KALOKERINOS & ANOR v HIA INSURANCE SERVICES P/L & ANOR

LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT 30072 of 2002 FILE NUMBER(S) : LOWER COURT Master Harrison JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 41119/2003

SANTOW JA BRYSON JA

FRIDAY 10 DECEMBER 2004 KALOKERINOS & ANOR v HIA INSURANCE SERVICES PTY LIMITED & ANOR Judgment 1 SANTOW JA: I agree with Bryson JA. 2 BRYSON JA: These reasons relate to the first respondent's Amended Notice of Motion filed on 4 May 2004 claiming an order that the appellants' Notice of Appeal with appointment filed on 3 March 2004 and Supplementary Notice of Appeal filed on 31 March 2004 be struck out with costs pursuant to Pt.51 r.25(1) of the Supreme Court Rules 1970 on the ground that each Notice is incompetent. The appellants rely on the Supplementary Notice of Appeal, not on the Notice of Appeal with Appointment earlier filed, and it is not disputed that they are entitled to do so. 3 Doctor Kalokerinos and Ms Bounds, who are the appellants, brought an application in the Fair Trading Tribunal, Home Building Division, against a builder named Baltimore Constructions Pty Limited which later passed into administration and was deemed to be insolvent. On 25 June 2001 the appellants brought another application against HIA Insurance Services Pty Ltd (the insurer), the first respondent. These applications arose out of an agreement for building and constructing a home for the appellants. While the application was pending the Fair Trading Tribunal was replaced by the Consumer, Trader and Tenancy Tribunal (CTTT), Home Building Division and the application against the insurer continued there, and was heard and determined by Ms Christine Paull, a Member in turn of both those Tribunals. On 25 July 2002 the Tribunal Member published Reasons for Decision to dismiss the application and made a costs order against the appellants. 4 The appellants appealed by Summons, now Further Amended Summons filed on 24 June 2003, to the Supreme Court. The matter came before the Administrative Law List of the Common Law Division where the List Judge referred it to a Master for hearing. The appeal was heard by Master Harrison on 24 June and 4 November 2003. The learned Master gave judgment on 4 November 2003, and ordered that the appeal be dismissed; and made related orders including remittal to the Tribunal Member for determination of costs of the application, and an order for costs of the appeal. The last day of the time to appeal from the Master's decision was Monday 1 December 2003; on 2 December 2003 the appellants filed Notice of Appeal without Appointment, on 3 March 2004 they filed a Notice of Appeal with Appointment for 22 April 2004, and on 31 March 2004 they filed a Supplementary Notice of Appeal. On 23 April 2004 the first respondent filed a Notice of Motion, now the Amended Notice of Motion of 4 May 2004, for an order that the appeal be struck out. The Amended Notice of Motion was heard on 6 September 2004. 5 I distinguish the contention that an appeal is incompetent because the grounds of appeal put forward are outside the limitations on the right of appeal conferred by legislation from a claim for summary disposal on the principles associated with General Steel Industry Inc v. Commissioner of Railways (NSW) (1964) 112 CLR 125, that is that an appeal should be summarily dismissed because there are overwhelming reasons why the matters sought to be argued cannot succeed. The terms of the Notice of Motion mean that if the first respondent's Notice is to succeed, it must succeed on the first basis. 6 The right of appeal from the Tribunal to the Supreme Court was conferred by s.67 of the Consumer, Trader and Tenancy Tribunal Act 2001 (CTTT Act). I set out the first three subsections of s.67: 67 Appeal against decision of Tribunal with respect to matter of law

(1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the Supreme Court against the decision. (2) An appeal is to be made in accordance with the rules of the Supreme Court. The rules of the Supreme Court may provide that an appeal (or such classes of appeal as may be specified in the rules) may be made only with the leave of the Court. (3) After deciding the question the subject of such an appeal, the Supreme Court may, unless it affirms the decision of the Tribunal on the question: (a) make such order in relation to the proceedings in which the question arose as, in its opinion, should have been made by the Tribunal, or (b) remit its decision on the question to the Tribunal and order a rehearing of the proceedings by the Tribunal. 7 Subsection 75A(5) of the Supreme Court Act 1970 provides that appeals to the Court shall be by way of rehearing. Subsection 75A(4) provides that "This section has effect subject to any Act", and for that reason an appeal from the Tribunal is subject to s67 of the CTTT Act, which has the effect of limiting the grounds on which the Common Law Division could consider the appeal.

8 Appeal from the Common Law Division to the Court of Appeal lies under s.101(1) of the Supreme Court Act 1970. Notwithstanding the provisions of s.75A(5) relating to appeals by way of rehearing, the terms of s.67 of the CTTT Act necessarily limit the matters open to consideration in the Court of Appeal. The question raised for consideration in this appeal is whether the decision of the Common Law Division was correct. That is a question which in turn is necessarily limited to the matters with which the Common Law Division had power to deal. 9 Ground 9 of the Notice of Appeal to the Common Law Division is as follows: 9. The learned Member erred in law by failing to consider at all the claims for loss and damage for breaches of statutory warranties and conditions, namely the obligation to proceed with the work with due diligence and the obligations to do the work in accordance with law, which breaches and claims for loss and damage flowing from such breaches were not dealt with by her at all. 10 The substance of the Supplementary Notice of Appeal is as follows (and I have added indications of passages A and B, to which I will return): The Appellants appeal from the following parts of the decision of Master Harrison : [A] The finding and decision that the Appellants had not suffered loss or damage for the cost of alternative accommodation reasonably and necessarily incurred because of the Respondent's insured builder's breaches of Statutory Warranty under the Home Building Act 1989.

[B] The findings and decision concerning the nature of the contract made between the Appellants and the Respondent's insured Builder and the findings and decisions that the Appellants had not suffered loss or damage.

1. The learned Master erred in law by holding that the construction issue concerning the proper meaning of s.18B(c) of the said Act raised by the Appellants in Ground 9 of their Appeal to the Court against the interpretation and manner in which the Consumer, Trader & Tenancy Tribunal dealt with the said section did not constitute a question of law and thus was not a matter which the learned Master was obliged to consider.

2. The learned Master erred in law - (a) By affirming the findings of the Consumer, Trader & Tenancy Tribunal that the Respondent's insured Builder had in fact offered to undertake and complete building work required by the Appellants on a "cost plus" basis and that the Appellants had accepted such an offer unequivocally or at all; or

(b) Alternatively, that the Appellants and the said Builder were ever ad idem as to the overall cost of the said building work.

3. The learned Master erred in law by dismissing the Appellants' claim for the costs of alternative accommodation as a compensable head of damage under Clause 5 of the Respondent's indemnity insurance policy on the grounds specified in paragraphs 26 and 27 of the Master's judgment for that: (a) The right and title to the Appellants' claim arose directly out of unremedied defective work done for the Appellants by the Respondent's insured which was paid for in full by the Appellants when ignorant that the work was defective;

(b) The Respondent's insured failed to make good the defective work when required so to do by the Appellants;

(c) The Appellants elected to make a claim on the Respondent insured for loss and damage arising out of the defective work;

(d) The learned Master wrongly set off the Appellants' home warranty insurance claim against a purported liability of the Appellants to the Respondent's insured when:-

(i) no such right had been asserted or established by the respondents Insured; (ii) the quantum of any such right was not proved; and/or (iii) no such right could be asserted by the Respondent's insured by reason of Section 10(3) of the Home Building Act, 1989 due to the Respondents insured's admitted breaches of Section 7(1), (2), (3) and (5) thereof; and (e) The uncontradicted evidence in the proceedings was that the Appellants were in fact incurring the accommodation expenses and were liable to pay for the same as the Learned Master ought to have so found. 11 The following summary of the facts is taken from the Tribunal Member's Reasons for Decision: 6. It is the Applicants' case that they met with the Builder in early July 1999 to discuss the residential building work they wanted to be carried out. At the time of that initial contact and throughout the subsequent transactions between the parties there was an understanding that the building works would not exceed $350,000.

7. It was with this figure in mind that the Applicants, assisted by Mr. Zaide, entered into negotiations with the Builder and budgeted on a figure of $350,000 as the amount they were able to expend for the building work.

8. It is the Applicants' case that the contract was for a fixed price of $350,000 or alternatively, a cost plus contract with a limit of $350,000. The terms of the contract are defined by the documents marked 5, 6 and 7 at Exhibit A1, the Council plans, the understanding between the parties that the work was to be done for no more than $350,000 and the statutory terms implied into the contract under the [ Home Building Act 1989]. 12 The building work started in the week of 16 August 1999, and as work progressed the appellants paid several progress payments. They claimed that they only became aware around 9 November 1999, when they received progress claim 4, that the cost of building works had exceeded $350,000. They paid progress claims 4 and 5, and they also paid other cash payments to the builder, suppliers and subcontractors and by December 1999 they had paid $462,200. On 24 January 2000 the appellants received progress claim 6 for $90,000. They paid $15,000. There was a meeting on the site on 29 January 2000. There was no resolution, and the builder left the site and did no further work. A further meeting did not achieve resolution and the builder stated on 29 February 2000 that the public liability insurance cover had expired. 13 In the Fair Trading Tribunal the appellants claimed as damages the money they paid in excess of $350,000 which they said was an agreed limit to the builder's charges, and they made several other claims. Some rectification work was done at the insurer's expense under consent orders on 28 March 2002. The amount which the appellants could claim against the insurer was limited to $200,000, less the value of that rectification work. The case of the insurer was that there was no agreement for a fixed price nor a cost limit of $350,000. The Tribunal Member said: There are two broad issues I must determine. Firstly, whether the parties entered into a fixed price or cost plus contract. Secondly, whether the Applicants have suffered "loss" or "damage" within the categories provided for under the relevant insurance policy. There are also some associated issues relating to the HBA.

The parties submitted a document headed Agreed Issues (marked T 2) which breaks down these general issues into specific questions. I will deal with each of these in the form and order that they appear in that document. 14 The first of the Agreed Issues was: Is the Agreement a fixed price contract or a cost plus contract?

The Member reviewed at length the evidence and the probabilities dealing with this subject and concluded: 55. I am therefore not satisfied upon an objective consideration of the facts surrounding the transactions between the parties that the Applicants have discharged the onus on them to establish that they entered into a fixed price contract with the Builder. 15 The second Agreed Issue was: What the terms (sic) of the contract:- (i) was there a fixed price not to exceed [$350,000]? (ii) was there a cost plus contract not to exceed $350,000? (iii) was it a cost plus contract with unknown price?

In light of her findings in relation to Agreed Issue 1, the Member arrived to a similar conclusion on Agreed Issue 2 and made a finding to the effect that the contract was a cost plus contract with an unknown price. The Member was not prepared to find that the contract was one for cost plus, not to exceed $350,000. 16 The Member then dealt with Agreed Issue 3 which was "Do the [appellants] have a 'non-completion' claim within the terms of [the first respondent's] policy?" In dealing with this the Member said: 65. Under the policy (and as far as is relevant in this case) a non-completion claim is one where the Applicants suffer loss or damage due to the insolvency of the Builder or the early termination of the contract due to the Builder's wrongful failure or refusal to complete the work ( see clauses 11 and 4 at document 38 Exhibit A1)

67. It is the Applicants' case that the Builder, by refusing to continue with and rectify the building work following the meeting in February 2000, repudiated the contract without justification.

68. I reject this submission and accept the Respondent's submission that at this time the Applicants owed the Builder the outstanding money under Progress claim 6, could no longer afford the building work (as admitted by Dr Kolokerinos at paragraph 57 of his Affidavit) and had made no further payment since 24 January 2000. I therefore do not find that in these circumstances the Builder wrongfully refused to continue with and rectify the work.

69. I also accept the Respondent's further submission that I the Applicants' acknowledgment that they had run out of money and were unable to pay Progress claim 6 amounted to a repudiation of the contract which the Builder was entitled to accept. I would only add that their failure to make any payment since 24 January 2000 was further evidence of that repudiation. 17 The Member then dealt with Agreed Issue 4 - "Did the [appellants] suffer a loss or damage with the terms of [the insurance] policy?" The Member concluded that they had not suffered loss or damage. As appears from paras 86 and 87 of her Reasons for Decision, the basis of this conclusion was that the appellants had not been overcharged and had not overpaid for the work done. Several claims under Agreed Issue 4 were then dealt with. 18 The Member dealt with an argument that the appellants were entitled to a payment under cl.2 of the Insurance Policy which relates to loss or damage arising from a breach of the builder's statutory warranty imposed by s.18B(c) of the Home Building Act 1989. That section deals with failure to specify the contract price in the written contract. The Member rejected this claim and gave three reasons: the first reason was that the statutory warranty related to the work, not to the contractual requirements about the work; secondly, as the appellants knowingly entered into a cost plus contract they were on notice of the effects of not having a specified price; and were estopped from relying on this argument; and thirdly: 96. Finally, the threshold which the applicants must pass is that they have sustained "loss or damage resulting from", in this instance, the Builder's breach of a statutory warranty.

97. Having found that the parties entered into a cost plus contract there was no fixed price which has been exceeded and so resulted in the applicants bearing a loss in excess of that fixed price.

19 The Member then dealt with a claim relating to the cost of alternative accommodation under cl.5 of the Insurance Policy which relates to "loss or damage resulting from … the cost of alternative accommodation … reasonably and necessarily incurred as a result of" non-completion of the work because of insolvency of the builder or the builder's breach of statutory warranty. In disposing of this claim the Member said: 98. Clause 5 of the policy provides (as far as is here relevant) for "loss or damage resulting from... the cost of alternative accommodation... reasonably and necessarily incurred as a result of" non -completion of the work because of insolvency of the Builder (in accordance with clause 11 of the policy) or the Builder's breach of a statutory warranty (in accordance with clause 2 of the policy). 99. I have found that the Applicants, having entered into a cost plus contract with no fixed price, for which they have failed to make full payment under the final progress claim, have not sustained a loss. More specifically I have found that they have not suffered loss or damage as a result of the Builder being insolvent or in breach of a statutory warranty so as to fall under clauses l or 2 of the policy. 100. Clause 5 is premised on a loss stemming from the events provided for under either clauses 1 and 2. As I have found that the Applicants did not sustain a loss under either of these clauses it follows that the Applicants cannot succeed under clause 5. I

101. Even if this were not the case I accept the Respondent's submission that the evidence relied upon by the Applicants to establish the amount claimed is less than satisfactory. Dr Kalokerinos when giving evidence before the Tribunal stated that he had not actually paid the amount claimed but would do so at some future time. An unsworn letter signed by Mr Zaide and tendered at the conclusion of the proceedings suggests otherwise. 20 The Member then dealt with a claim under the Insurance Policy for the loss of deposit or progress payment (cl 6) and disposed of that claim on the footing that the appellants did not suffer loss or damage of a deposit or progress payment due to insolvency or breach of statutory warranty. 21 Agreed Issue 5 was as follows: If the answer is "yes" to [Agreed Issues] 3 and 4 above what is the value of incomplete works and accommodation costs? It was not necessary for the Member to consider this issue in light of her findings in relation to Agreed Issues 3 and 4.

22 Agreed Issue 6 was as follows: Was the builder in breach of the [ Home Building Act 1989] and if so what is the effect of this? 23 To deal with Agreed Issue 6 the Member considered sections 6, 7 and 10 of the Home Building Act 1989. Section 10 of the Act in the form which it took at the relevant time for the present purposes was as follows. 10 Enforceability of contracts and other rights (1) A contract to which the requirements of section 7 apply that is not in writing or that does not have a sufficient description of the work to which it relates is not enforceable by the holder of the licence against any other party to the contract. (2) Subsection (1) does not apply to a contract entered into in the circumstances described in section 6(2). (3) A person who contracts to do work in contravention of this Division or who contracts to do work under a contract that does not comply with this Division: (a) is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, but (b) is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person. (4) This section does not affect the liability of the person for an offence against a provision of or made under this or any other Act. 24 The reference to s.6 has no present relevance. Section 7 prescribes that the contract must contain a number of matters including "2(c) A sufficient description of the work to which the contract relates." 25 The Member discussed the possible effects of breach of s.7 and the operation of s.10 and expressed views on them. Among other things she said "… I have formed a view that subs.10(3) of the Act does not extend so far to prevent a builder from bringing a quantum meruit claim." However there was no quantum meruit claim by the builder under adjudication. The Member expressed several other views on this question. However none of these views appears to have led to any order or to have been necessary for the Member's decision. 26 The Member also dealt with Agreed Issues 7, 8 and 9, which do not appear to have any continuing significance.

27 In a judgment published on 4 November 2003 Master Harrison addressed the grounds of the appeal to the Common Law Division at length. There were conclusions to the following effects: findings relating to there being no contractual term fixing the price at $350,000 were findings of fact; as the builder did not institute proceedings for breach of contract and was not entitled to do so, the impacts of s.7 and s.10 of the Home Building Act 1989 on the builder's rights were something which it was not necessary for the Tribunal Member to canvass. The Master dealt with the sixth ground of appeal before her which stated: [8] …Sixthly, the Member misdirected herself as to the operation and effect of s.10 of the Act by holding that the builder was entitled to enforce the remedy of termination of the contract notwithstanding the admitted failure by the builder to have complied with s.7 of the Act. 28 The Master said: [19]. In relation to appeal ground 6, the Tribunal Member did not determine that the builder was entitled to enforce the remedy of termination, but rather she stated that she did not find that the builder wrongfully refused to continue with and rectify the work [para 68]. The Tribunal Member held that it was the applicants who repudiated the contract and the builder was entitled to accept it [para 69]. 29 The Master dealt with a number of other matters which were not debated in the proceedings before the Court of Appeal. 30 The appellants appeal against two parts of the decision of the Master. The first (passage A) relates to the cost of alternative accommodation, to be understood by referring first to the treatment by the Tribunal Member in paras 98 to 101 of her Reasons for Decision, which I referred to earlier. 31 The Master at paras [25] - [27] of her judgment said: [25]. The parties agreed that [sic] by consent that the builder was liable to the applicants for items of defective building which were identified. A copy of the consent orders is annexed to the judgment. The respondent submitted that accommodation was only sought from the date when the works were due to be completed. However, in the points of claim at paragraph 23(a) to (c) reference is made to the damages sought for the cost of rectification of defective works. [26]. In relation to the accommodation the Tribunal Member stated [in] paragraphs 98 to 101 of her reasons:

[and those paragraphs appear at para 17 of my judgment] [27]. The finding that the applicants had not suffered loss or damage was open to the Tribunal Member on the facts as she found them. It was also open to the Tribunal Member to find that the evidence in relation to alternative accommodation costs was less than satisfactory. There is no error of law. 32 Ground 3 of the Supplementary Notice of Appeal appears to set out the basis of the challenge to this part of the Master's decision, but goes considerably further than could possibly be justified, having regard to the issues before the Tribunal Member and the Master. The grounds in para 3(d) are difficult to follow, but were explained by the appellants' counsel as being to the effect that it was wrong to set off claims for loss or damage by the appellants against the builder and hence against the insurer in relation to unpaid progress claims rendered by the builder because to do so was to enforce the building contract in breach of subs.10(1) and (3) of the Home Building Act 1989. It was said that to accept a repudiation was a remedy and that by subs.(3) the builder was forbidden to enforce the contract by accepting a repudiation. There is no sign in the Tribunal Member's reasons that she adjudicated this question, and the terms of the Agreed Issues, referred to in the Member's reasons show that she was not asked to adjudicate that question. 33 Although it is not necessary for me to act on this basis, I would not think that bringing an entitlement of the builder into consideration when determining the appellant's loss or damage for the purpose of the insurance claim would be in breach of subs.10(1) and its provision to the effect that the building contract is not enforceable by the licensee, meaning the builder; nothing in these events could constitute enforcement by the builder. For similar reasons I do not see subs.(3) as operating. 34 A provision in legislation that a contract is not enforceable is not a provision that rights do not arise under it, and does not prevent establishment of and decision by reference to those rights, if they are relevant in some other context than enforcement of the contract by a person whose right to enforce the contract is forbidden. There is no provision to the effect that the contract is void; and the contract continues to exist and to have whatever effects its provision produce on the rights of other parties than the licensee referred to in s.10. 35 The appellants' contention in relation to Ground 3 could not possibly succeed for reasons both of form and of substance. As a matter of substance, acceptance of repudiation and termination of the building contract is not a measure of enforcement by the builder within the meaning of s.10; the builder did not engage any public authority, or any arbitration machinery or any contractual machinery, to enforce the contract so as to compel the appellants to comply with the contract, or to do anything. The actions which the builder took cannot fall within the concept of enforcement in any way; s.10 does not interfere with the working out of rights under the contract at any point except at a point of enforcement. So far as appears the builder had never taken any kind of enforcement proceedings or any other step of enforcement. But more importantly, the prohibition in s.10 is directed only at the builder, and has no operation against the insurer, while the rights of the appellants and the rights of the insurer in respect of the insurance must turn upon establishment of the rights of the appellants and of the builder under the building contract; what those rights were can be established without any measure of enforcement.

36 The appellants' argument is more radical, to the effect that s.10 means that no money was payable to the builder, hence failure to pay progress payments was not a breach and the builder was not entitled to terminate. Although I do not look on this argument with favour, it is not necessary to determine it because the Tribunal Member's decision was founded not only on her view about the operation of the Insurance Policy but also and alternatively on her finding, challenged in passage A, in effect that there was no loss relating to accommodation. That is the effect of para 101 of her reasons: the Member did not accept the evidence of Dr Kalokerinos that there had been any expenditure on alternative accommodation. This is plainly a finding of fact and there is no power of appeal against it. As the Member's decision was based alternatively on this finding, the detailed material put forward in Ground 3 is irrelevant, could not arguably support the challenge to the Master's finding, and does not constitute an appeal within s.67 of the CTTT Act. 37 The Notice of Appeal contains a second statement (passage B) identifying a number of findings and decisions under appeal. Statements concerning the nature of the contract made between the appellants and the builder, which should be understood to refer to the terms of the contract, are plainly challenges to findings of facts, and can have no other character. The grounds of appeal which could be taken to refer to these challenges do not identify any question of law. The challenge in passage B to decisions that the appellants had not suffered loss or damage also raises questions of fact, as appears from reasons I have given earlier.

38 The Tribunal has jurisdiction to decide matters and to exercise functions, and what it does is expressed in orders which it makes. The general statement of the jurisdiction of the Tribunal is found in s.21(1) of the CTTT Act: (1) The Tribunal has such jurisdiction to decide matters, and such powers to make orders and otherwise exercise any function in connection with any such decisions, as is conferred on it by this or any other Act.

The provisions of s.67 relating to appeals confer a right of appeal against decisions, not specifically against orders. What may be appealed against is a decision of the kind referred to in subs.67(1) - "… the Tribunal decides a question with respect to a matter of law …". While a decision of a question with respect to a matter of law may often lead directly to an order, it will often be the case that it does not, but that the order is based upon the decision on a question with respect to a matter of law together with other decisions.

39 Limited rights of appeal are sometimes conferred in legislation which refers to "a point of law" or "a question of law." The words of subs.67(1) are not in one of these familiar forms, and raise for consideration the possibility that when the legislation refers to the Tribunal "[deciding] a question with respect to a matter of law," the subsection might be intended to refer to deciding a question which is in some way wider than or different to simply deciding the matter of law, such as a question of the kind referred to (not at all clearly) as a question of mixed fact and law, in which decision is required on the application of a legal test or a standard to the facts under consideration; the facts as well as the law must be decided, in the process of deciding what result is produced by their interaction. 40 The terms of subs.67(1) and particularly the words "with respect to" in their context seem to me to be capable of bearing a meaning in which the decision which may be appealed against is a decision specific to a matter of law. However they also seem to be capable of or at least to raise for consideration whether they bear another meaning in which the decision is one in which a question of law is involved, but the decision is or may be a decision on some wider matter than the question of law itself. In the first reading the words "a question with respect to" make the relation between the decision and the question of law specific; in the second reading the longer expression including these words is employed to indicate some penumbrum of meaning wider than the question of law itself. 41 The limitation of the subject matter of appeal is recognised in the opening words of subs.(3) - "After deciding the question the subject of such an appeal …"; and subs.(3) goes on to state what the Court may then do - affirm the decision of the Tribunal on the question, make such order as should have been made or to remit its decision on the question to the Tribunal and order a rehearing. In my opinion s.67 makes a careful delimitation of what the Supreme Court may do. The Supreme Court may only deal with a decision on a question with respect to a matter of law which is appealed against, and subs.67(3)(a) does not have the effect of making an appeal against such a decision a gateway into a wider review and correction of the proceedings in the Tribunal. In careful language s.67 authorises the Supreme Court to decide the question the subject of the appeal; it does not seem to me to be consistent with the provisions of s.67 overall and the careful language which it uses in delimiting and conferring power to interpret subs. 67(3)(a) as by implication greatly widening what may be the subject of an appeal. Subsection 67(3) speaks of what the Supreme Court may do after deciding the question the subject of an appeal, and confers no authority to go on to decide any other question.

42 A provision closely similar to subs.67(1) appeared in subs.20(5) of the Commercial Tribunal Act 1984, which came under the consideration of Carruthers J in Sullivan v. Waltons Credit Limited (1990) ASC 56-023. Subsection 20(5) provided: (5) Where, in proceedings before the Tribunal, the Chairman or a Deputy Chairman decides a question with respect to a matter of law, a party to the proceedings who is dissatisfied with the decision may appeal to the Supreme Court against the decision of the Chairman or Deputy Chairman.

Carruthers J said: The appeal is pursuant to subs20(5) of the Commercial Tribunal Act 1984 which provides that where, in proceedings before the Tribunal, the Chairman or a Deputy Chairman decides a question with respect to a matter of law, a party to the proceedings who is dissatisfied with the decision may appeal to the Supreme Court against the decision. I have held elsewhere that where there is no specific indication in the judgment of the Tribunal that the Chairman or Deputy Chairman decided a specific question with respect to a matter of law, it is open to this Court to infer from the wording of the judgment the question or questions with respect to a matter of law which were decided by the Chairman or Deputy Chairman. Further, the expression "a question with respect to a matter of law" is confined to a pure question of law. See Canham v Australian Guarantee Corporation Limited (unreported, 15 June 1990). 43 According to the view expressed by Carruthers J, the Commercial Tribunal might decide a question with respect to a matter of law without expressly disposing of the question, and it was open to the Court to infer from the wording of the Tribunal judgment that the question had been decided. In my respectful view this is correct; it is possible to establish that it was necessary to decide something which had been in issue or had been debated in order to dispose of the proceedings, and the reasons given may sustain the inference that it had been disposed of even though not expressly mentioned. It was also Carruthers J's view that the expression "a question with respect to a matter of law" is confined to a pure question of law; that is to say, his Honour did not see the provisions of subs.20(5), in whole or by reference to the words "decides" or "question with respect to," as widening the matter potentially under appeal beyond the pure question of law.

44 Subsection 20(5) of the Commercial Tribunal Act 1984 came under consideration of the Court of Appeal in Custom Credit Corporation Ltd v Commercial Tribunal of New South Wales (1993) 32 NSWLR 489: it was held that subs.20(5) authorised interlocutory appeals. To my reading the judgments proceeded on the assumption that the appeal was an appeal on a matter of law, and in doing so reflected what was argued in that appeal.

45 Canham v. Australian Guarantee Corporation Limited (1990) 20 ALD 361 to which Carruthers J referred in Sullivan v. Waltons Credit Limited was a decision under subs.20(3) of the Commercial Tribunal Act 1984, which is not in quite the same terms as subs.20(5). Subsection 20(3) provided: (3) Where, in proceedings before the Tribunal, a question arises with respect to a matter of law, the presiding Chairman or Deputy Chairman may decide the question or may refer it to the Supreme Court for decision. Carruthers J said of subs.20(3): … it is my view that the draftsman intended this phrase to encompass nothing more than a pure question of law … Further, I am confident that the Legislature would not have intended that the Chairman or Deputy Chairman had the right to refer anything other than a pure question of law to the Supreme Court for decision. It would be quite inconsistent with well established practice, as well as the function of this Court, for a mixed question of fact and law to be referred to it for decision.

46 In Custom Credit Corporation (In Liquidation) v. Commercial Tribunal of New South Wales Greg James J cited Canham v. Australian Guarantee Corporation Ltd and in substance followed that decision. 47 In my opinion both of Carruthers J's observations in Sullivan v. Waltons Credit Ltd and Canham v. Australian Guarantee Corporation Limited are applicable to subs.67(1). A decision on "a question with respect to a matter of law" in s.67(1) must be a decision on something which arose or was in issue or was debated in the proceedings; something which had to be decided in order to dispose of the proceedings, whether or not it was expressly referred to in the decision. The Tribunal may decide on such issue without overtly referring to it. Consistently with Carruthers J's observations, express advertence to the matter of law is not necessarily required, and the decision might be with respect to a matter of law even though the matter of law is not mentioned, if some decision with respect to it was necessarily involved in the decision.

48 The Court of Appeal has not adopted the view that, where there is an appeal on a point of law, other issues on appeal are open generally if a point of law is shown. In relation to appeals under s.32 of the Dust Diseases Tribunal Act 1989, which is not expressed in the same terms as s.67, see Amaca Pty Ltd v. The State of New South Wales [2004] NSWCA 124 at [15] (Ipp JA). Compare Vetter v. Lake Macquarie City Council (2001) 202 CLR 439 at 464 [70] per Kirby J (but see also 447 [14] Gleeson CJ, Gummow and Callinan JJ); that case dealt with s.32 of the Compensation Court Act 1984 which again is not in terms closely similar to s.67. The jurisdiction on appeal is markedly narrower than the jurisdiction formerly conferred on the High Court of Australia under s.196(2) of the Income Tax Assessment Act 1936, as amended, which was considered in Krew v. Commissioner of Taxation (1971) 45 ALJR 324 at 325-326 (Walsh J).

49 In New South Wales Land and Housing Corporation v. Stannard [2000] 50 NSWLR 89 Davies AJ dealt with an appeal under s.62 of the Residential Tribunal Act 1998. Subsection 62(2) which conferred a right of appeal in similar (but not identical) terms to subs.67 of the CTTT Act. When referring to subs.62(2) Davies AJ said at [90] "The appeal is limited to a question of law". The same view of s.62 was taken by Dunford J in Faraday v. Residential Tribunal [2002] NSWSC 126 and by Foster AJ in Rouvinetis v. Residential Tribunal [2002] NSWSC 1007. 50 In Janos Hoey v. Consumer Trader and Tenancy Tribunal [2002] NSWSC 1023 Master Malpass was of the view that the issue raised in the appeal under subs.67(1) of the CTTT Act was: 18. The plaintiff bears the onus of satisfying the Court that there has been an error of law justifying the disturbing of the decision. 51 In Smith v Collings Homes Pty Ltd [2004] NSWCA 75, an appeal from the CTTT under s.67 was heard by Master Malpass and there was a further appeal to the Court of Appeal. Mason P said of s.67: 23 This provision does not state that the appellate jurisdiction is engaged merely because the appeal involves a question of law or an assertion of error of law on the Tribunal's part. It seems to me that it is much narrower, although it is ultimately unnecessary to express concluded views on the matter. 24 In his reasons Master Malpass adverted to an earlier decision of his own, which acknowledged some uncertainty about the matter. Reference should also be made to Custom Credit Corporation Limited v The Commercial Tribunal of New South Wales (1993) 32 NSWLR 489, and Custom Credit Corporation Limited in Liquidation v The Commercial Tribunal of NSW, [1999] NSWSC 1021, James J, unreported 13 October 1999. 25 Apart from the very language of the sub-section, it is to be observed that the very presence of s 65, which provides for judicial review if there is excess of jurisdiction or denial of procedural fairness, provides additional support for a narrower, literal reading of s 67. 52 In the same appeal, Handley JA said: 60 … I agree with the reasons of the President and the orders he has proposed. I will only add some brief remarks about the scope of s67(1) of the CTTT Act . This provides for a more restricted right of appeal on the question of law for the Supreme Court than is ordinarily provided for in the State statutes. It is arguable that the right of appeal extends to legal decisions where such a decision was necessarily made by the Tribunal but is not apparent on the face of its decision. 61 It does seem clear, on any view, that the section prevents a new point of law being taken for the first time on appeal. It is not necessary for this Court to extend the right of appeal under section 67(1) in this case. I say nothing further on this section. 53 These dicta do not support a broad view of what subs.67(1) authorises. 54 In AJ Bignell v. SG Edenden [2004] NSWSC 27, Shaw J said at [10]: [10] Section 67 of the Consumer, Trader & Tenancy Tribunal Act 2001 confines an appeal to this Court to a decision of a question with respect to a matter of law. The onus is on the plaintiff to establish the existence of this error: Janos Hoey v Consumer Trader & Tenancy Tribunal & Anor [2002] NSWSC 1023 at [18]. 55 In Ideal Waterproofing Pty Ltd v. BuildCorp Australia Pty Limited [2004] NSWSC 765 at [27 to 33] Sperling J considered the operation of s.67, and disposed of the proceedings at [34] on the basis that "In the present case, the Tribunal implicitly decided questions of law and did so erroneously." Sperling J was not required to express his view on whether any wider ground of appeal was available. 56 On the occasions known to me where Judges of the Supreme Court and the Court of Appeal have made observations on subs.67(1) they have consistently treated the right of appeal as confined to a question of law, and have not treated the words of the subsection as giving any wider right of appeal. 57 The CTTT Act establishes the Tribunal to take the place of the Residential Tribunal and the Fair Trading Tribunal. Subsection 67(1) confers a right of appeal in similar terms to subs.62(2) of the Residential Tribunal Act 1998, but in somewhat different terms to subs.61(1) of the Fair Trading Tribunal Act 1998, which created a right of appeal to the Supreme Court on a question of law. Appeals from the Fair Trading Tribunal were further limited by cl.18 of the Fair Trading Tribunal Regulation 1999. On 19 September 2001, in his Second Reading Speech on the Bill for the CTTT Act the Minister for Fair Trading Mr Watkins said: Under the existing Tribunal's legislation, appeals may be made on matters of law from decisions of the Residential Tribunal, but in the case of the Fair Trading Tribunal in some instances there is no right of appeal. In some cases, matters involving amounts of money of $25,000 or less could be reheard by the Tribunal, but Supreme Court appeals were not available. These differences are removed by this Bill and all decisions of the Consumer Trader and Tenancy Tribunal will be appealable to the Supreme Court on matters of law.

This passage does not reveal any contemplation on the part of the Minister that subs.67(1) would enable appeals to be determined on any wider basis than on matters of law.

58 When an appeal is brought under s.67(1) I regard it as necessary, in order to achieve clarity, for the Notice of Appeal to state grounds which clearly identify the decision of a question with respect to a matter of law which is the subject of appeal, and to state grounds on which the decision is claimed to be incorrect. The contents of a Notice of Appeal with Appointment are prescribed by Pt.51 r.11 of the Supreme Court Rules 1970 and among other things it is necessary to state: (1)(b) whether the appeal is from the whole or part only, what part, of the decision in the court below; (c) briefly, but specifically the grounds relied upon in support of the appeal …". 59 In an appeal under s.67, Pt.51 r.11 is not complied with unless the decision on a question with respect to a matter of law under appeal is clearly identified, and unless grounds are shown which can be specifically related to that decision. There is a need to identify what is said relevantly to be the decision under appeal, and the appellants' Notice of Appeal has not done that in a clear way. The Supplementary Notice of Appeal has not done that in a clear way either, although nominally its terms would claim to do so.

60 Counsel for the first respondent contended that the Tribunal Member was obliged to confine her decision to the Agreed Issues and answer specific questions, and to confine her findings of fact accordingly. It was further contended that in order to deal with the Agreed Issues the Tribunal Member was not required to determine the entire ambit of all the contractual terms, but whether the terms alleged and referred to in the Agreed Issues were contractual terms. That is to say, it was contended that there was no failure or shortcoming in determining those only. In my opinion these contentions are correct. 61 It was then contended that paras 37 and 61 of the Tribunal Member's decision do not contain any questions with respect to matters of law, and that they are purely factual. In my opinion this submission is correct; these paragraphs refer to the facts and reasoning about the facts, leading to a conclusion to the effect that the building agreement was not a fixed price contract; and this conclusion is not a question with respect to a matter of law. The disposition of a number of the other Agreed Issues followed necessarily from the finding that there was no fixed price contract. These decisions also are not questions with respect to a matter of law. None of the Agreed Issues addressed by the Tribunal Member states for decision a question with respect to a matter of law.

62 Counsel for the first respondent further contended that what is referred to as a decision under appeal in passage B in the Supplementary Notice of Appeal in fact contains reference to two decisions, the first relating to the limit to $350,000 as a term of the building agreement which, he contended, was a question of fact, and the second relating to the decision that no damage had been suffered which, he also contended, was a question of fact. In my opinion these contentions are correct.

63 Counsel for the appellants contended that the effect of s.10 was that where the builder had to comply with s.7 of the Home Building Act 1989, the builder could not enforce the provisions of the contract; and that this had the consequence that the contractual rights of the appellants in relation to the builder, and their loss and damage in relation to their claim on the Insurance Policy could not and should not be determined on the footing that the builder was entitled to terminate or that the builder did terminate the building contract for repudiation by the appellants. This contention could not succeed for reasons which I expressed earlier. Yet more importantly, this contention, although advanced in the submissions, does not reflect anything found in the Supplementary Notice of Appeal or anything found in the Tribunal Member's decision which can be referred to as deciding a question with respect to a matter of law. 64 Counsel for the appellants outlined reasons upon which he contended that it might be thought that the finding that there was no agreement capping the amount of expenditure might appear to other persons deciding the facts to be unreasonable. In relation to the issues raised by the Notice of Motion, whether other deciding facts would come to a different view to that reached by the Tribunal Member is not a relevant consideration. Counsel contended that if there was an appeal against a decision on a question with respect to a matter of law, then every other appeal ground might be argued. For the reasons I have given earlier, I do not accept this contention. 65 It was then contended that it was necessary for the Tribunal Member to construe ss.7, 10, 92 and 94 of the Home Building Act 1989 and r.43 of the Home Building Regulation 2004, and for this reason the decision relating to the appellants not having incurred any damages was a decision with respect to a matter of law. 66 Notwithstanding the review of other issues made by the Tribunal Member, the decision on damages was equally based on the last consideration mentioned in her Reasons, that is a finding of fact to the effect that it was not accepted that expenditure for alternative accommodation had been incurred. This finding and this ground for the conclusion are not open to appeal, and a claim to appeal against a decision establishing alternative grounds for the outcome is only nominally and not in reality an appeal. Success on that point could not influence the outcome. 67 The appellant's counsel contended with respect to costs that it was a consideration adverse to the award of costs to the first respondent in the event of its success in the Notice of Motion that it had not entirely complied with Pt.51 r25. It was contended that although the Notice of Motion was filed within the time prescribed by that rule, it was not served until 27 April 2004 which was the day after the period available for filing and serving such a Notice of Motion. No practical prejudice or other consequence of this element of lateness was referred to and I do not believe that there could be any. It should be recalled that the appellants' Notice of Appeal was filed a day out of the time prescribed by the Supreme Court Rules 1970, and that thereafter the appellants took over four months to file the Supplementary Notice of Appeal setting out the grounds actually relied on; in this context a day's lateness on the part of the respondents has no significance. The late service of the Notice of Motion is not a significant element among the considerations affecting any discretionary decision as to costs and in my view the appropriate response is that the Court of Appeal should of its own motion extend the time available for service of the Notice of Motion by one day.

68 Where each party can point to small infractions of the rules by the opponent, with lateness in the order of one or two days for taking important steps, and where no effectual formal steps have been taken to dispose of the proceedings on the basis of those breaches and there is no suggestion that they have given rise to prejudice or loss, I do not think I should treat those breaches as of significance when deciding cost questions.

69 The appellants have moved for an extension of time of one day to file a Notice of Appeal. This extension is not opposed, and in my view should be granted. 70 In my opinion the Court of Appeal should order:

(1) The time for appeal from the orders of Master Harrison of 4 November 2003 is extended up to and including 2 December 2003.

(2) Of its own Motion the Court of Appeal orders that the time for service of the first respondent's Notice of Motion of 23 April 2004 be extended up to and including 27 April 2004.

(3) Upon the first respondent's Notice of Motion of 23 April 2004 and Amended Notice of Motion of 4 May 2004 order that the appeal be struck out as incompetent.

(4) Order that the appellants pay the first respondent's costs of the Notice of Motion and of the appeal.

Last Modified: 12/15/2004 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.