Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Seraglio v Le Sommet Pty Ltd [2021] NSWCATAP 150 Hearing dates: 13 May 2021 Date of orders: 26 May 2021 Decision date: 26 May 2021 Jurisdiction: Appeal Panel Before: G Curtin SC, Senior Member D Charles, Senior Member Decision: Appeal dismissed. Catchwords: BUILDING AND CONSTRUCTION – contract – written term that any variations to the contract were to be in writing – alleged oral variation – Tribunal not persuaded oral variation occurred - finding of fact not glaringly improbable, contrary to incontrovertible facts or compelling inferences APPEALS - procedural fairness - failure to give reasons - adequacy of reasons – minimum acceptable standard – standard met Legislation Cited: Nil Cases Cited: Cypressvale Pty Ltd v Retail Shop Leases Tribunal [1996] 2 Qd R 462 at 477; [1995] QCA 187 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 Nguyen v Cosmopolitan Homes [2008] NSWCA 246 Toll FCGT Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 Texts Cited: Halsbury's Laws of Australia, online edition, [09-010] Category: Principal judgment Parties: Jacqueline Seraglio (Appellant) Le Sommet Pty Ltd (Respondent) Representation: Appellant (Self-Represented) A Whitbread (Agent)(Respondent) File Number(s): 2021/00075263 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 22 February 2021 Before: S Sutherland, General Member File Number(s): HB 20/46549 REASONS FOR DECISION 1. This is an appeal by a homeowner from orders made by the Tribunal in which she was ordered to pay the respondent pool builder the sum of $7,100 which was for Payment 3 due under the terms of the written NSW Contract for the supply and installation of a fibreglass pool and/or spa (the "Contract") which had been entered into by the parties (and was signed by the appellant) on 9 August 2017. 2. For the reasons that follow the appeal is dismissed. Background 1. As we have said, the parties entered into the Contract dated 9 August 2017 for the supply and installation of a fibreglass swimming pool together with specified equipment and others matters identified in the Contract at the appellant's home at Oatlands, NSW. 2. The site was a vacant site upon which the appellant and her family were to (and did) construct a new home. The pool excavation and installation of the pool shell was to be done first, to be followed by the excavation for the basement of the new house. Completion of the pool would take place subsequent to the excavation of the basement. 3. The total Contract Price for the pool was $35,500 incl GST. 4. Clause 1.06 of the Contract said: "1.06 Schedule of Payments The Client (appellant) agrees to pay the Contractor (the respondent) the Contract Price in progressive payments as set out in the schedule below: Payment 1 … (a deposit of 10% of the Contract Price being of $3,500) Payment 2 … (70% of the Contract Price being $24,850) Payment 3 The balance of the Contract Price (less Payment 4) payable upon installation of the Works and filling the relevant parts of the Works with water being $7,100 based on the original Contract Price, which the parties acknowledge is subject to change in accordance with the Contract. Payment 4 The balance of the Contract Price payable upon (a) where the Works comprise a pool only, placement of the concrete bond beam, treatment of water to a standard suitable for swimming and handover of the pool and accessories required by the Contract; …" (Emphasis original) 1. In the General Conditions of Contract, being part of the Contract, clause G.C.3, headed "Plans, Specifications & Variations", said: "(1) … (2) Any agreement to vary this contract, or vary the plans or specifications for work to be done under this contract, must be in wiring (sic) and signed by or on behalf of each party. (3) This clause only applies to a contract to which s 7AA (consumer Information) of the Home Building Act applies." 1. It is apparent that the parties accepted that the condition mentioned in G.C.3(3) was satisfied, and so G.C.3 applied to the Contract. 2. After the Contract was entered into the parties fell into dispute almost immediately. 3. Be that as it may, the respondent commenced work and issued invoices for Payments 1 and 2 which were paid. 4. The respondent claimed that it had completed the work specified in cl 1.06 of the Contract in relation to Payment 3, had issued an invoice for that payment on 3 July 2019, but the appellant refused to pay that invoice. 5. The appellant said that there had been an oral variation to the Contract and specifically to the terms relating to Payment 3. She said the parties had orally agreed that the time for payment of Payment 3 was varied so that it was not payable until the pool was swimmable. The respondent disputed that there had been any such oral variation of the Contract. 6. The Tribunal found that the work referred to in Payment 3 had been done and was not satisfied that there had been an oral variation to the Contract as alleged by the appellant. The reasons of the Tribunal on those matters were as follows: "Consideration 9. In the Contract, Clause GC 3 Plans, Specification & Variance: (2) Any agreement to vary this contract, or vary the plans or specifications for work to be done under this contract, must be in wiring and signed by or on behalf of each party. 10. The variation to the contract that payment three was to be made once the pool is swimmable is oral and not in writing. The applicant disputes the oral variation by the applicant. 11. In Toll FCGT Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, contracts are assessed objectively, with written terms given primacy. 12. The oral variation is disputed and there is no variation in writing in accordance with the contract. I do not accept on balance that there is a valid variation of the contract. 13. As to the whether the pool was level the applicant states that the pool was level when he left, there is no expert report that the pool was not level. 14. The Contract states, that $7,1000 was payable upon installation and filling the relevant parts of the works with water being $7,100 based on the original Contract Price. The pool was filled with water and covered with the filter operating when the applicant left the site. When he returned the cover had been removed and the water level was too low. The pool was filled with water to ensure the weight in the pool and needed to be left for a period of at least two weeks before the pool could be cleaned and was swimmable. 15. I am satisfied that by installing the pool and filling the pool with water, the applicant had performed Payment 3 of the Contract. In my view, Payment 4 requires that the pool is swimmable and does not apply to Payment 3. The applicant withdrew the claim concerning Payment 4. I find that the claim concerning Payment 3 is proved to the civil standard and pursuant to Section 48O (a) of the Home Building Act, 1989, the respondent is to pay the applicant the amount of $7,100.00." The Appeal 1. The appellant makes a number of claims on this appeal which are not relevant to it and do not amount to grounds of appeal. For example, she makes a claim that she signed the Contract under duress, that she thought she had signed a contract with Narellan Pools (what she said was a "large corporation of 50 years old that is an international company") rather than the respondent (despite the fact the respondent's name, and not Narellan Pools's name, clearly appears in cl 1.01 of the Contract headed "The Parties" and bearing the appellant's initial in the bottom right-hand corner of the page), that a copy of the Contract was not received by her for some two years after execution, that the respondent had abandoned the Contract, that the respondent had unlawfully removed items, the respondent pretended to want to return to the site to complete the pool, that there was a delay in installing the pool cover and that the respondent had been unprofessional throughout. 2. None of those matters are relevant to this appeal. 3. Some of them potentially give rise to one or more causes of action the appellant may have against the respondent, but the appellant never commenced proceedings against the respondent. The only proceeding before the Tribunal was the respondent's claim for Payment 3. 4. The absence of proceedings being commenced by the appellant in relation to the matters we have just mentioned is not a technicality. The commencement of proceedings amounts to formal notice to the opposing side of the claims being made against him, her or it, the basis of the claims and the orders sought. The respondent to such an application is entitled to formal notice of claims brought against him so that he has a reasonable opportunity to prepare any defence to those claims. 5. That was not done in this case and, at least from the Tribunal's reasons, none of those matters appear to have been pursued before the Tribunal. If that is correct, then they cannot be raised for the first time on appeal. If they were pursued before the Tribunal, the Tribunal was right to ignore them in the absence of proceedings having been commenced by the appellant. 6. The appellant claimed that she had been advised by someone she spoke to on an unidentified 1800 phone number (although she did state that it was not a phone number of the Tribunal and thus she did not speak to a Tribunal officer) that she did not need to commence proceedings against the respondent in relation to those matters. If that advice was given to the appellant, then it was wrong. 7. In addition, the matters mentioned could not be defences to the respondent's claim for Payment 3 (unless the Contract had been "abandoned" – which we take to mean repudiated – before the time that Payment 3 was due, a fact no party suggested occurred) as distinct from being actionable claims that could have been brought against the respondent. 8. For those reasons there is no need to refer to those claims again in these reasons. 9. Two other claims made by the appellant do amount to grounds of appeal. The first was a challenge to the Tribunal's finding that it was not satisfied that an oral variation had been made. The second was a contention that the Tribunal's reasons (on the oral variation point) were inadequate. 10. We divert briefly to note that the general rule in Australia, which applies in the present case, in relation to signed contracts is that where there is no suggested vitiating element, and no claim for equitable or statutory relief, a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document - Toll FCGT Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52. Ground 1 1. On the question before the Tribunal whether an oral variation to the Contract was made, the appellant bore the onus of proof. 2. It is apparent from the statement by the Tribunal that "I do not accept on balance that there is a valid variation of the contract" that the Tribunal did not feel a sense of actual persuasion that the oral variation had occurred. 3. As to "actual persuasion" McDougall J, with whom McColl and Bell JJA agreed, said in Nguyen v Cosmopolitan Homes [2008] NSWCA 246: "[44] A number of cases, of high authority, insist that for a tribunal of fact to be satisfied, on the balance of probabilities, of the existence of a fact, it must feel an actual persuasion of the existence of that fact. See Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336. His Honour's statement was approved by the majority (Dixon, Evatt and McTiernan JJ) in Helton v Allen (1940) 63 CLR 691 at 712. [45] Dixon CJ put the matter in different words, although to similar effect, in Jones v Dunkel (1959) 101 CLR 298 at 305 where his Honour said that "[t]he facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied". Although his Honour dissented in the outcome of that case, the words that I have quoted were cited with approval by the majority (Stephen, Mason, Aickin and Wilson JJ) in West v Government Insurance Office of NSW (1981) 148 CLR 62 at 66. See also Stephen J in Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155 at 161–162, and Mason J (with whom Brennan J agreed) in the same case at 168." 1. His Honour went on to say at [51], in approving a statement by Hodgson J writing extra-curially, that: "… once the feeling (of actual persuasion) has been obtained, it is sufficient for it to lead to the conclusion that the event in question is more likely than not to have occurred, with 'a probability in excess of 50%'." 1. We were told by the parties that neither side had submitted any statements of witnesses to the Tribunal, and that the evidence as to the contents of the conversation was given orally. We therefore assume that the demeanour of the witnesses giving evidence played a part in the Tribunal's finding of fact. It follows that that finding cannot be disturbed on appeal unless we are persuaded by the appellant that the Tribunal member failed to use or has palpably misused his advantage in seeing and hearing the witnesses, or the finding was inconsistent with incontrovertible facts, or the Tribunal member acted on glaringly improbable evidence, or made the finding contrary to compelling inferences: Fox v Percy (2003) 214 CLR 118; [2003] HCA 22. 2. The appellant directed us to a text message dated 16 May 2019 (nearly two months before the invoice for payment 3 was issued) in which the respondent's director requested a site visit to discuss a range of issues including "payment of outstanding balance" and "payment 3 on contract will due (sic)". We fail to see how this text message bears on the issue of whether there was an oral variation. 3. It perhaps might have had some meaning and relevance in context, but the appellant did not provide a sound recording of the hearing as she was directed to do on 31 March 2021 if she intended to rely on what happened at the hearing, and a typed copy of the relevant parts, and therefore we do not know if there is some other significance to the text message in the context of the oral evidence. 4. In addition, in her written submissions the appellant refers to many documents she gave the Tribunal, but which she did not provide to the Appeal Panel as she was directed to do on 31 March 2021. As we do not have those documents, we cannot take them into consideration. 5. The appellant also directed us to a sound recording of a meeting between the appellant and a director of the respondent which occurred, it seems, sometime in late 2019. The Tribunal said that it had listened to the sound recording and "(t)he recording supports both parties versions". We, too, have listened to the sound recording. Half of it is unintelligible. The other half amounts to, with no disrespect to the parties, nothing more than the putting of their competing assertions to one another. 6. Therefore, we are not persuaded by the appellant that the Tribunal's finding that it was not persuaded that the oral variation occurred was erroneous. 7. We also note that in her written submissions the appellant herself seemed to adopt a different position to the assertion there had been an oral variation. Indeed, nowhere in her written submissions does she assert that there was an oral variation, or the terms of that conversation. Rather, she submitted that cl 1.06 of the Contract was "unfair" and Payment 3 "should have been" payable when the pool contained swimmable water. In those submissions she said: "Because I hadn't received the contract I did not know how unfair "1.06 Schedule of payments" page 5 (Annexure 9) was! Payment 2 and Payment 3 could have been claimed from me as soon as the shell went into the ground, as Tony explained they had to fill the shell with water to avoid it floating. That would have left only $500 for all the plumbing, installation and supply of accessories, cleaning of the water, the bond beam etc. The contract is inherently unfair and skewed in Tony's favour, as leaving $500 for the bulk of the works is simply unfair. Payment 3 for $7,100 should have been when the pool was full of swimmable water, not just fill water used to stop the pool from floating off the sand and cement base. As the water that was in my pool was from the original fill and had become stale dirty water, which had frogs living in it. As Tony stated in the hearing, the only way to of cleaned the pool properly was to empty the pool and scrub it clean. This did not occur, and as a result my pool is stained Annexures 10, 11, 12,14 & 15. So it was not fare nor reasonable that they claimed payment 3 when the water installed initially, being two years earlier for the purpose of ensuring the pool does not float, can be claimed now, leaving a small amount of only $500 to finish off the pool. The contract was skewed in Tony's favour and did not reflect the amount of work left to be done." 1. Those assertions are quite different to an assertion that there had been an oral variation, and almost seem to assume that there had not been an oral variation. 2. Be that as it may, it was relevant to take into consideration, as the Tribunal did, cl G.C.3(2) of the Contract (quoted at [7] above). 3. Such clauses are not binding on the parties in their terms, but are persuasive as to whether an oral variation was agreed. In relation to such clauses Halsbury's Laws of Australia, online edition, says at [09-010] (footnotes omitted): "A contract may expressly require any variation to be in writing signed by both parties, or state that a purely verbal variation is not enforceable. Such provisions are sometimes termed 'no oral modification' clauses. In all cases the intention of the parties depends on construction of the contract as a whole. While the clause is typically included as a boilerplate provision, there is no standard wording. Several issues may arise, including what 'writing' is sufficient, whether the writing must be 'signed' and who must sign. If writing signed by one party is required, it is sufficient that a signed written offer of variation was accepted orally. Scope may also be important. A contract which requires any variation agreement to be in writing may not be intended to apply to a purely collateral arrangement, or a termination or novation of the contract. However, even where such a provision is applicable, it will not necessarily be effective. Indeed, Australian law treats as fundamental to the concept of capacity to contract that the parties may agree to vary a contract by any means that they think fit even if they have stipulated in the contract which is varied that any variation must take a particular form. Therefore, a verbal variation, or one arising by conduct, is usually binding notwithstanding a failure to comply with a previously agreed requirement. Of course, statute may require variation to be in writing or evidenced by writing. If the question is whether the parties have varied an existing agreement, an intention to vary must be proved. If the alleged variation is oral, or otherwise not in conformity with a clause that requires writing, the parties' failure to comply with the clause is relevant to their intention to contract. A distinction can then be drawn between a situation in which the alleged variation is an inference from conduct and a situation in which the parties expressly vary the agreement. In the latter, the parties' intention to contract independently of the writing requirement is clear. But in deciding whether to infer an intention to vary, failure to comply with the clause may show that there is no intention to contract." (Emphasis ours) 1. It appears this is what the Tribunal had in mind when it said that "written terms" are given "primacy". 2. For all of those reasons we do not accept ground 1 is established. Ground 2 1. The appellant submits the Tribunal's reasons were inadequate. 2. As was said by the President, with whom Ward JA agreed, in New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 at [68], the quality of reasons necessary for the reasons to be adequate may vary both with the nature of the decision-maker, that is, whether or not it is a court or tribunal, and the nature of the question being decided. Some aspects of decision-making, such as findings on pure credibility or matters that necessarily call for estimation or impression, may require less or only allow for limited reasoning to be exposed. Credibility was obviously in play in this case, at least in terms of accuracy of recollection. 3. At [70] his Honour said that it is generally accepted that the sheer volume of work undertaken by tribunals is such that a perhaps more relaxed standard of review of reasons with corresponding compensation for linguistic infelicities is appropriate than may be the case when an appellate court is hearing an appeal from another court. 4. At [73] his Honour cited, with apparent approval, what was said by Fitzgerald P in Cypressvale Pty Ltd v Retail Shop Leases Tribunal [1996] 2 Qd R 462 at 477; [1995] QCA 187 of the Queensland Retail Shop Leases Tribunal, namely that that Tribunal might not be required to submit the material before it to the most meticulous analysis and carry into the reasons for its decisions a detailed exposition of every aspect of the evidence and the arguments or incorporate an extended intellectual dissertation upon the chain of reasoning, but at least a basic explanation of the fundamental reasons which leads the Tribunal to its conclusions was necessary. 5. In our opinion the Tribunal's reasons met the minimum acceptable standard for reasons, which is all that is required (see Orr at [66]). 6. The evidence for the oral variation was oral only, there were no witnesses who could support the appellant's recollection and whose evidence needed to be dealt with, there was no contemporaneous material to examine, there were no relevant objective facts to consider and there was nothing to indicate which party would be favoured by the inherent probabilities. 7. Thus, as the appellant put to us, it was a matter of "she said he said". Importantly, the Tribunal referred to cl G.C.3(2), and as we have pointed out by the reference in Halsbury's, such clauses can have persuasive effect, and clearly did so in the eyes of the Tribunal (see its reasons at [11]). 8. It is tolerably clear that the Tribunal did not feel a sense of "actual persuasion" in relation to the appellant's oral evidence, unsupported as it was by any other witness, contemporaneous document, objective fact or the inherent probabilities. The other evidence she took us to in the appeal does not provide any support for her case. It is therefore tolerably clear that the Tribunal simply did not believe the appellant. In those circumstances we consider that the Tribunal's reasons met the minimum acceptable standard. 9. For those reasons we do not accept ground 2. Orders 1. As the appellant has failed on both grounds of appeal the appeal must be dismissed. 2. We make the following order: 1. Appeal dismissed. ********** 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: 26 May 2021