Civil and Administrative Tribunal New South Wales Medium Neutral Citation: DSJ Carpentry & Construction Pty Ltd v Trajcevski [2023] NSWCATAP 174 Hearing dates: 13 June 2023 Date of orders: 30 June 2023 Decision date: 30 June 2023 Jurisdiction: Appeal Panel Before: G Ellis SC, Senior Member P Molony, Senior Member Decision: (1) Leave to appeal is refused. (2) The first instance decision is confirmed. (3) Order 1 made on 9 March 2023 is set aside to facilitate its variation. (4) Mendo Trajcevski is entitled to be paid $75,612.35 immediately. (5) That amount is to be paid either wholly by DSJ Carpentry & Construction P/L, or wholly by Toni Maroun Youssef, or partly by each of them. (6) Otherwise, the appeal is dismissed. (7) The appellants are to pay the costs of the respondent, on the ordinary basis, as agreed or assessed under the Legal Profession Uniform Law Application Act 2014 (NSW). (8) If either party wishes to contend that a different costs order should be made, order 7 ceases to have effect and the following orders apply: (a) Any application for a different costs order is to be filed and served, supported by submissions (not exceeding five pages in length) and evidence within 14 days of the date of these orders. (b) Any submissions (not exceeding five pages in length) and evidence in response are to be file and served with the following 14 days. (c) Any submissions in reply (not exceeding two pages in length) re to be filed and served within the following 7 days. (d) Each party's submissions should indicate whether they agree that costs should be determined on the papers, i.e. without the need for a further hearing, under s 50(1) of the Civil and Administrative Tribunal Act 2013 (NSW). Catchwords: CONTRACTS – Parties – name of company and licence number of individual on quotation - decision that both were parties to the contract affirmed APPEALS – Procedural fairness – failure to give reasons – adequacy of reasons APPEALS – Orders – Variation to remove potential ambiguity Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) - ss 36, 50, 60, 80, 81, Sch 4 cl 12(1) Civil and Administrative Tribunal Rules 2014 (NSW) – rr 25, 38, 38A Home Building Act 1989 (NSW) – ss 18B, 48MA Cases Cited: Ashby v Slipper [2014] FCAFC 15 Collins v Urban [2014] NSWCATAP 17 Commissioner of Police (NSW Police Force) v Adam [2022] NSWSC 789 House v The King [1936] HCA 40; 55 CLR 499 Jain v Dr N Kalokerinos [2023] NSWCATAP 141 John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) [2023] NSWCA 118 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Ryledar Pty Ltd & Anor v Euphoric Pty Ltd [2007] NSWCA 65 Suttor v Gundowda Pty Ltd [1950] HCA 35 The University of Wollongong v Metwally [1985] HCA 28 Water Board v Moustakas [1982] HCA 12 Texts Cited: None cited Category: Principal judgment Parties: DSJ Carpentry & Construction Pty Ltd (First Appellant) Toni Maroun Youssef (Second Appellant) Mendo Trajcevski (Respondent) Representation: Counsel: J Young (Appellants) B Ilovski (Respondent) Solicitors: Simon Diab & Associates (First and Second Appellant) GA Lawyers (Respondent) File Number(s): 2023/000110203 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 09 March 2023 Before: G Burton SC, Senior Member File Number(s): HB 22/30211 reasons for decision Outline 1. This is an internal appeal, under s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act), against a decision made in the Consumer and Commercial Division of the Tribunal, in relation to building work carried out on a property at Sylvania, which made a money order for the payment of $75,612.35 in favour of the respondent (the owner), against both appellants: DSJ Carpentry & Construction Pty Ltd (the company) and Toni Maroun Youssef (the builder). 2. An issue not uncommonly encountered in home building applications arises for consideration in this appeal, namely the question of liability when a licensed builder, who is the sole shareholder and director or a company, carries out building work under the name of that company, providing documents which contain the licence number of the builder. On that issue, we consider the Member was entitled, on the evidence that was before the Tribunal at first instance, to find that the builder and the company were both parties to the contract and were jointly and severally liable for the cost of rectification of the work determined to have been defective. 3. Otherwise, apart from rewording the money order to remove potential ambiguity, having considered the documents lodged by the parties and their oral submissions, we have determined that the appellants have not established either an error on a question of law or any basis for granting leave to appeal. Scope and nature of internal appeals 1. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2) of the NCAT Act. 2. In John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 (Prendergast) the Appeal Panel set out at [13] listed of questions of law as: 1. Whether there has been a failure to provide proper reasons. 2. Whether the Tribunal identified the wrong issue or asked the wrong question. 3. Whether a wrong principle of law had been applied. 4. Whether there was a failure to afford procedural fairness. 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations. 6. Whether the Tribunal took into account an irrelevant consideration. 7. Whether there was no evidence to support a finding of fact. 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it. 1. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b). 2. In Collins, at [84], the Appeal Panel stated that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. 1. In the NCAT Act, s 81 deals with the determination of internal appeals by providing: (1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following— (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance. Documents 1. Excluding documents lodged in relation to the appellants' stay application, documents lodged by the parties in respect of this appeal were as set out below: 1. The Notice of Appeal, received on 4 April 2023. 2. The Reply to Appeal, received on 18 April 2023. 3. Amended Notice of Appeal, submissions, transcript of the 1 August 2022 directions hearing, and transcript of the hearing on 19 December 2022, each received on 15 May 2023. 4. Owner's documents, received on 30 May 2023, including submissions and a copy of the documents tendered at first instance. 5. Appellants' submissions in reply, received on 7 June 2023. Time to appeal 1. Orders were made and reasons published on 9 March 2023. As the Notice of Appeal was received on 4 April 2023, the appeal is within time, being the 28-day requirement of r 25 of the Civil and Administrative Tribunal Rules 2014 (the Rules). Grounds of Appeal 1. While leave was not obtained to amend the grounds of appeal, having heard from counsel, we are satisfied that such leave should be granted since the owner has had ample notice of the intention to rely on those grounds. The Amended Notice of Appeal, contained the following six grounds: 1. The Tribunal erred in finding that the Second Appellant was a party to the contract. 2. The Tribunal erred in finding that there was a contract between the Owner and the Second Appellant, had a contract or was liable to the Owner or that the Second Appellant was liable to the owner. 3. The Tribunal erred in making an order for the payment of a sum of money instead of an Order to perform work under S48MA of the Home Building Act 1989. 4, The Tribunal erred in finding that the Respondent alone was the contracting party and entitled to bring proceedings alone when the evidence before the Tribunal was: i. All invoices were issued to the Respondent and to Mrs Trajcevski who was not a party to the proceedings. ii. All payments were made by Mrs Trajcevski alone or put of an account to which Mrs Tracjevski was a joint party. iii. The Amended Points of Claim wrongly alleged that Mrs Trajcevski was a party to the proceedings when she was not a party to the proceedings. 5. The Tribunal erred in making an Order for the entire amount claimed by the Respondent. 6. The Tribunal erred in ordering the sum of $75,612.35 was to be paid by each of the two (2) Appellant[s]. 1. Further, leave to appeal was sought on the basis that the decision was not fair and equitable, that the decision of the Tribunal was against the weight of the evidence, and that significant new evidence is now available. 2. The reasons advanced as to why leave should be granted were as follows: The Tribunal erred in finding in favour of the Applicant on the basis of [an] expert report in the absence of evidence of contract and evidence of work done and work contracted to be done by either of the Respondents. The Tribunal erred in not adjourning the proceedings until the Applicant had filed their lay evidence of facts. The Tribunal erred in not finding that the Applicant failed to prove on the balance of probability that [the] Second Respondent was a party to a contract with the Owner and against the weight of the evidence. The Tribunal erred by accepting the entirety of the expert evidence without proof of the facts forming the basis of the expert report. Hearing 1. Having identified the relevant documents, the Tribunal proceeded to hear oral submissions in the usual sequence so that each party was able to speak un support of their case and to respond to the case of the other party. Appellants' submissions 1. The appellants' written submissions contended (1) that the owner's Amended Points of Claim improperly named the owner's wife as an applicant, (2) that neither party lodged lay witness statements, (3) that the owner relied on a report from an expert which it was contended could not be evidence of the facts, and (4) that there was no evidence as to why the owner's wife was not a party to the proceedings. 2. It was submitted that the issues in this appeal are: a) Evidentiary issues concerning the lack of lay evidence. b) Whether there was a contract and if so, who were the contracting parties on the [owners'] side and on the Appellants' side. c) The order for the payment of money, instead of an order to perform work under Section 48MA of the HBA. 1. The form of the decision at first instance was criticised on the basis that (1) it looked first at the principles governing loss due to incomplete or defective work rather than whether there were breaches of s 18B of the Home Building Act 1989 (HBA) and (2) there was a finding that there was no expert evidence contradicting that of the owner. (However, that finding was plainly correct.) 2. As to who were the contracting parties, reference was made to the first instance decision at [37]-[43]. It was contended there were documents considered without considering what weight should be attached to them. A submission was made that only a quotation, which was an offer, was considered and not the question of acceptance. Further, that findings of breaches of s 18B could not be made without first determining the existence of a contract and the parties to that contract. The appellants' case, in this appeal, is that there was "no discernible basis for the finding that the Second Appellant was a party to the contract", that "There was no evidence that the Respondent, or his wife, intended to contract (subjectively or objectively) with the Second Appellant", and that the name of the builder appearing in an email was insufficient. 3. On the s 48MA issue, said to have been dealt with in the first instance decision at [32]-[36], it was submitted that there was no relevant evidence from either party to displace the preferred outcome, and that there was no basis for the findings that were made, notably as to whether there had been a breakdown in the relationship, especially as another party would be engaged to do the work. 4. The written submissions contended that the appeal should be allowed, that the application should either be dismissed or remitted for redetermination, and that the owner should bear both the appellants' costs both at first instance and of the appeal. 5. Mr Young began his oral submissions by noting that, at a directions hearing on 2 September 2022, an order was made for amended points of claim to be filed and served, indicating the basis upon which the builder was joined as a party to the proceedings. It was noted that the owner was the sole applicant at that time and that no leave was obtained to add the owner's wife as an applicant. 6. Reference was also made to the directions hearing on 1 August 2022 which it was said expressed a need for statements and evidence, but the owner only provided an expert report plus some documents while the company and builder made a forensic choice to not provide any evidence. It was contended that the expert report contained assumptions and did not provide evidence of facts. 7. The reasons provided at first instance were said to be deficient in that there was no finding there was a contract, there was no consideration of the owner's wife as a contracting party. Further, that the findings that the company was the agent of the builder (at [39]) and was a party, and thereby a principal, (at [41]) were irreconcilable. The consideration of whether to make a money order or work order, i.e. whether the statutory preference imposed by s 48MA of the HBA had been displaced, was also said to have been dealt with "unusually". 8. It was noted that the payments were made either by the owner's wife or from their joint account and contended that (1) there was no basis for finding that the builder was a party to the contract and (2) the owner's wife was a necessary party. It was submitted that that appellants would now be prejudiced if the owner's wife were to be joined since, if she had been added as an applicant, they would have led evidence. 9. The appellants contended that the application should be remitted for hearing by a differently constituted Tribunal or reconsidered by this appeal panel. Respondent's submissions 1. The owner's written submissions began by contending that no leave had been granted for the appellants to rely on the Amended Notice of Appeal. 2. It was contended that, as to the six grounds set out in that notice, grounds 1, 2 and 4 raised errors of fact, that ground 3 challenged an exercise of discretion, and that grounds 5 and 6 did not clearly state the nature of the contended error. 3. It was submitted that, as a result, the appellants required leave to appeal but had not addressed the general principles applied by the Appeal Panel when considering whether to grant leave to appeal. After responding to each of the six grounds of appeal, it was submitted that the appeal should be dismissed with costs. 4. As to ground 1, after referring to Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 and Ryledar Pty Ltd & Anor v Euphoric Pty Ltd [2007] NSWCA 65, being cases confirming what is commonly called the objective theory of contract, it was submitted that the challenged reasons made an objective assessment at [37]-[43] when deciding the appellants had joint and several liability. Reliance was placed on what was said at [38] and [41]. It was noted that the appellants' written submissions referred to matters of subjective intention at [28]-[29]. 5. As to grounds 2 and 4, it was suggested that the former ground went to whether there was a contract, while the latter went to whether there was an error in finding that only the owner was a contracting party (not his wife). It was noted that the Amended Points of Claim included the owner's wife as an applicant and that the appellants failed to file Points of Defence. Further, that the appellants did not contend that the builder was not a party and did not lead evidence on that issue. Reference was made to The University of Wollongong v Metwally [1985] HCA 28 (Metwally) at [7] in support of the submission that the appellants cannot now raise this point, for the first time, on appeal. 6. As to ground 3, it was contended that (1) this ground related to the exercise of discretion at first instance, (2) the appellants had failed to identify any of the grounds set out in House v The King [1936] HCA 40; 55 CLR 499 which would justify overturning that exercise of discretion, and (3) the Tribunal's discretion did not miscarry. It was noted that the reasons at first instance, at [32]-[35] noted that any remedial work could not be carried out by the appellants. 7. As to ground 5, it was noted that the amount awarded was based upon the owner's expert evidence and was explained in the reasons now challenged, at [23]-[31]. 8. As to ground 6, it was contended that the form of the order was based on the conclusion, at [43] in the reasons, that the appellants were jointly and severally liable, with the result that there was no error. 9. Mr Ilovski's oral submissions began by submitting that the appeal panel had all the relevant material and need not remit the matter for rehearing if the appeal were allowed. He contended that the Amended Grounds of Appeal did not raise any question of law and, after referring to Jain v Dr N Kalokerinos [2023] NSWCATAP 141 at [69]-[85] and Commissioner of Police (NSW Police Force) v Adam [2022] NSWSC 789 at [19], that the appellants need to identify a question of law. 10. It was said that the conclusion that both the company and the builder were parties to the contract was justified by what appears in the first instance reasons, at [40]-[41]. 11. In relation to the s 48MA issue, attention was directed to evidence that was before the Tribunal, namely emails dated 29 August 2021, 22 September 2021, and 9 and 11 May 2022 (at pages 38-39 and 57-58) which it was said should be viewed in the context of a late 2016 quotation and a last payment date of 21 September 2018. Those documents, it was contended, provided ample evidentiary support for the decision to make a money order. It was also noted that the builder was not licensed which meant he could not do the work but could only propose that someone else do the work. 12. As to the owner's wife not being a party, it was said that the issue was not raised, either in points of defence (which were never filed or served) or during the hearing, with the contended result that such an issue could not now be raised, for the first time, on appeal. 13. It was submitted that, if this issue was considered, then either the owner was the agent for his wife and that she is bound by the outcome of the proceedings with the result that she cannot subsequently sue, seeking a different outcome. 14. It was noted that no oral submissions were made in support of ground 5 and that ground 6 only related to the form of the order. Mr Ilovski, when asked, indicated that the owner would consent to an amended order in the event the Tribunal considered that was warranted. Submissions in reply 1. In support of ground 1, it was submitted that an incorrect finding that a party to the proceedings was a party to a contract was an error on a question of law and that finding at first instance, at [38], was a conclusion devoid of reasoning. Further, that the company would not be liable if it were only an agent and that the licensing and insurance obligations imposed by the HBA do not affect the determination of who are the parties to a contract. 2. As to grounds 2 and 4, Water Board v Moustakas [1982] HCA 12 (Moustakas) and Suttor v Gundowda Pty Ltd [1950] HCA 35 were cited in support of the proposition that issues of construction and law are exceptions to the general bar on raising issues for the first time on appeal. 3. In response to ground 3, it was said the appellants primary claim is that there was no evidentiary basis to displace the statutory presumption established by s 48MA of the HBA. 4. Finally, in relation to ground 6, it was contended that Order 1 was plainly wrong since requiring payment of $75,612.35 by each of the appellants suggests the owner is entitled to receive twice that amount, i.e. $151,224.70. 5. Oral submissions in reply included that the appellants would not oppose a better wording of the money order. It was contended that the owner could not be held to be the agent of his wife unless there was evidence for such a finding. 6. Further, s 48MA did not mean that a work order had to be carried out by the builder. There was also a submission that the fact that the owner held an owner-builder permit did not affect who are the parties to the contract. Consideration 1. It is important to first note two matters that were brought to the attention of the parties at the commencement of the hearing. First, that an appeal to an Appeal Panel does not simply provide a losing party in the Tribunal below with the opportunity to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. That point is made clear by the Tribunal's Guideline 1, Internal Appeals (which can be found on the Tribunal's website) which includes the words: "an appeal is not an opportunity to have a second go at a hearing". 2. Secondly, that it is not sufficient for an appellant to disagree with the outcome and to contend that there should have been a different outcome: an appellant must demonstrate either that an error was made on a question of law or that there is a basis upon which leave to appeal should be granted. 3. To determine this appeal, it is necessary to consider the adequacy of the reasons provided at first instance. As was noted in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 (Orr) at [66] in the context of an appeal, it is necessary to consider not the optimum level of detail but "a minimum acceptable standard" and, at [71], that minimum acceptable standard was said to require: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, and (c) the reasoning processes that lead the Tribunal to the conclusions it made. 1. In this instance, the reasons did not follow the usual sequence of finding (1) who were the parties to the contract, (2) what were its terms, (3) whether a term had been breached, (4) whether a work order or a money order should be made, and (5) either the form of a work order or the amount of a money order. 2. However, that unorthodox sequence is not of any moment provided all relevant issues are considered and the minimum acceptable requirements, as suggested in Orr, are met. It is convenient to consider the adequacy of the reasons provided when dealing with each of the grounds of appeal. Ground 1 1. This ground did not contest the finding that the company was a party to the contract but contended that the Tribunal erred in finding that the builder was a party to the contract. The quotation was headed with the name of the company underneath which was the licence number of the builder in the same font and same size, thereby clearly representing that licence was that of the company. The Amended Points of Claim asserted a case against both appellants, but the appellants did not respond by providing Points of Defence. At first instance, the issue of who was responsible for the defective works was, correctly, considered by reference to what is commonly referred to as the objective theory of contract. 2. The determination was that "both respondents were the contracting parties" (at [39]) and that "both respondents are liable jointly and separately for satisfying the money order" (at [43]). The reasoning was set out (at [38]-[43]) as follows: 38 The owner said that the quotation represented that the licence was the company's. To an objective reasonable onlooker the contract was made with the licence holder because that was the critical matter to protect against problems. The importance of licensed status was emphasised by its prominence on the letterhead. Accordingly, [the company] would be objectively understood to contract as agent for the licence holder, if itself was not the licence holder, in addition to or substitution for contracting for itself. The absence of points of defence meant that which respondent contested that it was a contracting party was unknown until the hearing. The fact that [the builder] electronically signed above the company name on the email attaching the quotation didn't affect his status as principal because he still signed and held the licence (even if it was an inadequate licence). 39 in the circumstances of this case to the extent that they are revealed by the evidence, it seems to me that both respondents were the contracting parties, jointly and separately, with the owner. 40 In that respect, the use of the letterhead on the quotation and the form of signature on the email attaching the quotation indicated objectively that [the company] was contracting as a party, irrespective of whatever other capacity in which it signed the email and provided the quotation. This was reinforced by the company name in the letterhead of the quotation. 41 Additionally, the prominence of the licence within the quotation letterhead, the importance of a contractor being licensed to an owner-builder, and the absence of restriction on the capacity in which [the builder] signed the email attaching the quotation, in my view objectively indicated that [the builder] was intending to be personally bound as a contracting party in addition to the [company]. The owner, as an owner-builder, was reliant upon relevant trades with whom he contracted being licensed and required to provide insurance: HBA ss4(1), 5, 12, 13, 16, ,95(2), 96(3)(a). [The builder] held the licence personally and allowed [the company] of which he was the sole director and shareholder, to trade under that licence. [The builder] either signed in two capacities – personally and on behalf of [the company] – the email attaching the quotation or signed on behalf of [the company] who, in addition to contracting as a party, contracted as agent for the licence holder being [the builder]. 42 To the extent that the post-contractual documents such as invoices and accompanying emails and payment destination records are permitted to assist in identifying the contracting parties, they reinforce the above conclusions because of their similar features: the addition to the letterhead of [the company's] ABN does not substantively detract from that conclusion in the overall circumstances. 43 Accordingly, both respondents are jointly and separately [responsible] for satisfying the money order. 1. By finding, in [38], that the company was the agent of the builder, the decision at first instance could be said to have been based on the doctrine of undisclosed principal which was summarised, two weeks prior to the hearing of this appeal, in Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) [2023] NSWCA 118 at [167]-[171]: 167 The doctrine of undisclosed principal is well established. Brief reference to some basic principles is necessary. 168 In Keighey, Maxstead & Co v Durant [1901] AC 240 at 261, Lord Lindley said: The explanation of the doctrine that an undisclosed principal can sue and be sued on a contract made in the name of another person with his authority is, that the contract is in truth, although not in form, that of the undisclosed principal himself. 169 Lord Lloyd noted in Siu Yin Kwan v Eastern Iinsurance Co Ltd [1994] 2 AC 199 at 207 that the development of the law with respect to undisclosed principals may seem anomalous, since it ran counter to fundamental principles of privity of contract, nevertheless, it was justified on grounds of commercial convenience. See also Mooney v Williams (1905) 3 CLR 1 at 8 (Griffith CJ); Teheran-Europe Co Ltd v ST Belton (Tractors) Ltd [1968] 2 QB 545 at 552 (Lord Denning); and Maynegrain Pty Ltd v Compafina Bank [1982] 2 NSWLR 141 at 150-151 (Hope JA). 170 No reliance is placed by Resilient on either of the exceptions to the doctrine of undisclosed principal. Those exceptions are that (a) the express or implied terms of a contract provide that the actual parties are the real and only principals, and (b) that the contract must not be of such a kind that the personality of the contracting parties is material; for example, a contract to paint a portrait: Winstonu Pty Ltd v Piston [2001] FCA 541 at [30] (Gyles J, Beaumont ACJ and Stone J agreeing). See also Siu Yin Kwan at 207; Hardinge v Schidor [2002] NSWCA 277 at [34] (Powell JA, Mason P agreeing); Filatona Trading Ltd v Navigator Equities Ltd [2020] EWCA Civ 109 at [44]-[46]. 171 One limitation on the operation of the doctrine of undisclosed principal was stated by Hope JA in Maynegrain at 150: This position of the undisclosed principal arises only where the agent was in truth his agent at the time of the transaction; a person claiming as principal cannot purport to ratify as the act of his agent a transaction entered into without his authority by one who purports at the time to be a principal, and does not disclose that he is an agent: Keighley, Maxsted & Co v Durant [1901] AC 240. 1. That doctrine would provide the owner with a right to sue either the company or the builder but would not render them both parties to the contract. If that were the only basis for concluding that both the company and the builder were parties to the contract, that conclusion could not be supported. 2. However, the structure of the reasons in relation to this issue is to make a finding of agency (at [38]), and then express a conclusion of joint liability (at [39]) before proceeding to give reasons why the builder was considered a party (at [40]) and why the company was considered a party (at [41]). After referring to post-contractual documents (at [42]), the decision that both the builder and the company are liable to the owner was restated (at [43]). 3. While the effect of the decision at first instance involves a finding that there was a partnership, the reasons do not use the word partnership. That constitutes a failure to meet the minimum standard set by Orr in that there is no reference to the applicable law. Since Prendergast establishes that a failure to provide proper reasons is an error on a question of law, this ground of appeal succeeds, and it is necessary to consider whether to remit or reconsider this issue. 4. It is convenient to here note that perusing the transcript from the hearing reveals that the issue of whether the builder was a party to the contract was raised during submissions and is not now being raised, for the first time. 5. Since the appellants have provided a transcript of the hearing and the owner has provided a copy of each of the documents tendered at the hearing, we consider an application of the Tribunal's guiding principle of the just, quick, and cheap resolution of the real issues in dispute, set out in s 36 of the NCAT Act, favours this issue being redetermined rather than remitted. 6. From the evidence, we make the following findings: 1. The objective theory of contract requires an objective consideration of the circumstances of the case. 2. The circumstances of this case included that the requirements of the HBA applied, that the owner obtained an owner-builder permit, and that the quotation included a licence number. 3. There was an offer made by a quotation dated 14 December 2016, addressed to the owner and his wife, which bore the name of the company and the licence number of the builder above the words "All type of Building Timber Framing – Flooring – Roofing – Extension". 4. That offer was made by the company and the holder of the specified licence, which was the builder. 5. The covering email, dated the same day, concluded as follows, (not suggesting that the builder's name was included in his capacity as a director of the company): Regards Tony DSJ Carpentry & Construction P/L 0413 819 173 1. That covering email included the sentence: "For accepting quote and you want me to book your job to start we ask for deposit of 10%". 2. On 21 December 2021 a 10% deposit was paid, thereby accepting the offer, and forming a contract. 1. As a result, we consider this was an arrangement whereby the company and the builder, as a partnership, contracted with the owner and his wife, with the role of the builder including the provision his licence. 2. For the sake of completeness, we note that the question of whether this was a partnership situation was raised with Mr Ilovski during his submissions, with a view to confirming that was the owner's case, and that Mr Young did not make any submissions in reply on this point. 3. Builders not uncommonly bring their licence to a contractual arrangement and carry out the work using the company with the aim of avoiding personal liability of the builder. However, if that goal is to be achieved, the relevant licence should be held by the company. It should be made clear in any communications that the builder is acting as a director of the company, and not personally. 4. Hence, in relation to this ground of appeal, we are satisfied that there was an error of law in that the reasons provided were not adequate but that, exercising the power provided by s 81(1)(b) of the NCAT Act, the decision that both appellants were parties to the contract should be confirmed. Ground 2 1. This ground does not raise any consideration additional to ground 1. Ground 3 1. This ground challenged the decision to make a money order instead of a work order which involved a finding that the statutory preference, created by s 48MA of the HBA, in favour of a work order had been displaced. Simply stated, the appellants' case is that there was no evidentiary basis for displacing that statutory presumption. 2. The question of whether to make a work order or money order was considered at [32]-[36] in the reasons published on 9 March 2023. After referring stating relevant considerations and citing the relevant authorities ([32]-[33], before indicating the decision that there should be a money order instead of a work order ([36]), it was said (at [34]-[35]): 34 In view of the communications, the length of time and the absence of adequate remediation or offers to remediate, together with the contest on the identity of the person(s) who would be responsible for choosing, engaging, overseeing and paying the remedial builder, establishes an objective breakdown of relationship between the parties and a justified loss of confidence of the owner and the willingness and ability of either respondent to fix the issues. 35 A work order would in all likelihood in the present circumstances lead to a renewal application for a money order. 1. Those words reveal that the decision was based on evidence that was before the Tribunal. The Tribunal's consideration of this issue was orthodox, and the reasons provided satisfied the minimum standard suggested by Orr. It is noted that the "communications" to which the Member referred included three emails to which Mr Ilovski referred in oral submissions: 1. On 29 August 2021, an email from the owner and his wife included the words: "Over the past 24 months, I have made numerous attempts via phone call[s] and sms messages to get you to come out to our residence at … Sylvania and repairs the faults – relating to the roof, gutters and blue board which you installed… once again I am pleading with you to come to my house an inspect the leaking roof which you constructed …. We need these defects and repair works to be rectified asap, as we have been very patient, however, it[']s getting to a point where we can no longer wait." 2. On 22 September 2021, the owner and his wife sent an email which commenced with the words: "After our phone call on the 3rd of September you have made it evident that you have no intention of repairing your faults …" 3. On 11 May 2022 an email was sent to the owners in which, above the name of the builder and the company were the concluding words: "There is nothing more I can do for your situation." 1. Those communications between the parties do not favour a work order and they do suggest a breakdown in the owner-builder relationship. The following matters are also noted: 1. The quotation was issued late in 2016, was accepted on 21 December 2016, the last payment was made on 21 September 2018, and the application was lodged on 6 July 2022 2. There had been ample opportunity for the appellants to rectify any defective work. 3. Neither of the appellants held the required licence, with the result that any work order would need to be arranged by the appellants but carried out by another person or firm. 4. The appellants did not concede the alleged defects. 5. The appellants did not indicate who it was intended would carry out the remedial work. 6. The appellants did not indicate the form of any proposed work order. 7. The appellants did not lead any evidence. 8. Neither appellant had the licence which the work required. 1. The position is that s 48MA creates a statutory presumption with the consequence that the owner bears the onus of establishing that a money order should be made. However, once that is done, the absence of any evidence from the builder, there is nothing to 'tip the scales' back in favour of a work order. 2. No error of law has been demonstrated by the appellants in relation to this ground of appeal. 3. For the sake of completeness, we also consider the issue of the exercise of discretion which was raised in the submissions. To the extent the decision to make a money order involved the exercise of discretion, the position is governed by what was said in the joint judgement of Dixon, Evatt, and McTiernan JJ in House, at 504-505: [i]t is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed ... It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. 1. The appellants have not identified any of the grounds set out in that passage namely (1) acting on a wrong principle, (2) being guided by extraneous or irrelevant matters, (3) making a mistake, (4) failing to consider a relevant matter, or (5) a result that is so unreasonable or plainly unjust as to warrant an inference the discretion has not been properly exercised. Ground 4 1. This ground contended that the Tribunal erred in omitting the owner's wife as a party to the contract, having regard to the invoices that were issued and the payments that were made, and claimed that the Amended Points of Claim wrongly named the owner's wife as a party to the proceedings. 2. The relevant history is that there was a hearing on 1 August 2022 at which directions were made. When the application was next before the Tribunal, on 2 September 2022, a direction was made for the owner to file and serve Amended Points of Claim, setting out the basis for the inclusion of the builder as a party, in addition to the company, and for the appellants to file and serve Points of Defence. 3. While the Amended Points of Claim did add the owner's wife as a party, and while her name appeared on the quotation, no leave was sought or obtained for her to be added as a party with the result that she never became a party. (In like manner, the appellants lodged Amended Grounds of Appeal but never, before today, sought or obtained leave to rely on those grounds.) 4. This issue involved an unfortunate trifecta: (1) the owner did not obtain leave to add his wife as a party, (2) the appellants did not raise this issue at first instance, and (3) the presiding Member did not raise this issue. 5. It is clear the owner was a party to the contract and was entitled to sue. It is also clear that the owner's wife was a party to the contract and was thereby entitled to sue. Since the owner's wife was never added as a party, it was correct that the order made at first instance did not refer to her. The fact that the owner's wife was entitled to be added as a party does not mean the owner was not entitled to the order he obtained. 6. There was evidence for a finding that the owner was acting as the agent for his wife as her name was recorded on the owner-builder permit he obtained. 7. Omission of the wife from the order is a matter which might have been varied by consent. The suggestion that the appellants would have led evidence if the owner's wife were added as a party is difficult to accept when her name appeared on the Amended Points of Claim served prior to the first instance hearing but the appellants did not lead any evidence. Indeed, they did not even file or serve Points of Defence to those Amended Points of Claim. The better view is that the appellants' desire to have the proceedings remitted reflects a desire to revisit their decision not to lead any evidence at first instance. 8. We do not accept that the Tribunal should allow the appeal and remit the matter so that the owner can seek leave to add his wife as an applicant which would then entitle them both to the same order that was obtained by him. 9. In Moustakas, at [13], the High Court said: More than once it has been held by this Court that a point cannot be raised for the first time upon appeal when it could possibly have been met by calling evidence below. Where all the facts have been established beyond controversy or where the point is one of construction or of law, then a court of appeal may find it expedient and in the interests of justice to entertain the point, but otherwise the rule is strictly applied. 1. Three years later, in Metwally at [7], the High Court said: It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so. 1. Following what was said in Metwally, we are not satisfied that we should permit a departure from the rule by allowing this issue to be raised for the first time on appeal. 2. Even if this issue being raised for the first time on appeal is overlooked, we do not consider there was any error on a question of law by making an order in favour of the owner. Clearly, (1) the owner should be considered to have maintained the proceedings on his own behalf and, as an agent, on behalf of his wife, (2) if the wife were to now commence proceedings in relation to the defects the subject of these proceedings, those proceedings would be dismissed, (3) any amount recovered by the owner under the money order would be held on a constructive trust hot the owner and his wife, as joint owners of the property which is the subject of these proceedings, (4) while not directly applicable in Tribunal proceedings the usual rule is that, "Proceedings are not defeated merely because of the misjoinder or non-joinder of any person as a party to the proceedings": see r. 6.23 of he Uniform Rules of Civil Procedure 2005 (NSW) Ground 5 1. It was contended that: "The Tribunal erred in making an Order for the entire amount claimed by the Respondent." 2. In Ashby v Slipper [2014] FCAFC 15 at [77] it was said that: as a general proposition, evidence, which is not inherently incredible and which is unchallenged, ought to be accepted: Precision Plastics Pty Ltd v Demir (1975) 132 CLR 372 at 370-371 (per Gibbs J, Stephen J agreeing, Murphy J generally agreeing). The evidence may of course be rejected if it is contradicted by facts otherwise established by the evidence or the particular circumstances point to its rejection. 1. The owner's expert was not cross-examined as to either the method of rectification or the cost of rectification, and the appellants did not file or serve any evidence, lay or expert, despite directions providing them with an opportunity to do so. 2. In those circumstances, it was open to the Tribunal to award the entire amount claimed and doing so did not involve any error on a question of law. Ground 6 1. This ground took issue with the form of Order 1 which was expressed as follows: Order that DSJ Carpentry & Construction PL and Toni Maroun Youssef and each of them pay Mendo Trajcevski $75,612.35 on or before 11 April 2023. 1. It was contended that the form of that order entitled to receive twice the amount specified in that order, i.e. $151,224.70. 2. An order for the payment of a single amount by multiple parties would more commonly be expressed as them being jointly and severally liable to pay that amount. 3. However, given that parties to proceedings in the Tribunal often conduct their own case without legal representation, the use of the words "jointly and severally liable" may not be sufficiently clear. Alternatively, such an order could state that the successful party is entitled to an amount which was to be paid either wholly or partly by either of the unsuccessful parties. 4. During the hearing of the appeal, Mr Ilovski consented to the money order being reworded and Mr Young did not oppose a better wording of that order. In view of those concessions, the preferable course is to remove any potential ambiguity, noting that the date for payment has passed and that a stay application was dismissed. Decision not fair and equitable 1. Under this heading, it was contended that the Tribunal refused to allow and adjournment application to allow the appellant to obtain expert evidence. However, it is not surprising that application was refused as it was not made until during the hearing, after the appellants' solicitor had cross-examined the owner's expert. 2. In circumstances where directions were made, and extensions of time were granted for the provision of evidence, the failure of the appellants to provide any evidence prior to the hearing was a forensic decision. It would have been procedurally unfair to permit the appellants to revisit that decision after they had not only seen but had also had an opportunity to test the evidence led against them. 3. It was also claimed that findings of fact were based on expert evidence without lay evidence to support them, but no supporting details were provided. Plainly, as was made clear in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305, there needs to be a factual foundation for an expert's opinion and either reasons or a process of reasoning to support that opinion. However, an expert's observations can provide that factual foundation and a consideration of both the expert's report and the Tribunal's reasons does not support this claim. 4. Under this heading, there was also a contention that "The findings of the Tribunal are against the weight or the evidence" but (1) that broad assertion was not supported by any details, and (2) that assertion overlaps the second basis upon which leave to appeal was sought, considered below. Decision against the weight of the evidence 1. The Notice of Appeal suggested: "The Tribunal accepted that the evidence [given] in the expert report in circumstances that under cross-examination the opinion expressed by the expert is not supported" but, again, no details were provided. A review of the expert report and transcript of the hearing does not favour acceptance of this suggestion. 2. By way of example, in submissions at first instance, the solicitor for the appellants contended that an alternative cause of a water leak was possible. However, (1) a possibility is insufficient when the test is balance of probabilities, and (2) there was no evidence from the appellants in support of that alternative cause. 3. There was also a reference by the appellants to the contention that the builder is not liable to the owner, an issue which has already been considered and rejected. Fresh evidence 1. As to what evidence the appellants now seek to produce, the appellants said they did not obtain expert evidence in the absence of lay evidence from the owner. It was contended that a new first instance hearing should be allowed to permit the appellants to obtain expert evidence, saying that evidence could now be obtained. 2. The reality is that the appellants received documents, including an expert report, from the owner well prior to the hearing and chose not to respond to that report. It is not sufficient to say that the appellants can now obtain an expert report when such a report was reasonably obtainable prior to the hearing. 3. In answer to the question in the appeal from which asked why that evidence was not available at the time of the hearing, it was said that the owner "failed to file lay evidence as ordered by the Tribunal". 4. In fact, the Tribunal's direction, made on 1 August 2022, noted that the owner had filed 117 pages of documents and provided an opportunity for the owner to provide "… a copy of any additional documents upon which [the owner] intends to rely at the hearing." On that occasion, it was noted that such documents may include any witness statement and any expert report. 5. There was never an order for the owner to file lay evidence: the owner was given an opportunity to lodge the evidence upon which he wished to rely at the hearing, lay and/or expert, as were the appellants. When the owner filed and served the documents upon which he wished to rely at the hearing, it was then for the appellants to decide what evidence, lay and/or expert, they wished to rely upon at the hearing. For whatever reason, they chose to file and serve no evidence. 6. The appellants' solicitor appears to have had the expectation that the owner would file a witness statement, statutory declaration or affidavit while the owner chose to rely on documents and an expert report. Leave to appeal 1. The reasons advanced in support of leave to appeal being granted repeated matters already considered. Accordingly, the appellants failed to establish a reason for granting leave to appeal. Costs 1. As the amount claimed or in dispute exceeded $30,000, costs of this application are governed by r 38 of the Rules instead of s 60 of the NCAT Act. Further, the effect of r 38A(2) is that costs of this appeal follow the costs provision applicable at first instance. It is noted that the appellants sought an order for costs of both the appeal and the first instance proceedings if the appeal was successful. 2. The practical course is to make an order for costs of the appeal to follow the event but to provide an opportunity for that order to be revisited should either party wish to lodge written submissions. Orders 1. For the reasons set out above, the orders that will be made are as follows: 1. Leave to appeal is refused. 2. The first instance decision confirmed. 3. Order 1 made on 9 March 2023 is set aside to facilitate its variation. 4. Mendo Trajcevski is entitled to be paid $75,612.35 immediately. 5. That amount is to be paid either wholly by DSJ Carpentry & Construction P/L, or wholly by Toni Maroun Youssef, or partly by each of them. 6. Otherwise, the appeal is dismissed. 7. The appellants are to pay the costs of the respondent, on the ordinary basis, as agreed or assessed under the Legal Profession Uniform Law Application Act 2014 (NSW). 8. If either party wishes to contend that a different costs order should be made, order 7 ceases to have effect and the following orders apply: 1. Any application for a different costs order is to be filed and served, supported by submissions (not exceeding five pages in length) and evidence within 14 days of the date of these orders. 2. Any submissions (not exceeding five pages in length) and evidence in response are to be file and served with the following 14 days. 3. Any submissions in reply (not exceeding two pages in length) re to be filed and served within the following 7 days. 4. Each party's submissions should indicate whether they agree that costs should be determined on the papers, i.e. without the need for a further hearing, under s 50(1) of the Civil and Administrative Tribunal Act 2013 (NSW). ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 June 2023