TNT Building Trades Pty Ltd v Baker

Consideration

1. If there has been a constructive failure to exercise jurisdiction there will have been error of law which can be addressed on an appeal limited to a question of law: Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165 (Alexandria Landfill) at [22] (Basten JA).
2. The interpretation of a statute or contract is directed to the ascertainment of the document's actual and true meaning. When the document is properly construed, there is only one correct meaning. It is for this reason that the proper construction of a statute is a question of law: Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385; [2020] FCAFC 50 (Bianco Walling) at [66] (Flick, White and Perry JJ).
3. In a building contract to which the HB Act applies, the reference in s 18B(1)(c) to "any other law" includes the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) and associated regulations which give legal effect to the BCA: Owners SP 92450 v JKN Para 1 Pty Limited [2023] NSWCA 114 (JKN) at [20] (Gleeson JA with White JA at [115] and Brereton JA at [116] agreeing).
4. Errors in the exercise of a discretion are capable of being agitated on appeal restricted to a question of law alone. If it was apparent that the court had acted on a "wrong principle", then the question of law would be whether that principle was wrong or correct and, if wrong, whether the trial judge acted on that principle and whether that materially affected the outcome: Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734 (Bimson) at [48]-[53] (Beech-Jones J). This passage was recently applied by the Appeal Panel in relation to the exercise of the discretion under s 48O of the HB Act: Noori Homes Pty v Patel [2023] NSWCATAP 149 (Noori Homes) at [45]-[47].
5. Recently the Appeal Panel has decided that a conclusion of mixed fact and law cannot be challenged on an appeal on a question of law under s 80(2)(b) of the NCAT Act except in the circumstances where it can be determined that the conclusion proceeded from a misdirection of law: Jain v Dr N Kalokerinos Pty Ltd [2023] NSWCATAP 141 at [91]. This is to be distinguished from the wrong application of the correct principles to the facts that would be an error of mixed fact and law and an appeal would not lie on a question of law: Bimson at [42]-[45] (Beech-Jones J).

Conclusion

1. We are satisfied that the reformulated grounds of appeal 2 to 4 raise questions of law and accordingly the builder has an appeal as of right under s 80(2)(b) of the NCAT Act in respect of these grounds: 1. as to ground of appeal 2, this is a question of law within the principles of Alexandria Landfill at [22]; 2. as to ground of appeal 3, this is a question of law within the principles of Bianco Walling at [66] to the extent that it involves the interpretation of the BCA; 3. as to ground of appeal 3, this is a question of law within the principles of Bimson at [48]-[53] to the extent that it involves the question of whether the Tribunal acted on a "wrong principle" in exercising its discretion under s 48O(1)(a) of the HB Act.

Issue 2: the nature of an appeal under s 80(2)(b) of the NCAT Act

1. In Bimson at [40]-[41], Beech-Jones J made the following observations when considering an appeal under a statute which conferred a right of appeal "on a ground that involves a question of law alone": "[40] This leads to the second proposition, namely that, ultimately it is incumbent on the parties contending that a question of law was decided erroneously, to identify the question and to do so in abstract terms. Thus in Williams v R [1986] HCA 88; 161 CLR 278 at 287 ("Williams"), Gibbs CJ stated: "... there is 'a question of law alone' if the question of law can be stated and considered separately from the facts which it may be connected in a given case." (see also 314 per Wilson and Dawson JJ.) [41] If that task is undertaken, then the consequential questions that will arise are whether the lower court or tribunal either answered that question or proceeded on an assumption concerning that answer, whether its answer or assumption was correct or incorrect, and whether that answer or assumption was material to the outcome, in the sense that it could have affected the outcome (see Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 per Mason CJ; Mark Aronson and Matthew Groves Judicial Review of Administrative Action (Thomson Reuters, 5th ed, 2013, at [4.270]))."
2. The Appeal Panel has determined that, except when it conducts a new hearing under s 80(3), an appeal under s 80(1) of the NCAT Act involves a rehearing in the sense of conducting a rehearing on the materials before the Tribunal to determine whether the order that is the subject of the appeal is the result of some legal, factual or discretionary error and, in some cases, has power to receive additional evidence. Although the appeal is described as being "by way of rehearing", it does not call for a fresh hearing and the Appeal Panel does not hear the witnesses again": Yuen v Thom [2016] NSWCATAP 243 at [14]-[22].
3. We consider that the approach in Bimson at [40]-[41] should be applied in determining whether the Tribunal made an error on a question of law under s 80(2)(b) of the NCAT Act. If we are satisfied that the Tribunal made one or more material errors of law, then it will be necessary to determine whether to undertake a rehearing on the material before the Appeal Panel or remit the proceedings for further consideration by the Tribunal.
4. We consider that the approach in Collins at [76], [77] and [84] should be followed in determining whether leave to appeal against the work order should be granted. If leave to appeal should be granted, then it will be necessary to determine whether to undertake a rehearing on the material before the Appeal Panel or remit the proceedings for further consideration by the Tribunal.

Issue 3: whether the Appeal Panel should receive the builder's "Appellant's Note - Authorities" except to the extent of the leave granted at the hearing

1. We have decided that we should not receive the builder's "Appellant's Note - Authorities" except to the extent of the leave granted at the hearing for the following reasons: 1. the builder has not made any application for leave to make further submissions; 2. we accept the submission of the owner that she would be prejudiced by reason of not having had an opportunity to respond to or consider the authorities raised.
2. It follows that, apart from the reference Kostas at [16], we have not taken these submissions of the builder into account in our consideration of this appeal.

Issue 4: whether the Tribunal constructively failed to exercise its jurisdiction by overlooking material evidence in relation to the issue of whether the windows, doors and roof were defective

Introduction

1. Before considering this issue, it is necessary to summarise the submissions of the parties and set out the applicable legal principles.

The builder's submissions

1. In the builder's appeal submissions, the builder made the following submissions: 1. the Tribunal is not obliged, in its reasons, to refer to every skerrick of evidence. However, in a proper discharge of its obligation to give reasons, it should, at minimum, identify and deal with the evidence touching directly upon any particular issue. And where evidence is not referred to, and where the Tribunal's reasons without having dealt with that evidence is incomplete or illogical in outcome, it is open to infer that the particular piece of crucial evidence was overlooked in rendering the reasons, meaning that the task of determination was not complete and the jurisdiction not properly exercised. Alternatively, in the light of that evidence, the determination can be said to be illogical and/or bizarre in the circumstances; 2. in the case of the Tribunal's findings regarding the windows, the doors and the roof, it failed to have regard to critical pieces of evidence that were before it, but that were fundamentally inconsistent with its findings: 1. as to the windows and doors: 1. the order of precedence of documents in the building contract; 2. the Owner's expert's concession (Tcpt, p 144.10-20): "COLLINS: Can I ask two questions about some of the words that you've just referred us 10 to. At the bottom of that first page, 630, the words "Sometimes described as semicommercial", then on the paragraph that you referred to on the following page, "Some might consider the design of these systems to be semi-commercial", that's consistent, isn't it, with the fact that the phrase "semi-commercial" doesn't have any specific meaning? WITNESS GlAOURlS: No, there's no definition, it's just an industry used term for a domestic level being 50 mil, where semi-commercials are 100 mil and your full commercials are 100 il but a bigger profile and it comes down to the thickness of the aluminium in the extrusion to just span larger openings without bowing or failing." 1. the evidence of the builder's expert report at appendix 06.5 (the Technical Guide for the Ascend Wideline Designer Range); 2. the section of the frame was in fact 100 mm (Tcpt, p 156.15-20); 3. evidence that "semi-commercial" was just a loose term (Tcpt, p 154.4-9); 4. evidence that the installed doors and windows complied with applicable standards; 1. as to the doors, the finding that the doors were too high did not take into account evidence (an email between the owner and a representative of Wideline); 2. as to the roof, the Tribunal failed to have regard to, or otherwise properly deal with the evidence from its expert that the roof did not leak and the owner's expert's concession that the roof did not leak (Tcpt, p 89.12-16); 3. the irresistible inference from the terms of its reasons is that the Tribunal overlooked that material. Given the fundamental inconsistency of that material with the Tribunal's findings, those findings are affected by an error of law in that respect, and should be overturned.
2. In the builder's appeal submissions in reply, the builder 1. substantially repeated the builder's appeal submissions; 2. responded to the owner's appeal submissions.
3. In oral submissions, the builder submitted that the Tribunal made no finding of what semi commercial meant, and then accepting that the term had no fixed meaning proceeded to decide that what was supplied did not comply with the contract.

The owner's submissions

1. In the owner's appeal submissions, the owner made the following submissions: 1. she referred to the principle that decision makers need not have to refer to every piece of evidence; 2. she referred to NSW Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 (Orr) at [77]; 3. she provided a detailed response to the builder's criticisms of the Tribunal Decision.
2. In oral submissions, the owner submitted that ground 2 was a merits review dressed up as question of law, and substantially repeated the owner's appeal submissions.

The applicable legal principles

1. In Alexandria Landfill the members of the New South Wales Court of Appeal in separate judgments (Basten JA at [6]-[34], [40], Macfarlan JA at [294]-[314] and Leeming JA) gave an extensive explanation of the principles applicable to the constructive failure to exercise jurisdiction and the related failure to give adequate reasons. Subject to one qualification at [64] and [65] below, we have applied these principles, and have drawn attention below to some of them.
2. At [6]-[7], Basten JA explained the notion of a "constructive" failure to exercise jurisdiction: "[6] The premise underlying a "constructive" failure to exercise jurisdiction is that there has been an apparent exercise of the jurisdiction of the court, but one that has failed in a way which can only be teased out by reference to the underlying issues and the materials presented to the court. It may then be demonstrated that a material issue presented for determination has not been resolved. By contrast, a failure to give adequate reasons implies that the relevant issues have been identified, addressed and resolved, but the reasons for reaching the conclusion have not been adequately expressed. [7] Despite the conceptual difference between the two complaints, they are related in a practical way. Because there is no means of interrogating a judge as to his or her intellectual processes, evidence that issues were not addressed can usually only be demonstrated by reference to the reasons. Thus, on the assumption that the judge addressed in the reasons all material matters, the absence of reference to a particular matter may allow the inference that it was not addressed and determined." (footnote omitted)
3. At [30], Basten JA commented on the submission that the reasons should disclose that the judge has "grappled with" the issues to be resolved: "[30] Despite the suggestion, frequent in recent years, that the reasons should disclose that the judge has "grappled with" the issues to be resolved, this is a metaphor which provides little guidance as to the intensity or nature of the intellectual process required as a matter of law. Further, the description seems directed to reasons as evidence of a failure to exercise jurisdiction, and not as a standard of disclosure of the process in fact adopted."
4. At [40], Basten JA noted that a failure to exercise jurisdiction may be global, or it may be particular.
5. At [308], Macfarlan JA considered the approach to the determination of whether the primary judge had in effect overlooked relevant parts of the evidence: "[308] In Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 77 ALJR 1598 this Court had ordered the new trial of a personal injury damages claim, finding that the primary judge had in effect overlooked relevant parts of the evidence. By a majority in the High Court, this Court's decision was reversed. In the course of its judgment, the majority said: "[62] … it should not be accepted that [the primary judge] failed, at least in a general way, to consider the matters to which the Court of Appeal referred. The fact that his Honour did not refer to these matters in his judgment is not decisive. A judge's reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge's failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party's case. [63] … To suggest that a trial judge has not properly considered a party's case is a serious charge. Such a suggestion should be accepted only when the record of the trial or other evidence persuasively suggests that the judge failed to discharge that paramount judicial duty. …""
6. At [313]-[314], Macfarlan JA referred with approval to Orr which explained the function of an appellate court in reviewing the adequacy of reasons given by a primary court: "[313] In New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 an appeal was brought from a decision of the Appeal Panel of the New South Wales Civil and Administrative Tribunal in relation to a social housing tenancy. The relevant statute confined the appeal to questions of law unless the court granted leave to extend the appeal more broadly. The appellant contended that the Tribunal's reasons for decision were inadequate. [314] In response, Bell P (with whom Ward JA agreed) emphasised at [66] that the function of an appellate court in reviewing the adequacy of reasons given by a primary court "is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard, referring to Resource Pacific at [48], and "[t]he standard is not one of perfection", referring to Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255."
7. At [400]-[403], Leeming JA commented on the submission that the reasons should disclose that the judge has "grappled with" the issues to be resolved: "[400] It is perhaps unfortunate that part of the debate focussed about the meaning of "grappled" in this context. The expression is not uncommonly used in determining appeals from the District Court …, or from a Division of the Supreme Court …. However, as has been explained …. what is being inferred in such cases is a failure in the process of fact finding. … [403] Where an appeal is confined to questions of law, the considerations summarised above - which are directed to the resolution of competing issues of fact - do not directly arise. While I accept that some errors in the fact finding process may amount to errors of law (actual bias is an example), I also think that one cannot safely transplant the principles applicable to an appeal by way of rehearing to appeals confined to questions of law." (authorities omitted)
8. In Orr, two members of the New South Wales Court of Appeal raised but did not decide the question of whether there is any duty, statutory or otherwise, for the Tribunal to give reasons for a decision in the absence of a request from a party under s 62(2) of the NCAT Act: Bell P at [54], Ward JA at [110-[114]. President Bell at [55] observed that it is not unreasonable to suppose that s 62(3) of the NCAT Act supplies important guidance as to what should be set out by the Tribunal in reasons which it chooses to give even without a request for reasons pursuant to s 62(2) of the NCAT Act, and that the balance of his reasons proceeded on that basis.
9. Even though there is no other express statutory duty to give reasons set out in the NCAT Act (other than pursuant to cl 11 of Sch 6 which relates to decisions of the Tribunal in the Guardianship Division), the Tribunal nonetheless endeavours, as a matter of good practice, to provide reasons for final or contested hearings: NCAT Policy 2, Publishing Reasons for Decisions, at [5]-[6].

Consideration

1. A difficulty we have faced in considering this issue, is that the builder did not provide us with its closing submissions before the Tribunal. Except so far as can be discerned from the owner's closing submissions in chief and in reply before the Tribunal and the Tribunal Decision, we do not know whether the builder in fact relied on the evidence or made submissions which it submits the Tribunal failed to grapple with. This failure is sufficient for us to determine that this ground is not made out.
2. In any event, on the basis of the material relied on by the builder we are not satisfied that the Tribunal constructively failed to exercise its jurisdiction by overlooking material evidence in relation to issue of whether the windows, doors and roof were defective: 1. the Tribunal dealt in considerable detail with the issue of whether the windows, doors and roof were defective including setting out evidence of the parties and their submissions (in the Tribunal Decision at [92]-[123]); 2. as set out in Alexandria Landfill at [308], [313]-[314], it was not necessary for the Tribunal to set out the particular evidence upon which the builder relies; 3. the builder's submissions suffered from the same deficiency as identified by Leeming JA in Alexandria Landfill at [411]-[412]: "[411] It follows that the appellant's submissions insofar as they complain of failing to engage with the evidence and submissions are outside the scope of an appeal confined to questions of law. … [412] Ultimately the appellant's submissions, faced with the task of falling within an appeal limited to questions of law, sought to transmute deficiencies in factual findings into deficiencies in the process of making findings or recording reasons. I am unpersuaded that the appellant can in that fashion make out legal error, as opposed to factual error.
3. If, contrary to our decision, the Tribunal constructively failed to exercise its jurisdiction by overlooking material evidence in relation to the issue of whether the windows, doors and roof were defective, then on a rehearing we would have come to the same conclusion as the Tribunal for the reasons it gave together with the following reasons: 1. as to the windows and doors: 1. it was common ground between the parties that AWS referred to "Aluminium Window Systems Pty Ltd" (Tcpt, p 141.8-14); 2. It was also common ground between the parties that the sliding doors were to have a height of 2750-2800mm (Tcpt, p 156.35-39). 3. there was unchallenged evidence that the AWS semi-commercial range included a sub-seal (Tcpt, pp 153.32-154.2); 4. there was uncontradicted evidence that the windows which were installed did not have sub-seals (Tcpt, p 153.17-30); 5. there was uncontradicted evidence that the sliding doors which were installed were not designed to have a height in excess of 2400mm (Tcpt, p 156.22-33; Joint Tender Bundle (JTB) 48); 1. as to the roof, the builder's submission that the owner's expert conceded that the roof did not leak was incorrect as he said that there was a puddle of water inside the ceiling (Tcpt, p 89.12-16; JTB 143).
4. For these reasons, we do not accept that the Tribunal made an error of law in respect of ground of appeal 2.

Issue 5: whether the Tribunal in the Tribunal Decision at [46]-[47] erred in its consideration and application of the BCA in its finding that it cannot consider evidence of alternative solutions in its determination as to whether the work has satisfied the Code's performance requirements

Introduction

1. Before considering this issue, it is necessary to set out the applicable statutory and NCC provisions and summarise the submissions of the parties.

HB Act

1. Part 2C (ss 18A-18G) contains provisions dealing with statutory warranties. Section 18B deals with warranties as to residential building work, and relevantly provides: 18B Warranties as to residential building work (1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work - … (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, …

EPA Act

1. Part 6 Division 6.1 (ss 6.1) contains preliminary provisions. Section 6.1 contains definitions, and as in force on 12 September 2018 relevantly provided: 6.1 Definitions: Part 6 In this Part: accredited certifier means the holder of a certificate of accreditation as an accredited certifier under the Building Professionals Act 2005 acting in relation to matters to which the accreditation applies. … certifier means a council or an accredited certifier. …
2. Part 6 Division 6.3 (ss 6.6-6.11) contains provisions dealing with building work and certificates relating to building. Section 6.7 deals with the requirement for construction certificate, and relevantly provides: 6.7 Requirement for construction certificate (cf previous s 81A) (1) A construction certificate is required for the erection of a building in accordance with a development consent. …
3. Section 6.8 deals with the restrictions on issue of construction certificate, and relevantly provides: 6.8 Restriction on issue of construction certificate (cf previous s 109F) (1) A construction certificate must not be issued with respect to the plans and specifications for any building work unless - (a) the requirements of the regulations have been complied with, and …

EPA Regulation

1. Part 8 Division 2 (cll 139-148) of the Environmental Planning and Assessment Regulation 2000 (NSW) as in force on 12 September 2018 (EPA Regulation) contained provisions dealing with construction certificates. Clause 139 dealt with applications for construction certificates, and relevantly provided: 139 Applications for construction certificates (cf clause 79A of EP&A Regulation 1994) (1) An application for a construction certificate: (a) must contain the information, and be accompanied by the documents, specified in Part 3 of Schedule 1, and …
2. Clause 145 dealt with compliance with the development consent and the BCA, and relevantly provided: 145 Compliance with development consent and Building Code of Australia (cf clause 79G of EP&A Regulation 1994) (1) A certifying authority must not issue a construction certificate for building work unless: … (b) the proposed building (not being a temporary building) will comply with the relevant requirements of the Building Code of Australia (as in force at the time the application for the construction certificate was made).
3. Schedule 1 Part 3 (cll 6-8) contained provisions dealing with construction certificates. Clause 6 dealt with the documents to accompany an application for a construction certificate, and relevantly provided: 6 Documents to accompany application for construction certificate (1) An application for a construction certificate must be accompanied by the following documents: (a) if the development involves building work (including work in relation to a dwelling-house or a building or structure that is ancillary to a dwelling-house): … (ii) appropriate building work plans and specifications, … (3) Appropriate building work plans and specifications referred to in subclause (1)(a)(ii) include the following: … (c) a statement as to how the performance requirements of the Building Code of Australia are to be complied with (if an alternative solution, to meet the performance requirements, is to be used), …

NCC

1. The introduction includes the following information: "DOCUMENTATION OF DECISIONS Decisions made under the BCA should be fully documented and copies of all relevant documentation should be retained. Examples of the kind of documentation which should be prepared and retained include: (a) Details of the Performance Solution or the Deemed-to-Satisfy Solution including all relevant plans and other supporting documentation. (b) In cases where a Performance Solution has been proposed - (i) details of the relevant Performance Requirements; and (ii) the Assessment Method or methods used to establish compliance with the relevant Performance Requirements; and (iii) details of any Expert Judgement relied upon including the extent to which the judgement was relied upon and the qualifications and experience of the expert; and (iv) details of any tests or calculations used to determine compliance with the relevant Performance Requirements; and (v) details of any Standards or other information which were relied upon."
2. Section 1 Part 1.0 (cll 1.0.1-1.0.7) contained provisions dealing with the application of the NCC, and relevantly provided: "1.0.1 Compliance with the NCC Compliance with the NCC is achieved by satisfying the Performance Requirements. 1.0.2 Meeting the Performance Requirements The Performance Requirements can only be satisfied by a - (a) Performance Solution; or (b) Deemed-to-Satisfy Solution; or (c) combination of (a) and (b). … 1.0.3 Performance Solutions (a) A Performance Solution must - (i) comply with the Performance Requirements; or (ii) be at least equivalent to the Deemed-to-Satisfy Provisions, and be assessed according to one or more of the Assessment Methods. (b) A Performance Solution will only comply with the NCC when the Assessment Methods used satisfactorily demonstrate compliance with the Performance Requirements. … 1.0.5 Assessment Methods The following Assessment Methods, or any combination of them, can be used to determine that a Performance Solution or a Deemed-to-Satisfy Solution complies with the Performance Requirements, as appropriate: (a) Evidence to support that the use of a material or product, form of construction or design meets a Performance Requirement or a Deemed-to-Satisfy Provision as described in 1.2.2. (b) Verification Methods such as - (i) the Verification Methods in the NCC; or (ii) such other Verification Methods as the appropriate authority accepts for determining compliance with the Performance Requirements. (c) Expert Judgement. (d) Comparison with the Deemed-to-Satisfy Provisions. 1.0.6 Defined terms Words with specific meanings are printed in italics and are defined in 1.1.1. 1.0.7 Relevant Performance Requirements In order to comply with the provisions of 1.1.5 (to comply with Section 1 and 2) the following method must be used to determine the Performance Requirement or Performance Requirements relevant to the Performance Solution: (a) Where a Performance Requirement is satisfied entirely by a Performance Solution: (i) Identify the relevant Performance Requirement from the Section or Part to which the Performance Solution applies. (ii) Identify Performance Requirements from other Sections or Parts that are relevant to any aspects of the Performance Solution proposed or that are affected by the application of the Performance Solution. (b) Where a Performance Requirement is satisfied by a Performance Solution in combination with a Deemed-to-Satisfy Solution: (i) Identify the relevant Deemed-to-Satisfy Provisions of each Section or Part that is be the subject of the Performance Solution. (ii) Identify the Performance Requirements from the same Sections or Parts that are relevant to the identified Deemed-to-Satisfy Provisions. (iii) Identify Performance Requirements from other Sections or Parts that are relevant to any aspects of the Performance Solution proposed or that are affected by the application of the Deemed-to-Satisfy Provisions that are the subject of the Performance Solution."
3. Section 1 Part 1.1 (cll 1.1.1-1.1.9) contained provisions dealing with the interpretation of the NCC, and relevantly provided: "1.1.1 Definitions … 1.1.1.2 In the Housing Provisions, unless the contrary appears: … Expert Judgement means the judgement of an expert who has the qualifications and experience to determine whether a Performance Solution or Deemed-to-Satisfy Solution complies with the Performance Requirements. … 1.1.5 Compliance with all Performance Requirements Subject to 1.1.6, Class 1 and 10 buildings must be so designed and constructed that they comply with the relevant provisions of Sections 1 and 2. 1.1.6 Application of the Housing Provisions to a particular State or Territory For application within a particular State or Territory, the Housing Provisions comprise - (a) Sections 1 to 3 (inclusive); and …"
4. Section 1 Part 1.2 (cll 1.2.1-1.2.5) contained provisions dealing with the acceptance of design and construction, and relevantly provided: "… 1.2.2 Evidence of suitability (a) Subject to 1.2.3 and 1.2.4, evidence to support that the use of a material, form of construction or design meets a Performance Requirement or a Deemed-to-Satisfy Provision may be in the form of one or a combination of the following: … (vi) Any other form of documentary evidence that correctly describes the properties and performance of the material or form of construction and adequately demonstrates its suitability for use in the building. …"
5. Section 3 contained provisions dealing with acceptable construction. The explanatory information relevantly provided: "Introduction Section 3, Parts 3.1 to 3.12 are Deemed-to-Satisfy Provisions that are considered to be acceptable forms of construction that meet the legislative requirements for complying with the Housing Provisions (i.e. they comply with the Performance Requirements listed in Section 2 of the Housing Provisions). There is no obligation to adopt any particular option contained in Section 3 of the Housing Provisions, if it is preferred to meet the Performance Requirement in some other way. However, if one of the options described in Section 3 is not complied with, then the appropriate authority must be satisfied that the Performance Requirements have been met."

The builder's submissions

1. In the builder's appeal submissions, the builder made the following submissions: 1. the owner's allegations as to the defects turned largely upon allegations of non-compliance with the BCA. The owner's allegations of non-compliance were based upon non-compliance with the deemed-to-satisfy solution provisions. The builder's case was that compliance was achieved by performance solutions; 2. the Tribunal dealt with this (Tribunal Decision at [46-57]) concluding that it could not accept a performance solution as evidencing compliance with the BCA because it "is not an approvals or other regulatory authority". It seemed to have found that a performance solution could only be accepted as such if there was contemporary documentary evidence at the time of building that was used within a regulatory function. This approach and construction of the BCA is inconsistent with the plain terms of BCA Part 1.0 and is wrong. The error is an error of law; 3. BCA para 1.0.5 plainly accepts expert judgment as a means of determining compliance. Nowhere in BCA Section 1 is there any specification for when the expert judgment must occur. Nor does it provide any mandatory requirements for evidence of a performance solution or when such evidence is to be provided. The BCA Part 1.0 requirements do not mandate the involvement of an "authority", regulatory or otherwise. There is no requirement for evidence of a performance solution to be submitted and approved by an "authority" for it to be valid; 4. the only requirement for satisfaction of the performance requirements, is that the work, in fact, satisfies them. The only requirement for evidence of a performance solution arises when the work's compliance with the performance requirements is challenged. That can be done in proceedings in the Tribunal; 5. the Tribunal's approach to the matter involved a misconception of the process and task before it. It misconstrued those requirements and wrongly abdicated the obligation to determine whether there had been a breach of the BCA by reference to the performance solution. By failing to acknowledge the provisions of BCA cl 1.0.2(a) and cl 1.0.5, the Tribunal misconstrued the BCA and determined contentious issues on a mistaken basis, all of which involves error of law.
2. In the builder's appeal submissions in reply, the builder made the following submissions: 1. it substantially repeated the builder's appeal submissions; 2. having artificially limited its analysis in determining breach of the BCA, by relegating the evaluation of a performance solution to the question of remediation, the Tribunal imposed the inappropriately high barrier of "exceptional circumstances" for adoption of alternative remediation; 3. the Tribunal should have dealt with the evidence of performance solution in its consideration of whether the work was in breach of the BCA, and referred to The Owners of Strata Plan 76888 v Walker Group Constructions Pty Ltd [2016] NSWSC 541 (Walker Group) where Meagher JA dealt with evidence of performance solutions in determining the question of breach of the BCA; 4. JKN should be confined to its own facts.
3. In oral submissions, the builder submitted that the issue in Walker Group was whether the builder was in breach of the BCA.

The owner's submissions

1. In the owner's appeal submissions, the owner made the following submissions: 1. the builder's contention appears to rely on Part 1 of the NCC in isolation, and consider Sections 2 and 3 of the NCC. That is not correct. The NCC must be read as a whole; 2. the builder's expert did not satisfy Part 1.1.7 of the NCC; 3. there was no contemporary evidence in respect of the works complying with performance solutions as noted in the introduction of the NCC; 4. the Tribunal Decision is entirely consistent with JKN at [63]-[66].

Consideration

1. The Tribunal made an implicit finding that the statutory warranty applicable to s 18B(1)(c) of the HB Act requires the builder to satisfy the performance requirements of the BCA by deemed-to-satisfy solutions. It was in this context that the Tribunal in the Tribunal Decision at [47] noted that it was common ground that the works alleged to be defective were not within the deemed-to-satisfy compliance requirements of the NCC where such non-compliance was alleged.
2. The question posed by this issue is whether in determining if there was a breach of the contract where the works failed to comply with deemed-to-satisfy solutions the Tribunal could take into account evidence that the works complied with a performance solution.
3. We consider that the Tribunal was correct in determining that the availability of a performance solution to meet performance requirements was limited to the following two situations: 1. the issue of a construction certificate where the application pursuant to cl 139(1)(a) and Sch1 cl 6(1)(a)(ii) and (3)(c) of the EPA Regulation included a statement as to how the performance requirements of the BCA were to be complied with if a performance solution to meet the performance requirements was to be used; 2. the assessment of damages where a breach of the BCA had been established.
4. We do not accept the builder's submissions as to the relevance of evidence as to a performance solution when the issue is the breach of the BCA where the building contract requires satisfaction of the performance requirements by a deemed-to-satisfy solution. There is no support for these submissions in the text of the NCC. The provisions of the NCC need to be read in the context of ss 6.1, 6.6 and 6.7 of the EPA Act and cll 139 and 145 of the EPA Regulation.
5. The judgment of the New South Wales Court of Appeal in JKN is consistent with this position. Gleeson JA at [64]-[65] (with White JA at [115] and Brereton JA at [116] agreeing) found that the respondents correctly accepted in oral argument that the statutory warranty in s 18B(1)(c) had been breached in circumstances where the external cladding did not comply with the deemed-to-satisfy provisions and, since no alternative solution was prepared prior to the issue of the construction certificate, the work was not done in compliance with the relevant provisions of the EPA Act and associated regulations.
6. In Walker Group, the issue was the adoption of a referee's report in proceedings by the owners corporation against the developer and the builder for breach of the statutory warranties in s 18B(1)(a) and (c) pursuant to ss 18C and 18D of the HB Act. Justice Meagher dealt with the issues in the following manner: 1. at [10], his Honour noted that the issues before the referee included the assessment of damages; 2. at [12], his Honour noted that in relation to each of the items in issue in this application, the question for the referee was formulated by reference to compliance or non-compliance with the requirements of the BCA, and where there was non-compliance, how compliance could be achieved; 3. at [24]-[25], his Honour noted that the two issues in dispute concerned waterproofing defects and alleged fire safety defects; 4. at [27]-[43], his Honour dealt with the item of systemic waterproofing defect in bathroom. At [27], his Honour recorded that the dispute concerned the scope of works necessary to rectify the waterproofing defect in the bathrooms of each of the 42 apartments; 5. at [44]-[90], his Honour dealt with general fire defects comprising six items. At [46], his Honour noted that as to five items the experts that the implementation of alternative solutions was the appropriate method of rectifying the building's non-compliance with the BCA. At [66]-[67], his Honour rejected the argument made by the plaintiff that the referee erred in assessing damages by reference to the cost of alternative solutions because contractual conformity required work by means of a deemed-to-satisfy provision. His Honour stated at [67]: "[67] … The more fundamental reason why the argument must be rejected is that the parties accepted in the way the issues were formulated in the final Scott Schedule that work which produced contractual conformity was work that complied with the Performance Requirements of the BCA, as distinct from its deemed-to-satisfy provisions, and the experts and the Referee proceeded on that basis.
7. We do not accept that Walker Group supports the builder's submission for the following reasons: 1. there is no indication that the issue the Tribunal was determining in respect of the alleged defects was whether they complied with the performance requirements of the BCA as opposed to the contractually required deemed-to-satisfy solution of the BCA; 2. the issue in Walker Group was the assessment of damages as opposed to the determination of the existence of defects.
8. For these reasons, we do not accept that the Tribunal made an error of law in respect of ground of appeal 3.

Issue 6: whether the Tribunal in the Tribunal Decision at [165] erred in its understanding and application of the elements and findings in the exercise of its discretion in making a money order under s 48O of the HB Act in light of s 48MA of the HB Act

Introduction

1. Before considering this issue, it is necessary to set out the applicable statutory provisions and summarise the submissions of the parties.

HB Act

1. Part 3A Division 4 (ss 48K-48MA) contains the provision dealing with the jurisdiction of the Tribunal in relation to building claims. Section 48MA deals with the preferred outcome in proceedings, and provides: 48MA Rectification of defective work is preferred outcome in proceedings A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.
2. Part 3A Division 5 (ss 48N-48N) contains provisions dealing with the powers of the Tribunal in relation to building claims. Section 48O deals with the orders which the Tribunal may make, and relevantly provides: 48O Powers of Tribunal (1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate - (a) an order that one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, … (c) an order that a party to the proceedings - (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or …

The builder's submissions

1. In the builder's appeal submissions, the builder made the following submissions: 1. the appeal involves an appeal from an evaluative discretion, involving the approach taken in Warren v Coombes (1979) 142 CLR 531 at 552; [1979] HCA 9, rather than the approach in House v R (1936) 55 CLR 499 at 504-505; [1936] HCA 40. This means that the Appeal Panel must consider that discretion afresh, by reference to the materials before the Tribunal, and not to follow the "deferential" model involved with the House v R evaluation; 2. the obviously deliberate use of the word "preferred" in s 48MA of the HB Act suggests that an applicant opposing a work order under s 48O carries the onus of proving that such an order is not appropriate, rather than the converse; 3. the history and circumstances of the matters addressed in the Tribunal Decision at [164], when properly considered and in the context of this case, are not such as to displace the onus, and that the preferred course should, on balance, lead to a work order.
2. In the builder's appeal submissions in reply, the builder substantially repeated the builder's appeal submissions.
3. In oral submissions, the builder submitted that the Tribunal exercised its discretion under s 48O of the HB on a wrong principle because it failed to have regard to s 48MA of the HB Act when determining whether or not to make a work order in the Tribunal Decision at [165].

The owner's submissions

1. In the owner's appeal submissions, the owner submitted that the Tribunal did not make a House v R error.
2. In oral submissions, the owner submitted that the appeal on this ground was a merits review dressed up as legal argument.

Consideration

1. It is well established that the requirement under s 48MA of the HB Act for the Tribunal to have regard to the "principle" that a work order is the "preferred outcome" creates a mandatory relevant consideration in exercising its discretion whether to make a money order under s 48O(1)(a) of the HB Act rather than a work order s 48O(1)(c)(i) of the HB Act: Galdona v Peacock [2017] NSWCATAP 64 at [50], [65]; Leung v Alexakis [2018] NSWCATAP 11 at [139]; John McDonald Building Services Pty Ltd v Gusa [2022] NSWCATAP 60 at [69]; Moody v M K Building Services Group Pty Ltd [2022] NSWCATAP 212 at [48]-[49].
2. Further, on the proper construction of s 48MA of the HB Act an owner who seeks a money order under s 48O(1)(a) of the HB Act does not have any evidentiary onus: Noori Homes at [53].
3. We do not accept that the Tribunal acted on a wrong principle because after having referred to s 48MA of the HB Act in the Tribunal Decision at [164] it failed to consider this provision when determining whether or not to make a work order in the Tribunal Decision at [165]. The submission of the builder involves the impermissible approach of reading passages from the reasons for decision in isolation from others to which they may be related: Orr at [76] and [77] (Bell P with Ward JA at [109] agreeing):
4. For these reasons, we do not accept that the Tribunal made an error of law in respect of ground of appeal 4.

Issue 7: whether the builder should be granted leave to appeal against the money order, and if so the appeal should be allowed and that order should be set aside

Introduction

1. The builder seeks leave to appeal against the findings of the Tribunal in the alternative in respect of grounds 2 to 4 as well as the findings of the Tribunal in relation to the following matters: 1. the role of the architect and the owner's reluctance to provide the builder access (leave ground 1); 2. the owner's role in obstructing the builder's access (leave ground 2); 3. the roof pitch (leave ground 3); 4. the beam (leave ground 4); 5. the windows and doors (leave ground 5); 6. the NCC performance solutions (leave ground 6); 7. the leaks (leave ground 7).
2. Before considering this issue, it is appropriate to set out the submissions of the parties in relation to leave grounds 1 to 7. The submissions of the parties in relation to grounds of appeal 2 to 4 have already been set out.

The builder's submissions

1. In the builder's appeal submissions, the builder made the following submissions: 1. as to leave ground 1, the finding of the Tribunal in the Tribunal Decision at [68] that the architect was not the owner's agent flies in the face of cl A6.3 of the building contract which clearly provide for such agency. That agency remained for the whole of the contract, given the Tribunal's finding that there was no variation, and the failure to have the architect properly perform her role lay at the owner's own feet, constituting a breach of the contract; 2. as to leave ground 2, the Tribunal should have put more weight on the owner's role in obstructing the builder's access. Numerous conversations were required to obtain access to the site; 3. as to leave ground 3, the Tribunal should have put more weight to the invoice from Roofing Supermarket as key evidence that the roof sheets were curved on site; 4. as to leave ground 4, the finding of the Tribunal in the Tribunal Decision at [75] that the beam appears to be a load bearing component is inconsistent with architectural drawings A300 and A802; 5. as to leave ground 5, the Tribunal failed to give sufficient attention to specified evidence; 6. as to leave ground 6, the Tribunal failed to consider specified evidence and authorities; 7. as to leave ground 7, the Tribunal failed to properly consider specified photographs and the builder's expert's hydrometer reading.
2. In the builder's appeal submissions in reply, the builder 1. substantially repeated the builder's appeal submissions; 2. responded to the owner's appeal submissions.
3. The builder made no oral submissions.

The owner's submissions

1. In the owner's appeal submissions, the owner provided a detailed response to the builder's criticisms of the Tribunal Decision.

Grounds of appeal 2 to 4

1. We are not satisfied that the builder has established that it may have suffered a substantial miscarriage of justice within cl 12(1) of Sch 4 of the NCAT Act for the same reasons that we have not accepted grounds of appeal 2 to 4.

Leave grounds 1 to 7

1. We are not satisfied that the builder has established that it may have suffered a substantial miscarriage of justice within cl 12(1) of Sch 4 of the NCAT Act for the following reasons: 1. as to leave ground 1, this finding was not material as it had no bearing on the making of the money order; 2. as to leave ground 2, this finding was not material as it had no bearing on the making of the money order; 3. as to leave ground 3, the Tribunal in the Tribunal Decision at [111] gave appropriate weight to the invoice from Roofing Supermarket, but found it was not determinative. The builder did not demonstrate that the finding in the Tribunal Decision at [112] was wrong or that if the Tribunal had given more weight to the invoice it would have made any difference; 4. as to leave ground 4, as the Tribunal in the Tribunal Decision at [135]-[137] found a breach of contract for the beam, any incorrect finding in respect of it being structural was not material as it had no bearing on the making of the money order; 5. as to leave ground 5, we accept the owner's submission that the Tribunal Decision in respect of the windows and doors came down to the finding that the Wideline Horizon range was a residential range, being an inferior range to what was specified in the building contract. The builder has not demonstrated that this finding was against the weight of the evidence; 6. as to leave ground 6, for the same reasons that we have not accepted ground of appeal 3; 7. as to leave ground 7, as there was evidence of leaks by the owner's expert (Tcpt, p 89.12-16; JTB 143) this finding was not against the weight of the evidence.

Conclusion

1. Since none of the criteria in cl 12(1) of Sch 4 of the NCAT Act has been satisfied, we are not satisfied that the builder may have suffered a substantial miscarriage of justice.
2. Even if we had been satisfied that the builder may have suffered a substantial miscarriage of justice, then having regard to the matters in Collins at [84(2)], we would not have exercised the discretion under cl 12(1) of Sch 4 of the NCAT Act to grant leave to appeal against the money order.

Introduction

1. In the owner's appeal submissions, the owner submitted that the builder should pay her costs of the appeal pursuant to r 38A of the NCAT Rules.

Consideration

1. Rule 38A deals with costs in internal appeals, and relevantly provides: 38A Costs in internal appeals … (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
2. For the purpose of r 38A of the NCAT Rules the amount claimed or in dispute is the amount in dispute on appeal, not the amount in dispute in the proceedings at first instance: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [57].
3. We are satisfied that r 38A(2) of the NCAT Rules is applicable to this appeal because the amount in dispute in the appeal is more than $30,000. It follows that the position of each party paying their own costs specified in s 60(1) of the NCAT Act is not applicable to the proceedings.
4. The builder has been unsuccessful in the appeal. We are satisfied that it should pay the owner's costs of the appeal.

The disposition of the appeal

1. As we have found that the builder has not established that it may have suffered a substantial miscarriage of justice within cl 12(1) of Sch 4 of the NCAT Act on grounds of appeal 2 to 4 and leave grounds 1 to 7, it follows that leave to appeal should be refused.
2. As we have found that the builder has not established any grounds of appeal 2 to 4, it follows that the appeal should be dismissed pursuant to s 81(1)(a) of the NCAT Act.
3. In view of these findings, the builder should pay the owner's costs of the appeal as agreed or assessed under the applicable costs legislation pursuant to r 38A of the NCAT Rules.

Orders

1. We make the following orders: 1. leave to appeal is refused; 2. the appeal is otherwise dismissed; 3. the appellant is to pay the respondent's costs of the appeal as agreed or assessed under the applicable costs legislation. 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: 30 June 2023