Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Orell v Clas Concrete & Constructions Pty Ltd [2024] NSWCATAP 220 Hearing dates: 21 October 2024 Date of orders: 05 November 2024 Decision date: 05 November 2024 Jurisdiction: Appeal Panel Before: G Blake AM SC, Principal Member E Bishop SC, Senior Member Decision: (1) Leave to appeal is granted. (2) The appeal is allowed. (3) Order 1 made on 24 July 2024 is set aside. (4) The following questions are to be considered by the Consumer and Commercial Division of the Tribunal as originally or differently constituted as determined by the Deputy President of that Division on the basis of such further evidence as the parties may adduce: (a) whether the respondent entered into the building contract in contravention of s 4 of the Home Building Act 1989 (NSW), and if so whether or not it is entitled to damages or to enforce any other remedy in respect of a breach of the building contract committed by the appellant, and the building contract is unenforceable by it pursuant to s 10(1)(a) of the Home Building Act 1989 (NSW); (b) whether the respondent carried out work under the building contract in contravention of s 92 of the Home Building Act 1989 (NSW), and if so whether or not it is entitled to damages or to enforce any other remedy in respect of a breach of the building contract committed by the appellant in respect of that work pursuant to s 94(1) of the Home Building Act 1989 (NSW); (c) whether a concrete pathway around the perimeter of the slab was necessary to remediate defective work carried out by the respondent, and if so what is the reasonable cost of the concrete pathway and whether the appellant is entitled to recover the reasonable cost as damages from the respondent; (d) whether the respondent has a right under s 48O(1)(a) and (2) of the Home Building Act 1989 (NSW) to recover money in respect of the work carried out on a quantum meruit basis in proceedings 2023/00395951, and if so the amount recoverable from the appellant; (e) whether any, and if so, what amount is payable by one party to the other party. (5) The security amount paid by the appellant to the respondent's solicitors is to be released immediately. (6) The respondent is to pay the costs of the appeal of the appellant as agreed or assessed in accordance with the Legal Profession Uniform Law Application Act 2014 (NSW). (7) If any party wishes to make an application for a different costs order, the applicant (the costs applicant) is to lodge and serve a costs application, including submissions limited to three pages and any evidence in support, on or before 14 days from the date of this decision, whereupon order (6) is to be set aside. (8) The respondent to the costs application is to lodge and serve any submissions limited to three pages and any evidence in reply on or before 28 days from the date of this decision. (9) The costs applicant is to lodge and serve any submissions limited to two pages in reply on or before 35 days from the date of this decision. (10) The parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted rather than the application being determined on the papers. If a hearing is not dispensed with, the parties will be advised of a date for the hearing of the application. Catchwords: APPEALS — Appeal on question of law – Scope of question of law APPEALS — Constructive failure to exercise jurisdiction by not addressing a material issue or by overlooking material evidence APPEALS — Leave to appeal — Principles governing – leave to appeal granted APPEALS — Procedural fairness — Failure to give reasons — Adequacy of reasons BUILDING AND CONSTRUCTION – Residential building work – Statutory warranties under Home Building Act 1989 (NSW) – Claims by owner against builder Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 62, 80, 81, Sch 4, cl 12, Sch 6, cl 11 Civil and Administrative Tribunal Rules 2014 (NSW), r 38A Home Building Act 1989 (NSW), ss 4, 10, 48O, 92, 94 Legal Profession Uniform Law Application Act 2014 (NSW) 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 Collins v Urban [2014] NSWCATAP 17 Flightdeck Geelong Pty Ltd v All Options Pty Ltd (2020) 280 FCR 479; [2020] FCAFC 138 Jeray v Blue Mountains City Council [2024] NSWCATAP 66 Maclean v Brylewski [2023] NSWCA 173 New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 Wollondilly Shire Council v Styles [2024] NSWCATAP 104 Yuen v Thom [2016] NSWCATAP 243 Texts Cited: NCAT Policy 2, Publishing Reasons for Decisions Category: Principal judgment Parties: Fernando Orell (Appellant) Clas Concrete & Constructions Pty Ltd (Respondent) Representation: Counsel: M Fraser (Appellant) Solicitors: Maxwell Berghouse & Ives Solicitors (Appellant) Project Lawyers (Respondent) File Number(s): 2024/00301229 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 24 July 2024 Before: R Titterton OAM, Senior Member File Number(s): 2023/00395951 (formerly HB 23/21318) REASONS FOR DECISION Overview 1. This is an internal appeal from the decision of the Consumer and Commercial Division of the Tribunal constituted by Senior Member R Titterton OAM made on 24 July 2024 (the 24 July 2024 decision) in proceedings under the Home Building Act 1989 (NSW) (HB Act). The appeal concerns a dispute between the appellant, Fernando Orell (Mr Orell), who is the owner of a property at Gledswood Hills (the property), and the respondent, Clas Concrete & Constructions Pty Ltd (Clas), the builder that carried out residential building works involving concreting for the construction of a new dwelling on the property (the works) under the contract between them (the building contract). In the 24 July 2024 decision the Senior Member made orders including an order that Mr Orell pay $50,654.50 to Clas on or before 19 August 2024 (the 24 July 2024 money order). 2. The substantial issues in the appeal were whether the Senior Member constructively failed to exercise the jurisdiction of the Tribunal, or failed to provide adequate reasons for his apparent decision that ss 10 and 94(1) of the HB Act in the circumstances of Clas being unlicensed and uninsured did not prevent recovery by Clas of monies owing under the building contract, and his rejection of the claim for the cost of the installation of concrete paths as necessary for the rectification of defective concreting. 3. We have decided that the Senior Member constructively failed to exercise the jurisdiction of the Tribunal or failed to provide adequate reasons on these issues, and that this failure was a material error of law. We have further decided that the appeal should be allowed; the 24 July 2024 money order should be set aside; these and related issues should be considered by the Senior Member; the security amount should be returned to Mr Orell; and Clas should pay the costs of the appeal. We have also made procedural orders for either party to apply for a different costs order. The factual background 1. On 6 October 2022, the parties entered into the building contract comprising: 1. the written quote dated 6 October 2022 of Clas addressed to Mr Orell and Grace Orell providing for a slab at the property for a lump sum price of $125,000.00 plus GST and incorporating "engineers details" (the 6 October 2022 quote); 2. the email of Mr Orell to Steven Lo Iacono (Mr Lo Iacono), the Director of Clas, stating he was "happy to go ahead". 1. On 8 December 2022, Clas poured the slab at the property. 2. On or shortly after 14 December 2022, Clas sent to Mr Orell its tax invoice of that date for $66,880.00 inclusive of GST, which was the balance owing under the building contract. 3. On 2 January 2023, Mr Orell sent an email to Clas in which he alleged that the works contained defects. The proceedings in the Consumer and Commercial Division 1. On 8 May 2023, Mr Orell as the applicant commenced proceedings HB 23/21318 (which were subsequently renumbered 2023/00395951) in the Consumer and Commercial Division of the Tribunal against Mr Lo Iacono as the respondent in which he sought the following: "An order that I do not have to pay the amount of $66880.00 Other order not mentioned 1) That Clas Concrete supply the screw pier data and certificate of compliance required by the engineer and for the Certifier for OC 2) I only pay the amount of $15087.62 after the screw pier data has been supplied as per above. Total Amount Claimed: $51792.38" 1. On 23 August 2023, the Tribunal made procedural orders including an order joining Clas as a respondent. 2. On 28 March 2024, the hearing took place. Mr Orell represented himself and Mr Lo Iacono represented Clas. Relevantly: 1. the documents on which Mr Orell relied included the report of Sam Nastasi (Mr Nastasi), a structural engineer, dated 12 October 2023 (the 12 October 2023 Nastasi report) which provided: "During an inspection on the 16th January 2023, at the abovementioned address, penetrations from formwork were observed through the concrete slab edge beam, this has resulted in the piercing of the dampproof membrane. This appears to have occurred in approximately 30 locations. As stated in previous reports this breaches NCC clause 4.2.8, 4.2.11, and AS2870. Considering the penetrations, that due to their locations are impractical to be sealed to comply with NCC clause 4.2.8 (4)(c) and AS 2870, even after rectifications are carried out, every measure which reduces moisture content adjacent to the concrete edge beam will be beneficial. Building a footpath around the perimeter, that is sloped away from the dwelling, will be beneficial in reducing water content adjacent to the dwelling edge beam." 1. Mr Orell, Howard Ryan (Mr Ryan), a building consultant who was an expert witness for Mr Orell, and Mario Bournelis (Mr Bournelis), a building consultant who was an expert witness for Clas, gave the following evidence (Tcpt, pp 41.11-42.6, 42.31-44): "SENIOR MEMBER TITTERTON: Yes, right. Mr Orell, the argument appears to be at least on the respondent's side was that this concrete path was never part of the work agreed to be undertaken by the respondent. What do you say about that? APPLICANT: I don't think Mr Bournelis or Mr La lacono actually understand. Because we've never claimed to be as part of the, of the, the works or the quoted - it is now a necessity because of all the defective work on the, on the edge beam in order to further protect it so it's not compromised. It was recommended by the engineer- SENIOR MEMBER TITTERTON: Okay. I understand what you're saying. APPLICANT: --that it should be done. And I don't think they have read the information correctly and there's a number of issues that- SENIOR MEMBER TITTERTON: Okay. You say that's reported by Mr Ryan's evidence, is it? APPLICANT: Sorry? SENIOR MEMBER TITTERTON: Is that view supported by Mr Ryan's- APPLICANT: Yeah. SENIOR MEMBER TITTERTON: --expert - okay. Do you want to explain that to me, Mr Ryan? I understand what the argument is. Mr OreIl is claiming that-- WITNESS RYAN: I agree, I agree that - the fact that there should be a path put, put around there after the fact. SENIOR MEMBER TITTERTON: You say it's a necessary part of the whole of the rectification works? WITNESS RYAN: Correct. SENIOR MEMBER TITTERTON: What do you say, Mr - so it's not arising out of the contract per Se, it's— WITNESS BOURNELIS: Yes. SENIOR MEMBER TITTERTON: --claimed to arise as a necessity because of the defective works, which I know you deny, and a necessary consequence of what was discovered during the course of the rectification works themselves. … SENIOR MEMBER TITTERTON: I'm just talking about the principle of – I accept that it doesn't arise out of-- WITNESS BOURNELIS: Yes. SENIOR MEMBER TITTERTON: --the contract. The claim is nevertheless it's a necessary part of the rectification work. Would you accept that or not? WITNESS BOURNELIS: Well, I disagree. I disagree, Member, because in any event the homeowner would have to put concrete paths on either side of the house. He's not going to leave it with mud. So yes, I agree that concrete paths are required, as most homes do. Either that or you'll have landscaping or pebbles or something. But the majority involves a concrete path, yes. I agree." 1. the following exchange took place between the Senior Member, Mr Orell and Mr Lo Iacono (Tcpt, pp 109.9-110.26): "SENIOR MEMBER: Right, there's something I want to bring up with both the parties which I'm really sorry I didn't bring it up earlier but I'm bringing it up now and I might have to ask you for additional submissions. It's quite complicated. As I understand what you've both told me, there's the contract itself consists of a quotation which is in writing which was accepted by you in writing. Now, and it's been said that your company is not licensed, that right? at the time it did the work? Does it have a builder's license? SECOND RESPONDENT: No, I don't have a, I'm not a builder. SENIOR MEMBER: Well, the company is the party. Does the company have any form of license? SECOND RESPONDENT: No. But .... have licensed workers that we work together on this site. SENIOR MEMBER: This is what I want to raise with both of you. … I think that bits okay, or in contravention of any provision of the Act, which includes being unlicensed is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by the other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the Contract committed by the person. SENIOR MEMBER: … Then there's got another issue that the works are supposed to be insured and they weren't. So, if this is the builder, you're the builder for the purpose of this application, if you were seeking to recover for the work that you had done, you could recover on a quantum merit basis, but not on the basis of the contract. But where that leaves to the owner, which you are for the purposes of this application, in terms of enforcing rights because of defective work, this is something I'm going to have to think about. Now, did that all sound like gobbly gook, or do you need me to put something in writing and give you some time to think about it. APPLICANT: It's a bit confusing, but yeah, SENIOR MEMBER: Yeah. It's not straightforward. This is what I'm going to do, gentlemen. I've heard your submissions about the substantive matter, okay? And I understand where you both stand in relation to that. I'm going to do a decision. I'm going to reserve my decision and put it in writing, But there might be some additional things I'm going to need you to address. You don't have to come back for another hearing. SENIOR MEMBER: I'll issue a note, hopefully, probably straight after Easter. I'll think about this over Easter to see if I need further assistance on relation to some legal issues. But this is actually not straightforward, but I will try to, if I think it's an issue, I will identify the issues and give you time to address me in writing about that, okay. Does that make sense to you Mr Orell? make sense to you? There are consequences which follow for with if unlicensed people undertake works there are consequences which follow, sorry, there are offences under the Act if you're not licensed and you don't have insurance I don't deal with that that's not me. The consequences I'm talking about is the ability of either you to enforce the balance of the monies which you're owed, and your application itself. SENIOR MEMBER: I know how it affects his claim. I'm not sure how it affects your claim. So I will articulate that in writing. …" 1. On 24 July 2024, the Senior Member made the 24 July 2024 decision comprising the following orders (the 24 July 2024 orders), and his reasons (the 24 July 2024 reasons): "1. The applicant is to pay the respondent $50,654.50 on or before 19 August 2024. 2. If the respondent wishes to seek the cost of any expert report (or other disbursements) it is to send a note and evidence of the expenses to the Tribunal and the applicant by 5 August 2024. 3. The applicant may respond by 19 August 2024 if he wishes." 1. On 12 September 2024, the Senior Member published his decision in which he made the following orders (the 12 September 2024 orders), and set out his reasons: "(1) A hearing is dispensed with. (2) The applicant is to pay the costs of the respondent's expert in the sum of $10,780.00. (3) That amount is to be paid on or before 8 October 2024." The 24 July 2024 reasons 1. In the 24 July 2024 reasons, the Senior Member: 1. set out introductory matters ([1]-[3]); 2. summarised the position of the parties ([4]-[9]); 3. summarised the evidence of the parties ([10]-[13]); 4. made factual findings as to the background of the proceedings ([14]-[29]); 5. dealt with introductory matters in relation to the expert evidence ([30]-[36]); 6. dealt with the disputed items in the joint Scott Schedule ([37]-[74]). As to the disputed "Item 12: concrete paths", he provided the following reasons ([71]-[73]): "71 This claim is for the installation of concrete paths around the perimeter of the house in the amount of $18,150.00. The applicant's opinion is that the concreting is required and that: This is an anticipated cost and not part of the landscaping plans (attached Refer to tab X-Z pages 296 - 297), The Concrete path is required due to poor workmanship and exposed reinforcement steel found. Highly likely to be other exposed areas of reinforcement steel, not yet found as well as other undetected blow holes and honeycombing. As quoted. This figure is also likely to be more by the time we are ready to install the concrete path Quote Refer Tab UW -Page 151 72 The Builder's position is that: The Homeowner states that this is an anticipated cost and that this figure could be more. On what basis is this figure calculated and who knows how to calculate what the figure is likely to be when installing the path, (future costs). The edge path slab around the perimeter of the house does not form part of the Contractors scope of works, see contractors quotation in Appendix F of this report. The concrete paths around the house are always completed by the Homeowner at the end of the project and during the landscaping stage unless specified otherwise. As this is not part of the Contractors scope of works, I do not provide an if found figure. 73 I accept the Builder's submissions on this matter. As the quotation makes clear, this item never formed part of the contracted works." 1. set out his conclusions ([75]-[78]); 2. set out the 24 July 2024 orders ([79]). 1. In the 24 July 2024 reasons, the Senior Member did not make any findings as to whether Clas was licensed under the HB Act and had a contract of insurance complying with the HB Act in relation to the works, and provided no reasons as to why ss 10 and 94(1) of the HB Act were not applicable to the determination of the proceedings. The history of the appeal 1. On 15 August 2024, Mr Orell as the appellant commenced proceedings 2024/00301229 against Clas as the respondent by lodging a notice of appeal in which he: 1. appeals against the 24 July 2024 orders; 2. sets out the following grounds of appeal: "Ground 1 1. Did the Tribunal err in law in making an order that the appellant pay the respondent a sum of money alleged to be owing under the contract to do residential building work in circumstances where: (a) the respondent was unlicenced, and (b) the effect of the order was to enforce the contract contrary to s. 10 of the Home Building Act 1989. Ground 2 2. Did the Tribunal err in law in making an order that the appellant pay the respondent a sum of money alleged to be owing under the contract to do residential building work in circumstances where: (a) the respondent had not insured the work, and (b) the effect of the order was to entitle the respondent to recover money under the contract contrary to s. 94 of the Home Building Act 1989. Ground 3 3. Did the Tribunal err in making a money order in the respondent's favour in circumstances where: (a) The respondent made no application seeking such an order, and (b) The respondent is precluded from receiving payment under a contract to do residential building work by s. 92(2) of the Home Building Act 1989. Ground 4 4. Did the Tribunal fail to give any or any adequate reasons for rejecting the unchallenged evidence of the appellant's engineer that a concrete pathway around the perimeter of the slab was necessary to remediate defective work carried out by the respondent? Ground 5 5. Such further or other grounds as may appear when the transcript of the hearing is obtained." 1. sets out the following orders which he contends the Appeal Panel should make: "1. The Applicant is not required to pay to the builder the sum of $66,880.00, or any amount. 2. The Respondent to pay the Applicant's costs." 1. does not seek leave to appeal. 1. On 28 August 2024, the Tribunal granted leave to the parties to be legally represented, made orders for the hearing of the appeal, and made an order that Clas may comply with the 24 July 2024 money order by depositing the specified sum into the trust account of its lawyers within seven days, with such monies to be held in trust and disbursed only in accordance with a signed written agreement between the parties, or otherwise to give effect to the decision in the appeal or further order of the Tribunal. 2. On or before 4 September 2024, Clas deposited the sum specified in the 24 July 2024 money order into the trust account of its lawyers (the security amount). 3. On 4 September 2024, Clas lodged its reply to appeal in which it relevantly contends: 1. each of grounds of appeal 1 to 4 are not valid; 2. grounds of appeal 1 and 2 were not raised at first instance; 3. if Mr Orell is entitled to succeed on any one or more of grounds of appeal 1, 2 and 3, it is entitled to a reasonable amount on a quantum meruit; 4. the security amount should be released. 1. On 24 October 2024, Mr Orell lodged an amended notice of appeal in which he: 1. deletes ground of appeal 5; 2. sets out the following orders which he contends the Appeal Panel should make: "1. The Applicant is not required to pay to the Respondent the sum of $66,880, or any amount, under the Contract. 2. Alternatively, the Applicant is not required to pay to the Respondent the sum of $34,375.50 under the Contract. 3. The Respondent to pay the Applicant's costs." 1. seeks leave to appeal and relevantly makes the following contentions under the heading "Application for Leave": "… 4. In the appellant's submissions, grounds 1 - 4 do not raise questions of disputed fact and do not depend upon challenges to facts as found. Rather the grounds raise questions of law in the nature of: a. did the Tribunal fail to apply the Home Building Act 1989 to reach its conclusions; b. did the Tribunal fail to exercise and/or exceed its jurisdiction (in the sense of its authority to decide); c. did the Tribunal's determination disclose adequate reasons. 5. If the above submission is rejected, the appellant seeks leave to appeal pursuant to s.80(2)(b) and cl. 12 of Schedule 4 of the Civil and Administrative Tribunal Act 2013. 6. The appellant seeks leave on the basis that the decision under appeal: (a) Is not fair and equitable: and (b) against the weight of the evidence; 7. The decision was not fair and equitable in that the Tribunal ordered the appellant to pay the Balance of the Contract sum to the respondent in circumstances where the Contract was unenforceable by the respondent and where the respondent had not applied for an order for payment. 8. The decision was against the weight of the undisputed evidence: (a) that the respondent was unlicenced under the Home Building Act 1989. and so was prohibited from entering into the Contract with the appellant, and (b) that the work that the respondent performed was uninsured in circumstances where it was required to be insured." The hearing of the appeal 1. On 21 October 2024, we heard the appeal. Mr Orell was represented by Ms M Fraser, a barrister. Clas was represented by Mr J Gilronan, a solicitor. 2. At the commencement of the appeal, when we referred to the decision of the Appeal Panel in Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 (Unique Commercial Group) at [25]-[40] and expressed the preliminary view that the notice of appeal did not raise any question of law within s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), counsel for Mr Orell sought leave to lodge an amended notice of appeal. We decided to grant leave to Mr Orell to lodge an amended notice of appeal in which he seeks leave to appeal in respect of grounds of appeal 1 to 4 specified in the notice of appeal with the amended notice of appeal to be lodged and served by 24 October 2024, and gave oral reasons for our decision. As the grant of leave did not raise new issues and each of Mr Orell and Clas had addressed grounds of appeal 1 to 4 in their written submissions, we did not make any procedural orders for Clas to lodge a reply to the amended notice of appeal and for the parties to lodge supplementary written submissions. 3. Counsel for Mr Orell conceded that the appeal was not pressed against orders 2 and 3 of the 24 July 2024 orders. When we noted that the notice of appeal necessarily did not include any appeal against orders 2 and 3 of the 12 September 2024 orders, counsel for Mr Orell sought leave to lodge an amended notice of appeal to include an appeal against these orders. We decided to refuse leave to Mr Orell to lodge an amended notice of appeal in respect of these orders, and gave oral reasons for our decision. 4. The parties relied on the documents in the Appeal Book lodged on 23 September 2024 relevantly comprising the documents before the Tribunal at first instance and the transcript of the hearing on 28 March 2024. 5. Clas sought to rely on the following documents lodged on 16 October 2024 comprising: 1. the report of Kenneth Andrew Whyte (Mr Whyte) dated 4 October 2024 (the 4 October 2024 Whyte report); 2. the statement of Mr Lo Iacono dated 4 October 2024 (the 4 October 2024 Lo Iacono statement). 1. Mr Orell relied on the following written submissions: 1. Submissions dated 18 September 2024; 2. Submissions in Reply dated 15 October 2024; 3. Further Submissions in Reply dated 15 October 2024. 1. Clas relied on its Submissions dated 10 October 2024 (the Clas appeal submissions). 2. Each of counsel for Mr Orell and the solicitor for Clas made oral submissions. 3. At the conclusion of the hearing, we reserved our decision. The scope and nature of internal appeals 1. Internal appeals against an internally appealable decision may be made in the case of any kind of decision (including an ancillary decision) other than an interlocutory decision as of right on a question of law, or with the leave of the Appeal Panel, on any other grounds: s 80(1) and (2)(b) of the NCAT Act. 2. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are where it is satisfied that the appellant may have suffered a substantial miscarriage of justice relevantly because the decision of the Tribunal under appeal was not fair and equitable, or the decision of the Tribunal under appeal was against the weight of evidence: cl 12(1)(a) and (b) of Sch 4 of the NCAT Act. 3. 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] set out the general principles which govern the granting of leave to appeal. These general principles were recently summarised by the New South Wales Court of Appeal in Maclean v Brylewski [2023] NSWCA 173 at [24] (Ward P and Simpson AJA): "[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. 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." (citations omitted) 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. The Appeal Panel may 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: s 80(3)(a) of the NCAT Act. Further, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including but not limited to any one or more of orders that the appeal is to be allowed, the decision under appeal is to be set aside, and the whole or any part of the case is to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel: s 81(1)(a), (c) and (e) of the NCAT Act. The issues for determination in the appeal 1. The following issues arise for determination in this appeal: 1. issue 1: whether the amended notice of appeal conforms with the leave granted by the Appeal Panel; 2. issue 2: whether the appeal is on one or more questions of law; 3. issue 3: whether Mr Orell should be granted leave to appeal against the 24 July 2024 money order, and if so what orders should be made; 4. issue 4: the costs of the appeal. Issue 1: whether the amended notice of appeal conforms with the leave granted by the Appeal Panel 1. The amended notice of appeal does not conform with the leave granted by the Appeal Panel in the following respects: 1. it deletes ground of appeal 5; 2. it sets out amended orders which he contends the Appeal Panel should make; 3. it seeks to explain the nature of the questions of law raised by grounds of appeal 1 to 4 in the notice of appeal; 4. it seeks leave to appeal on grounds expressed differently to grounds of appeal 1 to 4 in the notice of appeal. 1. Both the deletion of ground of appeal 5 and the statement of amended orders which he contends the Appeal Panel should make are uncontroversial as they reflect the position of Mr Orell during the hearing of the appeal. We have treated the explanation of the nature of the questions of law raised by grounds of appeal 1 to 4 in the notice of appeal as a submission. 2. However, paragraphs 7 and 8 under the heading "Application for Leave" in the amended notice of appeal differ from grounds of appeal 1 to 4 in the notice of appeal in the following material respects: 1. ground of appeal 1 in the notice of appeal refers to "a sum of money alleged to be owing under the contract to do residential building work", whereas paragraph 7 in the amended notice of appeal refers to "the Balance of the Contract sum"; 2. ground of appeal 1 in the notice of appeal states that Clas "was unlicenced", whereas paragraph 8(a) in the amended notice of appeal states that Clas "was unlicenced under the Home Building Act 1989. and so was prohibited from entering into the Contract with (Mr Orell)"; 3. ground of appeal 2 in the notice of appeal states that Clas "had not insured the work", whereas paragraph 8(b) in the amended notice of appeal states that "the work that (Clas) performed was uninsured in circumstances where it was required to be insured". 1. In these circumstances, we have ignored paragraphs 7 and 8 under the heading "Application for Leave" in the amended notice of appeal. We have treated the amended notice of appeal as if Clas is seeking leave to appeal within cl 12(1)(a) and (b) of Sch 4 of the NCAT Act on the basis of grounds of appeal 1 to 4 in the notice of appeal. Issue 2: whether the appeal is on one or more questions of law 1. Having regard to the principles in Wollondilly Shire Council v Styles [2024] NSWCATAP 104 at [28]-[32] and Unique Commercial Group at [25]-[40], we are not satisfied that grounds of appeal 1 to 4 in the notice of appeal raise a question of law for the following reasons: 1. none of these grounds identify the question in abstract terms, and so cannot be considered separately from the facts with which it may be connected; 2. each of grounds of appeal 1 to 3 raises a mixed question of fact and law; 3. as to ground of appeal 4, the allegation of error is so closely related to the Senior Member's determination of the facts in relation to item 12: concrete paths, that the alleged inadequacy of reasons does not amount to a question of law. Issue 3: whether Mr Orell should be granted leave to appeal against the 24 July 2024 money order, and if so what orders should be made Introduction 1. Grounds of appeal 1 to 4 in the notice of appeal misconceive the nature of the challenge that can properly be made to the 24 July 2024 money order. There was no finding by the Senior Member that Clas was unlicensed and had not obtained the required contract of insurance. Further, there was no admission made by Clas of these matters. 2. Rather, grounds of appeal 1 to 4 in the notice of appeal should be understood as raising the following questions: 1. whether the Senior Member constructively failed to exercise the jurisdiction of the Tribunal in failing to determine whether ss 10 and 94(1) of the HB Act prevented recovery by Clas of monies owing under the building contract, or alternatively failed to provide reasons for his determination that these statutory provisions were not applicable; 2. whether the Senior Member constructively failed to exercise the jurisdiction of the Tribunal in failing to determine whether the concrete paths were a reasonable measure to rectify the defective concrete slab and if so, their reasonable cost, or alternatively failed to provide reasons for his determination in relation to this item; 3. if one of both of these questions are answered affirmatively, whether leave to appeal should be granted and what orders should be made. 1. Before considering these questions, it is appropriate to set out the applicable statutory provisions and legal principles. The applicable statutory provisions HB Act 1. Section 10 deals with the enforceability of contracts and other rights, and relevantly provides: 10 Enforceability of contracts and other rights (1) A person who contracts to do any residential building work, or any specialist work, and who so contracts— (a) in contravention of section 4 (Unlicensed contracting), or … is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person. ... 1. Section 94 deals with the effect of failure to insure residential building work, and relevantly provides: 94 Effect of failure to insure residential building work (1) If a contract of insurance required by section 92 is not in force, in the name of the person who contracted to do the work, in relation to any residential building work done under a contract (the uninsured work), the contractor who did the work— (a) is not entitled to damages, or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, in relation to that work, and (b) is not entitled to recover money in respect of that work under any other right of action (including a quantum meruit). (1A) Despite section 92(2) and subsection (1), if a court or tribunal considers it just and equitable, the contractor, despite the absence of the required contract of insurance, is entitled to recover money in respect of that work on a quantum meruit basis. … NCAT Act 1. Section 62 deals with the requirement of the Tribunal to give notice of decision and provide written reasons on request, and relevantly provides: 62 Tribunal to give notice of decision and provide written reasons on request … (3) A written statement of reasons for the purposes of this section must set out the following— (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made. … The applicable legal principles 1. In Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165 (Alexandria Landfill) the members of the New South Wales Court of Appeal in separate judgments (Basten JA, Macfarlan JA 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. 2. In his judgment Basten JA: 1. at [6]-[7], 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 [8]-[17], set out the principles with respect to the constructive failure to exercise jurisdiction; 2. at [18]-[34], set out the principles with respect to the adequacy of reasons. 1. In his judgment Macfarlan JA at [294]-[314] set out the principles with respect to the constructive failure to exercise jurisdiction and the adequacy of reasons. 2. In his judgment Leeming JA at [404]-[412] set out the principles with respect to the adequacy of reasons. 3. Basten JA at [20] quoted and Macfarlan JA at [309] referred to the judgment of the New South Wales Court of Appeal in Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 (Resource Pacific) at [9] (Basten JA with Beazley JA at [1] agreeing): "The adoption, on an appeal limited to errors in point of law, of language derived from the supervisory jurisdiction of the court must be undertaken with caution. It is, no doubt, an error of law for the trial court to fail to exercise its constitutional function, which is to resolve a dispute presented to it by the parties by applying the law in accordance with proper procedure. In the present case, that function was almost entirely satisfied by the resolution of disputed factual issues. The term 'constructive failure to exercise jurisdiction' is used to describe a situation where the court has purported to resolve the parties' dispute but has not in fact done so. Thus, particularly with a court or tribunal required to provide reasons for its decision, it may become apparent from those reasons that a material issue has simply not been addressed or that material evidence has been overlooked. …" 1. In New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 (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]. Bell P 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 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]. Whether the Senior Member constructively failed to exercise its jurisdiction in failing to determine whether ss 10 and 94(1) of the HB Act prevented recovery by Clas of monies owing under the building contract or alternatively failed to provide reasons for his determination that these statutory provisions were not applicable 1. We disagree with the submissions of Clas that the application of ss 10 and 94(1) of the HB Act was not an issue for determination. While it is correct that this question was not raised by the parties, it was raised by the Senior Member during the hearing on 28 March 2024 as set out in [10(3)] above. In so doing the Senior Member was properly fulfilling his duty to Mr Orell as a litigant-in-person by ensuring he had not, because of a lack of legal skill, failed to claim rights or put forward arguments as explained by the Full Federal Court of Australia (Markovic, Derrington and Anastassiou JJ) in Flightdeck Geelong Pty Ltd v All Options Pty Ltd (2020) 280 FCR 479; [2020] FCAFC 138 (Flightdeck Geelong) at [55(c)]. The principles as to the Court's duty to the litigant-in-person in Flightdeck Geelong at [51]-[57] apply to proceedings in the Tribunal: Jeray v Blue Mountains City Council [2024] NSWCATAP 66 at [13]-[15]. 2. There are two plausible explanations for the failure of the Senior Member to deal with the application of ss 10 and 94(1) of the HB Act in the 24 July 2024 decision: 1. firstly, he forgot that he had raised the question of their application during the hearing; 2. secondly, he decided that they were not relevant to the issues to be decided. 1. If the Senior Member forgot that he had raised the question of the application of ss 10 and 94(1) of the HB Act during the hearing, then having regard to the principles in Resource Pacific at [9] and Alexandria Landfill at [6]-[17], [309], we are satisfied that his failure to answer this question in the 24 July 2024 decision constituted a constructive failure to exercise the jurisdiction of the Tribunal and a material error of law. 2. If the Senior Member decided that the application of ss 10 and 94(1) of the HB Act was not relevant to the issues to be decided, then having regard to the principles in Orr at [55] and Alexandria Landfill at [18]-[34], [294]-[314], [404]-[412], we are satisfied that his failure to answer this question in the 24 July 2024 decision constituted a failure to provide adequate reasons in conformity with s 62(3) of the NCAT Act and a material error. Not only did he fail to make findings on material questions of fact, namely whether Clas was unlicensed under the HB Act and did not obtain the contract of insurance for the works required under the HB Act, but also did not set out his understanding of the applicable law and conclusions. Whether the Senior Member constructively failed to exercise its jurisdiction in failing to determine whether the concrete paths were a reasonable measure to rectify the defective concrete slab or alternatively failed to provide reasons for his determination in relation to this item 1. In the Clas appeal submissions, Clas made several submissions as to why the opinion of Mr Nastasi in the 12 October 2023 Nastasi report should not be accepted. 2. As set out in [10(1)] and [10(2)] above, Mr Orell adduced evidence that concrete paths were a measure to rectify the defective concrete slab. Having regard to the principles in Resource Pacific at [9] and Alexandria Landfill at [6]-[34], [294]-[314], [404]-[412], we are satisfied that the failure of the Senior Member to consider the oral evidence of Mr Orell and Mr Ryan and the opinion of Mr Nastasi in the 12 October 2023 Nastasi report constituted a constructive failure to exercise jurisdiction or a failure to provide adequate reasons. The Clas appeal submissions are not to the point because the Senior Member did not consider the opinion of Mr Nastasi in the 12 October 2023 Nastasi report. If one of both of these questions are answered affirmatively, whether leave to appeal should be granted and what orders should be made 1. We are satisfied that, whether the correct analysis is that the Senior Member constructively failed to exercise the jurisdiction of the Tribunal or failed to provide adequate reasons, Mr Orell may have suffered a substantial miscarriage of justice on the ground that the 24 July 2024 decision was not fair and equitable within cl 12(1)(a) of Sch 4 of the NCAT Act. 2. We are not satisfied that the 24 July 2024 decision as a whole or the finding of the Senior Member with respect to item 12: concrete paths was against the weight of evidence within cl 12(1)(b) of Sch 4 of the NCAT Act. There was no finding by the Senior Member that can be said to have been against the weight of evidence. 3. We are further satisfied that the nature of these failures is such that we should exercise the discretion under s 80(2)(b) of the NCAT Act to grant leave to appeal in relation to these questions. The nature of the injustice to Mr Orell is reasonably clear in the sense of going beyond what is merely arguable. We do not accept the submission of Mr Orell with respect to item 12: concrete paths - that the oral evidence of Mr Orell and Mr Ryan and the opinion of Mr Nastasi in the 12 October 2023 Nastasi report that a concrete pathway around the perimeter of the slab was necessary to remediate defective work carried out by Clas (as set out in [10(1)] and [10(2)]) above was unchallenged. As set out in [10(2)] above, Mr Bournelis disagreed with this evidence. 4. We have decided that we are not in a position to conduct a new hearing under s 80(3)(a) of the NCAT Act. It follows that it is unnecessary to consider the question of whether Clas has a right under s 48O(1)(a) and (2) of the HB Act to recover money in respect of the works on a quantum meruit basis in proceedings 2023/00395951, and if so whether to permit Clas to rely on the 4 October 2024 Whyte report and the 4 October 2024 Lo Iacono statement. 5. We have decided pursuant to s 81(1)(a), (c) and (e) of the NCAT Act that the appeal should be allowed, the 24 July 2024 money order should be set aside, and to enable their prompt consideration the following questions should be considered by the Senior Member or another Senior Member as determined by the Deputy President of the Consumer and Commercial Division of the Tribunal on the basis of such further evidence as the parties may adduce: 1. whether Clas entered into the building contract in contravention of s 4 of the HB Act, and if so whether it is not entitled to damages or to enforce any other remedy in respect of a breach of the building contract committed by Mr Orell, and the building contract is unenforceable by it within s 10(1)(a) of the HB Act; 2. whether Clas carried out work under the building contract in contravention of s 92 of the HB Act, and if so whether it is not entitled to damages or to enforce any other remedy in respect of a breach of the building contract committed by Mr Orell in respect of that work within s 94(1)(a) of the HB Act; 3. whether a concrete pathway around the perimeter of the slab was necessary to remediate defective work carried out by Clas, and if so, the reasonable cost of the concrete pathway and whether Mr Orell is entitled to recover the reasonable cost as damages from Clas; 4. whether Clas has a right under s 48O(1)(a) and (2) of the HB Act to recover money in respect of the works on a quantum meruit basis in proceedings 2023/00395951, and if so, the amount recoverable from Mr Orell; 5. whether any, and if so what, amount is payable by one party to the other party. 1. In view of this decision, it necessarily follows that we should order that the security amount be released to Mr Orell immediately. Issue 4: the costs of the appeal 1. Mr Orell applied for the costs of the appeal. Clas submitted that the costs of the appeal should be determined subsequent to this decision. 2. Rule 38A of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) 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 not more than $30,000. 3. We cannot see any reason why Clas should not pay the costs of the appeal of Mr Orell as agreed or assessed in accordance with the Legal Profession Uniform Law Application Act 2014 (NSW), and have made this order. However, as the parties may wish to consider their position having regard to our decision in this appeal, we have decided to make procedural orders in respect of the costs of the appeal if any party wishes to apply for a different order. Orders 1. We make the following orders: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. Order 1 made on 24 July 2024 is set aside. 4. The following questions are to be considered by the Consumer and Commercial Division of the Tribunal as originally or differently constituted as determined by the Deputy President of that Division on the basis of such further evidence as the parties may adduce: 1. whether the respondent entered into the building contract in contravention of s 4 of the Home Building Act 1989 (NSW), and if so whether or not it is entitled to damages or to enforce any other remedy in respect of a breach of the building contract committed by the appellant, and the building contract is unenforceable by it pursuant to s 10(1)(a) of the Home Building Act 1989 (NSW); 2. whether the respondent carried out work under the building contract in contravention of s 92 of the Home Building Act 1989 (NSW), and if so whether or not it is entitled to damages or to enforce any other remedy in respect of a breach of the building contract committed by the appellant in respect of that work pursuant to s 94(1) of the Home Building Act 1989 (NSW); 3. whether a concrete pathway around the perimeter of the slab was necessary to remediate defective work carried out by the respondent, and if so what is the reasonable cost of the concrete pathway and whether the appellant is entitled to recover the reasonable cost as damages from the respondent; 4. whether the respondent has a right under s 48O(1)(a) and (2) of the Home Building Act 1989 (NSW) to recover money in respect of the work carried out on a quantum meruit basis in proceedings 2023/00395951, and if so the amount recoverable from the appellant; 5. whether any, and if so what, amount is payable by one party to the other party. 1. The security amount paid by the appellant to the respondent's solicitors is to be released immediately. 2. The respondent is to pay the costs of the appeal of the appellant as agreed or assessed in accordance with the Legal Profession Uniform Law Application Act 2014 (NSW). 3. If any party wishes to make an application for a different costs order, the applicant (the costs applicant) is to lodge and serve a costs application, including submissions limited to three pages and any evidence in support, on or before 14 days from the date of this decision, whereupon order (6) is to be set aside. 4. The respondent to the costs application is to lodge and serve any submissions limited to three pages and any evidence in reply on or before 28 days from the date of this decision. 5. The costs applicant is to lodge and serve any submissions limited to two pages in reply on or before 35 days from the date of this decision. 6. The parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted rather than the application being determined on the papers. If a hearing is not dispensed with, the parties will be advised of a date for the hearing of the application. ********** 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: 05 November 2024