Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Nyunt v North Shore Homes Pty Ltd [2020] NSWCATAP 143 Hearing dates: 24 February 2020 Date of orders: 17 July 2020 Decision date: 17 July 2020 Jurisdiction: Appeal Panel Before: K Rosser, Principal Member M Gracie, Senior Member Decision: (1) Leave to appeal on grounds 1-4 of the Amended Notice of Appeal is granted. (2) The appeal is allowed. (3) Orders made by the Tribunal on 12 November 2019 and 9 December 2019 are set aside. (4) In substitution for orders made by the Tribunal on 12 November 2019 and 9 December 2019, the following orders are made: (a) North Shore Homes Pty Ltd is to pay Ann Nyunt the sum of $46,728.13 within 28 days of the date of these orders. (b) North Shore Homes Pty Ltd is to pay two-thirds of Ann Nyunt's costs of the Tribunal proceedings, on the ordinary basis, as agreed or assessed. (5) North Shore Homes Pty Ltd is to pay Ann Nyunt's costs of the appeal including any costs of the stay application, on the ordinary basis, as agreed or assessed. (6) If either party contends for a different costs order, order 5 above ceases to have effect and the following orders apply: (a) The party contending for a different costs order (the costs applicant) is to file and serve evidence and submissions on costs within 14 days of the date of these orders including submissions as to whether a hearing on the question of costs should be dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013. (b) The costs respondent is to file and serve any evidence and submissions within 14 days thereafter including submissions as to whether a hearing on the question of costs should be dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013. (c) The costs applicant is to file and serve any evidence and submissions in reply within 7 days thereafter. Catchwords: APPEAL - Home Building Act - residential building contract - delay - suspension or abandonment of works - home warranty insurance - structural and non-structural works cover - quantum meruit - just and equitable - repudiation - termination - statutory warranty and intermediate contract terms - defective works - expert evidence - costs to complete - loss of rent COSTS - provisional costs order Legislation Cited: Australian Consumer Law (Cth) Building and Construction Industry Security of Payments Act 1999 (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Home Building Act 1989 (NSW) Sales of Goods Act 1923 (NSW) Cases Cited: Bell v Federal Commissioner of Taxation [2012] FCA 1042 Ciantar v Lawrence [2020] NSWCA 89) Collins v Urban [2014] NSWCATAP 17 Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273 Festa Holdings Pty Ltd v Adderton & Ors [2004] NSWCA 228 Hometeam Constructions Pty Ltd v McCauley [2005] NSWCA 303 Hong Kong Fir Shipping Company v Kawasaki Kisen Kaisha Limited [1961] EWCA Civ 7 Ingham Enterprises Proprietary Limited v Hannigan [2020] NSWCA 82 KG Bominflot Bunkergesellschaft für Mineraloele mbH & Co v Petroplus Marketing AG ("The Mercini Lady") [2010] EWCA Civ 1145 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115 at [55] Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32 Lawrence v Ciantar [2019] NSWSC 464 Minister for Immigration and Multicultural Affairs v Al-Miahi [2001] FCA 744 Re Bleriot Manufacturing Aircraft Co (1916) 32 TLR 253 Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 TFM Epping Land Pty Ltd v Decon Australia Pty Ltd [2020] NSWCA 93 Wesiak v D&R Constructions (Aust) Pty Ltd [2016] NSWCA 353. Texts Cited: None cited Category: Principal judgment Parties: Anne Nyunt: (Appellant) North Shore Homes Pty Ltd (Respondent) Representation: Counsel B DeBuse (Appellant) A Kaufmann (Respondent) Solicitors McCooe Raves & Poole (Appellant) BWT Legal Pty Ltd (Respondent) File Number(s): AP 19/54732 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 12 November 2019 Before: G Burton SC, Senior Member File Number(s): HB 18/46940; HB 18/48386 REASONS FOR DECISION Introduction 1. The appellant, North Shore Homes Pty Ltd (the builder), filed an Application seeking payment of outstanding moneys under a home building contract with the respondent to this appeal, Ms Ann Nyunt (the owner), in respect of residential building work. 2. The builder claimed damages from the owner for breach of contract or alternatively, under a quantum meruit. 3. The owner also filed an application against the builder, having terminated the building contract in purported acceptance of the builder's repudiatory conduct in suspending works and abandoning the site. 4. Both applications came on for hearing over three days before the Tribunal. This appeal is from the Reasons for Decision of the Tribunal delivered on 12 November 2019 (the reasons). 5. The owner also appealed from what may be characterised as "ancillary decisions" communicated to the parties on 20 November 2019 and 3 December 2019. In the former, the Tribunal refused the owner's request to re-list the matter and found that the builder had complied with Order 2 made on 12 November 2019. In the latter, the Tribunal again declined an application by the owner to re-list the proceedings under Order 7 made on 12 November 2019. Background 1. The parties entered into a written building contract on 26 February 2018 for extensive renovation works to the owner's premises. The contract sum was $360,000 (including GST) and the estimated date for completion was 13 July 2018. 2. Works began on-site on about 5 March 2018 and disputes arose between the parties in about July 2018. There were challenges by the owner in respect of progress payments already made, disputes in relation to the scope of works and complaints of allegedly defective work. The works were delayed some three to four months without a request for an extension of time before about June 2018. 3. It was common ground at the hearing before the Tribunal that the building contract did not comply with the provisions of the Home Building Act 1989 (NSW) (the HBA) because the works were uninsured and no insurance under the Home Building Compensation Fund (HBCF) (the insurance) in respect of the building works was obtained until 11 July 2018. 4. However, when the insurance was belatedly obtained, it did not expressly cover structural work, which had been performed by the builder. The certificate of insurance referred only to "non-structural renovations". 5. It was also common ground at the Tribunal hearing that the building contract was unenforceable against the owner under s 10(1) of the HBA. 6. In those circumstances, the builder claimed a total sum of $72,126 (including GST) for unpaid work performed on a quantum meruit. 7. The claim made by the owner against the builder was in respect of variations, defects claims and costs to complete (including a claim for loss of rent) following the termination of the contract totalling $133,654.80 (including GST) Summary of the Tribunal's Decision and Orders 1. The Tribunal found the owner liable to the builder in the sum of $60,995.87, being the balance of the outcome of both applications. That sum was ordered to be paid by the owner on or before 9 December 2019 (Order 1). 2. The Tribunal reached that outcome by finding: 1. the builder was entitled to claim a quantum meruit "with some hesitation," on the basis that "there is insufficient probative material to outweigh the builder's principal's evidence that the insurance was always intended to be applied for, was applied for and that he thought it was appropriate to defer finalising it until the end of the works"; 2. the owner did not discharge her onus to establish that the builder caused her loss by failing to complete in accordance with the contract time and as a result of which she terminated the contract and engaged a new builder to complete the works; 3. the owner was entitled to rely upon grounds for termination not known to her at the time of termination and which were objectively available to her at that time, but she was not entitled to claim any additional costs to complete incurred by her after termination by the new builder or claim any alleged loss of rent caused by the builder's delay. The failure by the builder to obtain the requisite insurance was not a breach of a contractual condition or of an intermediate term. The HBA specifies the penalties and type of relief for non-compliance with the statutory warranty provisions in the HBA, none of which include the right to terminate a contract; 4. The owner acted unreasonably by delaying and impeding access for the builder's expert to assess defects and assess the scope and costs of any remediation works and costs to complete. Unless the parties' experts agreed that work was defective and agreed on the quantum of any rectification or a visual inspection was not necessary to ascertain the nature and cost to rectify the defect, the owner otherwise failed in her claim for damages for defective work. 1. Order 1 for the payment to the builder of $60,995.87 was expressed to be "conditional" on the builder complying with Order 2, which required the builder "at its cost on or before 25 November 2019 obtaining and providing to the owner an extension to insurance cover to the structural work undertaken by the builder" (Order 2). 2. The Tribunal ordered that if the builder did not comply with Order 2, then the builder was liable to pay the owner the sum of $11,130.13 on or before 9 December 2019 (Order 3). This is the amount the Tribunal found for defects and remediation (inc GST), deducted from the amount allowed on the total of the quantum meruit as an offset: see [163] of the Tribunal's reasons for decision. 3. The Tribunal expressed a "provisional view" that the owner was to pay three- quarters of the builder's costs of both proceedings if the builder provided the owner with the requisite insurance documentation on or before 25 November 2019 in accordance with Order. Otherwise the builder was to pay two-thirds of the owner's costs (Order 4). 4. The Tribunal made orders in the event that either party contested the "provisional view" in respect of costs. (Orders 5 and 6). 5. Finally, the Tribunal granted leave to the parties "to apply in respect any matter arising in the performance of these orders, including any variation of time" (Order 7). Further Policy of Insurance Obtained by the Builder and Application to re-list 1. In correspondence dated 15 November 2019, the owner's solicitor sought to have the proceedings re-listed before the Tribunal in order to seek a variation of the times specified in Orders 1, 2 and 3 made on 12 November 2019. 2. On 18 November 2019, the builder provided to the owner and the Tribunal a copy of a further certificate of insurance dated 13 November 2019, which the builder contended satisfied Order 2 of the Tribunal's orders. The certificate purported to cover "structural renovation." 3. A Notice of Order signed on behalf of the Registrar was issued on 20 November 2019. It relevantly stated: Senior Member Burton has considered the owner's solicitor's request by email …. and the builder's solicitor's response by email… He notes that Order 2 has been complied with as ordered by the document attached to that email copied to the owner's solicitor. Accordingly, Order 1, the first alternative Order in order 4 and Orders 5 and 6 are the remaining operative orders. 1. In correspondence dated 22 November 2019, the owner's solicitor again sought to re-list the matter to seek a variation of the timeframe contained in the orders and to obtain some evidence of the disclosures made by the builder to the insurer for the issuing of the further certificate. 2. That request was denied in a Notice of Order dated 3 December 2019. The Tribunal relevantly stated at [7] to [8]: 7. e The owner's solicitor's letter to the builder's solicitor of 22 November 2019, copied to the Tribunal, expressed a concern, for reasons set out in that letter, that the builder had not fulfilled its duty of disclosure when obtaining the original cover on 11 July 2018 and the varied cover (to comply with order 2 made 12 November 2019) on 13 November 2019 and had voided that cover. It is anticipated that the matters in the letter would be contested on that topic. The letter also pointed to further correspondence about the owner discovering since the commencement of these proceedings and the hearing on 25 July 2019 alleged further defective work. The letter also pointed to communications with the insurer concerning (among other topics) documents "relative to" the issue of the original insurance on 11 July 2018 and the upgraded insurance cover on 12 November 2019, the lodgement of a GIPPA application and a request to the builder's solicitor to supply an authority to obtain the information. The letter also said that the owner's attitude to costs submissions was tied to the timing in order 2. 8. The Tribunal considers that it has no power to entertain the type of application that the owner wishes to make. It goes well beyond the performance or implementation of the orders made on 12 November 2019, to in effect, test whether there has been performance or implementation when, on the face of the insurance certificate obtained by the builder and provided to the owner as required by order 2, there has been performance and implementation of that order, with the consequence of which orders remain operative (as noted and communicated on 20 November 2019). 1. On 9 December 2019 the Tribunal ordered the provisional cost orders made on 12 November 2019 to become "final" by ordering the owner to pay three-quarters of the builder's costs on the ordinary basis as agreed or as assessed Appeal Grounds 1. With respect, the "Grounds of Appeal" set out in the Amended Notice of Appeal filed 6 January 2020 are unintelligible. 2. The respondent filed a Reply to Appeal on 16 December 2019 but no Reply to the Amended Notice of Appeal. 3. We have been assisted in better understanding the grounds of appeal and the respondent's reply by the helpful written submissions of counsel for both parties. We agree with the comment made in written submissions filed by counsel for the respondent that: "The Appellant's outline of submissions bears little resemblance to the grounds of appeal identified in the Amended Notice of Appeal. However, the Appellant's outline of submissions helpfully distilled down and clarify the grounds of appeal which the Appellant now seeks to propound." 1. Helpfully too, both parties' written submissions grouped the eleven separate issues to be dealt with on the appeal into four broad categories and we adopt that approach. Grounds 1 to 4 1. Collectively, these grounds raise for consideration whether "the Tribunal erred in law in finding that it was just and equitable for the respondent builder to recover on a quantum meruit". 2. Grounds 5 to 8 1. Collectively, these grounds challenge the Tribunal's finding that the owner was not entitled to terminate the contract by reason of "the builder's contraventions of the HBA, and in particular its failure to obtain insurance". 3. Ground 9 1. This ground concerns the Tribunal's provisional orders in relation to costs. The appellant's further submissions in reply dated 2 March 2020, made pursuant to the leave granted to both parties after the hearing, stated that the "Appellant presses all grounds of the appeal". We do not take that to include Ground 9 which was expressly not pressed by counsel at the hearing before us. 4. Grounds 10 and 11 1. These two grounds were added by the Amended Notice of Appeal (without apparent objection by the respondent) and assert that the builder has not complied with Order 2 of the Tribunal's orders in relation to the provision of insurance. Statutory Basis of the Appeal 1. Section 80 (2) of the Civil and Administrative Tribunal Act 2013 (CAT Act) sets out the statutory basis for an appeal, which relevantly provides: Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance — with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance — as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. 1. The owner asserted in the Amended Notice of Appeal that all grounds are concerned with "a question of law". With the exception of Grounds 5-8 dealing with the owner's legal right to terminate the building contract, we disagree. In relation to Grounds 5-8, we are of the opinion that the conduct and circumstances relied upon to constitute repudiation of contract is a question of law: Wesiak v D&R Constructions (Aust) Pty Ltd [2016] NSWCA 353. 2. For the reasons discussed below, leave is necessary to appeal the other grounds relied upon by the appellant and we have determined that leave should be granted to the owner under the provisions of cl 12(1) of Schedule 4 of the CAT Act, which governs our discretion concerning leave to appeal a decision from the Tribunal's Consumer and Commercial Division (CCD). 3. Clause 12(1), Schedule 4 of the CAT Act relevantly provides: An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). Appellants' Submissions Grounds 1 to 4: the builder's entitlement to claim on a quantum meruit 1. The owner submitted that there were numerous breaches of contract by the builder, not just limited to the failure to have obtained the insurance prior to commencing the works. Those breaches were said to be "not trivial". It was submitted that the Tribunal failed to consider those other grounds in allowing the builder to claim on a quantum meruit and that the Tribunal erred by only having regard to the builder's failure to obtain insurance. 2. In relation to the insurance issue, the owner relied on the Tribunal's finding that the builder was entitled to claim a quantum meruit "with some hesitation". Since the issue was said by the owner to be "finely balanced", it was submitted that the Tribunal made an error of law by failing to have regard to all relevant matters constituting breaches of contract and the HBA by the builder. Grounds 5 to 8: the owner's entitlement to terminate the contract by reason of the builder's contraventions of the HBA 1. The owner submitted that the Tribunal erred in finding that she had no right to terminate for an essential and statutory requirement of the contract. The owner accepted that the Tribunal was correct to find that she was entitled to rely upon objective grounds available at the time of termination even if not known by her at the relevant time. However, it was submitted that the Tribunal erred by regarding the intention of the parties as necessary to establish the essentiality of any requirement relied upon as a condition to terminate. 2. The owner said that insurance was not only lacking for the entirety of the building works, its absence was relied upon in the notice of termination together with the builder's failure to complete on time and demands for progress payments being made in the absence of insurance. Grounds 10 and 11: whether the builder has complied with Order 2 of the Tribunal's Orders in relation to the provision of insurance. 1. The owner submitted that the only evidence of compliance with the HBA was the certificate issued on 11 July 2019. That certificate did not on its face identify the scope of the works and there was a challenge as to whether the policy covered any structural works. 2. That is what caused the Tribunal to make Order 2. The intent of Order 2 was to ensure that cover was going to include the structural works already undertaken by the builder and that was both a condition of allowing the quantum meruit and for the making of the "provisional" costs order. 3. The owner disputed the validity of the further certificate of insurance provided by the builder which purported to cover "structural renovation" and challenged its compliance with Order 2 made by the Tribunal. 4. The owner submitted that there was no evidence of the builder's application for the insurance or any supporting documents provided by the insurer. This material was then sought by the owner as part of the appeal under a Summons issued to iCare, the insurer. Those documents were provided to us at the hearing, being MFIs 1 and 2. Based on supplementary submissions made by both parties with leave after the hearing, we have now received those MFIs into evidence on the appeal as Exhibits 1 and 2 respectively. 5. We have accepted that fresh evidence on the appeal under cl 12 (1) (c) of Schedule 4 of the CAT Act. As we set out later in these reasons, we are satisfied that the relevance of this evidence only arose because of the finding by the Tribunal that the insurance policy, when it was belatedly issued, was found to have had a retroactive effect. We have found that the Tribunal erred in making that finding in the absence of evidence. That same approach appears to have been was adopted by the Tribunal when again finding on 20 November 2019 that the further policy extending the cover complied with Order 2 to include structural works already undertaken by the builder. 6. As we discuss below, the issues with respect to the insurance documents produced under Summons acquired a wider significance on the appeal than was the case before the Tribunal. Respondents' Submissions 1. The builder contended that none of the grounds of appeal constituted errors of law by the Member. Grounds 1 to 4: the builder's entitlement to claim on a quantum meruit 1. The builder submitted that there was no error by the Tribunal in allowing the quantum meruit because the builder had a "good reason" to not have the insurance in place before works commenced. 2. The builder said that the "only matter" on which the owner relied to "cut ground from under" the builder's reliance on s 94 (1A) of the HBA, was the absence of a policy of insurance to cover structural work. The builder submitted that the Tribunal correctly considered the delay issue "together with" the insurance issue. 3. In any event, the builder submitted that the other alleged breaches were immaterial. Grounds 5 to 8: the owner's entitlement to terminate the contract by reason of the builder's contraventions of the HBA. 1. With leave, after the hearing, the builder provided supplementary submissions opposing grounds of appeal 5-8. Also with leave, the owner provided a short submission in reply. 2. The builder's primary contention at the hearing and in the further written submissions was that the Tribunal was correct in finding that the absence of insurance in breach of the HBA could entitle the owner to a claim in damages but not a right to terminate immediately for that breach. The builder submitted that it was "telling" that the owner had not cited any authority in support of the proposition that a "s 18B (1)(c) warranty has actually been found to be a condition (or intermediate term for that matter)" of a building contract. Grounds 10 and 11: whether the builder has complied with Order 2 of the Tribunal's Orders in relation to the provision of insurance. 1. As stated above, the main issue before the Tribunal in relation to the first policy was that it did not cover any of the structural works that the builder had already performed, as it only referred to "non structural renovation". 2. The issue raised at the outset of the appeal under the amended grounds 10 and 11, concerned whether the builder complied with Order 2 of the Tribunal's orders by effecting the further insurance on 13 November 2019. The certificate of insurance was expressed to cover structural renovations but it did not expressly refer to the non-structural works which had been mentioned in the earlier policy certificate. 3. The builder contended that it obtained the requisite policy on 13 November 2019 in accordance with Order 2, which covered "structural renovation". 4. The builder sought to rely upon an affidavit by its solicitor, Mr Benjamin Tolson dated 21 February 2020, which deposed to a conversation Mr Tolson had with a representative of iCare on 18 November 2019. Mr Tolson deposed at [2] of his affidavit that he was informed that the policy included cover for any variation works in excess of the principal contract sum of $360,000 and that: "If a certificate states non-structural, it covers non-structural only. If it states structural, it covers both structural and non-structural. There isn't a third option to say both." 1. Mr Tolson's affidavit was MFI 3 on the appeal. The affidavit related to a matter arising after the hearing and it helpfully provided some understanding to the wording and extent of cover under that further policy provided by the builder on 13 November 2019. The main purpose of the affidavit was to establish that the further policy complied with Order 2 of the Tribunal by covering both structural and non-structural works, since the certificate of insurance only expressly referred to structural work. 2. This evidence was not disputed by the owner and Mr Tolson was not required for cross examination. We have allowed that affidavit into evidence on the appeal as Exhibit 3 under cl 12(1)(c) of Schedule 4 of the CAT Act because it concerned a matter and deposed to a conversation with the insurer after the Tribunal delivered its reasons. 3. As stated above, the parties, with leave, provided supplementary submissions after the hearing. In their submissions, both parties departed from the terms on which leave was granted. 4. The builder's further submissions dated 28 February 2020 noted, somewhat equivocally: "As the Respondent understands that the Appellant intends to press the insurance certificate issue, the Respondent relies on the documents attached to this note as evidence in response. As the respondent does not have leave to do so, the Respondent makes no submission in respect of those documents, but would be happy to do so if it would assist the Appeal Panel and leave is granted." 1. The owner's submissions in reply dated 2 March 2020 dealt with the further insurance documentation produced under summons, which was not strictly in reply to the respondent's supplementary submissions and which also went outside of the terms of the leave granted. 2. The further matters raised in the appellant's submissions in reply are matters we had raised with the parties at the hearing of the appeal when MFIs 1 and 2 were received. To that extent, they are neither new or would come as any surprise to the respondent. In so far as the appellant's further submissions do no more than summarise the salient parts of the material produced under the summons, they are uncontentious. 3. In an email dated 2 March 2020 from the respondent's solicitor, objection was taken to us having regard to the further submissions of the appellant on the insurance issue without leave. To the extent that it is necessary, we grant that leave and in doing so have had regard to the respondent's submissions in that email which were said to be provided in the event of leave being granted. Consideration of the Parties' Submissions Grounds 1 to 4: the builder's entitlement to claim on a quantum meruit 1. We have determined that there is no question of law under this ground of appeal and that leave to appeal is necessary. We have decided that leave to appeal should be granted. 2. In our opinion, the Tribunal made findings which were against the weight of the evidence, so as to enliven cl 12 (1), Schedule 4 of the CAT Act. 3. The Tribunal addressed the correct question under s 94(1A) HBA as to whether it was "just and equitable" to allow the builder to claim under a quantum meruit, given non-compliance with the HBA. After having regard to the explanatory "Note" at the end of s94 HBA and the text of s 94 (1C) (b) and (4), the Tribunal stated: "The mischief intended to be cured, I infer, is to prevent opportunistic retroactive entry into insurance, when an amount is required to be claimed in quantum meruit, removing consideration of what is just and equitable in respect of the builder's claim, assessment of which will include the behaviour of the insured in consideration of the reason that insurance was obtained belatedly." 1. As stated above, the Tribunal albeit "with some hesitation," was satisfied that there was "insufficient probative material" to outweigh the evidence given by the builder's principal (Mr Nazha) that he always intended to apply for insurance and thought it was appropriate to defer applying for and finalising the insurance "until near the end of the works." The Tribunal then stated: "In the absence of sufficient proof, I take into account my findings below about my inability to accept the reliability as recollection of the oral evidence of either party, together with the absence of documentation that suggests deliberateness". 1. The Tribunal found it significant that the builder expressly referred to insurance as part of contract scope in an earlier quotation to the owner. The Tribunal concluded: "In my view the builder's approach bespoke a practical focus and ignorance of timing of performing legal obligations, rather than the deliberate misconduct alleged on behalf of the owner. In saying this, I hasten to add there was a proper basis for the owner's solicitor to test the builder's principal on such matters." 1. It is well-recognised that the words "just and equitable" are words of the "widest significance and do not limit the jurisdiction of the Court to any case. It is a question of fact, in each case which must depend on its own circumstances": Re Bleriot Manufacturing Aircraft Co (1916) 32 TLR 253 at 255 cited by Barrett J (as his Honour then was) in Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273 (Eddy Lau). 2. As Barrett J also observed in Eddy Lau at [48], section 94(1A) of the HBA "must therefore be seen as conferring a discretion that is wide but must be exercised judicially in the light of the whole of the circumstances surrounding the relevant subject matter." 3. Having found no deliberate misconduct and an absence of deliberateness on the part of the builder, in exercising its discretion to allow the claim on a quantum meruit, the Tribunal also had regard to the retroactive nature of the policy "with one qualification" and which became the qualification made in Order 2. 4. Having considered the evidence and submissions in the appeal, and for the reasons we set out below, we do not agree with the Tribunal's finding that there was an "absence of documentation [to] suggest deliberateness" or to support the implication that the owner's solicitor at the hearing did not test the principal on his motives and intentions in failing to apply for the insurance before the works commenced. The Evidence of Deliberateness and Cross Examination of the Builder's Principal 1. In the affidavit of Sami Nazha of 30 November 2018, Mr Nazha deposed that to avoid the cost of the works exceeding $360,000, at the request of Ms Nyunt, "I removed it [the cost of the insurance] from the quote and did not have a policy in place". The annexures to his affidavit provide the full context to this issue. The Tribunal did not specifically refer to this evidence in its reasons. 2. The evidence included an email from Ms Nyunt to Mr Nazha dated 5 July 2018 in which she said: "As per our conversation this morning, please send me the Fair Trading website pages stating that the home Owners Warranty Insurance is my responsibility, not yours, as it is contrary to the advice I have received. Would you send me your policy number and details of your insurer. When I looked at our contract and other documents, they contained no reference to the amount of the insurance premium in your contract cost." 1. Mr Nazha acknowledged also receiving an email from Ms Nyunt on 6 July 2018 (although dated 7 July 2018), which stated in part: "You continue to tell me you have taken out HBC insurance for the work and that you did this prior to commencement as is required by legislation. In previous emails I have used the term "Home Owners Warranty insurance" which was the description of this insurance cover up until recently. I have no doubt that you are at all times aware as to what I was talking about. I've been asking you now for over a week to provide me with evidence of this insurance. You have not supplied me with the original insurance policy nor a copy of it, nor even provided me with the policy number. It is essential that I have this information. Please forward by return email." 1. The next day, in a letter dated 7 July 2018 which referred "to my email yesterday" and which Mr Nazha also acknowledged receiving, Ms Nyunt stated: "Notwithstanding my constant requests for evidence of the HBC Insurance, all you have done is say "I will give you this when you have made the final payment." This is unacceptable for the following reasons … [then referring to sections 92 ands 94 of the HBA]. In the event that you do not immediately provide me with the matters I have requested over the last week and in particular the matters stated in my email yesterday morning, I shall be forced to conclude that there is no HBC Insurance and you have no intention of obtaining such insurance." 1. There is no evidence of any written or oral reply to those emails and no suggestion in Mr Nazha's affidavit that he disputed or challenged the accuracy of those emails. Rather, as Mr Nazha admitted in his affidavit, he then went and obtained the (first) home warranty insurance. 2. There was some cross examination of Mr Nazha on those documents which was not very clear or illuminating, although it was apparent that Mr Nazha was being challenged as to the accuracy or truthfulness of his evidence to explain the delay in getting the insurance. 3. It was put to Mr Nazha in relation to the 5 July 2018 email that he did not dispute the accuracy of the conversation set out in that email, to which he replied: "I had no idea why she said that, why she wrote that. I never did – I never responded because I found it outrageous". 1. It was also put to Mr Nazha that his evidence was not "particularly believable". Mr Nazha said that he always intended getting the insurance at the end of the job but did accept, it seems, the proposition put to him in cross examination that he only obtained the insurance when he did because Ms Nyunt had not requested it any earlier and that she refused to pay Progress Claim 6 until he obtained the insurance. 2. Having regard to the affidavit of Mr Nazha, including the relevant documentary evidence together with his cross-examination, we reach a different conclusion to that of the Tribunal which found that there was an "absence of sufficient proof" based on the oral evidence of either party together with the absence of documentation that suggests deliberateness." 3. There were at least three contemporaneous and unchallenged emails asserting matters by the owner which would directly contradict the oral evidence given by Mr Nazha. In particular, Mr Nazha did not challenge the allegation that he told Ms Nyunt that it was her responsibility and not his to obtain the insurance. He did not challenge the allegation that he had also informed her that he had taken out the insurance for the work prior to commencement. There is no record of Mr Nazha disputing or challenging any of those contemporaneous assertions made by the owner. 4. We are satisfied that Mr Nazah was sufficiently challenged on the truthfulness of his evidence which required the Tribunal to have regard to that evidence and assess its weight and credibility, rather than suggest that Mr Nazha was not tested on those matters. 5. We find that the Tribunal erred in failing to attribute sufficient weight to the affidavit evidence of Mr Nazha, the contemporaneous documents annexed to his affidavit and the cross examination of Mr Nazha. Collectively, these provided the Tribunal with sufficient evidence of deliberateness and misconduct as alleged by the owner against the builder for its failure to obtain insurance before works commenced. 6. It appears from the reasons for decision that the Tribunal would not have found in favour of the builder on the quantum meruit claim if the Tribunal had found that there was sufficient probative material to outweigh Mr Nahza's evidence that the failure to obtain insurance was not deliberate,. In these circumstances, we are satisfied that the appellant may have suffered a substantial miscarriage of justice, because, but for that relevant finding, there was a significant possibility that the appellant would have achieved a more favourable result: Collins v Urban [2014] NSWCATAP 17 (Collins v Urban) at [76]. 7. We are satisfied that leave to appeal should be granted in relation to this ground and the appeal allowed. The Tribunal's finding was against the weight of evidence and that has led to an injustice which is reasonably clear and goes beyond what is merely arguable. The finding was central to the Tribunal's decision on the quantum meruit claim and not merely peripheral. We consider that in these circumstances it would be unjust to allow the finding to stand: Collins v Urban at [84]. Grounds 5 to 8: the owner's entitlement to terminate the contract by reason of the builder's contraventions of the HBA 1. As stated above, we are of the opinion that grounds of appeal 5-8 raise a question of law for our determination. 2. At [91] the Tribunal found: "... I conclude that the builder, despite some aggravating conduct by the owner, has not discharged its evidential onus to establish that the owner was acting unreasonably in ending the contract and refusing access to continue work, but the owner, even accepting some aggravating conduct by the builder has not established her contention, on which she bears the ultimate onus, that the builder caused her loss by failing to complete in accord with the contract time as a result of which she ended the contract and engaged a new builder to complete the work, or whether her conduct contributed to the non-completion within the contract time. This is whether one is assessing non-completion by the contract date of 3-4 months after early March 2018 on common law principles or as an alleged breach of the statutory warranty in HBA s 18B(1)(d). Additionally, being expressed to be a warranty, the analysis in the succeeding paragraphs supports the conclusion that a breach of s 18(1) (d) of the HBA would not of itself justify termination." 1. In its consideration of the HBA statutory warranties and the statutory requirement to have HBCF insurance in place before residential building work commenced, the Tribunal found that there was no right for the owner to terminate the contract for non-compliance with those HBA statutory requirements. 2. The Tribunal found that such breaches were contraventions of the HBA and not the contract itself: at [[95]. The Tribunal emphasised that the implied terms imposed by the HBA were expressed as "warranties" and that section 48O of the HBA specifies the forms of relief available to a party: at [96]). The Tribunal concluded at [97]: "Further, the HBA itself prescribes penalties for non--compliance with the statutory provisions described in [5] above but does not specify a civil consequence on [sic] the contract for non--compliance, apart from unenforceability by the builder. Specification of one civil consequence, and the apparent comprehensiveness of the regime, suggest that a right to end for non--compliance with statutory requirements of themselves alone was not intended. Those statutory requirements are not made direct terms of the contract." 1. The statutory provisions referred to by the Tribunal in [5] of its reasons included s 4(2) and (3) (unlicensed contracting), s 7(2) (f), (fi), (g) (i), s 7(3), (4), (5), ss 7AA, 7A, 7E (formal requirements with respect to written contracts) and s 92(1) and (2) (compulsory insurance). The Tribunal noted that the owner had alleged non-compliance by the builder with each of those provisions together with a breach of the statutory warranties with respect to residential building work in s 18(B) (1) (a)-(f) of the HBA. 2. The Tribunal also recorded that it was common ground between the parties that the contract did not comply with "some" provisions of the HBA and was "unenforceable by the builder against the owner" under 10 (1) of the HBA which provides: 10 Enforceability of contracts and other rights (1) A person who contracts to do any residential building work, or any specialist work, and who so contracts— (a) in contravention of section 4 (Unlicensed contracting), or (b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6 (2)), or (c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person. 1. Section 92 (1) and (2) referred to in [5] by the Tribunal provides: 92 Contract work must be insured (1) A person must not do residential building work under a contract unless— (a) a contract of insurance that complies with this Act is in force in relation to that work in the name under which the person contracted to do the work, and (b) a certificate of insurance evidencing the contract of insurance, in a form approved by the Authority, has been provided to the other party (or one of the other parties) to the contract. [Note: Maximum penalty—1,000 penalty units in the case of a corporation and 200 penalty units in any other case.] (2) A person must not demand or receive a payment under a contract for residential building work (whether as a deposit or other payment and whether or not work under the contract has commenced) from any other party to the contract unless— (a) a contract of insurance that complies with this Act is in force in relation to that work in the name under which the person contracted to do the work, and (b) a certificate of insurance evidencing the contract of insurance, in a form approved by the Authority, has been provided to the other party (or one of the other parties) to the contract. [Note: Maximum penalty—1,000 penalty units in the case of a corporation and 200 penalty units in any other case.] 1. Section 94 also provides the following in the event of a contravention of section 92: 94 Effect of failure to insure residential building work (1) If a contract of insurance required by section 92 is not in force, in the name of the person who contracted to do the work, in relation to any residential building work done under a contract (the "uninsured work"), the contractor who did the work— (a) is not entitled to damages, or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, in relation to that work, and (b) is not entitled to recover money in respect of that work under any other right of action (including a quantum meruit). (1A) Despite section 92 (2) and subsection (1), if a court or tribunal considers it just and equitable, the contractor, despite the absence of the required contract of insurance, is entitled to recover money in respect of that work on a quantum meruit basis. 1. With respect, we disagree with the findings and conclusions of the Tribunal based on its construction of the HBA in the context of the facts and circumstances of this case. We acknowledge that this is a complicated area of law and the Tribunal did not have the benefit of all of the submissions and the further evidence we have received on this appeal. 2. There are four matters which we now discuss in reaching our conclusion that the Tribunal erred in finding that the owner was not entitled to terminate the contract for breaches of the HBA warranty provisions and the builder's failure to have the statutory insurance in place so that the owner was not entitled to damages for costs to complete and loss of rent. 3. The first concerns the proper approach to statutory construction, in particular where a statutory provision such as s 92 of the HBA provides its own remedy for contravention and whether, as a matter of construction, additional consequences may be implied by a court or tribunal. 4. The second concerns the Tribunal's finding that since the statutory requirements are not made direct terms of the contract, there was a legislative intention to exclude the right to terminate for non-compliance. 5. The third concerns the approach by the Tribunal when having determined that the statutory warranties and the statutory provisions with respect to compulsory insurance did not meet the requirements to be classified as a condition, the Tribunal effectively required the owner to establish by evidence that those provisions had the characteristics of an intermediate term which "required proof of the seriousness of the consequences of the breach" (at [101]). 6. The fourth concerns the Tribunal's failure to have proper regard to all relevant circumstances relied upon by the owner at the time of terminating the contract with the builder. Statutory Construction 1. The Tribunal observed at [96] that the HBA required work to be done in accordance with that Act, including the statutory requirements, but that "like all the paragraphs in s 18B it is "a warranty and specifies in s 48O the forms of relief that can be given. None of those forms of relief in themselves provides an ending of the contract." 2. Section 48O of the HBA is a power given to the Tribunal to make orders for payment of a debt, damages, restitution, to refund money or to issue a work order to a builder to "do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement". 3. In our opinion, the termination of a contract is a matter between the parties to the contract. It is not for a court or a tribunal to impose that legal outcome on a party, either as a part of or as a necessary consequence of a breach of a provision under the HBA, and whether or not it is expressed to be a "warranty". 4. For example, the Australian Consumer Law (ACL) in s 243 of Division 4, Subdivision C of Part 5.2 headed "Remedies", grants power to a court to vary the terms of an unfair contract, to declare a contract void ab initio or from a certain time or refuse to enforce certain terms of a contract. It does not give a court power to terminate a contract. The only power to terminate is with respect to the operation or effect of an instrument creating or transferring an interest in land: not a contract between parties. 5. In TFM Epping Land Pty Ltd v Decon Australia Pty Ltd [2020] NSWCA 93 (TFM Epping), Basten JA (with whom Meagher JA and Emmett AJA agreed) considered the Building and Construction Industry Security of Payments Act 1999 (NSW) and in particular, s 13(7) which provides a penalty for failure to comply with its requirements with respect to supporting statements. The section does not itself invalidate a payment claim served without a supporting statement, nor does it invalidate the act of serving such a claim. 6. In concluding that there is no basis to imply a legislative intention that non-compliance invalidates a payment claim or service of an otherwise valid claim, Basten J held at [47]-[48] (omitting citations): "[47] Any analysis of the effect of a contravention of s 13(7) must start with two propositions. First, the provision identifies its own consequence: it is a prohibition with a prescribed penalty, so that a contravener commits a statutory offence. Secondly, it does not in terms invalidate a payment claim served without compliance with the terms of s 13(7), nor does it invalidate the act of service, if that be considered an alternative consequence to invalidation of the claim itself. If it has either of those effects, they are implied consequences. How should the court determine whether they should indeed be implied? [48] The question is to be addressed by applying the principles of construction identified in the majority reasons in Project Blue Sky Inc v Australian Broadcasting Authority I1998] HCA 28; (1998) 194 CLR 355. As stated by McHugh, Gummow, Kirby and Hayne JJ at [69] [omitting citations and endnotes]: "The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined 'by reference to the language of the instrument viewed as a whole'. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed'. Thus, the process of construction must always begin by examining the context of the provision that is being construed." 1. His Honour further held at [50] (omitting citations): "In Project Blue Sky the consequence of non-compliance with a statutory direction had to be identified in the absence of any stated consequence; the possible answers depended on implications. By contrast, an implied consequence is unnecessary in circumstances where the statute provides its own remedy for contravention. Even in that case an additional consequence may be implied where the effect is to promote the purposes of the prohibition, but will less readily be implied where there is a tendency to conflict with the apparent purposes of the prohibition, or may give rise to adverse consequences for third parties. The appropriate course is to identify the subject matter, scope and purpose of the current provision, read in its statutory context." 1. By applying that same approach and reasoning, we are of the opinion that the mere absence of a stated consequence for non-compliance of a statutory provision in the HBA does not of itself suggest against the possibility that when properly construed, there may be other implied consequences for non-compliance. Further, where there are some stated consequences such as the unenforceability provisions for breach of the statutory warranties in s 10 and the prohibitions in ss 92 and 94 of the HBA, as set out above by Basten JA, "an additional consequence may be implied where the effect is to promote the purposes of the prohibition," particularly if there is no conflict with the apparent purpose of the prohibition. Legislative Intention to Exclude a Right To Terminate 1. As we have set out above, the Tribunal held that because the statutory requirements of the HBA "are not made direct terms of the contract" then it was unlikely that the legislature intended to permit termination for a breach of its provisions. We disagree with that finding having regard to our understanding of the proper approach to the construction of such implied or imposed statutory requirements. 2. In Ingham Enterprises Proprietary Limited v Hannigan [2020] NSWCA 82 (Ingham Enterprises), Bell P (in dissent) stated at [97]-[98]: [97] Not all contractual obligations arise as a result of the parties' agreement, some are implied by operation of law into a contract, as Hope JA's well-known decision in Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 468 at 487 (Castlemaine Tooheys) illustrates. Such obligations are no less contractual in nature ... [98] Just because an obligation arises by operation of law as opposed to the parties' express agreement does not mean, however, that the contract may not be the source of that obligation. Terms implied by operation of law are not dependent upon the intentions, objectively ascertained, of the parties: Castlemaine Tooheys at 487; JD Heydon Heydon on Contract (2019, Lawbook Co) at [10.130]". 1. The decision of Meagher JA (with whom Gleeson JA agreed) approached their consideration of the issues differently. At [146] Meagher JA observed: In support of that analysis [by Bell P] reference is made to the statements of Lord Diplock in Moschi v Lep Air Services Ltd [1973] AC 331 at 350 and Photo Production Ltd v Securicor Transport Ltd [1980] UKHL 2; [1980] AC 827 at 848-849, and the statement of Kiefel CJ, Bell and Keane JJ in Mann v Paterson Constructions Pty Ltd [2019] HCA 32; (2019) 93 ALJR 1164 at [12] that: "the right to damages for loss of bargain that arises in such a case [a termination for wrongful dismissal] is, in this respect, no less a creature of the contract than the right to recover sums that become due before its termination." 1. At [147] His Honour held : "However, none of those statements suggest that the obligation to pay damages for breach of contract is created by or arises under the contract. On the contrary, Lord Diplock's analysis in Lep Air Services and Photo Production acknowledges that the so-called "secondary obligation" arises "by operation of law" or by "implication of the common law", which is the same thing. The description of the right to loss of bargain damages following a termination for wrongful dismissal as a "creature of the contract" does not take this analysis any further". 1. For present purposes, it does not matter whether the source of an implied statutory obligation is characterised as arising under the contract (per Bell P) or by operation or implication of law (per Meagher and Gleeson JJA). The point of the discussion is that a right to terminate and sue for damages may arise from a breach of an obligation imposed or implied by law irrespective of whether it is - as the Tribunal found - "not a direct term of the contract". Bell P noted at [98] that "[T]erms implied by operation of law are not dependent upon the intentions, objectively ascertained of the parties" citing Castlemaine Tooheys at 487 and Heydon on Contract at [10.130]). In our opinion, based on the approach of the Court of Appeal in Ingham Enterprises, the effect and importance of terms implied by operation of law are not dependent upon the intentions of the parties and a right to terminate a contract and sue for damages is no less available to a party because the term relied upon in breach is implied by law. Evidence of Seriousness of Breach 1. If the source of an imposed statutory or implied common law term does not depend on the intentions of the parties, then it appears to us that the Tribunal misdirected itself by requiring particular evidence from the owner to establish the seriousness of the breach to entitle her to terminate the contract for breach of an intermediate term. 2. At [92] and [93] of its reasons, the Tribunal noted that in justifying her termination of the contract, the owner relied upon the builder's use of an unlicensed kitchen installer and the "builder's non-compliance with the provisions of the HBA listed at [5]" of its reasons and to which we have referred above. The Tribunal found that in relation to the unlicensed kitchen contractor, there was "no real evidence to support the submission about importance. The same applies to another submission concerning absence of insurance until 11 July 2018". 3. In the case of the s 18B statutory warranties also relied upon by the owner to terminate, the Tribunal set out some of the relevant authorities on the question of what constitutes a condition or an intermediate term, a breach of which may entitle a party to end a contract (at [98]-[99]) and a breach of a warranty which did not. The Tribunal concluded at [100]-[102]: "[100] Terms sounding in damages are warranties. [101] In my view, the statutory warranty relied upon by the owner, which is the only relevant term, does not meet the requirements to be classified as a condition, nor as an intermediate term whose consequences depend upon the seriousness of the breach. If it was an intermediate term, in this case there is no evidence to provide the required proof of the seriousness of the consequences of the breach. [102] Accordingly, the owner has not established a basis for her claim sounded on ending the contract...". 1. We agree with the Tribunal's statement of the law that an intermediate term of a contract is a non-essential term, a breach of which may give rise to a right to terminate if the breach is sufficiently serious. This right extends to circumstances where the breach goes to the root of the contract, deprives the other party of a "substantial part of the benefit for which it contracted" or causes a "substantial loss of benefit": Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115 at [55]. 2. Having determined that a statutory warranty did not meet the requirements to be classified as a condition, the Tribunal effectively required the owner to adduce specific evidence to establish that the statutory warranties had the characteristics of intermediate terms. The Tribunal found that this "required proof of the seriousness of the consequences of the breach" (at [101]). This appears to have followed from the Tribunal's reasons earlier at [98] which stated: "To classify a terms as a condition requires it to be construed objectively, as of such importance to at least one party, apparent to the other, that any failure of performance, irrespective of the seriousness of the consequence of the failure, entitles the other party to end the contract: Tramways Advertising PL v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 at 641-642, cited with approval in Associated Newspapers Ltd v Bancks (1951) 83 CLR 322 at 336-337; Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 at 849." 1. As we have stated above, in Ingham Enterprises Bell P noted that terms implied by the operation of law are not dependent upon the intentions, objectively ascertained, of the parties. That statement followed the long established decision of Hope JA in Castlemaine Tooheys and was not otherwise questioned in the decision of the majority. In our opinion, and adopting that reasoning, the Tribunal erred in placing an evidentiary onus on the owner to adduce evidence of the intentions of the parties to establish the seriousness to the owner of the breaches of the implied statutory warranties and the absence of compulsory insurance. 2. The owner's written submissions in the appeal contended at paragraph [14] that the Tribunal failed to give any consideration "to the respondent's other contraventions of the HBA apart from the failure to obtain insurance." The submissions at [14]-[16] stated the following in relation to the builder's breaches: "14. ... These include its engagement of an unlicensed subcontractor to perform a portion of the works in contravention of section 4; its actions in demanding and receiving five separate progress payments at a time when the works where [sic] uninsured in contravention of section 92; the various deficiencies in the written contract between the parties in contravention of section 7; the builder's failure to document in writing agreed variations between the parties in breach of section 7E; the builder's failure to provide the homeowner with the consumer information prescribed in section 7AA; and the builder's resultant breaches of the statutory warranty contained in section 18 B(1)(c). 15. Second, the Tribunal's finding that the respondent builder's various breaches of the HPA (and in particular the breaches of section 92 with its failure to obtain insurance) did not give rise to entitlement the part of the homeowner to terminate the contract for repudiation, and in particular: 15.1 The suspension of work by builder who had not and would not obtain insurance; 15.2 The absence of a contractual entitlement to such suspension in circumstances where there was no right to enforce payment and the right to any such payment was and remains subject to the provision of appropriate insurance; and 15.3 The Tribunal's failure to give proper consideration to the statutory scheme that made the acquisition of insurance by the builders [sic] compulsory. 16. The Tribunal's finding… that the respondent builder had obtained an extension to the insurance cover. The only material relied upon by the builder in this regard was the Certificate which on its face did not identify the works covered, and could not provide probative evidence of same." 1. As noted by Henry J in Lawrence v Ciantar [2019] NSWSC 464 at [191] (which the Court of Appeal endorsed in Ciantar v Lawrence [2020] NSWCA 89): "The general rule is that breach of an intermediate non-essential time term of a contract does not give rise to a right to terminate unless a party first serves a notice requiring performance within a reasonable time. The exceptions to this are where there is unreasonable delay in performance or anticipated failure to comply with a notice to perform. Unreasonable delay occurs where the delay evidences a repudiation of the obligation by the promisor: see JW Carter, Contract Law in Australia (7th ed, 2018, LexisNexis Butterworths) [30.54 – 30.56]." 1. In our opinion, the evidence establishes that the owner followed that course by serving a notice in the form of correspondence from the owner's solicitor to the builder's solicitor dated 19 July 2018 described as a "notice to show cause why the owner should not terminate the contract" (NTSC). We deal with the detail of that NTSC later but for present purposes it suffices to say that the NTSC relied upon several alleged breaches by the builder, including contraventions of the HBA statutory warranties and the absence of compulsory insurance. 2. In relation to the insurance, even though the builder had purportedly obtained the compulsory insurance on 9 July 2018, as we have stated above, the Certificate of Insurance dated 9 July 2018 only covered "non-structural works." Further, Exhibit 1 in the appeal included a copy of the invoice issued to the builder by ICare dated 9 July 2018 which stated a period of cover of 12 months from 9 July 2018 until 9 July 2019. The insurance therefore did not satisfy the statutory requirements by covering any of the works already performed at the date the insurance was obtained, which included both structural and non-structural work, and only operated prospectively to cover future non-structural work for the remainder of any works which may have been undertaken by the builder. 3. It was open to the owner, consistent with the principles set out by Henry J above, that in anticipation of a failure to comply with the notice or in the event of unreasonable delay by the builder, to not have issued a notice as a precondition to termination for breach of an intermediate term. In this case however, the owner did issue a NTSC. 4. We are of the view that the NTSC satisfied the purpose of providing notice of an intention to terminate for breach of the HBA's statutory warranty provisions and non-provision of the HBCF insurance on the basis of those breaches being sufficiently important to constitute intermediate terms of the contract if the builder did not remedy those breaches. 5. Further, the objective seriousness of a failure to obtain the statutory insurance ought to have been apparent to the Tribunal. No insurance was in place at any time during the course of the works - this was not just a case of the insurance being effected a little late. In our opinion, the Tribunal did not require more evidence from the owner to establish evidence of its seriousness in the context of the builder's breach. 6. In Festa Holdings Pty Ltd v Adderton & Ors [2004] NSWCA 228 (Festa Holdings), the Court of Appeal (per Mason P; Sheller and Stein JJA agreeing) at [32] held that it was "legitimate" to describe insurance as "compulsory" because the statutory scheme under the HBA makes it an offence under s 92 to perform residential building work or to seek to recover monies for work done without an appropriate certificate of insurance and further, section 94 imposes restrictions on the builder recovering damages or other remedies in certain circumstances. 7. As the Court of Appeal also observed in Festa Holdings (at [37]), an absence of insurance may have a negative impact on the resale value of the property; not only is the work uninsured and performed contrary to statutory consumer protections, the owner may not be able to sell the property in the absence of such insurance. 8. Based on the above, we are of the opinion that in the particular circumstances of this case, the implied statutory warranty provisions may have the effect of an intermediate contractual term. The lack of compulsory insurance was objectively serious, particularly at such a late stage of the works. This was compounded by the builder's failure when it did obtain insurance to ensure that it covered structural works. Further, as has now become apparent, the policy which the builder obtained at the time of termination did not operate retroactively in respect of any of the work already performed, contrary to the assumption made by the Tribunal that it did have such effect as we have discussed above. In those circumstances, we are satisfied that the absence of insurance at the time of termination could deprive the owner of a "substantial part of the benefit for which [she] contracted" or cause a "substantial loss of benefit" (Koompahtoo cited above). 9. The Tribunal correctly accepted that the owner was entitled to rely on grounds not relied upon when terminating at [94]: citing Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 370-371, 377-378; [1931] HCA 21 and Concut Pty Ltd v Worell [2000] HCA 64 at [27]-[28], [42]. 10. As Mason CJ said in Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 262: "Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 stands as authority for the general proposition that a termination of a contract may be justified by reference to any ground that was valid at the time of termination, even though it was not relied on at the time and even though the ground actually relied on is found to be without substance." 1. This may have been relied upon if the owner, after termination, discovered that the insurance did not meet the statutory requirements of the HBA and did not rely upon that at the time of termination. However, in this case, the owner expressly relied upon the lack of compulsory insurance as a ground to terminate. First, she did so by issuing the NTSC after the Certificate of Insurance was belatedly obtained by the builder as she was not satisfied that the insurance which the builder had said it obtained met the requirements of the HBA for the works because it was expressed to only cover non-structural works. Second, the owner also relied upon the absence of the compulsory insurance in the notice of termination. The owner was proven correct to have doubted the builder on this and to rely upon that matter as a breach entitling her to terminate. As it has now turned out, the insurance is useless. Despite purporting to cover only non-structural work, it did not cover any of the work already performed. As far as we can ascertain, the work was and remains uninsured. 2. The builder must be taken to have known that the policy did not operate retroactively as the invoice in Exhibit 1 issued to it on 9 July 2018 makes clear. Also, if not before but at least since the production of the documents now comprising Exhibit 1, the builder's lawyers also ought to have known that the policy did not operate retroactively. Yet at no time was this drawn to the attention of the Tribunal (if this was then known at the date of the hearing below) and it was certainly not raised with us in the written submissions filed on behalf of the builder or at the hearing of the appeal. 3. We do not agree with the finding by the Tribunal at [92] that the absence of insurance until 11 July 2018 was not important. 4. We accept that there may be circumstances in which a failure to have in place compulsory insurance before the commencement of work may not give rise to a right to terminate the contract, for example where there was a minor delay in effecting that insurance and where that omission was rectified or where the owner was aware of and had acquiesced or contributed to the delay. In the present case, that delay was for a full five months which was the entire duration of the works (and in fact one month over the estimated time of completion) and the breach has never been remedied despite orders of the Tribunal for the builder to do so. 5. As stated by Lord Justice Diplock in Hong Kong Fir Shipping Company v Kawasaki Kisen Kaisha Limited [1961] EWCA Civ 7: "In some classes of contracts such as sale of goods, marine insurance, contracts of affreightment evidenced by bills of lading in those between parties to tills of exchange, Parliament has defined by statute some of the events not provided for expressly in individual contracts of that class; but where an event occurs the occurrence which neither the parties nor Parliament have expressly stated will discharge one of the parties from further performance of his undertakings it is for the court to determine whether the event has this effect or not." 1. This approach accords with that described by us above in Project Blue Sky referred to in TFM Epping. 2. His Lordship continued: "The test whether an event has this effect or not has been stated in a number of metaphors all of which I think amount to the same things Does the occurrence of the event deprive the party who has further undertakings to perform of substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as the consideration for performing those undertakings?" 1. His Lordship further said: "The question whether an event which is the result of the other party's breach of contract has this consequence [ie: relieving the party not in default of further performance] cannot be answered by treating all contractual undertakings as falling into one of two separate categories: "conditions" the breach which gives rise to an event which relieves the party not in default of further performance of his obligations, and "warranties" the breach of which does not give rise to such an event. Lawyers tend to speak of this classification as if it were comprehensive… ... There are, however, many contractual undertakings of a more complex character which cannot be categorised as being "conditions" or "warranties" ... Of such undertakings all that can be predicated is that some breaches will and others will not give rise to an event which will deprive the party not in default of substantially the whole benefit which it was intended that he should obtain from the contract; and the legal consequences of a breach of such an undertaking, unless provided for expressly in the contract, depend upon the nature of the event to which the breach gives rise and do not follow automatically from the prior classification of the undertaking as a "condition" or a "warranty"... "… [t]he true answer, as I have already indicated, is that it is neither [a condition or a warranty], but one of that large class of contractual undertakings one breach of which may have the same effect as that described to a breach of "condition" under the Sale of Goods Act and different breach of which may have only the same effect as that ascribed to a breach of "warranty" under that Act." 1. His Lordship also recognised that the court must consider the circumstances relevant at the time of termination: "What the learned judge had to do in the present case is as in any other case where one party to a contract relies upon a breach by the other party is giving him a right to elect to rescind the contract, was to look at the events which had occurred as a result of the breach at the time at which the charterers purported to rescind the charter-party and to decide whether the occurrence of those events deprived the charterers of substantially the whole benefit which it was the intention of the parties as expressed in the charter-party that the charterers should obtain from the further performance of their own contractual undertakings." ... The question which the learned judge had to ask himself was, as he rightly decided, whether or not at the date when the charterers purported to rescind the contract … or when the shipowners purported to accept such rescission… the delay which had already occurred… and the delay which was likely to occur… were, when taken together, such as to deprive the charterers of substantially the whole benefit which it was the intention of the parties they should obtain from further use of the vessel under the charter-party." 1. This approach is also similar to the more recent comments of Lord Justice Maurice Kay (with whom Lord Justices Rix and Patten agreed) in the UK Court of Appeal in KG Bominflot Bunkergesellschaft für Mineraloele mbH & Co v Petroplus Marketing AG ("The Mercini Lady") [2010] EWCA Civ 1145. In that case, the appeal concerned the following issue which was set out at [47]: "On behalf of the buyer, Mr Edey, supported by the decision of the judge, relied on a well-known line of cases which state in effect that the Sale of Goods Act implied conditions cannot be excluded without express reference to the exclusion of "conditions". Exclusion of guarantees, warranties or representations do not suffice. On behalf of the seller, Mr Jacobs, however, submitted that time has moved on since those cases were decided and that the attitude to the construction of exception clauses, particularly as between commercial parties, has become more realistic and less formulaic. The reference to "guarantees, warranties or representations" was intended to be a reference to all contractual terms or pre-contractual representations of whatsoever kind." 1. His Lordship held at [55]: "It may be observed that even Lord Diplock has referred to the Mash & Murrell implication [being a reference to Diplock LJ's own decision in Mash & Murrell Ltd v. Joseph I Emmanuel Ltd [1961] 1 WLR 862], which on my understanding, is part of the meaning to be attached to what is now the section 14(2) implied condition, as a "warranty" (at 870). He similarly used the expression "warranty" to describe Sale of Goods Act conditions in Lambert v. Lewis [1982] AC 225 at 273, 276." 1. His Lordship continued at [61]: "If therefore I were construing this clause untrammelled by past authority, or if such authority was plainly limited, in the way that so many decisions on the construction of individual clauses are limited, by considerations of the precise language and context of those particular clauses, I would feel it open, in the modern world, to give to clause 18 the construction which I believe that it realistically bears: that is to say, that "guarantees" and "warranties" are intended to cover all terms, both those which entitle the innocent party in the case of breach to treat the contract as repudiated and those which sound only in damages. As section 11(3) of the 1979 Act [ie the Sales of Goods Act (UK)] itself records, "a stipulation may be a condition, though called a warranty in the contract": and clause 18 itself demonstrates that buyer's warranties there set out are treated by the contract as conditions." 1. Similarly, in the Sales of Goods Act 1923 (NSW), s 16 (1) permits a buyer to treat a condition as a warranty and conversely and s 16 (2) states: "Whether a stipulation in a contract of sale is a condition the breach of which may give rise to a right to treat the contract as repudiated, or a warranty the breach of which may give rise to a claim for damages but not a right to reject the goods and treat the contract as repudiated, depends on the construction of the contract. A stipulation may be a condition though called a warranty in the contract." 1. We are satisfied that at the time that the contract was terminated, the failure to obtain the compulsory insurance had by that stage of the already delayed works acquired a level of objective seriousness which entitled the owner to regard the ongoing failure by the builder to properly effect that compulsory insurance as repudiatory conduct entitling her to terminate the contract. 2. As noted above, there is still no complying insurance. The delay in the progress of the works at the time of termination must also be seen in the context of what further delay would have resulted if the contract was not terminated when it was and if the owner had been effectively forced to treat the contract as continuing on foot and wait for the builder to effect a policy to cover all works (which it has still failed or refused to obtain). 3. The analysis by the Tribunal lacked recognition of the fact that the builder could not lawfully undertake any further work until it rectified its omission to effect proper insurance cover for the work already performed and any future structural work. The work had been performed by the builder in breach of some of the provisions of the HBA. As we have noted, that was common ground before the Tribunal. With respect to the statutory insurance, the owner put the builder on notice by the NTSC that she required the builder to obtain and provide adequate proof of the statutory insurance. In our opinion, the owner was not required to permit the builder to undertake any further work until proper insurance was obtained for all of the works - both structural and non-structural in accordance with the HBA. Since the builder has never established a willingness or ability to effect the full cover required by the compulsory insurance requirements of the HBA, so as to cover all past and future works, including both structural and non-structural works, if the owner was not entitled to terminate, then existing delays to completion would only increase. 4. Further, the absence of insurance gave rise to another serious problem. The builder had stopped work on about 31 July 2018. The owner asserted this was because the builder refused to continue to undertake any further work until Progress Claim No 6 was paid. Progress Claim 6 related to works performed before the insurance was purportedly obtained on 9 July 2018. That action by the builder, if that was the case, would be a contravention of s 92(2)(a) of the HBA. Further, receiving any payment under the preceding five progress claims would also be a contravention of s 92(2)(a). In any event, the builder could not legally undertake any further work without the proper insurance being in place (s 92(1)(a)). A Certificate of Insurance before work is commenced as contemplated by s 92(1)(b) and 2(b) may ordinarily provide adequate proof of cover but the owner was not obliged - given the mutual distrust between the parties as found by the Tribunal - to accept at face value the Certificate belatedly obtained by the builder and the circumstances in which it was obtained. 5. As events transpired, the owner was correct in her distrust of the builder's assurances with respect to the insurance cover. The approach taken by the Tribunal assumed (mistakenly as events have proved) that the insurance for non-structural work was retrospective (when it was not) and that the structural cover (when later obtained) would also be retrospective (when it was not). 6. If the owner was not entitled to terminate the contract when she did, two obviously unintended consequences would have inevitably followed: first, the works would have been further delayed until the insurance was obtained; and second, since the works have remained uninsured, the builder could not have established that it was ready, willing and able to continue any work under the contract by first obtaining the necessary insurance which was legally required. On the analysis of the Tribunal, the owner would never have been entitled to terminate even if the breach continued and further work could not be performed. That cannot be a correct or intended legislative consequence of a breach of the compulsory insurance provisions of the HBA. 7. We find that the conduct of the builder with respect to the compulsory insurance was a repudiation of the contract and the requirements of the HBA which would not have allowed the owner to obtain a substantial part of the benefit of the contract, being a residence built with proper statutory insurance in place to cover all of the works. Other grounds relied upon by the owner to terminate the contract 1. Further to our analysis of the insurance which the builder purported to obtain on 9 July 2018, we are of the opinion that in undertaking its task, the Tribunal did not have regard to the full context in which that breach occurred and how it was relied upon by the owner at the time of termination. In particular, and as we now discuss, the repudiatory conduct relied upon by the owner was not only concerned with the breach of the statutory obligation to have insurance in place before work was commenced. 2. The NTSC issued to the builder on behalf of the owner identified several factors including non-compliance with the HBA and not just the lack of compulsory insurance. As we have set out above, the NTSC asserted that the form of the contract entered into by the parties did not comply with the HBA and the builder breached the HBA by issuing and seeking payment for progress claim number 6 when the work referable to that payment claim had not been completed together with the builder's alleged threat to suspend works for non-payment. The NTSC further alleged a breach of the HBA due to work being performed by the kitchen sub-contractor who was apparently unlicensed. 3. The notice of termination of contract dated 3 August 2018 was signed by the owner. Again, the notice of termination identified numerous breaches of the HBA including the statutory warranties, including reference to s 92 relating to compulsory insurance. Other matters relied upon in breach of the HBA included the builder's use of unlicensed subcontractors to perform work, issuing progress payments and demanding payment when works were uninsured and deficiencies in the written contract in contravention of s 7 of the HBA. 4. Other alleged breaches related to the quality of work, incomplete work, an absence of extensions of time to extend completion outside the estimated 3 to 4 month period from the commencement of the works and the builder's failure to document variations. 5. There was also reliance upon the builder stopping work on 30 July 2018 and then failing to take adequate security measures to protect the site and permitting unrestrained access to the inside of the house. 6. The notice of termination concluded: "On the basis of the foregoing and your company's general conduct, lack of supervision and planning and disregard for the legislation governing residential building work (the Act) it has demonstrated an intention not to be bound by the contract or in the alternative that is only prepared to carry out its obligations under the contract if and when it suits itself." 1. The Notice of Termination was challenged by the builder's solicitor. 2. The approach taken by the Tribunal which we have considered above caused it to overlook the relevance and significance of the owner's reliance on those other matters as part of the overall factual matrix relevant to her decision to terminate. A major aspect of the owner's decision was concerned with ongoing delay to the works. The issue of the insurance and its particular seriousness in the context of that matter cannot be ignored or disregarded. The Tribunal found that the owner failed to establish that the delay was the fault of the builder. 3. In our opinion the Tribunal ought to have had regard to all of the facts and circumstances relevant at the time of termination. For example, the evidence of the owner in her affidavit of 18 December 2018 stated at [99]: "What caused me to eventually terminate the contract was Sami Nazha's continuous demands for progress payment 6 despite the fact that it was not due because he had not done the work and his failure to diligently progress the work in the 5 month period since commencement, and the Applicant's discontinuance of work in late July." 1. This also needs to be seen in the context of the Tribunal's finding that at the time of termination at [90] (1)-(2): "[90] (1) There is, and has been since at least the second half of 2018 a fundamental lack of trust by each party of the other. (2) Whether or not the owner acted wrongly in ending the contract depends on highly-contested matters of the scope of works, including variations, for which the builder was responsible .... ". 1. In our opinion, there was sufficient evidence for the Tribunal to have made a finding as to whether the builder was undertaking the works in accordance with the contract, with due expedition and whether it remained ready, willing and able to complete the project as required by both the contract and the HBA within a reasonable time after receipt of the NTSC. 2. In Hometeam Constructions Pty Ltd v McCauley [2005] NSWCA 303 (omitting some citations), McColl JA (with Ipp and Tobias JJA agreeing) held at [181]: "... in my view, the respondent was also entitled to seek to prove lack of due diligence by establishing a case of delay in progress during construction. This appears from both Stubbs and Hooker. On this basis she could have established a failure to carry out a reasonable amount of work by a given time; that that period of time be measured by reference to all the work to be performed under the Contract or, in absolute terms, by reference to a lack of activity on site over a significant period that could not be satisfactorily explained. The onus of proving lack of due diligence was on the respondent. If the facts established by the respondent are capable of giving rise to an inference of lack of due diligence, the appellant may discharge any evidentiary onus that may pass to it, by explaining why the work progressed at that rate: see Hobbs. That evidence should be "sufficient ... to turn the scale": Brady v Group Lotus Car Cos plc [1987] 3 All ER 1050 at 1059 (CA) per Mustill LJ." 1. Also, as we have referred to above, Henry J in Lawrence v Ciantar [2019] NSWSC 464 at [191] had regard to the right to terminate for breach of an intermediate term "where there is unreasonable delay in performance or anticipated failure to comply with a notice to perform. Unreasonable delay occurs where the delay evidences a repudiation of the obligation by the promisor". 2. We conclude that for the same reasons that we have discussed above, the Tribunal's approach to the construction of the HBA was not the correct approach in reaching its conclusion that the HBA did not permit termination for breach of the statutory warranty provision in s 18B(1)(d) (at [91]) which provides for: (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time, 1. Having found that the breach of the statutory warranty in s 18B (1)(d) of the HBA "would not of itself" entitle the owner to terminate the contract (a finding with which we have disagreed as above), the proper approach still required the Tribunal to then determine whether other conduct by the builder relied upon by the owner, when considered collectively, constituted a repudiation of the contract entitling the owner to terminate. 2. That was the approach followed by Henry J and endorsed by the Court of Appeal in Ciantar v Lawrence [2020] NSWCA 89 (per Bathurst CJ with whom Meagher and Gleeson JJA agreed) at [136]-[138]: "[136] The primary judge, whilst concluding that the respondents were not entitled to terminate pursuant to s 7BB of the Home Building Act, considered that the appellant had repudiated the agreement such that the respondents were entitled to terminate it. [137] It was accepted that the respondents were entitled to rely on this ground notwithstanding they did not rely on it when terminating: Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 370-371, 377-378; [1931] HCA 21. [138] Her Honour's findings relevant to the question of repudiation set out in [59]-[62] and [77] above were not disputed. It showed in my opinion a clear intention by the appellant not to be bound by the contract or to perform it in a manner substantially inconsistent with his obligations: Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 633-634, 658-659; [1989] HCA 23; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61 at [44]." 1. In our opinion, the combination of all relevant circumstances surrounding the conduct of the builder at the time of termination evidenced a clear repudiation of the contract. In addition to the builder's non-compliance with the HBA which was common ground before the Tribunal, given the absence of the compulsory insurance, further delay to the works was inevitable. If the stoppage of work on 31 July 2018 was due to an insistence on being paid for Progress Claim 6, then that conduct by the builder was unlawful. If it was for other reasons, the fact remains that the builder could not rectify its delay in completing the works in the absence of being able or willing to obtain the requisite statutory insurance. Further delay would not have allowed the owner to obtain a substantial part of the benefit of the contract, being a residence built within a reasonable time given that the delays already experienced - for whatever the reason - would only be exacerbated by the builder having stopped work and not being legally permitted to undertake any further contract works. Conclusion on Grounds 5-8 of the Appeal 1. For the reasons set out above, we find that the owner was entitled to terminate the contract as and when she did in the particular circumstances of this case. 2. We requested the parties at the hearing of the appeal to agree upon the various amounts which may be payable by the builder to the owner in the event that we upheld the challenge on the appeal on the quantum meruit, the Tribunal's findings on termination or both. 3. Helpfully, the Tribunal had made alternative findings of quantum in relation to the owner's claim for defective works and completion costs in the event of being found wrong in relation to the findings on termination. 4. The parties agreed in their supplementary written submissions that if the appeal is upheld on both the quantum meruit and the termination grounds, then the completion costs of $31,562.67 in the Schedule before the Tribunal would be payable by the builder to the owner. The respondent candidly submitted that the figure before the Tribunal was subject to an adjustment for GST of 10% plus an amount of $800 for a shoe cabinet giving a revised total for costs to complete in the sum of $35,598. We accept that figure and award that sum to the owner under grounds 5-8 of the appeal. Grounds 10 and 11: whether the builder has complied with Order 2 of the Tribunal's Orders in relation to the provision of insurance. 1. The two new grounds of appeal primarily concern the Tribunal's findings and orders consequent upon the matters arising under Order 2. However, as we discuss below, these grounds overlap with the findings made by the Tribunal challenged under the first grounds of appeal for which the Tribunal allowed a quantum meruit. 2. The builder did not challenge the inclusion of the two amended grounds of appeal. As stated above, there was no Reply document filed by the builder in response to the Amended Notice of Appeal but the builder made submissions in opposition to the substantive grounds raised in those amendments. We have allowed the two additional grounds to be included in the owner's appeal. 3. We are of the opinion that amended grounds 10-11 of the appeal raise a question of law for determination. Therefore, leave to appeal under these grounds is not necessary. 4. As we set out below, the Tribunal made a finding of fact in relation to the operation of the first policy of insurance which was made in the absence of evidence. Further, the evidence which we have allowed in this appeal establishes that the finding made by the Tribunal was incorrect. 5. Therefore, there was no proper basis for the Tribunal making any of its conditional orders to allow the quantum meruit. 6. Also, by finding that the policy obtained on 13 November 2019 complied with Order 2, the Tribunal repeated the same erroneous finding or it implicitly relied upon its earlier erroneous finding, to assume that the further policy operated retroactively. 7. It was common ground before the Tribunal that the insurance only covered non-structural work and the builder had in fact undertaken structural works prior to the date of the insurance being obtained. We are unaware of any explanation offered by the builder for limiting the original cover to exclude, or at least not expressly include, structural work. 8. Order 2 was made by the Tribunal because the policy and cover issued on 11 July 2018 stated, in relation to the "description of construction as described by builder," the words: "non structural renovation" and the Tribunal found that the cover had a retroactive effect. This gave rise to the conditional basis on which the Tribunal allowed the quantum meruit by requiring further insurance cover to be obtained by the builder so that it would include structural work and operate with the same retroactive effect the Tribunal found had applied to the existing cover for non-structural works. 9. For the reasons which follow, we find that the builder has not satisfied the condition on which the Tribunal allowed the quantum meruit and the Tribunal incorrectly attributed a retroactive operation to the policy - either as issued at the time of the hearing or which was assumed to be the case in any further cover for structural work which was to be later obtained by the builder in an attempt to comply with Order 2 made by the Tribunal. Fresh Evidence 1. On the appeal, as we have referred above, the owner submitted further documents marked as MFI 1and 2 in relation to the insurance extension of the policy pursuant to Order 2 to cover structural work. That material was provisionally accepted by us on the basis that the parties would make submissions and notify us of any objections to the documents being received into evidence. There has been no express objection notified to us in considering those documents and accepting them into evidence. 2. This further material provided by the owner has raised two issues for our consideration. The first is whether to allow this as fresh evidence on the appeal. The second is the significance of this evidence if we do allow it on the appeal. 3. The further material provided on the appeal as MFI 1 was the builder's application for the policy for non-structural work and the relevant invoice raised by the insurer dated 9 July 2018. This material was not before the Tribunal. It was not tendered by the builder and it was reasonably available to the owner in that it could have been obtained by Summons (as it was obtained on the appeal). However, its relevance and materiality was not readily apparent until the finding by the Tribunal at [51] that the policy had a retroactive operation. The Tribunal noted that the onus was on the builder to establish that the policy had a retroactive effect but there was a dearth of evidence tendered by the builder to establish that proposition. The Tribunal made its finding solely on the basis that the policy did not have a "retroactivity limitation [stated] on the policy certificate". 4. We find that the onus which was on the builder was not discharged. Further, in the absence of any evidence tendered by the builder going to this issue, it was not incumbent on the owner to adduce any evidence on this issue until it was required to rebut evidence which may have been tendered by the builder. For those reasons we allowed MFI 1 into evidence on this appeal as Exhibit 1 under Clause 12 (1) (c) of Schedule 4 of the CAT Act. 5. As the evidence in Exhibit 1 has established, the policy was not retroactive and the Tribunal was wrong to have made its finding in the absence of evidence. Had the necessary evidence been adduced by the builder or been required by the Tribunal, it could not have made the finding which it did as to the retroactive operation of the policy. 6. The fresh evidence provided on the appeal as MFI 2 concerned the builder's extension of the policy to include structural work comprising an application to the insurer dated 12 November 2019 and the policy certificate and tax invoice issued by the insurer dated 13 November 2020. This evidence has only "arisen" after the orders were made by the Tribunal in an attempt by the builder to comply with Order 2. Given the significance of this evidence which we discuss below, we are satisfied that it should be admitted into evidence as Exhibit 2 under Clause 12 (1) (c) of Schedule 4 of the CAT Act. 7. Also, the Tribunal refused the two requests by the owner to relist the matter after the further policy was obtained. There was therefore no opportunity before the notice of appeal was filed for the owner to obtain this evidence relating to the further structural cover and raise it for the Tribunal's consideration. 8. It is apparent that the finding by the Tribunal on 20 November 2020 that the further policy obtained by the builder complied with Order 2, was based on no more than the same approach taken in the absence of evidence to find that the earlier policy had retroactive effect. As we discuss below, the further policy document provided by the builder did not establish that it operated retroactively and the material comprising Exhibit 2 has conclusively established that it did not. 9. There are several issues raised by this further documentation which was not before the Tribunal. Exhibit 1 1. Exhibit I includes a copy of the original application for insurance submitted by the builder and dated 9 July 2018. It is for contract works in the sum of $360,000 under a contract dated 26 February 2018, for "non structural renovations," and with an estimated completion date of 5 September 2018. 2. Exhibit 1 also contains a copy of the invoice issued from Insure Pty Ltd (which apparently trades as iCare) dated 9 July 2018 in respect of the builder's insurance application and which states a period of cover of 12 months from 9 July 2018 until 9 July 2019. 3. The policy issued in response to the application comprising Exhibit 1 was issued on 11 July 2018. It is clear that the cover did not include any structural work, causing the Tribunal to make Order 2. However, the Tribunal found in its reasons, and in the absence of any directly relevant evidence as far as we are aware, that: "In my view the builder established that the policy was retroactive in effect in what it applied to, being non-structural work. There was no retroactivity limitation on the policy certificate". 1. While we acknowledge that the Tribunal did not have in evidence the documents now comprising Exhibit 1, the finding by the Tribunal was made in the absence of any evidence to establish the policy in fact had a retroactive effect. As such, we are of the opinion that the finding by the Tribunal that the insurance operated retrospectively was made in the absence of evidence and constitutes an error of law. Further, the evidence in Exhibit 1 has proven to our satisfaction that the Tribunal was wrong in finding that when the policy was issued by the builder, it had any retroactive operation. 2. The policy start date of 9 July 2018 is well after the date on which the Tribunal found that works started; that is on about 5 March 2018. So for almost the entire period during which the works were undertaken, there was no cover unless the insurance certificate later obtained was retrospective. 3. We are not satisfied that the documents comprising Exhibit 1 support the Tribunal's finding of retrospectivity based solely on the wording of the policy document. The invoice raised by the insurer as part of Exhibit 1 in response to the application by the builder is dated 9 July 2018, states that the "period of cover" is from 9 July 2018 to 4pm on 9 July 2019. It does not purport to operate retrospectively. 4. There was no evidence and no other basis for the Tribunal to infer, assume or construe the policy issued on 9 July 2018 to operate retrospectively. To the contrary, the relevant invoice raised by the insurer which is part of Exhibit 1, establishes that there was a purely prospective operation of the policy for 12 months from 9 July 2018. 5. There are numerous authorities supporting the proposition that a finding of fact made without probative evidence (or drawing an inference that was not open on the primary facts) is an error of law: Bell v Federal Commissioner of Taxation [2012] FCA 1042, Gordon J at [84]. That decision followed a long-standing line of authorities (of which we mention just two by way of illustration). 6. In Minister for Immigration and Multicultural Affairs v Al-Miahi [2001] FCA 744 the Full Court per Sundberg, Emmett and Finkelstein JJ held at [34]: "The question of whether there is any evidence of a particular fact is a question of law." 1. In Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32, the plurality (Hayne, Heydon, Crennan and Keiffel JJ) held at [91]: "A tribunal that decides a question of fact when there is "no evidence" in support of the finding makes an error of law". Exhibit 2 1. As to the evidence now comprising Exhibit 2, the further application for insurance made by the builder was dated 12 November 2019, being the same date of the Tribunal's decision. 2. The further policy of insurance in Exhibit 2 was this time expressed in the "Policy Schedule Details" to cover "structural renovation". The further application which was part of Exhibit 2, correctly identified the start date of the works of 5 March 2018 and had the correct contract date of 26 February 2018. 3. However, the estimated completion date in the policy is stated to be 15 January 2019. This cannot be correct. The parties had been involved in a fully contested hearing in the Tribunal since at least 22 May 2019. A major issue concerned the disputed termination of the contract on 3 August 2018, after the builder had suspended or abandoned the works on about 26 July 2018, whether lawfully or otherwise. There was a claim by the owner for the costs to complete the works by another builder (and presumably under its own policy of insurance) and not that of the builder in this appeal. 4. Exhibit 2 includes a tax invoice issued by the insurer dated 13 November 2019 for a policy endorsement which is stated to only cover a 24 hour period from 9 July 2019 - 09 July 2019. 5. Exhibit 2 establishes an ongoing failure and refusal by the builder to obtain insurance for any of the structural work performed up to the date of work being suspended. 6. Based on the documents comprising Exhibits 1 and 2 provided under the Summons in this appeal, we find that the builder's further policy certificate issued to the owner and the Tribunal on 18 November 2019, does not comply with or satisfy either the intent or the substance of Order 2 made by the Tribunal on 12 November 2019. Exhibit 3 1. We accept that the reference in the certificate of insurance to structural work includes non structural work for the reasons deposed to in the unchallenged affidavit evidence of Mr Tolson comprising Exhibit 3. However, for the reasons set out above and based on the findings we have made by reference to the evidence comprising Exhibits 1 and 2, Mr Tolson's evidence is no longer of any relevance to our consideration of any of the grounds of appeal. 2. We have found that the further insurance did not satisfy Order 2 made by the Tribunal, not because it was expressly referrable only to structural work but because the policy has no effect at all in providing any cover for any building work (both structural and non-structural) performed by the builder under the contract. 3. Given the builder's non-compliance with Order 2, the amount found by the Tribunal in relation to the rectification costs for the builder's defective works in the sum of $11,130.13 is payable to the owner by virtue of Order 3 made by the Tribunal. 4. Since appeal ground 9 with respect to the costs orders made in the Tribunal proceedings was not pressed, we also confirm the Tribunal's earlier "provisional" costs orders in Order 4. 5. We uphold grounds 10 and 11 of the amended appeal. We find that the builder is liable to pay the owner the sum of $11,130.13 assessed by the Tribunal as the cost of rectifying the builder's defective works and it is to pay two-thirds of the owner's costs of the Tribunal proceedings in accordance with the Tribunal's provisional costs orders. Disposition of the Appeal 1. Section 81 of the CAT Act sets out the orders we are empowered to make, including orders allowing the appeal, to set aside the decision under appeal and to confirm, affirm or vary the decision under appeal. 2. The appellant has been wholly successful in the appeal. 3. In our disposition of the appeal, we: 1. Grant leave to the appellant to appeal grounds 1-4 of the Notice of Appeal and allow the appeal under grounds 1-4. 2. Allow the appeal on grounds 5-8, 10 and 11 of the Notice of Appeal. 3. Set aside Order 1 of the Tribunal made on 12 November 2019. 4. Vary Order 3 of the Tribunal made on 12 November 2019 and order that the respondent is to pay the appellant the sum of $46,728.13, being the total of the amount found by the Tribunal for defective works of $11,130.13 and the sum of $35,598 agreed between the parties based on the outcome of the appeal. 5. Confirm the Tribunal's "provisional" Order 4 with respect to costs, and order the respondent pay two-thirds of the appellant's costs of the Tribunal proceedings. Costs of the Appeal 1. The amount in dispute in both the proceedings in the Tribunal and on appeal exceeds $30,000. The operation of r 38A of the Civil and Administrative Tribunal Rules 2014 means that r 38 applies to costs of the appeal. We can make an order for costs in the absence of special circumstances. The appellant is the successful party. Therefore the respondent is ordered to pay the appellant's cost of the appeal. This order is subject to any application that might be made by either party for a different costs order. 2. The costs of the stay application heard by the Tribunal on 17 December 2019, stood over by directions made on 19 December 2019 for determination in this appeal are costs in the appeal. Orders 1. Leave to appeal on grounds 1-4 of the Amended Notice of Appeal is granted. 2. The appeal is allowed. 3. Orders made by the Tribunal on 12 November 2019 and 9 December 2019 are set aside. 4. In substitution for orders made by the Tribunal on 12 November 2019 and 9 December 2019, the following orders are made: 1. North Shore Homes Pty Ltd is to pay Ann Nyunt the sum of $46,728.13 within 28 days of the date of these orders. 2. North Shore Homes Pty Ltd is to pay two-thirds of Ann Nyunt's costs of the Tribunal proceedings, on the ordinary basis, as agreed or assessed. 1. North Shore Homes Pty Ltd is to pay Ann Nyunt's costs of the appeal including any costs of the stay application, on the ordinary basis, as agreed or assessed. 2. If either party contends for a different costs order, order 5 above ceases to have effect and the following orders apply: 1. The party contending for a different costs order (the costs applicant) is to file and serve evidence and submissions on costs within 14 days of the date of these orders including submissions as to whether a hearing on the question of costs should be dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013. 2. The costs respondent is to file and serve any evidence and submissions within 14 days thereafter including submissions as to whether a hearing on the question of costs should be dispensed with pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013. 3. The costs applicant is to file and serve any evidence and submissions in reply within 7 days thereafter. ********** 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: 17 July 2020