Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Jakin Constructions Pty Ltd v Shrimpton [2024] NSWCATAP 39 Hearing dates: 13 November 2023 Date of orders: 15 March 2024 Decision date: 15 March 2024 Jurisdiction: Appeal Panel Before: S Thode, Principal Member D Goldstein, Senior Member Decision: 1. The appeal is dismissed. 2. The appellant is to pay the respondents' cost of the appeal as agreed or assessed under the Legal Profession Uniform Law Application Act 2014. 3. If the costs order is opposed any party seeking a different costs order may file and serve submissions on costs within 14 days. 4. The party receiving cost submissions will have a further 14 days to file and serve a response. 5. Subject to the parties' submissions, the Appeal Panel will determine any cost application made on the basis of the submissions and papers filed with the Appeal Panel. Catchwords: APPEALS- BUILDING AND CONSTRUCTION – renewal – work order not completed – other appropriate orders available on renewal – money order made in accordance with consent orders – no error on a question of law established. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17 Coulton v Holcombe (1986) 162 CLR 1 Craig v State of South Australia (1995) 184 CLR 163 Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 Goodwin v Commissioner of Police [2012] NSWCA 379 LVR (WA) Pty Ltd v Administrative Appeals Tribunal [2012] FCAFC 90; 289 ALR 244 Maclean v Brylewski [2023] NSWCA 173 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985-6) 162 CLR 24 Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 Naish aka Khosroabadi v NSW Land and Housing Corporation [2023] NSWCATAP 99 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 Texts Cited: Robinson and Lucy's "NCAT Practice and Procedure", Second Edition 2020 Spry, Equitable Remedies 9e - Equity - Common Law Category: Principal judgment Parties: Jakin Constructions Pty Ltd (Appellant) Lisa and Dean Shrimpton (Respondent) Representation: Counsel: Mr T Davie (Appellant) Mr R Sud (Respondents) Solicitors: Peter Merity Solicitors (Appellant) Fielding Robinson Lawyers (Respondents) File Number(s): AP 2023/294133 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: (Unreported) Date of Decision: 2023 Before: M Gracie, Senior Member File Number(s): HB 22/40111 reasons for decision Background 1. This appeal arises from a decision of the Consumer and Commercial division to award $465,749 to the respondents. The parties entered into a contract for residential building work on 3 March 2018. Mr and Mrs Shrimpton, (the owners) commenced proceedings against Jakin Constructions Pty Ltd (the builder) for damages for defective work under s18B of the Home Building Act 1989. The builder filed a cross-application seeking payment of sums outstanding under the contract. Both proceedings HB 20/24403 and HB 20/28247 were settled by way of a consent work order entered on 25 May 2021. The work order provided for the rectification of defects and permitted, on renewal, a liquidated amount of damages to be awarded in the event that the builder did not carry out the work in a proper and workmanlike manner or by a certain time. 2. A copy of the consent work order is attached to these written reasons for decision (annexure A). For ease of reference only the work orders relevant to this appeal, the balcony construction and the external cavity works, have been repeated here: 1. Inspect and water test balcony to check waterproofing membrane. 2. Install strip drain as per plan / design prepared by James Watkin dated 1 September 2021 (Annexure A). 3. Install tiles by glue fixing and maintain minimum 50 millimetre freeboard to internal FFL. 4. Grout tiles in selected colour (noting the owners are to provide the builder with grout colour by email within five days of these signed orders). 5. Clean tiles. 6. Clean and tidy general area and touch up any painting as required. Ensure all overflows are clean and in working order. External cavity works ground floor. 1. Clear area of any debris and prepare area for works. 2. Install ramp, ladders , scaffold as required for access. 3. Install Ag lines behind proposed shotcrete wall as per design prepared by Ben Carruthers dated 21 September 2021 (Annexure B). 4. Install reinforcing steel using bar reinforcing (as opposed to mesh shown in Annexure B) and connect steel to existing slab to provide support. 5. Cog bars into floor to provide base for spoon drain and give wall support. 6. Set guidelines to give shotcrete contractors a straight line to work to. 7. Structural engineer (Ben Carruthers) to inspect reinforcing steel prior to shotcrete. 8. Shotcrete wall in concrete strength as detailed by structural engineer. 9. Pour concrete strip drain with falls away from house. 10. Structural engineer to inspect finished concrete works. 11. Touch up paint and make good any items. 12. Clean and tidy area. 13. Remove access ramps and immobilised site. 1. The consent work order required the builder to commence work on or before 31 May 2021 and complete the work within 14 weeks from the date of commencement. It was a further term of the consent work order that in the event the builder did not complete the work in a proper and workmanlike manner and in the allotted time, the builder would be liable to pay to the owners the rectification cost in a liquidated sum plus any requisite contingencies, preliminaries, margins and GST amounts. 2. The relevant time for completion was 6 September 2021. During the course of the works the date for completion was extended until 24 September 2021 but at the extended date for completion the work remained incomplete. On 11 October 2021 the owners issued a notice for the builder to cease further work and on 15 October 2021 the builder vacated the site. It was the owners' case that works remained incomplete. In particular in respect of the balcony construction, the external cavity works, the kitchen bench and there was paint work outstanding. 3. On 2 September 2022 the owners commenced renewal proceedings HB22/40111 pursuant to clause 8 of Schedule 4 of the Civil and Administrative Tribunal Act 2013 (the 'CAT Act'), (the renewal proceedings). The renewal proceedings were heard over a period of two days on 14 and 15 February 2023. The Tribunal published its reasons on 4 September 2023. 4. The Tribunal made a money order in the amount of $465,749.24 payable by the builder within seven days. The Tribunal proceedings and decision 1. The written reasons for decision published by the Tribunal are relatively lengthy, and for ease of reference we have set out the critical findings in relation to those passages which were referred to by the respective parties in their submissions on appeal: 2. In respect of the balcony work the Tribunal found: 1. the scope of work agreed between the parties had not been complied with; 2. no agreement had been reached with respect to the balcony works; 3. the cross examination of the owners' experts did not establish that an alternative method of rectification of the balcony was possible; 4. The builder's extension of time application was rejected by the owners and the owners' position was that no approval had been given to the builder's departure from the agreed scope of the balcony works and any delay was of the builder's own making. 5. The Tribunal allowed the owners' claim for the balcony reconstruction work in an agreed amount of $20,281 as set out in the consent orders which together with the agreed trade mark ups as set out in the owners' points of claim amounted to a total of $30,674.85 1. In respect of the external cavity work the Tribunal found: 1. The performance of the external cavity works was contrary to the terms of the works order; 2. The cavity works were undertaken in a manner that did not accord with the works order and at no time did the builder submit any proper extension of time claim in relation to the external cavity works [98]; 3. the failure of the builder to have the external cavity works carried out in strict compliance with instructions from a geotechnical and or structural engineer was a primary consideration for the Tribunal; 4. the Tribunal allowed the owner's claim for the external cavity works in the agreed amount of $246,837 in the consent orders which together with the agreed trade mark ups as set out in the owners' points of claim totalled $373,291.47 1. In respect of the painting claim: 1. the Tribunal accepted the owners' claim for the agreed amount of $13,655 plus trade mark ups identified in the owners points of claim totalling $20,653. 1. In respect of the kitchen bench claim: 1. the builder consented to the amount of $494.73 in relation to the kitchen bench. That sum included all trade mark ups. 1. The builder appeals against the decision. Relevant Law: The nature and scope of internal appeals 1. Internal appeals may be made as of right on a question of law, and otherwise with permission (that is, the "leave") of the Appeal Panel: s 80(2) of the CAT Act. 2. As has been noted in Robinson and Lucy's "NCAT Practice and Procedure", Second Edition 2020, [NCATA80.30] at page 182, there is no satisfactory test of universal application to define the concept of an error of law. However, in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 (Prendergast) the Appeal Panel set out at [13] a non-exclusive list of errors of law. 1. a failure to provide proper reasons; 2. identification of the wrong issue or asking the wrong question; 3. the application of a wrong principle of law; 4. a failure to afford procedural fairness; 5. a failure to take into account relevant (i.e., mandatory) considerations; 6. the taking into account of an irrelevant consideration; 7. the absence of evidence to support a finding of fact; and 8. the decision was so unreasonable that no reasonable decision-maker would have made it. Notice of Appeal and Submissions 1. The appeal was commenced on 14 September 2023 date and was, therefore, filed in time. 2. On the day of the hearing the appellant was granted leave to rely on its amended grounds of appeal. During oral submissions three further grounds of appeal were raised. 3. It is important to note that the appellant confirmed through counsel that all grounds of appeal are said to be errors on a question of law and that the appellant does not raise grounds of appeal for which the leave of the Appeal Panel is required. 4. The amended grounds of appeal [1] to [3] were provided in writing in the form of a narrative and for convenience those grounds have been set out verbatim: Amended grounds of appeal: Ground 1 1. The Tribunal identified the wrong issue or question. 1. The question correct issue or question (sic) was whether, having regard to the purpose of the renewal proceedings, the circumstances giving rise to the renewal application and any other relevant circumstances including circumstances since the making of the original orders the Tribunal should make any other appropriate order or refuse to make an order as required by section 8(4) of Schedule four of the Civil and Administrative Tribunal Act 2013 in the interests of justice. 2. The Tribunal did not address that issue or question. Rather it addressed the question of the contractual effect of the agreement giving rise to the original orders, and whether the respondents conduct could be regarded as unreasonable. Ground 2 2. The Tribunal failed to take into account relevant considerations. The following considerations were relevant but not addressed. 1. the decision produced an unjust consequence; 2. the appellant builder had taken all reasonable and practical steps to comply or attempt to comply with the original orders; 3. the respondent owners had not co-operated with the appellant builder so that the works could be carried out (even if that failure to cooperate might not be classified as unreasonable); 4. the reason why there had been non-compliance with the original work order, which was unforeseen circumstances preventing the work being carried out as originally intended; 5. the Tribunal failed to take into account the evidence provided under cross examination that Mr Lee in relation to internal painting and floorboards. Ground 3 3. The Tribunal constructively failed to exercise jurisdiction in failing to consider the appellant's clearly articulated contention that the work the builder proposed to carry out did not depart from the original work order. Rather, it is assumed that the work proposed to be carried out involved a departure from the work order. Decision [68] to [70], [76] [79], [80], [81] and [84] in relation to the balcony Decision [101], [104] (2), (3), (4), (5), [105] in relation to the cavity. 1. At the hearing the appellant raised three further amended grounds of appeal. These grounds were raised during oral submissions. As best as we understand it, the following three grounds were subcategories of ground [3] "failure to exercise jurisdiction". We refer to these grounds of appeal as grounds [4] to [6]. Ground 4 1. The Tribunal erred on a question of law because the orders created an unjust or harsh outcome. 2. The decision resulted in an unjust or harsh outcome because the builder was ordered to make payments in the sum of $465,000 for the whole of the work based on a quantity surveyor's report setting out the quantum of defective work filed in the proceedings below (report of Adrian Jamieson on behalf of the owners dated 23 April 2021). The amount awarded including uplift and contingencies does not reflect the damage actually suffered by the owners. It is submitted that "if the owners would have allowed the builder to finish the work the owners would have suffered no loss". Ground 5 1. The Tribunal erred on a question of law because its findings were based on a false premise and it failed to exercise jurisdiction. The balcony proposal. 1. The Tribunal proceeded on a false premise, namely that the builder departed from an agreed scope of work and the false premise led the Tribunal to make a finding that the owners were reasonable when they refused the builder's alternate scope of work in respect of the balcony. 2. There was no requirement for a 100mm set down yet the concept of "reasonableness" was predicated on that assumption. This was significant because it formed the basis of the finding by the Tribunal that the builder acted unreasonably when it informed the owners it was unable to provide a 100mm set down because of an existing steel beam and the builder proposed and alternative method by constructing a 70mm set down instead. The false assumption that the consent work order provided for a 100 mm set down led the Tribunal to the wrong conclusion at [84] "that the owners did not unreasonably insist on compliance with the balcony works order and to refuse a further extension of time for the builder in relation to the balcony works". Ground 6 1. The Tribunal erred on a question of law because its findings were based on a false premise and the Tribunal failed to exercise jurisdiction. The external cavity proposal. 1. The Tribunal misdirected itself when it found that the owners should be paid $350,000 for nonconformity with the work order in relation to external cavity excavation work. The purpose of the external cavity was to facilitate a 300mm dish drain through the cavity on two levels aligned with two floors of the dwelling and a passage allowing a person to inspect and clean the area and the drains. The parties agreed that the consent work order envisaged a 1000mm wide external cavity, but following some subsidence the owners' expert stopped the work and the parties' experts agreed that a 1000mm wide cavity was not achievable. An alternative work order was suggested by Mr Carruthers (the builder's expert) on 6 September 2022, only 14 days before the projected completion date of the work. The owners rejected the alternative work order. The owners, through their engineer Mr Appleyard, unreasonably rejected an alternative proposed work by the builder's engineer, Mr Carruthers. 2. The owners unreasonably rejected any alternative proposal suggested by the builder because the 1000mm could not be adhered to and the owners unreasonably instructed their engineer Mr Appleyard not to entertain any practical solutions proposed by the builder's engineer. The Transcript 1. In order to establish the proposition that the owners unreasonably instructed their engineer not to entertain practical solutions, the appellant placed particular reliance on the cross-examination of Mr Appleyard, the owners' expert: 2. See Transcript Page 123 (p143 of the Court Book (CB)): Mr Davie: Am I getting this correct? You approach was that because it didn't comply with the approved plans requiring 1 m width, then whatever was suggested it had to be rejected? Witness Mr Appleyard: Well they were my instructions yes. Mr Davie: But we've been through the approved plans and they don't show a 1 metre width, do they. Witness Appleyard: Well they do, yes. Yes, they do. We got to that point before lunch. Mr Davie: Anyway, that was the attitude you took that those were the instructions you had? Witness Appleyard: Yes. Mr Davie: so your instructions weren't to look at it from a, as it were, a practical view going forward, your instructions were "Do they comply with the original plans which have a 1 metre width or don't they?". Witness Appleyard: I think – and I'd look to my instructing solicitor here but I think my original instructions, way back at square one, were that the plaintiffs had specifically requested a clearance of 1 m around the perimeter. Mr Davie: No, no, but what I'm talking about is the circumstances where the excavation had reached a difficult point. Witness Appleyard: Yeah. No, I'm sorry, I understand that point exactly. Mr Davie: Yes. Witness Appleyard: I'm just clarifying that my instructions were predicated on the express requirements by the plaintiff that they have a minimum dimension. Mr Davie: Yes. So you weren't asked to address what would be a reasonable and practical solution to overcoming the problem? Witness Appleyard: No. Mr Davie: but if you had been asked that question, you would have said "well give or take one or two things, we can work with that"? Witness Appleyard: yes. 1. Although not specifically relied upon by the appellant, we refer to the re-examination of Mr Appleyard at TP 124-5 (P144 of the CB): Sud: So you met him then, .… Did he or anyone else around the time give you a specific proposal to consider as to how to proceed with the cavity works? Witness Appleyard: Not to consider. And I think for clarity, we had several discussions about what had been achieved thus far at that stage. And Mr Watkins made the correct observation that further excavation, particularly on the northern side, would be very, very difficult indeed and expensive and I agree with that. Where I perhaps I take issue with Mr Watkins' affidavit is I did make it very, very clear that any advice or response I made on that day was just being made as guidance as an engineer but I was there basically under instructions to ensure that the works that had been ordered in the works order had been or had not been carried out. And nothing I said countermanded that, but that's the distinction between the two. Sud: and subsequently to that conversation, nobody – neither the Shrimptons nor the builder – suggested to you "well here is a solution as a practical solution moving forward, now that we have a problem"? Witness Appleyard: No. Reply to Appeal 1. In its Reply to Appeal filed on 26 June 2023 the respondent supports in full the orders made on 4 May 2023. The appellant relies on errors on questions of law only 1. As was set out above, the appellant confirmed that the grounds of appeal rely on errors on questions of law only. The amended grounds of appeal do not raise errors that may be more appropriately referred to as "errors of fact" or errors for which the leave of the Appeal Panel is required. The principles for leave to appeal are well established (for example, Collins v Urban [2014] NSWCATAP 17 at [84], and were recently summarised by the NSW Court of Appeal in Maclean v Brylewski [2023] NSWCA 173 as follows at [24]: It is not disputed that leave to appeal is necessary. In determining whether leave to appeal should be granted, something more must be demonstrated than that the primary judge's decision was arguably wrong. What is ordinarily required to be demonstrated is that the matter involves a question of principle or of public importance or an injustice which is reasonably clear in the sense of going beyond what is merely arguable (see Clarke v State of New South Wales [2015] NSWCA 27; Carolan v AMF Bowling Pty Ltd (t/as Bennetts Green Bowl) [1995] NSWCA 69; Jaycar Pty Limited v Lombardo [2011] NSWCA 284 at [46]; Be Financial Pty Ltd (as Trustee for Be Financial Operations Trust) v Das [2012] NSWCA 164 at [32]-[34]). Moreover, where, as here, the decision the subject of the application for leave to appeal involves an exercise of discretion, what is required to be demonstrated is error in the House v The King sense.. 1. The appellant does not seek leave to appeal as no errors of fact have been raised for which the exercise of discretion would be required. Ground 1 – The Tribunal identified the wrong issue or question. 1. We refer to the appellant's written submissions from [48] onwards. It is submitted that the Tribunal failed to consider all relevant circumstances including whether the Tribunal should make any other appropriate orders, other than a money order, or refuse to make an order and the "Tribunal did not address that issue or question." 2. It is submitted that the Tribunal misdirected itself by asking the question whether the builder departed from the agreed works without the owner's knowledge or consent. Further, the Tribunal wrongly concluded that the builder had in fact departed from the agreed scope of works. In approaching the proceedings in this manner the Tribunal erred by not considering other, relevant, considerations such as are set out at [57] of the appellant's submissions: 1. the decision produced an unjust consequence; 2. the appellant builder had taken all reasonable and practicable steps to comply or attempts to comply with the original orders; 3. the respondent owners had not cooperated with the appellant builder so that the works could be carried out; 4. the reason why there had been non-compliance with the original work order, in relation to time for completion, which was unforeseen circumstances preventing the work from being carried out as originally intended; 5. the Tribunal failed to take into account the evidence provided under cross-examination of Mr Lee in relation to internal painting and floorboards. 1. Whether the Tribunal identified the wrong issue or asked the wrong question was the issue for determination in Craig v State of South Australia (1995) 184 CLR 163 at 179; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at [82]. 2. We are of the view that the Tribunal correctly identified the issues and asked the correct questions to be determined under clause 8 of Schedule 4 of the CAT Act. 3. At [10] to [13] of the decision the Senior Member considered whether a money order or a further work order should be made. 4. Rather than misdirecting itself, the question of particular focus of the Tribunal at [10] to [13] was whether at a renewal proceeding the Tribunal should have made any other appropriate order under the CAT Act or the enabling legislation as it could have made when the matter was originally determined, or whether it should refuse to make such an order. 5. The renewal provisions have recently been addressed by the Appeal Panel in Mania v NSW Land and Housing Corporation [2022] NSWCATAP 376. The meaning of the expression "other appropriate order under this Act or enabling legislation" was considered by the Appeal Panel in Blessed Sydney Constructions Pty Ltd v Vasudevan [2018] NSWCATAP 98. Of the word "other" the Appeal Panel said at [32]: 32 The first criterion, that an order made on renewal be "other", presents little difficulty. All that is required is that the order made is different in some material respect from the order originally made that has not been complied with. That is, the order made on renewal must be "different in some material respect". As to the word "appropriate", the Appeal Panel in Blessed said at [33]: … Since the order is being made on a renewal application, it would be natural to construe "appropriate" as requiring the order to be fitting or suitable having regard to the purpose for which a renewal application is made, the circumstances giving rise to the renewal application and any other relevant circumstances whenever arising. … 1. The Appeal Panel then continued at [35]: … A renewal application is, however, designed to deal with a situation where there has been non-compliance with the original order that the Tribunal thought was appropriate when the matter was first determined. The circumstances will inevitably have changed since that time, if for no other reasons than because there has been non-compliance with the order that had been made. What was appropriate originally may well not be appropriate at the time of the hearing of the renewal application. To limit the orders that could be made on renewal to those that would have been appropriate when the matter was originally determined would be likely to prevent the Tribunal from doing justice between the parties, having regard to the non-compliance with the original order and to any other circumstances that had changed materially since the proceedings were originally determined. This would render the right to renew proceedings ineffective in a significant number of cases. 1. Applying the principles enunciated in Mania at [35], the purpose of the renewal provision in this case provided a mechanism for the owners to enforce a money order. It was incumbent upon the builder to demonstrate that timely compliance with another work order was possible and appropriate but no such evidence was led, either at first instance or on appeal. 2. At [10] – [13] of the first instance decision the Tribunal clearly identified and grappled with the "the appropriate order[s]" it should make and considered whether the appropriate should be a 1. money order; or 2. another work order. 1. It was open to the builder to persuade the Tribunal that another work order should be made, based on the altered circumstances the builder encountered on site. The builder failed to provide a detailed written work order, if necessary supported by plans and specifications of the geotechnical engineer, Mr Carruthers, to demonstrate that a further work order was a viable alternative to a money order. Such evidence may have included setting out a time frame within which such a work order could be carried out. There was some evidence that a further work order was available to be considered by the Tribunal as an appropriate order on day two of the hearing, which was provided late and did not advance on the handwritten sketch Mr Carruthers provided on 21 September 2021. We consider that no error of law has been established because the Tribunal correctly considered, and decided that a money order should be made in accordance with the consent orders agreed by the parties and the particular agreement that a liquidated sum would be payable in the event of the builder's failure to complete the consent work order. This was particularly uncontroversial in light of the builder's admission in its pleaded points of defence that the work remained incomplete. 2. Finally, the builder did not submit that the Tribunal should decline leave to renew the proceedings on the basis that there had been strict compliance with the work order. This was a new issue raised on appeal. 3. In its post script at [211], the answers to issues identified by the Tribunal are pertinently answered as follows: "Did the builder comply with the Orders within the Time for Completion ? (as adjusted) at all? No." 1. Critically, this finding of fact was not appealed and nor was leave generally sought to appeal against findings of fact. The appellant relies on errors on questions of law only. 2. The builder is bound by the case that it ran below. The Tribunal correctly identified the critical issue before it was whether leave should be granted for the owners to bring renewal proceedings (see written reasons at [7]); and whether the non-compliance by the builder was caused in part by a failure on the part of the owners to co-operate with the builder (at [8(5)]). 3. In Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 (Coulton) the plurality of the High Court of Australia (Gibbs CJ, Wilson, Brennan and Dawson JJ) noted at 8 the following principle: "… in a recent decision of six Justices of this Court (University of Wollongong v. Metwally [No. 2]) the Court said: "it is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so."" (citation omitted) 1. The principle in Coulton has been applied by the Appeal Panel on many occasions: see, for example, Naish aka Khosroabadi v NSW Land and Housing Corporation [2023] NSWCATAP 99 at [21]. 2. Having regard to the principle in Coulton, we are satisfied that the builder should not be permitted to raise a novel argument of whether another appropriate order could have been made. Any other appropriate order the builder contends for is not articulated in the amended grounds of appeal, nor was it raised in defence to the renewal proceedings. 3. We do not consider that this ground of appeal establishes an error on a question of law. This ground of appeal is dismissed. Ground 2 1. The Tribunal failed to take into account relevant considerations. Ground 2 (a.) The Tribunal failed to take into account relevant considerations – the outcome was "unjust" 1. The amended grounds of appeal are set out above. Again we stress the appellant proceeded on errors on a question of law only, see s80(2)(b) of the CAT Act. At ground 2(a) of the appellant's Notice of Appeal it is stated that the decision produced an "unjust consequence". 2. First, we do not consider that ground 2(a) identifies an error on a question of law. Secondly, there is no evidence adduced by the builder that would support the contention that the owners were unjustly enriched, as suggested in the builder's written submissions. 3. Application HB 22/40111 involved a renewal application following non-compliance with a consent work order and an agreement for a payment of a liquidated sum of money in the event of non-compliance. By agreeing to replace the work order with an order for payment of money by way of damages the builder had agreed, at least in principle, for 'another appropriate order' to be made. 4. Taking this approach in the renewal proceedings enabled the Tribunal to consider a money order. A similar approach applies where a Court with equitable jurisdiction has made an order for specific performance of a contract and there has been non-compliance with that order. The approach taken in such cases is explained in Spry, Equitable Remedies 9e - Equity - Common Law (at 677-8) as follows: "… when, for example, an order for specific performance has been made but the defendant does not comply with it, it is unnecessary to commence new proceedings for damages and it is sufficient to apply to the court for dissolution of the order for specific performance and for permission to accept the defendant's repudiation and for an order declaring the contract to be terminated; and an award of damages may thereupon be made. … Where however the order for specific performance is dissolved, and damages are substituted, in the absence of special equitable considerations the measure of damages is determined by reference to the ordinary basis on which legal damages are calculated." 1. It was open to the Tribunal to consider whether it was appropriate to make the money order in the exercise of its discretion under cl 8 of Schedule 4 of the CAT Act. As it was open to the appellant to provide an assessment of damages to the Tribunal challenging the quantification of damages by reference "to the ordinary basis on which legal damages are calculated", or by reference to a more limited scope of work more reasonable or appropriate having regard to the changed circumstances on the site, and by reference to a scope of work prepared by an engineer, and with appropriate costing. This was not attempted. 2. We do not consider that the submission that the owners were unjustly enriched is established and for this reason we dismiss this ground of appeal. Ground 2(b) 1. The Tribunal failed to take into account a relevant consideration and in particular failed to take into account that the builder "had taken all reasonable and practicable steps to comply with the original orders". We do not consider that this ground raises an error on a question of law. We have considered the appellant's submissions at [25] and [48] in respect of this ground of appeal. 2. The builder cites the authority of Naish aka Khosroabadi v NSW Land and Housing Corporation [2023] NSWCATAP 99. The Appeal Panel considered whether the appellant was bound to have regard to the respondents' submissions, so that the failure of the appellant to do so amounted to a failure to take into account a consideration relevant to the exercise of power. 3. The failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration which he or she is bound to take into account in making that decision (Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363, at p 375; CREEDNZ Inc. v Governor-General (1981) 1 NZLR 172, at pp 183, 196-197; Ashby v Minister of Immigration (1981) 1 NZLR 222, at pp 225, 230, 232-233). 4. What the Senior Member had to consider in the context of the renewal proceedings under clause 8 of Schedule 4 is whether the builder had complied with the original consent work order. It is important to note that there is no challenge to the Tribunal's factual finding that the builder breached the consent orders by failing to retain an engineer before conducting external cavity works. The relevant considerations were whether to exercise power to renew proceedings, and whether to make a money order, these were correctly applied by the Tribunal. 5. The Tribunal considered whether the builder had taken practical steps to comply with orders but found its work lacking, both in respect of the balcony works and the external cavity works. As late as 14 September 2021 the builder wrote to the owners stating it was still awaiting engineering documentation in respect of the balcony works. The critical finding contained at [79] of the decision is that the builder unilaterally departed from the terms of the agreed works order and this necessitated the owners' renewal proceedings. The Tribunal clearly considered the builder's steps taken during the performance of the work order but found the builder had not complied with the consent work order. These are issues of fact. 6. In summary, failure to take into account a relevant consideration which the decision maker was bound to take into account is an error of law (Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985-6) 162 CLR 24 at 39 per Mason J). 7. Determining what is to be taken into account when making a decision is a matter of construction of the statute conferring power. Where the relevant matters are not expressly set out those matters are determined by implication from the subject matter, scope and purpose of the conferring statute: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd at 39-40 per Mason J. 8. What weight the Tribunal should give to those considerations is a matter for the Tribunal (at 41 per Mason J). Having regard to the principles of Peko Wallsend, and in particular the dicta expressed by Mason J at 39-40, we are not satisfied that this ground of appeal raises a question of law. On the contrary, the appellant's complaint is about factual matters for which it requires leave to appeal. 9. The proposition that the builder took all reasonable and practical steps to comply with the original order is inconsistent with the Tribunal's findings of fact on the issue and its detailed consideration of the evidence in relation to both the balcony works (reasons at [39] to [75]) and the external cavity works (reasons at [85] to [106]). For example, there is no challenge to the finding that the builder failed to comply with the consent orders by failing to retain an engineer before conducting the external cavity works, and we do not consider that the critical finding of fact has been impugned. Ground 2(c) 1. In respect of appeal ground 2(c), it is submitted that the Tribunal failed to take into account relevant considerations and in particular failed to address that "the respondent owners had not co-operated with the appellant builder". The Tribunal found the owners to be reasonable and the critical finding of fact, that the owners acted reasonably, was supported by the Tribunal's detailed conclusions that the owners obtained guidance from both experts before rejecting the builder's proposed departures from the work order at [70] and the finding that the external cavity works were performed contrary to the works order at [105]. These and many other findings of fact that underpin the Tribunal's conclusions are not appealed. We do not consider that the builder has sufficiently developed this ground of appeal to establish an error on a question of law. Ground 2(d) 1. In respect of ground 2(d) "there were unforeseen circumstances preventing the work being carried out as originally intended". We have had regard to the appellant's submissions at [62] which do not expand this ground of appeal. The appellant does not particularise the "unforeseen circumstances" the Tribunal is said to have ignored. This ground of appeal does not raise an error on a question of law. Ground 2(e) 1. In respect of ground 2(e), that the Tribunal failed to take into account the evidence provided under cross-examination of Mr Lee in relation to internal painting and floorboards. Again, we have referred to the appellant's submissions at [62] and following, we have not been provided with reference to the transcript nor have particulars been provided in respect of this ground. This ground was not addressed during oral submissions. We do not consider that this ground raises an error on a question of law. Grounds 3 and 4 Failure to exercise jurisdiction 1. The builder alleges an error on a question of law, in that "the Tribunal constructively failed to exercise jurisdiction" in failing to consider "the appellant's clearly articulated contention that the work the builder proposed to carry out did not depart from the original work order" (see amended grounds of appeal). The submissions are contained at paragraphs [9] to [24] of the appellant's appeal submissions. 2. In respect of the balcony stepdown the builder submits that there was no reference to a 100mm set down in the scope of works, the "applicable standards" or in the original plans and specifications. No further particulars have been provided in respect of this ground of appeal. 3. The Senior Member awarded $30,674.85 in respect of item 2, the balcony reconstruction. It is submitted that the appeal should be allowed and the order in respect of item 2 be "set aside". 4. Ground 4, which was raised for the first time during oral argument, is said to raise the same error of law. 5. It is submitted that "the Tribunal member focussed on the wrong thing and assumed that there was a requirement for a 100mm set down when there was no such requirement in the work order and fell into error by making findings on the owners' conduct based on the misapprehended notion that a 100mm step down was required and that as a result of the finding on the step down and any findings based on the step down was wrong". 6. It is submitted that the Tribunal erroneously proceeded on the assumption that the builder departed from the original scope when the builder merely responded to unforeseen site conditions and the Tribunal failed to address the builder's submission that there was no departure from the agreed scope of work. 7. The builder advances the same ground of appeal in respect of the external cavity. It is submitted that the original drawings did not call for a 1000mm wide external cavity; the experts agreed that a 1000mm wide external cavity risked undermining the site; and the builder provided an instruction letter from Mr Carruthers, a competent engineer, instructing how the work should be completed; the owners would not allow the builder to carry out the work. Finally, the money order bears no relation to the cost of completion of the work (see at [24] and again at [47]). 8. It is submitted that the Tribunal failed to address the builder's case that there was no departure from the scope of work and this was a failure by the Tribunal to address a question in contention and a constructive failure to exercise jurisdiction. 9. The owners submit that in relation to the balcony works the builder proceeded with alternative works without approval of the owners, and no extension of time was granted to bring the builder's new proposed works into conformity with the consent work order. A proposal in relation to the external cavity works was provided in handwriting by the engineer three days before time for completion of the works expired. Fundamentally, the builder failed to lead evidence, at first instance or on appeal, that a solution, proposed by Mr Carruthers constituted a viable alternative and could be carried out in a reasonable time frame. The point was not developed during the hearing and raised for the first time on "30 minutes' notice" (see owners' submissions at [19]). 10. The failure to address a party's case was addressed by the Court of Appeal in Goodwin v Commissioner of Police [2012] NSWCA 379 at [19]-[24]. In particular we refer to the language of Gummow and Callinan JJ in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088 at [24] that "[t]o fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice". Similar language was adopted by the Full Court of the Federal Court (North, Logan and Robertson JJ) in LVR (WA) Pty Ltd v Administrative Appeals Tribunal [2012] FCAFC 90; 289 ALR 244. The Full Court stated at [5], that the Tribunal, by simply adopting one party's submissions as it reasons, "had failed to bring its own mind to bear on the issues before it and thus … had constructively failed to exercise its jurisdiction": see also at [91]. 11. It would be an error on a question of law for the Tribunal to fail to exercise its jurisdictional function on a renewal, which is to resolve a dispute presented to it by the parties by applying the renewal provisions of clause 8 of Schedule 4 of the CAT Act. In the present appeal, the jurisdictional threshold of whether or not leave should be granted to renew the proceedings was predicated by the Tribunal's finding on the critical issue that there was no compliance with the consent work order. 12. The term "constructive failure to exercise jurisdiction" is used to describe a situation where the Tribunal has purported to resolve the parties' dispute but has not in fact done so. The Tribunal issued 60 pages of written reasons for its decision, it is apparent from those reasons that all material issues were addressed and the appellant cannot point to material evidence that has been overlooked. Examples of circumstances where material evidence was overlooked were referred to by Gummow ACJ and Kiefel J in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 at [23] where the Court spoke of "decision making upon an assumption which had no basis in the evidentiary material or which was contrary to the overwhelming weight of that material, and also of decisions based upon a contradiction in the processes by which conclusions were reached or upon the drawing of inferences which were not properly open." 13. We do not accept that the Tribunal made a decision "which had no basis in the evidentiary material", or that there has been a failure to exercise jurisdiction. 14. The member considered the failure of the builder to provide a 100mm step down, but this was not the only consideration. The Tribunal considered whether the alternative method of providing a 70mm stepdown was a viable alternative. The Tribunal arrived at the conclusion that the owners acted reasonably when they refused the builder further time to complete the work because: 1. the proposed changes suggested by the builder had not been rejected outright by the owners and the evidence does not lead to a conclusion that the owners were not open to any form of variation in respect of the balcony works; 2. the owners requested a scope of works including relevant structural design information to enable them to provide their informed consent to the proposed amendments and it was noted on their behalf that any agreed amendments would require a variation of the Consent Orders to be made by the Tribunal [at 48]; 3. details of the builder's proposed alteration to the balcony works were provided by the builder to the owners in a letter dated as late as 1 September 2021; 4. the builder's letter of 1 September 2021 appears to be the first time that the builder raised an issue about the need for an extension of time due to these works [56]; 5. the overwhelming issue driving the matters giving rise to the dispute still concerned the balcony works. 6. on 7 September 2021 the owners noted that alternative balcony rectification works were being undertaken but had not agreed to any amendment to the works order, due to lack of detail being provided; 7. the first knowledge of the owners being made aware that the balcony rectification works did not comply with the consent works order was at the end of week 12 of the 14-week programme; 8. having noted the builder's position that it was not possible to build the balcony to achieve a 100mm step down, Mr Cavallo the builder's engineer first suggested an alternative works when he attended the site for his second inspection on 1 September 2021; 9. critically, there was still insufficient information in relation to the alternative balcony works so that the owners could not be satisfied as to the "solution" the builder proposed; 10. there was no engineering information or drawing detail confirming the integrity of the alternative work from a structural perspective or sufficient details as to what was proposed by the alternative works in terms of the existing joists, the new drain, the new drainage weep holes, the screed, and/or the fall of the tiles; 11. a request was made for a cross section of the alternative works prepared by the builder's engineer so that "full and clear information is provided (including as to any step down) as to what exactly what [sic] will be built so that Jakin's 'solution' can be considered further"; and 12. the possibility of a further EOT was raised by the builder in relation to the tiling of the balcony, but only on 17 September 2021; 1. The Tribunal considered the totality of the evidence and came to the conclusion that the work order was not completed in respect of the balcony. We consider that as the builder was in possession of the site, it was open to the builder to build a step down of less than 100mm, whether with or without the consent of the owners, but the builder did not complete any work although the builder remained on site for weeks after the compliance date expired and there is no evidence before the Appeal Panel that establishes the builder was in a position to complete the balcony work, even to a scope proposed by the builder, in any time frame, or at all. 2. On 23 September 2021 the builder's lawyers submitted the second EOT purporting to cover the period June to September 2021. The builder claimed an adjusted date for completion of 9 November 20221. The approved adjusted date for completion of the works was at that time 24 September 2021. The sole basis of the EOT of 15 days was claimed for delays from 2 September 2021 to 22 September 2021 by the builder "awaiting client decision on balcony works". 3. On 11 October 2021 the owners' lawyers informed the builder's lawyers that the adjusted time for completion remained 24 September 2021 and observed that the builder had been continuing to work on the site after that date. The letter confirmed there were "outstanding and incomplete" works, being the rear cavity works, the rectification of the balcony and the stone bench replacement. 4. These findings are not appealed. 5. These are the findings that led the Tribunal to the ultimate conclusion: I am satisfied by reason of the matters set out above, that the owners did not unreasonably refuse the second EOT claim received the day before the adjusted date for completion or unreasonably refused to approve the builder's departure from the agreed scope of the balcony works order. 1. There can be no difficulty with the finding that the work had not been complied with at all, as the balcony work had not been completed, with a 100mm stepdown or in any other way that may have been open to the builder. The builder assumed that it departed from an agreed work order, the builder sought consent but did not wait to receive it before commencing with a scope of work that was new to both parties. 2. We have had regard to the builder's Points of Defence contained at CB [662]. The builder admits that the balcony construction and the external cavity works remained incomplete and merely states that the owners refused to agree to the alternative. Critically we have not been provided with evidence of the alternative work suggested by the builder that was said to have been unreasonably rejected. 3. There was no failure by the Tribunal to give reasons, nor a failure to exercise the jurisdiction conferred on the Tribunal in respect of the renewal proceedings when considering Item 2 of the consent work order, the balcony step down. The Tribunal did not fail to consider the claim, it did consider whether there was a failure to repair the balcony on a number of issues, not just the step down. Not least of all the Tribunal considered the failure by the builder to repair the balcony in the timeframe provided, or at all. 4. The parties had agreed, on renewal, that in the event of non-compliance the builder would be required to immediately pay the owners an agreed sum. The sum is not challenged and the monetary amount, as a finding of fact, has not been appealed. 5. We are therefore of the view that an error on a question of law has not been established, there has been no failure to exercise jurisdiction and these grounds of appeal should be dismissed. Ground 5 1. We consider ground 5 (the Tribunal proceeded on a false premise, in respect of the balcony proposal) has been addressed in grounds 3 and 4 above. We are satisfied that the Tribunal did not fail to exercise jurisdiction in respect of the balcony work and this ground of appeal is dismissed for the reasons set out in grounds 3 and 4 above. Ground 6 1. This ground was raised during oral submissions. It is alleged that the Tribunal failed to exercise jurisdiction because it failed to consider the builder's case that the excavation of the cavity could be achieved with less than 1000m width and still conform with the consent work order. 2. The builder appeals against the order that $373,291.47 is payable in respect of the external cavity works. 3. It was submitted that the Tribunal misdirected itself because it found that the work order in relation to the external cavity had not been complied with. 4. The work order directed the builder to carry out the scope of works to both the ground floor and lower ground floor as set out in the report of Paul Cavallo dated 3 September 2020 and the report of Leigh Appleyard dated 18 January 2021 at pages 14 and 15. 5. The relevant scope of work can be found at CB [367] and [509] to [510]. The scope is drafted in broad terms. The scope of work is set out in the appellant's written submissions: 'In my opinion it is necessary for the external drainage works to be rectified by delivering the outcome required by the contract. Whilst difficult the rectification work required is not impossible to execute. Access to the ground floor area is currently available by way of the cavity running along the southern wall. Access to the lower ground floor is available from both sides of the garage along the southern and northern walls. It would be logical to formulate a work programme working from the entrance to each level respectively, and working around the perimeter. Initial work would focus on increasing the cavity width to approximately 1000 mm by excavation into the existing shotcrete facing of the natural rock, and including some additional excavation into the rock face itself… Importantly, this work would need to be carried out in strict compliance with instructions to be provided by competent geotechnical and or civil engineers.' 1. The builder submits that it was discovered during the course of carrying out the excavation work that trying to excavate to exactly 1000mm was dangerous and risked undermining the site. It is submitted that the Tribunal was tasked to determine whether an excavation to approximately 1000 mm would satisfy compliance with the work order, as long as instructions were provided by a competent geotechnical or civil engineer. The builder's engineer provided an inspection letter instructing how the works should proceed to completion so as to comply with the work order without endangering the site. The letter was provided only days before the agreed date for completion. 2. It is the builder's submission that the cross-examination of Mr Appelyard [set out above] established the proposition that the expert for the owners unreasonably held onto the requirement of 1000mm and that a late alternative proposal by Mr Carruthers (on a handwritten note) was unreasonably rejected. 3. It is submitted that the Tribunal failed to take into account relevant or mandatory considerations (see Minister for Aboriginal Affairs v Peko-Wallsend Limited ibid), in particular the Tribunal failed to take into account that strict compliance with the 1000mm requirement was impossible and that the owners unreasonably rejected a solution whereby less than 1000m would be excavated and the area would be reinforced and stabilised with shotcrete. It is submitted that the Tribunal failed to consider that but for Mr Appleyard's "slavish adherence" to the 1000mm requirement, a practical solution was possible. 4. The failure by the Tribunal to resolve this issue is said to be a constructive failure to exercise jurisdiction, an error on a question of law. 5. We note that none of the critical findings of fact from [84] to [108] of the written reasons for decision have been appealed. 6. The builder's submissions go on to state that the Tribunal identified the wrong issue or question and that the Tribunal had no basis for making a finding that the builder engaging an engineer at an earlier stage would have made any difference to the duration of the cavity works (see submissions at [55] and at [57]) and that any findings that the builder failed to seek an extension of time in a timely fashion or at all are made in error. 7. Having regard to the written reasons for decision at [84] to [108] we are satisfied that the Tribunal did consider the alternative method advanced by the builder and that the Tribunal considered that the alternative solution advanced by the builder was, although supported by a geotechnical engineer was provided in a handwritten outline with insufficient detail, and was brought too late for the owners to reasonably agree to. 8. The Tribunal's finding at [107] that "the builder by its own actions was unable to complete either the original or varied scope within the adjusted time for completion and never sought an EOT, either on the basis of the original work order or any alternative proposal to complete the work" is therefore not made in error and certainly cannot be said to be a failure to exercise jurisdiction. 9. The Tribunal made the following critical findings: 1. The consideration of the balcony works and the cavity works are quite separate to the issue of whether the owners acted unreasonably [85]; 2. During a conversation on 1 September 2021 Mr Cavallo expressed his concerns about the impact of the cavity work on the structural integrity of the building and raised these concerns directly with Mr Watkin [88] and on 3 September 2021 Mr Watkin was told to stop work; 3. Mr Appleyard and Mr Cavallo both told Mr Watkin to get the builder's structural engineer to site to come up with solutions but Mr Carruthers did not attend site until 6 September 2021; 4. It was not until 21 September 2021 that Mr Watkins provided any detailed information about what the builder's engineer proposed in relation to those works; 5. The builder forwarded a sketch detail of the cavity works prepared by Mr Carruthers [97] on 21 September 2021; 6. At no time did the builder submit any EOT prior to the date of adjusted completion, being 24 September 2021; 7. The Tribunal found that the excavation works were "incomplete and defective" [100] among other things the cavity walls had not been excavated and required acrow propping to stabilise it and the cavity walls had not been excavated to achieve the minimum 1000mm and had not been shotcreted; 1. The Tribunal concluded In my view the failure by the builder to have these external cavity works carried out in strict compliance with instructions from a geotechnical and or structural engineer is the primary consideration for me in my determination in this case. 1. The Tribunal acknowledged the builder's submissions at [102]; among them "the original drawings did not specify a width of 1000mm; and Mr Carruthers proposed a way forward". 2. The Tribunal arrived at a finding that the scope of work including the 1000mm was difficult but not impossible, and the sketch provided by Mr Carruthers required another 10 weeks to complete, but there was no relevant extension of time application by the builder and the owners decided to terminate the contract. As the builder had already carried out unauthorised external cavity works, the owners were entitled to prevent the builder from moving forward with further works not vetted by a geotechnical engineer. 3. In light of these findings, we cannot conclude that the Tribunal "asked the wrong question" or "failed to exercise jurisdiction". The critical question was whether the work order had been complied with and the Tribunal's findings that it had not, was open to it on the evidence and on the builder's admission in its Points of Defence. The Tribunal's findings that the sketch proposed by Mr Carruthers lacked in detail, came three days before completion, and was not accompanied by an extension of time request was also reasonable under the circumstances. In any event, those critical findings of fact are not appealed and not impugned. 4. Ground 6 of the amended grounds of appeal is dismissed. 5. For these reasons we dismiss the appeal. 6. Consistent with the dismissal, the appellant should pay the respondent's costs of the appeal and any orders as to costs made below should not be disturbed. Orders 1. We make the following orders. 1. The appeal is dismissed. 2. The appellant is to pay the respondents' cost of the appeal as agreed or assessed under the Legal Profession Uniform Law Application Act 2014. 3. If the costs order is opposed any party seeking a different costs order may file and serve submissions on costs within 14 days. 4. The party receiving cost submissions will have a further 14 days to file and serve a response. 5. Subject to the parties' submissions, the Appeal Panel will determine any cost application made on the basis of the submissions and papers filed with the Appeal Panel. Annexure A - Work orders dated 25 May 2021 ********** 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: 15 March 2024