Symond v Dovera Homes Pty Ltd

Timing

1. The challenged order was made on 3 September 2024 and a request for that decision to be revised under s 63 of the NCAT Act was refused on 18 September 2024. As the Notice of Appeal was lodged on 20 September 2024, the appeal was commenced within the 28-day time limit imposed by r 25 of the Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules).

Documents

1. As just indicated, the Notice of Appeal was received on 20 September 2024. On 8 November 2024 the appellant lodged seven pages of written submissions plus 489 pages which contained a copy of the owners' evidence at first instance. The respondent did not lodge a Reply to Appeal and did not submit any documents.

Hearing

1. The appellants were represented by a solicitor. Since there was no appearance for the builder in the hearing room, from an abundance of caution, the surrounds of the hearing room were checked to confirm that was the position.
2. From the available documents, it is clear the builder was not represented (1) at the directions hearing on 26 April 2024, (2) at the first instance hearing on 3 September 2024, (3) at the call-over of the appeal on 11 October 2024, and (4) at the hearing of the appeal on 21 January 2025.
3. In such circumstances, and where no explanation has been provided for the absence of any representative of the builder at the hearing of the appeal, there was no point in adjourning the hearing of the appeal as there is nothing to suggest the position would be any different if the hearing was adjourned.

First instance decision

1. The presiding member adopted the traditional approach of adding the estimated cost of completion of $233,428.56 and the estimated cost of rectification of defects $203,506.38, giving $436,934.94, then deducting the unpaid balance of the contract price, which was $294,250. (The contract price was $588,500 of which a total of $294,250 had been paid by the owners.) To the resulting figure of $142,684.94 was added $9,643.50 for miscellaneous claims, giving the amount awarded, namely $152,328.44. (For completeness, it is noted that there were variations totalling $43,296 which had been fully paid.)

Notice of Appeal

1. It was contended that "The method used to calculate the damages awarded to the appellants was incorrect and the amount of damages awarded was incorrect." The amount sought was $446,578.

Appellants' submissions

1. In the written submissions, simply stated, the appellants' case was that the cost of completion, as set out in the expert's report upon which the appellants relied at first instance, was the cost of completing the contract work to lock-up stage, not to completion. What was said to be the appropriate calculation of damages was set out in a table, at [26], reproduced below (emphasis original): Description Amount Costs paid to the Builder pursuant to stages 1-4 of the Contract $294,250.00 Costs of completing and remediating the Builder's work for stages 1-4 pursuant to the Expert Report $436,934.04 Expense damages $9,643.50 Amount still payable to the Builder pursuant to staged 5-8 of the Contract $294,250.00 Subtotal $1,035,078.44 Original Contract Price ($588,500.00) Damages $446,578.44

1. In oral submissions, reference was made to the stages of the work set out in the contract (reproduced below). Stage 4 is carpentry: stage 5 lock up. Reference was also made to the expert's report, in support of the contention that the cost of completion only covered stages 1 to 4. It was submitted that (1) the accompany photos provided support for that view, (2) the cost of bring the work to completion was $294,250, being the unpaid balance of the contract price, (3) if the work had reached lock-up stage, the builder would have claimed the fifth progress payment, and (4) the member who presided at first instance had incorrectly proceeded on the basis that the cost of completing all the work covered by the contract.

Relevant law

1. In the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act), s 80(2)(b) permits that an appeal to be made against a decision at first instance either "as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds."
2. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 to the NCAT Act. They include where an appellant may have suffered a substantial miscarriage of justice on the basis that "the decision of the Tribunal under appeal was against the weight of evidence".
3. In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
4. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b). In Collins, at [84], the five situations in which Appeal Panel considered it would ordinarily be appropriate to grant leave to appeal included: (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;
5. When determining an appeal, s 82(1)(d) of the NCAT permits the decision to be varied.
6. The High Court, in Haines v Bendall [1991] HCA 15 at [1], said (citations omitted): The settled principle governing the assessment of compensatory damages, whether in actions of tort or contract, is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed.

Consideration

1. To understand the evidence and submissions, it is instructive to first set out the table of progress payments as appears in the written contract which governed the subject building work (A291, ie on page 291 of the appellants' first instance evidence):, 1 Deposit $58,250.00 2 Commencement $58,250.00 3 Demolition $58,250.00 4 Carpentry $117,700.00 5 Lock Up Stage $117,700.00 6 Plasterboard and tiling $58,250.00 7 Bathroom Completion and Fitout $58,250.00 8 Handover $58,250.00 Total $588,500.00

1. Unusually at first instance, the appellants (who were unrepresented) and/or their expert presented evidence covering the cost of rectifying defective work and the cost of completing work to the lock-up stage (stage 5).
2. Given that the usual approach is to present evidence of the cost of completing all the work covered by the contract, then deducting the unpaid balance of the contract price, the determination made by the presiding member is understandable.
3. However, the portion of the expert's report dealing with incomplete work (A224-257 or A456-481) makes it clear that the costing was to lock-up stage, which was stage 5. Reasons for that conclusion are: 1. Item1 in the Scott schedule for incomplete work (A246 or A478) was titled "Incomplete works to lock up stage." 2. There was an itemised list of the 12 components comprising that item (A225-226 or A457-458) which totalled $114,630.73, being the amount shown for item 1 in the Scott schedule. 3. That amount of $114,630.73 is comparable to the amount of $117,700 specified in the contract for that stage of the work, being the fifth stage.
4. We note that, when those matters were pointed out to the appellants' solicitor, after taking instructions, it was indicated that it was not disputed that the expert had assessed cost of completion to the end of lock-up, ie stage 5, and not stage 4.
5. It therefore appears that, at the time the contract was terminated, the work covered by the contract had not progressed far beyond stage 4 which explains why the expert included the cost of completing stage 5.
6. As the owners chose to run their case by reference to the position as at lock-up stage, that is how the assessment must now be made because it is not the role of the appeal panel to hear the case again. As stated in Guideline 1, Internal Appeals (published on the Tribunal's website), "an appeal is not an opportunity to have a second go at a hearing". That position is well established by Appeal Panel decisions such as Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39, at [10].
7. The position, to reach lock-up stage, is set out in the following table which shows the amount needed to put the appellants in the same position as if the work had reached that stage of completion without any defects: Description Amount Costs of rectification of defects $203,506.38 Costs of completing work to lock-up stage $233,428.56 Sub-total $436,934.94 Less unpaid amount to pay to lock-up stage $117,700.00 Sub-total $319,234.94 Add expense damages $9,643.50 Total $328,878.44

1. A result of the presiding member assessing damages as if the cost of completing the work covered all the work required by the contract and not just the work to achieve completion of the lock-up stage, the decision was against the weight of the evidence. Since the position is clear beyond argument, and there was a factual error that was clearly mistaken, there has been a miscarriage of justice that warrants granting leave to appeal.
2. There is no utility in remitting the application for rehearing when (1) the position is clear to us, (2) the appellant agrees with that position, and (3) the respondent had not participated in the proceedings.
3. The simplest course is to vary the money order that was made and make a money order for a different amount. As the date for compliance with the money order, namely 1 October 2024 has passed, the corrected amount should be made payable straightaway.

Costs

1. In the Rules, the effect of r 38A is that costs of the appeal are to be determined on the same basis as was the case at first instance. In these proceedings, costs were governed by r 38 of the rules, costs follow the event (ie outcome) unless there is disentitling conduct on the part of the successful party, and the Tribunal was unable to discern any such conduct in relation to this appeal.
2. It is noted that, at first instance, the then unrepresented appellants were awarded costs of $4,400 in respect of the cost of report they obtain from an expert.
3. The appellants have been successful, there does not appear to be any reason why an order for costs in their favour should not be made.

Orders

1. For the reasons set out above, the following orders are made: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. The date and amount of the order made on 3 September 2024 are varied. 4. The respondent is to pay the appellants $328,878.44 immediately. 5. The respondent is to pay the appellants' costs of the appeal, on the ordinary basis, as agreed or assessed.

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: 04 February 2025