Mitakidis v Everyday Homes Pty Ltd

Collins v Urban [2014] NSWCATAP 17

Commonwealth v Amann Aviation PL (1991) 174 CLR 64, [1991] HCA 54

Construction & Design Australia PL v Robinson [No 2] [2024] NSWSC 376

Coulton v Holcombe (1986) 162 CLR 1, [1986] HCA 33

Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163

DB Homes Australia PL v Kes [2019] NSWCATAP 221

FTB v Children's Guardian [2024] NSWCATAP 174

Jakin Constructions PL v Shrimpton [2024] NSWCATAP 39

New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231

North Sydney Leagues Club Ltd v Synergy Protection Agency PL [2012] NSWCA 168

Orr v Cobar Management PL [2020] NSWCCA 220, 103 NSWLR 36

Owen v Kim [2017] NSWCATAP 26

Pholi v Wearne [2014] NSWCATAP 78

Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69

Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39

TC Industrial Plant PL v Robert's Queensland PL [1963] HCA 57; (1963) 180 CLR 130

Unique Commercial Group PL v Cusumano [2024] NSWCATAP 204

Wilson v Chan & Naylor Parramatta Pty Ltd atf Chan & Naylor Paramatta Trust [2020] NSWCA 62

Heydon on contract: Part I (2019)

2023/00369894 (formerly HB 23/47688); 2023/00376807 (formerly HB 23/41218)

1. Outcome of proceedings
2. We have decided to refuse leave to appeal (to the extent that leave is required) and to dismiss the appeal for the reasons below.
3. When we reserved the decision we made orders for extra notes. As the parties wished, we have deferred issues of costs of the appeal until after delivery of this substantive decision. We have made directions for any further submissions and evidence on costs including any application for a further hearing on costs.
4. Background, jurisdiction, issues, procedure
5. The appellant owners and the respondent builder entered into a written contract dated 30 September 2022 in the standard HIA form (April 2021 version) for the builder to demolish the existing house and to construct a new residential dwelling in Sans Souci, an eastern suburb in Sydney, NSW. The owners obtained development consent in about mid-2022. Among a number of quotes from various builders, the builder's quotation dated 25 July 2022 for a construction price of $670,000 based on a set of approved development consent (DC) plans obtained by the owners was accepted. Contract price with four written and agreed variations between 10 October and 21 December 2022 totalled $682,780 including GST. A construction certificate (CC) was issued by the private certifier on about 21 November 2022 which the builder said was not provided to it and its existence was not made known to the builder. The owners said that they did not receive a CC until July 2023, after they received an owner-builder permit in about June 2023.
6. On 6 February 2023 the owners emailed the builder to place a temporary hold while they resolved a copyright issue with another builder, which was done by early March 2023.
7. On 21 April 2023 the owners' solicitor sent a letter to the builder stating that the relationship between the parties had broken down and the owners were not obliged to continue with the contract for reasons set out in the letter.
8. A letter from the owners' solicitors dated 9 May 2023 about the contract being unconscionable and not obliged to be performed was alleged, and found by the primary member, to constitute repudiation of the contract by the owners. It was also found, as alleged, that the builder by its solicitor accepted the repudiation by letter dated 19 May 2023. Construction did not begin under the contract.
9. In 2023/00376807 (formerly HB 23/41218) filed 7 September 2023 the builder claimed loss of profits as its damages for loss of bargain in respect of the owners' repudiation of the contract, in the amount of $153,343. This was calculated as the difference between $609,345 (contract price less GST) and the builder's project-specific costs of $456,002. Interest at the contract rate of 12%pa (cl 33 with item 12 in Sch 1) was claimed from 13 February 2024 (the contract date for completion of works) to date.
10. In 2023/00369894 (formerly HB 23/47688) filed 18 October 2023 the owners sought to have declared void the building contract with damages of $38,841.95 under the Australian Consumer Law (made part of NSW law by s 28 of the Fair Trading Act 1987 (NSW)) for alleged misleading conduct and unconscionable conduct by the builder and alleged unfair contract terms (respectively, ACL ss 18, 20 and 21, and 23, 27 and 243). The misleading conduct was alleged to be by silence when a duty to speak was alleged, in respect of changed plans to the ground floor of the dwelling, and an alleged pre-contract representation that the house could be built according to the DA-approved plans. The claimed amount comprised: $12,500 fee/deposit described below; $25,351.95 for rental accommodation from January to September 2023 at $625pw; amendments to the engineering plans requested by the builder $990. The builder contended, among other matters, that the Tribunal had no jurisdiction to declare the contract void.
11. There was no dispute that the builder was and remained appropriately licensed, the project was appropriately insured and, as the primary member found, the proceedings were brought within time and within the monetary limit for the Tribunal's jurisdiction under s 48K of the Home Building Act 1989 (NSW) (HBA) and under FTA Pt 6A as respectively a building claim and a consumer claim as those terms were defined. The subject of the contract was residential building work as defined in HBA Sch 1 paras 2(1)(a), 2(3)(a) and 3(1) with Home Building Regulation 2014 (NSW) (HBR) reg 12. The building contract required homeowners' warranty HBCF insurance since it exceeded $20,000 in the reasonable market cost of labour and materials involved: HBA ss 7(2)(f1), 92, 94; HBR reg 53.
12. Although the owners were self-represented at the primary hearing, they had received legal advice in some aspects of case preparation.
13. Following a primary hearing on 20 and 21 June 2024, on 12 September 2024 the primary member dismissed the owners' application (after joining Mrs Mitakidis as co-applicant with the owners' agreement) and in the builder's application ordered the owners to pay the builder $153,343 within 28 days of date of order. At para 40 of the primary reasons (PR) the primary member found, consistent with the builder's contentions, that the Tribunal had no power under either HBA s 48O or FTA ss 79N and 79O to order or declare that a contract was void ab initio or to set aside or terminate a contract.
14. Although a stay of costs questions was granted by the Appeal Panel on 22 October 2024, on 30 October 2024 the owners were ordered to pay the builder's costs on the ordinary basis as agreed or assessed. The primary member was satisfied that the usual costs rules applied since the claims in both proceedings exceeded $30,000, that the builder had been substantially successful in the proceedings (with the owners' claims dismissed and all of the builder's claim except for interest upheld), that there was no reason not to apply the usual rule that costs followed the event (outcome) and that the builder was therefore entitled to its costs of the proceedings on the ordinary basis as agreed or assessed. The primary member found that there was no basis for the award of indemnity costs, including a Calderbank letter and other conduct that pre-dated commencement of proceedings.
15. This appeal was filed on 9 October 2024 by the owners against the primary decision in respect of the damages order in favour of the builder. The appeal was filed within time. Amended grounds of appeal filed 4 December 2024 (by consent on 22 November 2024) added a challenge to the primary costs order and sought an order that each party pay its or their own costs of the primary proceedings and that the builder pay the owners' costs of the appeal.
16. On 23 October 2024 leave was granted to both parties for legal representation on the appeal. As said earlier, in the primary proceedings the owners represented themselves at hearing, with earlier legal assistance; the builder had the same legal representation as on this appeal.
17. Consent orders to deal with a stay of the primary orders (with costs of the stay application reserved as part of costs in the appeal) required payment of the ordered amount into a controlled monies account pending the appeal outcome.
18. Principal decision
19. The primary member found that on 16 August 2022 the builder had emailed the owners about various matters that included the required payment of $12,500 as a Preliminary Agreement Fee to be used for pre-construction works such as "redrawing of plans, home owners' warranty insurance etc" which would be deducted from the total price: PR para 14. The amount was paid at date of signing the contract, following an email on that date attaching an invoice and asking "Are you able to arrange payment and file moves forward to our drafting department and we can start redrawing your plans". As quoted at PR 66(5), that was consistent with an email of 11 August 2022 that "Once building contracts have been signed and the $12,500 is paid your file moves forward to our drafting department and we can start redrawing your plans". On 30 September 2022, as quoted at PR 66(8), the owners emailed the builder "We have the dwg files for our plans. Would you like me to send them to you to assist the drafting team". There were many emails between the parties from that time to just before the letter of 21 April 2023 (which are cited in PR 67 et seq) concerning changes to the plans, without protest from the owners.
20. The primary member accepted at PR 60 et seq the builder's evidence to the following effect set out at PR 43-45: the DC approved plans (being architectural drawings by the owners' architect dated 24 April 2022) were the only plans available at time of quotation; at a zoom meeting on 15 July 2022 with the owners, the builder's principal directed the owners' attention to the provision in the quotation that the builder was to do the construction drawings, which would reflect the builder's standard building practice and that the quotation price may be varied subject to final square metreage check; the builder was to include on drawings structural and hydraulic engineering, council approval conditions and BASIX requirements; the owners had received a credit for working engineering drawings so were required to provide them, until a variation provided for the builder to check and liaise with the engineer; the builder's principal told the owners that the plans needed to be re-drawn because they were missing measurements and details required by contractors and suppliers and were minimalist; at a further zoom meeting on 22 July 2022 the builder's principal again explained the quotation provision and said that the current plans were not suitable to build from; the owners were expressly invited by the builder to obtain legal advice before signing the contract; all the builder's suggested changes to the engineering plans were referred by the owners to their engineer, who did not dispute any of them; at a meeting on 14 December 2022 the owners agreed for the builder to liaise directly with the owners' engineer about preparation of the construction plans after the builder expressed concerns with the engineering plans; there was considerable email communication (in evidence) between late December 2022 and 16 March 2023 concerning amended engineering plans but the plans still contained errors including for compliant beams; there were seven revisions of the engineering plans between 29 June 2022 and 7 March 2023; at no time did the owners request the builder to begin work according to the DC approved plans.
21. Additionally, the primary member accepted the builder's contentions that: it was not engaged to give an opinion on the accuracy of the plans; the builder had no knowledge of the engineering plans at time of contract and expected that they would comply with codes, standards and practices; it made recommendations not changes to the engineering plans, pertaining to structural integrity; the owners agreed to their engineer's changes to the plans; there was no evidence that the contract terms (late payment interest and liquidated damages) were unfair.
22. Clause 8.1 of the contract, set out at PR 45(4), provided:

"Where the owner supplies any contract document, the owner warrants:

(b) the suitability of the design, materials and method of working each item specified therein."

1. The owners contended, as summarised at PR 48, that: at no time before agreeing to the quotation or signing the contract were they told by the builder that the structural beams plan would be altered; in late October 2022 the builder confirmed that two additional beams could be included in the scope to change two external walls from cladding to brick; at a meeting with their engineer on 10 January 2023 they learned that plan changes meant that the hallway was narrower and the lounge room was smaller by reason of changes to all beams, room and hallway widths and stairway which they did not want; they were not told until 31 March 2023 that the DC plans were not suitable for construction; the builder refused face-to-face meetings (with covid not being a valid excuse by late 2022) and email and zoom meetings were inadequate; that on 20 April 2023 the builder said it would revert to the original design on which the owners had signed the contract, believing that it could be built; the plan changes had been to suit the builder and increase costs; by the time of their solicitors' letter of 21 April 2023 the owners had lost all confidence in the builder. The primary member did not accept these contentions.
2. The primary member pointed out at PR 51 that the owners did not invoke the breach notice requirements in cl 27 of the contract.
3. The primary member accepted at PR 55-58 the builder's contention that the owners repudiated the contract and that repudiation was accepted by the builder which permitted a claim for damages for loss of profit, citing a decision of the Appeal Panel in DB Homes Australia PL v Kes [2019] NSWCATAP 221 at [43]- [46].
4. The primary member at PR 61 expressly found that it was the owners' responsibility to provide the engineering drawings and by 5 December 2022 the builder was still expressing that those drawings were not correct and not ready for construction. This was based on an email from the builder to the owners dated 5 December 2022 expressly to that effect which was quoted in PR 62. In particular, a complete and correct set of plans was said to be required "for construction and pricing ... This is delaying your project from finishing the architectural plans which are required for CC approval". It can be added that this letter, unless established to be dissembling which was not done, corroborated the builder's evidence that it did not know that a CC had already issued.
5. At PR 64 the primary member pointed to the fact that the owners' engineer did not give evidence, which meant the builder's principal's evidence was not contested by the person with direct knowledge to contradict it on the changes to plans not being necessary or related to structural integrity.
6. Additionally, at PR 66 the primary member relied on the purpose of the Preliminary Agreement Fee being to redraft plans for construction and that the DC plans were stamped not approved for construction.
7. In PR 88 the primary member accepted the evidence of the builder's principal, supported by the private certifier in cross-examination, that the owners received a CC in about late November 2022. The primary member at PR 90 accepted the uncontested evidence of the builder's principal that the builder was not given a copy of the CC and was never instructed to build according to the original (DC) plans.
8. At PR 91 the primary member rejected (in the absence of reliable supporting evidence) that the builder delayed the project for financial gain and said that the evidence suggested that the delays were "being caused by the engineers not finalising accurate plans".
9. At PR 92-93 the primary member cited emails from the builder on 17 March and 20 April 2023 to find that the builder was ready, willing and able to continue with the project. This was after the owners' difficulties with another builder over the plans were resolved, which took about a month.
10. Having already found that loss of profit was an appropriate measure of damages for loss of bargain, at PR 95-96 the primary member accepted the builder's detailed calculation of costings which was found by the primary member not to be contested or sought to be modified by the owners. The primary member said:

" ... the costing evidence has not been challenged by the Home Owners, nor have they made any submission that other amounts ought to be deducted from the contract price to calculate the loss of profits ... ".

1. At PR 97 the primary member rejected the builder's claim for interest because: the contract rate was for delayed payment and other claims under the contract whereas the money order was for an award of damages, and the Tribunal had no power to award pre-judgment interest.
2. At PR 98 the primary member dismissed the owners' claim for rent. The primary member found the following matters. Misleading conduct had not been established. The builder's suggested changes to plans were reasonable, necessary and accepted by the owners. The builder communicated promptly with the owners. The owners' dispute with another builder contributed to the delay. The builder was willing to proceed until the owners repudiated. Further, the builder had performed what the Preliminary Agreement Fee was paid for and there was no basis to refund the fee for amendments to the engineering plans.
3. Grounds of appeal
4. The owners raised the following alleged errors on alleged questions of law:

(1) There was no evidence to support the finding that the net profit was $153,343. The builder adduced only evidence of gross profit and there was no evidence of overheads and operating costs.

(2) The primary member applied the incorrect principle of law in the net profit conclusion because in this case the builder "must have been able to produce evidence of what its overheads were but adduced no evidence on this issue".

(3) The primary member gave no reasons or provided inadequate reasons with respect to the conclusion that the builder's net profit was $153,343.

1. The owners raised the following alleged errors on alleged questions of fact for which a grant of leave was said to be justified:

(1) To the extent that alleged errors of law (1) and (2) were mixed questions of fact and law, the findings were against the weight of evidence and gave rise to a decision that was not fair and equitable, with a resulting substantial miscarriage of justice. On this basis the Appeal Panel should exercise discretion in respect granting leave to appeal because there was a reasonably clear injustice from a readily apparent error that was essential to the Tribunal's decision.

1. In addition to the grant of leave to appeal and upholding the appeal, the owners sought that the builder's application be dismissed with costs. The amended grounds of appeal, as already said, sought that each party bear their, or its, costs of the primary proceedings.
2. There was no challenge to the primary findings on liability.
3. The builder filed on 22 October 2024 a detailed reply to appeal. In essence, the builder contended that there was no error. The primary member was not required to address overheads and operating costs or the state of evidence in that respect. That was because the owners did not challenge the builder's claimed quantum, and ultimately admitted that quantum. Additionally, the owners did not raise overheads and operating costs or the absence of evidence in respect of them in the proceedings, including in the owners' submissions. It was said that it would be contrary to the guiding principle (just, quick and cheap resolution of the real issues in the proceedings) in s 36 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) "if evidence was required of quantum where the quantum has not been challenged, and was ultimately admitted".
4. The builder further contended that the alleged question of law had not been identified with precision as required by the authorities cited in Orr v Cobar, below.
5. Further, applying the principle in Coulton v Holcombe (1986) 162 CLR 1, [1986] HCA 33 at [7]- [9], the builder contended that it was too late to raise the matters the subject of appeal on appeal, when they were not raised in the primary proceedings. It was clearly possible, indeed inevitable, that if these issues had been raised in the primary proceedings, they would have prompted further evidence on the topic from the builder. The principle was applied, among other occasions, by the Appeal Panel in Jakin Constructions PL v Shrimpton [2024] NSWCATAP 39 at [49]- [50].
6. The builder expressly contended "There is no absolute principle that account must be taken of overhead expenses".
7. We are of the view that the second alleged error on an alleged question of law (wrong application of legal principle to the alleged contested facts) raises a mixed question of law and fact and therefore requires leave to appeal because it is not a pure question of law: Orr v Cobar Management PL [2020] NSWCCA 220, 103 NSWLR 36 at [31]- [61]; Unique Commercial Group PL v Cusumano [2024] NSWCATAP 204 at [25]- [40]. The other two alleged errors on alleged questions of law do raise questions of law that are sufficiently articulated, do not depend on facts not found and can be considered separately from the facts in the manner articulated (even if the conclusion after argument is, contrary to the appellants' contention, that the alleged principle of law is not absolute and is fact-dependent).
8. The reason for that conclusion is that the issue the two grounds raise is: whether the absence of inclusion, in calculating loss from breach of contract, of overheads and operating expenses is contrary to the principles for assessing expectation loss, so that by their non-inclusion the builder has not discharged its onus to prove its expectation loss, or whether (as the builder contended) there were no relevant overheads or operating expenses to be included in the circumstances of this assessment.
9. Principles governing appeals
10. Section 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) states, in respect of Division decisions:

(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."

1. Clause 12 of Schedule 4 to the NCAT Act states:

An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:

(a) the decision of the Tribunal under appeal was not fair and equitable, or

(b) the decision of the Tribunal under appeal was against the weight of evidence, or

(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. A Division decision is a primary decision of the Consumer and Commercial Division. The primary decision here is such a decision.
2. In summary, internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel.
3. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, more recently revisited in Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 at [25]- [40] esp at [30]-[32], 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 where they are required;

(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.

1. A question of mixed fact and law, such as an alleged error in applying legal principle to the facts, is not a question of law unless the facts are jurisdictional in nature: FTB v Children's Guardian [2024] NSWCATAP 174 at [8]; Wilson v Chan & Naylor Parramatta Pty Ltd atf Chan & Naylor Paramatta Trust [2020] NSWCA 62 at [4] and [11].
2. Taking into account an irrelevant consideration or not taking into account a relevant consideration includes not making a finding on an ingredient or central issue required to make out a claimed entitlement to relief: see CEO of Customs v AMI Toyota Ltd [2000] FCA 1343; (2000) 102 FCR 578 (Full Fed Ct), [2000] FCA 1343 at [45], applying the statement of principle in Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179.
3. Adequacy of reasons will vary according to the nature of the determination and of the determining body: New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 esp at [77].
4. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited by para 12(1) of Sch 4 to the NCAT Act. In such cases, as already set out, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that:

(a) the decision of the Tribunal under appeal was not fair and equitable; or

(b) the decision of the Tribunal under appeal was against the weight of evidence; or

(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [76] and [79] that a substantial miscarriage of justice for the purposes of cl 12(1) in Sch 4 to the NCAT Act may have been suffered where:

"[76] ...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. ...

[79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this then, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred - see the general discussion in Kyriakou v Long [2013] NSWSC 1890 at [32] and following concerning the corresponding provisions of the [statutory predecessor to CATA (s 68 of the Consumer Trader and Tenancy Tribunal Act)] and especially at [46] and [55]."

1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4 to the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b): Pholi v Wearne [2014] NSWCATAP 78 at [32]. 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:

(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."

1. Turning to the specific grounds in cl 12(1)(a) and (b) of Sch 4 to the NCAT Act, in Collins the Appeal Panel said:

"[77] As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that:

1 If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12].

2 The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]."

1. The question of what constitutes significant new evidence not reasonably available at the time the proceedings under appeal were being dealt with under the ground in cl 12(1)(c) to the NCAT Act was considered by an Appeal Panel in Owen v Kim [2017] NSWCATAP 26. In that appeal the Appeal Panel stated at [37]-[39]:

"37 In Owners - SP 76269 v Draybi Bros Pty Ltd [2014] NSWCATAP 29 the Appeal Panel stated at [109] in connection with cl 12(1)(c) of Schedule 4 to the Civil and Administrative Tribunal Act:

'In order to fall within this paragraph the appellant must be able to point to evidence which:

(2) has arisen and is new in the sense that it was not reasonably available at the time the proceedings below were being heard.'

38 In Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11 the Appeal Panel stated at [40 ]:

'The meaning of this clause was considered by the Appeal Panel in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. At [23] - [24] the Appeal Panel said:

'23 Unlike the WIM Act, the expression "reasonably available" is not qualified by the words "to the party". This difference suggests that the test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence. For example, in Owners SP 76269 v Draybi Bros [2014] NSWCATAP 20 at [114] the Appeal Panel refused leave because, although the appellant may not have been aware of the evidence (being an email), it could have obtained the evidence by summons. In Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81 at [17] the Appeal Panel granted leave because the respondent to the appeal had fraudulently altered evidence. The party seeking leave under cl 12(1)(c) could not reasonably have had available to them the evidence that the report in question had been fraudulently altered at the time the proceedings were being dealt with by the Tribunal. That fact was not known to the appellant at the time of the hearing and could not reasonably be known due to fraud.

24 Each of these cases illustrates that something more than a party's incapacity to procure evidence is necessary to satisfy the requirements of cl 12(1)(c).'

39 As stated at [27] in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown:

'the issue is whether, objectively, the evidence has arisen since the hearing and was "not reasonably available" at the time of the hearing.'"

1. In Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 an Appeal Panel stated at [10]:

"An appeal does not provide a losing party with the opportunity to run their case again except in the narrow circumstances which we have described. Mr Ryan has not satisfied us that those circumstances apply to his case and we refuse permission for him to appeal."

1. There was debate in submissions over procedural documents not in evidence. Ultimately nothing turned on this because the substance of those documents had been repeated sufficiently in other documents to support the parties' competing submissions.
2. Consideration and conclusion
3. The owners contended that' as a matter of law, overheads must be taken into account in assessing loss of profit damages for breach of contract. The owners said that the decision in Construction & Design Australia PL v Robinson [No 2] [2024] NSWSC 376 (CDA) was effectively on all fours with the present case and must be followed. At [360] in that decision the Court relevantly said "It follows, in my opinion, that the Builder has not established loss of profit. This is not a case where 'precise evidence is not available'. The Builder must be able to produce evidence of what its overheads are."
4. The builder submitted that there was no such absolute principle that account must be taken of overhead expenses in the assessment of damages or that, as a matter of general principle, overhead expenses should be taken into account proportionately to the overall value of the contract to the overall business, in reliance on North Sydney Leagues Club Ltd v Synergy Protection Agency PL [2012] NSWCA 168 (NSL) at [26]- [48] esp [46], [84]-[87], [91] and authority there discussed. CDA was in any event sought to be distinguished because overheads and components of quantum generally were in issue in that case, in contrast to the present case, and the Court in CDA was not taken to and did not consider NSL.
5. It appears to be common ground that there was no distinct expressly identified component, within the builder's evidence of cost of construction in the "Costings Schedule" in evidence, of overheads and operating expenses.
6. Paragraph 9 of the builder's points of claim stated the builder's loss as follows: amount owing excluding GST $609,345; "Less cost of expenses to construction excluding GST -$456,002"; "Loss of profits excluding GST $153,343". The points of defence filed 30 October 2023 stated "[9] The Respondents deny that the Applicant has suffered loss and damage and deny that they are entitled to any claim against the Respondents for loss and damage, and even if the Applicant is entitled to loss and damage (which is denied) deny that the Builder's loss and damage is as set out in the application".
7. The owners contended on appeal that they made no concession or admission about quantum and that para 9 of the defence expressly put in issue not only entitlement to an amount but also the amount. In response to the primary member's question "But with quantum, is there a dispute on the figures, like the amounts that have been claimed?", the owners' opening response was "Yeah, we dispute any amount that they're asking".
8. The owners pointed to there being no breakdown of the costings schedule in evidence to derive the $456,002 in response to the primary member's request "to break down into the detail" the components of the $153,343 claimed. In particular, there was a complete absence of a required component of expectation loss in the form of loss of profit, being overheads and operating expenses as part of the costs to be deducted proportionately from contract price. Accordingly, having been put to proof on entitlement to quantum and also on the amount, the builder had not discharged its onus of proof and ought not to be given a further opportunity to do so. It was not a case of doing the best one could with the evidence, since the builder had the ability to quantify its overheads and operating expenses.
9. The owners contended that there was objective evidence of at least some overheads and operating expenses that should have been included. These comprised at the least: rent and other expenses to use and maintain various office premises including "head office"; intellectual property such as logo and branding; a 1300 phone number; a PO box; internet access costs; website, email address, facebook and Instagram pages; a YouTube channel and other advertising material; licence fee; corporate representatives' salaries or contract fees for employees in sales, supervision, administration and accounts, estimating, document drafting and updating; e-signature facilities.
10. Accordingly, the owners contended, the first ground of appeal was made out because there was no evidence identifying such expenses within the costings found by the primary member. The second ground of appeal was made out because the builder could have led evidence on the identified matters so there was no reason for the primary member to assess damages on the evidence doing the best one could, with the result that the builder was placed in a better position than if the contract had been performed. The third ground of appeal was made out because there was no explanation of why overheads and operating expenses were not the subject of an allowance and the nature and costs of allowance apportioned to this project. Each error was said to be material because it could have made a difference - the builder had not established the amount of its damages. To the extent that leave was required, the absence of consideration of overheads and operating expenses was clear and unreasonable and the issue was of the type that often arose in Tribunal commercial cases.
11. In the further notes filed after the appeal hearing, the owners appeared to contend that, even if the law did not require a proportion of overheads and operating expenses mandatorily to be deducted as part of costs to achieve lost (net) profit rather than gross profit from the particular contract, the builder was required to establish why overheads and operating costs were not included and had not done so.
12. The builder's written outline, repeated in verbal opening at the primary hearing, had contended that: the builder's claim and evidence of loss of profits was met only by a blanket denial in the points of defence; the owners led no evidence challenging the quantum claimed and made no other challenge to quantum, apart from entitlement to any amount by reason of the matters in the owners' cross-claim; in their response filed 26 February 2024 to the builder's application on 12 February 2024 for access to and production of quantum documents, the owners stated "... we have not disputed the amount claimed by the applicant, but we have disputed the right of the applicant to claim any amount". The builder's opening outline clearly stated, "The owners do not dispute quantum".
13. The builder submitted on appeal that, by an email of 1 November 2023, which was before the primary member, it sought a response to the costings schedule which was the builder's evidence on costs to be deducted from the contract price. The email read in part "... The owners Points of Defence ... has not responded to the quantum claimed in the Schedule. A response will enable the builder to determine which, if any costings are in issue". The owners did not respond.
14. The builder, in addition to pointing to that email and the owners' responsive submission to the access application described above, set out the owners' submissions, that did not raise overheads, and said "Owners dispute any claim from the builder as no work ever commenced, and the contract is null and void due to the builder not building according to the original plans".
15. Further, the builder set out the rest of the exchange in opening (Court Book pp 880-881) between the owners and the primary member, following builder's counsel's opening, surrounding the brief extract that the owners relied on in their appeal submissions that has been set out above (in para 61). With some interpolations by us in brackets of the likely sense of mistranscribed phrases, the exchange reads as follows:

"Builder's counsel [BC]: The builder's claim is for loss of profits. They are contained in the affidavits of Mr Sam Sanfilippo which were sworn on 8 November and 19 January 2024. In relation to the loss of profits, as far as the builder can make out the defence to the builder's application, it appears, apart from making a denial blank a blank denial of the application, there's no evidence, first of all, challenging the quantum claim by the builder. And it appears that the owners don't dispute the quantum because they have indicated, in relation to a response to a summons filed by the builder, we have not disputed the amount claimed by the applicant but we have disputed the right of the applicant to claim any amount.

BC: Now, from that it would follow that the quantum is not an issue and it would appear that the basis of denying the quantum is because of the cross-claim which seeks relief for misleading, deceptive conduct and unconscionable conduct. That's basically the outline of the builder's case.

PM: All right. And I inform you, Mr and Mrs Mitakidis, should both of you be the applicants in your own proceedings? Should I be putting you both on there?

Mr Mitakidis [MM] and Mrs Mitakidis [TM]: Yes, please.

PM: All right. It's just sort of in a similar format. It's just really an overview of what your position is.

MM: We're just We're basically denying any time [claim?]. The figure is 153, and it is profit that they are seeking. We're denying that should be any claim whatsoever due to our cross-application and the evidence that we have put forward in this matter.

PM: So there's two parts to reclaim. There's liability and there's quantum. So liability is, is somebody liable? Is somebody breached the law or there a liability established? And then the value of what any loss that might have flowed from that breach. So you're denying liability, obviously. But with quantum, is there a dispute on the figures, like the amounts that have been claimed?

Mr Mitakidis [MM]: Yeah, we dispute any amount that they're asking.

PM: But that's a liability issue. You're saying that they shouldn't be. But if the Tribunal So the whole spectrum of outcomes One of the possible outcomes could be that the bid [builder] was successful and can establish the loss of profit claim. Now if that's the case, do you have you got you've heard what [builder's counsel] is saying is open [in his opening], but you don't have any evidence disputing the calculation of that loss, which is about $153,000. Is that correct?

PM: So you don't say that it should be, for example, 130,000 or 90,000 or something like that?

PM: You're just saying it should be zero because liability is not established?

TM: Yes, as far as we're concerned, the contract is void.

PM: Yes, I understand that. All right, anything else?

MM: And we're obviously going to rely on our evidence to support our reasons why there shouldn't be a claim by the builder.

PM: Okay. All right. All right, so thank you for those openings. We'll move on to the evidence now ... ."

1. As a matter of principle, the assessment of loss of profits does not require a discount for overheads and operating expenses that are not specific to and which are beyond the costs of the project itself, in a building project such as the present; that is, they are not expenses which would be saved in the absence of the project. Profits in projects are by their character the source for paying such expenses that are not specific to a particular project and are present irrespective of the number and value of projects at any particular point in time. The total of such expenses against the total of gross profits in projects will either result in coverage of such expenses, or it won't. But that does not require a parsing of such expenses against each project; all the more so, it would skew the outcome if all such expenses were thrown against one project. It would also reduce the funds available to pay such expenses which have to be paid in any event.
2. The orthodox test for expectation damages (of which loss of profit is an exemplum) is to put the non-breaching/non-repudiating party in the position in which it would have been had the contract been performed. Had the present contract been performed, the builder would have received the contract price less expenses of this project and used that along with other receipts from other projects to defray expenses such as overheads and operating expenses not specific to a project and which remain to be paid (in contrast to expenses specific to the project): see, eg, TC Industrial Plant PL v Robert's Queensland PL [1963] HCA 57; (1963) 180 CLR 130 at 143-144 and, generally, Heydon on contract: Part I (2019) Ch 26 esp paras 26.10, 26.270.
3. In this respect, compensation is distinct from, for example, where a person is entitled to an account of profits from a business, which is an assessment founded on different principles and onus of proof.
4. Three matters emerge from the authority on this topic to which we were referred and which is set out above.
5. The first is that, for the reasons we discuss below, amount and components of quantum were not put in issue in the present case, in contrast to the situation in CDA. This was the case, at least, once particulars of challenged items of quantum were requested and not provided. In our view, they were not put in issue on the points of defence, as was confirmed in what the owners said on other occasions described above.
6. The second is that the Court in CDA did not have cited to it either NSL or TC Industrial.
7. The third is that NSL is expressly inconsistent with there being an absolute requirement that overheads and operating expenses not directly arising in respect of the particular contract are to be taken into account in assessing loss of profit for breach of contract. As said in NSL at [29], the principle, expounded in Commonwealth v Amann Aviation PL (1991) 174 CLR 64, [1991] HCA 54 esp at 80-81 requires expectation damages (which includes loss of profits) to put the party in the position in which it would have been had the contract been performed. This is a combination of "expenses justifiably incurred in the performance of a party's contractual obligations and any amount by which gross receipts would have exceeded those expenses. The second amount is the net profit".
8. The foregoing is sufficient to determine this appeal in the builder's favour. The builder was not required to deduct overheads and operating expenses as a matter of law and did not include them. There was no challenge to that non-inclusion on the basis that they were specific to the contract in question and the building project that was its subject and so ought to be included. Absent such a challenge, a party does not need to say why items do not need to be included.
9. However, there are additional bases to determine this appeal in the builder's favour.
10. It is quite clear, as the builder contends, that the matters now raised on appeal by the owners were not raised before the primary member. Contrary to the owners' submission, they were not required to be raised only in closing submissions and so were not subject to the principle in Coulton v Holcombe and authority it discusses, set out earlier. As already said, the owners were asked what was challenged as to quantum and did not respond, and their other statements on quantum, described earlier, did not squarely put in issue the matters now challenged on appeal.
11. It is equally clear that, if the challenge now raised had been properly raised, there is a possibility (indeed, a likelihood or certainty given the builder's inquiry of 1 November 2023 described above) that evidence would have been adduced to address any such challenge, whether: to meet the situation that it was found that overheads and operating expenses ought to be taken into account as a matter of law, or that some overheads and operating expenses potentially ought to be taken into consideration on the facts. The situation falls squarely within the principle in Coulton v Holcombe set out earlier.
12. Further, parties are under a duty to co-operate with the Tribunal to give effect to the guiding principle in s 36 of the NCAT Act "to facilitate the just, quick and cheap resolution of the real issues in the proceedings" and procedural fairness is to be observed: s 38(2). It would be inconsistent with such requirements for a party not to disclose in a timely manner, in the course of preparation for hearing, the scope of challenge within a blanket denial on an issue such as appeared in the owners' points of defence. This is all the more so when: there has been a request for such disclosure; the builder expressly claimed an amount, in its application, "less cost of expenses to construct" and particularised on a basis that did not on its face include overheads and operating expenses; the owners disputed that "any amount" was owed which, in the context of the owners' statements set out above, appeared to contend that there was no basis for entitlement to an award of damages at all rather than to how the amount was ascertained. That impression could be reinforced by leading no evidence on the matter, unless it was clearly stated that there was no need to lead evidence because it was being contended that the other party had not proved its claimed amount of damages.
13. The appeal therefore will be dismissed.
14. If, contrary to our view, the conclusion was reached that the appeal ought to be allowed, so as to take into account overheads and operating expenses, in our view it would be fundamentally procedurally unfair to the builder, in the context that is described above, not to remit the proceedings for a further primary hearing with no restriction to the existing evidence.
15. The consequence of the appeal being dismissed is that there is no basis to disturb the primary costs order.
16. If, contrary to our view, the conclusion was reached that the appeal ought to be allowed, so as to take into account overheads and operating expenses, the builder ought in any event to have the costs of the owners' claim in the existing primary hearing, from which there was no appeal. There was no basis for the owners' denial of liability on the builder's claim that was not wrapped up with the owners' unsuccessful claim and the time taken on the issues of quantum at the existing primary hearing was minor. The appropriate costs order would be to let the existing costs order stand in those circumstances. The costs of the remitted proceedings would abide the conduct of and outcome in those proceedings.
17. Orders
18. We make the following orders:
19. (1) Leave to appeal (to the extent that leave is required) is refused.
20. (2) Appeal dismissed.
21. (3) Order as follows in respect of costs of the appeal:

(a) Any application for costs (including for any further hearing on costs) is to be filed and served, together with any further evidence on costs and written submissions (the latter not exceeding 3 pages with reasonable font size and margins), on or before the expiration of 14 days after date of these orders.

(b) Any further evidence and written submissions (the latter not exceeding 3 pages with reasonable font size and margins) in response are to be filed and served on or before the expiration of 28 days after date of these orders.

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.