Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Lauer v Comer (No 2) [2016] NSWCATAP 158 Hearing dates: On the papers Date of orders: 22 July 2016 Decision date: 22 July 2016 Jurisdiction: Appeal Panel Before: D Patten, Principal Member R Titterton, Senior Member Decision: (1) Appeal allowed in part. (2) Quash order made in Tribunal below and in lieu order that the respondent pay to the appellants the sum of $52,040.00 forthwith. (3) Order that the respondent to this appeal pay the appellants' costs of the proceedings in the Tribunal below on the ordinary basis as agreed or assessed. (4) No order as to the costs of the appeal. Catchwords: Home Building Act – s 94(1A) – quantum meruit not just and equitable Legislation Cited: Home Building Act 1989 Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Cases Cited: Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273 Pender v Robwenphi Pty Ltd [2008] NSWSC 1144 Pavey & Matthews v Paul (1987) 162 CLR 221 Port of Melbourne Authority v Anshun Pty Ltd [1997] 147 CLR 589 Category: Principal judgment Parties: Simon Lauer and Rachel Ng (Appellants) Ike Comer (Respondent) Representation: Solicitors: File Number(s): AP 15/51531 Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: [2015] NSWCATCCD 114 Date of Decision: 25 August 2015 Before: G Meadows, Senior Member File Number(s): HB 14/35459 REASONS FOR DECISION 1. In reasons for decision published on 5 May 2016, we held that the conclusion of the Tribunal below in effect allowed the respondent to this appeal (the builder) a quantum meruit of $26,000 against the appellants (the owners) in respect of a residential building. The quantum meruit was apparently allowed under s 94(1A) of the Home Building Act 1989 (the Act) 2. As, in the particular circumstances of the case it seemed that the parties had not previously been given the opportunity to make submissions as to whether or not such a quantum meruit should be allowed, we gave them the opportunity to do so, and indicated that that issue and the issue of costs would thereupon be decided on the papers. 3. The builder filed submissions on 24 May 2016, the owners on 2 June 2016, and the builder in reply on 14 June 2016. 4. The builder accepted that his entitlement fell to be considered under s 94(1A) of the Act as he was relevantly a contractor within the meaning of that subsection. He also conceded that the analysis of the subsection by Barrett J in Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273 and the analysis by Hall J in Pender v Robwenphi Pty Ltd [2008] NSWSC 1144 are relevant to this case. 5. The builder's submissions noted that the existence of the right to relief under s 94(1A) predicated the existence of a breach of the section and referred to the observation of Barrett J at par [53] that: "In general contravention through ignorance will be more deserving of favourable treatment in the "just and equitable" inquiry than deliberate contravention would be." 1. While agreeing that the findings below indicated that the builder's contraventions tended toward the higher end of such a spectrum, it was pointed out that the Tribunal made a finding that one of the owners, Ms Ng, wanted the transaction to proceed with the minimum of formality and expense. 2. The builder's submission referred to the remarks of Deane J in Pavey & Matthews v Paul (1987) 162 CLR 221 at 262: "The quantum meruit sum itself will, of its nature, reflect a fair remuneration, having regard to the extent of the work actually done. That is of the essence of a quantum meruit." 1. It was then submitted that the builder approached the owners in response to their advertisement, with both parties free to investigate the bona fides of the other, and to agree on the terms of the contractual relationship. As a consequence, the owners enjoy the benefit of the work completed. 2. Further, it was submitted that, at the hearing below, on the basis of an expert's report, the Tribunal found specific defects in the work in respect of which the builder was ordered to pay $2,040.00. It followed, so the submissions contended, that this should set the boundaries of the detriments suffered by the owners within Pavey so that any other work carried out properly fell within the quantum meruit claim. There was reference to the observation by Barrett J of unjust enrichment being the most telling factor (Eddy Lau at par [63]). 3. As to the amount of any quantum meruit which should be allowed, the builder submitted that the tax invoice amounting to the sum dated 16 May 2014 should be accepted as the value of the work performed. The sum of $26,000.00 represented 40% of the contract price of $58,500.00 plus skip bin hire charges of $1,050.00 and labour charges of $1,600.00. 4. Finally, it was submitted that there were no special circumstances within s 60 of the Civil and Administrative Tribunal Act 2013 and that there should be no order as to costs. 5. The submissions made on behalf of the owners by Ms Michelle McMahon of Counsel were to the effect that there was no evidence before the Tribunal below upon which a quantum meruit could be determined. She submitted that "all that exists are invoices from unlicensed and uninsured people or entities. There can be no correlation between the two particularly given the fact that a claim is (sic in) quantum meruit be outside a claim in contract in any event". 6. We think there is force in this submission. In our view, there was in truth no evidence upon which the Tribunal below could assess the "value" of the work performed by the builder, and there is accordingly no evidence before us to base such an assessment. Despite Ms McMahon's suggestion, it may be that the builder is now estopped from instituting fresh proceedings upon the principles established by Port of Melbourne Authority v Anshun Pty Ltd [1997] 147 CLR 589. 7. The owners' submissions did not include reference to whether it would be just and equitable within s 94(1A) to order a quantum meruit. This is a matter upon which evidence was given below, findings made by the Tribunal, and we have received submissions from the builder. We believe we are in a position to reach a conclusion upon the subject. 8. In our view, this matter was more than "closer" to the upper end of a spectrum from inadvertent to deliberate, it was right at the top. The Tribunal's findings in our opinion establish what might be described as a conspiracy between the builder as the moving party and others to avoid or ignore the provisions of the Act, a statute designed to protect home owners in the position of the owners in this case. We regard as entirely irrelevant the fact that the owners advertised the work and thereby opened themselves up to the builder's predatory and illegal behaviour. In our view, it was very significant that considerable building work intended to receive the statutory protection of insured work performed by licensed contractors did not receive that protection. We are of the opinion that the loss of such protection outweighed any value which could be attributable to the work performed by the builder. In those circumstances, we find that it would not be just and equitable to order quantum meruit under s 94(1A) of the Act. 9. As a consequence, the order made below should be varied and the appeal upheld in part. 10. As to costs the issues below involved more than $30,000 and rule 38 of the Civil and Administrative Tribunal Rules 2014 applies. We find there were special circumstances within s 60 of the Civil and Administrative Tribunal Act 2013 and that costs on a party and party basis should follow the event below. There should be no order as to the costs of the appeal. ORDERS 1. Appeal allowed in part. 2. Quash the order made in Tribunal below and in lieu order that the respondent to the appeal Isaac Comer pay to the appellants Simon Lauer and Rachel Ng the sum of $52,040.00 forthwith. 3. Order that the respondent to this appeal pay the appellants costs of the proceedings in the Tribunal below as agreed or assessed. 4. No order as to the costs of the appeal. 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: 22 July 2016