief": see Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at [46]-[47]. This has long been the law: see for example Jordan CJ's reasons in Perpetual Trustee Co (Ltd) v Bligh (1940) 38 SR NSW 33 at 39-40. In all these areas, strong evidence is required in order to displace the orthodox approach to construction. Hence the "heavy onus" that must be discharged by the plaintiff in a non est factum case (Petelin v Cullen (1975) 132 CLR 355 at 360) and the need for "clear and convincing proof" in a rectification suit (Franklins Pty Ltd v Metcash Pty Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 at [451]-[460]). 63. Because a finding of sham requires a finding of an intent to deceive, considerations associated with Briginshaw v Briginshaw (1938) 60 CLR 336 require a cautious approach: Raftland Pty Ltd v Commission of Taxation at [36]. Thus there is a "strong and natural presumption against holding a provision or a document a sham": National Westminster Bank plc v Jones [2001] 1 BCLC 98 at [59] (Neuberger J). "A court will only look behind a transaction's ostensible validity if there is a good reason to do so, and 'good reason' is a high threshold, since a premium is placed on commercial certainty": Official Assignee v Wilson [2007] NZCA 122; [2008] 3 NZLR 45 at [52] (Robertson and O'Regan JJ). Lockhart J referred to "a strong finding, and one which cannot be made if another inference is at least equally open" in Sharrment Pty Ltd v Official Trustee in Bankruptcy at 461. 64. Sham in the sense relevant to this appeal is to be distinguished from other transactions to which legal opprobrium attaches, such as transactions entered into for an improper purpose, which have long been the subject of statutory attention, such as voidable settlements or conveyances to defraud creditors. Sham is also to be distinguished from the body of law (which ultimately turns on questions of statutory construction) as to whether apparently artificial transactions attract taxation advantages: see Fletcher v Federal Commissioner of Taxation [1991] HCA 42; (1991) 173 CLR 1 at 19 and Customs v Tower MCashback LLPI v Revenue and Customs Commissioners [2011] UKSC 19; [2011] 2 AC 457, decisions referred to by G Pagone, "Sham trusts" [2012] VicJSchol 5 and which reflect what Lord Walker described in the latter appeal at [80] as the "unremitting ingenuity of tax consultants and investment bankers determined to test the limits". The High Court criticised applying the notion of sham to transactions which were legally effective, albeit that they had no "economic effect" and which did not involve "real money" in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd at [46]-[51]. 64. It is also necessary to be precise as to the extent to which a transaction is said to be a sham. The whole of the transaction may be a sham, or merely a part of it; see for example the clause found by the House of Lords to be a sham in the otherwise valid lease in AG Securities v Vaughan [1990] 1 AC 417. There may be a validly created trust, but a later settlement of property upon the terms of that trust may nonetheless be a sham: Official Assignee v Wilson at [57].
23. As made clear by Leeming JA, a case involving a sham is rare and requires a careful examination of the subjective intention of both parties in order to displace the intention of the parties otherwise to be determined on an objective basis in accordance with ordinary concepts of contract law.
24. In the present case: 1. there is no examination or explanation by the Tribunal of the motive of the builder in reaching a decision that the subjective mutual intent of the parties was that they would not be bound by the written agreement; and 2. there is no or no adequate explanation of the underlying arrangement, contractual or otherwise, on which the parties proceeded.
25. It seems on the material presently available to us (which we emphasise does not include all the evidence including the transcript) that the parties intended to enter into an arrangement on terms that the respondent would carry out some residential building work for reward. The reasons do not enable us to understand whether or not the Tribunal concluded there was an express contract, oral or in writing, although the facts to which we have been referred and the subsequent performance of building work would at least suggest there might be an inferred contract: see eg Concut Pty Ltd v Worrell (2000) 176 ALR 693; Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd [1988] 14 NSWLR 523. If there was a contract, the reasons do not set out the terms of such an agreement or explain when it was entered into.
26. Obviously, having regard to the principles in Lewis, any findings on these matters may significantly affect the assessment as to whether the ultimate finding of the Tribunal that the contract was a sham is correct.
27. Fourthly, there was an issue about the absence of home owners warranty insurance and whether the respondent was entitled to recover on a quantum meruit basis by reason of the failure to obtain insurance.
28. The Tribunal was required to determine if it was "just and equitable" to permit the respondent to recover remuneration on a quantum meruit basis in circumstances where it seems an agreed fact that the builder did not have insurance and would otherwise be deprived of a right to make such a claim having regard to the provisions of s 94 of the HB Act. On this aspect, neither of the parties' Counsel was able to identify any paragraphs in the reasons which dealt with the submissions made by the appellants on this aspect of the dispute.
29. We agree the issue was not dealt with by the Tribunal in its reasons.
30. The obligations in respect of adequacy of reasons have been dealt with in many cases referred to by this Tribunal: see eg Collins v Urban [2014] NSWCATAP 17.
31. In our view, the above analysis demonstrates the reasons in the present case are inadequate. They do not: 1. deal with relevant evidence to which the parties refer; 2. address relevant submission made by the parties; 3. explain why particular views have been reached concerning the construction of the HB Act and Limitation Act in order to sustain the decision under appeal.
32. The reasons fall short of making necessary findings and providing reasons for concluding the written agreement was a sham, a matter fundamental to the resolution of the dispute. They also fall short in making necessary findings concerning the terms of the arrangements between the parties to carry out work in fact undertaken by the respondent.
33. The respondent made reference to the fact the Tribunal said it has carefully considered the evidence. Such general statements in the reasons that the Tribunal may have "carefully and at great length" reviewed documents rarely, if ever, provides any assistance in determining the adequacy of reasons and should be avoided. As made clear by the authorities, the obligation to provide reasons depends on the evidence submitted, the law to be applied and the issues raised. Reference must be made to the relevant evidence and a sufficient explanation given as to how the matters in dispute have been resolved. In part, this allows a party to exercise any right of appeal and to allow an affected party to understand why a decision has been made: Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 per Meagher JA at 441-2.
34. It follows that an error of law has been established.
35. Because we do not have all the evidence from the proceedings at first instance, regrettably we cannot redetermine these issues. Consequently, the proceedings will need to be remitted. The redetermination should be by a differently constituted Tribunal.

Does the limitation period in s 18E of the HB Act in respect of claims for breach of statutory warranty alter the limitation found in s 14(1) of the Limitation Act permitting a party to a contract to commence proceedings for breach of a term of that contract within six years from the date a cause of action accrues?

1. Although we have decided to remit the proceedings, we should refer to one matter agreed by the parties concerning limitation periods in respect of the claimed defects.
2. The Tribunal concluded that the limitation period in s 18E operated in respect of claims for breach of express warranty found in a contract, the terms of which wholly or partly overlapped with the statutory warranties in s 18B of the HB Act. That is, on the proper construction of the HB Act, a homeowner who is the original contracting party with a builder is limited to 6 and 2 years respectively to bring a claim for breach of an express warranty depending on whether the defect was a major defect within the meaning of the HB Act or not.
3. Put differently, although there is an express contractual right otherwise actionable in proceedings commenced within a six year period as provided in s 14(1) of the Limitation Act, where that right was co-extensive with a statutory warranty or party overlapping with that warranty, the HB Act operated to reduce the general limitation period.
4. Consequently, the Tribunal dismissed certain defect claims because they were brought more than 2 years after the cause of action accrued.
5. Both parties agreed that the HB Act did not operate to limit a right of action by an original contracting party under an express provision in the contract in this way. That is, a right of action for breach of an express term, not being a claim for claim for breach of statutory warranty under s 18E, could be brought within 6 years from when the cause of action accrues, whether or not the express warranty is wholly or partly in the same terms as the statutory warranty implied by s 18B.
6. This concession appears properly made.
7. While unnecessary to decide, it is difficult to see why the HB Act and the grant of rights under Part 2C Statutory Warranties (which benefit both contracting owners and non-contracting owners and successors in title) should be construed in a manner that reduces the express rights agreed between the original contracting parties. Certainly s 18G of the HB Act, which makes void a provision in the agreement that "purports to restrict or remove the rights of a person in respect of any statutory warranty", and the time limits in s 18E in respect of proceedings for breach of statutory warranty do not seem to offer any support for such a construction of the HB Act.
8. Of course, proceedings to enforce a contractual right independently of s 18E can only be brought in the Tribunal (as opposed to a court) if brought within the jurisdictional time limits found in s 48K(3), (4) or (8) as the case may be. However, again, this jurisdictional limit of the Tribunal, fixed by reference to time would not, of itself, appear to otherwise restrict the general limitation period applicable to a claim for breach of contract found in s 14(1) of the Limitation Act.
9. Consequently, the Tribunal will need to determine whether there is any contract and, if so, whether there is any express warranty that might otherwise permit the recovery for defects otherwise disallowed by the Tribunal as set out in Schedules 2 and 3 of the reasons.
10. Finally, we should note there were some submissions concerning oral contracts on terms which might be implied into a contract having regard to the general law principles expressed in BP Refinery (Westernport) Pty Ltd v Hastings Shire [1977] UKPCHCA 1; (1994) 180 CLR 266 at [40]. It was submitted that there would be no implication under the general law in circumstances where s 18B operates to imply terms into a contract to do residential building work because there would be no necessity to do so.
11. As this matter was not fully argued before us and came up in the course of oral submissions, it is inappropriate to express any views on this subject matter at this time.

Orders

1. Having regard to the views we have formed concerning the adequacy of reasons, and in the absence of all evidence from the proceedings at first instance, it is appropriate to make an order to set aside the original decision and remit for rehearing proceedings HB 17/46747 and HB 17/38121.
2. Our initial view is that the parties have had an opportunity to provide all evidence in support of their respective claims and to cross-examine each other's' witnesses (to the extent they wished to do so) at the original hearing. As such, it would seem appropriate for the proceedings to be redetermined on the existing evidence with the benefit of a transcript of the proceedings at first instance.
3. The Tribunal rehearing these proceedings may take the view that the oral submissions and submissions originally filed are sufficient to complete its task. On the other hand, the Tribunal may take the view that these submissions need to be supplemented.
4. At this stage we will remit the proceedings within the above confines on the basis that the Tribunal may vary our orders in respect of further evidence and/or submissions if it considers it appropriate.
5. In respect of costs of the appeal, this is a matter to which r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) applies. This is because r 38A requires that r 38 be applied in determining costs of the appeal. The amount claimed or in dispute in the appeal is greater than $30,000.00: The Owners Corporation Strata Plan No. 63341 v Malachite Holdings Pty Ltd [2018] NSWCATAP 256. Consequently there is a general discretion to award costs: see eg Thompson v Chapman [2016] NSWCATAP 6 at [68] and following. As the appellants have been successful, costs should follow the event and an order should be made in favour of the appellants in relation to this appeal.
6. Costs of the proceedings at first instance are reserved for determination by the Tribunal on remittal.
7. The Appeal Panel makes the following orders: 1. The orders made in applications HB 17/46747 and HB 17/38121 on 31 October 2018 are set aside and the proceedings are remitted for rehearing by a differently constituted Tribunal. 2. Subject to any order of the Tribunal on remittal, the remitted proceedings are to be determined on the written and oral evidence provided by the parties at the original hearing on 6 and 7 June 2018 and without a further hearing. 3. In respect of the remitted proceedings, the Appeal Panel makes the following directions: 1. On or before 29 March 2019 parties are to file an agreed bundle to contain: 1. all written evidence from the proceedings at first instance; 2. a transcript of the proceedings at first instance; 3. the written submissions provided by the parties in the proceedings at first instance; and 4. short written submissions, not more than 3 pages, as to whether any order should be made by the Tribunal on remittal to permit further evidence and/or to permit further written or oral submissions. 1. The proceedings are to be fixed for directions on a date after 29 March 2019 for the purpose of considering any submissions provided pursuant to order (a)(iv) and/or to fix a hearing date. 1. All costs of the proceedings at first instance are reserved to the Tribunal to determine on remittal. 2. The respondent is to pay the appellants' cost of this appeal as agreed or assessed on an ordinary basis.

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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: 20 March 2019