Longbottom v Boughton

NCAT Appeal Panel|2020-01-29

ty Ltd [2019] HCA 32 Parkdale Custom Built Furniture v Buku (1982) 149 CLR 191 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 Shevill v Builders Licensing Board (1982) 149 CLR 620 Simmonds v Rust; Rust v Simmonds [2018] NSWCATCD 75 Yorke v Lucas (1985) 158 CLR 661 Texts Cited: None Category: Principal judgment Parties: Gregory Ross Boughton (Appellant - Builder) Dale Longbottom and Natalie Longbottom (Respondents - Home Owners) Representation: Counsel: A. Justice for the Builder J. Weightman for the Home Owners

Solicitors: Peter Rogers, Moroney Rutter & Mantach Lawyers, for the Builder Nicholas Pidcoc, Fletcher Pidcoc Lawyers, for the Home Owners File Number(s): AP19/46638; AP19/50591 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Boughton v Longbottom [2019] NSWCATCD Date of Decision: 18 September 2019 Before: K. Ross, Senior Member

Background

The Tribunal handed down its decision on 18 September 2019 (the Decision). The Builder filed a Notice of Appeal on 15 October 2019: AP19/46638. On 24 October 2019 the Appeal Panel constituted by M. Harrowell, Deputy President, directed that any appeal in the nature of a cross-appeal was to be lodged with the Tribunal by 7 November 2019. The Home Owners then filed their own Notice of Appeal which we will call the Cross-Appeal: AP19/50591. The Builder did not contend before us that an extension of time was required by the Home Owners in respect of the Cross-Appeal.
The parties filed with the Appeal Panel an Agreed Tender Bundle constituting three volumes of papers.
At the conclusion of the hearing on 29 January 2020, the Appeal Panel ordered that the Builder file an Amended Notice of Appeal in respect of a contention the Builder was making to us. For clarity, we decided this should be the subject of an Amended Notice of Appeal. This was not disputed by the Home Owners. Pursuant to those orders, the Builder filed his Amended Notice of Appeal and further submissions on 5 February 2020. Submissions in reply were filed on 26 February 2020.
The Appeal Panel has had regard to the Amended Notice of Appeal, Cross-Appeal and Replies to Notice of Appeal and Cross-Appeal and the parties' extensive written submissions.

The findings of the Tribunal

The Tribunal noted that the Builder was seeking orders that the Home Owners pay him various sums said to be outstanding pursuant to the contract as well as $3,727.45, being damages for the loss of profit on the balance of the contract, being 20% of $18,637.25. The Home Owners disputed the amounts claimed by the Builder as being due and owing. They contended before the Tribunal that the Builder was not entitled to terminate the contract. They submitted the Builder's purported termination was a repudiation of the contract which they accepted. As a consequence, the Home Owners contended in the Tribunal that they were entitled to damages, being the cost to complete any incomplete work and rectify any defects, less the outstanding contract balance: see [2]-[3] of the Decision.
In addition, the Home Owners alleged that the Builder engaged in misleading and deceptive conduct, either in representing to them that he could build the roof in accordance with the plans, or in the alternative in advising them that the roof shape in the plans could not be constructed: see [4] of the Decision. Accordingly, the Home Owners sought various sums for damages to complete the incomplete work, for rectification of the defective work, reimbursement for urgent electrical work less the balance owing under the contract and damages for misleading and deceptive conduct: see [5] of the Decision.
The Tribunal made a number of findings which were set out in [11] and [12] of the Decision as follows: "11 A number of facts are not disputed or can be deduced from the evidence and I make the following findings in respect of them: (1) In early 2015 the parties began discussions in respect of an extension to and renovation of the Home Owners' property at Aberdare. During those discussions the Home Owners stated that they wanted: (a) new roof sheets over the entire house, with the roof on the extension tied into the existing roof, and (b) to retain the heights of the ceilings including their pressed metal detail, and (c) for new flooring to tie in with existing flooring. (2) The Home Owners provided the Builder with plans drawn by Graham Burston, Draftsman ("the Burston plans"). (3) The Builder provided the Home Owners with a number of quotations, including quotation 5 dated 5 April 2016 in an amount of $184,090.00 incl GST and quotation 6 dated 17 April 2016 in the sum of $172,745.00 incl GST. (4) The Builder alleges that the Home Owners requested that quotation 5 be reduced because of borrowing constraints, and that he provided the reduced quotation 6 on the basis that an additional amount of $10,000.00 would be payable on completion but not reflected in the written contract. This was conceded by the Home Owner Natalie Longbottom during cross examination. (5) The Home Owners accepted quotation 6 and it formed part of the written contract entered into by the parties on about 19 June 2016 ("the contract"). (6) The contract incorporated the Burston plans. (7) The contract relevantly provided: 3.3 All variations to this contract (including those to the plans and specifications) must be in writing, dated and signed by both parties to the contract. 21 Termination … 21.3 The Contractor may cancel this contract (subject to clause 21.4) if the Owner (a) failed to make payment due under the contract, or … (c) denies the Contractor access to the worksite to complete or undertake any works … 21.4 Where the Contractor believes the defaults in clause 21.3 can be rectified then the Contractor shall advise the Owner in writing that they have ten (10) working days from the date of the letter in which to do so. If the Owner fails to rectify any default within that period then the Contractor shall advise the Owner in writing that they are cancelling the contract. 21.5 If the contract is ended under this clause the contractor shall be entitled to a reasonable price for the Works carried out under the contract to the date the contract is ended (including the cost of any materials delivered to the worksite or already ordered from suppliers and not paid for by the Owner). 22. Disputes 22.1 If the Owner or Contractor believes a dispute has arisen in relation to any matter under this contract, then that party must promptly give the other party written notice setting out the matter in dispute. 22.2 Both parties shall meet within fourteen (14) days of the giving of such notice to attempt to resolve the dispute. 22.3 In the event that the dispute cannot be resolved then the matter shall be referred to a mutually agreed third party or, failing agreement on a third party, to the Office of Fair Trading for assistance in the resolution of the dispute. 12 The contract included a payment schedule (schedule F) which provided: Stage of the works completed Deposit $17,274.50 10% 1st Progress Payment Demolition, site cleared and slab formed 30% $51823.50 2nd Progress Payment Frames erected, roof on new addition, walls cladded 30% $51823.50 3rd Progress Payment Services installed, frame inspected, walls lined 25% $43185.26 4th Progress Payment Practical completion reached 5% $8637.25

(1) On 4 September 2016 the Builder attended the site to measure up and order materials. Physical work commenced on site on 5 October 2016. (2) When the builder went onto the roof at the commencement of the work he determined that, in his view, the Burston plans were incorrect in respect of the ridge at the apex. He determined that he could not build the roof shown on the Burston plans without removing the entire roof structure (including the pressed metal ceilings) and reconstructing it. (3) At some time after commencement of the work, (the Builder says shortly after and the Home Owner says after the frames were erected) the Builder had a conversation with the Home Owner Natalie Longbottom to the effect: GB "I can't build the roof the way your draftsman has drawn it without replacing the whole roof. That would mean taking out the pressed metal ceilings. NL "We don't want that" GB "I'll see if I can get an alternate design and come back to you". (4) On 18 October 2016 the Builder sent an email to the Home Owners in respect of 3 issues claimed as variations. On 19 October 2016 the Home Owners emailed acceptance of those variations. On 4 December 2016 the Builder raised Variation 1 in respect of them in an amount of $4330.00. (5) On 14 November 2016 the Builder sent an email to the Home Owners attaching a copy of amended roof plans and a 3D design for the trusses. (6) On 15 November 2016: (a) the Builder sent a further email to the Home Owners requesting approval for the changes to the roof. The email stated that the pitch on the rear roof would be reduced and it would "look different to the plans", and (b) the Home Owners emailed acceptance of the changes to the roof. (7) The Builder constructed the roof in accordance with the amended plans. (8) On 9 and 10 December 2016 the parties exchanged text messages in respect of a builder's blanket and cable. On 9 December 2016 the Builder raised variation 2 in respect of these items, as well as removal of double ceilings and cable for A/C, in an amount of $3820.00. (9) On 19 December 2016 the Builder sent an email to the Home Owners proposing a variation in respect of four issues: (a) double thickness walls in and around fire place and alterations to wall $1210.00 incl GST (b) complete minor repairs to saddle trusses in existing roof $870.00 incl GST (c) levelling kitchen floor by replacing bearers and joists $2956.00 incl GST (d) excess on provisional allowance for tiles $513.00 incl GST (10) On 20 December 2016 a meeting was held on site. Present were the Home Owners, the Builder, Graham Burston and Natalie Longbottom's father. (11) On 21 December 2016 the Home Owners requested that work on site be suspended to enable them to seek advice. The Builder responded by stating that he agreed subject to a number of conditions: (a) That the Home Owners engage clause 22 of the contract in question of dispute resolution, (b) That the plasterers be allowed to complete their work, and (c) That access be permitted to enable the site to be cleaned, items removed and the garage cleared. (12) On 22 December 2016 the Builder's plasterers were denied access to the Site by the Home Owners. (13) On 23 December 2016 the Builder sent an email to the Home Owners seeking payment of the invoices for variations 1 and 2 and submitting an invoice for progress claim 3. (14) On 24 December 2016 the Home Owners sent an email disputing the claims for payment and advising that a complaint had been lodged with Department of Fair Trading. (15) On 6 January 2017 the Builder's then solicitors wrote to the Home Owners stating that if payment of $51,336.25 was not made by 20 January 2017, the Builder would terminate the contract. (16) On 20 January 2017 the Home Owner's solicitor wrote to the Builder's solicitor disputing that the monies claimed by the builder were due and owing and disputing that the Builder was entitled to terminate the contract. (17) On 24 January 2017 the Home Owners' solicitor gave the Builder's solicitor a notice of dispute under clause 22 of the contract. (18) By notice dated 25 January 2017 (apparently attaching an invoice for PC items in an amount of $6877.66 dated 30 January 2017) the Builder's solicitor responded to the Home Owner's notice and terminated the contract."

The Tribunal then considered the question as to whether the Builder was entitled to terminate the contract. The Tribunal noted that the Builder had purported to terminate the contract pursuant to clause 21.3 on the basis that the Home Owners were in default by failing to make payment due under the contract and by denying access to the work site to complete or undertake the work. In the alternative, the Builder was contending before the Tribunal that the failure to make payment and the denial of access amounted to a repudiation of the contract.
There was no dispute that the Home Owners had failed to make payment of the sum claimed by the Builder: see [14] of the Decision. The Tribunal held that the Home Owners' obligation to make progress payments arose only upon each completed stage of the works (emphasis added) (see clause 4.3): citing Simmonds v Rust; Rust v Simmonds [2018] NSWCATCD 75; Lifestyle Designer Homes Pty Ltd v Choy [2012] NSWCTTT 217. The Tribunal held that the progress claim made by the Builder included work which had not been completed and hence was not due and owing: [14] of the Decision.
The Tribunal held, pursuant to clause 3.4 of the Contract, that variations became payable at the time of the next progress claim. Accordingly (at [19] of the Decision): "[t]he result is that if the work had not been done such as to entitle the Builder to make the next progress claim, the payment for the variations was not due and owing and the Home Owners were not in breach in refusing to pay."
In respect of whether or not the Home Owners had repudiated the Contract, the Tribunal found as follows: "Did the Home Owners repudiate the Contract? 17. I do not accept the proposition that the Home Owners repudiated the contract. When they suspended the work they sought time to seek advice. They lodged a complaint with Department of Fair Trading and by letter dated 24 January 2017 sought to invoke the provisions of clause 22 of the contract. These actions are inconsistent with a repudiation of the contract. 18. The Owners did deny the Builder access to the site, but they did so in the context of the dispute about the roof. The Builder responded to the Owners' invoking of clause 22 by terminating the contract. The Builder did not himself invoke clause 22 of the contract before terminating. Those provisions are mandatory. I do not accept that the Builder was entitled to terminate the contract without first attempting to resolve the dispute." Did the Builder repudiate the contract? 19. I find that the Builder was not entitled to terminate when he did. The Home Owners accepted the Builder's termination as a repudiation of the contract (as they were entitled to do) and terminated the contract."
The Tribunal held that in the above circumstances, the Home Owners were entitled to damages which included the cost of completing the work and rectifying the defects, less the outstanding contract balance.
In respect of the Home Owners' claim that the Builder engaged in misleading and deceptive conduct in respect of the roof, the Tribunal, after considering all of the evidence, found that ultimately the issues in respect of the roof arose from the fact that the so-called Burston plans did not provide any detail as to how the new roof was to be melded into the existing roof: [40] of the Decision. The Tribunal concluded that any shortcomings in the plans could not be said to be the responsibility of the Builder and, therefore, there was no misleading or deceptive conduct on the part of the Builder.

Accordingly the Builder should pay the Home Owners $79,245.51."

Scope and nature of internal appeals

Internal appeals may be made as of right on a question of law, and otherwise with permission (that is, the "leave") of the Appeal Panel: s 80(2) Civil and Administrative Tribunal Act 2013 (NCAT Act).
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
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 Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 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.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
In Collins v Urban, 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; (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; (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.

Builder's Submissions

Mr Justice of counsel, who appeared for the Builder, presented detailed, careful and learned submissions for which the Appeal Panel is grateful. Grounds 1-3 of the Amended Notice of Appeal (Notice of Appeal) all dealt with the issue of the Tribunal failing to find that the Home Owners had repudiated the contract. They can conveniently be dealt with together. They were in the following terms: 1. the learned Senior Member erred in finding that the Home Owners had suspended the works when in fact no agreement to vary the contract to permit the Home Owners to suspend works had in fact occurred; 2. the learned Senior Member erred in failing to consider that the Home Owners had repudiated the contract and/or the variation to the contract by purporting to suspend the works on or about 22 December 2016; 3. the learned Senior Member erred in failing to find that the Home Owners had repudiated the contract and that the Builder accepted the repudiation on 25 January 2017.
Mr Justice focused firstly on the following two subparagraphs of paragraph [12] of the Decision, which provided: "(11) On 21 December 2016 the Home Owners requested the work on-site be suspended to enable them to seek advice. The Builder responded by stating that he agreed subject to a number of conditions: (a) that the Home Owners engage clause 22 of the contract in question of dispute resolution, (b) that the plasterers be allowed to complete their work, and (c) that access be permitted to enable the site to be cleaned, items removed and the garage cleared. (12) On 22 December 2016 the Builder's plasterers were denied access to the Site by the Home Owners."
Nextly, Mr Justice turned to [17] and [18] of the Decision and submitted that the above findings were inconsistent with the following parts of the Decision: "Did the Home Owners repudiate the Contract? 17. I do not accept the proposition that the Home Owners repudiated the contract. When they suspended the work they sought time to seek advice. They lodged a complaint with Department of Fair Trading and by letter dated 24 January 2017 sought to invoke the provisions of clause 22 of the contract. These actions are inconsistent with a repudiation of the contract. 18. The Owners did deny the Builder access to the site, but they did so in the context of the dispute about the roof. The Builder responded to the Owners' invoking of clause 22 by terminating the contract. The Builder did not himself invoke clause 22 of the contract before terminating. Those provisions are mandatory. I do not accept that the Builder was entitled to terminate the contract without first attempting to resolve the dispute."
Mr Justice then turned to the Home Owners' Reply which states: "The Senior Member did not find that the contract had been varied to permit the Home Owners to suspend the works. The Appellant's ground for appeal is based on the premises that the Home Owners unilaterally suspended works. The suspension of the works was requested by the Home Owners and consented to by the Builder."
In response to this paragraph of the Reply, Mr Justice submitted that the Home Owners had unilaterally suspended the works as there was no consent by the Builder to the suspension. Mr Justice contended there was no power in the contract for the Home Owners to unilaterally suspend the works. Clause 6 of the contract deals with the Builder's right to suspend the works, but there was no right in the Home Owners to suspend the works. Accordingly, Mr Justice contended, there had to be a variation to the contract agreed to by the parties to enable there to be a lawful suspension of works as opposed to an unlawful unilateral suspension of the works.
Mr Justice contended that the variation is in itself a contract and needs to comply with the principles relating to entering into a contract, citing in support Commissioner of Taxation v Sara Lee Household & Body Care (2000) 201 CLR 520 at [22]-[24].
Mr Justice then contended that based on the findings of the Tribunal, it could not be said that there was a variation to the Contract agreed to by the parties to permit suspension of the works. The Builder, it was submitted, put forward a counter-offer to the Home Owners' offer that there be a mutual suspension of works, being the conditions set out at subparagraphs 12(a)-(c) of the Decision. The Tribunal in turn, Mr Justice contended, found at 12 of the Decision that the counter-offer was rejected or the conditions never accepted because by their conduct, the Home Owners denied the Builder's plasterers access to the site.
Accordingly, Mr Justice concluded that the finding by the Tribunal in 12 demonstrates that there was no consent to the suspension which remained unlawful. In turn, such an unlawful suspension, including an unlawful denial of access to the site, amounted to a repudiation which the Tribunal should have found was accepted by the Builder on 25 January 2017 when it issued its Notice of Termination. It was a repudiation because the denial of access to the site evidenced an intention not to be bound by the terms of the contract.
The letter from the Builder's solicitor dated 25 January 2017, relevantly states: "Our instructions are that: • … • your clients have denied access to the property since 22 December 2016, in contravention of clause 9.1(e) of the contract enlivening our client's right to cancel the contract under clause 21.3(d). Termination Given your clients' breaches of the contract we are instructed to give you notice that our client terminates the contract pursuant to clause 21.3 on the following grounds: • the Owners have failed to make payment due under the contract; • the Owners have denied access to the worksite to complete or undertake the works. In addition, and at common law, your clients' failure to make payment due under the contract and the denial of access to the worksite constitutes a repudiation of the contract (having evinced an intention to no longer be bound by the contract). Our client accepts the repudiation and terminates the contract."
Mr Justice identified the errors in the Tribunal's findings at [17] and [18] as follows. First, the Tribunal's reference to the Home Owners seeking advice and lodging a complaint with Department of Fair Trading does not ameliorate the fact that the Home Owners were not allowing the Builder's trades on site, which was inconsistent with the Builder's rights under the contract and should have been found to be a repudiation. Second, Mr Justice criticised the Tribunal's reasoning at [18] where the Tribunal referred to there being a "roof dispute". Mr Justice contended the fact that the parties were in a dispute over the roof could not give rise to any right to suspend works or avoid a finding of repudiation.
Third, Mr Justice contended that the Tribunal's reference to clause 22 of the contract in [18] was also flawed. Mr Justice submitted that clause 22 of the contract is not "mandatory" and does not have to be attempted prior to termination of the contract. Clause 21 of the contract deals with termination and is not conditioned on clause 22. Mr Justice further submitted that the terms of clause 22 do not displace the common law right to terminate for repudiation.
Mr Justice submitted that the Tribunal ought to have found that at common law the denial of access to the worksite constituted a repudiation of the contract and that there was an acceptance of that repudiation by letter dated 25 January 2017 which brought about the lawful termination of the contract.
Mr Justice submitted that clause 9.1(c) of the contract which required the Home Owners to provide the Builder with access to the site should be construed as a condition or fundamental term, the breach of which goes to the root of the contract and, without more, entitles the Builder to terminate for any breach. We note that Mr Justice did not on appeal contend a common law right to terminate on the ground of the Home Owners' failure to make payment due under the contract. It was not contended that this amounted to a repudiation at common law.

The Home Owners' Submissions

Mr Weightman, of counsel, appeared for the Home Owners. He presented concise but erudite and clear submissions which carefully said everything that could have been said on behalf his clients. He contended that the Tribunal's finding at 12 of the Decision that the plasterers were denied access to the site by the Home Owners on 22 December 2016 was wrong.
He also contended that as the overturning of this factual finding will not alter the outcome, but only provide an alternative basis for supporting the Tribunal's decision, leave to appeal this finding of fact was not required. In other words, the Home Owners were not, in response to the Notice of Appeal, seeking to overturn the orders made below, hence, the statutory requirements as to leave to appeal on grounds other than questions of law is not engaged.
In support of their contention that the plasterers in fact were not denied access to the site, Mr Weightman referred to the Builder's evidence which was: "Further works were completed by my plasterers on 21 and 22 December 2016."
Mr Weightman then referred to the Builder's email of 21 December 2016 which states: "The plasterers have just called and said they are finished and I am about to head up and do my own inspection. However I will need you to go over the plastering works (excluding the wall that's not built yet due to stop work) and confirm that it's complete to your standard."
Then the Builder sent an email on 22 December 2016 which states: "Plasterer ran out of time yesterday and didn't have enough scaffold for cornice so he is borrowing ours today. Plastering will be complete today."
Paragraph [50] of the Builder's affidavit of 17 October 2017 states that: "On 22 December 2016 I was told by one of my plasterers that he had spoken with Natalie and she had advised him that I was not permitted on-site."
Mr Weightman referred to the handwritten note by Ms Longbottom of 22 December 2016 which allegedly confirmed that the plastering work had been completed, excluding the lounge wall.
Accordingly, Mr Weightman submitted that there was agreement to suspend the works as the plasterers had been allowed on-site to complete the work and therefore each of the conditions of the alleged "counter-offer" had been met.
Mr Weightman submitted that whether or not there was a repudiation by the Home Owners is a question of fact or a question of mixed fact and law - either way, leave is required to appeal pursuant to s.80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW).
Mr Weightman disputed the Builder's contention that more than $30,000 is in dispute in support of any requirement for a grant of leave. Rather, Mr Weightman submitted the amount in dispute was $27,526.49 and, in any event, a mere reference to the amount that a builder may need to pay is insufficient to demonstrate a "substantial miscarriage of justice" on account of the decision being fair and reasonable.
In any event, Mr Weightman submitted that there was no error in the finding of the Tribunal that there was no repudiation. He contended that the refusal to allow trades on-site was, as the Tribunal correctly found, tied up with the desire of the Home Owners to pause the work whilst they obtained advice from the Department of Fair Trading. As Mr Weightman put it, the Home Owners have not renounced their liability under the contract; they did not evince an intention to no longer be bound by the contract; and they gave no indication of an absolute refusal to perform the contract. To the contrary, the Home Owners contended that they sought a suspension of the works - not a termination of the contract - to allow them to take advice.
Further, Mr Weightman submitted that the Home Owners' intention to continue with the contract was made clear by the correspondence from their solicitors, which included a notice on 24 January 2017 seeking to rely upon clause 22 of the contract, being the dispute resolution mechanism. Invoking clause 22 of the contract was the first condition imposed by the Builder on the Home Owners for a consensual suspension of the works.

Builder's Submissions in Reply

Mr Justice contended that leave to appeal is required to dispute the finding of fact as to whether or not the plasterers, and other trades, were denied access to the site. Further, the Home Owners' submissions selectively referred to evidence that favoured them whilst ignoring other evidence that properly formed the basis of the Tribunal's finding.
For example, Mr Justice referred to the email of Mrs Longbottom of 24 December 2016 sent to Mr Boughton stating: "With regards to the stop work email I did respond by email on December 22 at 7.00am, stating I had contacted Fair Trading and was well within my rights to stop work and yourself & other trades were NOT to be on-site. Materials have been removed from site without my permission."
Mr Justice submitted that whilst the email of 22 December 2016 does not appear in evidence, the above email makes it clear that as and from 7.00am on 22 December 2016 the plasterers, Mr Boughton and other trades were not to be on-site. Mr Justice contended that Mrs Longbottom in her evidence did not dispute the effect of the email of 22 December 2016 that all trades and Mr Boughton were not to be on-site on and from 22 December.
Mr Justice submitted that the question as to whether or not, based upon facts fully found by the Tribunal, there is a repudiation of the contract, is a question of law

Consideration

We consider it makes logical sense to commence with considering whether or not we should overturn the finding of fact that the plasterers were denied access to the site on 22 December 2016. In turn, this requires consideration as to whether or not leave to appeal is required so that the principles in Collins v Urban [2014] NSWCATAP 17 at [82]-[84] are applicable.
No authority has been cited to us on this question. We have set out above the relevant provisions dealing with the scope and nature of internal appeals. Of particular relevance is s.80(1) and (2) of the NCAT Act. These provisions are as follows: "(1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceeding in which the decision is made. (2) Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds."
Section 32(4) and (5) of the NCAT Act are as follows: "(4) An "internally appealable decision" is a decision of the Tribunal or a registrar over which the Tribunal has internal appeal jurisdiction. (5) An "internal appeal" is an appeal to the Tribunal against an internally appealable decision."
Section 32(1) of the NCAT Act is as follows: "The Tribunal has "internal appeal jurisdiction" over: (a) any decision made by the Tribunal in proceedings for a general decision or an administrative review decision, and (b) any decision made by a Registrar of a kind that is declared by this Act or the Procedural Rules to be internally appealable for the purposes of this section."
By s.5 of the NCAT Act "decision" includes any of the following: "(a) making, suspending, revoking or refusing to make an order or determination, (b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or provision, (c) issuing, suspending, revoking or refusing to issue a licence, authority or other instrument, (d) imposing a condition or restriction, (e) making a declaration, demand or requirement, (f) retaining, or refusing to deliver, an article, (g) doing or refusing to do any other act or thing."
Further, by s.5(2) of the NCAT Act, a refusal or failure to make a decision may constitute a decision by the decision-maker.
In the case before us, the Home Owners seek to dispute a finding of fact but, relevantly, in respect of the issue currently being considered by the Appeal Panel, do not seek to overturn the orders of the Tribunal. The Home Owners seek to support the relevant orders of the Tribunal on an alternative finding of fact. In other words, the Home Owners seek to support the decision of the Tribunal on the basis of a different finding of fact, but, otherwise, they do not seek to overturn the orders of the Tribunal relevantly in this regard.
In some jurisdictions, the rules specifically cater for a party who wishes to contend that the decision of the court below should be affirmed on grounds other than those relied on by the court, but does not seek to discharge or vary any orders: see for example reg 50.11 of the Uniform Civil Procedure Rules 2005. In such a case, the rules will frequently provide for a requirement that such a party must file a "notice of contention": see for example reg 50.11(2) of the Uniform Civil Procedure Rules 2005.
The filing of internal appeals and replies to such appeals are dealt with by clauses 25 and 26 of the Civil and Administrative Tribunal Rules 2015 (NCAT Rules). These rules do not specifically deal with a requirement to file a "notice of contention". They do, however, require a respondent to an appeal to lodge a reply "setting out the respondent's response to the application or appeal": see r 26(2) of the NCAT Rules.
In our view, this would generally cover what may otherwise be dealt with as a notice of contention. We note that in the form for the reply to appeal there is a question which reads, "Do you support the original orders made by the Tribunal which the Appellant challenges for reasons other than those given by the Tribunal?" In this case, the Home Owners filed an Amended Reply to Appeal which answered this question "Yes". There is no stated requirement to file a separate notice of appeal in such a case.
In our view, the term "decision" as referred to in the NCAT Act, in respect of the Decision under appeal, refers to the orders made and does not refer to individual findings of fact in the reasons for decision issued by the Tribunal. Further, an "internal appeal" against a "decision" as referred to in s.80 of the NCAT Act, does not encompass a party which seeks to support orders made by the Tribunal but challenges the reasoning or facts found in the reasons for decision issued by the Tribunal in support of its orders.
Accordingly, in our view, the requirement for "leave to appeal" as provided for in s.80 of the NCAT Act does not apply to the Home Owners' submission and generally to a party's contention, that the orders of the Tribunal should be upheld on grounds or reasons other than, or different to those, found in the reasons for decision issued by the Tribunal. Accordingly, in our view, the principles in Collins v Urban do not apply to the challenge made by the Home Owners to the finding of fact at 12 of the Decision.
That then leads to our consideration of the question as to whether the Appeal Panel should overturn this finding of fact. In our view, we are not satisfied that the finding of the Tribunal at 12 of the Decision is wrong and should be overturned.
First, the Home Owners referred to paragraph [48] of Mr Boughton's affidavit affirmed 17 October 2017 which states: "Further works were completed by my plasterers on 21 and 22 December 2016." This statement in itself is not inconsistent with the finding of the Tribunal that at some time on 22 December 2016 the plasterers were denied access to the site. In particular, paragraph [48] also states: "There were a few lengths of cornice which were to be used for the one wall which had not been sheeted." This supports the proposition that not all of the plasterers' work had been completed. In particular, the statement that further works were completed is not necessarily conclusive that all of the relevant plastering work was completed in respect of the site.
Next, the Home Owners rely upon the statement made by the Builder in his email on 22 December 2016 which stated: "Plasterer ran out of time yesterday and didn't have enough scaffold for Cornice so he is borrowing ours today. Plastering will be complete today."
Again, the statement that plastering "will be complete today" is not conclusive as to whether or not the work was in fact completed on 22 December 2016 and whether or not the Home Owners denied the plasterers access to the site on 22 December 2016.
Then when one considers the handwritten note from Ms Longbottom of 22 December 2016, while this may confirm that some plastering work had been completed, it demonstrates that the lounge wall did not have its plastering completed on 22 December 2016. The fact that all relevant plastering work had not been completed, including the lounge wall, does not appear to be in dispute. It is confirmed by the last sentence of paragraph [48] of the Builder's affidavit referred to above. The Home Owners appeared to submit, as we understood it, that it was not necessary to complete this work because it was by agreement of the parties not to be performed. We reject this submission as the terms of the Builder's email of 21 December 2016 stated that one of the conditions to permitting suspension of the works was for the plasterers to be allowed to complete their work.
We accept the Builder's submission that the email from Mrs Longbottom of 24 December 2016 evidences that she sent an email on 22 December at 7.00am stating that she "was well within [her] rights to stop work and yourself and other trades were NOT to be on site". In our view, such an email on its own evidences that the Home Owners were denying all trades, including the plasterers, access to the site from 7.00am on 22 December 2016. Even if the plasterers did some work on 22 December 2016, the email referred to is consistent with the plasterers at some point being denied access to the site on 22 December 2016.
This conclusion is supported by the Builder's solicitor's letter of 24 January 2017 which states: "Your clients have denied access to the property since 22 December 2016." The conclusion we have arrived at is also consistent with paragraph [50] of the Builder's affidavit which states: "On 22 December 2016 I was told by one of my plasterers that he had spoken with Natalie and she advised him that I was not permitted on-site."
We also agree with the submission that Ms Longbottom's affidavit does not dispute the effect of her email that she was denying all trades and the Builder access to the site from 7.00am on 22 December 2016.
In further support of the finding of the Tribunal is the email from the Builder referred to in paragraph [39] of Ms Longbottom's affidavit which states: "Progress payment 3 has been completed to a sustainall [sic] finish (excluding the one wall which was not sorted as you stopped the job) all other items have been finished."
This is consistent with the view that the wall in question was otherwise to be completed by the plasterers except for the denial of access by the Home Owners on 22 December 2016. We note that at [14] of the Decision the Tribunal found that progress claim 3 included work which had not been completed in respect of the plastering. There was no challenge to this finding.
In conclusion, we are not satisfied that the finding at 12 of the Decision is wrong and should be overturned.
It follows that we agree with the Builder's submission that there was no consensual suspension of works or variation to the contract to permit a suspension of the works. We accept the Builder's submission that it follows that the Home Owner's denial of access to the site from 22 December 2016 was in contravention of the contract and, in particular, clause 9.1(e) which relevantly states: "It is the intention of the Contractor and agreed by the Owner that: … (e) the Owner should provide the Contractor with clear and free access to the worksite to enable the Contractor to complete the Works and/or to remedy any defects after the Completion Date."
The next issue for determination is whether such wrongful denial of access to the site enlivened a common law right to terminate the contract by the Builder on the ground that the Home Owners had repudiated the contract. As Mr Justice put it: "One can scarcely imagine conduct that more clearly "evinces an intention to no longer be bound by the contract" than to deny the other party the right to perform."
The principles with respect to repudiation are well-established. Gibb CJ in Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625-626 stated: "As Lord Wright pointed out in Heyman v Darwins Ltd repudiation is an ambiguous word and is used in various senses. We are of course concerned only with a case in which it is admitted that there was a valid and binding contract. Such a contract may be repudiated if one party renounces its liability under it - if he evinces an intention no longer to be bound by the contract or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way."
Wilson J in Shevill v Builders Licensing Board at 633 stated: "Repudiation of a contract is a serious matter and is not to be lightly found or inferred. When considering it, one must look at all the circumstances of the case to see whether the conduct 'amounts to a renunciation, to an absolute refusal to perform the contract.'"
In Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17, Mason J at [31] stated: "It is often said that repudiation or fundamental breach - in the sense of breach of a condition or breach of another term or terms which is so serious that it goes to the root of the contract, and thus deprives the other party of substantially the whole benefit of the contract (Federal Commerce & Navigation Co Ltd v Molena (1979) AC 757 at 779) - entitles the innocent party to rescind the contract and sue for damages for loss of the bargain."
In Progressive Mailing House Mason J also stated at [36] the following: "36. The appellant's next submission is that the evidence does not justify the conclusion that the appellant had demonstrated that it would or could no longer perform its obligations under the Memorandum of Lease or that there had occurred a fundamental breach entitling the respondent to rescind and recover damages for loss of bargain. In support of this submission the appellant points out, correctly, that repudiation of contract is a serious matter that is not to be lightly inferred and that neither a breach of a covenant to pay rent nor a breach of a covenant to repair, without more, constitutes a breach of a fundamental term, or amounts to a repudiation of the lease. … 38. … What needs to be established in order to constitute a repudiation is that the party evinces an intention no longer to be bound by the contract or that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way (Shevill, at pp.625-627). Likewise, the primary judge's finding does not amount to a finding that there was a fundamental breach of contract in the sense that the party at fault, though wishing to perform the contract, was guilty of such default in performance that the breach went so much to the root of the contract that it made commercial performance of it impossible."
In our view, whether facts as fully found by the Tribunal, and accepted on appeal by the Builder, amounts to a repudiation of the contract is a question of law. Accordingly, no leave to appeal is required and the principles in Collins v Urban do not apply.
The reasoning of the Tribunal on the question of repudiation was as follows: "17. I do not accept the proposition that the Home Owners repudiated the contract. When they suspended the work they sought time to seek advice. They lodged a complaint with Department of Fair Trading and by letter dated 24 January 2017 sought to invoke the provisions of clause 22 of the contract. These actions are inconsistent with a repudiation of the contract. 18. The Owners did deny the Builder access to the site, but they did so in the context of the dispute about the roof. The Builder responded to the Owners' invoking of clause 22 by terminating the contract. The Builder did not himself invoke clause 22 of the contract before terminating. Those provisions are mandatory. I do not accept that the Builder was entitled to terminate the contract without first attempting to resolve the dispute."
Clause 22 is in the following terms: "22 Disputes 22.1 If the Owner or Contractor believes a dispute has arisen in relation to any matter under the Contract, then that party must promptly give the other party written notice setting out the matter in dispute. 22.2 Both parties shall meet within fourteen (14) days of the giving of such notice to attempt to resolve the dispute. 22.3 In the event that the dispute cannot be resolved then the matter shall be referred to a mutually agreed third party or, failing agreement on a third party, to the Office of Fair Trading for assistance in the resolution of the dispute."
In our view, the holding of the Tribunal that the Builder was not entitled to terminate the contract without first attempting to resolve the dispute, including under clause 22 of the contract, is incorrect. Clause 22 of the contract is immediately preceded by clause 21, which deals with the right to terminate. Clause 21 does not state that it is subject to clause 22, nor does either clause 21 or 22 state that the Builder is not entitled to exercise its rights to terminate under clause 21 if there is a dispute and clause 22 is invoked.
Another way of considering the matter is that if clause 22 is mandatory in the sense of precluding a right to terminate, then clauses 22 and 21 would appear to be in significant conflict with each other. We note that in most cases where there is an attempt to invoke clause 21 there may well be a "dispute" between the parties. This then requires one or both of the parties to activate clause 22.
We note that the dispute resolution process under clause 22 is open-ended as to the time such dispute resolution process may take. The mediation type process envisaged by clause 22.3 may well take some time to be completed. The construction which appears to have favoured the Tribunal that clause 22 is mandatory and the right to terminate does not arise while the parties are in the process of invoking clause 22, would represent a significant curtailment of the right to terminate under clause 21.
In our view, the contract is better construed as requiring the parties to engage in the dispute resolution process where there is a dispute "under the contract" but only for so long as the contract remains on-foot. The right to terminate under clause 21 will operate in accordance with its terms, and if it is validly invoked and the contract terminated under clause 21, then the so-called "mandatory" requirements under clause 22 fall away as there is no longer a contract in operation between the parties.
It was not disputed by the parties that clause 21 did not displace the common law right to terminate for repudiation. The general principle is that where one party terminates the contract in response to the other party's repudiation then both parties are discharged from the further performance of the contract: McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476-477 per Dixon J. In our view, just as the further performance of the contract, such as the Builder's obligation to complete the works, no longer operates after termination, so the obligation to attempt a resolution of the dispute pursuant to clause 22 no longer arises after termination of the contract.
Nevertheless, this does not provide an answer to the question as to whether or not the facts as found give rise to a common law right to terminate for repudiation. We note the principle that this is not to be lightly inferred and is a serious matter. We accept the submissions of the Home Owners that the facts as found do not amount to a repudiation of the contract, in particular for the following reasons.
First, as stated by the Tribunal at 12, the denial of access to the site commenced with a "request" by the Home Owners on 21 December 2016 that work on-site "be suspended to enable them to seek advice". In its terms, this does not evince an intention not to be bound by the contract. Further, the response of the Builder was not to dispute the utility of a suspension of works to allow the parties to consider their position with respect to the roof, but was to suggest three conditions upon which he was willing to allow a suspension of works. His email of 21 December 2016 included the statement that: "Please note that I am prepared to allow a reasonable period of time in which to resolve the dispute. In the circumstances, I consider that 14 days is a reasonable period."
The high point of the case concerning repudiation is the effect of the email of 22 December 2016 by Mrs Longbottom whereby she indicated that work was to stop and trades and the Builder were not to be on-site. Even in this email, the proposition was that Mrs Longbottom had contacted Fair Trading and stated that she was "well within my rights".
In our view, the Home Owners' refusal to allow trades on-site was tied up with a desire to pause the work while the Home Owners obtained advice including from the Department of Fair Trading. It does not suggest a permanent denial of access to the site.
We agree with the submission of the Home Owners that a better construction of the facts is that the Home Owners had not entirely renounced their liabilities under the contract, nor had they evinced an intention to no longer be bound by the contract as their conduct did not give an indication of an absolute refusal to perform the contract. In particular, the Home Owners were seeking a suspension of works, not a termination of the contract, to allow them to take advice.
Further, the conduct of the Builder thereafter was not consistent with an understanding that the Home Owners were evincing an intention absolutely to no longer be bound by the contract. For example, after 22 December 2016, the Builder forwarded an email to Mrs Longbottom which stated: "That's fine but you need to read the contract, progress payment 3 has been completed to a substantial [sic] finish (excluding the one wall which was not sorted as you stopped the job) all other items have been finished. Again we reserve the right for recovery action."
There was no statement complaining about the denial of access to the site. On 23 December 2016 the Builder sought payment of the invoices for variations 1 and 2 and submitted an invoice for progress payment 3. On 24 December 2016, the Home Owners sent an email disputing the claims for payment and advising that a complaint had been lodged with the Department of Fair Trading. Again, there was no mention of denial of access to the site as being wrongful by either of the parties.
Then on 6 January 2017 the Builder's solicitors invoked clause 21 of the contract by advising that if payment of $51,336.25 was not paid by 20 January 2017, the Builder would terminate the contract. It is of significance that the Builder did not at that stage, though he could have, advise the Home Owners that unless access to the site was granted by the Home Owners by a certain date, such as 20 January 2017, the Builder would terminate the contract. On 20 January 2017 the Home Owners' solicitors wrote to the Builder's solicitors disputing that the moneys were owing and that the Builder was entitled to terminate the contract on this ground. On 24 January 2017 the Home Owners' solicitors gave the Builder's solicitors a Notice of Dispute under clause 22 of the contract.
It is a fair inference from the above that the Builder at this point in time was not particularly concerned about being able to access the site to continue work, but was more concerned about obtaining payment. The evidence does not suggest that the Builder viewed the suspension of works imposed by the Home Owners as evincing an absolute intention not to perform the contract or as a breach going to the root of the contract. It was then on 25 January 2017 that the Builder purported to terminate the contract, including for the previous denial of access to the site.
In our view, these facts do not sufficiently make out a repudiation of the contract entitling the Builder to accept such repudiation and terminate the contract.
We also reject the submission that clause 9.1(c) of the contract should be construed as a condition or essential term. In Shevill v Builders Licensing Board, Gibbs CJ at 626 dealt with the situation of the right to terminate a contract for breach of a "fundamental or essential term" as follows: "The third situation in which a right to a rescission arises is where there has been a breach of a fundamental or essential term. In Suisse Atlantique Société d'Armement Maritim SA v NV Rotterdamsche Kolen Centrale, Lord Upjohn said: 'A fundamental term of contract is a stipulation which the parties have agreed either expressly or by necessary implication or which the general law regards as a condition which goes to the root of the contract so that any breach of that term may at once and without further reference to the facts and circumstances be regarded by the innocent party as a fundamental breach.'"
Clauses 21.3 and 21.4 of the contract imply that matters such as failing to make payments under the contract when due and denying access to the site will be capable of being rectified and where that is the belief of the Builder this requires a notice of the default pursuant to clause 21.4 before termination can occur pursuant to clause 21.3.
In our view, the failure to provide access to the site cannot be regarded by necessary implication as being a condition of the contract which goes to the root of the contract so that any breach of this term may at once and without further reference to the facts and circumstances be regarded by the Builder as a fundamental breach.
In conclusion, we reject grounds 1-3 of the Notice of Appeal.

Ground 4: Termination pursuant to clause 21 of the contract

Ground 4 of the Amended Notice of Appeal is as follows: "The learned Senior Member erred in finding that the Builder had wrongfully terminated the contract as a result of failure to pay invoices and/or refusal to grant access to the site."
Clause 21.3 relevantly provides as follows: "21.3 The Contractor may cancel this Contract (subject to clause 21.4) if the Owner: (a) fails to make a payment due under the Contract, or … (c) denies the Contractor access to the worksite to complete or undertake any works. … 21.4 Where the Contractor believes the defaults in clause 21.3 can be rectified then the Contractor shall advise the Owner in writing that they have ten (10) working days from the date of the letter in which to do so. If the Owner fails to rectify any default within that period then the Contractor shall advise the Owner in writing that they are cancelling the Contract."
The Tribunal concluded that the Builder was not entitled to terminate the Contract pursuant to clause 21.3. Its reasoning was as follows: "Was the Builder entitled to terminate the contract? 13 The Builder purported to terminate the contract pursuant to clause 21.3 on the basis that the Home Owners were in default by failing to make payment due under the contract and by denying access to the worksite to complete or undertake the work. In the alternative the Builder stated that the failure to make payment and denial of access amounted to a repudiation of the contract by the Home Owners entitling the Builder to accept the repudiation and terminate the contract. Were the Home Owners in breach of the contract by refusing to pay the amounts claimed by the Builder? 14 It is true that the Home Owners had failed to make payment of the sum claimed by the Builder. However I do not accept that Progress Claim 3 was due and owing. The Owners obligation is to make progress payments for each completed stage of the works (emphasis added) (see clause 4.3). In respect of this issue, this contract can be distinguished from those contracts which require substantial completion for a progress claim to be made (see for example Simmonds v Rust; Rust v Simmonds [2018] NSWCATCD 75; Lifestyle Designer Homes Pty Ltd v Choy [2012] NSWCTTT 217). The claim made by the Builder included work which had not been completed, both in respect of the plastering, and also in respect of the provision of the services (plumbing drainage gas and electricity had not been extended to the kitchen). 15 I do not accept the submission made by the Builder that the percentage found next to the description of the work in the Schedule identified a percentage of work which needed to be completed. Rather I find that the percentage referred to the percentage of the price to be paid because there is no evidence that for example 5% of the work remained at the time of practical completion, or that any of the percentages related to the value of work carried out. 16 Variations become payable at the time of the next progress claim (clause 3.4). The result is that if the work had not been done such as to entitle the Builder to make the next progress claim, the payment for the variations was not due and owing and the Home Owners were not in breach in refusing to pay."

Builder's Submissions

Mr Justice relied upon the factual findings of the Tribunal at 12, (8) and (13) as follows: "(4) On 18 October 2016 the Builder sent an email to the Home Owners in respect of 3 issues claimed as variations. On 19 October 2016 the Home Owners emailed acceptance of those variations. On 4 December 2016 the Builder raised Variation 1 in respect of them in an amount of $4330.00. … (8) On 9 and 10 December 2016 the parties exchanged text messages in respect of a builder's blanket and cable. On 9 December 2016 the Builder raised variation 2 in respect of these items, as well as removal of double ceilings and cable for A/C, in an amount of $3820.00. … (13) On 23 December 2016 the Builder sent an email to the Home Owners seeking payment of the invoices for variations 1 and 2 and submitting an invoice for progress claim 3.
Mr Justice submitted that the Builder by its Notice of 25 January 2017 validly terminated the contract pursuant to clause 21.3 of the Contract on two bases: 1. the Home Owners' failure to pay invoices due and payable under the contract; and 2. the Home Owners' refusal to grant the Builder access to the site.
In respect of the denial of access to the worksite, Mr Justice referred to the finding of the Tribunal, which we have upheld, that the Home Owners denied the plasterers access to the site. Further, as explained above, the Home Owners by email on 22 December 2016 were denying all trades and the Builder access to the site from 7.00am on that day.
Mr Justice accepted that the Builder had not advised the Home Owners in writing pursuant to clause 21.4 that they had 10 days from the date of the letter to rectify the default in respect of denial of access. We note that by letter dated 6 January 2017 the Builder had invoked clause 21.4 in respect of alleged non-payment of invoices and the Home Owners were given at least 10 days to rectify that default.
Mr Justice submitted that clause 21.4 only operated where the Builder "believes the defaults in clause 21.3 can be rectified". Mr Justice contended that the Builder did not have such belief, and hence no notice of the default requiring rectification in 10 days under clause 21.4 was required.
Mr Justice accepted that the Builder did not give evidence of a lack of belief that the defaults could be rectified, but equally there was no cross-examination on the issue. Accordingly, Mr Justice submitted that it had to be established by the Home Owners that the Builder held the belief that the default in respect of denial of access to the site could be rectified, and they had failed to do so. Accordingly, clause 21.4 did not apply, and the termination on the ground of denial of access to the site was valid.
Turning then to the other ground - failure to pay invoices due and payable under the contract - Mr Justice did not dispute the finding at [14] of the Decision that progress claim 3 was not due and owing. However, reliance was placed upon clause 3.4 of the contract which states: "The costs of any variation shall be taken into account at the time of the next progress payment or otherwise agreed in writing by the parties."
Mr Justice submitted that the amount payable for variation 1 was agreed to: see [69] of the Decision. Similarly, the Tribunal was satisfied that variation 2 was payable in the sum of $3,820: see [70] of the Decision. Further, Mr Justice submitted that invoices in respect of variations 1 and 2 were delivered to the Home Owners on 4 and 9 December 2016 respectively. Mr Justice submitted that it was accepted and not in dispute that the work comprised in variations 1 and 2 was performed by the Builder before the issue of the invoices in question. Further, progress claim 2 was issued by the Builder to the Home Owners on 9 December 2016 and paid by the Home Owners on 16 December 2016 but the amounts for variations 1 and 2 were not paid.
Mr Justice submitted that certainly in the case of variation 1 the position was clear. The Tribunal found that the amount was owing to the Builder ([69] of the Decision). The invoice in respect of this work was delivered on 4 December 2016 and the next progress claim was issued by the Builder on 9 December 2016 which was paid by the Home Owners on 16 December 2016. Accordingly, Mr Justice submitted, it was clear that on the date of the default notice of 6 January 2017, the amount owing for variation 1 was due and owing. In the absence of payment of that amount within 10 days thereafter, the Builder was entitled to terminate the contract, which it did by its letter dated 25 January 2017. Accordingly, the finding of the Tribunal at [16] that "…the payment for variations was not due and owing and the Home Owners were not breaching refusing to pay" was wrong.
Similarly, Mr Justice submitted that variation 2 being issued on the same day as progress claim 2 must be due and payable arising from progress payment 2 being due and payable. Mr Justice submitted that this construction is supported by clause 4.3 of the contract requiring payment for variations with progress payments when they are due. In essence, Mr Justice submitted that whilst the Tribunal may have found that progress claim 3 was invalid, variations 1 and 2 should have been considered as being due and payable against progress claim 2. The failure to do so resulted in error on the part of the Tribunal.

Home Owners' Submissions

Mr Weightman accepted that the invoice for variation 1 was issued on 4 December 2016 and that the Tribunal so found at 12 of the Decision. Further, Mr Weightman accepted that the invoice for variation 2 was issued on 9 December 2016 and that the Tribunal also found this: 12 of the Decision.
Mr Weightman, however, submitted that whilst the invoice for variation 2 was issued on 9 December, the actual agreement that this variation was properly made and payment should be made for it was not reached until after 9 December, also based upon the Tribunal's finding at 12. Mr Weightman conceded that whether or not variation 2 was approved on 9 December 2016 is not relevant as the Builder still had his argument that he was entitled to terminate on the basis of non-payment of the invoice for variation 1.
In that regard, Mr Weightman contended that neither the invoices for variations 1 nor 2 were payable by reason of the letter from the Builder's solicitor of 6 January 2017, which stated: "We are instructed that our client issued progress payment claim 3 in the sum of $43,106.25 dated 23 December 2016, variation 1 in the sum of $4,330.00 dated 4 December 2016 and variation 2 in the sum of $3,820.00 dated 9 December 2016 by email to you at natalie.parkinson@hotmail.com on 23 December 2016. The progress payment claim therefore becomes due and payable by no later than 3 January 2017. You have refused to make payment and are now in default of payment."
Mr Weightman submitted that the letter indicated that the invoices for progress claim 3, variation 1 and variation 2 all issued on 23 December 2016 and this gave rise to a "factual estoppel". Mr Weightman referred to Cheshire & Fifoot Law of Contract, 11th Australian Edition, at [2.29] which relevantly provides: "Estoppel may operate during the course of the contractual relationship to prevent departure from a negative promise bearing a term of the contract … or it may bind the parties to a common assumption (traditionally called estoppel by convention). This assumption may be mistaken but is nevertheless binding if to depart from it would be unconscionable."
Mr Weightman submitted that it would be unconscionable to allow the Builder to depart from the statement of fact as to the date of service of the variation invoices. Accordingly, Mr Weightman submitted, the Builder must be held to the representation that the invoices for variations 1 and 2 were issued on 23 December 2016, or put another way, that the entitlement to payment for such variations was contingent on the invoice for progress claim 3, not progress claim 2. In other words, the Builder is estopped from raising the argument that the due date for payment of the invoices for variations 1 and 2 was contingent upon progress claim 2 rather than progress claim 3.
Secondly, Mr Weightman supported the conclusion of the Tribunal below that clause 22 of the contract was mandatory and as it had been invoked prior to any attempt by the Builder to terminate, this prevented the right of the Builder to terminate the contract.
Finally, Mr Weightman contended that the finding of the Tribunal at [18] to the effect that the Builder was not entitled to terminate the contract without first attempting to resolve the dispute, was a finding of fact and one not challenged by the Builder.

Consideration

We deal firstly with the question of the right of the Builder to terminate the contract for denial of access to the site pursuant to clause 21.3 of the contract. We note that the question of the belief or absence of belief by the Builder as to whether or not the "suspension of works" could be rectified was not only the subject of no evidence below, it was also not the subject of any submissions by any of the parties below, nor was it the subject of any finding by the Tribunal.
The difficulty we have with the submission of Mr Justice is the fact that denial of access to the site is a matter which obviously can be rectified. It follows that the rational and natural state of mind of the Builder, or any person in the shoes of the Builder, would be to hold the belief that the breach could be rectified. During the course of the hearing Mr Justice was asked on what rational basis could it be said that the Builder did not believe that the breach could be rectified. Mr Justice was unable to answer this enquiry.
In our view, in order to rebut the obvious inference that the Builder had the belief that the denial of access to the site could be rectified, the Builder would have to give evidence of this and explain how he held such a belief. In the absence of such evidence, which could have been tested by cross-examination, in our opinion there is no basis to conclude that the Builder did not in fact have such a belief. Accordingly, we reject this submission that the Builder was entitled to terminate the contract pursuant to clause 21.3 on the ground of the Home Owners' denial of access to the site without first issuing the notice of default provided for in clause 21.4 of the contract.
Next is the issue of whether or not the Builder was entitled to terminate the contract on the basis of non-payment of the invoices for variation 1 in the sum of $4,330 and variation 2 in the sum of $3,820 and the contention that the Builder should be estopped from asserting that those invoices were served prior to 23 December 2016. We are unable to accept Mr Weightman's submission in this regard.
First, we note that the issue of an estoppel was not raised by the Home Owners before the Tribunal at first instance. In our view, estoppel is a mixed issue of fact and law and one upon which the Builder would have been entitled to lead evidence and cross-examine the Home Owners as to their state of mind, including what they relied upon arising from the letter of 6 January 2017. Accordingly, pursuant to the principles in Coulton v Holcombe (1986) 162 CLR 1, the Home Owners are precluded from raising this issue for the first time on appeal.
Second, we cannot agree with the submission of Mr Weightman that the letter of 6 January 2017 makes a clear representation that the invoices for variations 1 and 2 were issued only on or served on the Home Owners on 23 December 2016. The representations in the letter are consistent with those invoices being emailed to the Home Owners on 4 and 9 December 2016 as well as by email on 23 December 2016. This necessarily destroys the foundation of the alleged claim in estoppel. Further, Mr Weightman does not point to any evidence being led by the Home Owners that they were misled in any way by the letter of 6 January 2017 or otherwise to support the contention that it would be unconscionable for the Builder to rely upon its contractual rights of payment.
Lastly is the contention of Mr Weightman that clause 22 having been invoked by the Home Owners precluded the Builder from being able to terminate the contract pursuant to clause 21.3. We have already dealt with this contention previously and have concluded that service of the dispute notice under clause 22 does not prevent the Builder, in our view, from being able to terminate the contract under clause 21.3.
Accordingly, we uphold ground 3 and find that the Tribunal erred in not concluding that the Builder had by its letters of 6 January 2017, and in particular its letter of 24 January 2017, validly terminated the contract pursuant to clause 21.3 of the contract for non-payment of the invoices for variations 1 and 2.

Ground 5: Interest

The Builder contended that the failure to allow the Builder any amounts for interest was erroneous. In our view, this claim is best dealt with after we have dealt with the Home Owners' Cross-Appeal and when the Appeal Panel considers the nature of the orders that should be made on appeal.

Home Owners' Cross-Appeal

The Home Owners filed a Notice of Appeal, in the nature of a cross-appeal, the grounds of which were as follows: "1. The learned Senior Member erred in finding that the builder did not engage in misleading and deceptive conduct in respect of the roof when the Senior Member found that the roof could in fact have been built as per the plans. 2. The learned Senior Member erred in finding that the builder would have been entitled to a variation in respect of any additional work to construct the roof in accordance with the plans. 3. The learned Senior Member erred in failing to find or failing to consider that the homeowners' agreement to the varied roof design was only provided on account of the builder's statements that the roof could not be constructed in accordance with the plans. 4. The learned Senior Member erred in failing to find or failing to consider that the builder should have disclosed that the roof could have been built in accordance with the plans, irrespective of the homeowners' budget constraints. 5. The learned Senior Member erred in failing to find or failing to consider that the builder had a responsibility to clarify the plans and construct the roof in accordance with those plans. 6. The learned Senior Member erred in failing to allow compensation in favour of the homeowners in the amount of $84,074.45 in respect of the builder's misleading and deceptive conduct regarding the roof."

The Tribunal's Reasoning

The claim by the Home Owners before the Tribunal was that the Builder engaged in misleading and deceptive conduct, either by quoting on the plans, and representing that he could build the roof in accordance with those plans when he couldn't, or alternatively in telling them that the roof could not be built in accordance with the plans when it could: [26] of the Decision.
The Tribunal commenced consideration of this issue by looking at what the parties had agreed upon. It found that the Contract incorporated what was referred to by the parties as "the Burston plans", being plans prepared by Mr Burston for the roof, and the quote: [27] of the Decision. The quote set out the relevant features of the roof to be built and referred to the plans. Relevantly, the trusses for the extension to the roof were to be designed by the truss manufacturer: [28] of the Decision.
The Tribunal found there was no dispute that the Home Owners required the existing pressed metal ceilings to remain as well as the existing roof structure: [29] of the Decision.
The Tribunal did not accept the submission of the Home Owners that in quoting for the extension to the roof, the Builder made a representation that he could build the roof in accordance with the plans: [30] of the Decision. The Tribunal did so on the basis that the Builder: "…was careful to qualify the quote including statements to the following effect: "will need confirmation from engineering drawings" (in respect of the rafters) and: "Please note if the existing roof structure needs any work to accommodate addition a variation may be asked.""
At the hearing the Builder gave evidence that when he inspected the roof he discovered that the plans had been drawn incorrectly with respect to the ridge at the apex. The Builder stated that he could not build the roof as drawn without taking off the whole roof and dropping the ceilings, which would involve additional cost of approximately $30,000: [31] of the Decision. The Tribunal did not accept that the plans had been drawn incorrectly on the basis that there was no expert evidence to support such a finding: [31] of the Decision. The Tribunal, however, accepted the Builder's evidence that he believed, when he inspected the roof, that he could not build it in accordance with the plans without removing the whole roof, destroying the pressed metal ceilings and incurring costs over the Home Owners' budget: [32] of the Decision.
The Builder then sought and obtained the Home Owners' consent to a redesign and implemented that course: [32] of the Decision. He explained to the Home Owners that the effect of the variation would be to drop the pitch of the roof over the extension to 9.55° so that the overall desired effect for the roof would be maintained but with a different look to that set out in the Burston plans: [32] of the Decision.
On 22 December 2016 the Builder obtained advice from Mr Rose. Mr Rose stated that the plans did not clearly articulate how the new roof was to be integrated with the existing roof: [33] of the Decision. The Tribunal accepted this evidence that the Burston plans did not clearly articulate how the roof was to be integrated and that his evidence was supported by the plans themselves: [34] of the Decision.
The Tribunal found that the evidence of Mr Burston supported the Builder's statement that building the roof as depicted in the Burston plans required substantial rebuilding of the roof structure: [36] of the Decision. The Tribunal then considered the expert evidence in respect of the roof dispute. Mr Zakos, one of the experts, gave evidence to the effect that you could not build the roof in accordance with the plans without having to remove the existing ceiling joists, which would be contrary to the Home Owners' requirement: [37] of the Decision. Mr Shepherd, the other expert, gave evidence to the effect that the roof could be built without demolishing the existing roof and the pressed metal ceilings: [38] of the Decision. The conclusion of the Tribunal was as follows: "39 I accept Mr Shepherd's evidence that the roof could have been built at the pitch shown on the plans. Mr Zakos' evidence was predicated on an assumption that trusses would be placed over the existing ceiling joists. I accept that the roof could have been built without demolishing the existing roof structure and the pressed metal ceilings. However I am satisfied that the builder would have been entitled to a variation, as provided for in the quote, to accommodate any additional work required to meld the new roof into the existing. Because he was aware of the Home Owners' budget constraints he sought out a different solution. The Home Owners agreed to that solution and he constructed it. I am not satisfied that this amounted to misleading or deceptive conduct. 40 I find that ultimately the issues in respect of the roof arise from the fact that the Burston plans did not provide any detail as to how the new roof was to be melded into the existing roof. The plans were provided to the Builder by the Home Owners. Any shortcomings in the plans cannot be said to be the responsibility of the Builder."
The ultimate conclusion of the Tribunal on the question of whether or not the Builder had engaged in misleading and deceptive conduct in respect of the roof was as follows: "Did the builder engage in misleading and deceptive conduct in respect of the roof? 41 It follows that I am not satisfied that the Builder engaged in misleading and deceptive conduct in respect of the roof. 42 The home owners also submitted that the roof as constructed was not fit for purpose because it would not accommodate ducted air conditioning nor access to the ceiling void. I am not satisfied that ducted air conditioning was ever proposed. The first three quotes, before the air conditioning was removed, provided for a split system. There was never a proposal to install ducted air conditioning. 43 I accept that physical access to the ceiling is restricted because of the pitch of the roof but I am satisfied that a manhole would allow visual access. There was no express requirement for crawl access to the roof void."

The Home Owners' Submissions

Mr Weightman concentrated on the two findings of the Tribunal at [31] and [39] of the Decision which were to the effect that after inspecting the roof, the Builder represented that he could not build the roof as drawn without taking off the whole roof, which would have necessitated dropping the ceilings and incurring additional cost; and the finding that the Tribunal accepted that the roof in fact could have been built without demolishing the existing roof structure and the pressed metal ceilings. Mr Weightman submitted that in accordance with these factual findings, it was misleading and deceptive for the Builder to indicate that the plans had been drawn incorrectly and that the roof could not be built without demolishing the existing structure and the pressed metal ceilings.
According to Mr Weightman, the error of the Tribunal was revealed in the reasoning for finding there was no misleading and deceptive conduct as set out at [32] of the Decision. There the Tribunal accepted the Builder's evidence that he believed the roof could not be built in accordance with the plans without removing the whole roof, destroying the pressed metal ceilings and incurring costs over the Home Owners' budget.
Mr Weightman submitted that it was irrelevant that the Builder may have acted honestly and did not intend to mislead or deceive, citing in support Hornsby Building Information Centre v Sydney Building Information Centre (1978) 140 CLR 216; Parkdale Custom Built Furniture v Buku (1982) 149 CLR 191; Yorke v Lucas (1985) 158 CLR 661.
Mr Weightman then submitted that the finding of the Tribunal that the Builder would have been entitled to a variation to accommodate any additional work required to meld the new roof into the existing roof ([39] of the Decision) was in error. According to Mr Weightman, the contractual requirements were that the roof was to be built as per the Burston plans so that the Builder could not be entitled to a variation.
Mr Weightman also took issue with the Tribunal's conclusion at [39] of the Decision. This was to the effect that the parties coming to an agreed solution to vary the work done to the roof meant that the Tribunal was not satisfied that "this amounted to misleading or deceptive conduct". Mr Weightman contended that the Home Owners' agreement to the variation came about because of their reliance on the Builder's misleading and deceptive conduct when he represented that the plans had been drawn incorrectly and that the roof could not be built in accordance with the plans.

The Builder's Submissions

Mr Justice submitted that the Tribunal looked at the representation of the Builder in the circumstances of the case as a whole and correctly, or without error, held that there was no misleading or deceptive conduct: citing in support All Options Pty Ltd v Flight Deck Geelong Pty Ltd [2019] FCA 588 at [95]; Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd [1987] FCA 332; 178 ALR 193 at 241, citing Parkdale Custom Built Furniture Pty Ltd v Buku Pty Ltd (1982) 149 CLR 191 at 199. The circumstances as a whole included the fact that "the plans did not clearly articulate how the [new] roof is to be integrated" into the existing roof ([34] of the Decision) and that the quote contained the proviso as follows: "Please note if existing roof structure needs any work to accommodate addition a variation may be asked."
Mr Justice submitted that Mr Shepherd's evidence, which the Tribunal accepted, indicated that additional work to meld the roof into the plans would be required. That would prima facie entitle the Builder to a variation. Further, Mr Burston knew that the design of the trusses would be left to others.
Mr Justice contends that in any event, there was no loss suffered and no evidence of any loss suffered by the Home Owners. Mr Justice referred to the Home Owners' Points of Claim where damages were stated to be in accordance with s.236 of the Australian Consumer Law as including those damages particularised at paragraph [11]. Paragraph [11] in turn set out the damages "on account of the incomplete and defective works the Home Owners have and continue to suffer". In other words, Mr Justice submitted that the Home Owners' claim for damages in this regard was not a separate cause of action but an alternative cause of action for the same loss being for incomplete and defective works.
Further, Mr Justice submitted that the expert evidence led from Mr Shepherd by the Home Owners did not put forward any other claim or reasoning for damages beyond the claim for incomplete and defective work. Mr Justice referred to the Home Owners' submissions at first instance to the effect that their loss and damage is that they have a roof which has been constructed which is not in accordance with their plans and is "unsightly" with a pitch that "does not match". Mr Justice submitted that the problem was that there was no evidence of what this loss was worth.

Consideration

The first issue is the challenge to the reasoning at [32] of the Decision to the following effect: "However I accept the Builder's evidence that he believed when he inspected the roof that he could not build it in accordance with the plans without removing the whole roof, destroying the pressed metal ceilings and incurring costs over the Home Owners' budget. When he advised the Home Owners of that fact, it was a fact which he believed to be true. He then sought and obtained the Home Owners' consent to a redesign and implemented that course."
The Home Owners contend that it was wrong of the Tribunal to focus merely upon the belief of the Builder. Instead, the Tribunal ought to have found that there was misleading and deceptive conduct because the representation of the Builder at the time was factually incorrect. Paragraph [32] of the Decision needs to be seen in the context of paragraphs [39] and [40] as follows: "39 I accept Mr Shepherd's evidence that the roof could have been built at the pitch shown on the plans. Mr Zakos' evidence was predicated on an assumption that trusses would be placed over the existing ceiling joists. I accept that the roof could have been built without demolishing the existing roof structure and the pressed metal ceilings. However I am satisfied that the builder would have been entitled to a variation, as provided for in the quote, to accommodate any additional work required to meld the new roof into the existing. Because he was aware of the Home Owners' budget constraints he sought out a different solution. The Home Owners agreed to that solution and he constructed it. I am not satisfied that this amounted to misleading or deceptive conduct. 40 I find that ultimately the issues in respect of the roof arise from the fact that the Burston plans did not provide any detail as to how the new roof was to be melded into the existing roof. The plans were provided to the Builder by the Home Owners. Any shortcomings in the plans cannot be said to be the responsibility of the Builder."
We agree with Mr Justice's submission that whether or not there was misleading or deceptive conduct depends on all of the circumstances of the case, and of relevance here is the lack of details in the Burston plans as to how the new roof was to be melded into the existing roof, and that to actually build the roof as intended by the Home Owners would need additional work to meld the new roof into the existing.
Further, a representor's statement may, properly construed in all of the circumstances, merely constitute a representation as to the representor's belief, not a representation of fact. The distinction has been made clear in a recent Court of Appeal decision in Ireland v WG Riverview Pty Ltd [2019] NSWCA 3007 (Ireland's case). In that case, the representor was an auctioneer and there was an incorrect identification of the bull's sire in the auction catalogue. The Court concluded that consideration of the whole of the circumstances, including the character of the transaction and the contents of the auction catalogue, led inevitably to the conclusion that the representor did not represent that, as a matter of certain fact, the sire of the bull in question was as described in the catalogue: per Macfarlan JA at [74] with Bell ACJ and Barrett AJA agreeing at [1] and [91].
As stated by Bell ACJ, "some representations which present on one level as representations of fact may, properly characterised, be no more than representations of honestly held belief": at [2]. Bell ACJ cited the analysis in Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88, in which the Full Court of the Federal Court said: "An expression of opinion which is identifiable as such conveys no more than that the opinion expressed is held and perhaps that there is a basis for the opinion. At least if those conditions are met, an expression of opinion, however erroneous, represents nothing." (at [24])
Bell ACJ stated: "There is no relevant difference in principle … between the expression of opinion and opinion in a statement of belief": [29]. According to Bell ACJ, the case law on misleading or deceptive conduct requires that the characterisation of the statement as either a statement of belief or opinion, or a statement of fact, is to be viewed from the perspective of the "ordinary or reasonable" audience to whom the statement is directed: at [30]. It follows that there will be cases where a statement made by a person honestly believing it to be true will give rise to liability, notwithstanding the person's honest belief in its truth because, to the target audience, that statement was entered as one of fact, and not of opinion or belief: at [33].
On the other hand, where it is established that a statement is or must have been understood by the target audience as one of opinion or belief, even though presented at one level as one of fact, liability would generally depend upon an assessment as to whether or not the belief or the opinion was honestly held and "perhaps" whether or not the maker had a reasonable basis for the belief or opinion. Other than statements as to future matters (where a different statutory presumption is engaged), it will then be for the plaintiff to establish the lack of reasonable basis for the belief before misleading or deceptive conduct is to be established: Bell ACJ at [34].
According to Bell ACJ, the "Global Sportsman analysis" may apply equally to statements that present as ones of opinion and to statements that "present as matters of objective fact but which, upon proper analysis, viewed from the perspective of their target audience, are in fact statements of nothing more than the maker's belief": at [35].
In our opinion, the Tribunal's findings were to the effect that the representation of the Builder, whilst perhaps presenting on one level as a representation of fact, properly characterised, was no more than a representation of honestly held belief, and hence was not misleading and deceptive. In our view, this does not represent an erroneous approach in law.
Mr Weightman accepted that the finding that the Builder's statement that he could not build the roof extension in accordance with the plans was not misleading or deceptive was a finding of fact and leave to appeal is required. For the reasons which follow, we are not satisfied there was any erroneous approach to the fact-finding process conducted by the Tribunal or that it was clearly mistaken.
First, the Tribunal found that the Builder was careful to qualify the quote and, in particular, he included a qualification about the rafters in the conventionally pitched part of the roof: see [30] of the Decision. Second, the Tribunal found that ultimately, the issues in respect of the roof arise from the fact that the Burston plans did not provide any detail as to how the new roof was to be melded into the existing roof, and that any shortcomings in the plans cannot be said to be the responsibility of the Builder. Third, Mr Burston's evidence, the Tribunal found, supported the Builder's statement that to build the roof depicted in the plans required substantial rebuilding of the roof structure: see [36] of the Decision.
In other words, the parties understood that at the time of execution of the contract the Burston plans did not provide sufficient details as to how the intended roof extension was to be built and that further investigation into this matter would be required. This sets the proper context for interpreting what is conveyed by the Builder's representation after such investigation was undertaken.
Further, the statement by the Builder that he could not build the intended roof extension in accordance with the plans is not necessarily falsified by the conclusion by an expert in evidence to the Tribunal that the roof "could have been built at the pitch shown on the plans": [39] of the Decision. We note that the Builder's expert gave evidence that in his opinion the intended roof extension could not be built in accordance with the plans and intention of the Home Owners. This supports the proposition that there may be at best little conflict between the statement of the Builder that he could not build the roof in accordance with the plans and the statement of another expert builder that in fact it could be done but at considerable additional cost.
In our view it has not been demonstrated in accordance with the principles in Collins v Urban that there was any erroneous approach in the Tribunal, correctly understood, concluding that in all of the circumstances the representation amounted to no more than a statement of opinion by the Builder at the time that he could not build the extension to the roof as intended in accordance with the plans.
We note there was no allegation that in the event that the representation was taken to be merely a statement of opinion, such opinion was not reasonably held by the Builder at the time.
Further and in any event, the Tribunal, in our view, concluded that the Home Owners had not suffered any loss from the alleged misrepresentation. In our opinion, the Tribunal was correct to conclude that the Builder would have been entitled to a variation had he proceeded to build the roof extension in accordance with the plans and quote. The quote included the statement "Please note if the existing roof structure needs any work to accommodate addition a variation may be asked" (emphasis added): [30] of the Decision.
It is clear that the Tribunal found that the existing roof structure needed work to accommodate the addition and, hence, the variation was able to be claimed: see [36] and [39] of the Decision. In our opinion, the findings of the Tribunal, in particular at [39], amounted to a finding that had the Builder told the Home Owners the roof could have been built at the pitch shown on the plans without demolishing the existing roof structure and the pressed metal ceilings, but at significant additional expense as a variation, the Home Owners would have negotiated for a different solution along the lines of that finally agreed to as constructed by the Builder.
In other words, the Tribunal was satisfied that had the Builder correctly stated that it was possible to construct the roof as intended, but at considerable additional cost, the same result would have eventuated. Accordingly, no loss arises in any event.
In conclusion, we dismiss the Cross-Appeal and decline to grant leave to appeal in respect of disputed findings of fact sought to be overturned by the Home Owners.

Submissions of the Builder

Mr Justice submitted that on the basis that the Builder was entitled to terminate the contract, the following adjustments to the Decision and orders need to be made: 1. the allowance made for $84,074.45 for incomplete work at [77] of the Decision cannot stand; and 2. the Builder should be entitled to $3,727.45 for loss of profits: see [73] of the Decision; 3. the Home Owners are entitled to $59,949.01 in accordance with [79] of the Decision; 4. the Builder is entitled to variation 1, in the sum of $4,330 and variation 2, in the sum of $3,820 as found to be owing by the Tribunal: see [82] of the Decision.

Submissions of the Home Owners

The Home Owners referred to clause 21.5 of the contract which states that the Builder is entitled to a "reasonable price for the Works carried out under the contract to the date the contract is ended" where there has been a lawful termination by the Builder of the contract. Mr Weightman submitted that in circumstances where it is conceded by the Builder that there was an amount of $84,074.45 required to complete the contract, yet only $69,973.40 remained to be paid - a difference of $14,100.95 - it is not reasonable for the Builder to avoid the fact that he had overcharged for the work undertaken. Mr Weightman submitted that there should remain an amount of $14,100.95 as owing to the Home Owners as an overpayment for the works undertaken by the Builder.
Mr Weightman submitted that the Builder's claim for lost profit of $3,727.45 was without any evidentiary support and remains unexplained.

Consideration

The essential findings of the Tribunal, which were not disputed by either of the parties on appeal, were to the following effect: 1. $89,350 represents the cost to the Home Owners to complete the incomplete work under the contract: [78] of the Decision; 2. the Home Owner was entitled to $59,869.01 for defective work plus urgent electrical work: [79]-[80] of the Decision; the amount referred to in the Decision is $57,917.80 but this appears to arise as a result of an arithmetic error; 3. the total contract price after variations was $190,895 and after deduction for the amount paid of $120,921.60, left a balance to be paid under the total contract price of $69,973.50: see [82] of the Decision; and 4. accordingly, the Builder was ordered to pay the Home Owners $79,245.51: [83] of the Decision.
Mr Weightman submitted that even if the Builder was correct in his argument that he properly terminated the contract, the Home Owners are entitled to $73,969.96, comprising $59,069.01 defective work, plus $800 urgent electrical work, plus $14,100.95 being the net result of the Builder obtaining "a reasonable price" pursuant to clause 21.5, resulting in a net difference in the amount payable to the Home Owners of $5,275.55.
First, we agree with the Home Owners' submission that there was no evidence to support the claim for lost profits. The claim is derived from assuming a 20% profit margin on the remaining contract price to complete the works. There was evidence, accepted by the Tribunal at [78], from the experts that a margin of 30% was reasonable on top of their agreed trade costs used when calculating the cost to complete the works. This was the estimated cost to complete the works at the hands of the Home Owners.
There was no evidence, however, from Mr Boughton as to what his margin was as well as his trade costs for the balance of the works under the contract. In our view, this evidence was necessary to establish and make out the claim for lost profit.
Further, a claim for lost profit is in the nature of a claim for damages for lost bargain. Whilst, generally, such a claim is available where the innocent party elects to terminate the contract for the other party's repudiation, we note that we have not upheld the Builder's claim that the Home Owners repudiated the contract. Accordingly, the Builder's entitlement to compensation consequent upon terminating the contract pursuant to clause 21.3 is governed by clause 21.5 of the contract which states that the Builder is entitled to a "reasonable price for the Works carried out under the contract to the date the contract is ended" . In our view, this clause does not encompass a claim for lost profit for the balance of the works under the contract. It clearly limits the claim of the Builder to compensation for the works carried out "to the date the contract is ended" and not beyond.
Accordingly, we do not allow the Builder's claim for lost profit.
Second, there is no dispute that the Home Owners are entitled to $59,869.01 for defective work.
Third, the main issue between the parties is how to treat the claim for incomplete work made by the Home Owners and upheld by the Tribunal below. The Home Owners contend that as there was a finding that there was an amount of $84,074.45 required to complete the contract, yet the Builder was only left with $69,973.50 remaining to be paid, the amount of $14,100.95 is owing to the Home Owners as an overpayment for the works undertaken by the Builder. The Home Owners contend that this is the result of clause 21.5 whereby the Builder is only entitled to a "reasonable price for the Works carried out under the contract to the date the contract is ended".
In this regard, it is relevant to consider the conclusion of the Tribunal with respect to its award of $89,350 to complete the incomplete work at [78] of the Decision as follows: "The allowance for incomplete work was agreed between the experts at $61,782.00 plus 30% builder's margin and 10% GST making a total of $88,348.26. In addition an allowance of $700.60 plus margin and GST is to be made in respect of the wall linings, a total of $1001.85. There is an allowance of $89,350.00 for incomplete work."
The submission of Mr Justice was that this claim was wholly irrelevant in the event of the Builder being found to have lawfully terminated the contract.
In our view, it is clear that the evidence presented to ground the amount found to complete the incomplete work was not based upon the percentage of the work left outstanding under the contract, or the percentage of the work performed by the Builder under the contract compared to the total amount paid. It seems clear that the award of $89,350 was based upon the evidence of the experts as to what it would cost for another builder to complete the work without regard to the contract price for the works as a whole.
Accordingly, the finding at [78] does not of itself evidence that there was an overpayment to the Builder. In theory, we accept the proposition that a claim may arise in quantum meruit for overpayment to the Builder. However, to establish such a claim would require calculation of the percentage of the work performed by the Builder up to the date of the termination of the contract compared with the amount actually paid under the contract. In the absence of any evidence to that effect, there is insufficient material to conclude that the Builder had in fact been "overpaid", thereby entitling the Home Owners to some refund on the amounts paid under the contract up to the date of the termination.
Similarly, in our view, in theory the Builder would be entitled pursuant to clause 21.5 to a "reasonable price" for the work performed to the date of termination less the amount actually received under the contract. Had it been necessary to decide, this potentially could have given rise to an interesting question of interpretation as to whether clause 21.5 entitles the Builder to a claim, similar to a claim in restitution, for the ''reasonable value'' of the works beyond otherwise what may be the value of the works as measured by the contract itself. The High Court in its recent decision in Mann v Patterson Constructions Pty Ltd [2019] HCA 32 overturned the principle in Lodder v Slowey (1901) 20 NZLR 321 that a builder, once he has accepted a repudiation, may recover under restitution as an alternative to damages for breach of contract.
We need not consider this issue further because the Builder has not made any claim pursuant to clause 21.5 or otherwise for allegedly outstanding sums due under the contract or for the "reasonable" value of work performed beyond variations 1 and 2. We note paragraph [71] of the Decision dealing with progress claim 3 is as follows: "The Builder is entitled to be paid for the work he carried out under the contract. However I found that not all of the work required to be carried out for progress payment 3 had in fact been carried out. There is no evidence of the value of the work which was carried out. In any event, the balance owing under the contract will be deducted, and the claim therefore becomes otiose."
The result is that the Home Owners are entitled to $59,869.01 for defective work and the Builder is entitled to $4,330 for variation 1, and $3,820 for variation 2.
This then gives rise to the remaining issue as to whether or not the Builder is entitled to interest on the sums in respect of variations 1 and 2. The consequence of the above is that the amount owing to the Home Owners for defective work exceeds that owed to the Builder for outstanding amounts for variations 1 and 2.
In our view, the amount owing for defective works is able to be set-off in equity against the amount owed to the Builder for variations 1 and 2. In Hawes v Dean [2014] NSWCA 380, Barrett JA stated at [63]-[64]: "A more recent statement of the principle in this Court is found in the judgment of Emmett JA (Beazley P and Meagher JA concurring) in HP Mercantile Pty Ltd v Dierickx. His Honour said (at [36]), referring to the decision of Gummow J in James v Commonwealth Bank of Australia (1992) 37 FCR 445: 'For there to be an equitable set-off, the set-off must essentially be bound up with and go to the root of, challenge, call in question, or impeach the title of the claimant. Equitable set off is available where the party seeking it can show a recognised equitable ground for being, to the relevant extent, protected from its adversary's demand. The mere existence of a cross-claim is not sufficient. There must be some ground for equitable intervention beyond the mere existence of a cross-claim such that it can be said that the equity of the defendant impeaches the claimant's title to the legal demand being enforced.' Emmett JA gave three examples of situations in which relevant impeachment will exist. The first is where a mortgage is granted to a solicitor as security for costs and the mortgagor client has had a cross-claim against the solicitor for faulty work (the lien of a solicitor was referred to as "well-known" in this connection in Simpson v Lam (1857) 7 E&B 84; 139 ER 1179 at 1181). The second is where a builder has a claim for money due under the building contract and there is an unliquidated claim against the builder for damages for breach of that contract. The third case is where a lender fails to provide promised further advances for a development project and the borrower is unable to complete the development project and repay the advances actually made."
Applying this principle, at the time that variations 1 and 2 were owing, the Home Owners had a countervailing claim against the Builder for damages for breach of that contract which survives the termination. Such claim is able to be set-off against the claim for payment for those variations. In such circumstances, a claim for interest, in our view, does not arise.
In the result, the Home Owners will be entitled to an order for payment of $51,719.01 made up as follows: 1. $59,869.01 for defective work; 2. less $4,330, for variation 1, and 3. less $3,820 for variation 2.

ORDERS In respect of appeal AP19/50591, the orders will be: 1. Leave to appeal is refused. 2. Appeal is dismissed. In respect of appeal AP19/46638: 1. The appeal is allowed in part. 2. Set aside order 1 of the orders of K. Ross, Senior Member, made 18 September 2019. 3. In lieu thereof, Gregory Ross Boughton is to pay to Dale Longbottom and Natalie Longbottom the sum of $51,719.01. In respect of both AP19/46638 and AP19/50591, the following directions are made: 1. Each party is to give to the Appeal Panel and the other party any application for costs, including in respect of costs of the hearing at first instance, and submissions in support within 14 days of these orders. 2. Each party is to give to the Appeal Panel and the other party any submissions in reply within 14 days thereafter. 3. Any such submissions shall include submissions as to whether the Appeal Panel should make an order dispensing with a hearing in respect of the issue of costs pursuant to s.50(3) of the Civil and Administrative Tribunal Act 2013 (NSW).

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: 23 March 2020

Civil and Administrative Tribunal Rules 2013(NSW)

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Judgment (27 paragraphs)

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