Varsani v Sunrise Pools Australia Pty Ltd t/as Sunrise Pools

Notice of Appeal

1. The Notice of Appeal was filed on 25 September 2020. The appeal was filed in time.
2. At the hearing of the appeal, leave was sought and granted to file the Amended Notice of Appeal dated 11 November 2020. The Amended Notice of Appeal raised the following grounds: Grounds of Appeal as of Right 1. The learned Senior Member erred at [55] in: (a) Concluding that the owners' conduct constituted repudiation (b) Failing to conclude that the owners' conduct did not constitute repudiation and in doing so applied a wrong principle of law. Particulars (i) The learned Senior Member failed to consider an exception exists where the breach or the repudiation was caused by the terminating party's breach. (ii) The builder's breach of contract (by reason, inter alia, of the finding at [59] that there are defects in the works defects) caused a breach of contract by the other party (the owners). Accordingly, the builder is not entitled to exercise a right to terminate the contract that would otherwise be available at common law. (iii) The learned Senior Member failed to apply the principle of construction whereby the Court will strain against construing a contractual right to terminate an agreement in a manner which will permit a party whose default has created the apparent right to terminate to do so in the exercise of that contractual right. 2. Having made the factual finding during the period 2 September 2015 to 22 December 2016, that the Appellant did not provide a proposal, the Tribunal erred at [57] in concluding that this was a breach of the general duty to cooperate that exists between parties to a contract, and in doing so applied a wrong principle of law. 3. The learned Senior Member erred at [48] in failing to provide reasons, or adequate reasons, as to why a reasonable period of time for the owners to act after 6 March 2015 was three months. 4. The learned Senior Member erred at [50] in failing to provide reasons, or adequate reasons, as to why a reasonable period of time for a proposal to be put by, or on behalf of the owners, was three months after 2 September 2015. 5. The learned Senior Member erred at [54] in failing to provide reasons, or adequate reasons, as to why the period of 1 August to 22 December 2016 was a reasonable period of time for the owners to make a decision. 6. The learned Senior Member erred at [88] in finding that the builder was entitled to $1 50.00 fence hire per week when there was no evidence to support such a finding. Particulars (a) The builder's claim for fence hire, taken at its highest, sought $150.00 per month for fence hire. 7. The owners were not afforded procedural fairness by reason of the manner in which the hearing was conducted as outlined at [2]. Particulars (a) The owners were unable to discuss matters of importance with their legal representative. Grounds Requiring Leave 8. The conclusion at [51] that the owners' conduct created a situation where a reasonable person would form the opinion that the owners were evincing an intention to be no longer bound by the contract was not fair and equitable. 9. The conclusion at [51] that the owners' conduct created a situation where a reasonable person would form the opinion that the owners were evincing an intention to be no longer bound by the contract was against the weight of evidence. 10. The conclusion at [55] that the owners' conduct constituted repudiation was not fair and equitable. 11. The conclusion at [55] that the owners' conduct constituted repudiation was against the weight of evidence.
3. At the hearing of the appeal, by consent, leave was also given to further amend the Notice of Appeal to seek the following relief: 1. That the appeal be allowed. 2. That the appellant be awarded $45,390.92 for completion cost (including a set off of $150 in favour of the builder). 3. That the builder pays the homeowners' costs of the proceedings below and the costs of the appeal.

Decision at first instance

1. As stated above, the Tribunal found that the homeowners had repudiated the contract, which repudiation was accepted by the builder terminating the contract on 22 December 2016: reasons at [55]-[56]. At [57] the Tribunal said: Did the Owners breach the contract by failing to cooperate with the Builder to agree a scope of work before the contract was terminated? For the reasons set out above, the Tribunal considers that the owners did breach the contract by not providing a proposal and thereby failed to cooperate with the builder to agree a scope of work before the contract was terminated on 22 December 2016. The position was that the builder and its solicitor was waiting on the provision of a proposal from either the owner or their solicitor.
2. The Tribunal applied the decision in Carr v JA Berriman Pty Ltd [1953] HCA 31; (1953) 89 CLR 327 (Carr).
3. In reaching this conclusion the Tribunal noted various agreed facts at [11] and made the following findings at the paragraphs noted: 1. Where there is defective work, cl 11.5 of the contract operates. This clause provides: 11.5 Defect rectification (a) The Builder must:- (i) within twenty-one (21) days of receipt of a written notification by the Customer of a defect, commence rectification of the notified defect; (ii) keep the Customer informed of the actions to be taken and the results obtained; and (iii) carry out such rectification at times approved by the customer in accordance with all reasonable conditions that the customer may impose or require.

Reasons at [10]. 1. Following complaints by the homeowners about defective works, the parties inspected the work with an inspector of NSW Fair Trading. At that meeting an agreement was reached between the parties at a meeting on 29 January 2015 (January Agreement) in the following terms: After discussions between the parties, the following was agreed: Before any further work is carried out, the contractor will arrange for the consulting design engineer to inspect the concerns listed on page 1 and the contractor agrees to carry out such work as the engineer requires, to the engineer's written satisfaction. Should the consumer be unsatisfied with the consulting design engineer's proposals then this matter may proceed to a Tribunal for determination. Engineer's opinion to be provided by 14 February.

Reasons at [14] and [40(1)]. This has been referred to by the homeowners as the "standstill agreement", for work ceasing on-site pending the builder providing to the homeowner a report setting out the proposed rectification work. 1. A report was provided by the builder on 2 March 2015, the report being prepared by Mr Fong, an engineer. This report was discussed at a meeting held on 6 March 2015. One of the homeowners, Mr Varsani, was not satisfied by the report and provided a list of 19 issues, 16 of which were new, which he said needed to be addressed: reasons at [40(2) and (3)]. 2. Contrary to the January Agreement, no proceedings were commenced in the Tribunal to determine the nature and extent of the defects or what work was required to rectify such defects: reasons at [40(3)]. 3. A letter dated 27 August 2015 was sent by the homeowners' solicitor to the builder. That letter attached a document entitled Notice of Defect. In turn, that notice referred to a letter from the homeowners' expert, Mr David Stubbs, dated 17 August 2015 (incorrectly referred to in the Notice of Defect as dated 11 August 2015): reasons at [40(5)]. These documents are found at Appeal Bundle (AB) 754, 755 and 1096-1098. It was agreed that the 17 August 2015 letter was the document referred to in the Notice of Defect at the hearing on 20 May 2020: see tscrpt p 19 line 1 and following, AB 71. Inter alia, the solicitors' letter dated 27 August 2015 said: We are instructed to request a non-site (sic) meeting at a time convenient to all parties including the rider and your company's solicitor should you wish to seek advice as soon as possible. Our clients are desirous of your company completing their pool in a timely manner once various concerns have been addressed. 1. A meeting occurred on 2 September 2015 at which the homeowners' solicitor indicated he would make a proposal for completion of the work: reasons at [40(6)].

1. Thereafter, the Tribunal found the following occurred (reasons at [40(7)-(16)]: (7) However, no such proposal was ever provided to the builder. (8) On 05 November 2015 the builder's solicitor wrote to the owners' solicitor noting that no such proposal had been received. (9) More than six months later, on 13 May 2016, the owners' solicitor told the builder's solicitor that the matter was still being investigated. (10) On 29 July 2016 the builder's solicitor rang the owners' solicitor and left a message but that call was not returned so a letter was prepared. (11) On 01 August 2016 the builder's solicitor sent a warning letter to the owners' solicitor which included the words "We expect your client to make a decision of whether or not they will allow our client to complete the Contract". (12) During a conversation on 19 August 2016 the owners' solicitor told the builder's solicitor he would provide a scope of work and said he thought his clients would want the builder to complete the pool. (13) On 03 and 04 November 2016 the builder's solicitor endeavoured to obtain clarification from the owner's solicitor. (14) On 22 December 2016 the builder's solicitor provided the owners' solicitor with notice of termination of the contract. (15) At no time between 27 August 2015 and 22 December 2016 did the owners (or their solicitor) complain that the works had not been resumed by the builder. (16) On 17 January 2017 the owners' solicitor suggested the notice of termination was wrongful and constituted repudiation of the contract.
2. The homeowners' solicitors letter dated 17 January 2017 relevantly said: As you are aware, and as in fact your client's notice of termination refers, our client served a notice of breach of contract on 27 August 2015, which has not been responded to. In fact, the suggestion that our client has prevented your client from completing the building works is incorrect. There was nothing that prevented your client from returning to the site and rectifying the works identified in the notice of breach and thereafter completing the works, which if it had done so, would have been completed by this time. Further to the above, during the course of conversation between [the solicitors], it was made clear that our client did not view the contract as abandoned and wished your client to return to the site to complete the building works. In this regard, it was in the process of obtaining a scope of works to ensure that the rectification works were carried out properly
3. The Tribunal rejected the "suggestions" made in that letter that the termination on 22 December 2016 was wrongful.
4. First, at [41] the Tribunal rejected the suggestion that there was nothing preventing the builder from returning to the site and rectifying the work identified in the Notice of Defect. The Tribunal found the notice was contradicted by the covering letter which had requested a site meeting and that the result of the site meeting which was in fact held was that "the builder was left to await a proposal from the [homeowners'] solicitor which was never provided". In this regard, we note the last sentence of [41] which uses the expression "did not suggest there was something preventing the builder from returning to the site" appears to be a typographical error.
5. Secondly, at [42] the Tribunal rejected the suggestion that it was made clear to the builder's solicitor that the homeowners wanted the builder to return to site and complete the work. The Tribunal found there was no evidence of the events between 2 September 2015 and 22 December 2016 to support this claim. In this regard the Tribunal relied on correspondence from the builder's solicitor dated 1 August 2016 where the solicitor said: can we expect your client to make a decision of whether or not they will allow our client to complete the Contract. Of this letter, the Tribunal noted there was no written response. As to the homeowners' solicitors' letter dated 17 January 2017 suggesting there had been a conversation concerning this topic, the Tribunal said "no evidence was provided to give those words [in the letter of 17 January 2017] a higher status than too little said too late".
6. Thirdly, the file note of the builder's solicitor dated 19 August 2016 recorded: Thinks his client will want us to complete the pool. This file note, the Tribunal found, was at odds with the homeowners' solicitors' letter dated 17 January 2017 that he had made clear to the builder's solicitor that the homeowners wished the builder to return to the site and complete the work: reasons at [43].
7. The Tribunal then examined the events which occurred before and after 2 September 2015. The Tribunal noted the evidence of Mr Varsani (in an email AB 753) that as at 20 April 2015 (incorrectly stated in the reasons as 20 April 2016) there was a "current ongoing dispute" and found there was "no evidence to suggest the builder was requested to resume work at any time during the period 29 January 2015 up to and including 1 September 2015". After that date the Tribunal noted that, while various expert reports appear to have been procured by the homeowners, no proposals were presented to the builder at any time prior to 22 December 2016, nor was there a request to the builder to resume work during this period. In this regard the Tribunal found there was no satisfactory explanation as to why it took until 23 December 2015 to obtain a report from a concrete expert nor was there an explanation about what was done during the one year period since that report was obtained. Finally, no explanation was provided as to why it took until 3 October 2017 to obtain a report from a geotechnical engineer: reasons at [44]-[46].
8. Having found that there was inaction by the homeowners and having noted that there was nothing in the contract to make time of the essence, the Tribunal determined that a reasonable time for the homeowners to take action was 3 months after the 6 March 2015 meeting. In this regard the Tribunal noted that in his email dated 10 March 2015 Mr Varsani said: We are unsatisfied with the rectification works and recompense offered and are taking the matter to [the] Tribunal.

Reasons at [48].

1. The Tribunal also noted that proceedings were not commenced until 27 November 2018. The Tribunal said that the homeowners "appear to have changed their mind" about going to the Tribunal and "instead opted to issue [the] Notice of Defect. Of this notice, the Tribunal found any "failure to comply … was not "of any moment". Inter-alia, this was because the notice was attached to a letter in contradictory terms (proposing a meeting) which subsequently took place and there was no evidence of a request thereafter for the builder to return to work. Rather, what occurred was that the builder's solicitor endeavoured to obtain the proposal promised at the meeting held in consequence of the request made in the solicitors' letter dated 27 August 2015: reasons at [49].
2. Similarly, the Tribunal determined that three months after the on-site meeting on 2 September 2015 was a reasonable time for the homeowners to provide to the builder any proposal as to the works required to be carried out to rectify the alleged defects: reasons at [50].
3. Consequently, having regard to the inordinate delay and the communications from the builder's solicitors on 15 November 2015 and on 13 May, 29 July and 1 August 2016 following up in connection with the homeowners' proposal for works, the Tribunal concluded the homeowners had evinced an intention no longer to be bound by the contract and that the builder was entitled to terminate in accordance with the principle in Carr.

Consideration

1. The homeowners say they have an appeal as of right on certain questions. Otherwise leave to appeal is sought. To obtain leave the homeowners must demonstrate they may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or was against the weight of evidence: Sch 4 cl 12(1) Civil and Administrative Tribunal Act 2013 (NSW).
2. As stated above, the ultimate question for determination in this appeal is whether the Tribunal was correct in its determination that the homeowners had repudiated the contract and that the builder was therefore entitled to accept the repudiation and validly did so by notice dated 22 December 2016. If not, was the builder liable to pay to the homeowners completion costs of $45,390.92 (after set off of $150 in favour of the builder) following the homeowners accepting the repudiatory conduct of the builder by letter dated 17 January 2017.
3. In submissions in this appeal, the homeowners accepted that, if the Tribunal was correct in concluding the notice dated 22 December 2016 validly terminated the contract, then its appeal should be dismissed.

Was the contract validly terminated by the builder?- Grounds 1-2

1. There is no dispute that the parties entered into a contract dated 28 April 2014 or that the parties were bound by the January Agreement. In this regard, this agreement must be seen as a variation to the contract dated 28 April 2014. The homeowners accepted this agreement was in writing and met the requirements for enforceability under the Home Building Act 1989 (NSW) (HB Act.
2. The particulars of the conduct relied upon by the builder as constituting repudiation were as follows (AB 758): Letter from Snelgroves Lawyers dated 27 August 2015 E. At the request of the Owners' Solicitor the Builder attended a site meeting on 2 September 2015. F. From about January 2015 the builder had been prevented from completing the building works on the basis the owners wanted Expert Report is to be furnished. G. The Owners have not furnished the Expert Reports despite numerous requests from the Builder and its Solicitor.
3. As stated above, the Tribunal found there was an obligation on the homeowners to provide a proposal concerning the works required to rectify defects. This report was not provided in a reasonable time and, by reason of the contract and the January Agreement, the failure to provide the proposal within a reasonable time and despite request to do so from the builder constituted repudiatory conduct entitling the builder to terminate the contract.
4. The Tribunal relied on the decision of the High Court in Carr. That case concerned the failure of Mr Carr to carry out required site excavation work and deliver to the contractor, JA Berriman Pty Ltd, by a required date the site prepared in accordance with the relevant specifications. There, Fullagar J considered whether, where time was not specified to be of the essence in the contract, the company could terminate the contract where the failure to deliver up possession in the required state had continued for a considerable period of time after the date for performance had passed. At 349 his Honour said: On the other hand, the effect of the builder's election not to rescind was to leave it open to the building owner to remedy his breach. If he did remedy it, the builder would be bound to accept the late performance, though entitled, of course, to sue for any damage suffered by him through the delay. The position thus remaining open, it is correct, in my opinion, to say, as Mr. Ferguson said, that a failure to remedy the breach might continue so long and in such circumstances as to evince an intention on the part of the building owner no longer to be bound by the contract. In other words, the only legitimate inference might be that he is saying: "Not only have I broken my contract by not doing the thing on the due day, but I am not going to do the thing at all", or "I am not going to do the thing at all unless and until I find it convenient to do it". In this way a right to rescind might arise which is not based on breach of the particular promise as such. That promise, even if essential to begin with, has become non-essential by reason of the election of the promisee, but the promisee may nevertheless be able to establish that the conduct of the promisor with respect to his promise amounts to a refusal to be bound by the contract: cf. Associated Newspapers Ltd. v. Bancks (1951) 83 CLR, at p 339 .
5. The correctness of the Tribunal's decision depends upon the proper construction of the contract, which includes the January Agreement.
6. As the homeowners submitted, it is necessary to have regard to the contract as a whole.
7. The Tribunal identified the contractual provisions relevant to the rectification of defects. First was cl 11.5(a) which required the builder to carry out rectification works in consequence of a notice issued under that clause. In the present case, in our view cl 11.5 (iii) is relevant to the present dispute. That clause required the builder to "carry out such rectification at times approved by the [homeowners] in accordance with all reasonable conditions that the [homeowners] may impose or require".
8. Second was the January Agreement. It was referred to as a standstill agreement by the homeowners. It required the builder to provide a proposal concerning the defects requiring rectification. Once the engineer's proposal was received, the agreement provided that the homeowners "may proceed to the Tribunal for formal determination" if "unsatisfied" with the proposal.
9. The agreement did not provide a time in which the required level of satisfaction or dissatisfaction was to be reached. However, the contract required the whole of the construction work was to be completed within 16 weeks from commencement on site: AB 284.
10. In oral submissions at the hearing of the appeal, the homeowners accepted that this standstill period operated, at least, pending the provision of a report from Mr Fong. Further, the homeowners accepted that, if the report was satisfactory, the work in that report would be carried out to rectify the defects. The challenge that was raised concerned that part of the January Agreement which provided that the homeowners may apply to the Tribunal and the interpretation given to that provision.
11. In doing so, the homeowners' primary position in its submissions filed 11 November 2020 was that the builder was in breach of the contract because it had carried out defective works. Consequently, the builder was not entitled to exercise any right to terminate for repudiation because any breach by the homeowners was caused by the builder's own breach. Reliance was placed on the decision of Francis Gregory Hannigan v Inghams Enterprises Pty Ltd [2019] NSWSC 321 (Francis Gregory).
12. In our view Francis Gregory does not support the homeowners' submission. Our reasons are as follows.
13. In Francis Gregory, Robb J said at [104]-107]: 104 Powell JA accepted the statement made by the Court of Appeal in Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (recs and mgr apptd), to the effect that a party in breach of a non-essential term is prevented from terminating for fundamental breach by the other party, if there was a causal relationship between the terminating party's breach and the breach by the other party, as an established principle of law. 105 The relevant principles have perhaps most clearly been stated by Hodgson JA in Sharjade Pty Ltd v Commonwealth of Australia [2009] NSWCA 373; (2009) 15 BPR 28,443: … [54] A further and more difficult question is whether, when one party has committed a breach satisfying one or more of the three categories, but the other party is also in breach of the contract, the latter can terminate despite its own breach. The answer is that generally it can, at least unless the obligations breached are interdependent or the breach by the party wishing to terminate has caused the breach that this party wishes to rely on. … [56] As regards the latter exception, it seems clear that a party cannot rely on an event as a ground for terminating a contract if that event has been caused by that party's own breach of contract: see for example Suttor v Gundowda Pty Ltd [1950] HCA 35 ; (1950) 81 CLR 418 at 440-442, Nina's Bar Bistro Pty Ltd v MBE Corporation (Sydney) Pty Ltd [1984] 3 NSWLR 613; Plumor Pty Ltd v Handley (1996) 41 NSWLR 30. The latter two cases also decided, correctly in my opinion, that the onus of proof lies on the party resisting termination, that is, the party who wishes to assert that the event that would otherwise justify termination was caused by the party seeking to rely on that event. [57] In the absence of such interdependence or a proved causal link, the circumstance that a party is itself in breach does not generally disentitle it to rely on the other party's breach of contract, if that breach would otherwise entitle the former to terminate: Nina's Bar, State Trading Corporation of India Ltd v M Golodetz Ltd [1989] 2 Lloyds Reports 277; Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (1997) 42 NSWLR 462. This position is assumed in the decision of the High Court of Australia in Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64. Even if the terminating party's breach were itself sufficient to justify termination, in my opinion the better view is that this would not of itself preclude termination by that party, so long as the terms breached were independent and the causal link referred to earlier was not established: see Golodetz at 285-287, Roadshow at 481. (This passage from Roadshow was quoted with approval by Powell JA, with whom Meagher JA agreed, in Kyrwood v Drinkwater [2000] NSWCA 126 at [154]; although opposing views have been expressed by Fitzgerald JA in dissent in that case, and by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 143-144 and White J in Rona v Shimden Pty Ltd [2005] NSWSC 818; (2005) 12 BPR 23,287 at [92].) However, since entitlement to damages for loss of the bargain would generally require proof of readiness, willingness and ability to perform on the part of the party claiming damages, the party terminating in those circumstances may be unable to claim damages for loss of the bargain. … 106 Hodgson JA's reliance, at [56], on Suttor v Gundowda Pty Ltd tends to support the conclusion that the distinction between the principle being one of construction or of law is not of great significance. In any event, the Court of Appeal decisions that are considered above have, in the result, accepted that the principle of construction applied in Suttor v Gundowda Pty Ltd and the other cases referred to above in that connection extends to support the proposition that a party whose breach of contract has caused a breach of contract by the other party is not entitled to exercise a right to terminate the contract that would otherwise be available under the general law of contract. 107 It is necessary, in the present case, to consider the principles that are to be applied where there may be breaches by both parties that have caused the event relied upon by one of them as a ground for terminating the contract, and where the terminating party claims that its own breach has ceased to be an effective cause of the event because of the conduct of the other party.
14. In the present case, the builder's obligation was to complete the works in accordance with the contract by the due date for completion. If there were defective works, they needed to be rectified by the builder by the date for completion. Clause 11.5 of the contract permitted the homeowner to issue a notice requiring defects to be rectified. It was not suggested this clause operated only after the date for completion. If notice was issued under cl 11.5, then the builder was obliged to carry out works required by the notice, at least in respect of matters that were actual defects. In doing so the builder was required to comply with "all reasonable conditions" that the homeowners may require in connection with the carrying out of that work.
15. However, no notice was issued under clause 11.5 at that time. Rather the parties entered into the January Agreement on the terms set out above.
16. The essence of this agreement was that "before any further work is carried out", a scope of work would be developed by Mr Fong to rectify the defects. If acceptable to the homeowners, those works would be carried out and building works would resume. If not, the homeowners were entitled to make an application to the Tribunal to have any disputes resolved. The January Agreement operated, as we have said, as a variation to the contract.
17. Having regard to the powers of the Tribunal found in s 48O of the HB Act, the Tribunal would have been able to adjudicate on the nature and extent of any defects that were disputed and make work orders consistent with the contract.
18. In these circumstances, while there may have been defects that then existed, in the absence of a notice under cl 11.5 and having regard to the January Agreement (that constituted a variation to the contract), any breach by reason of any defective work was not, relevantly, "interdependent" upon the breach found by the Tribunal as entitling the builder to terminate the contract for repudiation in the sense used by Hodgson JA in Sharjade Pty Ltd v Commonwealth of Australia [2009] NSWCA 373; (2009) 15 BPR 28,443, referred to in Francis Gregory. Rather, both cl 11.5 and the January Agreement operated where there was a defect, and regulated what was to occur.
19. It follows that ground 1 of the appeal is not made out.
20. In reaching this conclusion it is convenient to deal with the events that occurred after the provision of the report by Mr Fong.
21. First, the homeowners indicated they were unsatisfied with the rectification works proposed and were taking the matter to the Tribunal. This was by email dated 10 March 2015: reasons at [11(7)]. However, they did not do so.
22. Rather, after a period of inaction, they served the Notice of Defect dated 18 August 2015 under cover of a letter dated 27 August 2015. Contrary to the notice and in accordance with the covering letter, an on-site meeting was invited and took place on 2 September 2015. The outcome of that meeting was that the homeowners' solicitor would provide a proposal to the builder containing three options for review by Mr Fong and comment by the builder: reasons at [20].
23. These facts can be construed in one of two ways: 1. the homeowners were not at that time seeking to enforce the Notice of Defect and the requirements of cl 11.5 but, rather, were wishing to develop their own proposals to be put forward to the builder to rectify the claim defects; or 2. the homeowners were continuing to exercise their rights under cl 11.5 by imposing conditions as to what works were required and what was to be done to rectify the alleged defects.
24. On either view, what occurred was that the homeowners were not insisting on the carrying out of rectification work within 21 days as required by 11.5 of the contract and were not otherwise directing the builder to immediately return to site to complete the contract according to its terms and terminating the standstill arrangement. Rather, they were developing a proposed scope of work which was to be used as part of rectifying the defects. In the meantime, the standstill arrangement was to continue.
25. The homeowners say in submissions that after this time they "made concerted efforts to discover the true nature and extent of the defects in a proposed method of rectification". This submission seems at odds with the fact that the Notice of Defect had been issued, that notice relying on the report of Mr Stubbs dated 17 August 2015 (incorrectly referred to in the notice as 11 August 2015).
26. Be that as it may, the evidence shows that, even though these investigations may have been ongoing: 1. no response was made to communications from the builder requesting that it be provided with any proposal for rectification work; and 2. no update was provided to the builder or any request for extension of time made in connection with the preparation of such a proposal; and 3. no proposal was provided prior to termination on 22 December 2015; and 4. no application was otherwise made to the Tribunal to determine the nature and extent of the defects and/or seek orders in connection therewith. Rather, the builder was left in the position where it was told nothing and, consequent upon the January Agreement that any further work concerning defects had to be agreed, it was unable to continue and complete the work under the contract.
27. Seen in this way, there was a failure to co-operate in the sense referred to by the Tribunal in its reasons at [57]. Consequently, ground 2 of the appeal is not made out.

Adequacy of reasons- grounds 3-5

1. Grounds 3 to 5 of the Amended Notice of Appeal concern adequacy of reasons. These relate to the Tribunal's determinations that 1. three months from 6 March 2015 was a reasonable time for the homeowners to commence proceedings; 2. three months from 2 September 2015 was a reasonable time for the homeowners to provide a proposal concerning the works required; and 3. three months was a reasonable period of time to make a decision regarding the builder's letter issued on 1 August 2016.
2. In New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 (Orr) the Court of Appeal considered the requirements for the provision of adequate reasons by the Tribunal. Bell P dealt with this question at [65] and following. At [77] Bell P said the principles to be applied in determining whether reasons are adequate include: 77 These principles include the following: (i) "Decision-makers commonly express their reasons sequentially; but that does not mean that they decide each factual issue in isolation from the others. Ordinarily they review the whole of the evidence, and consider all issues of fact, before they write anything. Expression of conclusions in a certain sequence does not indicate a failure to consider the evidence as a whole": Re Minister for Immigration and Multicultural Affairs, Re; Ex parte Applicant S20/2002; Appellant S106/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 30; 77 ALJR 1165 per Gleeson CJ at [14] (Ex parte Applicant); (ii) the court should not read passages from the reasons for decision in isolation from others to which they may be related: Re Maria Politis v Commissioner of Taxation [1988] FCA 739 at [14]; 20 ATR 108 at 111; (iii) the reasons must be read fairly and as a whole: Ex parte Applicant at [147] per Kirby J; Wu Shan Liang at 291; Bisley at 251; the reasons recorded ought not to be inspected with a fine tooth-comb attuned to identifying error: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287; [1993] FCA 456 (Pozzolanic) at 287; Wu Shan Liang at 272, 291; (iv) there should be a degree of tolerance for looseness in the language of the tribunal, unhappy phrasing of the tribunal's thoughts or verbal slips: Pozzolanic at 287, Wu Shu Liang at 272 and 291.
3. In the present case, the Tribunal in its reasons: 1. identified the contract and its terms, including the making of the January Agreement; 2. set out the factual matters concerning the meetings between the parties and the time between each meeting and the delay in responding to correspondence; 3. determined the obligations of the parties arising from the agreement based on the facts as found; and 4. determined that a reasonable time for the homeowners to take action was three months in respect of each of the three matters identified.
4. As we set out above, the contract was a 16 week contract. The dispute concerning the alleged defects arose in about November 2014 when the homeowners raised their concerns about the construction: reasons at [11(4)]. A meeting was held on site on 29 January 2015 at which the parties agreed the way forward. Despite this, the issue of what work the builder was to undertake in order to satisfy the homeowners (there being no Tribunal proceedings commenced to determine this matter) was still unresolved nearly two years later when the contract was terminated on 22 December 2016. This was despite the builder proactively seeking a proposal from the homeowners and writing to them providing a warning by letter dated 1 August 2016.
5. The letter of 1 August 2016 was in the following terms: We refer to our telephone discussion on 13 May 2016 wherein we inquired as to what stage your client was up to concerning his investigations. We confirm we have left a message at your office on 29 July 2016. On 5 November 2015 our client wrote to you some nine (9) weeks after works had been suspended. Our client was under the understanding that you would come back to them with a proposal of an intended course of action. We are of the view that no more time should be provided to your client as more than enough time has now elapsed it has been more than nine months since our client has been allowed to complete the Contract. We expect your client to make a decision of whether or not they will allow our client to complete the Contract. If the decision is to the negative it is our view that your client will be in a position of wrongfully repudiating the Contract under the Principles express in the General Law. It is neither parties interest to have this matter end up in the Tribunal. Please advise your client's position.
6. When the reasons are examined in the manner contemplated by Bell P in Orr, in our view the reasons could not be described as inadequate. Further, even if such a criticism can be made, it is of no moment. Having regard to the period of the contract requiring all works to be executed within 16 weeks from the date of commencement, it could hardly be regarded that the time taken by the homeowners to respond or take action was reasonable. Whether a reasonable period should have been determined as more than three months, on any view a reasonable time for the homeowners to act had passed.
7. Accordingly, we reject grounds 3 to 5 inclusive.

Leave to appeal- grounds 8-11

1. In relation to Grounds 8 to 11 inclusive, these grounds require leave to appeal.
2. Grounds 8 and 9 challenge the conclusion at [51] of the reasons. Grounds 10 and 11 challenge the conclusion at [55] of the reasons. Each of these conclusions was that the homeowners had evinced an intention not to be bound.
3. The written submissions focused upon the circumstances in which leave should be granted. The legal principles are not in dispute.
4. However, we do not see this case raises any general issues of importance concerning the standard form contract or its construction. A unique feature of this case is the January Agreement. The other feature of this case concerns the delay of the homeowners in providing a proposal to rectify defects in circumstances where the homeowners: 1. had raised concerns the works were not being constructed in accordance with the contract, 2. required rectification work to be undertaken in accordance with a proposal they were to provide; and 3. failed to complete any investigations as to the nature and extent of the defects and provide a proposal to the builder for a period of more than two years after their concerns were first raised.
5. In oral submissions, the homeowners' primary position was that the builder could not accept any repudiatory conduct by the homeowners because the builder itself was in breach and its entitlement to do so was dependent upon the proper construction of the contract. As stated above, we have rejected the submission that the builder was not entitled to terminate the contract.
6. The homeowners also submitted that the builder's conduct caused the need for the homeowners to investigate the matters about which they had concern and that the builder had failed to carry out its own investigations.
7. As stated above, the builder's obligations were to complete the works in accordance with the contract by the due date. In consequence of the January Agreement the builder was to stop work and provide a proposal to the homeowners as to what works were required to address the homeowners' concerns. The builder did this. Thereafter, the builder was required to carry out the work specified in the proposal if the homeowners were satisfied.
8. The homeowners were not satisfied. Instead, the parties proceeded on the basis that the homeowners would prepare a proposal for the builder to consider. This did not happen. Nor did the homeowners make an application to the Tribunal as they were entitled to do under the January Agreement.
9. The findings made by the Tribunal were consistent with the evidence to which it referred.
10. In our view the findings of fact could not be said to be unfair or inequitable nor against the weight of evidence. There is no matter of general principle and we are not satisfied that the homeowners may have suffered a substantial miscarriage of justice. Accordingly, leave to appeal is refused.

Proceedings HB 19/ 27962 and the orders made in those proceedings on 31 August 2020 and 25 September 2020.

1. This issue arises under grounds 5 and 6 of the appeal. It can be dealt with shortly.
2. While there were various discussions concerning rights of set-off, it was agreed that this application was originally filed out of time. Therefore the parties agreed that it should have been dismissed.
3. This agreement overlooks an important aspect of the history of these proceedings.
4. A review of the evidence filed in the proceedings indicates that in fact these proceedings had been dismissed by the Tribunal on 9 July 2019: Tscpt p 8 line 37 and following, AB 60. A review of the Tribunal file confirms an order was made on 9 July 2019 dismissing the proceedings on that day because the application was withdrawn.
5. Consequently, the orders made on 31 August 2020 and 25 August 2020 in proceedings HB 19/27962 should be set aside.
6. No doubt if either of the parties had drawn this fact to the attention of the Tribunal at the original hearing, some time and money could have been saved in dealing with these proceedings at all.

Costs

1. Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) applied to the proceedings at first instance as the amount claimed or in dispute was greater than $30,000. Consequently, by reason of r 38A, r 38 applies to the costs of this appeal and displaces s 60 of the NCAT Act. As the amount claimed or in dispute in the appeal is greater than $30,000, there is a general discretion in connection with costs.
2. As the appellants have been unsuccessful, costs should follow the event.
3. These costs should exclude any costs associated with proceedings HB 19/27962. This is because those proceedings were dismissed on 9 July 2019 with no costs order being made. If this fact had been drawn to the attention of the Tribunal, the Tribunal would have declined to deal with those proceedings further and no time or costs would have been incurred in connection with those proceedings after the date they were dismissed.
4. We will make orders consistent with the above. We will also permit the parties to apply for a separate costs order if appropriate.

Orders

1. The Appeal Panel makes the following orders: 1. The orders made in application HB 19/27962 on 31 August 2020 and 25 September 2020 is set aside. 2. Save as provided in order, leave to appeal is refused in the appeal is dismissed. 3. The appellants are to pay the respondent's costs of this appeal as agreed or assessed on an ordinary basis, such costs to exclude any costs in relation to application HB 19/27962. 4. If either party contends for a different costs order, the following directions apply: 1. Within 14 days from the date of these orders the applicant for costs (costs applicant) is to file and serve any evidence and submissions in support of the application (costs application). 2. Within 28 days from the date of these orders, the respondent to the costs application is to file and serve any evidence and submissions in response. 3. Within 42 days from the date of these orders, the costs applicant is to file and serve any submissions in reply. 4. The parties submissions are to include submissions concerning whether an order should be made dispensing with a hearing of the costs application.

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 November 2021