John McDonald Building Services Pty Ltd v Gusa [2022] NSWCATAP 60 | Case summary

NCAT Appeal Panel|2021-10-22

CATCD 24 World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 Zey v Bunnings Group Limited [2016] NSWCATAP 72 Texts Cited: J Beazley AO, P Vout & S Fitzgerald, Appeals and Appellate Courts in Australia and New Zealand, (1st ed, 2013, Lexis Nexis Australia) D Pearce & R Geddes, Statutory Interpretation in Australia, (9th ed, 2019, Lexis Nexis Australia) Category: Principal judgment Parties: John McDonald Building Services Pty Ltd (Appellant) Milorad Gusa (First Respondent) Natasha Gusa (Second Respondent) Representation: Counsel: M Sheldon (Appellant) P Lonergan (Respondent)

Solicitors: Macfarlane Law (Appellant) Reuben George Lawyers (Respondent) File Number(s): 2021/00245160 Publication restriction: Unrestricted Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 11 August 2021 Before: L Wilson, Senior Member File Number(s): HB 20/14844

REASONS FOR DECISION

By Notice of Appeal filed 26 August 2021, John McDonald Building Services Pty Limited ("the builder") appealed against orders of the Consumer and Commercial Division of the Tribunal of 11 August 2021. By Reply filed on 14 September 2021, Milorad Gusa and Natasha Gusa ("the homeowners") sought the dismissal of the appeal.
The orders of the Tribunal which give rise to the appeal provided that the builder pay to the homeowners the sum of $150,812.90, and that the homeowners were relieved from paying the builder any amount for Invoice 495 issued on 13 February 2018. The orders included directions that the builder file submissions with respect to the costs of the proceedings, failing compliance with which the builder would be ordered to pay the homeowners' costs on the ordinary basis as agreed or assessed.
The builder's Notice of Appeal articulated six grounds, five of which were agitated on the hearing of the appeal, ground 3 having been abandoned. The builder did not seek leave to appeal, asserting that each of the grounds advanced by it raised a "question of law" and was thus able to be agitated as of right in accordance with s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) ("the CAT Act").
The homeowners asserted that the builder required leave to appeal, which leave was opposed, and pleaded four grounds on which they asserted that leave should be refused.

The decision of the Tribunal at first instance

In its reasons for decision ("Reasons"), the Tribunal recorded that the parties entered into a Home Building Contract on 21 September 2016 for the construction of a residence.
On or about 20 March 2020 the homeowners commenced proceedings in the Tribunal in reliance upon provisions of the Home Building Act 1989 (NSW), alleging incomplete and defective works (Reasons at [3]).
The parties agreed that the completion date of the contract for the purposes of s 3B of the Home Building Act was 28 March 2018, in reliance upon which the Tribunal found that the homeowners' application was "within time for all defects" asserted by them (Reasons at [4]). That finding is not controversial in the appeal.
The proceedings were heard over two days, during which four witnesses were cross-examined: the female homeowner, the director of the builder, and two building experts (Mr Mellick for the homeowners and Mr Xue for the builder) (Reasons at [8]).
The Tribunal identified a number of issues as requiring determination (Reasons at [10]-[15]). It is not suggested that the Tribunal failed to identify or determine any relevant issue which was raised before it.
The Tribunal recorded its findings with respect to the material facts of the dispute under the heading "Facts". Most of the Tribunal's findings of primary fact are not controversial for present purposes.
The Tribunal found that on 2 September 2016 the builder provided the homeowners with a tender for the construction of their new home ("tender"), which was signed on or about that date. The tender price was $634,800 inclusive of GST, but did not include $22,230 for the preparation of plans, work drawings, engineering requirements, development consent and construction certificates (Reasons at [17]).
On 2 September 2016 the builder issued the homeowners with an invoice for preparation and lodgement of plans in the sum of $22,350 inclusive of GST, which the homeowners paid on 6 December 2016 (Reasons at [18]). On the same day the builder issued the homeowners with another invoice for "Additional Architectural working drawings" in the sum of $4,080 inclusive of GST, which the homeowners paid on 5 December 2016 (Reasons at [19]).
On 21 September 2016 the parties entered into a "Standard HIA Home Building Contract for New Dwellings" ("the contract") (Reasons at [20]). The contract sum was $571,320 plus $63,480 GST, the total recorded in Schedule 1, clause 4 of the contract being $643,800 (Reasons at [21]).
Having entered into the contract within 45 days of the tender, in accordance with its terms, the tender price became the "contract sum", which was thereafter binding upon the parties (Reasons at [23]).
On 11 November 2016 the builder issued the homeowners with the invoice for their first progress payment, which was 5% of the contract sum for "commencement", which was paid on 19 June 2017 (Reasons at [24]).
On or about 23 November 2016 the builder obtained home warranty insurance for the building works (Reasons at [25]).
On 1 June 2017 the homeowners received confirmation from their bank that a loan to undertake the building work had been approved (Reasons at [26]).
On 7 June 2017 the builder sent the homeowners an email which said, relevantly for present purposes (Reasons at [27]): "Please find attached out [sic] letter regarding the termination of the NSW residential building contract. Also attached is a Statutory Declaration that needs to be signed, witnessed and returned to our office ASP."
Attached to the 7 June 2017 email was a letter which relevantly stated (Reasons at [28]): "This letter is to inform you about the cancellation of the NSW residential building contract between [the builder] and [yourselves] dated 27 January 2016. As per clause 33.2 a substantial breach of the contract by the owner includes: (a) fails to pay any amount by the due date (b) fails to give evidence of ability to pay as requested (f) fails to give an instruction or direction within the time specified Hence this contract will be terminated as of 21st June 2017. Could you please both sign the enclosed Statutory Declaration and have this witnessed by an Authorised witness and return to our office at your earliest convenience."
The Statutory Declaration attached to the 7 June 2017 email relevantly provided (Reasons at [29]): "We [the owners] hereby confirm that no deposit or money has been paid to [the builder] in relation to the commencement of building works at [address] other than plan preparation and submissions. We [the owners] hereby confirm that we are not proceeding with building works at [address] due to expiration of contract time and lack of funding. We [homeowners] hereby confirm that no claim exists in respect to [address]."
Later on 7 June 2017 the homeowners replied to the builder in the following terms (Reasons at [30]): "We just got the loan approved last week. We received the papers yesterday to sign and I sent them back this morning. If you like I can bring you the paperwork tomorrow that we received from Rams. I have no idea why it took so long, I think it had a lot to do with our broker. I'm really sorry. I'm sure Rams will call you tomorrow or Friday to tell you the funds are approved. If John gets the money in the next few days is it still terminated?"
On 8 June 2017 the homeowners' bank sent the builder a letter advising that the bank "was in a position to commence progress payments to your builder under the terms of your fixed price building contract" (Reasons at [32]).
On 9 June 2017 the homeowners met with the director of the builder at the builder's premises. The Tribunal accepted (Reasons at [33]) the evidence of the homeowners that words to the effect asserted by the female homeowner were then stated, the substance of which was that the builder advised that the building contract had "expired", that it had "terminated" the contract, and that, if the homeowners wished to: "..keep going with the contract we will need to amend the contract and take some items out. If you don't agree to an amendment, the contract will stay terminated, we will keep the $22,350 you've already paid and we won't carry out any works".
The homeowners were found to have stated that they wished to continue with the contract, and did not want to lose the money which they had paid, to which the builder responded that if it took off "the bar, the landscaping and some other items" it would "keep the same price". The homeowners' response to that proposition was equivocal. The builder then stated that he had "an amendment typed up for you to sign".
The document which the builder gave the homeowners at the meeting on 9 June 2017, which the homeowners signed, relevantly provided (Reasons at [34]): "The tender has been going for some 18 months now and commencement has been ineffective. We have made realisation of a CPI increase of 5.6% which has increased [builder's] costs by $35,550. To alleviate further borrowings we suggest removing the following items from the contract to compensate for CPI increase rather than refinance Bar and cellar allowance $7,000 Tiling to alfresco and veranda $5,550 Fencing (86.61 metres) $3,900 Gates $800 Landscaping and turf $7,900 Total $25,150 Should you wish to accept this amendment to contract, please sign below in agreement of this proposal. This statement hereby gives effect that the above items will NOT be included in the building tender and that the contract price remains."
The Tribunal found (Reasons at [35]) that a conversation then ensued in which the builder said words to the effect that : "We also need you to sign copies of all the progress payment forms now so there is no delay with payments."
The Tribunal recorded that the builder "broadly agreed with what the homeowners claimed was said in the 9 June meeting" and that, in cross-examination, the builder suggested that the homeowners "had a choice back then to go, either with another builder or to accept that we were going to remove a couple of items". As the Tribunal recorded, that was consistent with the letter the builder presented to the homeowners for them to sign, agreeing to remove $25,150 of items from the contract works in order that work could proceed (Reasons at [36]).
The Tribunal found that "[t]here was no choice represented to the Homeowners, who had not engaged a lawyer for these discussions, to keep what had been agreed in the Contract. The choice presented was either terminate the Contract or vary it by removing works or increasing the Contract sum" (Reasons at [38]).
The Tribunal then found (Reasons at [39]) that, "[a]s at 7 June 2017, in the circumstances of this case, the builder was not entitled to terminate the Contract", and that, if the builder wanted to terminate the contract based on an alleged breach by the homeowners it needed to do so in accordance with clause 33. "Subclause 33.2 defines what is a substantial breach by the owners. Subclause 33.3 allows an innocent party to give a party who is in substantial breach a written notice stating the details of the breach and that, if the breach is not remedied within 10 working days that the innocent party is entitled to terminate the Contract."
The Tribunal further found (Reasons at [40]) that, under clause 33.4 of the contract, the builder was only entitled to terminate after 10 days had passed with the substantial breach not being remedied and by giving a further written notice to that effect. The Tribunal found (Reasons at [41]) that in cross-examination the builder accepted that by "the day following the Termination Letter being emailed to the homeowners, any breach by them had been remedied".
The Tribunal found that the builder had never given written notice of an alleged substantial breach to the homeowners in the terms required by clause 33 of the contract and that, even if the Termination Letter could be construed as such, which it held it could not, the homeowners remedied the breaches complained of within 10 days (Reasons at [42]). The Tribunal reiterated its finding that, in the circumstances found by it, the builder would not have been entitled to terminate the contract.
The Tribunal found the representations to the homeowners by the builder on 7 June 2017 to have been misleading and deceptive (Reasons at [43] and [44]), the material misrepresentation being that it was entitled to terminate the contract unless the homeowners agreed to the variations earlier referred to. The Tribunal found that, but for the misleading representations made to them by the builder, the homeowners would not have agreed to the variation recorded in the 9 June 2017 letter, and found that the "only reason the homeowners agreed to the variation, which was entirely in the builder's favour and entirely against their interests, was because of the misrepresentations of the builder": (Reasons at [45]).
The Tribunal rejected the builder's contention that the homeowners did not suffer any detriment by relying upon its representation (Reasons at [46]). The Tribunal recorded (Reasons at [47]), the basis of the builder's proposed variations to the contract. The Tribunal found the builder's submissions to "misunderstand the concept of detriment" (Reasons at [48]). The Tribunal further observed that the builder's contentions demonstrated that it "misunderstands the legal nature of a contract". The Tribunal reiterated (Reasons at [49]) that the builder's rights to terminate were in accordance with clause 33 of the contract, and that the builder had both failed to comply with the provisions of that clause and misled the homeowners with respect to his entitlement to do so.
The Tribunal dealt (Reasons at [50] and [51]) with other contentions of the builder which it rejected. The Tribunal found that the "fourth misrepresentation" considered by it "did not alone cause detriment to the homeowners" but rather "added weight to the other misrepresentations made by the builder about the end or expiration of the contract" (Reasons at [53]).
The Tribunal then considered whether the homeowners acted upon the first, second and/or third misleading and deceptive representations by the builder to their detriment (Reasons at [54]). The Tribunal found the first misrepresentation was the builder's failure to tell the homeowners that the contract remained on foot, and that it had a contractual obligation to complete the contracted works at the contracted price (Reasons at [55]). The Tribunal found that the homeowners "could not have acted upon an omission" and, as such, "have no recourse as they did not take any steps to their detriment because of the builder's omission". The omission was, however, considered to be "part of the overall context in which the homeowners agreed to the removal of items from the scope of works" as the Tribunal found to be the case with the fourth misrepresentation. The Tribunal "took both the omission and fourth misrepresentation into account when assessing whether the second and third representations were misleading or deceptive".
The second misrepresentation (Reasons at [56]) found by the Tribunal was that "the contract was terminated in circumstances where the builder knew this was not the case". The Tribunal found that the builder "ought to have known the contract was not terminated on 7 June and that it was incapable of terminating it on 7 June 2017". The termination letter was thus found to contain a misleading and deceptive representation that the contract was terminated or cancelled. The Tribunal reiterated in this context a number of its earlier findings with respect to the rights and obligations of the builder.
The third misrepresentation (Reasons at [57]) found by the Tribunal was "that items had to be removed from the contract in order for the builder to continue with the contract, that is, not proceed to terminate it as the builder misrepresented it had the power to do".
The Tribunal "readily" found that, on 9 June 2017, the builder misrepresented to the homeowners that the only way to avoid the contract coming to an end was for the homeowners to agree to remove the items identified in the 9 June letter which was produced for them to sign. For the reasons which it thus recorded, the Tribunal found (Reasons at [58]) that misrepresentations 2 and 3, taken together, caused the homeowners to act to their detriment and suffer loss. Pivotal to that finding was the finding that the breaches complained of in the termination letter had been remedied "certainly within the requisite 10 working days". The Tribunal found that the only reason that the homeowners agreed to remove the items on 9 June was because of the builder's misrepresentations with respect to its entitlement to terminate the contract (Reasons at [58]).
The Tribunal recorded (Reasons at [59]) that on 19 June 2017 the first progress payment was made and the builder commenced the works. On 19 July 2017 (Reasons at [60]) the builder issued the homeowners with an invoice for $6,015.60 of variations, which was paid. On 14 August 2017 a further variations invoice was issued to the homeowners, being for variations to the foyer, floor waste, laundry splashback, underfloor heating and a credit for the kitchen and bar not being tiled ([Reasons at 61]). This invoice for $4,630 was paid on 21 August 2017. On 13 February 2018 the builder issued the final invoice on the homeowners for variations, including some credits. That invoice (numbered 495) had not been paid by the homeowners (Reasons at [62]). That was the invoice which, pursuant to the Tribunal's orders, the homeowners were not obliged to pay.
Under the heading "Jurisdiction" the Tribunal identified the sources of power upon which the homeowners relied, being s 18E of the Home Building Act with respect to defects (Reasons at [63]), and s 48O of the Home Building Act for damages in excess of $40,000 for the breaches of the Competition and Consumer Act 2010 (Cth), Schedule 2 - Australian Consumer Law ("ACL"). The Tribunal recorded that it had jurisdiction to apply the ACL, in accordance with s 79S of the Fair Trading Act 1987 (NSW) and award damages to a maximum of $40,000.
It was not suggested in the appeal that the Tribunal either lacked jurisdiction or misconceived the basis of its jurisdiction. The jurisdiction to award more than $40,000 in damages for breaches of the ACL was controversial in the appeal.
The Tribunal (Reasons at [66]) identified the homeowners' application as "a building claim as defined in s 48A of the Home Building Act. Their claim is for both breaches of contract (including breaches of the statutory warranties implied in the contract pursuant to s.18B of the Home Building Act) and damages for breaches of the ACL".
The Tribunal identified s 74(3) of the Fair Trading Act as being relied upon by the homeowners in support of their contention that the Tribunal had jurisdiction to award damages and/or compensation for breach of the ACL in excess of $40,000 (Reasons at [67]).
The Tribunal recorded (Reasons at [68]) that neither party referred the Tribunal to authority shedding light on "how s.74(3) applied in home building claims that raised misleading and deceptive conduct".
By reference to the decision of the Appeal Panel in Jenkinson v Chaw [2015] NSWCATAP 127 ("Jenkinson") (Reasons at [68]) and the decision in Singh v Verdi Group Pty Limited [2017] NSWCATCD 94 ("Singh") (Reasons at [71]) and other authorities to which the Tribunal had been referred or found for itself, and the authorities relied upon by the builder, the Tribunal found (Reasons at [87]) that: "A building claim is defined in s.48A as one that arises from a supply of building goods or services. It expressly includes a claim for compensation for loss arising from a breach of statutory warranty implied under Part 2C (s.48A(2)(b)) but does not exclude any cause of action or relief claimed such as a claim for breach of contract or for breaching the ACL. There is precedent for the Tribunal awarding damages to homeowners for misleading and deceptive conduct and for those damages to exceed the limit in consumer claims. The only limit on such damages is $500,000: s48K(1) Home Building Act."
As the Tribunal's conclusion in this regard gives rise to a ground of appeal (ground 4) and it will be necessary to consider the authorities raised by the parties to the appeal, we have not referred to them in detail in this overview of the Tribunal's Reasons.
Having regard to the grounds of appeal, it appears unnecessary to engage with the Tribunal's findings with respect to a number of specific issues arising out of its finding that the builder was, and remained, bound by the contract (Reasons at [88]-[104]).
As the Tribunal's determination of whether the builder performed defective work "for which the homeowners are entitled to a work order or money order for rectification" is the subject of a ground of appeal (ground 6), it is necessary to refer to the Tribunal's findings in that regard.
Having reviewed the "Scott Schedule", which was provided to it, the Tribunal referred (Reasons at [105]) to the evidence with respect to particular defects and its findings in that regard. We apprehend that the thrust of ground 6 is whether a work order or a money order should have been made by the Tribunal, rather than the quantum of such order.
Under the heading "Should the homeowners obtain a money order rather than a money order?", clearly intended to read "work order", the Tribunal considered the competing claims. The Tribunal recorded (Reasons at [167]) the evidence of the homeowners that they had "lost faith in the builder" and had "given the builder multiple opportunities to rectify defects or complete works which it has not done". The homeowners also relied upon correspondence with respect to rectification of complaints which were the subject of the proceedings in support of their contentions. The Tribunal reiterated its earlier findings with respect to misleading and deceptive conduct by the builder, and to the builder's persistent assertion that it "did nothing wrong" in misleading and deceiving the homeowners. The Tribunal concluded that it would "not force these Homeowners to have to continue to deal with such a Builder against their will given this deceptive conduct".
The Tribunal referred in detail to the submissions of the builder in relation to the work order issue, including the "change in position" of the homeowners, from being agreeable to a work order to opposing such an order (Reasons at [168]).
The Tribunal ultimately concluded that a money order rather than a work order should be made on the basis that "more important is the clear breakdown in the relationship between the parties, and the fact the Builder still thinks it is proper to mislead the Homeowners into changing the Contract to their detriment. The relationship between the parties is broken and the Homeowners should not have to deal with this Builder ever again" (Reasons at [170]).
The Tribunal then considered whether the homeowners had failed to mitigate their loss (Reasons at [171]-[176]), and was not satisfied (Reasons at [175]) that the homeowners had failed to mitigate their loss, that the builder had been given opportunities to rectify defects and complete work but had not done so or replied to letters and requests of the homeowners or their lawyers.
The Tribunal then considered whether the homeowners were entitled to damages for breach of s 18 of the ACL (Reasons at [177]-[186]). The Tribunal accepted (Reasons at [186]) the homeowners' evidence of the cost to complete the work which should not have been removed from the contract, being the sum of $83,740.25. The Tribunal accepted the homeowners' expert evidence that to complete works in accordance with the contract drawings and other landscaping works which should not have been deleted from the contract would cost $80,390.64 (Reasons at [187]). The Tribunal thus ordered the builder to pay the homeowners $150,812.90, comprising $2,800 credit for the front doors, $58,382.24 for defects, $9,240 for the bar (ACL claim) and $80,390.64 for landscaping (ACL claim).

Whether the builder requires leave to appeal

As the homeowners' Reply makes clear, a preliminary question requiring determination is whether the builder requires a grant of leave to appeal pursuant to s 80(2)(b) of the CAT Act. As this is an appeal against the decision of the Consumer and Commercial Division of the Tribunal, the provisions of clause 12 of Schedule 4 to the CAT Act apply in the event that it is held that the builder requires a grant of leave to appeal.
The homeowners submitted that only one ground articulated in the builder's Notice of Appeal, ground 4, raised a question of law, and thus that leave to appeal was required with respect to grounds 1, 2, 5 and 6. The homeowners submitted that leave had not been sought, and should not be granted in any event. The homeowners do not assert any prejudice as a result of the builder not formally seeking leave to appeal. If a grant of leave to appeal is necessary and appropriate, we would be disinclined to decline to grant that leave simply because no formal application for leave had been made.
To determine this issue, it is convenient to set out the grounds of appeal which were ultimately agitated before us. Those grounds provided: "1 In finding that the appellant misled and deceived the respondent, did the Tribunal deny the appellants procedural fairness by failing to consider a substantial and clearly articulated argument that the appellant was entitled to terminate the contract under clause 4 of the contract, such that the appellant's representations were not misleading or deceptive. 2 Whether in construing the contract, and concluding that as at 7 June 2017 the appellant was not entitled to terminate the contract with the consequence that the appellant engaged in misleading or deceptive conduct, the Tribunal erred at law. … 4 Whether on the proper construction of sections 74(3) and 79S of the Fair Trading Act 1987 (NSW) the Tribunal had jurisdiction to: (a) make any order in favour of the Respondent for the payment of an amount for misleading or deceptive conduct; (b) alternatively, an order for the payment of money in excess of $40,000. 5 Whether in adopting quotations by a person not called to give evidence and not subject to the Expert Evidence Procedure or Direction 3 for the landscaping works, the Tribunal denied the appellant procedural fairness or otherwise did not comply with the requirements of subsection 38(2) or 38(4) of the Civil and Administrative Tribunal Act 2013 (NSW). 6 In circumstances where the Tribunal ought not to have found that the appellant engaged in misleading or deceptive conduct, on the proper application of section 48MA of the Home Building Act, should the Tribunal have made a works order under s.48O(c) of the Home Building Act instead of a money order."
What constitutes a question of law for present purposes is well settled. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, by reference to earlier authorities, the Appeal Panel provided a "non-exclusive" list of questions of law, which included, whether the Tribunal identified the wrong issue or asked the wrong question, whether a wrong principle of law was applied, whether there was a failure to afford procedural fairness, whether the Tribunal failed to have regard to a relevant consideration, or had regard to an irrelevant consideration, whether the Tribunal made a material error of fact, whether the decision is so unreasonable that no reasonable decision-maker would make it, and whether the Tribunal failed to provide adequate reasons for its decision.
We are satisfied that grounds 1, 2, 5 and 6 raise questions of law. Ground 1 raises a procedural fairness point which is reliant upon an asserted failure to have regard to a "substantial and clearly articulated argument". Either of those complaints, in our view, raises a question of law. The latter effectively asserts a failure to have regard to a material consideration, and/or to assert a constructive failure to exercise jurisdiction (Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33). Moreover, the ground challenges the Tribunal's interpretation of the contract, and the rights and entitlements of the parties pursuant to clause 4 of the contract, which involves a question of law.
Ground 2 involves a question of contractual interpretation, the builder asserting that the Tribunal has "mistaken the law" in its interpretation of the contract. Such challenge sits comfortably within the recognised categories of "question of law". Legal error through a mistake of law includes "challenges to the legal consequences held to follow from the facts as found, admitted or agreed, since it is not the facts themselves that are challenged" (J Beazley AO, P Vout & S Fitzgerald, Appeals and Appellate Courts in Australia and New Zealand, (1st ed, 2013, Lexis Nexis Australia) at page 105). The challenge articulated in this ground comfortably falls within that description. We are satisfied that ground 2 raises a question of law.
Ground 5 again asserts a denial of procedural fairness, and/or an asserted error of law in having regard to irrelevant facts or circumstances, or mistaking the facts, by erroneously relying upon evidence which could not be relied upon. We are satisfied that each of the challenges articulated in ground 5 raises a question of law.
Ground 6, on its face, is a challenge to the exercise of discretion. It appears implicit in this ground that, if the challenge advanced by ground 2 is successful, the fate of this challenge is academic. Conversely, if ground 2 is unsuccessful, then the builder must establish that the Tribunal erred by making a money order as sought by the homeowners, rather than a work order as it sought.
In support of ground 6, the builder made a series of submissions (paragraph 61) in reliance on the provisions of s 48MA of the Home Building Act, which provides: A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.
It was thus submitted (paragraph 62) that, in the circumstances, there was "nothing preventing the Tribunal from making a works order". It was submitted that (paragraph 63) there was "no evidence of a breakdown in relationship (beyond the sort of tension that exists between all parties in dispute), there was no evidence of harassment or intimidation or anything of that nature".
It was also submitted on behalf of the builder that "absent the finding of misleading or deceptive conduct, the only evidence pointing against a works order" was the female homeowner's "conclusory assertion that she had lost faith in the builder" and that such an assertion could not be sufficient to rebut the presumption in s 48MA of the Home Building Act and that "if that was sufficient, s48MA would be easily overcome in every case" (paragraph 65). It was further submitted that there should be "matters of significant weight before the Tribunal departs from the preferred position" (paragraph 66). It was also submitted that the "relatively minor" defects found by the Tribunal could be "readily and easily fixed and the builder is willing to do so" (paragraph 67).
The homeowners' submissions (paragraph 68) identified, by reference to the findings of the Tribunal, 8 particular matters in support of the making of a money order rather than the work order which the statute provides is the "preferred outcome".
It is not in doubt that the decision to make a money order in preference to a work order involved the exercise of discretion. The principles governing such appeals are not in doubt and have been consistently reiterated for more than 80 years since the decision in House v The King (1936) 55 CLR 499; [1936] HCA 40.
With respect to the submissions of the builder, at their highest, they demonstrate that the Tribunal could permissibly have made a work order. The builder has not challenged the findings of primary fact upon which the issue was decided. It is not suggested that the Tribunal failed to have regard to any relevant fact or circumstance. It is not suggested that the Tribunal misconceived the law. It is not suggested that the Tribunal had regard to irrelevant facts or circumstances. Nor is it suggested that the decision was attended by any absence of procedural fairness, or was so unreasonable that it could not permissibly have been made. Though not so expressed, the builder's challenge is in reality a challenge to the "weight" given to the evidence of the homeowners. That evidence may have been afforded less weight, but that does not demonstrate appealable error. Nothing to which we have been referred establishes that the discretion of the Tribunal miscarried in making a money order in preference to a work order.
The requirement of s 48MA that the Tribunal have regard to the "principle" that a work order is the "preferred outcome" creates a mandatory relevant consideration (Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40) failure to have regard to which is an error of law. Save in that respect, the discretion conferred by s 48MA of the Home Building Act is fettered only by the general principles to which we have referred, as its terms confirm. The builder has not established that the Tribunal erred by failing to have regard to the "preferred outcome" articulated in s 48MA.
We are not persuaded that the builder has established that the discretion of the Tribunal miscarried. For the foregoing reasons, we would reject ground 6, if it raises a question of law or, for those same reasons, would refuse leave to agitate the ground if a grant of leave is required.

Grounds 1 and 2

Grounds 1 and 2 were argued conjointly. The crux of the grounds was that the Tribunal at first instance "omitted consideration of a substantial and clearly articulated submission made by the builder in its written submissions as to why the builder was entitled to terminate the contract".
The asserted failure of the Tribunal at first instance was submitted to constitute a denial of procedural fairness. Although an error of law if established, denial of procedural fairness does not enliven appellate intervention if the outcome would be no different if the case was re-determined (Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54). The builder submitted that, if the Tribunal at first instance had regard to its submission "the conclusion that the builder was not entitled to terminate the contract could not have been reached" and, as a consequence, "there could not have been a finding of misleading or deceptive conduct".
These grounds do not involve consideration of whether the builder's representations with respect to its entitlement to terminate the contract were representations of "fact" which were capable of enlivening s 18 of the ACL: World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181, or issues of the kind considered by the High Court in Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31 with respect to the bargaining power, decision making or commercial competence of the parties. These issues did not arise during the proceedings at first instance.
The builder referred (paragraph 16) to its submissions at first instance, drawing to the Tribunal's attention clause 4 of the contract, which was submitted to require that the owners "provide the builder with written advice from their lending body that the amount of finance, when added to the owner's funds, was sufficient to pay the contract price and that the building works may commence". The builder submitted at first instance that the homeowners "were required to satisfy the essential matters in clause 4 of the contract within 15 days of the contract date (i.e. by 6 October 2016), otherwise the builder was permitted to terminate the contract by giving written notice to the applicants to that effect".
The builder contended that the requirement pursuant to clause 4 was not satisfied by the homeowners until sometime after 8 June 2017. The builder thus submitted that the Tribunal at first instance had erred in finding that it was not entitled to terminate the contract and that, as a consequence, it could not find misleading or deceptive conduct in reliance upon the builder's statements to the homeowners in June 2017.
Clause 4 of the contract headed "Essential Matters" was set out, accurately, by the builder in support of its submissions (paragraph 20). The clause provided, relevantly for present purposes, that: "The Owner must, within the initial period, give the Builder: (d) if the Owner is obtaining finance from a lending body, written advice from the lending body that (i) the amount of finance, when added to the Owner's Own individual funds is sufficient to pay the Contract Price and (ii) the building works may commence"
The builder further relied (paragraph 21) on clause 4.2 of the contract which provided that: "If the owner fails to satisfy all of the above within the initial period the builder may end this contract by giving the owner a written notice to that effect, at any time prior to physical commencement of the building works".
The builder relied upon item 15 of Schedule 1 to the contract as providing the "initial period" was a period of 15 days from the date of contract, or 15 days from 21 September 2016.
The builder thus asserted (paragraph 27) that, on the findings of primary fact made by the Tribunal at first instance, it was entitled to terminate the contract on 7 June 2017, many months after the initial period had expired. It was further submitted that, although not a necessary finding, at the time the builder represented that it was entitled to terminate the contract, the builder had not received any notice from the owner's bank in accordance with clause 4.1(d) of the contract.
The builder submitted (paragraph 28) that nowhere in the reasons for the decision of the Tribunal at first instance was there any consideration of its submissions with respect to clause 4, or reference to or consideration of clause 4 itself. It was thus submitted (paragraph 29) that, although the Tribunal may have correctly interpreted clause 33, and its impact upon the builder's rights, it was "incorrect in the ultimate conclusion when regard is had to clause 4 of the contract and the unchallenged factual findings as to the timeline". By reference to the decision of the High Court in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088 the builder submitted that there was a failure by the decision-maker to address a "substantial, clearly articulated argument relying upon established facts" which constitutes a denial of procedural fairness.
The builder addressed what it described as "two additional points by way of Notice of Contention" raised by the homeowners (paragraphs 33-35). The first matter was with respect to the Tribunal's acceptance of the homeowners' evidence that, on 9 June 2017 the builder also misled the homeowners by representing to them that the contract had expired, and that if they wanted to continue, the contract needed to be amended to delete some items of work. It was submitted that, if, as at 7 June 2017 the builder was entitled to terminate the contract, then there was nothing misleading or deceptive about the same representation being reiterated on 9 June 2017. It was thus submitted that the Tribunal at first instance "only found that the 9 June 2017 representation was misleading because it erroneously concluded that the builder was not entitled to terminate the contract on 7 June 2017", and that, once that finding was "corrected" by reference to clause 4, then the builder was entitled to renegotiate a new contract with the homeowners, which the homeowners were free to accept or reject.
The builder further submitted (paragraph 36) that the submission of the homeowners that it had effectively waived its rights to terminate the contract in reliance upon non-compliance with clause 4 was not explained and was not a submission which was made at first instance in response to the builder raising clause 4 in its written submissions. The builder further submitted that the homeowners' contention contradicted the "no waiver clause" in clause 41 of the contract. It was submitted that: "far from being any waiver, the builder exercised its rights under clause 4.2 within the timeframe expressly permitted by clause 4.2, that being prior to the physical commencement of the building works".
The homeowners made a number of submissions in reliance upon the findings of fact of the Tribunal with respect to conversations between the parties, and the interpretation of clause 33 of the contract and submitted that, for the reasons advanced by them at first instance, the builder was not entitled to rely on clause 4 to terminate the contract (paragraph 4).
The homeowners referred (paragraphs 5 and 6) to the principles emerging from a number of authorities with respect to the denial of procedural fairness asserted by the builder, none of which is controversial. The homeowners also referred (paragraphs 7 and 9) to the particulars of the homeowners' claim and asserted that: "at no point in the case, other than it its closing submissions, did the builder raise clause 4 of the contract as part of its defence and say that it was entitled to terminate the contract. This stage of affairs is consistent with the evidence of the builder's sole Director - being that he represented reliance on clause 33.2 of the contract to say the contract was terminated".
It was thus submitted that the builder having not raised a "substantial, clearly articulated argument", the Tribunal could not have erred by failing to engage with it. It was further submitted that, having "never argued or established, as a fact, that the homeowners were in breach of clause 4 of the contract as at 7 July 2017" the Tribunal did not err in failing to find that the builder was entitled to rely upon clause 4 to defeat their claim.
It was further submitted that, even if it were found that there had been procedural unfairness to the builder: "such unfairness cannot be reasonably supposed to have affected the result that the builder made misleading and deceptive representations to the homeowner. Other representations were found to have been misleading and deceptive. The result, being a finding of misleading and deceptive conduct under ACL s18, cannot be affected".
The homeowners conceded that they "did not provide within 15 days of entry into the contract (21 September 2016) a letter that would have satisfied the requirements of clause 4.1(d) of the contract" (paragraph 13). The homeowners relied upon actions of the builder on 11 November 2016 and 23 November 2016 as constituting an "affirmation of the contract" (paragraph 14). It was thus submitted that, although as at early 2016 the builder was entitled to terminate the contract in reliance upon clause 4.1, by issuing the invoice for the payment of the first progress payment and/or obtaining home warranty insurance, the builder had acted in a manner inconsistent with terminating the contract, in a manner consistent with affirming the contract, and that the builder did those things knowing that it had not received a notice from the lending body within the initial period. It was thus submitted that the builder had "affirmed the contract" and it continued with full effect, each party being required to perform their obligations pursuant to it.
The homeowners further asserted (paragraph 15) that by its conduct, the builder had waived any rights to terminate the contract pursuant to clause 4, and that, on 7 April 2017 the lending body (RAMS) issued a commencement letter to the builder, which satisfied the requirements of clause 4.1(d) of the contract, which the builder accepted (paragraph 16).
The homeowners submitted (paragraph 17) that, even if the builder had been entitled to terminate the contract pursuant to clause 4, the builder's misrepresentations "stand firm in support of the Tribunal's findings" and that any asserted error did not affect the result. The homeowners referred to a number of findings of fact made by the Tribunal, in support of its decision which were submitted to have been open to it (paragraph 18).
On balance, we consider that the pivotal factor in the Tribunal's findings of misleading or deceptive conduct by the builder was its finding that the builder's misleading or deceptive representations (to the effect that it was entitled to terminate the contract) constituted the reason for the homeowners' agreement to the variations demanded by the builder.
In reply, the builder submitted (paragraph 9) that the builder's reliance at first instance on clause 4 of the contract did not "fall outside of the pleadings". The builder submitted that a determination as to whether the representations of the builder were misleading or deceptive or false turned on the proper interpretation of the contract. In short, the builder submitted that it was entitled, generally and in relation to the ACL claims, to rely upon the terms of the contract and that, if it was entitled to terminate the contract in reliance upon clause 4, then the representations with respect to the status of the contract were neither misleading nor deceptive.
In response to the contention of the homeowners that, even if error was established pursuant to this ground appellate intervention would not be enlivened because any such error did not affect the result, the builder relied upon the decision of the High Court in MZAPC v Minister for Immigration and Border Protection [2021] HCA 17 at [161] and [162]. The builder thus submitted that the Tribunal's "failure to consider a critical clause of the contract which prima facie permitted the builder to terminate the contract was a serious error" and thus capable of producing practical injustice.
The builder submitted that even if it was required to demonstrate that the asserted error of the Tribunal actually did affect the result, which requirement was disputed, the builder could discharge that onus as: "none of the other alleged misleading or deceptive representations on which the owners relied could have caused the owners any loss".
The builder submitted (paragraph 20) in response to the homeowners' "waiver" submissions that the touchstone was "whether or not the builder acted inconsistently where the right required a proper consideration of what the right was". The builder reiterated its reliance upon the terms of clause 4.2 which we have earlier recorded.
The builder thus submitted that the right to end the contract was activated upon the homeowners failing to satisfy all of the conditions within the initial period, and that the right "continued to remain live" until prior to physical commencement of the building works" (paragraph 22). It was thus submitted that there was: "nothing inconsistent with the exercise of the builder's rights under clause 4.2 in the builder seeking to have the owners progress the project so that the physical building works could commence, but for the builder to reserve for itself the right (as the contract expressly allowed it to do) to terminate the contract prior to the physical commencement of works."
The builder further relied (paragraph 24) on the failure of the homeowners to pay the "5% upfront deposit" which was required for commencement pursuant to the 11 November 2016 invoice until after the builder purported to terminate the contract.
It was also submitted that the obtaining of insurance did not constitute a waiver of the right to terminate the contract prior to the physical commencement of work, but rather was a "necessary step to ensure that the builder was ready, willing and able to proceed with the works if the owner was" (paragraph 25).
The builder submitted (paragraphs 27 and 28) that the contention of the homeowners that the right to terminate the contract was extinguished prior to June 2017 could not be sustained, particularly as finance was not approved until 1 June 2017.
The builder further submitted (paragraph 30) that, had the homeowners' assertedly contradictory case been raised below, the builder would have needed to call on production of the documents exchanged between the financier and the owners for the period between November 2016 and June 2017 and to cross-examine the homeowners on those documents in order to challenge the submission that finance was approved in April 2017.
The further submissions of the builder raise the question of receipt of further evidence to which we will shortly turn. The builder submitted (paragraph 33) that any notice given by RAMS (the homeowners' financier) was not notice by the owners as required by clause 4.1, and did not comply with the clause. The builder ultimately submitted that: "even if the notice did validly comply with 4.1.d (which is denied) it was given well after the initial period, and therefore under the express terms of clause 4.2 the builder had the right to terminate the contract provided that physical commencement of works had not yet occurred. As at 7 June 2017 the physical commencement of the works had not yet occurred. The giving of a belated notice was irrelevant and did not undermine the builder's accrued right to terminate".
During the hearing of the appeal the homeowners sought to "introduce into evidence" a document which was attached to an email which was before the Tribunal at first instance (found at Appeal Bundle page 782). The document sought to be adduced was said to have been attached to the email and was an "authority to commence construction" letter ("commencement letter") from the lender (RAMS) to the homeowners. The homeowners submitted (paragraph 1, additional submissions) that the commencement letter merely acted to complement what was set out in the email to the builder from the lender, i.e. that the lender had authorised the commencement of the construction works. The homeowners submitted that, rather than raising a new point, the evidence "gives full context to the email that the builder itself put into evidence".
The homeowners submitted (paragraph 3) in the alternative that the evidence contained in the commencement letter was largely set out in the email from the lender to the builder and that, as such, the letter provides the: "context around the evidence already before the Appeal Panel, such that the Appeal Panel is not left guessing as to what might otherwise be required to be inferred from the email itself".
The homeowners further submitted (paragraph 4) that the commencement letter was a "complete answer" to the builder's claim that it was entitled to terminate the contract under clause 4 as at 7 June 2017. It was thus submitted that, if the Appeal Panel was "otherwise minded to find in favour of the builder's right to terminate the contract, the existence of this document is of sufficient importance that the interests of justice would dictate its inclusion into evidence" and that to do otherwise would "risk the Appeal Panel considering evidence as to the central component of the builder's appeal without full context to that evidence".
In opposing the receipt of the commencement letter, the builder submitted that, for the reasons there asserted (additional submissions paragraph 3), even if admitted, the commencement letter could not satisfy the requirements of clause 4.1(d)(i) and cannot assist the owners. It was further submitted that "even if the notice did comply with all the requirements of clause 4.1(d), it was given well after the initial period, and therefore under the express terms of clause 4.2, the builder had the right to terminate the contract provided that the physical commencement of works had not yet commenced. As at 7 June 2017 the physical commencement of the works had not yet commenced. The giving of a belated notice in April was irrelevant and did not undermine the builder's accrued right to terminate (paragraph 4).
The builder reiterated its reliance upon the pleaded case of the homeowners with respect to the obtaining of finance and the asserted inconsistency between the homeowners' case at first instance and the case which was apparently now being sought.
We doubt that the commencement letter takes matters any further than the evidence before the Tribunal at first instance did. It does not seem to be suggested that, until April 2017 the homeowners' lender, RAMS, formally or informally indicated that finance had been approved, or provided a "commencement letter" in the terms contemplated by clause 4 of the contract. The Tribunal was not unaware of the terms of the RAMS letter of 7 April 2017.
It is appropriate to record the terms of the letter from RAMS to each of the builder and the homeowners of 7 April 2017. As the terms of the letter make clear, the lender imposed conditions on the homeowners' loan approval. The RAMS letter materially stated: "Customers need to contribute $135,222 towards the build contract BEFORE Rams can release progress payments. Please provide a receipt of this shortfall once paid. When progress payments are due, please provide a completed RAMS claim form (attached) along with the supporting invoice - payments are processed within 48 hours after received."
We have not been directed to any cross-examination of the director of the builder with respect to the receipt of the commencement letter. We agree with the submission of the builder that the email itself, by its terms, makes clear that there is a condition to be satisfied by the owners. We also agree with the submission of the builder that, if the document were now to be received, doing so could prejudice the builder in that, unlike at first instance, there would be no opportunity for the builder to give oral evidence in relation to the commencement letter, or to cross-examine the homeowners on it.
Perhaps more importantly, our conclusion with respect to the merits of these grounds do not turn on accepting or refusing to receive the commencement letter into evidence. The matters evidenced by it were established by other evidence which was not controversial at first instance, as recorded later in these reasons.
If these grounds are upheld, although it is possible for the Appeal Panel to re-determine the matter, grounds of appeal asserting the failure to have regard to a claim of the kind with which these grounds are concerned militate against doing so. The application to adduce further evidence in the appeal, its nature and asserted significance, and likelihood of cross-examination on it, further militate against the Appeal Panel rehearing the matter if these grounds are upheld. We have not been referred to any part of the transcript of the proceedings at which it is suggested that the builder abandoned reliance upon clause 4 of the contract.
For the reasons which follow, we are satisfied that the Tribunal erred by failing to give proper, genuine and realistic consideration to the claim of the builder in reliance upon clause 4 of the contract. As submitted on behalf of the builder, the Tribunal's reasons do not engage with the submissions of either party with respect to the interpretation or impact of clause 4 of the contract.
We have earlier referred to the terms of clause 4 of the building contract (found at Appeal Tender Bundle, Volume 1, pages 98-119). As noted earlier, the term "initial period" (page 105) means the period stated in item 15 of Schedule 1. Clause 4 is headed "Essential Matters". It does not appear to be controversial that the building contract being a commercial contract, terms with respect to time contained in it were "of the essence" (Lombard North Central Plc v Butterworth [1987] QB 527), or that failure to comply with those times entitled the builder to terminate. Clause 4(1)(d) of the contract clearly applied in the circumstances, as the homeowners were obtaining finance from a lending body. The homeowners were obliged to comply with the provisions of clause 4(1)(d) within the agreed period for doing so, which was well prior to April 2017.
On the undisputed evidence, after the expiry of 15 days from 21 September 2016, the builder was entitled to invoke clause 4.2 of the contract to "end" the contract by giving a written notice to that effect. The contract does not prescribe in its interpretation clause, or elsewhere, any particular form for a notice pursuant to clause 4.2. By comparison, a notice of completion is required to comply with clause 26. In our view, the notice given to the homeowners by the builder enlivened clause 4.2, and potentially entitled the builder to terminate the contract.
In view of the submissions of the homeowners, it is appropriate to consider the extent to which the builder relied on the provisions of clause 4 before the Tribunal at first instance. We have not been able to find, or been referred to, anything in the nature of a formal response to the homeowners' claim which was filed in the Tribunal in March 2020. In his statement, found at Tender Bundle, Volume 3, pages 858-862 of 23 November 2020, which seems to be the first document evidencing the builder's response to the homeowners' claim, the director of the builder said (page 860): "On 1st March 2017 we were notified by RAMS that commencement cannot be given due to loan not being settled and that Gusa had still not signed documents" and, further, that: "On 7th April 2017 RAMS notify us that Gusa needs to pay initial $135,222 before RAMS will release any payments".
The builder then recorded: "On the 7th June 2017, after communications being ignored constantly and being some 7 months after commencement invoice was issued, and still without any payments to commence, we decided that we had wasted some 21 months and were not progress. JMBS terminated agreement due to fail to pay, fail to give evidence and fail to give instructions or direction."
The builder further suggested that: "On 8th June we received an email from Gusa stating that received [sic] an email from Gusa stating that they had only received the papers the day before from RAMS which is contradictory to all other communications form [sic] RAMS". As is not in doubt, it was not until well after the initial period that the homeowners complied with clause 4.1(d).
The female homeowner filed a statement on 22 December 2020 (Appeal Bundle, Volume 2, pages 527-531). In the course of her statement (pages 528-531), the female homeowner engaged with the statements of the director of the builder of 23 November 2020. At paragraph 13 of her statement the female homeowner stated that she and her husband "understood the contract was terminated as at 7 June 2017. We were not informed that there was an intention to terminate the contract. We were informed the contract was terminated because the contract had expired".
As is not in doubt, and for compelling reasons, the proceedings were heard remotely by AVL. After Counsel for the homeowners opened their case (Appeal Bundle, Volume 4, page 1147) the Tribunal observed (page 1154) that as neither party was suggesting that the contract was "still on foot", the Tribunal needed to know "when it came to an end, because that will impact on incomplete works. So how do the homeowners say the contract came to an end?". Counsel for the homeowners replied "It was terminated by virtue of the failure to take steps of the builder".
The Tribunal drew to the attention of Counsel then appearing for the builder that it "hasn't pleaded when the contract came to an end as far as the builder is concerned. When and how does the builder say that the contract ended?" (page 1154). The response (page 1155) addressed issues of merit rather than providing a direct answer to those questions, although, in fairness to the Tribunal and Counsel, the word "unintelligible" appears regularly throughout the transcript in general, and particularly during Counsels' opening statements.
The discussion then turned to consideration of the "preferred outcome" pursuant to the Home Building Act and some discussion of s 18 of the ACL and "unconscionability". It is tolerably clear that, due to difficulties with the technology, the opening addresses of both Counsel were less than fully transcribed.
We do not perceive from the balance of Counsel's opening addresses that there was any reference to issues specifically relating to whether, and, if so, on what basis the builder was entitled to terminate the contract.
We have not been referred to any statements during the hearing in which it is suggested by the homeowners that the builder abandoned reliance upon clause 4 of the contract.
We have been referred to and considered the written submissions of the parties at first instance. The homeowners' submissions are found at Appeal Bundle Volume 4, pages 1084-1131. It was submitted by the homeowners that "[t]he cited basis for the termination was non-compliance with clause 33.2 of the contract" (page 1089, paragraph 24). The purported termination notice is found at Appeal Bundle Volume 3, page 784 and did not refer to clause 4 of the contract, but did refer to clause 33.2 of the contract, particularising three ways in which the builder asserted that the homeowners had substantially breached the contract. Unsurprisingly in the circumstances, the submissions of the homeowners before the Tribunal at first instance did not engage with the meaning and effect of clause 4 of the contract, or the builder's entitlement to rely upon it.
The written submissions of the builder (found at Volume 3, pages 1115-1129) raised (page 1119, paragraph 26), in the context of the "first and second alleged representations" the builder's reliance upon clause 4 of the contract, submitting: "One of the applicable requirements of clause 4 of the contract was that the applicants provide the builder with written advice from their lending body that the amount of finance, when added to the applicants' own funds, is sufficient to pay the contract price and that the building works may commence".
It was further submitted that the homeowners were required to satisfy the essential matters in clause 4 (paragraph 27), that the homeowners did not do so until sometime after 8 June 2017 (paragraph 28) and that, in the circumstances, the builder was entitled to terminate the contract.
In written submissions in reply (Volume 3, pages 1130-1135), the homeowners did not engage with the submissions of the builder in reliance upon clause 4 of the contract.
Although, for reasons which are not hard to understand, having regard to the way in which the proceedings had to be conducted, and the difficulties which clearly arose as evidenced by the numerous references to "unintelligible" in the transcript, the issue is less than entirely clear, we are satisfied that the builder's reliance upon clause 4 of the contract was an issue in the proceedings which required determination. Regrettably, although the Decision of the Tribunal was thorough and comprehensive in other respects, nowhere was this issue addressed. Unsurprisingly in those circumstances, no findings of fact were made in relation to the builder's reliance upon clause 4, or any possible waiver of its rights under that clause. In our view it cannot be said that reliance upon clause 4 was futile.
Conversely, in the absence of findings of fact with respect to the issue, we are not able to be comfortably satisfied that the builder was entitled to succeed with its reliance upon clause 4 of the contract, and, if it was, whether the builder had waived its rights, or was estopped by its conduct from exercising its legal rights on equitable grounds. There was in our view a controversy which required resolution which was not resolved. Whether the Tribunal is considered to have constructively failed to exercise jurisdiction by not resolving this controversy, or to have failed to give proper, genuine and realistic consideration to it, or, if it did, to provide adequate reasons for its decision, we are persuaded that appealable error has been demonstrated.
For the reasons advanced above, we conclude that the Tribunal at first instance erred by failing to consider the builder's contention that it was entitled to terminate the contract in reliance upon clause 4 of the contract, and that, had such claim been considered, it would not necessarily have failed. The Tribunal at first instance having found that the builder was not entitled to terminate the contract, there was no occasion for consideration of the homeowners' claim that, in all the circumstances, by waiver, representation or conduct, the builder was estopped from relying upon a legal right to terminate. That issue involved findings of fact which are not available to us, and provides further support for the remittal of the proceedings for rehearing.
The determination, after evidence in relation to the issue is tested, of the builder's claim that it was entitled to terminate the contract pursuant to clause 4, and the homeowners' response to it, in our view hold the key to the determination of the misleading and deceptive conduct claims of the homeowners. Although we do not need to express a concluded view in the light of our conclusion with respect to ground 1, it is difficult to see how, if the builder was entitled to terminate the contract on or before 7 June 2017, any representation made by it at that time was misleading or deceptive. We understand the reasons of the Tribunal at first instance to suggest that the misrepresentation that the builder was entitled to terminate the contract on 7 June 2017 was the foundation of its findings with respect to the ACL claim. Put another way, the reasons of the Tribunal at first instance do not suggest that, but for that misrepresentation, anything else which the builder represented could have constituted misleading or deceptive conduct.
It remains, however, to consider whether the further evidence sought to be relied upon by the homeowners could lead us to a different decision with respect to these grounds. As we have earlier recorded, we are not persuaded that the receipt of the RAMS letter would lead us to a different decision. On a rehearing of the proceedings, the letter will no doubt be tendered, and the director of the builder cross-examined on it. Its significance in terms of the builder's entitlement to terminate in reliance upon clause 4 of the contract can then be agitated and determined.
Ground 2 reiterates the substance of ground 1. In view of the basis upon which we have upheld ground 1, and the reality that the proceedings will need to be remitted for rehearing, it is strictly unnecessary to deal with ground 2. In reality, if the builder was not entitled to terminate the contract on 7 June 2017, nothing to which we have been referred would establish that the Tribunal at first instance erred by finding that the builder's representations constituted deceptive or misleading conduct pursuant to s 18 of the ACL having regard to the way the case was conducted (Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54).

Ground 4

The builder submitted that this ground only required consideration if it did not succeed on either grounds 1 or 2. As is clear from its submissions, the builder's contention was that the appeal should be allowed, the orders of the Tribunal at first instance set aside and the homeowners' application dismissed. As explained in our reasons with respect to grounds 1 and 2, although we are persuaded that ground 1 should be upheld, and the orders of the Tribunal at first instance set aside, we are not persuaded that the homeowners' claim necessarily fails. That being so, it is necessary to consider this ground.
The crux of the ground is that the Tribunal at first instance erroneously found that it had jurisdiction to award more than $40,000 in respect of a claim for misleading or deceptive conduct pursuant to the ACL. An award of $89,630.64 was made by way of damages for misleading or deceptive conduct pursuant to the ACL.
It was submitted, correctly, that the Tribunal was a "creature of statute and its jurisdiction is expressly limited to those functions as conferred or imposed on it by the CAT Act, or other legislation" (paragraph 39). It was then submitted (paragraph 40) that the Tribunal had jurisdiction to award damages under the ACL in either of two ways. The first way was under Part 6A of the Fair Trading Act, pursuant to which the Tribunal can determine disputes concerning the supply of goods and services to consumers (s 79B). Pursuant to s 79S of the Fair Trading Act, the Tribunal's jurisdiction to award damages in that case is limited to the prescribed amount, being $40,000. That was submitted (paragraph 41) to establish the legislative intention that there be an express limit on the Tribunal's jurisdiction with respect to the award of damages in cases of that kind.
The second asserted basis of jurisdiction was asserted (paragraph 42) to be where the Tribunal is "already seized of jurisdiction by reason of it having jurisdiction in respect of another matter", in which case the Tribunal has ancillary jurisdiction pursuant to s 74(3) of the Fair Trading Act to determine whether a person has suffered loss or damage because of another person in contravention of the ACL.
The builder submitted that s 74(3) of the Fair Trading Act does not expressly provide for a monetary limit on the Tribunal when exercising its ancillary jurisdiction. It was submitted that (paragraph 43): "On the proper reading of the Fair Trading Act, the jurisdiction in respect of misleading or deceptive conduct claims, whether under s79S or the Tribunal's ancillary jurisdiction is limited to $40,000 being the monetary limit that the legislature bestowed upon the Tribunal for claims for misleading or deceptive conduct."
The builder submitted that the homeowners' reliance upon the expression in s 74(3) "[i]n deciding the matter of loss or damage, the Tribunal may award such sum, and may make such ancillary order as it thinks fit" was erroneous. As the builder submitted, those words reflect the terms of s 236 and s 237 of the ACL. We accept that words of general application are usually interpreted in the light of specific legislative provisions with respect to the same subject matter, or that "general matters are constrained by reference to specific matters" (D Pearce & R Geddes, Statutory Interpretation in Australia, (9th ed, 2019, Lexis Nexis Australia) at page 167). If the homeowners are right, there would be potentially no limit to the amount which the Tribunal could award by way of damages with respect to claims for misleading or deceptive conduct, and s 79S(7) of the Fair Trading Act would have little work to do.
The homeowners' submissions before us did not extensively engage with this ground. The builder submitted in reply, that such failure denied the homeowners any entitlement to make oral submissions on appeal in opposition. We do not accept that limitation upon the homeowners, particularly with respect to a matter that goes to jurisdiction.
This issue of jurisdiction to award in excess of $40,000 with respect to the ACL claim was carefully considered by the Tribunal at first instance (Reasons at [63]-[87]). Under the heading "Jurisdiction" the Tribunal at first instance identified the controversy which gives rise to this ground (Reasons at [64]). The Tribunal referred to the written submissions of each of the parties with respect to the issue (Reasons at [65]). To the extent that the written submissions of the parties before us in relation to this issue are comparatively brief, that is not cause for criticism in view of the extensive written submissions each party made at first instance with respect to the topic, which submissions are included in the Appeal Tender Bundle.
The Tribunal identified (Reasons at [66]) that the homeowners' application was a building claim as defined in s 48A of the Home Building Act and was for both breaches of contract (including breaches of statutory warranties implied pursuant to s 18B of the Home Building Act) and damages for breaches of the ACL. The Tribunal identified (Reasons at [67]) the provisions of s 74(3) of the Fair Trading Act as the asserted basis of jurisdiction to award damages and/or compensation in excess of the sum of $40,000. As is not in doubt, that section invests the Tribunal with jurisdiction to "decide" the matters therein referred to and "award such sum, and make such ancillary orders, as it thinks fit".
The Tribunal then referred to the "case that came closest" to addressing the controversy, being Jenkinson (Reasons at [68]). The Tribunal referred to passages from the Judgment of the Appeal Panel in Jenkinson. The passage from Jenkinson extracted by the Tribunal at first instance (Reasons at [69]) engages with the conferral of jurisdiction, rather than any limits upon it, as the Tribunal noted. Significantly, in the passage to which the Tribunal then referred (Reasons at [70]) the Appeal Panel in Jenkinson at [70] observed that: "In saying that expansion of Tribunal powers was intended by s 74(3) [to extend to misleading and deceptive conduct claims beyond the Tribunal's monetary limit], we express no view on the meaning and scope of the concluding words in the section that the Tribunal "may award such sum, and may make such ancillary orders, as it thinks fit" as the meaning of that aspect of the section did not arise on the facts of the case."
The Tribunal then referred to the decision in Singh (Reasons at [71]). The passages cited by the Tribunal (Reasons at [72]) do not appear to engage with any controversy with respect to monetary jurisdictional limits with respect to s 18 ACL claims, although the award made was clearly in excess of the $40,000 jurisdictional limit which would otherwise apply. The Tribunal at first instance accepted the contentions of the homeowners that Singh established: 1. that in building claims the Tribunal could award more than $40,000 for breaches of the ACL; 2. that s 74(3) of the Fair Trading Act enables the Tribunal to award damages for contraventions of the ACL, including s 18 contraventions, in a sum "as much as the Tribunal sees fit"; and 3. that a measure of damages for misleading and deceptive conduct in a home building claim is the cost to complete the work by a licenced insured builder.
For present purposes, it is the first and second of those propositions which require consideration. If controversial, the third proposition is not one with which we need to engage.
Whilst not convinced that the decision in Singh was "wrong" and agreeing with the orders made by the Tribunal in that case, the Tribunal at first instance recorded, accurately on our reading of the case, that Singh did not "make any comments about s 74(3)". The Tribunal at first instance "undertook some further research" on the issue and found, having referred to other authority (Reasons at [75]), a passage extracted from the Judgment in Herbert v American Express Australia Limited & Ors [2016] NSWCATAP 47; but that does not advance the interpretation of s 74(3) of the Fair Trading Act in our view, nor, as earlier recorded, does the decision in Jenkinson or the further authority referred to of Zey v Bunnings Group Limited [2016] NSWCATAP 72.
The Tribunal referred to the decision in Chuang v New Legend Global Developments Pty Limited [2017] NSWCATCD 101 as being "much more apposite" with respect to this issue (Reasons at [76]). Whilst we do not consider anything there recorded to be controversial, the passage extracted does not engage with the question of jurisdictional limits. Nor, with respect to the Tribunal at first instance, does the fact that the Tribunal "appeared to have no difficulty in awarding damages for such a breach in excess of $40,000" advance the homeowners' contentions that jurisdiction does exceed $40,000.
In its review of the builder's submissions, the Tribunal referred to three authorities relied upon by it, all of which were regarded as "irrelevant" to the question of jurisdictional limit (Reasons at [83]). The Tribunal at first instance was correct in our view in observing that Vince Taskovski & Anor v Otomobile Shoppe Pty Limited [2015] NSWCATCD 24 contained a statement by the Tribunal that the "statutory limit" for a consumer claim was $40,000, albeit that was a case not involving breach of the ACL in a home building contract or a building claim (Reasons at [84]).
The decision in O'Neill v Country Motor Company [2018] NSWCATCD 76 to which the Tribunal at first instance referred (Reasons at [85]), also turned on its own, and quite different facts, and, to the extent that the Tribunal there observed that there appeared to be no jurisdiction for the Tribunal to make the money orders sought, was not correct, for the reasons suggested by the Tribunal. The Tribunal referred to the decision in Safi v Heartland Motors Pty Limited t/as Heartland Chrysler [2016] NSWCATAP 80, an Appeal Panel decision which also turned on its own particular facts.
It is difficult to accept that the fact that an ACL claim arises out of a building dispute changes or expands the jurisdictional limits which apply to such claims. Jurisdiction of the Tribunal under the CAT Act being pursuant to the ACL, we see no legal or logical impediment to concluding that the words of the specific provision of the statute which confers and limits that jurisdiction should not be given their ordinary meaning (Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28).
The Tribunal at first instance ultimately concluded (Reasons at [87]) with respect to jurisdiction that there was "precedent for the Tribunal awarding damages to homeowners for misleading and deceptive conduct and for those damages to exceed the limit in consumer claims. The only limit on such damages is $500,000: s 48K(1) Home Building Act".
We have not been referred to, or discovered for ourselves, any authority which directly assists us to resolve this issue. With respect to the legal representatives then appearing, the Tribunal at first instance received less than optimal assistance in resolving the issue. This ground raises questions of statutory interpretation, and, in the absence of authority, is best approached by reference to established principles of statutory interpretation.
The Tribunal was established by the CAT Act. Section 28 of the CAT Act confers on the Tribunal such jurisdiction and functions as may be conferred or imposed on it "by or under" the CAT Act or any other legislation. It is not in doubt that jurisdiction pursuant to the Home Building Act and the Fair Trading Act is not conferred or imposed on the Tribunal by the CAT Act, but by each of those statutes. It is not suggested by either party that the Tribunal has jurisdiction pursuant to either Act other than in accordance with the provisions of each Act.
Section 48A of the Home Building Act defines "building claim". It is unnecessary for present purposes to refer to the definition of "building claim", it not being in dispute that the proceedings commenced by the homeowners in the Tribunal constituted a building claim within the meaning of the Home Building Act. Similarly, it is not in doubt that the proceedings constituted a "building dispute" or that the building claim arose out of the provision of "building goods or services".
Section 48K(1) of the Home Building Act confers jurisdiction on the Tribunal to hear and determine any building claim in which the amount claimed does not exceed $500,000. Section 48K contains limitation periods, and exclusions, which do not assume actual or potential significance for present purposes.
Section 48L of the Home Building Act is instructive for present purposes. Section 48L of the Home Building Act records "Tribunal to be chiefly responsible for resolving building claims". The section contains mandatory provisions for the transfer to the Tribunal of building claims not exceeding $500,000 which are commenced in a Court. The legislative scheme created by the Home Building Act is thus clear. The jurisdiction of the Tribunal is $500,000, in furtherance of the promotion of the objectives of the legislation.
Section 27 of the Fair Trading Act incorporates into the laws of New South Wales the provisions of Schedule 2 to the Competition and Consumer Act 2010 (Cth), generally referred to as the Australian Consumer Law or ACL. There is no provision in the Fair Trading Act in the terms of s 48L of the Home Building Act, or in any terms similar to them.
Section 74 of the Fair Trading Act is found in Part 6 of the Act, which is headed "Enforcement and remedies". The terms of s 74(3) have been recorded earlier in these reasons. For present purposes the issue is whether the expression "the Tribunal may award such sum as it thinks fit" removes any monetary limitations on the jurisdiction of the Tribunal when awarding damages pursuant to the ACL.
Part 6A of the Fair Trading Act is headed "Jurisdiction of Tribunal in relation to consumer claims". Section 79B of the Fair Trading Act records the objects of Part 6A which are "to provide for remedies for, and the straightforward resolution of, disputes concerning the supply of goods and services to consumers". It is not in doubt that the contract between the present parties was a contract for the supply of goods and/or services to a consumer and fell within the jurisdiction of the Tribunal.
Section 79C of the Fair Trading Act provides that Part 6A "does not affect any provision of this or any other Act that confers jurisdiction on the Tribunal".
Section 79J of the Fair Trading Act invests the Tribunal with jurisdiction under the Act, and provides that: "The Tribunal has jurisdiction, except as otherwise provided by this Division, to hear and determine a consumer claim the subject of an application under this Division".
Section 79S(1) of the Fair Trading Act provides that: "The Tribunal has no jurisdiction to make, in respect of a particular consumer claim, an order or orders in favour of the claimant (or, where there are two or more claimants, in favour of those claimants) if the relevant total under or because of the order or orders would exceed the prescribed amount."
Section 79S(7) provides that the "prescribed amount" means $40,000 or such other amount as is prescribed for the purposes of this section". It is not in dispute that no other sum has been prescribed for the purposes of s 79S.
The statutory scheme created by sections 74(3), 79C, 79J and 79S(1) invests the Tribunal with jurisdiction to hear and determine "consumer claims", and, in its discretion, award such sums as it "thinks fit", up to the sum of $40,000. If the legislature had intended a higher jurisdictional for claims arising out of building contracts, or the supply of building goods or services, it would have been a simple matter to provide for that.
In our view, the legislative schemes created by each of the Home Building Act and the Fair Trading Act are different, and have different purposes and objects. We find no inconsistency between the two in terms of the monetary limits on the jurisdiction of the Tribunal with respect to each statute. As we have earlier noted, the legislative intention with respect to claims arising out of building disputes is that the Tribunal has jurisdiction to make orders for up to the sum of $500,000. The Fair Trading Act expressly prescribes a monetary jurisdictional limit of $40,000 on the Tribunal when exercising jurisdiction pursuant to the Act. Although arising out of a building dispute, the homeowners' ACL claim was made pursuant to the provisions of the ACL, and was, prima facie, constrained by the $40,000 jurisdictional limit provided by the ACL.
As the definition of "building claim" in s 48A(1) of the Home Building Act seems to make clear, not all claims arising out of the supply of building goods or services fall within the ambit of the Act, and have to be agitated pursuant to other statutory provisions, or at law or in equity, in such tribunals, or, in the case of common law and equity proceedings, courts, as have jurisdiction to entertain them. The legislature did not intend to "cover the field" with respect to all claims arising out of or with respect to the supply of building goods or services, howsoever they arose. We perceive no anomaly in the Tribunal concurrently exercising jurisdiction pursuant to two statutes, with different monetary limits, which have a common, or substantially common factual sub-stratum.
In Grygiel v Baine & Ors [2005] NSWCA 218 ("Grygiel"), the scope of the definition of "building claim" was considered by the Court of Appeal. Basten JA, (at [58]) declined to "say that the jurisdiction of the Tribunal under the Home Building Act should be expanded beyond the proper construction of the terms used in Part 3A. The fact that the Tribunal has a jurisdiction under that Part up to $500,000, whereas its current jurisdiction under the Consumer Claims Act is limited to $25,000, demonstrates the need to maintain proper limits on the jurisdiction". The jurisdiction of the Tribunal with respect to claims pursuant to the Consumer Claims Act is now conferred by the Fair Trading Act.
Basten JA further observed (at [58]) that "to the extent that the statutory terminology permits, those (jurisdictional) limits should not be arbitrary, nor should an unduly restrictive construction be given to the words of the statute, particularly as they mirror the terminology of the Consumer Claims Act". The "statute" the interpretation of which was under consideration was the Home Building Act. The question, resolved in the affirmative by majority, was whether a claim against a solicitor gave rise to a "building claim" for the purposes of s 48A of the Home Building Act. We perceive nothing emerging from the decision in Grygiel which assists the Respondent's case before us.
For the foregoing reasons, and with great respect to the Tribunal at first instance, which received limited assistance with respect to this issue, although by no means clear or straightforward, on the facts of this case, we find that the second jurisdictional challenge raised by this ground has merit.
Ground 4 is directed to two specific issues of jurisdiction. To the extent that it has been seriously pressed, nothing to which we have been referred persuades us that ground 4(a), which raises a general challenge to the jurisdiction of the Tribunal pursuant to the ACL with respect to claims arising out of building disputes has merit. The statutory provisions which we have identified above, and the authorities to which the Tribunal at first instance referred confirm that the Tribunal has jurisdiction pursuant to the ACL. For the reasons advanced above, we uphold ground 4(b), which raises a challenge to the finding of the Tribunal at first instance that the jurisdictional limit with respect to ACL claims of the homeowners arising out of building disputes is $500,000.

Ground 5

The builder submitted (paragraph 45) that ground 5 need only be considered if it did not succeed on either grounds 1 or 2. For the reasons we have earlier recorded, we uphold ground 1. However, as we propose remitting the proceedings for further hearing, without suggesting that the Tribunal which rehears the proceedings on remittal is bound by our decision, in view of the conclusion we have reached, providing our reasons with respect to this challenge may avoid unnecessary costs of the rehearing.
The builder submitted (paragraph 47) that the homeowners' claim, and evidence supporting it "ought to have invited serious scrutiny and alarm", being a claim for approximately $80,000 in circumstances where the allowance in the contract for landscaping was only $7,900. It was submitted that the effect of the Tribunal's decision was that, by reasons of the builder's alleged misleading or deceptive conduct, the builder misled the owners into deleting landscaping and turf from the contract (an amount of $7,900) and the owners suffered damage in excess of $80,000 to perform the same omitted landscaping works (paragraph 48). In view of our conclusion with respect to the jurisdictional limit on claims pursuant to the Fair Trading Act, this challenge can be seen as a challenge to an award of $40,000 for damages with respect to deletion of a contract item in the amount of $7,900.
The builder submitted that "the only evidence of quantum led by the owners was two quotes prepared by a company called 'Procoat Group'", no-one from that entity having given evidence. Numerous criticisms were made of the quotes (paragraph 49), including that they were "not given on oath or subject to any obligation of honesty". The qualifications and experience of Procoat Group to provide landscaping services was disputed. It was accepted that the Tribunal was not bound by the rules of evidence, but was obliged to observe the rules of natural justice. Section 38(2) of the CAT Act undoubtedly confirms that to be so.
The expert evidence provisions of the Tribunal's Procedural Direction 3 was submitted, again correctly, to apply to building claims with a value greater than $30,000, as this was. It was thus submitted that the manner in which the homeowners sought to prove the quantum of the largest aspect of their claim (landscaping) was "unsatisfactory, inadmissible and a breach of the rules of natural justice" (paragraph 51).
In support of the natural justice complaint, the builder asserted that there had been "no fair opportunity to test or challenge the veracity of the evidence. The evidence should have been rejected or afforded no weight." Given that the proceedings will be remitted and reheard and, presumably, the appropriate monetary jurisdictional limit imposed, and that neither party will be precluded from adducing such evidence as it or they are advised with respect to this issue, our decision with respect to this ground may have little practical utility.
In our view, the transcript of the proceedings holds the key to the success or failure of this ground. Two quotes from Procoat Group totalling approximately $69,324.75 are found at Appeal Bundle pages 147-148. They were described as Annexures to the statement of the female homeowner which commenced at Tender Bundle page 120. Although they do not total $80,000, and we have not located any other quotes or invoices from Procoat Group, as it is not contentious that the figure claimed was the sum of $80,394, this does not create a difficulty, particularly in view of our decision with respect to the jurisdictional limit on the homeowners' claim pursuant to the Fair Trading Act.
Nothing we have been referred to in the transcript, or located for ourselves in reviewing it, suggests that there was any objection to the receipt of the Procoat Group quotations. We do not discern that the female homeowner was cross-examined in relation to the Procoat Group quotations. No adverse inference arises from that.
The director of the builder was cross-examined at length (Appeal Bundle, page 1260) in relation to what was asserted to be required to complete the landscaping work on the property. The Tribunal identified, at transcript line 6153 and following, the relevance of the issue. Properly, the evidence did not traverse the quantum of the homeowners' claim with respect to completion of the landscaping work, but was directed to the topography of the subject property and its physical state.
On the second day of the hearing, Counsel then appearing for the builder raised an issue "about some of the evidence on" after which "unintelligible" appears. The discussion continued, without the evidence to which Counsel for the builder was objecting being identified, or at least being identified on the transcript. In the course of the discussion the Tribunal suggested (page 1275) that when asked "[i]s that the evidence of the parties" on the first day of the hearing, Counsel for both parties said "[y]es" and "[t]here was no objection raised". The Tribunal suggested that "[i]n the index", "it's noted that there nobody raised it I mean the document was actually tendered". Counsel for the builder then replied "I'd like to raise it". There followed a discussion from which it does not seem to have been suggested that the Procoat Group quotations had previously been the subject of objection.
At least inferentially, the discussion involved the Procoat Group quotations, as Counsel submitted that the document objected to "came well after the joint report and it does raise matters that are new, it raises matters as to costings in relation to the landscape" and other items "that were not raised and my expert has not had opportunity to" after which "unintelligible" again appears. Although it is less than entirely clear, the extensive discussion between the Tribunal and Counsel for the parties seems to have resolved (page 1283) on the basis that "[a]ll the items that are set out in relation to the bar area, the fencing and the landscaping, will not be relied on in the later reports".
During the concurrent cross-examination of the parties' experts (at Appeal Bundle page 1338) the Procoat Group quotations were agitated. That cross-examination continued for some pages. At page 1342, Counsel then appearing for the builder referred to the "vast amount of excavation that was quoted by Procoat". It was then suggested to the homeowners' expert that what he had prepared was "just simply from someone else's quotes" to which the homeowners' expert replied "I assessed that quote as fair and reasonable. I could put that price together myself, but I believe it's better to use experts I'm not an expert landscape gardener. I'm an expert builder."
There followed further questions of the homeowners' expert during which it was put to him that "The quote you prepared for landscaping is excessive". The expert reiterated his view that the quote was fair and reasonable for a licenced landscaper.
The expertise of the homeowners' expert with respect to landscaping was challenged (page 1343). In the course of his answers to those challenges, the homeowners' expert was able to and did, in the pages that followed, give evidence of expertise which was capable of being accepted (pages 1343-1345).
Without criticising Counsel then appearing for the builder, we have not been referred to any passage of transcript where objection was specifically taken to the homeowners' reliance upon the Procoat Group quotations prior to the exchanges referred to above. In the circumstances, where Counsel for the builder was able to, and did thoroughly cross-examine the homeowners' expert on the quotation, we see no denial of natural justice in the Tribunal receiving and relying upon the Procoat Group quotations. The evidence of the homeowners' expert in cross-examination by Counsel then appearing for the builder, in our view, was able to be relied upon without any necessity for reliance upon the Procoat Group quotation.
This ground asserts an error of law, by reason of a denial of natural justice. We are not persuaded that it has merit. If, as the homeowners submit, the ground does not raise a question of law, and requires a grant of leave, for the reasons we have given, we are not satisfied that leave would be granted. If leave is required, nothing to which we have been referred persuades us that the builder satisfies the requirements for leave articulated in Schedule 4, clause 12 to the CAT Act. We are not satisfied that the builder "may have suffered a substantial miscarriage of justice" either because the decision of the Tribunal at first instance was not "fair and equitable" or was "against the weight of evidence".

Conclusion

For the reasons we have earlier recorded, the appeal is allowed. Orders 1 and 2 of the orders of the Tribunal of 11 August 2021 are set aside. As the foundation for orders 3, 4, 5 and 6 of the Tribunal of 11 August 2021 dissolves as a result of the appeal being allowed, irrespective of what ensued as a result of those orders, they cannot stand and will be set aside.
Order 2 sought by the builder in its Notice of Appeal provided that: "In lieu of the appellant paying the respondent $58,382.24 for defects, that pursuant to s48O(c) of the Home Building Act, the appellant performed rectification works according to the scope required to be performed as found by the Primary Member".
For the reasons recorded earlier, we have rejected ground 6 of the builder's appeal, which asserted that the Tribunal at first instance erred in making a money order instead of a work order under s 48O(c) of the Home Building Act. As our reasons make clear, that conclusion was not dependent upon our conclusions with respect to the builder's challenges to the decision of the Tribunal at first instance with respect to the builder's entitlement to terminate the contract in June 2017, and its decision with respect to misleading or deceptive conduct.
The relief sought by the builder in the event that the appeal succeeds, as it will, is that the sum found by the Tribunal at first instance with respect to rectification of defective work should not be disturbed, but that finding should have resulted in a work order, rather than a money order. The quantum of the relief determined by the Tribunal at first instance was not challenged, only whether, as the Tribunal ordered, that should be by way of money order, rather than a work order.
In the circumstances we have identified, order 1 of the orders of the Tribunal at first instance should be set aside other than to the extent of the sum of $58,382.24 which related to the costs of rectification of "defects". That sum would be payable irrespective of whether the builder is held on remittal to have been entitled to terminate the original contract, and thus performed the defective work pursuant to an amended or subsequent contract, or, whether the builder is held on remittal to not have been so entitled, thus performed the work pursuant to the original contract.
Although nothing may turn on the form of our orders, we consider that the preferable course is to set aside the orders of the Tribunal at first instance and make an order that the Appellant pay the Respondents the sum of $58,382.24 for rectification of defective works, and remit the balance of the proceedings for rehearing according to law.
Costs of the appeal are reserved. We will make orders to facilitate any submissions in support of any application for costs by either party, and submissions in opposition to any such submissions. Without pre-empting our decision in relation to costs, if one is required, in our view, the extent to which each party has been successful or unsuccessful in the appeal renders problematic an assertion by either party that it or they have been substantially successful on an overall basis. That in no way indicates any predisposition or prejudgment with respect to costs, but is a matter to which a party seeking an order for costs should direct its or their submissions.

Order 1. The appeal is allowed. 2. The orders of the Tribunal of 11 August 2021 are set aside. 3. The Appellant forthwith pay to the Respondents the sum of $58,382.24 for the rectification of defective works. 4. The balance of the proceedings be remitted for rehearing according to law. 5. Costs are reserved. 6. That within 7 days, a party making an application for costs file and serve written submissions not exceeding five pages in length in support of such application. 7. That within 7 days of receipt of submissions pursuant to order 6, a party resisting an application for costs file and serve written submissions not exceeding 5 pages in length in support of such opposition.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 07 March 2022

Australian Consumer Law Fair Trading Act 1987(NSW)

John McDonald Building Services Pty Ltd v Gusa

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