Innovative Builders and Engineers Pty Ltd v Shah

Introduction

1. This is an appeal against a decision made by the Tribunal on 18 June 2024 with respect to a building claim brought by Mr Shah and Ms Begum (the homeowners) against Innovative Builders and Engineers Pty Ltd (the builder) with respect the construction of a residential dwelling for the homeowners.
2. The homeowners commenced proceedings by an application filed in the Consumer and Commercial Division of the Tribunal of the Tribunal (the CCD). Also named as a respondent in the proceedings is Mr Chowdhury, a director of the builder (the director). While not originally named as a party he was added as a respondent on the first return date of the building claim on 8 June 2023 is an appellant in this appeal. Together, the director and the builder are collectively referred to in these reasons as "the appellants".
3. Not named in the proceedings, but essential to an understanding of the factual background is Mr Khan. The homeowners say that he was the builder's representative and supervisor of works in the construction of their home, while the appellants deny that and describe him as being the builder's one time apprentice and the owner's architect. Mr Khan's precise status and authority is in issue, although all the parties agree he played a central role in what they each see as a scam or fraud perpetrated on them by the others. There was no attempt to join Mr Khan as a party to the proceedings.
4. The proceedings first came before Senior Member Titterton on 15 December 2023 when he made a series of directions requiring the parties to file evidence and materials clarifying their respective positions. This included requiring the homeowner to file an amended statement by 14 February 2024 addressing: "a) the circumstances as to how the contract was entered into; b) who negotiated on behalf of the respondents; c) who carried out the works; d) proof of payment of the respondents invoices; e) the reasons why he no longer wants the builder to rectify the defects and seeks a money order."
5. The homeowners were also to file an expert report by that date setting out: "a) the defective items; b) the scope of works for rectification; c) raw cost of rectification; d) the incomplete works; e) the cost of completion."
6. The appellants had until 14 March 2024 to respond with statements and the expert reports of their own.
7. A conclave of experts was to occur prior to the hearing date, with the parties experts to file a joint report/Scott schedule at least 14 days prior to the hearing.
8. The Tribunal noted: THE TRIBUNAL NOTES THE FOLLWING ISSUES WILL ARISE WHICH THE PARTIES' EVIDENCE MUST ADDRESS 1 Who were the parties to the contract, noting that the respondents claim that the contract and the invoices issued in tis name are fraudulent. 2 what discussions the applicant had with any representative or agent of either respondent. 3 defective works. 4 incomplete works. 5 costs to rectify and complete.
9. In the event, no conclave took place as the appellants chose not to file an expert reports. The status and sufficiency of the reports relied on by the homeowners are in issue in this appeal. Both parties filed affidavits.
10. The proceedings were heard by Senior Member Titterton on 11 June 2024. In reasons for decision dated 18 June 2024 (reasons) he ordered the builder and the director jointly and severally pay the homeowners $157,165 being to cost of completion of their home, which he found to be 90% complete, and of rectifying defects. The Tribunal subsequently, on 10 September 2024, ordered the builder and the director to pay the homeowners' costs.
11. A notice of appeal was filed on 3 July 2024 by the builder, which is within the required time for making an internal appeal against a decision of the CCD concerning a home building claim: see rule 25 of the Civil and Administrative Tribunal Rules 2014 (NSW). It did not address the costs decision, although it will have to be reconsidered if the appeal is successful. The director was formally recognised as a party to the appeal on 15 July 2024.
12. An application for a stay made with the notice of appeal was unsuccessful.
13. The appeal was heard by us on 30 September 2024, when both parties were self-represented. At the conclusion of the hearing, we reserved our decision.

Materials before the Appeal Panel

1. In considering this appeal we had before us the following materials: 1. Provided by the builder and the director: 1. Notice of Appeal filed by the builder on 3 July 2024 with attachments. 2. Application for stay made by the builder on 3 July 2024 with attachments. 3. A folder containing a variety of materials annexed to an affidavit of the director sworn 5 August 2023 containing hundreds of pages of materials, most of which was not in evidence before the Tribunal below. These are discussed below under the heading new evidence. 4. A document entitled, "Reply to the Respondent's points of claim," filed on 27 July 2024 by the appellants. 5. Written submissions filed by the builder and the director the day before the appeal hearing. 1. Provided by the homeowners: 1. Reply to appeal filed on 23 July 2024. 2. A document entitled "Respondent's points of claim" filed on 16 August 2024 with attachments. 1. Original application made to the Tribunal by the homeowners on 1 May 2023. 2. Orders made by the Tribunal in preparing for the hearing below on 13 July 2024 and 15 December 2024. 3. The reasons dated 18 June 2024. 4. The costs decision made by the Tribunal on 10 September 2024. 5. Orders made by the Appeal Panel preparatory to the hearing of the appeal, which include orders made on 15 July 2024 that: 1. The director be made a party to the appeal; and 2. That both parties file and serve, "All the evidence provided to the Tribunal at first instance on which it is intended to rely."
2. It is to be noted that at the appeal hearing the homeowners sought to rely on submissions in response to the recently filed submissions made by the builder and the director. These were only available in electronic format and had not been shown to the director. In those circumstances, we refused the homeowner's leave to file late submissions. In response, the male homeowner indicated that the submissions in reply may not be needed and had been addressed in oral submissions. He agreed that he had time in which to consider the late submissions made by the builder and the director.
3. Those late submissions had been drafted with some legal assistance and were more focussed and intelligible.

Scope and Nature of Appeals

1. Section 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) states: "Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds."
2. Clause 12 of Schedule 4 to the NCAT Act states with respect to decisions made in the Consumer and Commercial Division that: "An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)."
3. To succeed in an appeal, an appellant must demonstrate either an error by the Tribunal below on a question of law, which may be argued as of right; or, that permission (that is "leave") to appeal should be granted to bring the appeal: NCAT Act, s 80(2).
4. A question of law may include, not only an error in ascertaining the legal principle or in applying it to the facts of the case, but also taking into account an irrelevant consideration or not having regard to a relevant consideration. This includes not making a finding on central issue that is required to be made out in order to claim an entitlement to relief: see CEO of Customs v AMI Toyota Ltd (2000) 102 FCR 578 (Full Fed Ct), [2000] FCA 1343 at [45], applying the statement of principle in Craig v South Australia (1995) 184 CLR 163 at 179; [1995] HCA 58.
5. An appellant to an internal appeal brought under s 80(2)(b) of the NCAT Act must identify with precision a question of law said to be raised by the appeal: Ferella & Anor v Chief Commissioner of State Revenue [2014] NSWCA 378 at [6], [22]; Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 at [13]. Whether a question is one of law must be approached as a matter of substance: Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92 at 62, [94], [203]; Kudrynski v Orange City Council [2024] NSWCA 33 at [50].
6. Each such question must be a pure question of law (adopting what was said in Orr v Cobar Management Pty Limited (2020) 103 NSWLR 36; [2020] NSWCCA 220 (Cobar) at [44], [49]; and Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 at [71], albeit in relation to different statutory provisions). In Cobar at [109] Bathurst CJ and Bell P (as the Chief Justice then was) said, with Garling, Johnson and Lonergan JJ agreeing: "Those questions of law should be, in our opinion, what are sometimes described as 'pure questions of law.' They should not draw the Court of Criminal Appeal into questions of fact. Moreover, they must be questions whose character as a question of law can be recognised on the face of the question, and not depend upon the answer given to the question. This does not include a question which may ultimately disclose an error of law depending on an analysis of the facts but where this cannot be known without scrutiny of the facts."
7. Examples of pure questions of law include: 1. Denial of procedural fairness (Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at 13); FVA v Commissioner for Police, NSW Police Force [2024] NSWCATAP 127 at [83]-[84]). 2. A constructive failure to exercise jurisdiction, which includes the failure to consider and address a material issue raised by a party in the proceedings that is within the jurisdiction of the Tribunal to determine (Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165 at [8]-[12] and [413]). This category of error also includes a failure by the Tribunal to engage with a clearly articulated argument put to it. 3. Acting on the application of the wrong legal principle which materially affected the outcome (Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734 at [38]-[53]). 4. No evidence to support a factual finding (Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 23 at [91])
8. The principles governing an application for leave to appeal under the NCAT Act are well-established and are repeated in many decisions of the Appeal Panel, often quoting Collins v Urban [2014] NSWCATAP 17. It is only if the decision is affected by sufficient doubt, to warrant its reconsideration on appeal, that leave will be granted. Usually, it is appropriate to grant leave where there is an issue of principle, a question of public importance or an injustice which is reasonably clear, and beyond what is merely arguable: Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]. As explained in Collins v Urban at [84], it is not sufficient merely to show that the Tribunal below was arguably wrong or that there was a bona fide challenge to an issue of fact.
9. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division of this Tribunal under s 80(2)(b) of the NCAT Act are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
10. 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. Usually, it is appropriate to grant leave to appeal only in matters that involve: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; or 3. an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed; see 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, and Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; 1. 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.
11. With respect to leave under cl 12 of Schedule 4 to the NCAT Act. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel stated: "74 Accordingly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in clause 12(1)(a), (b) or (c) 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 paragraph (a) or (b) not occurred or if the fresh evidence under paragraph (c) had been before the Tribunal at first instance. 75 As to the particular grounds in clause 12(1)(a) and (b), without seeking to be exhaustive in any way, 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" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12]. 2 The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) 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 - Calin v The Greater Union Organisation Pty Ltd (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]. … 78 If in either of those circumstances the appellant may have been deprived of a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the decision was against the weight of the evidence. 79 In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in clause 12(1)(a), (b) or (c), it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this then, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred - see the general discussion in Kyriakou v Long [2013] NSWSC 1890 at [32] and following concerning the corresponding provisions of the [statutory predecessor to CATA (s 68 of the Consumer Trader and Tenancy Tribunal Act)] and especially at [46] and [55]."
12. The legal principles regarding error on a question of law and concerning have leave to appeal have recently been discussed in detail by the Appeal Panel in Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 at [28]-[44].
13. Where, as here, the parties are self-represented, the Tribunal should look at the grounds of appeal generally in order to determine whether a question of law has in fact been raised, but must ensure that procedural fairness is given to the respondent before considering it. In Cominos v Di Rico [2016] NSWCATAP 5, the Appeal Panel explained at [13]: 13. It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. The Appeal Panel has taken such an approach in a number of cases, for instance, Khan v Kang [2014] NSWCATAP 48 and Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. However, this must be balanced against the obligation to act fairly and impartially (Bauskis v Liew [2013] NSWCA 297 at [68] citing Hamod v State of New South Wales [2011] NSWCA 367 at [309]- [316]). Relevantly, s 38(2) provides that that Tribunal "may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.

Grounds of Appeal

1. The submissions made on behalf of the appellants best articulate their grounds of appeal. They seek leave to appeal on each of the grounds set out in cl 12 of Sch 4 of the NCAT Act, including the availability of new evidence. They asserted a significant number of new facts, much of which relied on new evidence from the respondents that had not been before the Tribunal below. They also, in our view, raise a number of questions of law.
2. In summary those grounds were: 1. That the decision was not fair and equitable because the appellants were not given an additional opportunity to obtain expert reports. 2. That the Tribunal failed to provide adequate reasons for finding that the director was personally liable for the damages sustained by the homeowners. 3. That the Tribunal failed to consider or make findings about the scope of the works, before assessing damages for breach of contract. 4. The decision was not made in compliance with the requirements of the s 36(4) of the NCAT Act, that the Tribunal act in accordance with "equity, good conscience, and the substantial merits of the case." 5. The decision disregarded "the potential defence of set-off" because the builder had never been paid under the alleged contract." 6. The decision was not fair and equitable and against the weight of the evidence because: 1. while signed the original contract bearing the licence number of the builder (360732C) was never proceeded with. With respect to this ground the appellants also sought to rely on new evidence. 2. There was no evidence of the director ever attending the site. 3. The builder's licence did not entitle it to undertake work exceeding $20,000 in value and no insurance was available on its work. 1. The evidence relied on by the homeowners to establish the uncompleted works, and those in need of rectification, consisted of Pre-Purchase Inspection reports which were wrongly relied on by the Tribunal. The reliance on a quote for the costs of completing and rectifying those works was also in error, given it was based on those reports. 2. The damages assessed by the Tribunal included costs for completing or rectifying "works not listed in the building contract."
3. Of these, grounds (2) (3) and (4) raise questions of law. The rest all involve questions of fact (including the weight to be given to evidence or the admission of new evidence) or mixed questions of fact and law. They require leave to appeal.

New Evidence - consideration

1. With respect to new evidence, the appellants sought to rely on the affidavit of the director sworn 5 August 2024, to which were attached hundreds of pages of exhibits.
2. At the start of the hearing the director told us that all of this material was new, which assertion proved wrong. During the course of the appeal hearing, it emerged that some of these documents were before the Tribunal below and some were new.
3. New evidence requires the Appeal Panel's leave under cl 12 of Sch 4 of the NCAT Act in order for it to be considered on appeal. The homeowners opposed the appellants being given leave to rely on fresh evidence.
4. In order for leave to be granted, the Appeal Panel must be persuaded that the new evidence is significant evidence that was not reasonably available at the time of the hearing. Whether evidence was "not reasonably available" at the time of the hearing is not considered by reference to any subjective explanation from the party seeking leave to rely on it, but by applying an objective test considering whether the evidence in question was unavailable because no person could have reasonably obtained it: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [23].
5. At the commencement of the hearing, we identified documents that were obviously new evidence, being expert reports from: 1. MD Selim Chowdhury, an engineer and builder, dated 8 July 2024, after the notice of appeal was filed. In response to a question, the director told us that MD Selim Chowdhury is not a relative of his. 2. Humayan Kabir, a licensed builder, also dated 8 July 2024. We note from the decision, that an affidavit from Humayan Kabir was relied on by the appellants at the hearing before Senior Member Titterton. The independence of Mr Kabir is therefore in issue.
6. Having heard from the parties, with respect to new evidence, we initially indicated that leave to rely on new evidence would not be granted. We noted that experts reports could readily have been obtained by the appellants prior to the hearing. The appellants were given an opportunity to obtain and file them prior to the hearing.
7. During the course of the hearing, it emerged that some of the materials annexed to the director's affidavit of 5 August 2024 were agreed to have been part of the evidence before the Tribunal. Examples of this are: 1. The application for a complying certificate dated 2 June 2021 prepared by Mr Khan and signed by the homeowners. 2. A copy of a contract (NSW Residential Building Contract for New Dwellings, Ed 8a) dated 29 March 2021 between the homeowners and the builder, bearing the builders licence number 360732C ('contract A"). This was signed by the homeowners and by the director on behalf of the builder. The director's signature was witnessed by Mr Khan. 3. Two property reports from Mr Paul Johnson of Rapid Building Inspections dated 1 and 24 February 2024.
8. We admitted materials that had been in evidence before the Tribunal hearing below as evidence in the appeal.
9. Also, during the course of the hearing, it emerged that exhibited to the director's affidavit of 5 August 2024 was another copy of the contract dated 29 March 2021: identical in all respects to contract A, save for it bearing a different licence number for the builder, 219527C, where it twice appears in the contract (contract B). Licence number 219527C is, in fact, the licence number of the director. In his affidavit the director denied ever signing a contract with that licence number. In oral submissions he said he had only become aware of contract B after the hearing, when shown it by the male homeowner.
10. In their submissions, the homeowners acknowledged the existence of copies of the same contract bearing different licence numbers. They explained that Mr Khan had provided them with the copy contract B, after their bank refused them finance. Searches by the bank had revealed that the holder of the original licence number (the builder) was not licenced to do work greater than $20,000 in value.
11. As will become evident below, it would appear that a copy of contract B and evidence about the change in licence numbers was not before the Tribunal below. We are unable to verify whether or not it was, because the parties in the appeal have not filed and relied on all of the evidence that was before the Tribunal.
12. We did not rule on whether or not to grant appellants leave to rely on contract B as new evidence during the appeal hearing. Because of the conclusions we have reached regarding the appeal, as is explained below, it has proved both unnecessary and undesirable that we do so.

The decision

1. It is necessary to outline the decision in some detail.
2. The Tribunal found that the homeowners and the builder had entered into a building contract for a new dwelling [1]. At [2], the Tribunal noted that the director was joined to the proceedings as a respondent. The decision continued: "3. The Contract price was $520,000 and Schedule 2 to the Contract set out a payment schedule. 4. The Homeowners say that they paid $468,000 to the Builder, but the Builder says that it never received any money. It says that any monies were paid to a Mr Khan. The Homeowners say that Mr Khan was the Builder's Supervisor or Project Manager, alternatively its apprentice. Initially, the Builder said that Mr Khan was the Homeowner's architect. At the hearing, the Builder stated that Mr Khan was its apprentice. 5. As it has not received any payments due to it under the Contract, on or about 15 June 2023, the Builder terminated the Contract. This was not accepted as a valid termination by the Homeowner. However, on 15 December 2023 the Homeowners themselves terminated the Contract, which termination has been accepted by the Builder both parties now regarding the Contract as at an end. 6. In those circumstances, the Homeowners seek a money order that the respondents pay them $157,165.00 in relation to incomplete and defective works".
3. When referring to "both parties now regarding the contract as being at an end" we understand the Tribunal in par [5] to be referring to the parties to the contract; i.e. the homeowners and the builder.
4. The Tribunal outlined the evidence presented by the homeowners and the appellants. This involved a confused tale whereby the owners told of the incomplete construction of their new home by the builder, represented at all times by Mr Khan, the builder's site supervisor and project manager. The homeowners paid for this work in accordance with demands for progress payment made of them in invoices from the builder, given to them by Mr Khan.
5. The builder, while agreeing that there was an initial contract signed with the homeowner, denied that the contract had proceeded. The appellants maintained that the builder had done no work under the contract, and had not received any payment from the homeowners. The builder had retained Mr Khan as an apprentice at one time, but had not employed him as a site supervisor or project manager.
6. The Tribunal considered statements presented by both parties. We think it worth quoting in some detail the evidence given by the Mr Shah (the male homeowner) and the director.
7. The Tribunal quoted Mr Shah's statement thus, at [17]: "The contract was signed by Mr Mohd Ertaz-ul Haque Chowdhury on behalf of Innovative Builders and Engineers Pty Ltd and witnessed by Mr Mohammad Touhid Reza Khan … . When we first reached out to Innovative Builders and Engineers Pty Ltd for re-building this property, Mr Khan introduced himself as a Project Manager of the company and we have dealt everything with him. Home Building Compensation insurance policy HBCF21056873 (for main house) and HBCF21057070 (for granny flat) had been issued with iCare on 15/09/2021 (annexure 1). Innovative Builders and Engineers Pty Ltd has started construction on 15/09/2021 on site. The construction site had a sign stating this is being built by Innovative Builders and Engineers Pty Ltd and Supervisor was Mr Mohammad Touhid Reza Khan with his mobile contact number: [XXXX]. Since the beginning, Mr Khan looked after this as a Project Manager of Innovative Builders and Engineers and had sent us all the paperwork, invoices, contract, tender documents, Concept Design Plan, CDC approval. He looked after the construction until Lockup Stage. As per attached correspondence between Mr Khan [XXXX] and Mr Chowdhury ([XXXX] on 15th September 2021 proves that Mr Chowdhury has obtained the HBCF Insurances for this construction and provided these to Mr Khan. Also, the correspondence between Mr Khan [XXXX] and Mr Chowdhury [XXXX] on 6th April 2022 in the spreadsheet list, Innovative Builders and Engineers (IBE) would receive $18,200.00 which is 3.5% of the total construction price $520,00.00. This clearly establishes that Mr Khan has been conducting the construction work on behalf of Mr Chowdhury (IBE). … This also makes it clear why Mr Chowdhury never sent any invoice by himself to me for any payment (he admitted this in the hearing on 15/12/2023). Generally, once a contract is signed, builder will ask for 5% deposit for Concept Design, plan, CDC application and HBCF Insurance. The HBCF Insurance had been issued on 15/09/2021, and Mr Chowdhury's signature in CDC and plans proves that he was well aware of this, and he knew 5% deposit had been paid already. As per progress payment schedule, we have made payments on the below mentioned dates: 1. 5% Deposit of $26,000.00 paid on 29/03/2021. 2. Slab invoice payment of $78,000.00 paid on 16/09/2021 (request sent to bank on 15/09/2021. 3. Frame invoice payment of $104,000.00 paid on 27/10/2021. 4. Lockup invoice payment of $130,000.00 paid on 28/02/2022 (request sent to bank on 2/02/2022). 5. Fixing invoice payment of $130,000.00 paid on 11/07/2022 (request sent to bank on 10/07/2022). … On 5 July 2022, Mr Khan had provided me with a Statutory Declaration for releasing Fixing Invoice progress payment before stating the next stage (annexure 4.2). He had provided the reason: the building costs have gone higher since we had signed the contract. He also provided the quotes from the suppliers and trades as supporting documents for [the] bank to release the funds. He had promised, once the builder received these funds $130,000 he will purchase the materials straightaway and have things installed and deliver the house within 6 weeks. There were approximately 6 weeks of work remaining. Since then we have contacted Mr Khan on multiple occasions to check progress. … Because of lack of response from Mr Khan, we had to escalate this to Mr Chowdhury. He then came and met us on site on 28th November 2022 and informed us that Mr Khan is no longer with IBE. He also mentioned, the account numbers mentioned in the invoices belong to Mr Khan and all the cost we have paid went to Mr Khan. So, if we want IBE to complete the remaining of the construction, we need to pay him $183,937.60 including GST. He provided a formal quote for the remaining works (annexure 3.2). He took no initiative for his mismanagement of his staff/business-associate/subcontractor and denied taking any responsibility to fulfil the contract obligations. He even mentioned that, if we do not like the idea, we can take this further to the Fair Trading. Since then, we had tried to contact him and Mr Khan numerous times to sort this out but they both had been uncooperative"
8. At par [16] and [17] of the decision the Tribunal wrote: 16. In the first affidavit, in summary, Mr Chowdhury relevantly states: 5. The applicant Mahmudul Shah, also owner of the property at [XXXX] Macquarie Field NSW 2564, had not paid any money to me for the construction of the double storey house and granny flat. 6. The applicant claim that they had paid for the construction by showing the account number and ABN of a business that is not associated to me, but of their architect [Mr Khan] with his business entity known as Innovative Buildings and Services. Both the architect and the business entity have no associated to me or my business entity Innovative Builders and Engineers. 7. The payments were not going to my account but instead to the account number and ABN under their architect [Mr Khan]. 8. The owners were most likely conned by this architect as through his manipulation the owner had assumed that he and his business entity Innovative Buildings and Services were linked to me. 9. Neither the owner or the bank had paid me anything, for the construction costs as they were going to the account of [Mr Khan] who is not associated with me or Innovative Builders and Engineers. 10. Because of the owners not paying me for any of the construction costs I had no choice but to terminate the Building Contract between us. 12. I reject any claim by the applicant Mahmudul Shah and their legal representatives based on the claim that they had been paying the payment for the construction costs to their architect [Mr Khan] and his business Entity Innovative Building and Services, which both have no associated to me or my business entity Innovative Builders and Engineers. Because of this the building contract between us had to be terminated". 17. In his second affidavit Mr Chowdhury relevantly states: "Contact with the applicant after signing Contract. 11. Since I did not hear from the applicant after the signing of the building contract, I assumed the applicant was not going ahead with the project and he would contact me when he was ready to start. 12. The applicant did not contact me at any stage after the building contract was signed to ask us to start work until around November 2022 when I received a telephone call from the applicant in relation to incomplete works. I was surprised and shocked when the applicant said to me words to the following effect "the works are not progressing well, we paid you all this money, we expect better service". I replied to the applicant with words to the following effect, "I am not sure what's happening, but we have not done any work on the project. If you paid money, it was not to us, we did not send any invoice". 13. I organised to meet with the applicant to discuss what was happening and get a better understanding of the situation. "14. On 28 November 2022, I attended the Site and held a meeting with the applicant. This was my first attendance at the Site since the contract was signed. During this meeting I recall having a discussion with the applicant with words to the following effect: [Mr Chowdhury]: this is the first time I have been here since the contract was signed, I do not know who did the work or how much you paid them. [Mr Shah]: Mr Khan did the work for your company, and we paid him up to this stage. We have been dealing with him since the contract was signed. [Mr Chowdhury]: I was not made aware of this. Mr Khan is not allowed to do this work or ask payment; he is only an apprentice; I am the only supervisor for my company. You signed the contract with me, why didn't you come to me? [Mr Shah]: he did the work and we paid him. He gave us in voices. [Mr Chowdhury]: Why did not you pay the invoices without questioning him, did I ask you to pay him? [Mr Shah]: No, but the invoices came from your company. [Mr Chowdhury]: it's not my company. I did not give those invoices because I did not do the work, the detail on the invoice is not correct, it's not my account and the payment did not come to me. Like I said, he is not allowed to do this work, and the payment you made did not come to me or my company. Do not pay him anything else, he is using our company to get money from you. We can complete the project at a price of $167,216 plus GST. … 15. I engaged Mr [Khan] as an apprentice as he was seeking work experience in the building and construction industry. I believe Mr [Khan] had some experience as an architect. 16. Mr [Khan's] responsibilities did not include undertaking residential building without my supervision, nor was he ever allowed to perform residential building work without my knowledge or use the name Innovative Builders to perform building works. 17. I believe the applicant engaged and dealt directly with [Mr Khan] after signing the Contract without my knowledge or approval. 18. I did not know that the applicant and [Mr Khan] were in communication and that [Mr Khan] was doing works at the site, giving invoices, and receiving payments. 19. I understand the applicant engaged with [Mr Khan] for [Mr Khan] to prepare architectural designs and drawings for use at the Site and this ended up in [Mr Khan] doing the works. 20. Following my attendance at the Site on 28 November 2022, I ended [Mr Khan's] apprenticeship with us. 21. At the site meeting on 28 November 2022, the Applicant provided me invoices which were issued by Mr Khan, the payment details listed in those invoices are for "Innovative Building & Service", the BSB and account number are not mine or my company's. … 22. The invoices also have a logo of "Maverick Homes Australia", I do not know that company or have any connections with it. I caused a google search for the company Maverick Homes Australia. The company is described as "an unique architecturally custom designed construction company with comp." The search also reveals that the company is temporarily closed. … 23. The applicant did not contact us for anything between the signing of the contract until November 2022. 24. I did not ask anyone to work at the project on behalf of Innovative Builders. 25. I have never asked payment from the applicant or gave the applicant an invoice or asked the applicant to pay another person, including [Mr Khan]. 26. The spreadsheet referred to in the documents filed by the applicant sets out all the projects [Mr Khan] was assisting us in. He was not authorised to receive any funds or ask payment from the owners in any of those jobs. 27. The allegation that Innovative Builders was getting commission 3.5% of the contract price is incorrect and does not make commercial sense. Innovative Builders signed the contract, it can do the job and get full payment of the contract price, it is not beneficial for us to only receive a commission when we can have the full contract price. 28. I believe Mr [Khan] took advantage of the applicant and used Innovative Builders' name to claim and receive payments. 29. We did not do the work, we did not ask or receive any payment from the applicant, the monies paid by the applicant to Mr [Khan] did not come to us and we do not have any share in it. We are not responsible for the works and any defects arising out of the works".
9. The Tribunal noted that the respondent also relied on affidavits from Humayan Kabir, a "site supervisor for the builder" and Mr Faruk Houssain a "construction site manager of the builder in 2022 and 2023." These supported the proposition that the builder did not do work on the homeowners dwelling.
10. The Tribunal also noted, at [38], that there was in evidence a statutory declaration from Mr Khan, dated 5 July 2022, prepared in support of an application by the homeowners to have funds released from their bank early, in order to pay the builder. Relevantly it said: "I am the Project Manager on Behalf of Innovative Builders and Engineers Pty Ltd (Builders HIA Membership No: 1187146, Licence No: 219527C) running the Project of New Dwellings for [XXXX] Macquarie Fields NSW 2564. So far, I have successfully completed 4 out of 6 stages of construction and Innovative Builder have received payment for all these 4 stages of progress payment as per Progress Payment Schedule mentioned in the contract. I am currently at 5th stage (fixing) and have completed partial works, such as doors, skirting, stairs and plaster works. Due to the building materials price has gone almost 40% higher since this contract was signed on 29th March 2021, I am currently struggling to purchase the joinery and kitchen equipment to complete the rest of Fixing stage. However, I have made necessary arrangement with my suppliers and have obtained quotes to purchase all these joineries and kitchen equipment as soon as I have some additional funds available. Hereby, I would like the Owners Mr Mahmudul Hasan Arman Shah and Mrs Syeda Tahamina Begum to approve the payment of stage 5 (fixing), so that I have the necessary funds to purchase these materials and complete the rest of the construction. Once I receive the payment of 5th stage (fixing) for the amount of $130,000.00, I will be able to compete the rest of Fixing stage and Practical Completion stage as early as possible".
11. The Tribunal made the following findings of fact: "22 Based on the evidence before me I make the following relevant findings based on the evidence before me. 23 On 29 March 2021, the parties entered into the Contract. 24 The Contract was signed by Mr Chowdhury on behalf of the Builder. Mr Chowdhury's signature was witnessed by Mr Md Touhid Reza Khan. The stated contact details for the Builder were Mr Khan's mobile telephone number and the Builder's email account. 25 The Contract provided for the demolition of an existing structure and the construction of a house and a granny flat at the Homeowners' property in Macquarie Fields. 26 The Contract price was $520,000. 27 There were no variations to the Contract. 28 Schedule 2 to the Contract provides for 6 progress payments as follows: (1) 5%, Deposit, $26,000.00. (2) 15%, Slab, $78,000.00 (3) 20%, Frame, $104,000.00 (4) 25%, Lockup $130,000.00 (5) 25%, Fixing, $130,000.00 (6) 10%, Practical completion, $52,000 29 On 18 June 2021, Principal Certifying Authority Mr Sam Kayellou issued a Complying Development Certificate in respect of the proposed works on the application of Mr Khan. 30 On 15 September 2023, icare issued to the Homeowners a Certificate in respect of insurance for residential building work. For reasons that are not explained, this certificate identifies that the works were to be carried out by Mr Chowdhury (and his own licence number was included, not that of the Builder) and the "contract amount" was stated as $410,000. 31 Apparently, Mr Chowdhury gave his personal details to icare as, at the time, the Builder was not in fact licensed to carry out the subject works. Mr Shah says that that is not correct as, at the time the Contract was entered into the Builder was appropriately licensed, that for a period there the Builder was not, but now it is again. 32 The works commenced on 19 September 2021 and lock up stage was reached in June 2022. 33 At the time the works commenced, the Homeowners' property had a sign stating this the works were being built by Innovative Builders and Engineers Pty Ltd and that the Supervisor was Mr Khan. Mr Khan's mobile contact number also appeared on the sign. 34 At all material times until 18 November 2022 the Homeowners dealt with Mr Khan, who told them he was the Builder's Project Manager. Mr Khan issued invoices to the Homeowners for the first five progress payments, all of which were paid by the Homeowners. These invoices were issued on a letterhead of the Builder, with the Builder's ABN and licence number stated. The invoices also bore a logo of "Maverick Homes Australia", which the Builder claims is an entity associated with Mr Khan. 35 Each of the five invoices provided payment details for "Innovative Building & Services" identifying a BSB and account number. 36 The Builder claims, and I accept, these are not its account details. The Builder claims that these are Mr Khan's account details. On the balance of probabilities I cannot make that finding. Mr Shah, understandably, has not been able to obtain information from the bank to prove that this is the case. 37 Nevertheless, I accept that Mr Shah thought he was making the five progress payments to the Builder through Mr Khan, who he thought was the Builder's Project Manager."
12. The Tribunal went on to consider what happened when Mr Shah disappeared after the homeowners paid $130,000 for the fifth stage of the works. It is unnecessary to traverse that part of the decision in detail. The Tribunal's conclusions about what happened after Mr Khan disappeared are not in dispute. Put shortly, there were attempts by both the builder and the homeowner to terminate the contract between them. The Tribunal found that the homeowner's termination of the contract was accepted by the builder, at par [45].
13. The Tribunal then proceeded to determine 8 issues which it summarised as follows - with answers in italics - at [46]: "(1) Who were the parties to the Contract? The Homeowners and the Builder. (2) Is the Builder estopped from saying that it has not been paid? Yes (3) Has the Builder failed to comply with the Terms of the Contract. Yes. (4) Are the works complete. No (5) Are the works defective. Yes. (6) Should the Tribunal make a money order or a work order? A money order. (7) If a money order, what should that money order be? An order that, within 14 days of the publication of these reasons, the Builder pay the Homeowners $157,165. (8) Costs. The Homeowners have been successful; subject to receiving submissions from the parties, the Tribunal proposes to order the Builder to pay the Homeowners' costs as agreed or as assessed."
14. The Tribunal discussed some of those questions in greater detail. In the course of doing so, it added to the list of questions, " Was Mr Khan the agent of the Builder?" It answered that question in the affirmative relying on four things: 1. An email from the director to Mr Khan seeking further payment with respect to an arrangement "under which Mr Khan was to pay certain sums in respect of a number of properties, including that of the Homeowners", concerning which "$3,540 had been paid to the Builder in respect of the Homeowners' property": see [50]. 2. That on 15 September 2021 the director forwarded to Mr Khan a copy of the icare insurance certificate with respect to the homeowner's dwelling. 3. Mr Khan had witnessed the signing of the contract by the director. 4. At the dwelling a sign had been erected stating that the construction was by the builder and that its supervisor was Mr Khan.
15. These, the Tribunal found, went adversely to the director's credibility. The decision concluded that on balance Mr Khan was the builder's site supervisor and that he was, at [56]: "56. … the agent of the Builder, and therefore has been clothed with the ostensible authority of the Builder to do tasks an agent would be ordinarily empowered to do, such as directing where payments are to be made."
16. In doing so, the Tribunal the expressly rejected the director's evidence that, at [58]: "(1) Mr Khan and the business entity Innovative Buildings and Services are not associated to [the director] or his business entity Innovative Builders and Engineers; (2) Since [the director] did not hear from [the homeowner] after the signing of the Contract, he assumed that the Homeowners were not going ahead with the project. I reject this assertion, particularly in light of the fact that Mr Khan forwarded [the director] the CDC plans; (3) [The homeowner] engaged and dealt directly with Mr Khan after signing the Contract without [the director's] knowledge or approval. It may have been without [the director's] knowledge, but it was with Mr [the director's] approval, given that Mr Khan's details were set out in the Contract as the contact details for the works; (4) [The director's] did not know that [the homeowner] and Mr Khan were in communication. Perhaps Mr Chowdhury did not know, but as I have noted, [The director's] himself nominated Mr Khan as the contact for the works the subject of the Contract 59 In those circumstances, I find that the Builder is estopped from denying that it received the progress payments made by Mr Shah."
17. With respect to the finding that the builder had failed to comply with the contract the Tribunal said, at [60]: "60 The unchallenged and uncontradicted evidence of the Homeowners is that the works are only 90% complete. The unchallenged and uncontradicted evidence in the two expert reports of the two reports of Mr Paul Johnson of RAPID BUILDING INSPECTIONS respectively dated 1 February 2024 relied on by the Homeowners is that some of the completed works are defective."
18. At [63]-[68] the Tribunal considered whether to make a work or a money order and concluded that a money order was appropriate given "the breakdown in the parties' relationship, and [the homeowners'] views about [the director's] honesty."
19. When it came to assessing damages, the Tribunal wrote, at [70] -[77]: "70 I was told that the payments made actually reflected the works that had been carried out by each progress stage. Accordingly, as 90% of the works have been paid for, I find that the works have been 90% completed. As the Homeowners have not paid for the Practical Completion stage, they will have to give a credit of $52,000 in relation to any damages the Tribunal awards. 71 The two RAPID BUILDING INSPECTIONS reports are detailed documents setting out: (1) in respect of the main building, serious safety hazards, major defects and defects other than major defects (described as "minor defects"); (2) in respect of the granny flat, some minor defects. 72 I note that these reports were actually "Pre-Purchase Standard Property Reports". They were not the type of expert report usually seen by the Tribunal where the expert has been provided with a number of assumptions and the relevant contract and plans and specifications and been asked to opine on whether there has been a breach of any of the statutory warranties found in s 18B of the Home Building Act 1989 (NSW). 73 Based on those reports, BELLA GREEN HOMES has prepared a scope of works dated 8 February 2024 based the defects identified. They quantify the costs (including GST) to complete the works and rectify the defects as $209,165.00. 74 I accept that the BELLA GREEN HOMES is not in the form of an expert report, and does not comply with the Code of Conduct. I also accept that a global figure only was given for the proposed works. But I do not accept that I should simply ignore those reports. It is evidence before the Tribunal. I note in particular that: (1) it appears to be prepared by an appropriately qualified person; (2) the Builder did not object to the reports of RAPID BUILDING INSPECTIONS or the scope of works of BELLA GREEN HOMES; (3) the Builder did not require the author of any of those documents for cross-examination. 75 Further, the BELLA GREEN HOMES document is a form of quotation. Here I am guided by the Appeal Panel of Khan v Kang [2014] NSWCATAP 48… 76 As noted, neither Mr Johnson or the author of the BELLA GREEN HOMES was required for cross-examination, and Mr Chowdhury made no submissions on their documents. 77 In the circumstances, the appropriate order is to order the Builder to pay the Homeowners $157,165.00."
20. The Tribunal then turned its attention to a question it had not previously mentioned or addressed, that of whether an order should be made making the director jointly and severally liable for the damages, along with the builder. The Tribunal said. At [79] -[80]: 79 I have considered whether I should order Mr Chowdhury to pay the $157,165.00 jointly or jointly and severally with the Builder. As the Contract was clearly between the Builder and the Homeowners, I see no basis for doing so because of the Contract. On the other hand, as noted above, on 15 September 2023, icare issued to the Homeowners a Certificate in respect of insurance for residential building work. The certificate identifies that the works were to be carried out by Mr Chowdhury (and his own licence number was included, not that of the Builder) and the "contract amount" was stated as $410,000. 80 In those circumstances, as requested by the Homeowners, I will make an order that the respondents jointly and severally are to pay the Homeowners $157,165.00 within 28 days.

Did the Tribunal provide adequate reasons for its decision finding the director jointly and severally liable to pay the money order?

1. In New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 (Orr) the Court of Appeal addressed the question of the adequacy of reasons expected of NCAT. Bell P (as the Chief Justice then was), with whom Ward JA and McCallum JA agreed, first cautioned that in reviewing the adequacy of reasons on appeal one should not expect perfection. "66. In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] (Resource Pacific). The standard is not one of perfection: Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255 (Bisley)."
2. In assessing reasons, the parameters of quality and quantity are useful, at [67] and [68]. As to the former, the President observed in Orr, at [70]: "…it is generally accepted that the sheer volume of work undertaken by tribunals is such that a perhaps more relaxed standard of review of reasons with corresponding compensation for linguistic infelicities is appropriate than may be the case when an appellate court is hearing an appeal from another court."
3. His Honour continued, at [71-73]: "71. That having been said, even in the less formal setting of a tribunal which has significant powers the exercise of which is capable of affecting the lives of citizens in profound ways, there are certain minimum characteristics that a Tribunal's reasons must possess. These are really supplied, in relation to the Tribunal, by s 62(3) of the CAT Act which, as noted at [52] above, requires there to be set out in reasons (when requested by a party): (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, and (c) the reasoning processes that lead the Tribunal to the conclusions it made. 72. Whilst s 62(3) provides a useful starting point, it still leaves for consideration the question as to the quality and detail of the reasoning process that must be exposed. 73. In this context, in Cypressvale Pty Ltd v Retail Shop Leases Tribunal [1996] 2 Qd R 462 at 477; [1995] QCA 187, Fitzgerald P said of the Queensland Retail Shop Leases Tribunal, adapting the language of Samuels JA in the unreported decision of this Court in Strbak v Newton (Court of Appeal (NSW), Samuels JA, 18 July 1989, unrep) (Strbak), cited in Xuereb v Viola (1988) 18 NSWLR 453 at 469, that, while such a tribunal: "might not be required to 'submit the material before [it] to the most meticulous analysis and carry into [the reasons for its decisions] a detailed exposition of every aspect of the evidence and the arguments ...' or '... incorporate an extended intellectual dissertation upon the chain of reasoning ...', at least 'a basic explanation of the fundamental reasons which led the [Tribunal] to [its] conclusion ...' is necessary".
4. In Meacham v Commissioner of Police [2020] NSWCATAP 107 an Appeal Panel explained: "34. … in reviewing the adequacy of a decision maker's reasons, an appellate court (and, by extension, this Appeal Panel): • should not read passages from the reasons for decision in isolation from others to which they may be related; • must read the reasons fairly and as a whole; • should not inspect the reasons with a fine tooth comb attuned to identifying error; and • should have a degree of tolerance for looseness in the language of the Tribunal, unhappy phrasing of the Tribunal's thoughts or verbal slips: Orr at [77]. 35. In line with the authorities referred to in Orr, it has also generally been accepted that, while not every submission or piece of evidence put forward by the parties must be referred to, "central controversies" put up for resolution by the parties must be dealt with, and the competing evidence relevant to those controversies analysed and resolved: Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 ("Mitchell") at [2]."
5. The Tribunal's explanation of why it was making an order personally against the director, at [80], did not explain what law the Tribunal was applying in reaching that conclusion.
6. The Tribunal had previously found that the parties to the contract were the homeowners and the builder. It had not found the director to be a party to the contract. It had found that Mr Khan was the agent of the builder, but there was no finding that he was also the agent of the director. While the director had signed the contract in that capacity, there is nothing in the contract which provided that he was a party to the contract or was accepting personal liability for the builder's performance of it. In those circumstances, it is difficult to see how that director could have been contractually liable to the homeowner. The Tribunal certainly made no findings in that regard, and did not explain how the director was contractually liable.
7. The basis for the decision finding the director liable was stated by the Tribunal to be the issue of the icare certificate of insurance for the works, which occurred some two and a half year after the signing of the contract. There is no explanation as to how, as a matter of law, this led to a finding that the director was personally liable for the contracted works.
8. One can envisage a number of grounds upon which it could have been argued that the director should be held personally liable; e.g., misleading and deceptive conduct. But the Tribunal did not discuss that or any other basis of liability on the director's part.
9. For all of these reasons, the Tribunal in its decision failed to come to grips with and explain the legal basis underlying its conclusion that the director should be held personally liable. It did not explain its understanding of the law it was applying in reaching that conclusion.
10. This is an error on a question of law and is one that is material to the decision reached by the Tribunal with respect to the director being personally liable.

Did the Tribunal fail to consider or make findings about the scope of the works under the contract before assessing damages for breach of contract?

1. The contract dated 29 March 2021 (no matter which version one refers to) did not contain a description of the proposed works, or drawings or specifications for them. One arguable consequence of this is that the contract is partly in writing and partly oral, rendering it unenforceable by the builder under s 10 of the Home Building Act 1989 (NSW): see Dyjecinska v Step-Up Renovations (NSW) Pty Ltd [2024] NSWSC 159. This is not a matter we have to decide.
2. The copy drawings and plans relied on by the homeowner at the hearing are not referred to in the Schedule 5 of the contract, where provision is made for other documents such as "the plan and specifications" that form part of the contract to be listed. The drawings do not apparently form part of the contract. The drawings are undated. They show that they were prepared by "Md Rashid" and checked by "Mohammad Khan". They bear a stamp showing they were approved as plans and specification by the Private Certifying Authority on 18 June 2021. No mention is made of the plans in the Tribunal's decision, or of when and how they were agreed to by the parties. If they were not part of the original contract, there are issues concerning when, how and if the contract was varied to include them.
3. The appellants submit that, given the builder's denial that it had done any work under the contract, and that the homeowners' claim was for the costs of completion and rectification of the works, it was incumbent on the Tribunal to make findings regarding the nature and scope of the contracted works. Such an understanding, it was submitted, was required before an assessment could be made of the nature and extent of the works required to remedy the defects, in order to bring the construction to completion in accordance with the contract, and as to the cost of that work. We agree.
4. Beyond finding at par [25] of the reasons that the contract was for, "the demolition of an existing structure and the construction of a house and a granny flat at the Homeowners' property", the Tribunal made no findings as to the scope and size of the works, the materials to be used in construction, or about things such as prime costs and provisional sum items. How big a house and granny flat was to be built? Constructed from what materials? With how many bedrooms, bathrooms, living areas and kitchens, constructed or what, and fitted out to what level?
5. What evidence there was concerning the scope of the works before the Tribunal is uncertain. We have not been provided with copies of all the evidence relied on by the parties at hearing, despite them being directed to do so. We are therefore unable to reasonably consider whether there was evidence before the Tribunal going to those issues, upon which it could have concluded what the scope of the works was. In passing, we note that the homeowners' report from Rapid Building Inspections dated 1 February 2024, which is before us, contains no discussion of the scope of the contracted works.
6. What we can conclude is that the Tribunal failed to consider what the scope of the works was, and if, how and when that scope was agreed between the parties. These were necessary and required findings in the circumstances of this dispute. They had to be made in order for the Tribunal to be able to find if and how the builder had breached its obligations under the contract. Only then, could the Tribunal properly assess what was required to complete the works, rectify defects, and the associated costs. It is a fundamental principle that damages for breach of contract are intended, so far as possible, to put the person claiming them in the same position as she or he would have been in had the contract properly performed: Robinson v Harman (1848) 1 Ex 850 at 855 per Parke B; 115 RE 363 at 356. To assess damages, one has to know what the work contracted for was.
7. It follows that we think the Tribunal failed to determine the scope of works under the contract, which was fundamental to the determination of the claim.

Did the Tribunal fail to act in accordance with "equity, good conscience, and the substantial merits of the case" as required by s 38(4) of the NCAT Act?

1. Section 38(4) of the NCAT Act provides: "(4) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms."
2. For the present purposes, we will assume, without deciding, that the requirements that the Tribunal act according to equity, good conscience and the substantial merits of the case are mandatory considerations.
3. The builder asserts that it was "substantially prejudiced by reason of the informality of its evidence at a time when it was self-represented:" see par [21] of the appellants' submissions. This reflects the appellants submissions that it was not given an opportunity to adduce expert evidence and that the Tribunal should have adjourned the proceedings to enable such a report to be obtained. As we understand it, this reflects the respondents' argument that the Tribunal did not act according to equity, good conscience and the substantial merits of the case.
4. These submissions do not withstand the weight of analysis. The Tribunal made orders which gave both parties an opportunity to file expert reports prior to the hearing. The appellants chose not to do so, with the director reasoning that the contract had not proceeded, that the builder had done no work, and therefore, it would not be found liable. That was a strategic decision made by the director which the appellants have come to regret. The respondents knew what the claim against them was and were warned by the Tribunal in writing of the issues it foresaw arising.
5. We are not persuaded that the Tribunal did not act with due regard to equity, good conscience and the substantial merits of the case in specifying the evidence it required, or in its treatment of the appellants and in the consideration of their case.
6. This ground of appeal fails.

Conclusion regarding questions of law

1. We are satisfied that grounds (2) and (3) are made out. As a consequence, we will allow the appeal. This means that the homeowners' application will have to be redetermined.
2. In those circumstances, we see little merit in considering each of the leave grounds relied on by the appellants, including whether or not to admit new evidence, which would require us to embark on a consideration of factual matters which will have to be redetermined in any case.
3. The full evidence that was before the Tribunal below is not before us, making it impossible for us to reconsider the matter on the basis of the evidence before the Tribunal.
4. We will, therefore, set aside the Tribunal's decision and remit the matter for rehearing before a differently constituted Tribunal. We think a different member is necessary because the Tribunal below made adverse findings as to the director's credibility: see Smith v NSW Bar Association (1992) 176 CLR 256; [1992] HCA 36 and Chapman v Nicolosi (No 2) [2023] NSWCATAP 73. We also think it likely that substantial fresh or new evidence will be needed for the Tribunal to be able to re-determine that contractual issues that will be alive before it. This includes some of the new evidence which the appellants sought to rely on in the appeal, including evidence that we have not reached the point of considering. In saying that, we caution the parties that they need to ensure that any expert evidence they seek to rely on is (1), truly from independent experts (emphasising both word), and (2), deals with all the issues in dispute requiring expertise.
5. We note that the parties informed us that $50,000 had been paid to the homeowners in part-payment of the money order, but not by whom. An allowance for that amount, and who paid it, should be factored into the final orders made by the Tribunal when the matter is redetermined.

Costs

1. The parties are referred to the Consumer and Commercial Division Guideline on Costs, available to download from NCAT at https://ncat.nsw.gov.au/publications-and-resources/procedural-directions-and-guidelines.html. It provides useful information about costs in the Consumer and Commercial Division, including details of what can be claimed.
2. With respect to the costs of the hearing below, as we have set aside the Tribunal's orders, we think it proper to also set aside the costs orders made by the Tribunal. We are of the view that we should order that costs of the original hearing be costs in the cause on the rehearing. This means that the costs of those proceedings will be dependent on the outcome of the rehearing. If either party wishes to seek a different outcome, they can apply for a different order in accordance with the orders below within 15 working days of the publication of these reasons.
3. With respect to the costs of the appeal, rule 38A of the NCAT Rules applies to require that we apply the same costs rules as those that applied in the Consumer and Commercial Division under rule 38. This, with respect to a claim over $30,000, as is the case here, requires that costs follow the event, rather than the usual rule, that each party bear their own costs, found in s 60 of the NCAT Act.
4. As the appellants have been successful in the appeal, our view is that we should make an order that the homeowners pay the appellants' costs of the appeal. If either party wishes to seek a different outcome, they may apply for a different order in accordance with the orders below.

Orders

1. The Appeal Panel makes the following orders. 1. Appeal allowed. 2. The orders made by the Tribunal on 11 June 2024 and 12 September 2024 are set aside. 3. The application is to be reheard before a differently constituted Tribunal with new evidence allowed. 4. The costs of the appealed proceedings are costs in the cause on rehearing. 5. The respondent homeowners are to pay the appellants' costs of the appeal as agreed or assessed. 6. If any party contends that there should be a different order to those in orders (4) and (5) above then: 1. They shall file an application for miscellaneous orders specifying the order(s) they seek within 15 working days of the publication of these reasons together with: 1. Details of the costs they seek (specifying amounts); and, 2. Submissions (not exceeding 5 pages) in support of their application. 1. The other party(ies) shall file submissions in reply (not exceeding 5 pages) within a further 10 working days. 2. Any submission in reply from the party(ies) seeking costs (not exceeding 2 pages) shall be filed within a further 5 working days. 3. All submission should also address: 1. Whether the Appeal Panel can dispense with a hearing and deal with the issues relating to costs on the papers by relying on the materials provided; and 2. Whether, if the Appeal Panel makes an order for costs, it should fix the costs by ordering a specific amount.

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

Amendments 17 December 2024 - Decision under Appeal details added. Paragraph numbering corrected. 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: 17 December 2024