Sydney Contracting Engineers Pty Ltd v; Gulawita [2024] NSWCATAP 231

Overview

1. This is an appeal by Sydney Contracting Engineers Pty Ltd (the Appellant) against a decision (the Tribunal Decision) made by the Tribunal in the Consumer and Commercial Division (the Tribunal below). The Respondent is Captain Nadeesh Gulawita.
2. The Tribunal Decision concerned two matters transferred to the Tribunal from the Local Court. One matter is a claim by the Appellant (the Appellant's claim) against the Respondent for fees and interest that the Appellant alleges were unpaid for work carried out by the Appellant under a contract. The other matter is a cross-application by the Respondent (the Respondent's cross-application) against the Appellant for costs that the Respondent alleges he incurred to complete work that the Appellant did not complete.
3. The Tribunal below ordered amounts for both the Appellant's claim and the Respondent's cross-application. However, as the amount ordered for the Respondent's cross-application was greater than the amount ordered for the Appellant's claim, the Tribunal offset the amounts and ordered the Appellant to pay the Respondent the difference.
4. The Appeal Panel has decided to allow the appeal. These are the reasons for our decision.

Leave for the Appellant to be legally represented

1. Before turning to the substance of the appeal, we must first deal with a preliminary issue concerning the Appellant's legal representation.
2. Section 45(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) provides that an Australian legal practitioner may represent a party to proceedings only with the leave of the Tribunal. In addition, s 45(2) provides that a party to an internal appeal does not require the leave of the Appeal Panel to be represented in the appeal if the person was entitled to be represented by such a person without the leave of Tribunal in the proceedings in which the decision under appeal was made. Parties to proceedings in the Consumer and Commercial Division are not entitled to be represented: Boreland v Brewis [2024] NSWCATAP 140 at [23].
3. Mr Karnib, who is a solicitor, purported to represent the Appellant at the hearing of the appeal. During the hearing, the Appeal Panel asked Mr Karnib whether he had been granted leave to represent the Appellant. He says he was granted leave at an earlier interlocutory hearing for the appeal before a differently constituted Appeal Panel. That was also the Respondent's recollection. Mr Karnib also indicated that leave was granted unconditionally.
4. We have been unable to discover any written order made by the Appeal Panel granting leave. It may be that the order was made orally at the interlocutory hearing, but not recorded. However, we have not been provided with a recording or transcript of the hearing.
5. Given that both parties recall leave was granted, we have proceeded on that basis and we will make a formal order to record that Mr Karnib has been granted leave to represent the Appellant.

The Contract

1. The Appellant and Respondent entered a contract in August 2020 (the Contract). The Contract used the standard form contract set out in Standards Australia. (2005). General conditions of contract (AS 4000:1997). The standard form contract is widely used in the construction industry.
2. The Contract provided for the date for practical completion to be 8 weeks from the date of site possession. The contract price specified was $100,993.20 (not including GST).
3. The Contract does not itself specify the work that the Appellant agreed to undertake. Rather, this was specified in a separate quotation issued by the Appellant on 20 July 2020 (the Quotation).
4. The Quotation, which is annexed to the Affidavit of Farshid Manesh affirmed on 17 February 2023 (the Manesh Affidavit), provided for progress payments in the following terms: 1. $3,841 for site ESCP Implementation (which included the installation of sandbags around pits, installation of a sediment fence and the installation of shaker Grid); 2. $11,960 for Excavation and Site Preparation (which included tree removal excavation and excavation to subgrade level); 3. $29,739 for Retaining Wall Construction (which included foot block installation and backfill); 4. $30,291 for Driveway Construction (which included the supply and installation of formwork & Reo and a concrete pour); 5. $11,937 for Stormwater Installation (which included pipe and pits installations and an installation break).
5. The Quotation also specified the following terms to which the Quotation was subject under the heading "Notes": "• No allowance to deal with asbestos • No allowance for traffic control • No allowance for temporary accommodation • No allowance for any other works not included in the Scope of Works • No allowance for weather related delays or other delays outside SCE control • No allowance for dealing with services other than stormwater line to be installed • Our assumption is that the works will be completed in one establishment • Our assumption is that the works will be completed during normal working hours • No allowance for the supply and installation of guard rails • No allowance for landscape works • No allowance for future stages • No allowance for temporary fencing • Our program is based on dry weather • No allowance for rock excavation • Our submission is prepared based on reference to DA/457/2018 • Our allowance for the construction of the retaining wall is from Ch 6 to Ch 65 based on Drawing C08-4 (Rev 3) • Our allowance for the construction of the driveway is to Ch 43 only based on Drawing C08-4 (Rev 3) • An amount of 10% of the contract value to be paid upon contract signing. • Upon commencement of the project an invoice will be raised every Friday based on the percentage of completed works on items 1 to 5 of the Price Schedule."
6. The following provisions of the Contract concerning variations are of particular significance in the appeal: "36 Variations 36.1 Directing variations The Contractor shall not vary WUC except as directed in writing. The Superintendent, before the date of practical completion, may direct the Contractor to vary WUC by any one or more of the following which is nevertheless of a character and extent contemplated by, and capable of being carried out under, the provisions of the Contract: a) increase, decrease or omit any part; b) change the character or quality; c) change the levels, lines, positions or dimensions; d) carry out additional work; e) demolish or remove material or work no longer required by the Principal. 36.2 Proposed variations The Superintendent may give the Contractor written notice of a proposed variation. The Contractor shall as soon as practicable after receiving such notice, notify the Superintendent whether the proposed variation can be effected, together with, if it can be effected, the Contractor's estimate of the: a) effect on the construction program (including the date for practical completion); and b) cost (including all time-related costs, if any) of the proposed variation. The Superintendent may direct the Contractor to give a detailed quotation for the proposed variation supported by measurements or other evidence of cost. The Contractor's costs for each compliance with this subclause shall be certified by the Superintendent as moneys due to the Contractor. 36.3 Variations for convenience of contractor If the Contractor requests the Superintendent to direct a variation for the convenience of the Contractor, the Superintendent may do so. The direction shall be written and may be conditional. Unless the direction provides otherwise, the Contractor shall be entitled to neither extra time nor extra money. 36.4 Pricing The Superintendent shall, as soon as possible, price each variation using the following order of precedence: a) prior agreement; b) applicable rates or prices in the Contract; c) rates or prices in a priced bill of quantities, schedule of rates or schedule of prices, even though not Contract documents, to the extent that it is reasonable to use them; and d) reasonable rates or prices, which shall include a reasonable amount for profit and overheads, and any deductions shall include a reasonable amount for profit but not overheads. That price shall be added to or deducted from the contract sum."
7. The "WUC" referred to these provisions is the work under contract. However, the Superintendent referred to in the provisions was not specified in the space provided in Part A of the Annexure to the Contract. Instead, "N/A" was inserted.
8. The following provision of the Contract concerning the payment of interest is also relevant: "37.5 Interest Interest in Item 30 shall be due and payable after the date of default in payment."
9. Item 30 in Part A to the Annexure to the Contract provides that 18% is the interest rate if nothing is stated. No other interest rate was stated. The expression "the date of default in payment" is not defined by the Contract.
10. Finally, the following provision of the Contract concerning access to the work site by persons other than the Appellant should be noted: "24.2 Access for Principal and others The Principal and the Principal's employees, consultants and agents may at any time after reasonable written notice to the Contractor, have access to any part of the site for any purpose. The Contractor shall permit persons engaged by the Principal to carry out work on the site other than WUC and shall cooperate with them. The Principal shall give to the Contractor the names and roles of the persons so engaged. The Contractor shall at all reasonable times give the Superintendent access to WUC. The Principal shall ensure that none of the persons referred to in this subclause impedes the Contractor."

Commencement of proceedings in Local Court and transfer to Tribunal

1. The Appellant's claim was first filed in the Local Court. The Respondent's cross-application was originally filed in the Local Court as a cross-claim. In the Tribunal, cross-applications are treated as separate applications under the Home Building Act 1989 (NSW) (HB Act).
2. In a letter dated 15 August 2023, a Registrar of the Local Court wrote to the Principal Registrar of the Tribunal in the following terms: "On 17 July 2023, the presiding magistrate in the above matter made the following orders: 1. Notice of Motion (to transfer proceedings to NCAT NSW and to continue as if they have been instituted there) granted; 2. Proceedings transferred to NSW Civil and Administration Tribunal; and 3. Application for costs refused. Pursuant to the orders made, please find attached the court file of the matter for your further action."
3. The Local Court is given power to transfer proceedings to the Tribunal by two different statutory provisions.
4. First, cl 6(2) of Sch 4 to the NCAT Act enables a court, with the consent of the parties or of its own motion, to transfer proceedings to the Tribunal if the proceedings relate to a matter for which the Tribunal has jurisdiction.
5. Second, s 48L(2) of the HB Act requires a court to transfer proceedings in respect of a building claim to the Tribunal on the application of the defendant if the claim is one that could be heard by the Tribunal under Div 4 of Pt 3A of that Act. Once transferred, s 48L(2) provides that the proceedings "are to continue before the Tribunal as if they had been instituted there." Section 48L(4) provides that s 48L has effect despite cl 6 of Sch 4 to the NCAT Act.
6. A building claim is a claim for a remedy that arises from a supply of building goods or services: HB Act, s 48A(1) (definition of "building claim"). Building goods or services are goods or services supplied in certain circumstances for or in connection with the carrying out of residential building work or specialist work: HB Act, s 48A(1) (definition of "building goods or services"). The Tribunal has general jurisdiction to determine a building claim in which the amount claimed does not exceed $500,000: HB Act, s 48K(1); NCAT Act, s 29(1).
7. The parties have not provided us with a copy of the formal orders of the Local Court or the reasons, if any, given by the Court for transferring the proceedings. The Tribunal below noted both claims had been transferred from the Local Court, but did not indicate on what basis: Tribunal Decision at [1]. Also, the Tribunal did not indicate expressly whether it was determining the proceedings in exercise of its jurisdiction under the HB Act. However, in its reasons the Tribunal referred to the Appellant as the "Builder" and the Respondent as the "Homeowner": Tribunal Decision at [2].
8. We consider it appropriate to infer that the Local Court transferred the proceedings based on s 48L(2) of the HB Act. We do not understand the Appellant to have submitted otherwise.

Tribunal Decision

1. The Tribunal Decision included the following findings: 1. The Contract price excluding variations was $100,993.20 (not including GST): Tribunal Decision at 11. 2. The Contract price including variations found by the Tribunal below was $133,034.95: Tribunal Decision at [13] 3. The Respondent paid $121,035.64 to the Appellant: Tribunal Decision at [14] 4. Consequently, the amount owed under the Contract by the Respondent to the Appellant was $11,999.31: Tribunal Decision at [15] 5. The Appellant owed the Respondent $20,055 for amounts paid by the Respondent to other contractors for uncompleted work of the Appellant: Tribunal Decision at [22]. 6. When the amounts owed by each party were offset against each other, the Appellant owed the Respondent $8,055.69, which together with GST of $805.57, resulted in a total amount of $8,861.26: Tribunal Decision at [24] 7. The Contract allowed the Appellant to claim 18% interest for overdue payments of the Respondent. However, as the net result was that Appellant owed the Respondent money, the Tribunal below held that issue of interest did not arise: Tribunal Decision at [26].
2. The Tribunal Decision noted the following about the evidence before the Tribunal below: 1. The primary evidence relied on by the Appellant was the Manesh Affidavit. Mr Manesh is a director of the Appellant and was cross-examined on his evidence: Tribunal Decision at [7]-[8]. 2. The primary evidence relied on by the Respondent was his affidavit dated 24 October 2022 on which he was cross-examined: Tribunal Decision at [9]-[10]. 3. The Respondent also relied on the report of Mr Daniel Lee of FairDinkum Technical Services (the Lee Report): Tribunal Decision at [2]. After quoting passages from the Lee Report, the Tribunal found it was an expert report supporting the Respondent's claims in respect of the retaining wall, site cleanup, the stormwater pit and the safety rail: Tribunal Decision at [19]-[20].
3. Apart from quoting from the Lee Report, the Tribunal Decision does not refer to or quote from the evidence of Mr Manesh or the Respondent. The Appeal Panel has not been provided with a copy of the Lee Report or the affidavit of the Respondent to which the Tribunal Decision refers.
4. The Tribunal below ordered the Appellant to pay the Respondent $8,861.26 on or before 12 August 2024. Tribunal Decision at 33.
5. The Tribunal also made an order for any party seeking costs to file and serve submissions on or before 30 July 2024: Tribunal Decision at 33. However, we understand that neither party applied for costs within the specified period.
6. An order was made on 16 August 2024, by consent, by a differently constituted Appeal Panel staying the order of the Tribunal below requiring the Appellant to pay the Respondent until further order of the Tribunal or finalisation of the appeal, whichever is the earlier in time.

Material relied on by the parties in the appeal

1. On 16 August 2024, the differently constituted Appeal Panel also made orders (the document provision orders) requiring each party to the appeal to lodge with the Tribunal and to give the other party: 1. all the evidence given to the Tribunal below on which it is intended to rely; and 2. any evidence not provided to the Tribunal below in making the decision under appeal, on which it is intended to seek leave to rely; 3. the party's written submissions in support, or in opposition, of the appeal; and 4. the sound recording or transcript of the hearing at first instance, if oral reasons were given and/or what happened at the hearing is being relied on and a typed copy of the relevant parts.
2. The principal focus of the appeal is whether the Tribunal below made factual errors of a kind that would justify the granting of leave to appeal under cl 12(1) of Sch 4 of the NCAT Act. Although some of the documentary evidence that was before the Tribunal below was lodged with the Appeal Panel, much was not, even though it is now sought to rely on it. Moreover, at various points during the hearing of the appeal, submissions were made based on what was said to have happened at the hearing before the Tribunal below. Yet, neither party has provided a copy of the sound recording or transcript of the relevant parts of the hearing before the Tribunal.
3. The failure to lodge relevant material has prevented the Appeal Panel from coming to a concluded view on some of the issues raised because to do so would amount to speculation rather than involve drawing legitimate inferences from the material actually before us.
4. That said, we note the following about the material on which the parties seek to rely.
5. The Respondent sought leave to rely on an affidavit affirmed by the Respondent dated 26 February 2024. At the hearing, the Respondent indicated that the affidavit had been prepared for use in the Tribunal below, but the Tribunal did not allow it to be used because its late lodgement. It was therefore not before the Tribunal below. Given these circumstances, the Appeal Panel refused leave for the Respondent to rely on the affidavit in the appeal.
6. Some of the submissions made by the Appellant referred to material annexed to the Respondent's affidavit. This was done even though the Appellant objected to the affidavit. After leave was refused for the Respondent to rely on his affidavit, the Appellant sought to rely on a bundle of documents comprised of the following: 1. an arborist report dated 24 July 2022; 2. copies of various receipts, invoices and quotes on which the Respondent relied in the Tribunal below to demonstrate the loss he incurred by completing work that the Respondent alleges was not completed by the Appellant.
7. The Respondent objected to the arborist report because he said he had not seen it before. However, he conceded that the receipts, invoices and quotes had been before the Tribunal below. Given these circumstances, we refused leave for the Appellant to rely on the arborist report, but granted leave for the Appellant to rely on the receipts, invoices and quotes.
8. The Appellant, in its written submissions dated 5 September 2024, submits that we should not have regard to the Reply to Appeal lodged by the Respondent because it was not lodged on time. By orders made on 19 August 2024 by a differently constituted Appeal Panel, the Respondent was required to lodge the Reply by 23 August 2024. The Reply, dated 9 September 2024, was received by the Tribunal on 20 September 2024.
9. We will make an order under s 41 of the NCAT Act extending the period of time for lodging the Reply to Appeal to 20 September 2024 even though the Respondent has not sought an extension. Section 41 enables the Tribunal to extend the period of time of its own motion as well as on application. In exercising our discretion to extend the period, we note that: 1. the stricter principles concerning when to extend the period for lodging an appeal are inapplicable because the extension is being granted in favour of the Respondent rather than the Appellant: cf Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [18]-[22]; 2. the Appellant has not complied with the same orders concerning lodging all the relevant material required for the Appeal Panel to undertake its task; and 3. the Appellant was not prejudiced by the late filing of the Reply; and 4. the Appellant did not to press its objection in its oral submissions at the hearing of the appeal.
10. Accordingly, the material to which the Appeal Panel has had regard is limited to the following: 1. the Tribunal Decision; 2. the Notice of Appeal; 3. the Reply to Appeal; 4. the oral and written submissions of the parties; 5. the bundle of documents lodged with the Tribunal on 9 September 2024 pursuant to the orders mentioned above comprised of the following: 1. Amended Statement of Claim filed in the Local Court dated 25 December 2022; 2. Cross-Defendant's Response to the Cross-Claim filed in the Local Court; 3. the Manesh Affidavit; 4. A copy of the contract entered between the Appellant and the Respondent on or about 3 August 2020. 1. the receipts, invoices and quotes that we gave the Appellant leave to rely on; 2. the orders made by the Local Court and the Tribunal below in relation to the Appellant's claim and the Respondent's cross-application; 3. the interlocutory orders made in the appeal.

Nature and scope of internal appeals

1. A party to proceedings in which the Tribunal makes an internally appealable decision may appeal to an Appeal Panel under s 80 of the NCAT Act against the decision as of right on a question of law or, with the leave of the Appeal Panel, on any other question. The Tribunal Decision was a general decision: NCAT, s 29 (1) and (3). A general decision is an internally appealable decision: NCAT, s 32(1)(a) and (4). The orders made in the Tribunal Decision are therefore appealable to an Appeal Panel under s 80.
2. It is important to note, as we did in the hearing, that an appeal under s 80 is not simply an opportunity for a losing party to rerun its case: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. Except where the decision is an interlocutory decision, s 80(2) provides that a party's right to appeal is limited to questions of law. Leave is required for an appeal on any other questions.
3. The categories for questions of law are not closed: Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 (Unique Commercial Group) at [33]. However, whether an internal appeal involves a question of law must be approached with discernment and care: Unique Commercial Group at [39]. For present purposes, it is sufficient to note that the following can involve questions of law: 1. whether the construction of a contract arrived at by the Tribunal at first instance was wrong in some identified way: Unique Commercial Group at 32 citing Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385; [2020] FCAFC 50 at [66]; 2. whether a decision is so unreasonable that no reasonable decision-maker would make it: Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223; Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86; [2013] NSWCA 180 at [10]; Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18; Pridgeon v Medical Council of New South Wales [2022] NSWCA 60 at [37]; 3. whether there is a constructive failure to exercise jurisdiction by failing to consider a substantial, clearly articulated argument: Commissioner of Police, NSW Police Force v FYH [2024] NSWCATAP 176 at [36].
4. Clause 12(1) of Sch 4 to the NCAT Act limits the discretion of an Appeal Panel to grant leave for an internal appeal against a general decision of the Tribunal in the Consumer and Commercial Division. It provides that an Appeal Panel may grant leave under s 80(2)(b) of that Act only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: 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).
5. There is a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act if 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": Collins v Urban [2014] NSWCATAP 17 (Collins) at [76].
6. Without being exhaustive, a decision of the Tribunal will not be fair and equitable if there has been a denial of procedural fairness: Collins at [77(1)]. A decision will be against the weight of evidence if "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": Collins at [77(2)].
7. Establishing one of the grounds mentioned in cl 12(1) of Sch 4 merely enlivens the discretion to grant leave. An Appeal Panel is still required to decide whether it is appropriate to exercise the discretion. As noted in Collins at [84], the following general principles apply to the exercise of the discretion: "[84] The general principles derived from these cases can be summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) 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, BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45];"
8. We approach the appeal grounds with these principles in mind.

Appeal grounds

1. The Appellant relies on the following appeal grounds: 1. Ground 1 - The Tribunal below did not give proper weight to the evidence of the Appellant. 2. Ground 2 - The Tribunal below erred in the calculation of the contract price. 3. Ground 3 - There was no proper lay or expert evidence before the Tribunal below to make a decision in favour of the Respondent on the cross-application. 4. Ground 4 - The Tribunal below erred in placing a significant amount of weight to the Lee Report. 5. Ground 5 - The Tribunal below erred in not granting the Appellant interest on the overdue payments.
2. The Appellant seeks leave to amend the orders sought in its Notice of Appeal for the following orders: 1. Appeal allowed. 2. The Respondent is to pay the Appellant the sum of $28,749.00 within 28 days. 3. In the alternative to sub-paragraph (2), the Respondent is to pay the Appellant the sum of $23,469.00 within 28 days. 4. The Respondent is to pay the Appellant interest pursuant to the Contract in the sum of $18,322.65 within 28 days. 5. In the alternative to (4), the Respondent is to pay the Appellant interest pursuant to the Contract in the sum of $15,718.51 within 28 days. 6. The Respondent's cross-application is dismissed. 7. The Respondent is to pay the Appellant's costs of the Appeal.
3. The Appellant seeks leave for the amended orders because the calculation of the various site works was not previously expressly claimed in the amended statement of claim or in the total amount sought as well as the interest component. As the Respondent has not objected, we are prepared to grant leave for the orders sought to be amended.
4. We will address whether leave is required for a question raised by an appeal ground when we consider the ground later in these reasons.

Respondent's submissions concerning insurance

1. The Respondent submits that the Appellant is not entitled to recover any compensation because of s 94(1)(b) of the HB Act.
2. Section 92 of the HB Act requires a contractor who does residential building work to be insured for the work. There is no dispute that the Appellant did not have such insurance. Section 94(1)(b) provides that a contractor who does uninsured residential building work is not entitled to recover money in respect of that work. However, s 94(2) provides that if a court or tribunal considers it just and equitable, the contractor, despite the absence of the required contract of insurance, is entitled to recover money in respect of that work on a quantum meruit basis.
3. The Tribunal Decision does not address the issue and we have not been provided with any material to indicate whether it was pressed before the Tribunal below. The Respondent submits that it was not pressed. This appears to be correct. There is no mention of the issue in the Tribunal Decision.
4. As we pointed out at the hearing, the further difficulty with the Respondent's submission is that it raises an appeal ground. As such, the proper course was for the Respondent to appeal against the Tribunal Decision on this basis rather than to raise the issue in reply to the Appellant's appeal.
5. As Respondent has not appealed against the Tribunal Decision, we must reject the Appellant's submissions concerning the issue.

Ground 1 - The Tribunal below did not give proper weight to the evidence of the Appellant

Submissions

1. The Appellant submits that the documentary evidence of the Appellant was not given the proper weight and consideration it ought to have been given by the Tribunal below with respect to the variations for which the Appellant contended. It submits the evidence, particularly the Manesh Affidavit, supports the work under the contract being done and the entitlement for payment.
2. The Respondent submits that the Tribunal below had ample evidence to make the findings it did. He contends that some of that evidence was given orally at the hearing before the Tribunal.
3. The Tribunal Decision (at [12]) included the following findings concerning variations: "12 The Builder alleges that following variations also formed part of the Contract: (1) a bridging slab variation of $14,150.75. As an invoice for this item was paid by the Homeowner, I find therefore that this variation performed part of the Contract; (2) extra rock variation $1,150.00. $750.00 was agreed between the parties; (3) a riser variation of $902.75. This amount was agreed by the parties; (4) a sewer variation of $765.75. I am not satisfied on the Builder's evidence that this item formed part of the Contract. Nor is there any evidence that would enable me to assess the value of the work for this item on quantum meruit basis. Accordingly, I make no allowance for this variation; (5) footpath $1,725.00. I am not satisfied on the Builder's evidence that this item formed part of the Contract. Nor is there any evidence that would enable me to assess the value of the work for this item on quantum (6) asbestos testing variation of $600.00. I am satisfied on the Builder's evidence that this item formed part of the Contract; (7) storm water pit $4,682.00. Given that this was a Council requirement, I find that this item formed part of the Contract; (8) guard rail (labour), $3,575.00. The Homeowner conceded 75% of this amount which I will allow in the sum of $2,681.25. (9) removal of redundant kerb unit $1,848. I am not satisfied on the Builder's evidence that this item formed part of the Contract. Nor is there any evidence that would enable me to assess the value of the work for this item on quantum meruit basis. Accordingly, I make no allowance for this variation; (10) junction pit $385.00. I am not satisfied on the Builder's evidence that this item formed part of the Contract. Nor is there any evidence that would enable me to assess the value of the work for this item on quantum meruit basis. Accordingly, I make no allowance for this variation; (11) various site visits. I am not satisfied on the Builder's evidence that this item formed part of the Contract. Nor is there any evidence that would enable me to assess the value of the work for this item on quantum meruit basis. Accordingly, I make no allowance for this variation."
4. The Appellant does not challenge the findings made in the Tribunal Decision at 12, (2), (3), (6) and (7). However, the other findings are challenged as being against the weight of the evidence as follows: 1. Finding at 12 (the sewer variation) The Tribunal below refused to allow a variation of $765.75 for this work. The Appellant submits that the work was incidental to the stormwater work under the Contract and should have been allowed. 1. Finding at 12 (the footpath variation) The Tribunal below refused to allow a variation of $1,725 for this work. The Appellant submits there was evidence before the Tribunal that the Respondent requested the work to be undertaken. The Appellant points to an email dated 13 May 2021 in Annexure HI to the Manesh Affidavit (13 May 2021 email) requesting, among other things, the "vehicular crossing (the layback in Kerb)". The Appellant submits this is evidence of the Respondent requesting the variation as it was a requirement from Hornsby Shire Counsel. It submits this variation should be allowed. 1. Finding at 12 (the guard rail (labour) variation) The Tribunal below refused to allow a variation of $3,575.00 for this work. Instead, it allowed $2,681.25 to reflect the Respondent's concession to pay 75% of the amount. The Appellant submits there was evidence before the Tribunal that the Respondent requested the works to be undertaken. The Appellant points again to the 13 May 2021 email requesting, among other things, the "Safety Rail Installation (the remaining work comprised of 5 steel posts to be installed and guard rails to be mounted)." The Appellant submits this is evidence of the Respondent requesting the variation as it was a requirement from Hornsby Shire Counsel. The Appellant submits it was not open on the evidence for the Tribunal to only allow 75% of the variation 1. Finding at 12 (the removal of redundant kerb unit variation) The Tribunal below refused to allow a variation of $1,848 for this work. The Appellant submits there was evidence before the Tribunal that the Respondent requested the works to be undertaken. Once again, the Appellant points to the 13 May 2021 email requesting, among other things, the "vehicular crossing (the layback in Kerb)" The Appellant submits that this is evidence of the Respondent requesting the variation as it was a requirement from Hornsby Shire Counsel. It says this was sufficient evidence for the Tribunal to find the amount owing. 1. Finding at 12 (the junction pit variation) The Tribunal below refused to allow a variation of $385 for this work. The Appellant submits that there was evidence before the Tribunal that the variation was completed as a direction and requirement of Hornsby Shire Council as set out in Annexure I to the Manesh Affidavit. The Appellant submits this is evidence of the variation and that the Tribunal should have allowed this variation in full. 1. Finding at 12 (the site visits variation) The Appellant submits the Tribunal below should have allowed a variation of $5,280 for this work. The Appellant submits that the time arose and was charged because a representative of the Appellant had to attend Hornsby Shire Council for the guard rail and layback variations, Sydney Water and property valuers. The Appellant points to para 4(f) and Annexure D2 of the Manesh Affidavit. This, it is submitted, was all extra work in addition to the contract price.
5. The Appellant also submits that Tribunal below did not consider the payment claims made by the Appellant under the Building and Construction Industry Security for Payment Act 1999 (NSW) (BCISP Act). In its submission, there was evidence set out in paragraphs [8]−[9] and Annexures B, C and DI of the Manesh Affidavit that payment claims were submitted to the Respondent in accordance with the BCISP Act and the Respondent did not provide a payment schedule as required by the Act.
6. As indicated, the Appellant relies particularly on the Manesh Affidavit as evidence in support of its submissions. The Appellant submits that the Affidavit, and all the annexures to it, should have been given more weight by the Tribunal below because the evidence is supported by contemporaneous documentary evidence. It submits the Contract and evidence of variations were included in this Affidavit and its annexures.

Is leave to appeal required?

1. Appeal ground 1 involves questions of fact to the extent that it raises questions concerning whether the Tribunal below gave appropriate weight to the Appellant's evidence concerning the variations. One of the grounds for granting leave to appeal against a decision of the Tribunal in the Consumer and Commercial Division is that the decision was against the weight of evidence is a ground for granting leave to appeal: NCAT Act, Sch 4, cl 12(1). Accordingly, leave is required to this extent.
2. To the extent that the appeal ground raises a failure by the Tribunal below to consider progress payment claims made under the BCISP Act, this may potentially raise a question of law. This is because, as we pointed above, whether there is a constructive failure to exercise jurisdiction by failing to consider a substantial, clearly articulated argument may involve a question of law. However, we have no evidence before us as to whether a submission was made to the Tribunal about the significance of the payment claims. We have not been provided with a copy of any of the written submissions made to the Tribunal or a transcript of the hearing before it. Accordingly, we think it appropriate to treat the submission about the progress payment claims as directed to the weight of evidence before the Tribunal.

Consideration

1. There are two issues concerning appeal ground 1 that prevent it from succeeding.
2. The first issue is that the Appeal Panel has not been provided with the whole of the evidence that may have been before the Tribunal below. In particular, we do not have the benefit of a recording or transcript of the hearing before the Tribunal which may have indicated why the Tribunal did not treat the Appellant's evidence as dispositive. As we have noted, both Mr Manesh and the Respondent were cross-examined on their affidavits. In this regard, we note that the Respondent submitted at the hearing of the appeal that he gave oral evidence concerning some of the matters raised by the Appellant by way of clarification of the documentary evidence. This makes it impossible for the Appeal Panel to assess whether the alleged failure of the Tribunal to rely on the evidence in the Manesh Affidavit was against the weight of evidence in the sense that "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": Collins at [77(2)].
3. The second issue is that it is unclear that the variations for which the Appellant contends were appropriately documented for the purposes of the Contract. As we noted above, clause 36 of the Contract contains provisions concerning how variations are to be made. Assuming clause 36 applies, subcl 36.1 enables the Superintendent to direct additional work. For present purposes, we are prepared to assume the Respondent is the Superintendent even though he is not specified as such in the Contract. Subclause 36.2 requires the direction to be in writing and the Contractor (in this case, the Appellant) must provide an estimate of the cost of work if the work can be effected. Subclause 36.4 requires the Superintendent to apply a pricing formula to the variations, which absent specified figures, has to be reasonable.
4. The Appellant has not provided the Appeal Panel with sufficient evidence to enable the Appeal Panel to be satisfied that the variations for which the Appellant contends complied with the requirements for variations imposed by cl 36 of the Contract. In particular, we have not been provided with evidence that the Appellant provided the Respondent with a written estimate of the cost of each variation.
5. In our view, it would be inappropriate because of these two issues to grant leave to appeal in respect of appeal ground 1. Accordingly, leave to appeal on that ground is refused.

Ground 2 - The Tribunal below erred in the calculation of the contract price.

1. The Appellant submits that the Tribunal below erred in its calculation of the contract price based on the contract variations found by the Tribunal. It submits the contract price, even when limited to these variations, is $137,235.95 rather than $133,034.95 as calculated by the Tribunal. The Respondent submits that the Tribunal's calculations are correct.
2. In determining whether the Tribunal below made a mathematical error, we need to set out the relevant findings of the Tribunal:
3. First, the Tribunal found that the original contract price without the variations was $100,993.20 (not including GST): Tribunal Decision at [2]. We note that the original contract price with GST included would be $111,092.52.
4. Second, the Tribunal allowed the following amounts for variations (Tribunal Decision at 11): 1. $14,150.75 for a bridging slab variation; 2. $750 for an extra rock variation; 3. $902.75 for a riser variation; 4. $600 for an asbestos testing variation; 5. $4,682 for a storm water pit; 6. $2,681.25 for a guard rail (labour).
5. By our calculations, the total amount for the variations is $23,766.75.
6. The Tribunal Decision does not indicate whether the amount of $133,034.95 calculated by the Tribunal is inclusive of GST. We assume that the Tribunal made some allowance for GST because the addition of the original contract price excluding GST and the total amount for the variations would result in an amount of $124,759.95.
7. There are questions as to the Tribunal's calculation. If the GST is applied only to the original contract price and not to the variation amounts, the total contract price would be $134,859.27, relatively close to the $133,034.95 figure reached by the Tribunal. However, if, as the Appellant submits, the GST is applied to the combined original contract price excluding the GST and the variation amounts, the total contract price would be the $137,235.95 as calculated by the Appellant, rather than the figure of $133,034.95 reached by the Tribunal. It is clear that a mathematical error has been made by the Tribunal.
8. On one view, whether a mathematical error has occurred might be categorised as involving a question of law on the basis that the calculation is so unreasonable that no reasonable decision-maker would make it. However, even if the question does not involve a question of law, leave should be granted on the basis that the decision was not fair and equitable, there is a significant possibility the Appellant would have achieved a different and more favourable result if the error had not occurred and the error is plain and readily apparent so that it would unjust to allow it to stand: cf Qin v Billings [2015] NSWCATAP 105 at [38].
9. Given these circumstances, we would grant leave to appeal in respect ground 2 to the extent it is necessary and allow the ground.
10. However, the absence of a clear indication in the Tribunal Decision of whether the variation amounts are inclusive or exclusive of GST makes it difficult for the Appeal Panel to make an order substituting a different contract price to that found by the Tribunal below in the absence of clear evidence concerning the incidence of GST.
11. We will return to the question of the appropriate remedy for the error in our conclusions below.

Ground 3 - There was no proper lay or expert evidence before the Tribunal below to make a decision in favour of the Respondent on the cross-application

1. The Appellant submits that there was no proper lay and expert evidence before the Tribunal below for it to allow the Respondent's cross-application. In its submission, the Tribunal should not have awarded $20,055 to the Respondent because it was not open to do so on the evidence. We will refer to this issue raised by the appeal ground as the insufficient evidence issue.
2. The Respondent again submits that the Tribunal had ample evidence to make the findings it did. He contends that some of that evidence was given orally at the hearing before the Tribunal.
3. The Tribunal Decision (at [21]−[23]) included the following findings concerning the Respondent's cross-application for uncompleted work: "21 The lay and expert evidence of the Homeowner supports the amounts claimed for the following items: (1) the retaining wall, $8,349.00; (2) the removal of one tree, in respect of which the Homeowner claims $4,500.00, being the amount he says he spent on using another contractor to complete the works; (3) the drainage pit, $5,280.00; (4) waste removal/skip hire, $5,760.00; (5) removal of timber formwork, $850.00. 22 I find therefore that the Builder is liable to the Homeowner in the sum of $20,055.00. 23 While the expert report supports a claim for landscaping, landscaping was a specific exclusion from the Contract. Therefore I make no allowance for landscaping."
4. The Appellant seeks leave to appeal all five items allowed on the Respondent's cross-application in the Tribunal Decision (at [22]) because there was no proper lay or expert evidence to allow each item.
5. Alternatively, the Appellant submits that the Respondent's cross-application should have been dismissed because subcl 24.2 of the Contract prevents the Respondent from engaging any other contractor to undertake the works under the Contract. It is submitted that the Respondent would therefore have been in breach of the Contract by engaging other contractors rather than the Appellant. We will refer to this alternative issue raised by the appeal ground as the contract breach issue.

Is leave to appeal required?

1. The insufficient evidence issue clearly involves questions of fact. Consequently, leave to appeal is required to the extent appeal ground 3 raises the issue.
2. However, the contract breach issue concerns the construction to be given to subcl 24.2 of the Contract. It therefore involves a question of law for which leave to appeal is not required.

Insufficient evidence issue

1. As with appeal ground 1, the Appellant has not lodged sufficient evidence to enable the Appeal Panel to determine whether the items allowed by the Tribunal below on the Respondent's cross-application were against the weight of evidence or not just and equitable.
2. The Tribunal held that the Lee Report supported the Respondent's claims in respect of the retaining wall, site cleanup, the stormwater pit and the safety rail: Tribunal Decision at [20]. The Appellant challenges this evidence because Mr Lee was not qualified to give the evidence. The Appellant also points to the suggestion made by Mr Lee that a survey was required to determine discrepancy in the height of the stormwater pit relative to the retaining wall height. As to Mr Lee's qualifications, this is the subject of appeal ground 4. We dismiss ground 4 below. We rely on the same reasons to reject the Appellant's submissions concern the Lee Report in relation to appeal ground 3.
3. The Appellant relies on a number of invoices and quotes (including those which we gave the Appellant leave to rely on in the hearing of the appeal) to demonstrate that there was insufficient evidence about the amounts paid to, and the work done, by the Respondent's contractors. In his oral submissions, the Respondent asserted that the invoices and quotes had to be understood in the context of the oral evidence he gave in the hearing before the Tribunal below. This may well be true. However, neither the Appellant nor the Respondent has provided us with a recording or transcript of the hearing. Accordingly, we are not in a position to make an assessment concerning that context.
4. The Appellant's argument would be stronger if its submissions had been made on the basis of the entirety of the evidence before the Tribunal below (including oral evidence) concerning each item allowed on the cross-application rather than by reference to selected invoices and quotes read without the context that may have been given to them at the hearing before the Tribunal.
5. We therefore refuse leave to appeal to the extent that appeal ground 3 raises the insufficient evidence issue.

Contract breach issue

1. Subclause 24.2 of the Contract does not directly prevent the Principal (that is, the Respondent) from engaging contractors other than the Contractor (that is, the Appellant). Instead, the subclause operates as follows: 1. The Principal and the Principal's employees, consultants and agents may at any time, after reasonable written notice to the Contractor, have access to any part of the site for any purpose. This confers a right rather than impose an obligation. The right is qualified by the requirement to give reasonable written notice. The Appellant has not pointed to any evidence concerning the giving of notice. 2. The Contractor must permit persons engaged by the Principal to carry out work on the site other than WUC. This is an obligation imposed on the Contractor rather than the Principal. The fact that the work involves WUC merely qualifies the obligation imposed on the Principal to provide access to the site. There is no suggestion that the Appellant denied access to the contractors engaged by the Respondent to complete work that the Respondent alleges the Appellant did not complete. 3. The Principal must ensure that the persons it engages do not impede the Contractor. Given that the Appellant asserted that it had completed the work or would not do any more work under the Contract, it is difficult to see how the Respondent could be said to have impeded the Appellant doing work it refused to do.
2. As a result, we do not consider that the Respondent was in breach of the Contract by engaging other contractors.

Disposition As neither the insufficient evidence issue nor contract breach issue have been made out, appeal ground 3 fails.

Ground 4 - The Tribunal below erred in placing a significant amount of weight to the Lee Report

1. The Appellant submits that the Tribunal below erred in giving a significant amount of weight to the Lee Report. It submits that Mr Lee, who was the designer of the project, did not have the proper qualifications to provide the opinion and was unable to provide an independent opinion because he was employed by the Respondent. The Appellant submits that the Respondent should have engaged an independent surveyor to assess whether the work had been completed.
2. The Respondent submits that Mr Lee was appropriately qualified and that the Tribunal was justified in relying on his evidence. In particular, the Respondent submitted during the hearing that Mr Lee was a civil engineer.
3. This ground involves a question of fact because it raises the question of the weight given to evidence to Mr Lee's evidence. Accordingly, leave is required.
4. The Appellant has not provided the Appeal Panel with a copy of the Lee Report despite the document provision orders. The only reference we have to the contents of the Report is the short excerpt in the Tribunal Decision. The provision of the complete Report may have enabled us to assess the qualifications, if any, of Mr Lee. Expert reports often include a recitation of the qualifications of the person who prepared the report. The absence of documentation (including a recording or transcripts of the hearing at first instance) precludes us from assessing the qualifications of Mr Lee or determining whether the weight given to Mr Lee's evidence was inappropriate.
5. The fact that Mr Lee was engaged by the Respondent to design the project to which the Contract related did not necessarily preclude the Tribunal below from relying on his evidence. Indeed, he may well have been the person who was best placed to determine whether the work required to complete the project had been completed.
6. Leave to appeal on ground 4 is refused.

Ground 5 - The Tribunal below erred in not granting the Appellant interest on the overdue payments

1. The Appellant submits that the Tribunal below has not allowed the Appellant interest on the overdue payments even though it is a term of the Contract that the Appellant is entitled to charge the owner 18% interest for overdue payments.
2. We consider that this appeal ground raises a question of law. The question concerns whether the Tribunal misconstrued subcl 37.5 of the Contract concerning the payment of interest for late payments by the Respondent. As we noted above, the proper construction to be given to a contract is a question of law.
3. The Tribunal held that the question of interest did not arise because the offset of the amounts owed by the parties resulted in the Appellant owing the Respondent money: Tribunal Decision at [26]. With respect, we disagree.
4. Subclause 37.5 provides that interest at the rate of 18% "shall be due and payable after the date of default in payment". The obligation to pay interest is contingent on a default in payment. Accordingly, the Tribunal should have added any interest owed to the Appellant by the Respondent to the other amounts owed to the Appellant under the Contract as a result of default, before offsetting the amounts owed to each party. It was wrong to approach the question of interest by reference to the favourable result of the offset for the Respondent rather than by reference to defaults in payment by the Respondent.
5. Appeal ground 5 is allowed.

Conclusions

1. The appeal should be allowed because: 1. the Tribunal below erred in its calculation of the contract price; and 2. the Tribunal below erred in not granting the Appellant interest on the Respondent's overdue payments under the Contract.
2. Both of these errors ultimately affect the correctness of the Tribunal's offset of the amount owed on the Appellant's claim and the amount owed on the Respondent's cross-application. Accordingly, the amount that the Tribunal ordered the Appellant to pay the Respondent must be set aside.
3. The legal representative for the Appellant conceded at the hearing of the appeal that a remittal would be appropriate if the Appellant was successful. We agree.
4. We are unable, because of the paucity of the evidence lodged by the parties for the consideration of the Appeal Panel, to make orders in substitution of the orders made by the Tribunal. Consequently, we consider that the appropriate course is to remit the proceedings.
5. We note that findings have not been made concerning the amount of interest payable by the Respondent to the Appellant under the Contract. This will require additional fact finding, particularly concerning if, and when, the Respondent failed to make payments on time under the Contract and calculating interest by reference to those defaults. However, given the relatively small amount of money at issue, and the requirement that the Tribunal provide a "just, quick and cheap" resolution of the dispute (NCAT Act, s 36(1)), we will order that the outstanding issues (that is, GST and interest) be determined by the Tribunal as originally constituted on the basis of the evidence then before it, with no fresh evidence allowed.
6. It may be that the Tribunal to which the proceedings are remitted will consider that these issues can be determined without a hearing, following submissions. In making new orders to resolve both applications, the Tribunal should also consider whether it is correct as a matter of law to set any orders for payments it makes off against each other.

Costs

1. The Appellant seeks its costs in the appeal if it is successful in the appeal.
2. Ordinarily, s 60 of the NCAT Act would require each party to pay its or their own costs unless there are special circumstances warranting an order for costs. However, r 38(2)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) allows the Tribunal in proceedings in the Consumer and Commercial Division to award costs in the proceedings even in the absence of special circumstances warranting an award if the amount claimed is more than $30,000.
3. Rule 38A of the NCAT Rules provides that costs can be ordered in an internal appeal if r 38 applied in the proceedings at first instance and the amount claimed or in dispute in the appeal is more than $30,000: Martins-Lopes v Keller [2024] NSWCATAP 215 at [18]. The Tribunal below held that r 38 did not apply to the claim made by the Appellant because it was less than $30,000: Tribunal Decision at [27]. However, the Tribunal held that r 38 did apply the Respondent's claim because his claim exceeded that amount: Tribunal Decision at [28]. The Appellant did not appeal against these decisions.
4. It follows that r 38A does not apply to the Appellant's claim on appeal because r 38 did not apply to the Appellant's claim in the proceedings at first instance. Accordingly, s 60 of the NCAT Act precludes an award of costs in favour of the Appellant unless there are special circumstances warranting the award,
5. Noting the above and that the parties have not provided submissions on costs in the appeal, we will make orders providing for submissions to be made.

Orders

1. Accordingly, the orders of the Appeal Panel are as follows: 1. Mr Ahmad Karnib is granted leave to represent the Appellant in the appeal. 2. Leave to appeal is granted to the extent it is necessary for appeal ground 2. 3. The appeal is allowed. 4. The order made by the Tribunal on 17 July 2024 in proceedings 2023/00379909 (formerly HB 23/37734) for the Appellant is to pay the Respondent $8,861.26 is set aside. 5. The proceedings are remitted to the Tribunal constituted by the same Member, if available, to redetermine the proceedings in accordance with these reasons with no further evidence allowed. 6. If a party wishes to seek an order for costs in the appeal, the following directions apply: 1. The party seeking the costs order (the costs applicant) must lodge with the Tribunal and serve on the other party (the costs respondent) their application for costs, along with any supporting submissions (not exceeding five pages in length) and evidence, within 14 days of the date of this decision. 2. The costs respondent must lodge with the Tribunal and serve on the costs applicant any written submissions (not exceeding five pages in length) and evidence in response within a further 14 days of receipt of the costs applicant's submissions. 3. The costs applicant may lodge with the Tribunal and serve on the costs respondent any written submissions (not exceeding 3 pages) in reply within a further 7 days of receipt of the costs respondent's submissions. 4. The parties are to address in their submissions whether, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), the Appeal Panel should dispense with a hearing on the issue of the costs of the appeal so that the issue is decided on the papers lodged with the Tribunal and with appearances of the parties not required.

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: 19 November 2024