Knobloch v Curtis; Curtis v Knobloch

Reasoning

1. The Tribunal identified that the correct interpretation of cl 20 of the Contract was critical and that cl 21 (a) (i) was important (Reasons [25]-[27]).
2. The Tribunal referred to the decision of the Tribunal in Kostos Pty Ltd v Vellios [2019] NSWCATCD 13 ("Kostos") at Reasons [30]- [31] and: 1. set out the following passage from paragraph [173] of that decision: "The Payment Claim, which the accompanying email described as a "final invoice", was issued by the Builder during the DLP. For clause 21 to apply, the Builder has to establish that both its form and content made the amount to which it referred due and payable under a term of the Contract, otherwise it was no more than a contingent debt, which if denied, required the Builder to prove the entitlement in a court or in the Tribunal. The best case for the Owners is that the Payment Claim was actually a progress payment claim under clause 20. However, the Payment Claim does not comply with the requirements of clause 20. It contains no statement of "the value of the contract work performed at the date of the claim", as required by clause 20(b)(i) of the Contract. It contains no statement of the amount previously paid by the Owners other than the deposit, as required by clause 20(b)(iv) of the Contract. It contains no statement of amount claimed by the Builder, referrable to the amount previously paid by the Owners, as required by clause 20(b)(v) of the Contract." 1. noted that cl 20 in the contract considered in Kostos was different to the wording in the contract but that it was clear that it was necessary for PC 3 to satisfy cl 20(b)(i)-(iv) of the Contract before the builder's right to suspend the works under clause 21 of the Contract arises.
3. Next the Tribunal considered whether the builder had a right to suspend, which was based on the purported underpayment of PC 3 by the owners. The Tribunal did this at Reasons [32] to [64]. The essence of the Tribunal's analysis is that PC3 did not comply with cl 20 because the amount claimed was overstated for at least two reasons: 1. there had been a double counting of an amount of at least $13,000 (Reasons [48]-[56], [63]-[64]) ; and 2. the hours claimed exceeded the hours that had been worked (Reasons [58]-[61]).
4. At Reasons [56] the Tribunal found that the "Builder would have been entitled to render PC 3 in the sum of approximately $44,792.00 and rely upon the non-payment of this sum to suspend work. But he didn't. He rendered PC 3 in the sum of $57,493.00 which was not a sum due and owing. And the Builder was not entitled to rely upon a payment claim in this sum to suspend work which the Tribunal finds he wrongly did".
5. After a detailed discussion concerning the contents of PC 3, the Tribunal concluded at Reasons [64] that: "the payment claim submitted by the Builder as PC 3…is not a proper statement of the amount owing to the Builder for the stage of the contract work performed at the date of the claim in breach of clause 20 (b) (i) of the Contract. The Tribunal also finds that it is not a proper basis upon which the Builder is entitled to exercise a right of suspension of work under clause 21 (a) (i) of the Contract."
6. Under the heading "Consequences" the Tribunal found that the Builder was not entitled to suspend the work when he did (Reasons [65]) and was not entitled to claim damages from the owners for his unlawful suspension (Reasons [66]). Conversely the Tribunal found the owners were entitled to terminate the contract (Reasons [67]) and then dealt with the owners' claim for damages at Reasons [76] to [96].

The builder's appeal

1. The builder's Amended Notice of Appeal is in the following form: "Error of law 1. The Tribunal erred at paragraphs 56 and 64 of the decision when it decided that the appellant builder was not entitled to rely on non-payment of its payment claim to exercise its contractual right to suspend work under the contract. 2. The applicable clause (clause 21) said that should the Owner fail to pay or cause to be paid any amount or any part thereof of a payment claim within the time required the builder may suspend the works. 3. The Tribunal found that the owners had failed to pay or cause to be paid an amount of a progress claim at paragraph 57 of the decision where it found that a sum of no less than $15,000 was due from the owner to the builder in respect of the relevant progress claim. 4. The Tribunal found at paragraph 56 that the builder would have been entitled to render the relevant progress claim the sum of 'approximately' $44,792 and rely upon non-payment of the work but because it rendered a claim in the sum of $57,493 it was not entitled to rely upon the payment claim. 5. The Tribunal found at paragraph 63 the relevant progress claim was overstated by 'at least' $13,000 and that the builder had 'materially retreated' from its claim from overstated elements. 6. This decision that the builder was not entitled to suspend works is either based on a misinterpretation of clause 20 to the effect that a miscalculation in the sum claimed as dew means that the relevant payment claim is not a payment claim under the contract, or a misinterpretation of clause 21 to the effect that the right to suspend arises only if there is a failure to make any payment of an amount claimed. 7. The Tribunal found at paragraph 53 that there had been double counting of an amount of $13,000 in a payment claim. This finding was contrary to incontrovertible facts and contended for by neither party and there was no evidence to support it, or alternatively it was so unreasonable that no reasonable decision maker could have made it. 8. Further and in the alternate, the Tribunal denied the applicant procedural fairness in failing to give the applicant notice of a dispositive issue, being that there had been a double counting of an amount of $13,000 in a payment claim, being a matter that was not put in issue by either party. 9. The Tribunal constructively failed to exercise jurisdiction in failing to take into account and express, clearly articulated argument made on part of the applicant, being that the evidence of Mr McNamara (a witness for the respondents) corroborated that the work identified in the TRBS invoice (and that was rejected by the Tribunal at [61] had as a matter of fact been carried out. Errors of fact for which leave to appeal is sought 10. The Tribunal found at paragraph 53 that there had been double counting of an amount of $13,000 in a payment claim. This finding was contrary to incontrovertible facts and contended for by neither party and there was no evidence to support it. 11. The Tribunal found at 61 that a TRBS invoice could not be relied upon as evidence of matters asserted by the builder as to its content. This finding of fact was glaringly improbable and contrary to compelling inferences."
2. In paragraph 2 of the builder's written submissions the builder submitted: "The builder will also seek to rely on another error of law which is to the effect that no reasons are given for the Tribunal's conclusion at paragraph 56 of the decision to the effect that because the builder rendered PC3 in the sum of $57,493 which was not the precise sum due and owing the builder was not entitled to rely upon a payment claim in this sum to suspend work."
3. Whether leave should be granted to add this twelfth ground of appeal is dealt with below.
4. The owners' Reply to Appeal contained the following reply to the builder's grounds of appeal: 1. The entirety of the appeal is incompetent because: 1. The Appellant does not identify any orders from which he appeals. Those must be clearly identified; 2. The Appellant lists seven asserted "errors of law", but does not seek leave to appeal with respect to any of them. An appeal as of right lies only on "any question of law": s.80(2) of the CATA. Each asserted error of law must be dismissed as incompetent as no leave is sought. The Appellant must fairly identify the basis of any application for leave with respect to those seven asserted "errors of law". If granted leave in respect of grounds 8 and 9, no relief would follow; 3. All but the first (and possibly seventh) "errors" disclose no basis for an appeal. They are not questions of law or grounds of appeal. Each should be summarily dismissed. 1. Further, and without derogating from the objections above: 1. Ground 1 - The Tribunal did not err. Further the same conclusion ought to have been reached for the reasons in section A, point 2. 2. Ground 2 - That is not a ground of appeal, but an assertion as to what a clause says. This ground should be summarily dismissed. 3. Ground 3 - That is not a ground of appeal, but a statement as to what the Appellant says the Tribunal found. This ground should be summarily dismissed. In any event, the contention in Ground 3 is incorrect. No further amount was owing by the Owners. 4. Ground 4 - That is not a ground of appeal, but a statement as to what the Appellant says the Tribunal found. This ground should be summarily dismissed. In any event, the contention in Ground 4 is incorrect. No further amount was owing by the Owners. Further, the Builder was not entitled to suspend because of the reasons in section A, point 2. 5. Ground 5 - That is not a ground of appeal, but a statement as to what the Appellant says the Tribunal found. This ground should be summarily dismissed. In any event, the Tribunal was correct in finding that the claim for overstated elements. The finding relied on findings as to Mr Knobloch's credit (J[58]-J[64]). The Appeal Panel should not disturb a finding based on credit. 6. Ground 6 - That is not a ground of appeal, but an assertion. This ground should be summarily dismissed. In any event, the Tribunal's conclusion was correct. The Builder was not entitled to suspend the works, including because of the reasons in section A, point 2. 7. Ground 7 - The Tribunal was correct that PC 3 included double counting. 8. Ground 8 - This is a repeat of Ground 7. The Tribunal was correct that PC 3 included double counting. 9. Ground 9 - The Tribunal was correct that the TRBS invoice could not be relied upon. The finding relied on findings as to Mr Knobloch's credit (J[58]- J[64]). The Appeal Panel should not disturb a finding based on credit.
5. The owners then addressed whether leave should be given for the appeal, noting the builder had not sought leave, which the owners claim is needed, nor did the builder address the requirements for leave in Part 6 of Schedule 4 of the NCAT Act and for these reasons leave should be refused.

The owners' appeal

1. The owners' appeal was lodged on 7 June 2021, a week after the Builder's appeal, and was referred to as the cross appeal.
2. The owners indicated at the hearing that they would not press their appeal if the Builder's appeal were dismissed. In view of the conclusion we have reached that the builder's appeal is to be dismissed it is unnecessary to describe or deal with the cross appeal in detail. It is sufficient to note that it raises eight grounds of appeal as follows, with the words in square brackets after each ground being the builder's reply to that ground of appeal: 1. Having found at J[62] that: 1. the alleged underpayment (for PC 3) by the Owners was made on or about 21 June 2019; 2. the Builder did not suspend works until 16 July 2019; 3. throughout the period from 21 June 2019 until 16 July 2019 work continued under the Contract on the Unit; 4. on or about 11 July 2019 the Owners paid PC 4 to the Builder in the sum of $53,278.29, was the proper legal conclusion that the Builder either elected not to suspend the works for an alleged underpayment of PC 3, or waived his right to do so? [In the builder's reply to appeal: "The answer to the question is 'no'"] 1. In setting out the issues for determination at J[18], and omitting to set out and then consider, the questions of whether: 1. the Builder either elected not to suspend the works for an alleged underpayment of PC 3; or 2. waived his right to do so; or 3. the payment of PC 3 in the amount of $25,981.12 constituted accord and satisfaction for all the works and claims the subject of PC 3, did the Tribunal deny the Owners procedural fairness? ["The answer to the question is 'no'"] 1. Having found at J[58]-J[64] that: 1. there appeared to be no legitimate tax invoice created by TRBS; 2. there appeared to be no documented record of payment by the Builder to TRBS; 3. the TRBS invoiced [sic] produced by the Builder contained "certain imperfections"; 4. the form of the TRBS invoice differed from the forms of standard invoice produced by TRBS; 5. the Tribunal cannot rely on the TRBS invoice as evidence of any of the matters asserted by the Builder' 6. the Builder materially retreated from his initial claim for labour, together with (or even in the absence of the other evidence of the Builder's dishonesty) was the proper legal conclusion that the Builder repudiated the Contract, such that the Owners were entitled to (and did) terminate the Contract? ["The answer to the question is 'no'"] 1. In setting out the issues for determination at J[18], and omitting to set out and then consider, the questions of whether the Builder repudiated the Contract by reason of: 1. the Builder's dishonest conduct in claiming more than he was entitled to under PC3; 2. the Builder issuing invoice PC3 on the basis of an illegitimate tax invoice, or one that could not be relied upon; 3. the Builder issuing invoice PC 3 on the basis of amounts not paid to TRBS for works; or 4. the Builder stopping work for his own financial benefit, did the Tribunal deny the Owners procedural fairness? ["The answer to the question is 'no'"] 1. On the proper construction of clauses 20 and 21 of the Contract, in circumstances where the Tribunal found that: 1. PC 3 was not a proper statement of the amount owing to the Builder (J[64]); and 2. made the findings at J[58]-J[63], were the Owners liable to pay any amount (including the amount stated in J[57] and J[97]) in respect of PC 3 or was the conclusion at J[57] and J[97] erroneous? [The owners were liable to pay at least the amount identified at [57]. The conclusions at [57] and [59] were erroneous for the reasons stated in the respondent's grounds of appeal.] 1. In ordering at J[57] that an amount of $15,000 be paid to the Builder in respect of PC 3, did the Tribunal approach the assessment of damages according to the wrong legal principles? ["The answer to the question is 'no'"] 2. In setting out the issues for determination at J[18], and omitting to set out and then consider, the questions of whether: 1. even if the Owners did breach the Contract (which is denied), on the correct approach to damages, was the Builder never the less not entitled to damages; and 2. in also failing to have regard to the independent expert evidence of Mr Madden for the purposes of that question, did the Tribunal deny the Owners procedural fairness? ["The answer to the question is 'no'"] 1. Did the Tribunal apply the wrong legal test for damages, or misapply the correct legal test, in finding that rent, storage costs and Horizon mitigation costs were not payable by the Builder? ["The answer to the question is 'no'"]
3. In addition to the replies set out in square brackets above, the builder also stated in his Reply to Appeal that it is "not clear from the Grounds of Appeal whether or not the appeal is confined to questions of law, but it is noted that the Appellants are not seeking leave to appeal".

The legal framework for determination of the appeals

1. As these appeals are from the Consumer and Commercial Division of the Tribunal they are internal appeals. Internal appeals may be made as of right on a question of law, and otherwise with the leave of the Appeal Panel: s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act").
2. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 to the NCAT Act. Clause 12(1) provides: "12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80(2)(b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because - (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)."
3. In Collins v Urban [2014] NSWCATAP 17 ("Collins"), an Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where: "… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance."
4. If (relevantly) the builder were to establish that he may have suffered a substantial miscarriage of justice in the sense explained above, then the Appeal Panel would have a discretion whether to grant leave under s 80(2) of the NCAT Act. In Collins, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: "(a) issues of principle; or (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; or (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed."
5. Where an appellant is not legally represented it is appropriate for the Appeal Panel to review the stated grounds of appeal, the material provided, and the Decision to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal: Cominos v Di Rico [2016] NSWCATAP 5 at [13]; John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12] . However, that is not this case. The parties were legally represented throughout the appeal, and in the proceedings at first instance. The grounds of appeal were drafted and argued by legal practitioners.
6. The builder lodged his appeal first by his Notice of Appeal which set out 9 grounds of appeal which the builder claimed were all errors of law. On 16 June 2021, apparently without leave to do so, the builder filed amended grounds of appeal which included 9 errors of law plus two further errors of fact for which leave was sought. As noted above, in the written submissions of the builder the builder referred to the 11 amended grounds of appeal and then also made reference to a further ground of appeal as set out above. The builder does not seek leave to rely on this further ground of appeal as it is said to be another error of law, but does seek leave to raise this ground out of time.
7. The builder filed an application for a stay along with his appeal. The Appeal Panel dismissed the stay application on 16 June 2021 thus the Appeal Panel presumes the judgment debt has now been paid.
8. On 16 June 2021 the Appeal Panel issued directions in both appeals. The Appeal Panel did not give the Builder leave to amend his grounds of appeal. The owners strongly opposed leave to amend the Notice of Appeal being granted: paragraphs 6 and 7 of their submissions on appeal and cross-appeal.
9. As was noted in the directions made on 16 June 2021, at the hearing the Appeal Panel may proceed, if appropriate, to deal with the appeal by way of a new hearing, under the s.80(3) of the Civil and Administrative Tribunal Act 2013 (NSW). The Appeal Panel did not decide to proceed with a new hearing of these matters, rather the appeal was a standard appeal hearing without the parties relying on fresh evidence or conducting their cases de-novo. Neither party requested the Appeal Panel proceed by way of a new hearing, and had they done so such application would have been refused.
10. Both parties claim their costs of this appeal and the costs of the proceedings below. The proper forum to claim the costs of the first instance decision is to the presiding Member at first instance, which the parties did and the cost decision was published on 20 July 2021. Neither party sought to amend their appeal to include an appeal against that cost decision.
11. As the owners' submissions made plain, these cases involved modest claims. Both parties sought a money order less than $70,000 and ultimately less than $25,000 was ordered to be paid. The first instance hearing took two days plus further written submissions. The cost of the first instance hearing is likely to have exceeded the amount of the money order made.
12. Unsurprisingly then, neither party asked the Appeal Panel to remit the matters for further hearing; both asked the Appeal Panel to substitute its orders for the orders made by the Senior Member below, rather than remitting for further hearing. Substitution of orders, once one or both of the appeals were upheld, is in keeping with the guiding principle of the Tribunal, of which the Appeal Panel is part. Remitting the matters for further hearing, presumably for a further two or three days, would not be in keeping with the guiding principle.
13. The appeal hearing therefore was not a hearing de novo, which is a chance for the parties to reargue their cases at first instance. It was an appeal hearing to determine if the Member below made an error of law, and if not an error of law, whether leave should be granted under section 80(2)(b) of the NCAT Act for an internal appeal against a Division decision, as provided by cl.12(1) of Sch 4 to the NCAT Act.

Material before the Appeal Panel

1. The Appeal Panel was provided with the evidence, which was before the Member at first instance, contained in 7 lever arch folders. Included in the 1,512 pages in the Appeal Court Book were the submissions at first instance and on the stay application argued before the Appeal Panel. The pleadings at first instance were also included.
2. Neither party sought to rely on fresh evidence. The only documents which were before the Appeal Panel which had not been before the Tribunal below were some emails between the parties referring to their respective grounds of appeals. The Appeal Panel was not taken to the relevance of these emails and indeed was not referred to them at all.
3. The Appeal Panel told the parties at the commencement of the appeal hearing: You can be confident that any document or part of a document that is mentioned in your written submissions or oral submissions will be considered. You can be less confident that any part of the appeal book which is not mentioned in oral or written submissions will be taken into account.
4. As leave was not sought to rely on the emails as fresh evidence, the Appeal Panel have disregarded them. In any event their relevance seems minimal, at best.

Overview

1. The Tribunal's decision rested upon two central propositions: (1) where a payment claim is used to justify a suspension of the Contract, it must comply with cl 20 and in particular the amount claimed must be due and payable; (2) the amount claimed in PC3 was not due and payable because (a) there had been double counting; and (b) the hours claimed were excessive.
2. The first proposition is essentially a question of law and the second proposition is essentially a mixed question of law and fact.
3. As noted above, leave is not required for questions of law but is otherwise required.
4. The builder's notice of appeal, as is illustrated below, did not clearly identify a question of law and the grounds of appeal largely raise questions which go to the factual aspect of the second proposition.
5. For the reasons discussed below, the Appeal Panel is not satisfied that the Tribunal erred in law. It is also not satisfied that there is otherwise any basis for a grant of leave to appeal.

Grounds 1 to 6 inclusive

1. The builder dealt with grounds 1 to 6 together. Despite listing six grounds of appeal the builder submitted "The question is a question of law because the issue is the proper interpretation of cll 20 or 21 of the contract, or perhaps of both clauses".
2. As was done in the written submissions, during the appeal hearing the builder submitted that "the issue really resolves itself down to the interpretation of cll 20 and 21 and the right to suspend". When asked by the Appeal Panel to confirm or clarify whether the first nine grounds of appeal, the first six of which were addressed together, were errors of law, with grounds seven to eleven inclusive needing leave (and the twelfth being another error of law), Mr Davie for the builder replied: "The problem with the drafting of the grounds of appeal, which I take responsibility for, is it is not, with great respect to the tribunal member at first instance, at all clear the basis upon which he reached his decision. However, I think it would be fair to say that as we've distilled this matter down with the benefit of Mr Sheldon's useful submissions and the submissions of the parties the issue really resolves itself down to the interpretation of cll 20 and 21 and the right to suspend. That is an issue of law because it's an issue of the correct interpretation of those clauses and in particular what account is to be taken of the words "or any part thereof" in cl 21 on the basis that we will be saying and this is the primary submission, that if one simply takes the fact that there was 44,792 payable and that wasn't paid then the right to suspension arises but that is a pure issue of the interpretation of a contract, the interpretation of a contract is an issue of law. Similarly, if and whether we are correct in our assumption that the - and it is by no means clear, the tribunal's decision, the full $54,000 wasn't payable was that the associated elements didn't fall within the provisional sum, that is, in addition a question of the interpretation of the contract in this case, the interpretation of the clause identifying the provisional sum and again, that would be a question of law."
3. The owners submitted grounds 1 to 6 were "questions of mixed fact and law, or pure questions of fact".
4. Grounds 1 to 5 do not directly raise the question of whether the Member incorrectly interpreted the contract clauses. Ground 6 mentions "misinterpretation of clause 20" and "misinterpretation of clause 21" but does not directly explain how those clauses should have been interpreted to be, in the builder's view, according to law.
5. The owners submit that the builder is "seeking to re-run substantial parts of the trial de-novo". The Appeal Panel agrees.
6. The builder's submissions, both in writing and orally, were largely a re-run of the builder's (failed) case at first instance. The builder asks the Appeal Panel to make a different finding than that made by the Member below; this is not a proper ground of appeal.
7. In the builder's submissions, particularly paragraphs 5 to 22, the builder seeks to persuade the Appeal Panel to make different factual findings than those made by the Member below. For example, the 'error' referred to in paragraph 12 for example is purely a factual error which the builder would prefer the Appeal Panel change to being in its favour. Paragraph 12 is: It is interpolated that the identification of the sum of $44,792 is based on the finding that there was a double counting of the amount of $13,000 being the provisional sum deducted for structural steel supply'. [sic] This is an error.
8. The proper interpretation of contractual clauses is a question of law: John McDonald Building Services Pty Ltd v Gusa [2022] NSWCATAP 60 at [59] and [60] ; Champion Homes Sales Pty Ltd v Bailey [2018] NSWCATAP 212 at [24].
9. In Kostos Senior Member Corsaro SC considered a materially identical question as to whether a builder was entitled to suspend works under clause 21 of an earlier version of the same Master Builders Association Residential (BC4 edition) contract (which is materially identical in the relevant respects) in circumstances where the payment claim on which the suspension relied did not comply with clause 20 of the contract.
10. At [173]-[174] of Kostos, the Senior Member concluded that for clause 21 (the suspension provision) to apply, the Builder had the onus to establish both the form and content of the payment claim was correct and that the amount claimed was due and payable under the terms of the Contract. Failing that, the amount claimed was no more than a contingent debt, which if denied, required the Builder to prove the entitlement in a Court or a Tribunal. Critically, the Senior Member emphasised that the amount claimed in a payment claim did not become an amount due merely because of "an assertion in the document" that the amount claimed was due. There was no entitlement to suspend until the contingent debt had crystalised by a finding in the Tribunal.
11. Kostos is plainly correct. Applying a business-like, common sense, interpretation, it would be absurd and uncommercial to permit a Builder to insert any amount in a payment claim (whether entitled to that amount under the Contract or not) and suspend if the client did not pay that asserted amount).
12. The builder asked a question in paragraph 15 of its' submissions about the interpretation of clause 21, then explained that submissions were made to the Member below about how that question should be answered (in paragraphs 16 - 17) then suggested that [56] of the Decision "should be set aside": paragraph 18.
13. The owners addressed grounds 1 - 6, in paragraphs 29 to 83 of their submissions. The Appeal Panel agrees with the owners' submissions that: Clause 20(b)(iii) of the Contract permits a payment claim to include other adjustments "under the provision of the Contract". If an adjustment is not made under the provisions of the Contract, the payment claim does not satisfy the requirements of clause 20(b) and is not a valid payment claim. There is therefore no entitlement to suspend. The Owners' construction is consistent with the logical and orthodox extension of the well known principle that a person cannot take advantage of his or her own wrong: TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 at 147. The Builder's construction is entirely inconsistent with that principle… The Builder wrongly issued an invoice and suspended on the basis of an incorrect invoice. The Tribunal found at J[65] that as a result of that the Builder was not entitled to suspend the work under the Contract and at J[66] the Builder was not entitled to claim damages for his "unlawful suspension", but that the Builder was exposed to damages.
14. Both parties referred to Wesiak v D&R Constructions Pty Ltd [2015] NSWCA 353. The Court of Appeal reached the same conclusion about the construction of cll. 20 and 21 as did the Tribunal. The builder, in paragraph 24 of his submissions, attempted to distinguish Wesiak from the present case, but the Appeal Panel does not find that the cases are distinguishable. As the owners submitted at paragraph 47 of their written submissions (emphasis in original, footnotes omitted): At [46], the Court of Appeal recorded that the Appeal Panel found that the payment claim was not payable for two reasons. First, because the Builder had not achieved the milestone, but second "as well as on non-compliance with cl 20". The Court of Appeal's finding at [100]-[101] related both to the fact that no amount was owing because no milestone was reached and also because the payment claim did not comply with clause 20 of the Contract. By suspending in those circumstances, the Builder repudiated the Contract: see Wesiak at [123]-[124].
15. The Appeal Panel is not satisfied that the Member below incorrectly interpreted clauses 20 or 21 of the Contract. It follows that grounds 1 to 6, as propounded together by the builder as a question of law, must be dismissed.

Ground 7

1. Ground 7 is that there was no evidence to support the finding of "double counting" or that finding was no unreasonable no reasonable decision maker could have made it. These are questions of law.
2. Ground 7 is not made out. There was evidence in support of the Tribunal's finding at [53] that the builder "added back in the provisional sum of $13,000". The owners point to some of this evidence in paragraphs 48 to 59 of their submissions, referencing Item 3, Part 4 of Sch. 2 to the Contract, the builder's own submissions at first instance, PC 3 and clause 20 of the Contract.
3. The reasons consider ample evidence, under the heading "Builder's evidence" from paragraph 32 to 53 and following. The Appeal Panel could not conclude that there was no evidence to support a finding that "the Builder has added back in the provisional sum of $13,000" and does not accept that it was so unreasonable that no decision maker could have come to that conclusion.
4. Further, if the Tribunal did err in law in reaching the conclusion that there had been double counting, such an error would not have been material. This is because, as noted above, the Tribunal found non-compliance with cl 20 not only because of double counting but also because of the inclusion of amounts claimed for hours that had not been worked.

Ground 8

1. Ground 8 is that the Tribunal denied the builder procedural fairness because he was not given the opportunity to make submissions on the issue of whether the builder double charged the owners an amount in the order of $13,000.
2. This also raises a question of law.
3. The Appeal Panel is not satisfied that there was a failure to afford procedural fairness. It was always a question of fact, or contention, during the hearing at first instance, whether PC3 had been rendered in the correct amount: 1. The builder's contention that he was entitled to issue PC3 in the amount that he did and the owners' underpayment of PC3 entitled him to suspend then terminate the contract, depended on a factual finding about the correct amount of PC3 or alternatively whether there was underpayment by the owners. A calculation of the proper amount to be charged in PC3 was always a fact for determination in the hearing; 2. On the other side, the owners' case was always that "Progress Claim 3 was for more than the agreed lump sum as per the Agreement": particulars to paragraph 4 of the owners' application filed on 15 Jan 2020. Paragraph 4 of the owners' application was that "On 21 June 2019, in breach of the Agreement and in breach of the Home Building Act, the Builder issued Progress Claim 3…". The amount the builder was entitled to claim in PC3 was always an important fact for determination; the Member had no obligation to "give the [builder] notice of a dispositive issue". Put another way, there was no denial of procedural fairness in the Member deciding this important issue of fact, which had been raised by both parties since the commencement of both applications in the Tribunal below.
4. The Member did not need to "give the applicant notice of a dispositive issue" as contended in Ground 8, in such circumstances. Submissions about the correct amount the builder was entitled to claim from the owners in PC 3 was an important issue in the proceedings. There was no obligation upon the Member to alert the parties to the fact that he may find the builder overcharged, or double charged as the case may be.
5. In any event, for the reasons discussed above with respect to Ground 7, if there had been a failure to afford procedural fairness on the question of double counting, it is not material in circumstances where the double counting was but one basis for the finding that PC 3 did not comply with cl 20.
6. Ground 8 is accordingly dismissed.

Ground 9

1. This ground is: The Tribunal constructively failed to exercise jurisdiction in failing to take into account and express, clearly articulated argument made on part of the applicant, being that the evidence of Mr McNamara (a witness for the respondents) corroborated that the work identified in the TRBS invoice (and that was rejected by the Tribunal at [61] had as a matter of fact been carried out.
2. Paragraph 61 of the Reasons, referred to in this 'ground', was: Also, the form of invoice 725.3 differed from the forms of standard invoice produced by TRBS pursuant to a Summons for Production. Finally, in cross-examination, the Builder struggled to explain these matters. For these reasons, the Tribunal cannot rely on the TRBS invoice as evidence of any the matters asserted by the Builder in its content.
3. The builder made submissions about this ground in paragraphs 44 to 58 of his submissions, the first of which are excerpts from various decisions from various courts and the Appeal Panel. The cases generally repeat that it may be an error of law for a Tribunal not to consider part of a claim at all, that is, to make no adjudication about part of an applicant's claim. That is to be contrasted with what the Tribunal did in the Reasons, which was to make findings about PC3 which the builder does not agree with.
4. The builder's submissions, from paragraph 48, then set out the findings made by the Tribunal in the reasons, before turning to the builder's arguments again, in an effort to re-argue the case and persuade the Appeal Panel, seemingly, that the Appeal Panel should form a contrary view than was found by the Tribunal. The argument that the Tribunal did not consider at all whether the work in the TRBS invoice had been carried out cannot be sustained when one has regard to the reasons which reject that proposition.
5. The owners submit this ground "is the sort of "disguised attack on the factual findings…dressed up as a complaint about natural justice" that the Full Federal Court has warned must be avoided: TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd [2014] FCAFC 83 at [54]".
6. The owners submissions continue, paragraphs 89 to 92: 89. Ultimately the asserted error goes nowhere because even if the work as set out in the TRBS invoice (the authenticity of which was challenged) was performed, PC 3 still contained a calculation error. Further, the problems with the TRBS invoice were not material to any of the conclusions as to its unreliability in the Primary Judgment. 90. In that regard, the only submissions made by the Builder about Mr McNamara's evidence was at [45]-[50] of the Builder's Closing Submissions. That part of the submissions relates only to the Owners' allegation that the Builder committed a fraud by making a claim on a forged invoice. The Tribunal did not engage with that question as a separate ground (finding against the Builder on other grounds) and therefore the submissions made by the Builder on this issue were irrelevant. There was no failure to consider a material argument. There was no occasion to consider it. 91. At J[60]-J[61], the Primary Member clearly set out the basis of his factual finding that the Tribunal cannot rely on the TRBS invoice as evidence of any matters asserted by the Builder in its content. Nothing Mr McNamara said in evidence could overcome any of the factual findings addressed in J[60]-J[61]. They were wholly independent of Mr McNamara's evidence and would stand even if everything the Builder says about the effect of Mr McNamara' evidence is accepted. There was plainly sufficient evidence to make those findings. 92. Further, and in any event, contrary to paragraph 54 of the Builder's submissions, Mr McNamara's evidence did not confirm that he carried out the works described in PC3, or that he checked and confirmed the diary entries and that he was paid for that work. The proper effect of Mr McNamara's evidence is set out at [76] to [94] of the Owner's Closing Submissions before the Primary Member and at [19] to [21] of the Owner's Reply Submissions.
7. The ground is essentially that the Tribunal did not hear and determine a part of the builder's claim and as such it must fail. As set out above, the Tribunal did adequately consider this part of the builder's argument, it just made findings which the builder contests. The appeal is not a chance to present arguments for a second time, hoping to achieve a better outcome. No error is present. This ground of appeal is dismissed.

Grounds 10 and 11 - grounds requiring leave to appeal

1. Ground 10 repeats the no evidence part of ground 7 and if leave were to be given would likely fail for the same reasons.
2. Ground 11 is that the Tribunal made an incorrect finding of fact as to an invoice which was relevant to the finding that PC 3 included a claim for hours that had not been worked.
3. The builder made no submissions about whether leave should be granted to bring these two grounds of appeal, in accordance with cl.12 Sch 4 of the NCAT Act, or at all.
4. The owners expressed concern, in paragraph 94 of their written submissions, that they may be ambushed at the appeal hearing by submissions establishing why leave should be granted to bring these grounds of appeal. They were not so ambushed. Nothing was said about why leave should be granted in writing or orally at the hearing.
5. In any event, the Appeal Panel is not persuaded that the challenged factual finding was unavailable, improbable or contrary to compelling inferences.
6. It follows that the Appeal Panel is not satisfied that cl 12 of Sch 1 has been satisfied. As there is no basis on which to grant leave to appeal with respect to grounds 10 and 11 those grounds are also dismissed.

Leave to add a twelfth ground of appeal

1. As noted above, in paragraph 2 of the builder's written submissions the builder submitted: "The builder will also seek to rely on another error of law which is to the effect that no reasons are given for the Tribunal's conclusion at paragraph 56 of the decision to the effect that because the builder rendered PC3 in the sum of $57,493 which was not the precise sum due and owing the builder was not entitled to rely upon a payment claim in this sum to suspend work."
2. However, the builder did not seek that leave until the very end of the appeal hearing during this exchange: Davie: …if we can't say for certain how [the Member below] arrived at his conclusions, we would say necessarily, there's a question of law arising which is a failure to give reasons. SENIOR MEMBER WILSON: But a failure to give adequate reasons for this ground of appeal in the alternative-- DAVIE: I'm pretty sure it is. SENIOR MEMBER WILSON: Is it? Is it in, to deny the procedural fairness in terms of appellant notice - is that what ground 8 is? DAVIE: Paragraph 7. SENIOR MEMBER WILSON: You mean ground of appeal 7? No evidence to support it [double counting], not reasonable, no reasonable decision maker could have made it. DAVIE: Yes. SENIOR MEMBER WILSON: You say that that ground is failure to provide adequate reasons? DAVIE: Yes, it is because he hasn't stated the evidence as put but if - I don't want to be caught out on a technicality. If that is the issue, and I think this is fairly clear from my submissions, that I have made the assumption as to what the reasons were. We would go on further to say that there is another failure which is the failure to give reasons. These arise - I think it's fair that I can make that point because this point arises because of the contest in the submissions and how it's arisen today. SENIOR MEMBER WILSON: I think we'll probably need to ask Mr Sheldon if he appreciated that ground 7 includes a ground that the Member failed to provide adequate reasons and to make sure that he addressed those but just before I leave you, Mr Davie-- DAVIE: Sorry, at para 2, it may not be a question of law but in para 2 of my submissions I think you can safely say, in the submissions before the tribunal-- SENIOR MEMBER WILSON: Of the former tribunal? DAVIE: …before the appeal panel. SENIOR MEMBER WILSON: Yes, yes, go ahead. DAVIE: Yes, no, no, here we are, at para 2, I said, "The builder would also seek to rely...at para 56 of the decision," so it would be fair to say that Mr Sheldon was clearly put on notice. SENIOR MEMBER WILSON: Well, then you would probably need to ask us, you should have done that probably at the outset-- DAVIE: Yes, I accept that and I apologise but I can't see that there's been any relevant prejudice because it's been explicitly raised. SENIOR MEMBER WILSON: Essentially, you want the appeal panel to treat para 2 of your submissions as the twelfth ground of appeal. DAVIE: Yes, yes, and I apologise, the panel is absolutely right, there can be no prejudice.
3. The Appeal Panel asked for the owners' submissions about whether leave should be granted to the builder to add this twelfth ground of appeal. The submissions were as follows: SHELDON: …The difficulty I have is I still do not know precisely what the ground is; it still hasn't been clearly articulated. That's in circumstances where we were served with the notice of appeal; we put on a reply which pointed out that it was incompetent; we were then served with submissions. We've had a longstanding complaint including in my submissions of a case against us still isn't clear. I'm still trying to guess what the real issues are, and that after all submissions have been made both in writing and orally, a new ground of appeal raises. It puts me in some difficulty. SENIOR MEMBER GOODMAN: But haven't you had the benefit of para 2 of Mr Davie's submissions since mid-July. SHELDON: That is no doubt correct but I've made it plain that I had real difficulty on reading submissions and identifying what the real issues were as well. I had to do the best I could responding to the amended grounds of appeal because there are a whole series of factual and mixed questions of facts and all that in submissions. I just responded to what was in the amended notice of appeal as I understood the issues were. SENIOR MEMBER WILSON: It just seems that, Mr Sheldon, you also did in making your oral submissions today did grapple a little bit with how Senior Member below did make some findings. So, I'm not saying that you are agreeing that there was a failure to provide proper reasons but that this might arise on reading the decision itself, but as Senior Member Goodman just pointed out, it was in the para 2 of the written submissions, so do you say that you're prejudiced by the addition of the 12th ground, the failure to provide proper reasons? SHELDON: I'm understanding what the Tribunal says so can I address it in this way then. I'm prejudiced in this but I don't necessarily say it's incurable. Had I been given proper notice of it I would have gone to the authorities about the need to give reasons in the Tribunal. There's a more recent Court of Appeal decision which name escapes me, I think it's Orr. SENIOR MEMBER WILSON: Orr v New South Wales Land and Housing. SHELDON: Which says that the real reasons don't need to be extensive. I would have delved into more detail but can I just address it this way; in my submission, para 20 to 31 at least, and there may be other paragraphs but at least 20 to 31, are sufficient to discharge that burden. In any event, if there was a failure to give reasons the obvious consequence is that the Tribunal needs to reconsider the issue for itself and there was no error in the conclusions so it probably doesn't take Mr Davie all that far beyond his other ground of appeal.
4. In Aon Risk Services Australia Limited v Australian National University [2009] HCA 27, [2009] 239 CLR 175, the High Court considered the discretion to allow amendments to pleadings. Their Honours considered in detail the overriding purpose which is akin to the Tribunal's guiding principle to resolve matters in a quick, just and cheap manner.
5. In this appeal the proposed amendment did not require an adjournment and neither party sought to file further submissions if leave was granted to add the new ground of appeal. This minimised issues concerning the quick and cheap resolution of the appeals. The primary consideration must be whether it was just to allow the builder to add another ground of appeal at the last moment, without the owners addressing the new ground in his written submissions.
6. The proposed ground of appeal is that the Tribunal gave "no reasons" for its "conclusion at paragraph 56 of the decision". Paragraph 56 of the Reasons was: So it seems to the Tribunal that neither party was correct with its calculation of PC 3 in July 2019. The Builder would have been entitled to render PC 3 in the sum of approximately $44,792.00 and rely upon the non-payment of this sum of $57,493.00 which was not a sum due and owing. And the Builder was not entitled to rely upon a payment claim in this sum to suspend work which the Tribunal finds it wrongly did.
7. Detailed analysis of PC 3 preceded paragraph 56 in the Reasons. The builder takes the view the Tribunal made factual, and perhaps legal, errors in that analysis, but that does not amount to a finding that the Tribunal gave inadequate reasons for its conclusion at paragraph 56 that "the Builder was not entitled to rely upon a payment claim in this sum to suspend work which the Tribunal finds it wrongly did".
8. As set out in the extract from the hearing above, the owners' counsel conceded that he addressed the conclusion in [56] of the Reasons in his written submissions in paragraphs 20 to 31 "at least". The owners also submitted that the Senior Member's reasons were "sufficient to discharge that burden", namely the burden of written reasons expressed by the Court of Appeal in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231. Orr considered the question of adequacy of Tribunal decisions, particularly at [65] to [106]. In [76] and [77] President Bell, as he then was, summarised some useful principles: What constitutes adequate reasoning on the part of a tribunal is also informed, in my opinion, by statements from well-known administrative law decisions relating to the limits of judicial review and the need for practical as well as principled restraint in that context: Pozzolanic at 287. These principles include the following: (i) "Decision-makers commonly express their reasons sequentially; but that does not mean that they decide each factual issue in isolation from the others. Ordinarily they review the whole of the evidence, and consider all issues of fact, before they write anything. Expression of conclusions in a certain sequence does not indicate a failure to consider the evidence as a whole": Re Minister for Immigration and Multicultural Affairs, Re; Ex parte Applicant S20/2002; Appellant S106/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 30; 77 ALJR 1165 per Gleeson CJ at [14] (Ex parte Applicant); (ii) the court should not read passages from the reasons for decision in isolation from others to which they may be related: Re Maria Politis v Commissioner of Taxation [1988] FCA 739 at [14]; 20 ATR 108 at 111; (iii) the reasons must be read fairly and as a whole: Ex parte Applicant at [147] per Kirby J; Wu Shan Liang at 291; Bisley at 251; (iv) the reasons recorded ought not to be inspected with a fine tooth-comb attuned to identifying error: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287; [1993] FCA 456 (Pozzolanic) at 287; Wu Shan Liang at 272, 291; (v) there should be a degree of tolerance for looseness in the language of the tribunal, unhappy phrasing of the tribunal's thoughts or verbal slips: Pozzolanic at 287, Wu Shu Liang at 272 and 291.
9. The Tribunal is not a court of strict pleading, however it must still consider whether it is just to allow a party to amend its grounds of appeal at the last moment, without making any formal application to do so. All that the builder did in this appeal was state that he "will also seek to rely on another error of law" in his written submissions. Nothing more was said about seeking such leave until pressed by the Appeal Panel at the end of the appeal hearing. The owners had not addressed leave being granted or the proposed ground of appeal in his written or oral submissions, until the end of the appeal hearing when asked to respond, as set out above.
10. The lateness of the application to add the twelfth ground of appeal weighs against leave being granted, as does the lack of notice to the owners to respond to the new ground. On the other hand, the proposed amendment was included in the builder's written submissions served over a month prior to the appeal hearing and the owners could have responded to the proposed ground during the appeal hearing.
11. However the Appeal Panel is not persuaded that the proposed ground has sufficient merit to justify leave. It was not expanded upon by the builder in the appeal hearing and the written submissions about the proposed ground are contained in paragraphs 16 to 21 as follows: The first argument is that clause 21 does not simply address the circumstances where the owner fails to pay the whole of the amount claimed. It also addresses the circumstances where the owner has failed to pay any part of the amount claimed. This was an issue that was expressly and clearly raised on the part of the builder in its submissions but was not addressed in the Tribunal's decision. Since on the found facts the owner has failed to pay part of the amount claimed it is submitted that the finding at paragraph 56 is in error and should be set aside. It may be that the reasoning of the Tribunal is that because an amount of $57,493 is claimed and based on the erroneous finding of the Tribunal, only an amount of 'approximately' $44,792 was due, then the Owner has not failed to pay any 'payment' under clause 21(a)(i), because the payment was not a 'payment' payable within the time required in Schedule 2 item 4. Schedule 2 item 4 requires claims to be paid no later than 10 days after a written request for payment. No such reasoning articulated by the Tribunal and, it is submitted, the failure to articulate such reasoning would be, without more, an error of law.
12. The Reasons contain an adequate discharge of the Tribunal's duty to provide sufficient reasons, as explained in Orr. The Tribunal explained that cl 21 required compliance with cl 20 and that there was a failure to comply with cl 20 for several reasons. Implicit in the Tribunal's reasoning is the premise that the "amount" in cl 21 is an amount that is due and payable. In other words, the whole of the amount claimed must be due and payable and it is no answer to say that part of the amount claimed was due and payable and this is sufficient to justify suspension. Were this so, a builder entitled to $1000 could serve a notice claiming $1m and justify a subsequent suspension on the basis that a part of the claimed amount was not due but not paid. This is clearly absurd.
13. Considering the lateness of the application to amend and the lack of merit of the ground itself, the Appeal Panel refuses to grant leave to add this twelfth ground of appeal.

Conclusion as to the builder's appeal

1. It follows that the builders' appeal is dismissed.

The owners' cross appeal

1. The owners asked that their cross appeal only be considered if any part of the builder's appeal was upheld. As the builder's appeal has been dismissed, it is unnecessary to consider the owners' appeal and it should be dismissed.

Costs

1. In view of the result and the owners' indication that they would seek costs of the appeal, the Appeal Panel will makes orders allowing the owners to make a cost application and for the builder to respond.
2. The parties are reminded that they must assist the Appeal Panel to resolve matters in a quick, just and cheap manner. The amounts in dispute in these appeals are modest. The parties are urged to attempt to resolve the question of costs by consent, without the need to incur further legal costs arguing about legal costs.

Orders In 2021/00155240: 1. Leave to appeal is refused. 2. The appeal is dismissed. In 2021/00163674: 1. The appeal is dismissed because it is withdrawn. Costs: 1. If the owners wish to apply for their costs of these appeal proceedings they may make a cost application by 18 May 2022. 2. If the owners make a cost application the builder may provide submissions on costs by 1 June 2022. 3. All parties must include in any submissions a statement of their attitude to the Appeal Panel dispensing with a hearing on the question of costs, and deciding the question on the papers.

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: 03 May 2022