Civil and Administrative Tribunal New South Wales Medium Neutral Citation: TNT Building Trades Pty Ltd v Baker [2023] NSWCATAP 178 Hearing dates: 19 June 2023 Date of orders: 30 June 2023 Decision date: 30 June 2023 Jurisdiction: Appeal Panel Before: G Blake AM SC, Senior Member L Wilson, Senior Member Decision: (1) Leave to appeal is refused. (2) The appeal is otherwise dismissed. (3) The appellant is to pay the respondent's costs of the appeal as agreed or assessed under the applicable costs legislation. Catchwords: APPEALS — Appeal on question of law – Scope of question of law - Allegations of constructive failure to exercise jurisdiction APPEALS — From exercise of discretion — Acting on the wrong principle APPEALS — Leave to appeal — Principles governing – Leave to appeal refused BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW) — Building dispute – Where the builder breached statutory warranties – Money order made against the builder Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), ss 60, 62, 80, 81, Sch 4, cl 12, Sch 6, cl 11 Civil and Administrative Tribunal Rules 2014 (NSW), rr 25, 38A Environmental Planning and Assessment Act 1979 (NSW), ss 6.1, 6.6 and 6.7 Environmental Planning and Assessment Regulation 2000 (NSW), cll 139, 145, Sch 1 (repealed) Fair Trading Act 1987 (NSW), Pt 6A Home Building Act 1989 (NSW), ss 18B, 18C, 18D, 18E, 48MA, 48O Cases Cited: Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165 Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385; [2020] FCAFC 50 Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734 Collins v Urban [2014] NSWCATAP 17 Galdona v Peacock [2017] NSWCATAP 64 House v The King (1936) 55 CLR 499; [1936] HCA 40 Jain v Dr N Kalokerinos Pty Ltd [2023] NSWCATAP 141 John McDonald Building Services Pty Ltd v Gusa [2022] NSWCATAP 60 Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 Leung v Alexakis [2018] NSWCATAP 11 Moody v M K Building Services Group Pty Ltd [2022] NSWCATAP 212 New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 Noori Homes Pty v Patel [2023] NSWCATAP 149 Owners SP 92450 v JKN Para 1 Pty Limited [2023] NSWCA 114 The Owners of Strata Plan 76888 v Walker Group Constructions Pty Ltd [2016] NSWSC 541 Thomas and Naaz Pty Ltd (ACN 101 491 703) v Chief Commissioner of State Revenue [2022] NSWCATAP 220 Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 Warren v Coombes (1979) 142 CLR 531 at 552; [1979] HCA 9 Yuen v Thom [2016] NSWCATAP 243 Texts Cited: National Construction Code, volume 2, 2016 NCAT Policy 2, Publishing Reasons for Decisions Category: Principal judgment Parties: TNT Building Trades Pty Ltd (Appellant) EIli Elise Eleni Baker (Respondent) Representation: Counsel: P Bambagiotti (Appellant) B Anderson (Respondent) Solicitors: Harris & Company Solicitors Pty Ltd (Appellant) File Number(s): 2023/00087086 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 1 March 2023 (substantive); 23 May 2023 (costs) Before: G Burton SC, Senior Member File Number(s): HB21/46560; HB21/52256 REASONS FOR DECISION Overview 1. This is an internal appeal from a decision of the Consumer and Commercial Division of the Tribunal made on 1 March 2023 in two proceedings under the Home Building Act 1989 (NSW) (HB Act) concerning a dispute between the respondent, EIli Elise Eleni Baker (the owner) who is the owner of a property at Randwick in New South Wales (the property), and the appellant, TNT Building Trades Pty Ltd (the builder), which is the builder that carried out building work at the property. In the decision made on 1 March 2023 the Tribunal ordered the builder to pay to the owner the sum of $180,197.14 on or before 29 March 2023. On 29 March 2023 that money order was stayed with conditions. 2. We have decided to refuse leave to appeal, otherwise dismiss the appeal and order the builder to pay the owner's costs of the appeal. The stay granted on 29 March 2023 is therefore lifted. The factual background 1. On 12 September 2018, the owner and the builder entered into a contract for the renovation of the building on the property for the price of $1,027,653 including GST under which the owner appointed an architect. 2. On 22 September 2018, the builder commenced work under the contract. 3. On 9 April 2019, the architect sent an email to the parties advising her withdrawal from the project. 4. On 1 October 2019, practical completion under the contract occurred with the owner taking occupation of the property. 5. On 29 April 2020, the builder obtained an occupation certificate. 6. The parties fell into dispute about the quality of the work carried out by the builder and the outstanding amount owing by the owner. The two proceedings between the parties in the Tribunal 1. On 12 November 2021, the owner as the applicant commenced proceedings HB21/46560 against the builder as the respondent by filing an application claiming the amount of $60,000 for breach of the contract by reason of defective work. 2. On 22 December 2021, the builder as the applicant commenced proceedings HB21/52256 against the owner as the respondent by filing a home building application claiming the amount of $15,414.80, being the unpaid retention under the contract. 3. On 11 and 12 August 2022, the Tribunal heard the two proceedings. At the conclusion of the hearing, the Tribunal made procedural orders for written submissions by the parties and reserved its decision. 4. On 1 March 2023, the Tribunal relevantly made the following order which was corrected on 9 March 2023 (the money order) and procedural directions with respect to the costs of the two proceedings (the costs procedural order), and published reasons for its decision (the Tribunal Decision): "1. Order that TNT Building Trades PL pay Elli Elise Eleni Baker pay [sic] $180,197.14 on or before 29 March 2023." 1. On 23 May 2023, the Tribunal made the following order (the costs order), and published reasons for its decision: "1. Order that TNT Building Trades PL pay Eli Baker's costs of proceedings HB 21/46560 and HB 21/52256 on the ordinary basis up to and including 31 July 2022 and thereafter on the indemnity basis as agreed or assessed. 2. Order as follows in respect of questions of costs: (1) Any costs application with further submissions and documents relating to questions of costs is to be filed and served on or before 22 March 2023. (2) Any submissions and documents relating to questions of costs in response is to be filed and served on or before 5 April 2023." The Tribunal Decision 1. In the Tribunal Decision, the Tribunal relevantly: 1. summarised the outcome of proceedings (at [1]-[2]); 2. set out the factual background, details of the two proceedings, the common ground of the parties that the renovation work was residential building work within the HB Act, their claims were under the Tribunal's jurisdictional limit and the owner's claim was brought within time so far as the alleged defective work constituted a major defect within s 18E of the HB Act, the issues and nature of the evidence in proceedings HB21/46560, and the rejection of certain evidence tendered by the owner (at [3]-[28]). The alleged outstanding defects included (at [9]): "9 … the roof/ceiling was leaking; roof flashings were inadequate; doors and windows were not "AWS semi-commercial" as the contract required; the doors were also the wrong size for the specified space so did not meet load safety testing requirements; … a ceiling beam in the living room was not as specified and suffered from veneer cracking and peeling; …" 1. rejected the builder's defences based on the failure of the architect to give notice of defects within the specified time under the contract, and promissory and conventional estoppel (at [29]-[43]); 2. found that the builder had not established the defences of the failure of the owner to grant access, inform the builder about alleged defects in written notices and in a timely manner and to mitigate her loss (at [44]-[45]); 3. dealt with the issue of non-compliance with the National Construction Code (NCC) (which is also referred to as the Building Code of Australia (BCA)) (at [46]-[57]) including the following matters: 1. it was common ground that the building's classification was "Class 1a – dwelling" and that volume 2 was the relevant part of the NCC (at [46]); 2. it was common ground that the works alleged to be defective were not within the deemed-to-satisfy compliance requirements of the NCC where such non-compliance was alleged (at [47]); 3. the builder did not discharge its evidential onus to put forward performance solutions and demonstrate that they met the qualifying requirements. There was no evidence contemporary to approvals, whether the construction certificate or the occupation certificate, that the alleged defective works met the requirements of the NCC to qualify as performance solutions (at [48]-[49]); 4. did not accept the builder's essential submission that the Tribunal was an "Authority" for the purposes of approving a performance solution, that the expert opinion obtained by the builder for the purposes of the litigation and after the occupation certificate was an "expert opinion" that qualified as one means to satisfy the performance solution by reason of being inconsistent with other means of satisfying performance requirements (at [50]-[55]); 5. held that if what the builder did was sufficient to satisfy the performance requirements for a performance solution, if such process had been engaged in, then it would not cure the breach of statutory warranty for non-compliance but might, in the context of all the evidence, be relevant to the appropriate remediation and its cost (at [56]-[57]); 1. dealt with the limitation defence of the builder (at [58]-[77]) including the following matters: 1. it accepted that the flashing, roofing/awning and internal waterproofing alleged defects were within time by reason of being major defects within s 18E(4) of the HB Act (at [58]); 2. it noted that the focus of this defence was on the doors and windows and the living room beam claims for breach of statutory warranty (at [59]); 3. it found that the windows and doors claim for breach of statutory warranty was within time (at [60]-[70]); 4. it found that the contract claim for alleged non-supply of the specified type of windows and door was within time (at [71]); 5. it found that the owner's claim in respect of the windows and doors was a consumer claim as defined in Pt 6A of the Fair Trading Act 1987 (NSW) (FT Act) and was brought within time under that Act. It was unnecessary to decide whether the increased jurisdictional limit of $100,000 was applicable (at [72]-[74]); 6. it found that the owner's claim in respect of the living room beam was within time whether as a claim for breach of statutory warranty by reason of being a major defect within s 18E(4) of the HB Act or as a breach of contract claim or as a consumer claim under the FT Act (at [75]-[76]); 7. it found that the owner's other claims were not brought within time (at [77]); 1. set out the principle governing loss arising from defective and incomplete work is that reinstatement, provided it is not extravagantly disproportionate, is the appropriate measure of relief (at [78]-[83]); 2. set out its consideration and conclusions on the defects and the remediation method (at [84]-[148]) including the following matters: 1. it noted the order for precedence of incorporated documents under the contract (at [84]); 2. it made findings on the challenges to the credibility of the builder's expert and the builder's director (at [85]-[89]); 3. it noted that the owner had withdrawn 11 of the 60 alleged defects (at [90]-[91]); 4. it dealt with the windows and doors (at [92]-[105]) in the following way: 1. it noted that there was no dispute that the contract specified "AWS semi-commercial range" for the windows and doors and that what was installed was the "Wideline" brand. There was a dispute as to whether or not the installed windows and doors were semi-commercial standard or grade (at [92]-[94]); 2. it summarised the evidence of the builder's expert and the owner's expert in their respective reports and in their concurrent evidence (at [95]-[98]). It noted the communications in August 2021 with the supplier of the windows and between a director of the supplier and the builder's expert on 26 April 2022 that the doors installed were Wideline "Horizon" which was a residential and not a semi-commercial range (at [95]). It referred to two photographs in the report of the owner's expert which showed that the section of frame surrounding the glass on sides other than the sill/track base was 50mm not 100mm, and noted that this was consistent with his uncontradicted evidence that such frame size apart from the sill/track base was the difference between residential and a higher grade of semi-commercial (at [96]). It found that Wideline had been making windows and doors for 45 years and had a consistent product range of three of which "Horizon" was clearly residential and not semi-commercial (at [97]). It also found that the owner's expert's reliance on the supplier's representative's observations of which product had been installed was appropriate and the owner's expert's experience that a uniform range of windows and doors was usually installed, which was not contradicted, ought also to be accepted (at [97]); 3. it held that its conclusion that the "Horizon" range was installed, that range was unchallenged as residential and not semi-commercial and there were clear differences in quality and properties between a residential range and other ranges was not affected by the variation between suppliers of what constitutes "semi-commercial" which has no set meaning (at [99]); 4. it found that the supplier's certification was for standards for the type of windows and door that were supplied and installed, and not that the window was the correct window under the contract specification (at [100]); 5. it found that the builder had installed the wrong windows and doors according to the contract specification and was in breach of contract and the statutory warranty in s 18B(1)(a) of the HB Act. The owner was entitled to supply and installation of the specified windows and doors, being "AWS semi-commercial range", in replacement of the existing windows and doors (at [101]-[102]); 6. it found that the "Horizon" range for doors was for a maximum height of 2400mm whereas the contract window schedule specified 2800mm and it was not in dispute that the installed doors were 2800mm high, which required a higher range window that met the semi-commercial description (at [103]); 7. it accepted the owner's expert's uncontradicted evidence that the installed dimensions were outside of the manufacturer's load-tested specifications if they were installed with "Horizon" specifications which either reinforced the findings of breach of contract and warranty because the "Horizon" specifications were used for installation, or was neutral in determining what range was used (at [104]); 8. it found that there was also no supporting evidence for the builder's expert's opinion that the mid-range product he ultimately identified as what was installed could meet the 2800mm specification (at [105]); 1. it dealt with the curved corrugated roof on the ground floor and the first floor (at [106]-[113]) in the following way: 1. it noted that this defect involved non-compliance with the manufacturer's guide in minimum radius, causing stress lifting at the roof frontage from excessive pressure, popping of fasteners, non-compliance with the NCC in roof form and pitch and avenue for water ingress (at [106]); 2. it noted that the experts also agreed that fasteners needed to be replaced and the corrugated roofing sheets needed to be pre-sprung for curvature (at [107]-[108]); 3. it accepted the builder's submissions that there was on site pre-springing and the ability to achieve tighter radius by pre-springing, but this was not determinative (at [109]-[111]); 4. it found that the pre-springing, if it occurred, to a tighter radius than the tabulated recommendation had stressed the roof in this instance, caused fasteners to pop and caused the front to lift and sheeting to overlap which created a non-compliant roof pitch and risk of water entry, with absence of waterproofing from external water entry itself being proof of non-compliance (at [112]); 5. it accepted that the existing curved roof needed to be replaced with a curved roof designed with a radius not less than the minimum in the manufacturer's guidelines and not less than the compliant minimum roof pitch (at [113]); 1. it dealt with the flat roof on the first floor above the stairs (below highlight windows) and lower roof above the living room (at [114]-[123]) in the following way: 1. it noted that non-compliance with the NCC roof pitch performance requirement causing deterioration of rubbers over time and resultant water ingress was alleged and supported by the owner's expert's opinion (at [114], [116]-[118]); 2. it noted that the builder did not contest the roof pitch in both locations was not compliant as a deemed-to-satisfy performance solution for this requirement (at [115], [119]); 3. it noted that the builder relied upon its expert's opinion that the performance solution reflecting what was done complied with the performance requirements and that it had already found such an expert opinion not to be sufficient for the purposes of liability for non-compliance and breach of warranty (at [119]); 4. it found that the builder's expert's opinion was not sufficiently supported by documentation and appeared to rely upon there being no leaking, which was contradicted by the evidence and in any event did not address risk of such water entry (at [120]-[122]); 5. it found that the owner had established the defects (at [123]); 1. it dealt with the flashings (at [124]-[134]) in the following way: 1. it accepted the evidence of the owner's expert as to the defects in the flashing and the consequent water ingress (at [124]-[128], [133]-[134]); 2. it noted that the builder did not contest non-compliance with the relevant deemed-to-satisfy solution performance requirements (at [129]); 3. it noted that the builder relied upon its expert's opinion that the performance solution reflecting what was done complied with the performance requirements and that it had already found such an expert opinion not to be sufficient for the purposes of liability for non-compliance and breach of warranty (at [129]); 4. it found that the builder's expert's opinion was to the effect that Dakaflash (the general flashing used) and Smartform flashings (used on the eastern gable and eaves roof) were a modern alternative to traditional flashing that used a rubber strip with aluminium face and adhesive backing was not sufficiently supported by documentation that the adhesive-backed aluminium-faced flashings had properties and characteristics to meet the performance requirements. It further found the builder's expert's opinion was not sufficiently supported by documentsation that the flashings were suitable for use in this site or were correctly installed (at [130]-[131]); 5. even if the builder's expert's opinion was sufficiently supported by documentation, there was adhesion failure due to the flashing being laid on dirty substrate which alone was sufficient to require removal and replacement of flashings in the affected locations (at [132]); 1. it found that the living room beam was not solid as specified in the contract and that the owner was entitled to replacement of the beam (at [135]-[137]); 2. it dealt with the defect items which were agreed in whole or part (at [138]); 3. it dealt with the remaining defect items (at [139]-[143]); 4. it recorded the items that were not pressed or incorporated into other items (at [144]-[148]); 1. determined the costings on the basis that it accepted the methodology of the owner's expert, and found that if a money order was to be made the owner would be entitled to $195,611.94 remediation costs, less the $15,414.80 admittedly owed under the contract, leaving a balance of $180,197.14 (at [149]-[162]); 2. dealt with the issue of a work order or money order should be made (at [163]-[165]): "163 Under HBA s 48MA, a work order is the preferred, not the mandatory, outcome for defective work. Personal animosity is not sufficient to displace the primacy of a work order for defective work, as the test is objective and the flexibility of s 48O permits an order that the builder fulfil a work order by engaging another party to carry out the work order on behalf of the builder. However, relational breakdown is an element in objective assessment, as can be the builder's conduct in unrelated projects and as will be doubts about the builder's capacity (including being licensed) or skills to undertake the required remediation, the builder's attitude to the standard of work done and willingness to return and the likelihood of further dispute not meaning that a work order would be a timely or cost-effective resolution. 164 In my view the evidence discussed above, including particularly in relation to the mitigation and access issues, establishes an objective breakdown of relationship between the parties from the loss of confidence of the owner in the builder's willingness and ability. This loss of confidence arose from a history of attempts to remediate defects and the builder's resistance (in my view unsuccessfully) to what the owner she maintained were defects or items not supplied in accord with the contract. A work order would in all likelihood in the present circumstances lead to a renewal application for a money order. 165 Accordingly, there will be a money order in favour of the owner against the builder as previously set out." (citations omitted) 1. set out the statutory provisions and principles to be applied in determining the costs of the two proceedings (at [166]-[178]); 2. set out the money order (at [179]). The history of the appeal 1. On 16 March 2023, the builder as the appellant commenced proceedings 2023/00087086 against the owner as the respondent by filing a notice of appeal (the notice of appeal) containing the following details: 1. in section "5 GROUNDS FOR APPEAL": 1. under the subheading "A ORDERS CHALLENGED ON APPEAL", the money order and the costs procedural order; 2. under the subheading "B GROUNDS OF APPEAL" when read with Attachment 1: "Ground 1: Error of Law in construction of the Contract a. The learned Senior Member erred in his construction of the Building Contract, by reference to both its standard terms, specifications, and drawings, as to the meaning and requirement of the term 'semi-commercial windows' that culminated in the finding at [95]: the interpretation and construction of the terms of the contract involve error of law; Ground 2: Error of Law in the Exercise of its Jurisdiction, Procedural Fairness b. In reaching its finding regarding the windows, at [95], the doors at [105] and the roof at [113] the Tribunal failed to have regard to the relevant evidence before it, overlooking features of that evidence, and so misconstruing the body of clearly relevant evidence before it, giving rise to an illogical and/or bizzare in the circumstances and/or was made in disregard of the evidence which amounts to an error of law with respect to the exercise of its jurisdiction. Particulars of Ground 2 1) Re the finding at [95], the Member failed to have proper, sufficient, or any real regard to the following relevant evidence: i. The Owner's expert's concession at Page 144 of the Transcript [lines 10-201 ii. The evidence at the Builder's Expert Report (Appendix 6.5) iii. The section of the frame was in fact 100mm iv. Evidence that "semi-commercial" was just a lose term [lines 4-9, Page 154 of the Transcript] v. Evidence that the installed doors and windows complied with applicable standards vi. The order of precedence in the Contract Making the finding bizzare in the light of that evidence. 2) Re the finding at [105] that the doors were too high did not take into account the evidence at JTB.48, and is bizzare in the light of that evidence. 3) Re the finding at [113] re the roof: The Tribunal in reaching his own conclusion at [112] including in regard to the 'spring' in the roof, failed to have regard to, or otherwise properly deal with, the evidence before it: from the TNT's expert that the roof did not leak, and Ms Baker's expert's concession that the roof did not leak. c. The failure to have proper regard to the whole of the evidence relevant on a point that led to a finding also gives rise to an error of law in the Tribunal failing to afford TNT with procedural fairness. Ground 3: Error of Law in its Construction of the Requirements/Operation of the Building Code of Australia (BCA) d. In [46-57], the Tribunal erred in its construction and application of the Building Code of Australia (BCA), which was, inter alia, drawn into the Building Contract by the Statutory Warranty at HBA sec 18B(1)(c) as a requirement of law. Particulars of Ground 3 1) The Tribunal misconstrued and misapplied the BCA provisions involving recognition of Alternative Solutions as satisfying the Code's performance requirements in lieu of the Deemed to Satisfy provisions in PartA2 Compliance including those sub-parts addressing Performance Solutions, which led the Tribunal to incorrectly reject evidence of TNT's compliance with the said Codes. Ground 4: Error of Law going to the exercise of its discretion as to making a money order: HBA sec 48O(1) as opposed to a 'work' order: HBA sec 48O(1)(c) e. In reaching its finding at [165], made in the light of its findings as to defects, the Tribunal erred in its understanding and application of the elements and principles involved in the exercise of that discretion, in the sense known as House v R [1936] HCA 40 (17 August 1936), including by reference to the evidence before it and its construction as to the intention of the HBA, in particular the provisions of sec 48MA. Particulars of Ground 4 1) Failing to have regard to the appropriate criteria and/or giving too little weight to relevant considerations and/or giving undue weight to irrelevant considerations in determining the exercise of the discretion. 2) Failing to appropriately balance those considerations in the light of the clear legislative intention underlying HBA sec 48MA. Other Errors - NCATA sec 80(2)(b) in respect of which leave is sought 4 If, contrary to TNT's contention, the Appeal Panel finds that any of the above grounds require leave, TNT will advance an alternative application for leave for such grounds. 5 TNT says that the Tribunal incorrectly evaluated the evidence, by reference to the legal principles giving rise to estoppel, with respect to its estoppel defence in [29-43] which gave rise to a substantial miscarriage of justice to TNT, as that defence went, inter alia, to the substantial elements of the claim against it." 1. under the subheading "C ORDERS SOUGHT": "1. Orders 1 and 2 to be quashed. 2. Alternative orders as substituted in relation to specified defects [P3, P4 (weep holes covers only), P8, P9, P17 (trim flashing only), P34, P42 (refix veneer only) and P53]" 1. in section "6 LEAVE TO APPEAL" under the subheading "B APPLICATION FOR LEAVE TO APPEAL FROM A CONSUMER AND COMMERCIAL DIVISION DECISION": 1. under the subheading "i Decision not fair and equitable": "If, contrary to TNT's contention, the Appeal Panel finds that any of [Grounds 1 to 4] require leave, TNT will advance an alternative application for leave for such grounds. If such leave is considered necessary, then leave should be granted because the Senior Member's discretion has miscarried as per House v R [1936] HCA 40 as a result of failing to take into account evidence contrary to findings and misapplying the law to finding of fact." 1. under the subheading "iii. Decision of the Tribunal against the weight of evidence" when read with Attachment 2: "What evidence should the Tribunal have given more weight to? Why? In relation to the role of the Architect and Owner's reluctance to provide Builder access 1. The Email re Architect's confirmation of release dated 7 October 2021 (J1 Page 685) and Letter of Release dated 9 April 2019 (J1 Page 884) The termination of the Architect was a breach of agreement which rendered performance impossible and should have been taken into account. For example, it is impossible for a final certificate to be issued without an Architect according to the Contract. 2. Correspondence where Owner refused or was reluctant to provide access (J1 Pages 859, 863, 870-876, 915) The Senior Member should have put more weight on the Owner's role in obstructing the Builder's access. Numerous conversations were required to obtain access to the site. In relation to the Roof Pitch 3. Invoice from Roofing Supermarket (J1 Page 727) This invoice should be given more weight to serve as key evidence that the roof sheets were curved on site by the manufacturer. In relation to the Beam 4. Drawings A300 (J1 Pages 508 and 948) and A802 (J1 Pages 532 and 972) These drawings prepared by Georgina Wilson Architect show that the beam is not a structural nor a load-bearing component of the building. In relation to the Windows and Doors 5. Order of Precedence in the Contract (J1 Page 1000) and A 001 General Specification (J1 Page 935) The Senior Member failed to find that A 001 General Specification takes precedence over Drawing A 901. A 001 provided for "standard aluminium windows". 6. The Owner's Expert concession that 100mm frame width can be considered "semicommercial" (Transcript Page 144.10-20) This is a concession that they are "semi-commercial". 7. The Owner's Expert concession that the windows and doors have 100mm frames (Transcript Page 156.15-20) This follows that they satisfy a "semi-commercial" description. 8. The transcript between Wideline and the Owner (J1 Page 48) Wideline has indicated that doors manufactured at the height would not be a safety issue. In relation to NCC Performance Solutions 9. The Owner's Expert's concession in relation to Handbook (Transcript Pages 95.29 -96.3) This is a concession that the Handbook relied upon by the Owner's Expert in argument of performance solutions are satisfied was in fact not part of the NCC. 10. May v Pittwater Council [2010] NSWLEC 1027. The Senior Member failed to properly consider authorities. In relation to leaks 11. Photos in J1 Pages 1193 - 1196 The Senior Member failed to properly consider the photos in relation to water leaks and the claimed defects. 12. Reference to Builder's Expert's hydrometer reading (J1 Page 757) and Owner's Expert's concession (Transcript Page 89.12-16) The Senior Member did not properly consider the Builder's Expert report confirming his hydrometer reading demonstrating moisture content within limits while in contrast, the Owner's Expert conceded not having undertaken any hydrometer testing." 1. On 27 March 2023, the owner filed a reply to appeal in which she contended the appeal should be dismissed and relevantly containing the following details: "… Appeal Grounds 7. The Appellant submits there are 4 grounds of appeal in respect of alleged questions of law: a. error of law in construction of the Contract (Appeal Ground 1); b. error of law in exercise of jurisdiction / procedural fairness (Appeal Ground 2); c. error of law in construction of the requirements of the BCA (Appeal Ground 3); and d. error of law in exercise of discretion in respect of making a money order as opposed to a work order (Ground 4). 8. The Appellant also makes assertions if leave is required including: a. the Senior Member failed to properly consider its estoppel defence giving rise to a substantial miscarriage of justice (Leave Ground 1); b. House v R error/s on the part of the Senior Member (Leave Ground 2); and c. the Tribunal ought to have given more weight to the following (Leave Ground 3): i. the role of the architect and Owner's reluctance to provide access; ii. in relation to the roof pitch; iii. in relation to the beam; iv. in relation to the windows and doors; v. in relation to the NCC performance solutions; and vi. in relation to the leaks. 9. The Appellant has not pointed to any errors of law in respect of the Decision, and the Respondent submits that there are no such errors in any event. In particular, the Appellant has not considered or properly identified why it says that the Grounds of Appeal contain error of law. 10. In relation to the alleged leave grounds, the Appellant has not considered or referred to the principles of Collins v Urban [2014] NSWCATAP 17. There has been no substantial miscarriage of justice or any other basis upon which leave would be granted. Response to Appeal Grounds 11. In response to Appeal Ground 1: a. the Appellant has not actually identified any error in respect of the construction of the Contract, nor identified what decision the Senior Member ought to have come to, and why the decision involved an error of law; and b. the Respondent says there is no such error, and that the decision was open to the Senior Member to make. 12. In response to Appeal Ground 2: a. the title of this ground (relating to exercise of jurisdiction and procedural fairness) does not appear to align with the particulars identified by the Appellant; b. the alleged errors do not constitute any errors of law (or any error); and c. the Senior Member did not misconstrue the evidence and the decision was reasonably open and available for the Senior Member to make. 13. In response to Appeal Ground 3: a. the Appellant has not identified in any specific alleged error in respect of the Decision; b. the alleged errors do not constitute any errors of law (or any error whatsoever); and c. the Senior Member did not misconstrue the evidence and the decision was reasonably open and available to the Senior Member to make. 14. In response to Appeal Ground 4: a. the Respondent has not provided any proper particulars to the alleged errors and has not identified with specificity why there was a House v R error on the part of the Senior Member; b. the alleged errors do not constitute any errors of law (or any error whatsoever); and c. the Senior Member did not misconstrue the evidence and the decision was reasonably open and available for the Senior Member to make. 15. In response to Leave Ground 1: a. the Appellant has not identified with any sufficient particularity why it says there was a miscarriage of justice: i. how the estoppel defence was improperly considered by the Senior Member; and ii. how that amounted to a miscarriage of justice or how the decision was otherwise unfair. 16. In response to Leave Ground 2: a. the Appellant has not identified any specific House v R errors on the part of the Senior Member, nor identified any specific aspects of the Decision which falls into that category; and b. the Appellant has not identified any particulars of how the decision was not fair and equitable. 17. In response to Leave Ground 3: a. the Appellant has not identified any relevance in respect of the role of the Architect and the failure to give access; b. any decisions of the Senior Member were entirely reasonable and open to be made by the Senior Member; c. the Appellant has not identified how the alleged evidence was not considered by the Senior Member, or how that evidence impacted the Decision; d. any decisions of the Senior Member were entirely reasonable and open to be made by the Senior Member; e. the Decision identifies that the Senior Member properly considered the evidence, submissions and everything available to it in coming to its Decision; and f. the Decision was fair and equitable in the circumstances, and not against the weight of the evidence. Summary 18. The Respondent submits that the Appeal should be dismissed. 19. The Respondent submits the Appeal Panel should not grant leave, and in the event that it does grant leave, the Appeal will otherwise be dismissed. …" (footnote omitted) 1. On 29 March 2023, the Appeal Panel constituted by a Principal Member granted the parties leave to be legally represented, made a conditional order staying the money order until the earlier of a further order of the Tribunal or the finalisation of the appeal, and made procedural directions for the hearing of the appeal. The hearing of the appeal 1. On 19 June 2023, we heard the appeal. The builder was represented by Mr P Bambagiotti, a barrister. The owner was represented by Ms B Anderson, a barrister. 2. At the commencement of the hearing the parties made the following concessions: 1. the owner accepted that if the money order was set aside then the costs order should be set aside; 2. the builder accepted that if the money order was not set aside then the costs order should stand subject to any appeal relating to the miscarriage of the exercise of the discretion relating to costs; 3. the builder indicated that it did not press ground 1 of the notice of appeal. 1. We referred to the necessity to identify a question of law in a notice of appeal as explained in recent authority: Thomas and Naaz Pty Ltd (ACN 101 491 703) v Chief Commissioner of State Revenue [2022] NSWCATAP 220 at [58]-[59]; Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 (Thomas and Naaz CA) at [26] (Leeming JA) (with Meagher JA at [1] and Griffiths AJA at [75] agreeing). 2. The builder in response formulated questions which it submitted were questions of law in relation to grounds 2 to 4 of the notice of appeal. The owner submitted that these formulated questions did not raise a question of law. We indicated we would deal with this issue in our decision. 3. The builder relied on the following documents: 1. Appellant's Submissions dated 28 April 2023 (the builder's appeal submissions) together with the evidence referred to in these submissions and the transcript of the relevant parts of the hearing; 2. Appellant's Submissions in Reply dated 9 June 2023 (the builder's appeal submissions in reply) together with the evidence referred in these submissions. 1. The builder chose not to file all the evidence it relied upon in the original hearing. 2. The owner relied on Response to Builder's Submissions dated 29 May 2023 (the owner's appeal submissions) together with the evidence referred in these submissions, her closing submissions in chief and in reply before the Tribunal and the transcript of the hearing. 3. Each of the builder and the owner made oral submissions in which they substantially repeated their written submissions. 4. At the conclusion of the hearing, we reserved our decision and gave the builder leave to provide a reference to the paragraph of Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 (Kostas) relied on by 5.00pm on 19 June 2023. 5. On 19 June 2023, the builder provided a four page document entitled "Appellant's Note – Authorities" setting out Kostas at [16], making a submission as to its application and extensive references to five other authorities. The owner objected to that document, except for the reference to Kostas at [16], on the grounds of prejudice in circumstances where she had not had an opportunity to respond to or consider the authorities raised, and in any event the hearing having concluded. The scope and nature of internal appeals 1. Part 6 Division 2 (ss 80-81) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) contains provisions dealing with internal appeals. Section 80 deals with the making of internal appeals, and provides: 80 Making of internal appeals (1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made. Note. Internal appeals are required to be heard by the Tribunal constituted as an Appeal Panel. See section 27(1). (2) 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. (3) The Appeal Panel may— (a) decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and (b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances. 1. Section 81 deals with the determination of internal appeals, and provides: 81 Determination of internal appeals (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. 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: 12 Limitations on internal appeals against Division decisions (1) 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). Note. Under section 80 of this Act, a party to proceedings in which a Division decision that is an internally appealable decision is made may appeal against the decision on a question of law as of right. The leave of the Appeal Panel is required for an internal appeal on any other grounds. 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 Sch 4 of the NCAT Act 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." (emphasis in original) 1. In Collins, the Appeal Panel at [77], without seeking to be exhaustive in any way, stated the authorities establish that: 1. if there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" within cl 12(1)(a) of Sch 4 of the NCAT Act; 2. the decision under appeal can be said to be "against the weight of evidence" within cl 12(1)(b) of Sch 4 of the NCAT Act where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach. 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 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act. 2. In Collins, the Appeal Panel at [84] summarised the general principles which govern the granting of leave to appeal: "[84] The general principles derived from these cases can be summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) 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, BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (3) In relation to an application for leave to appeal relating to a question of practice and procedure, the application is to be approached with the restraint applied by an appellate court when reviewing such decisions, especially if the application is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21] and the authorities cited there." 1. Rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) relevantly provides that, in the case of an appeal from a decision of the Tribunal, an internal appeal must be lodged within 28 days from the day on which the appellant was notified of the decision to be appealed or given reasons for the decision. The issues 1. We are satisfied that the appeal was commenced within the time of 28 days prescribed under r 25(4)(c) of the NCAT Rules. 2. The following issues arise for determination in this appeal or may arise for determination depending on the outcome of anterior issues: 1. issue 1: whether the notice of appeal raises questions of law; 2. issue 2: the nature of an appeal under s 80(2)(b) of the NCAT Act; 3. issue 3: whether the Appeal Panel should receive the builder's "Appellant's Note – Authorities" except to the extent of the leave granted at the hearing; 4. issue 4: whether the Tribunal constructively failed to exercise its jurisdiction by overlooking material evidence in relation to the issue of whether the windows, doors and roof were defective; 5. issue 5: whether the Tribunal in the Tribunal Decision at [46]-[47] erred in its consideration and application of the BCA in its finding that it cannot consider evidence of alternative solutions in its determination as to whether the work has satisfied the Code's performance requirements; 6. issue 6: whether the Tribunal in the Tribunal Decision at [165] erred in its understanding and application of the elements and findings in the exercise of its discretion in making a money order under s 48O of the HB Act in light of s 48MA of the HB Act; 7. issue 7: whether the builder should be granted leave to appeal against the money order, and if so the appeal should be allowed and that order should be set aside; 8. issue 8: the costs of the appeal. Issue 1: whether the notice of appeal raises questions of law Introduction 1. The builder formulated the following questions as constituting questions of law in relation to grounds 2 to 4 of the notice of appeal: 1. ground 2: whether the Tribunal constructively failed to exercise its jurisdiction by overlooking material evidence in relation to the issue of whether the windows, doors and roof were defective; 2. ground 3: whether the Tribunal in the Tribunal Decision at [46]-[47] erred in its consideration and application of the BCA in its finding that it cannot consider evidence of alternative solutions in its determination as to whether the work has satisfied the Code's performance requirements; 3. ground 4: whether the Tribunal in the Tribunal Decision at [165] erred in its understanding and application of the elements and findings in the exercise of its discretion in making a money order under s 48O of the HB Act in light of s 48MA of the HB Act. Consideration 1. If there has been a constructive failure to exercise jurisdiction there will have been error of law which can be addressed on an appeal limited to a question of law: Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165 (Alexandria Landfill) at [22] (Basten JA). 2. The interpretation of a statute or contract is directed to the ascertainment of the document's actual and true meaning. When the document is properly construed, there is only one correct meaning. It is for this reason that the proper construction of a statute is a question of law: Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385; [2020] FCAFC 50 (Bianco Walling) at [66] (Flick, White and Perry JJ). 3. In a building contract to which the HB Act applies, the reference in s 18B(1)(c) to "any other law" includes the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) and associated regulations which give legal effect to the BCA: Owners SP 92450 v JKN Para 1 Pty Limited [2023] NSWCA 114 (JKN) at [20] (Gleeson JA with White JA at [115] and Brereton JA at [116] agreeing). 4. Errors in the exercise of a discretion are capable of being agitated on appeal restricted to a question of law alone. If it was apparent that the court had acted on a "wrong principle", then the question of law would be whether that principle was wrong or correct and, if wrong, whether the trial judge acted on that principle and whether that materially affected the outcome: Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734 (Bimson) at [48]-[53] (Beech-Jones J). This passage was recently applied by the Appeal Panel in relation to the exercise of the discretion under s 48O of the HB Act: Noori Homes Pty v Patel [2023] NSWCATAP 149 (Noori Homes) at [45]-[47]. 5. Recently the Appeal Panel has decided that a conclusion of mixed fact and law cannot be challenged on an appeal on a question of law under s 80(2)(b) of the NCAT Act except in the circumstances where it can be determined that the conclusion proceeded from a misdirection of law: Jain v Dr N Kalokerinos Pty Ltd [2023] NSWCATAP 141 at [91]. This is to be distinguished from the wrong application of the correct principles to the facts that would be an error of mixed fact and law and an appeal would not lie on a question of law: Bimson at [42]-[45] (Beech-Jones J). Conclusion 1. We are satisfied that the reformulated grounds of appeal 2 to 4 raise questions of law and accordingly the builder has an appeal as of right under s 80(2)(b) of the NCAT Act in respect of these grounds: 1. as to ground of appeal 2, this is a question of law within the principles of Alexandria Landfill at [22]; 2. as to ground of appeal 3, this is a question of law within the principles of Bianco Walling at [66] to the extent that it involves the interpretation of the BCA; 3. as to ground of appeal 3, this is a question of law within the principles of Bimson at [48]-[53] to the extent that it involves the question of whether the Tribunal acted on a "wrong principle" in exercising its discretion under s 48O(1)(a) of the HB Act. Issue 2: the nature of an appeal under s 80(2)(b) of the NCAT Act 1. In Bimson at [40]-[41], Beech-Jones J made the following observations when considering an appeal under a statute which conferred a right of appeal "on a ground that involves a question of law alone": "[40] This leads to the second proposition, namely that, ultimately it is incumbent on the parties contending that a question of law was decided erroneously, to identify the question and to do so in abstract terms. Thus in Williams v R [1986] HCA 88; 161 CLR 278 at 287 ("Williams"), Gibbs CJ stated: "... there is 'a question of law alone' if the question of law can be stated and considered separately from the facts which it may be connected in a given case." (see also 314 per Wilson and Dawson JJ.) [41] If that task is undertaken, then the consequential questions that will arise are whether the lower court or tribunal either answered that question or proceeded on an assumption concerning that answer, whether its answer or assumption was correct or incorrect, and whether that answer or assumption was material to the outcome, in the sense that it could have affected the outcome (see Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 per Mason CJ; Mark Aronson and Matthew Groves Judicial Review of Administrative Action (Thomson Reuters, 5th ed, 2013, at [4.270]))." 1. The Appeal Panel has determined that, except when it conducts a new hearing under s 80(3), an appeal under s 80(1) of the NCAT Act involves a rehearing in the sense of conducting a rehearing on the materials before the Tribunal to determine whether the order that is the subject of the appeal is the result of some legal, factual or discretionary error and, in some cases, has power to receive additional evidence. Although the appeal is described as being "by way of rehearing", it does not call for a fresh hearing and the Appeal Panel does not hear the witnesses again": Yuen v Thom [2016] NSWCATAP 243 at [14]-[22]. 2. We consider that the approach in Bimson at [40]-[41] should be applied in determining whether the Tribunal made an error on a question of law under s 80(2)(b) of the NCAT Act. If we are satisfied that the Tribunal made one or more material errors of law, then it will be necessary to determine whether to undertake a rehearing on the material before the Appeal Panel or remit the proceedings for further consideration by the Tribunal. 3. We consider that the approach in Collins at [76], [77] and [84] should be followed in determining whether leave to appeal against the work order should be granted. If leave to appeal should be granted, then it will be necessary to determine whether to undertake a rehearing on the material before the Appeal Panel or remit the proceedings for further consideration by the Tribunal. Issue 3: whether the Appeal Panel should receive the builder's "Appellant's Note – Authorities" except to the extent of the leave granted at the hearing 1. We have decided that we should not receive the builder's "Appellant's Note – Authorities" except to the extent of the leave granted at the hearing for the following reasons: 1. the builder has not made any application for leave to make further submissions; 2. we accept the submission of the owner that she would be prejudiced by reason of not having had an opportunity to respond to or consider the authorities raised. 1. It follows that, apart from the reference Kostas at [16], we have not taken these submissions of the builder into account in our consideration of this appeal. Issue 4: whether the Tribunal constructively failed to exercise its jurisdiction by overlooking material evidence in relation to the issue of whether the windows, doors and roof were defective Introduction 1. Before considering this issue, it is necessary to summarise the submissions of the parties and set out the applicable legal principles. The submissions of the parties The builder's submissions 1. In the builder's appeal submissions, the builder made the following submissions: 1. the Tribunal is not obliged, in its reasons, to refer to every skerrick of evidence. However, in a proper discharge of its obligation to give reasons, it should, at minimum, identify and deal with the evidence touching directly upon any particular issue. And where evidence is not referred to, and where the Tribunal's reasons without having dealt with that evidence is incomplete or illogical in outcome, it is open to infer that the particular piece of crucial evidence was overlooked in rendering the reasons, meaning that the task of determination was not complete and the jurisdiction not properly exercised. Alternatively, in the light of that evidence, the determination can be said to be illogical and/or bizarre in the circumstances; 2. in the case of the Tribunal's findings regarding the windows, the doors and the roof, it failed to have regard to critical pieces of evidence that were before it, but that were fundamentally inconsistent with its findings: 1. as to the windows and doors: 1. the order of precedence of documents in the building contract; 2. the Owner's expert's concession (Tcpt, p 144.10-20): "COLLINS: Can I ask two questions about some of the words that you've just referred us 10 to. At the bottom of that first page, 630, the words "Sometimes described as semicommercial", then on the paragraph that you referred to on the following page, "Some might consider the design of these systems to be semi-commercial", that's consistent, isn't it, with the fact that the phrase "semi-commercial" doesn't have any specific meaning? WITNESS GlAOURlS: No, there's no definition, it's just an industry used term for a domestic level being 50 mil, where semi-commercials are 100 mil and your full commercials are 100 il but a bigger profile and it comes down to the thickness of the aluminium in the extrusion to just span larger openings without bowing or failing." 1. the evidence of the builder's expert report at appendix 06.5 (the Technical Guide for the Ascend Wideline Designer Range); 2. the section of the frame was in fact 100 mm (Tcpt, p 156.15-20); 3. evidence that "semi-commercial" was just a loose term (Tcpt, p 154.4-9); 4. evidence that the installed doors and windows complied with applicable standards; 1. as to the doors, the finding that the doors were too high did not take into account evidence (an email between the owner and a representative of Wideline); 2. as to the roof, the Tribunal failed to have regard to, or otherwise properly deal with the evidence from its expert that the roof did not leak and the owner's expert's concession that the roof did not leak (Tcpt, p 89.12-16); 3. the irresistible inference from the terms of its reasons is that the Tribunal overlooked that material. Given the fundamental inconsistency of that material with the Tribunal's findings, those findings are affected by an error of law in that respect, and should be overturned. 1. In the builder's appeal submissions in reply, the builder 1. substantially repeated the builder's appeal submissions; 2. responded to the owner's appeal submissions. 1. In oral submissions, the builder submitted that the Tribunal made no finding of what semi commercial meant, and then accepting that the term had no fixed meaning proceeded to decide that what was supplied did not comply with the contract. The owner's submissions 1. In the owner's appeal submissions, the owner made the following submissions: 1. she referred to the principle that decision makers need not have to refer to every piece of evidence; 2. she referred to NSW Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 (Orr) at [77]; 3. she provided a detailed response to the builder's criticisms of the Tribunal Decision. 1. In oral submissions, the owner submitted that ground 2 was a merits review dressed up as question of law, and substantially repeated the owner's appeal submissions. The applicable legal principles 1. In Alexandria Landfill the members of the New South Wales Court of Appeal in separate judgments (Basten JA at [6]-[34], [40], Macfarlan JA at [294]-[314] and Leeming JA) gave an extensive explanation of the principles applicable to the constructive failure to exercise jurisdiction and the related failure to give adequate reasons. Subject to one qualification at [64] and [65] below, we have applied these principles, and have drawn attention below to some of them. 2. At [6]-[7], Basten JA explained the notion of a "constructive" failure to exercise jurisdiction: "[6] The premise underlying a "constructive" failure to exercise jurisdiction is that there has been an apparent exercise of the jurisdiction of the court, but one that has failed in a way which can only be teased out by reference to the underlying issues and the materials presented to the court. It may then be demonstrated that a material issue presented for determination has not been resolved. By contrast, a failure to give adequate reasons implies that the relevant issues have been identified, addressed and resolved, but the reasons for reaching the conclusion have not been adequately expressed. [7] Despite the conceptual difference between the two complaints, they are related in a practical way. Because there is no means of interrogating a judge as to his or her intellectual processes, evidence that issues were not addressed can usually only be demonstrated by reference to the reasons. Thus, on the assumption that the judge addressed in the reasons all material matters, the absence of reference to a particular matter may allow the inference that it was not addressed and determined." (footnote omitted) 1. At [30], Basten JA commented on the submission that the reasons should disclose that the judge has "grappled with" the issues to be resolved: "[30] Despite the suggestion, frequent in recent years, that the reasons should disclose that the judge has "grappled with" the issues to be resolved, this is a metaphor which provides little guidance as to the intensity or nature of the intellectual process required as a matter of law. Further, the description seems directed to reasons as evidence of a failure to exercise jurisdiction, and not as a standard of disclosure of the process in fact adopted." 1. At [40], Basten JA noted that a failure to exercise jurisdiction may be global, or it may be particular. 2. At [308], Macfarlan JA considered the approach to the determination of whether the primary judge had in effect overlooked relevant parts of the evidence: "[308] In Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 77 ALJR 1598 this Court had ordered the new trial of a personal injury damages claim, finding that the primary judge had in effect overlooked relevant parts of the evidence. By a majority in the High Court, this Court's decision was reversed. In the course of its judgment, the majority said: "[62] … it should not be accepted that [the primary judge] failed, at least in a general way, to consider the matters to which the Court of Appeal referred. The fact that his Honour did not refer to these matters in his judgment is not decisive. A judge's reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge's failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party's case. [63] … To suggest that a trial judge has not properly considered a party's case is a serious charge. Such a suggestion should be accepted only when the record of the trial or other evidence persuasively suggests that the judge failed to discharge that paramount judicial duty. …"" 1. At [313]-[314], Macfarlan JA referred with approval to Orr which explained the function of an appellate court in reviewing the adequacy of reasons given by a primary court: "[313] In New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 an appeal was brought from a decision of the Appeal Panel of the New South Wales Civil and Administrative Tribunal in relation to a social housing tenancy. The relevant statute confined the appeal to questions of law unless the court granted leave to extend the appeal more broadly. The appellant contended that the Tribunal's reasons for decision were inadequate. [314] In response, Bell P (with whom Ward JA agreed) emphasised at [66] that the function of an appellate court in reviewing the adequacy of reasons given by a primary court "is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard, referring to Resource Pacific at [48], and "[t]he standard is not one of perfection", referring to Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255." 1. At [400]-[403], Leeming JA commented on the submission that the reasons should disclose that the judge has "grappled with" the issues to be resolved: "[400] It is perhaps unfortunate that part of the debate focussed about the meaning of "grappled" in this context. The expression is not uncommonly used in determining appeals from the District Court …, or from a Division of the Supreme Court …. However, as has been explained …. what is being inferred in such cases is a failure in the process of fact finding. … [403] Where an appeal is confined to questions of law, the considerations summarised above – which are directed to the resolution of competing issues of fact – do not directly arise. While I accept that some errors in the fact finding process may amount to errors of law (actual bias is an example), I also think that one cannot safely transplant the principles applicable to an appeal by way of rehearing to appeals confined to questions of law." (authorities omitted) 1. In Orr, two members of the New South Wales Court of Appeal raised but did not decide the question of whether there is any duty, statutory or otherwise, for the Tribunal to give reasons for a decision in the absence of a request from a party under s 62(2) of the NCAT Act: Bell P at [54], Ward JA at [110-[114]. President Bell at [55] observed that it is not unreasonable to suppose that s 62(3) of the NCAT Act supplies important guidance as to what should be set out by the Tribunal in reasons which it chooses to give even without a request for reasons pursuant to s 62(2) of the NCAT Act, and that the balance of his reasons proceeded on that basis. 2. Even though there is no other express statutory duty to give reasons set out in the NCAT Act (other than pursuant to cl 11 of Sch 6 which relates to decisions of the Tribunal in the Guardianship Division), the Tribunal nonetheless endeavours, as a matter of good practice, to provide reasons for final or contested hearings: NCAT Policy 2, Publishing Reasons for Decisions, at [5]-[6]. Consideration 1. A difficulty we have faced in considering this issue, is that the builder did not provide us with its closing submissions before the Tribunal. Except so far as can be discerned from the owner's closing submissions in chief and in reply before the Tribunal and the Tribunal Decision, we do not know whether the builder in fact relied on the evidence or made submissions which it submits the Tribunal failed to grapple with. This failure is sufficient for us to determine that this ground is not made out. 2. In any event, on the basis of the material relied on by the builder we are not satisfied that the Tribunal constructively failed to exercise its jurisdiction by overlooking material evidence in relation to issue of whether the windows, doors and roof were defective: 1. the Tribunal dealt in considerable detail with the issue of whether the windows, doors and roof were defective including setting out evidence of the parties and their submissions (in the Tribunal Decision at [92]-[123]); 2. as set out in Alexandria Landfill at [308], [313]-[314], it was not necessary for the Tribunal to set out the particular evidence upon which the builder relies; 3. the builder's submissions suffered from the same deficiency as identified by Leeming JA in Alexandria Landfill at [411]-[412]: "[411] It follows that the appellant's submissions insofar as they complain of failing to engage with the evidence and submissions are outside the scope of an appeal confined to questions of law. … [412] Ultimately the appellant's submissions, faced with the task of falling within an appeal limited to questions of law, sought to transmute deficiencies in factual findings into deficiencies in the process of making findings or recording reasons. I am unpersuaded that the appellant can in that fashion make out legal error, as opposed to factual error. 1. If, contrary to our decision, the Tribunal constructively failed to exercise its jurisdiction by overlooking material evidence in relation to the issue of whether the windows, doors and roof were defective, then on a rehearing we would have come to the same conclusion as the Tribunal for the reasons it gave together with the following reasons: 1. as to the windows and doors: 1. it was common ground between the parties that AWS referred to "Aluminium Window Systems Pty Ltd" (Tcpt, p 141.8-14); 2. It was also common ground between the parties that the sliding doors were to have a height of 2750-2800mm (Tcpt, p 156.35-39). 3. there was unchallenged evidence that the AWS semi-commercial range included a sub-seal (Tcpt, pp 153.32-154.2); 4. there was uncontradicted evidence that the windows which were installed did not have sub-seals (Tcpt, p 153.17-30); 5. there was uncontradicted evidence that the sliding doors which were installed were not designed to have a height in excess of 2400mm (Tcpt, p 156.22-33; Joint Tender Bundle (JTB) 48); 1. as to the roof, the builder's submission that the owner's expert conceded that the roof did not leak was incorrect as he said that there was a puddle of water inside the ceiling (Tcpt, p 89.12-16; JTB 143). 1. For these reasons, we do not accept that the Tribunal made an error of law in respect of ground of appeal 2. Issue 5: whether the Tribunal in the Tribunal Decision at [46]-[47] erred in its consideration and application of the BCA in its finding that it cannot consider evidence of alternative solutions in its determination as to whether the work has satisfied the Code's performance requirements Introduction 1. Before considering this issue, it is necessary to set out the applicable statutory and NCC provisions and summarise the submissions of the parties. The applicable statutory and NCC provisions HB Act 1. Part 2C (ss 18A-18G) contains provisions dealing with statutory warranties. Section 18B deals with warranties as to residential building work, and relevantly provides: 18B Warranties as to residential building work (1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work— … (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, … EPA Act 1. Part 6 Division 6.1 (ss 6.1) contains preliminary provisions. Section 6.1 contains definitions, and as in force on 12 September 2018 relevantly provided: 6.1 Definitions: Part 6 In this Part: accredited certifier means the holder of a certificate of accreditation as an accredited certifier under the Building Professionals Act 2005 acting in relation to matters to which the accreditation applies. … certifier means a council or an accredited certifier. … 1. Part 6 Division 6.3 (ss 6.6-6.11) contains provisions dealing with building work and certificates relating to building. Section 6.7 deals with the requirement for construction certificate, and relevantly provides: 6.7 Requirement for construction certificate (cf previous s 81A) (1) A construction certificate is required for the erection of a building in accordance with a development consent. … 1. Section 6.8 deals with the restrictions on issue of construction certificate, and relevantly provides: 6.8 Restriction on issue of construction certificate (cf previous s 109F) (1) A construction certificate must not be issued with respect to the plans and specifications for any building work unless— (a) the requirements of the regulations have been complied with, and … EPA Regulation 1. Part 8 Division 2 (cll 139-148) of the Environmental Planning and Assessment Regulation 2000 (NSW) as in force on 12 September 2018 (EPA Regulation) contained provisions dealing with construction certificates. Clause 139 dealt with applications for construction certificates, and relevantly provided: 139 Applications for construction certificates (cf clause 79A of EP&A Regulation 1994) (1) An application for a construction certificate: (a) must contain the information, and be accompanied by the documents, specified in Part 3 of Schedule 1, and … 1. Clause 145 dealt with compliance with the development consent and the BCA, and relevantly provided: 145 Compliance with development consent and Building Code of Australia (cf clause 79G of EP&A Regulation 1994) (1) A certifying authority must not issue a construction certificate for building work unless: … (b) the proposed building (not being a temporary building) will comply with the relevant requirements of the Building Code of Australia (as in force at the time the application for the construction certificate was made). 1. Schedule 1 Part 3 (cll 6-8) contained provisions dealing with construction certificates. Clause 6 dealt with the documents to accompany an application for a construction certificate, and relevantly provided: 6 Documents to accompany application for construction certificate (1) An application for a construction certificate must be accompanied by the following documents: (a) if the development involves building work (including work in relation to a dwelling-house or a building or structure that is ancillary to a dwelling-house): … (ii) appropriate building work plans and specifications, … (3) Appropriate building work plans and specifications referred to in subclause (1)(a)(ii) include the following: … (c) a statement as to how the performance requirements of the Building Code of Australia are to be complied with (if an alternative solution, to meet the performance requirements, is to be used), … NCC 1. The introduction includes the following information: "DOCUMENTATION OF DECISIONS Decisions made under the BCA should be fully documented and copies of all relevant documentation should be retained. Examples of the kind of documentation which should be prepared and retained include: (a) Details of the Performance Solution or the Deemed-to-Satisfy Solution including all relevant plans and other supporting documentation. (b) In cases where a Performance Solution has been proposed— (i) details of the relevant Performance Requirements; and (ii) the Assessment Method or methods used to establish compliance with the relevant Performance Requirements; and (iii) details of any Expert Judgement relied upon including the extent to which the judgement was relied upon and the qualifications and experience of the expert; and (iv) details of any tests or calculations used to determine compliance with the relevant Performance Requirements; and (v) details of any Standards or other information which were relied upon." 1. Section 1 Part 1.0 (cll 1.0.1-1.0.7) contained provisions dealing with the application of the NCC, and relevantly provided: "1.0.1 Compliance with the NCC Compliance with the NCC is achieved by satisfying the Performance Requirements. 1.0.2 Meeting the Performance Requirements The Performance Requirements can only be satisfied by a— (a) Performance Solution; or (b) Deemed-to-Satisfy Solution; or (c) combination of (a) and (b). … 1.0.3 Performance Solutions (a) A Performance Solution must— (i) comply with the Performance Requirements; or (ii) be at least equivalent to the Deemed-to-Satisfy Provisions, and be assessed according to one or more of the Assessment Methods. (b) A Performance Solution will only comply with the NCC when the Assessment Methods used satisfactorily demonstrate compliance with the Performance Requirements. … 1.0.5 Assessment Methods The following Assessment Methods, or any combination of them, can be used to determine that a Performance Solution or a Deemed-to-Satisfy Solution complies with the Performance Requirements, as appropriate: (a) Evidence to support that the use of a material or product, form of construction or design meets a Performance Requirement or a Deemed-to-Satisfy Provision as described in 1.2.2. (b) Verification Methods such as— (i) the Verification Methods in the NCC; or (ii) such other Verification Methods as the appropriate authority accepts for determining compliance with the Performance Requirements. (c) Expert Judgement. (d) Comparison with the Deemed-to-Satisfy Provisions. 1.0.6 Defined terms Words with specific meanings are printed in italics and are defined in 1.1.1. 1.0.7 Relevant Performance Requirements In order to comply with the provisions of 1.1.5 (to comply with Section 1 and 2) the following method must be used to determine the Performance Requirement or Performance Requirements relevant to the Performance Solution: (a) Where a Performance Requirement is satisfied entirely by a Performance Solution: (i) Identify the relevant Performance Requirement from the Section or Part to which the Performance Solution applies. (ii) Identify Performance Requirements from other Sections or Parts that are relevant to any aspects of the Performance Solution proposed or that are affected by the application of the Performance Solution. (b) Where a Performance Requirement is satisfied by a Performance Solution in combination with a Deemed-to-Satisfy Solution: (i) Identify the relevant Deemed-to-Satisfy Provisions of each Section or Part that is be the subject of the Performance Solution. (ii) Identify the Performance Requirements from the same Sections or Parts that are relevant to the identified Deemed-to-Satisfy Provisions. (iii) Identify Performance Requirements from other Sections or Parts that are relevant to any aspects of the Performance Solution proposed or that are affected by the application of the Deemed-to-Satisfy Provisions that are the subject of the Performance Solution." 1. Section 1 Part 1.1 (cll 1.1.1-1.1.9) contained provisions dealing with the interpretation of the NCC, and relevantly provided: "1.1.1 Definitions … 1.1.1.2 In the Housing Provisions, unless the contrary appears: … Expert Judgement means the judgement of an expert who has the qualifications and experience to determine whether a Performance Solution or Deemed-to-Satisfy Solution complies with the Performance Requirements. … 1.1.5 Compliance with all Performance Requirements Subject to 1.1.6, Class 1 and 10 buildings must be so designed and constructed that they comply with the relevant provisions of Sections 1 and 2. 1.1.6 Application of the Housing Provisions to a particular State or Territory For application within a particular State or Territory, the Housing Provisions comprise— (a) Sections 1 to 3 (inclusive); and …" 1. Section 1 Part 1.2 (cll 1.2.1-1.2.5) contained provisions dealing with the acceptance of design and construction, and relevantly provided: "… 1.2.2 Evidence of suitability (a) Subject to 1.2.3 and 1.2.4, evidence to support that the use of a material, form of construction or design meets a Performance Requirement or a Deemed-to-Satisfy Provision may be in the form of one or a combination of the following: … (vi) Any other form of documentary evidence that correctly describes the properties and performance of the material or form of construction and adequately demonstrates its suitability for use in the building. …" 1. Section 3 contained provisions dealing with acceptable construction. The explanatory information relevantly provided: "Introduction Section 3, Parts 3.1 to 3.12 are Deemed-to-Satisfy Provisions that are considered to be acceptable forms of construction that meet the legislative requirements for complying with the Housing Provisions (i.e. they comply with the Performance Requirements listed in Section 2 of the Housing Provisions). There is no obligation to adopt any particular option contained in Section 3 of the Housing Provisions, if it is preferred to meet the Performance Requirement in some other way. However, if one of the options described in Section 3 is not complied with, then the appropriate authority must be satisfied that the Performance Requirements have been met." The submissions of the parties The builder's submissions 1. In the builder's appeal submissions, the builder made the following submissions: 1. the owner's allegations as to the defects turned largely upon allegations of non-compliance with the BCA. The owner's allegations of non-compliance were based upon non-compliance with the deemed-to-satisfy solution provisions. The builder's case was that compliance was achieved by performance solutions; 2. the Tribunal dealt with this (Tribunal Decision at [46-57]) concluding that it could not accept a performance solution as evidencing compliance with the BCA because it "is not an approvals or other regulatory authority". It seemed to have found that a performance solution could only be accepted as such if there was contemporary documentary evidence at the time of building that was used within a regulatory function. This approach and construction of the BCA is inconsistent with the plain terms of BCA Part 1.0 and is wrong. The error is an error of law; 3. BCA para 1.0.5 plainly accepts expert judgment as a means of determining compliance. Nowhere in BCA Section 1 is there any specification for when the expert judgment must occur. Nor does it provide any mandatory requirements for evidence of a performance solution or when such evidence is to be provided. The BCA Part 1.0 requirements do not mandate the involvement of an "authority", regulatory or otherwise. There is no requirement for evidence of a performance solution to be submitted and approved by an "authority" for it to be valid; 4. the only requirement for satisfaction of the performance requirements, is that the work, in fact, satisfies them. The only requirement for evidence of a performance solution arises when the work's compliance with the performance requirements is challenged. That can be done in proceedings in the Tribunal; 5. the Tribunal's approach to the matter involved a misconception of the process and task before it. It misconstrued those requirements and wrongly abdicated the obligation to determine whether there had been a breach of the BCA by reference to the performance solution. By failing to acknowledge the provisions of BCA cl 1.0.2(a) and cl 1.0.5, the Tribunal misconstrued the BCA and determined contentious issues on a mistaken basis, all of which involves error of law. 1. In the builder's appeal submissions in reply, the builder made the following submissions: 1. it substantially repeated the builder's appeal submissions; 2. having artificially limited its analysis in determining breach of the BCA, by relegating the evaluation of a performance solution to the question of remediation, the Tribunal imposed the inappropriately high barrier of "exceptional circumstances" for adoption of alternative remediation; 3. the Tribunal should have dealt with the evidence of performance solution in its consideration of whether the work was in breach of the BCA, and referred to The Owners of Strata Plan 76888 v Walker Group Constructions Pty Ltd [2016] NSWSC 541 (Walker Group) where Meagher JA dealt with evidence of performance solutions in determining the question of breach of the BCA; 4. JKN should be confined to its own facts. 1. In oral submissions, the builder submitted that the issue in Walker Group was whether the builder was in breach of the BCA. The owner's submissions 1. In the owner's appeal submissions, the owner made the following submissions: 1. the builder's contention appears to rely on Part 1 of the NCC in isolation, and consider Sections 2 and 3 of the NCC. That is not correct. The NCC must be read as a whole; 2. the builder's expert did not satisfy Part 1.1.7 of the NCC; 3. there was no contemporary evidence in respect of the works complying with performance solutions as noted in the introduction of the NCC; 4. the Tribunal Decision is entirely consistent with JKN at [63]-[66]. Consideration 1. The Tribunal made an implicit finding that the statutory warranty applicable to s 18B(1)(c) of the HB Act requires the builder to satisfy the performance requirements of the BCA by deemed-to-satisfy solutions. It was in this context that the Tribunal in the Tribunal Decision at [47] noted that it was common ground that the works alleged to be defective were not within the deemed-to-satisfy compliance requirements of the NCC where such non-compliance was alleged. 2. The question posed by this issue is whether in determining if there was a breach of the contract where the works failed to comply with deemed-to-satisfy solutions the Tribunal could take into account evidence that the works complied with a performance solution. 3. We consider that the Tribunal was correct in determining that the availability of a performance solution to meet performance requirements was limited to the following two situations: 1. the issue of a construction certificate where the application pursuant to cl 139(1)(a) and Sch1 cl 6(1)(a)(ii) and (3)(c) of the EPA Regulation included a statement as to how the performance requirements of the BCA were to be complied with if a performance solution to meet the performance requirements was to be used; 2. the assessment of damages where a breach of the BCA had been established. 1. We do not accept the builder's submissions as to the relevance of evidence as to a performance solution when the issue is the breach of the BCA where the building contract requires satisfaction of the performance requirements by a deemed-to-satisfy solution. There is no support for these submissions in the text of the NCC. The provisions of the NCC need to be read in the context of ss 6.1, 6.6 and 6.7 of the EPA Act and cll 139 and 145 of the EPA Regulation. 2. The judgment of the New South Wales Court of Appeal in JKN is consistent with this position. Gleeson JA at [64]-[65] (with White JA at [115] and Brereton JA at [116] agreeing) found that the respondents correctly accepted in oral argument that the statutory warranty in s 18B(1)(c) had been breached in circumstances where the external cladding did not comply with the deemed-to-satisfy provisions and, since no alternative solution was prepared prior to the issue of the construction certificate, the work was not done in compliance with the relevant provisions of the EPA Act and associated regulations. 3. In Walker Group, the issue was the adoption of a referee's report in proceedings by the owners corporation against the developer and the builder for breach of the statutory warranties in s 18B(1)(a) and (c) pursuant to ss 18C and 18D of the HB Act. Justice Meagher dealt with the issues in the following manner: 1. at [10], his Honour noted that the issues before the referee included the assessment of damages; 2. at [12], his Honour noted that in relation to each of the items in issue in this application, the question for the referee was formulated by reference to compliance or non-compliance with the requirements of the BCA, and where there was non-compliance, how compliance could be achieved; 3. at [24]-[25], his Honour noted that the two issues in dispute concerned waterproofing defects and alleged fire safety defects; 4. at [27]-[43], his Honour dealt with the item of systemic waterproofing defect in bathroom. At [27], his Honour recorded that the dispute concerned the scope of works necessary to rectify the waterproofing defect in the bathrooms of each of the 42 apartments; 5. at [44]-[90], his Honour dealt with general fire defects comprising six items. At [46], his Honour noted that as to five items the experts that the implementation of alternative solutions was the appropriate method of rectifying the building's non-compliance with the BCA. At [66]-[67], his Honour rejected the argument made by the plaintiff that the referee erred in assessing damages by reference to the cost of alternative solutions because contractual conformity required work by means of a deemed-to-satisfy provision. His Honour stated at [67]: "[67] … The more fundamental reason why the argument must be rejected is that the parties accepted in the way the issues were formulated in the final Scott Schedule that work which produced contractual conformity was work that complied with the Performance Requirements of the BCA, as distinct from its deemed-to-satisfy provisions, and the experts and the Referee proceeded on that basis. 1. We do not accept that Walker Group supports the builder's submission for the following reasons: 1. there is no indication that the issue the Tribunal was determining in respect of the alleged defects was whether they complied with the performance requirements of the BCA as opposed to the contractually required deemed-to-satisfy solution of the BCA; 2. the issue in Walker Group was the assessment of damages as opposed to the determination of the existence of defects. 1. For these reasons, we do not accept that the Tribunal made an error of law in respect of ground of appeal 3. Issue 6: whether the Tribunal in the Tribunal Decision at [165] erred in its understanding and application of the elements and findings in the exercise of its discretion in making a money order under s 48O of the HB Act in light of s 48MA of the HB Act Introduction 1. Before considering this issue, it is necessary to set out the applicable statutory provisions and summarise the submissions of the parties. The applicable statutory provisions HB Act 1. Part 3A Division 4 (ss 48K-48MA) contains the provision dealing with the jurisdiction of the Tribunal in relation to building claims. Section 48MA deals with the preferred outcome in proceedings, and provides: 48MA Rectification of defective work is preferred outcome in proceedings A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome. 1. Part 3A Division 5 (ss 48N-48N) contains provisions dealing with the powers of the Tribunal in relation to building claims. Section 48O deals with the orders which the Tribunal may make, and relevantly provides: 48O Powers of Tribunal (1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate— (a) an order that one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, … (c) an order that a party to the proceedings— (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or … The submissions of the parties The builder's submissions 1. In the builder's appeal submissions, the builder made the following submissions: 1. the appeal involves an appeal from an evaluative discretion, involving the approach taken in Warren v Coombes (1979) 142 CLR 531 at 552; [1979] HCA 9, rather than the approach in House v R (1936) 55 CLR 499 at 504-505; [1936] HCA 40. This means that the Appeal Panel must consider that discretion afresh, by reference to the materials before the Tribunal, and not to follow the "deferential" model involved with the House v R evaluation; 2. the obviously deliberate use of the word "preferred" in s 48MA of the HB Act suggests that an applicant opposing a work order under s 48O carries the onus of proving that such an order is not appropriate, rather than the converse; 3. the history and circumstances of the matters addressed in the Tribunal Decision at [164], when properly considered and in the context of this case, are not such as to displace the onus, and that the preferred course should, on balance, lead to a work order. 1. In the builder's appeal submissions in reply, the builder substantially repeated the builder's appeal submissions. 2. In oral submissions, the builder submitted that the Tribunal exercised its discretion under s 48O of the HB on a wrong principle because it failed to have regard to s 48MA of the HB Act when determining whether or not to make a work order in the Tribunal Decision at [165]. The owner's submissions 1. In the owner's appeal submissions, the owner submitted that the Tribunal did not make a House v R error. 2. In oral submissions, the owner submitted that the appeal on this ground was a merits review dressed up as legal argument. Consideration 1. It is well established that the requirement under s 48MA of the HB Act for the Tribunal to have regard to the "principle" that a work order is the "preferred outcome" creates a mandatory relevant consideration in exercising its discretion whether to make a money order under s 48O(1)(a) of the HB Act rather than a work order s 48O(1)(c)(i) of the HB Act: Galdona v Peacock [2017] NSWCATAP 64 at [50], [65]; Leung v Alexakis [2018] NSWCATAP 11 at [139]; John McDonald Building Services Pty Ltd v Gusa [2022] NSWCATAP 60 at [69]; Moody v M K Building Services Group Pty Ltd [2022] NSWCATAP 212 at [48]-[49]. 2. Further, on the proper construction of s 48MA of the HB Act an owner who seeks a money order under s 48O(1)(a) of the HB Act does not have any evidentiary onus: Noori Homes at [53]. 3. We do not accept that the Tribunal acted on a wrong principle because after having referred to s 48MA of the HB Act in the Tribunal Decision at [164] it failed to consider this provision when determining whether or not to make a work order in the Tribunal Decision at [165]. The submission of the builder involves the impermissible approach of reading passages from the reasons for decision in isolation from others to which they may be related: Orr at [76] and [77] (Bell P with Ward JA at [109] agreeing): 4. For these reasons, we do not accept that the Tribunal made an error of law in respect of ground of appeal 4. Issue 7: whether the builder should be granted leave to appeal against the money order, and if so the appeal should be allowed and that order should be set aside Introduction 1. The builder seeks leave to appeal against the findings of the Tribunal in the alternative in respect of grounds 2 to 4 as well as the findings of the Tribunal in relation to the following matters: 1. the role of the architect and the owner's reluctance to provide the builder access (leave ground 1); 2. the owner's role in obstructing the builder's access (leave ground 2); 3. the roof pitch (leave ground 3); 4. the beam (leave ground 4); 5. the windows and doors (leave ground 5); 6. the NCC performance solutions (leave ground 6); 7. the leaks (leave ground 7). 1. Before considering this issue, it is appropriate to set out the submissions of the parties in relation to leave grounds 1 to 7. The submissions of the parties in relation to grounds of appeal 2 to 4 have already been set out. The submissions of the parties The builder's submissions 1. In the builder's appeal submissions, the builder made the following submissions: 1. as to leave ground 1, the finding of the Tribunal in the Tribunal Decision at [68] that the architect was not the owner's agent flies in the face of cl A6.3 of the building contract which clearly provide for such agency. That agency remained for the whole of the contract, given the Tribunal's finding that there was no variation, and the failure to have the architect properly perform her role lay at the owner's own feet, constituting a breach of the contract; 2. as to leave ground 2, the Tribunal should have put more weight on the owner's role in obstructing the builder's access. Numerous conversations were required to obtain access to the site; 3. as to leave ground 3, the Tribunal should have put more weight to the invoice from Roofing Supermarket as key evidence that the roof sheets were curved on site; 4. as to leave ground 4, the finding of the Tribunal in the Tribunal Decision at [75] that the beam appears to be a load bearing component is inconsistent with architectural drawings A300 and A802; 5. as to leave ground 5, the Tribunal failed to give sufficient attention to specified evidence; 6. as to leave ground 6, the Tribunal failed to consider specified evidence and authorities; 7. as to leave ground 7, the Tribunal failed to properly consider specified photographs and the builder's expert's hydrometer reading. 1. In the builder's appeal submissions in reply, the builder 1. substantially repeated the builder's appeal submissions; 2. responded to the owner's appeal submissions. 1. The builder made no oral submissions. The owner's submissions 1. In the owner's appeal submissions, the owner provided a detailed response to the builder's criticisms of the Tribunal Decision. Consideration Grounds of appeal 2 to 4 1. We are not satisfied that the builder has established that it may have suffered a substantial miscarriage of justice within cl 12(1) of Sch 4 of the NCAT Act for the same reasons that we have not accepted grounds of appeal 2 to 4. Leave grounds 1 to 7 1. We are not satisfied that the builder has established that it may have suffered a substantial miscarriage of justice within cl 12(1) of Sch 4 of the NCAT Act for the following reasons: 1. as to leave ground 1, this finding was not material as it had no bearing on the making of the money order; 2. as to leave ground 2, this finding was not material as it had no bearing on the making of the money order; 3. as to leave ground 3, the Tribunal in the Tribunal Decision at [111] gave appropriate weight to the invoice from Roofing Supermarket, but found it was not determinative. The builder did not demonstrate that the finding in the Tribunal Decision at [112] was wrong or that if the Tribunal had given more weight to the invoice it would have made any difference; 4. as to leave ground 4, as the Tribunal in the Tribunal Decision at [135]-[137] found a breach of contract for the beam, any incorrect finding in respect of it being structural was not material as it had no bearing on the making of the money order; 5. as to leave ground 5, we accept the owner's submission that the Tribunal Decision in respect of the windows and doors came down to the finding that the Wideline Horizon range was a residential range, being an inferior range to what was specified in the building contract. The builder has not demonstrated that this finding was against the weight of the evidence; 6. as to leave ground 6, for the same reasons that we have not accepted ground of appeal 3; 7. as to leave ground 7, as there was evidence of leaks by the owner's expert (Tcpt, p 89.12-16; JTB 143) this finding was not against the weight of the evidence. Conclusion 1. Since none of the criteria in cl 12(1) of Sch 4 of the NCAT Act has been satisfied, we are not satisfied that the builder may have suffered a substantial miscarriage of justice. 2. Even if we had been satisfied that the builder may have suffered a substantial miscarriage of justice, then having regard to the matters in Collins at [84(2)], we would not have exercised the discretion under cl 12(1) of Sch 4 of the NCAT Act to grant leave to appeal against the money order. Issue 8: the costs of the appeal Introduction 1. In the owner's appeal submissions, the owner submitted that the builder should pay her costs of the appeal pursuant to r 38A of the NCAT Rules. Consideration 1. Rule 38A deals with costs in internal appeals, and relevantly provides: 38A Costs in internal appeals … (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal. 1. For the purpose of r 38A of the NCAT Rules the amount claimed or in dispute is the amount in dispute on appeal, not the amount in dispute in the proceedings at first instance: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [57]. 2. We are satisfied that r 38A(2) of the NCAT Rules is applicable to this appeal because the amount in dispute in the appeal is more than $30,000. It follows that the position of each party paying their own costs specified in s 60(1) of the NCAT Act is not applicable to the proceedings. 3. The builder has been unsuccessful in the appeal. We are satisfied that it should pay the owner's costs of the appeal. The disposition of the appeal 1. As we have found that the builder has not established that it may have suffered a substantial miscarriage of justice within cl 12(1) of Sch 4 of the NCAT Act on grounds of appeal 2 to 4 and leave grounds 1 to 7, it follows that leave to appeal should be refused. 2. As we have found that the builder has not established any grounds of appeal 2 to 4, it follows that the appeal should be dismissed pursuant to s 81(1)(a) of the NCAT Act. 3. In view of these findings, the builder should pay the owner's costs of the appeal as agreed or assessed under the applicable costs legislation pursuant to r 38A of the NCAT Rules. Orders 1. We make the following orders: 1. leave to appeal is refused; 2. the appeal is otherwise dismissed; 3. the appellant is to pay the respondent's costs of the appeal as agreed or assessed under the applicable costs legislation. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 June 2023