Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Daoud v Hammoud [2017] NSWCATAP 114 Hearing dates: 20 February 2017 and 3 April 2017 Date of orders: 22 May 2017 Decision date: 22 May 2017 Jurisdiction: Appeal Panel Before: P Durack SC, Senior Member D Charles, Senior Member Decision: (1) The appeal is allowed in part. (2) The orders made by the Tribunal Member on 20 October 2016 are set aside. (3) In substitution for the orders made by the Tribunal Member on 20 October 2016, order that the Tribunal Member reconsider the amount payable by the Builder to the Home Owners in the renewal proceedings brought by the Home Owners, being File number HB 16/18392, and the amount payable by the Home Owners to the Builder in the cross-application brought by the Builder, being File number HB 16/26546, and the net amount payable after setting off these two amounts, but that such reconsideration by the Tribunal Member is to proceed on the basis that the amounts payable are the same amounts as were determined to be payable in the decision of the Tribunal Member dated 20 October 2016, save that: (a) the sum total of amounts paid by bank transfers to the Builder is to be $272,000.00 and not $275,000.00; (b) In File Number HB 16/18392 the quantum of the amounts to be paid by the Builder to the Home Owners in respect of items 2a, 2b and 2j in the Paragraph 28 Schedule is to be reconsidered by the Tribunal Member with leave for the parties to adduce further evidence. (c) In File Number HB 16/26546 the amounts of $500.00 in respect of "Application Fees", $500.00 in respect of "Service NSW receipt" and $2,600.00 in respect of "Repair and install 5 columns 2 front and 3 rear" as set out in the Paragraph 38 Schedule are not to be deducted from the amount to be ordered to be paid by the Home Owners to the Builder. Catchwords: APPEAL – home owners' renewal application in respect of defective and incomplete residential building work – builder's cross application for balance of contract price including variations – adequacy of reasons on particular disputed items - procedural fairness - appeal allowed in part. Legislation Cited: Home Building Act 1989 Home Building Regulation 2014 Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Coulton v Halcombe [1986] HCA 33; 162 CLR 1 Hernady v Raccani [2016] NSWCATAP 67 Hudson v Arp 1 (NSW) Pty Ltd [2014] NSWCATAP 31 M&M Building Pty Ltd v Keith [2017] NSWCATAP 88 Pavey & Matthews v Paul [1987] HCA 5; (1987) 162 CLR 221 Suttor v Gundowda Pty Ltd [1950] HCA 35; 81 CLR 418 Xu v Jihong Design & Constructions Pty Ltd [2011] NSWCA 277 Category: Principal judgment Parties: N & L Daoud (Appellants) Ali Hammoud & Mary Hammoud (Respondents) Representation: Solicitors: In Person (Appellant) In Person (Respondent) File Number(s): AP 16/49766 Publication restriction: Unrestricted Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 20 October 2016 Before: G Meadows, Senior Member File Number(s): HB 16/04193, HB 16/18392 & HB 16/26546 Reasons for Decision Overview 1. This is an appeal by the builders ("the Builder") contracted to undertake major improvements to the owners' home ("the Home Owners") in Beecroft New South Wales. The Builder appeals from a decision of the Consumer and Commercial Division of the Tribunal the effect of which was that the sum of $27,994.20 was to be paid by the Builder to the Home Owners after deducting an amount of $14,404.00 ordered to be paid to the Builder by the Home Owners. 2. On the appeal the Builder complained that errors of calculation had occurred and material evidence had been overlooked. Underlying these complaints was a contention by the Builder that they had been deprived of an opportunity to challenge the Home Owners' claims and supporting evidence at the hearing. 3. We reject this contention. However, we have decided that the appeal must succeed on some of the points raised on appeal. Clearly, given the nature of the differences between the parties, it would have been desirable for the Appeal Panel to re-determine the remaining issues between the parties, all of which concerned the quantum of the amounts to be paid in respect of particular aspects of the building works. Unfortunately, this was not possible because of uncertainties surrounding the evidence, some of which evidence was fresh evidence sought to be relied upon at the hearing of the appeal and also because of the breadth of the dispute between the parties about the remaining issues. 4. Our reasons for these conclusions are set out below. Background 1. During 2014 and 2015, the Builder carried out residential building work in the nature of alterations and additions to the Beecroft home of the Home Owners. Much of the controversy between the parties arises from the time it took for the Builder to carry out the building work and the Home Owners' complaint as to the incompleteness and defective quality of some of the work. 2. Payments to the Builder for the work began on 22 July 2014 and continued through to 14 July 2015. It is now agreed by the parties that these payments total $272,000.00. The difference between this amount and the fixed agreed contractual price for the building works of $374,000.00 is $102,000.00. However, a number of provisional cost items within the fixed contract price, such as the installation of the kitchen, laundry and air conditioning, by agreement, were paid for by the Home Owners. Furthermore, some work was incomplete and other parts of the work had defects. Also, the Builder claimed that they had carried out agreed variations. 3. By the end of 2015 the work at the Home Owners' residence had not been completed by the Builder and the Home Owners had complaints about the Builder's standard of workmanship. 4. On 28 January 2016, the Home Owners brought proceedings in the Tribunal against the Builder (the original proceedings, constituted by File No HB 16/04193). The application in those proceedings sought compensation in an amount of up to $250,000.00 being damages for breach of contract and for breach of the statutory warranties contained in the Home Building Act 1989 NSW ( the HB Act). 5. Following conciliation at a directions hearing on 12 February 2016 the parties negotiated a scope of works to be completed by the Builder which became the subject of consent orders made on that date. The consent orders also included that the works were to be completed by the Builder on or before 14 March 2016 (order 3a), various payment obligations on the Builder and an order that if the order to perform the work was not complied with then the Home Owners could request a renewal of the application at any time before 31 August 2016 (order 4). 6. The Home Owners claimed that the Builder did not comply with all the consent orders for work. Accordingly, they exercised their right of renewal of the original proceedings by filing a Notice to Renew Proceedings dated 14 April 2016 against the Builder (the renewal proceedings, constituted by File No HB 16/18392). By the Notice to Renew Proceedings, the Home Owners sought an order for payment of $60,000.00 (made up of specified amounts in respect of 15 items) and compensation in the amount of $20,000.00. 7. The renewal proceedings were listed before the Tribunal on 20 May 2016. On that occasion, various orders were made for the parties to serve the evidence each relied upon. An order was also made in respect of the filing of any cross application by the Builder and for the service of evidence in relation to any such cross application. 8. On 3 June 2016, the Builder lodged a cross application against the Home Owners (the cross application, constituted by File No HB 16/26546). In the cross application the Builder sought an order that the Home Owners pay the Builder an amount of up to $20,000.00. 9. In the cross application the Builder's answer to question 12 on the application form ("What are your reasons for requesting the above order/s?) was: "The [Home Owner] has become abusive and threatening towards the [Builder] and thereby repudiated the Contract. It has reached the stage when the [Builder] feels it is unsafe to go back on site. The [Builder] claims the balance of the Contract price, as varied, less allowances not utilised, less a credit for tiles supplied by the [Home Owners], less the amount it would cost the [Builder] to complete (based on subcontractor quotes) had the [Builder] not been prevented from proceeding with the works due to the [Home Owner's] abusive and threatening behaviour". 1. It is apparent that the Home Owners accepted that leaving aside an amount due to them for the partial non-performance by the Builder of the consent orders made on 12 February 2016 there was an amount due to the Builder for the net profit the Builder could have expected to have made from the performance of the contract. This acceptance did not include any amount in respect of what the Builder claimed were agreed variations. However, it was the Home Owners' position that, after taking account of what was said to be due to them for the partial non-performance of the consent orders, a significant sum was owing to them. 2. At the hearing before the Tribunal Member it became clear that the Builder accepted that some items the subject of the consent orders made on 12 February 2016 had not been completed by them. The hearing on 13 July 2016 1. In view of the contention by the Builder that they were not given the opportunity to challenge the Home Owners' material in support of their case, we have listened to the sound recording of the hearing. 2. It is apparent to us that each party's conduct of the hearing created difficulties for the Tribunal Member in identifying the real issues to be resolved and to determine the merits of the respective claims. In the first place, each party sought to raise issues concerning the scope of uncompleted work that went behind the resolution achieved by the consent orders. Furthermore, each party sought to rely on new quotations as to the cost of work not supplied to the other party before the hearing, despite orders providing for such documents to be served in advance of the hearing. Furthermore, the Builder was unable to clearly indicate what their position was in respect of each item that made up the Home Owners' claim. Yet further, the Home Owners', at times, made insulting remarks about the Builder and unspecified allegations of fabrication of documents. Overall, the assistance the Tribunal received from the parties to determine the claims was well below that which it should have obtained. Decision of Tribunal at first instance 1. The Tribunal decided that after taking account of the costs to complete or perform the outstanding items the subject of the consent orders there was a net sum of $27,994.42 owing to the Home Owners (at [41]). This was the figure obtained after deducting an amount of $14,404.00 found to be payable to the Builder (at [40]) on the Builders' cross application from the amount of $42,398.20 found to be payable to the Home Owners on their claim (at [28]). 2. As to the amount of $42,398.20 payable to the Home Owners, the Tribunal set out its findings in the following schedule in paragraph 28 of the reasons (the Paragraph 28 Schedule): Item No Work Quotation Amount allowed 2a and 2b to remove the existing dentil mouldings from the gable above the portico; Ada Carpentry and Joinery Services; this quotation contains 7 items, including install subfloor gate, install quad to rear eave lining and supply and install various doors which do not appear to relate to these items. The total quotation is in the sum of $19,965.00 including GST. Of this total, I estimate an allowance of $12,000.00 in relation to this item. $12,000.00 to supply and install pre-cast 'unitex' moulding to gable above bay window and the same moulding is to be installed at the soffit of the gable to the portico at the junction of the face of the wall and to prepare for painting; 2c to complete all external painting in accordance with the specification using a three coat 'Dulux' paint system; Australian Colourful Painting and Decorating: this quotation includes a detailed description of the work to be done. It has not been disputed and I allow the amount quoted. $12,800.00 2e to clean the subfloor areas by removing and disposing of all building waste; For the same reasons as above, I allow the quotation of AECS Cleaning. $1,708.20 2j to provide and install vented subfloor gate; This is included in the Ada Carpentry and Joinery Services quotation referred to above. I allow a proportion of that quotation in the sum of $1,500.00. $1,500.00 2l In respect of rear columns, to cut the shaft of the columns to allow the installation of the base to sit on top of the tiles to the rear patio; I allow the unchallenged quotation of Slave Gjakovski. $2,420.00 In respect of the front columns, to repair building damage to two columns at their bases and capitals; 2m where required in respect of the color bond fence, to repair or replace (as required) one panel which was removed to allow building access and straighten and concrete in adjacent panels to achieve a level of plumb fence; I allow the quotation provided by Bella Vista Fencing and Gates, and again I note this was not disputed. $550.00 2n in respect of garage doors, to provide proof of order of garage doors to the applicant (such proof to be provided on or before Tuesday 15-Feb-2016); The homeowners submit this work was not done. However, the consent orders do not otherwise provide for any work to be done in relation to garage doors and the renewal application indicates all further work in relation to the garage has been completed. However, this item is still included in the renewal application, limited to the cost of the doors. As noted above, the builder also includes this in his schedule of "Items to finish" in the amount of $4,070.00. This agrees with the homeowners' claim and I allow that amount. $4,070.00 3b the respondent is to pay $5,000.00 to the balustrade contractor selected by the owner; The applicants allege this payment has not been made. The builder did not dispute this nor provide any evidence of such a payment. $5,000.00 3f and 3g if the installation is found to be defective, the respondent will pay the $250.00 inspection fee; The "installation" referred to is the gas installation. I note that this item applies only to the cost of inspection fee and does not refer to any work done or to be done in relation to the gas installation. $250.00 however, if the installation is found to be satisfactory then the applicants will bear payment of the inspection fee; The evidence is unclear but I note the applicants have included an invoice from a gasfitter in relation to re-installing the termination. On that basis I find the installation was unsatisfactory and therefore the builder is to pay this amount. The applicants have noted in respect of this item that "front tiling not done". The contract between the parties specified $60m2m for tiling and therefore this item claims that amount multiplied by the area applicable. 3i the respondent is to pay the PC allowance times the area to the tiles supplier and any excess is to be met by the applicants. There are two quotations for tiling. Sydney Tile Gallery quotes for 35m2 but this quotation does not make clear which area or areas are referred to. $2,100.00 The quotation from Crescent Tiling makes clear this is the front area and the area is also quoted as 35m2. On that basis the amount allowed and to be paid by the builder is $60.00 x 35. Total $42,398.20 1. Each of the items in this schedule were items contained in the consent orders made on 12 February 2016. 2. As to the amount of $14,404.00 payable to the Builder in paragraph 38 of the reasons (the Paragraph 38 Schedule), the Tribunal accepted the correctness of a schedule supplied by the Home Owners as follows: Item Amount Contract Value $374,000.00 Bank Transfers $275,000.00 Balance Due $ 99,000.00 PC Allowance – Items included in the Contract – below Kitchen cabinetry and Pantry Supply and install $ 18,516.00 Bench tops and splashbacks supply and install $ 4,900.00 Laundry supply and install $ 10,000.00 Vanities supply and install $ 5,500.00 Air condition supply and install $ 10,000.00 Ensuite, Bathroom, W.O $ 8,000.00 WIR Fitout supply and install $ 1,000.00 Rubbish removal $ 300.00 Tiling of pantry $45 m2 x 2 $ 90.00 Internal door handle x 10 at $150 each $ 1,500.00 Extra for bathroom tiles $ 1,100.00 Deposit of bathroom and laundry tiles $ 2,000.00 Full payment for internal tiles 10/3/2015 $ 6,200.00 Payment to Frank install doors skirting boards and architraves $ 1,500.00 Rough floor sanding from water damage $ 1,000.00 Paid Hus for excavation August 2015 $ 3,800.00 Gas Heater repair $ 490.00 Front door lock $ 200.00 Simon Gyprocker $ 500.00 Paid Booth to adjust front doors and fit lock $ 100.00 Paid Booth for timber for front door jamb exterior $ 200.00 Brian Booth for installing architraves and door in garage $ 1,120.00 Paid Brian Booth for installation of ducted fans in bathrooms $ 200.00 Supply paint for garage $ 500.00 Sand and polish steps in garage 16/5/2016 $ 1,000.00 Application fees $ 500.00 Excavation front yard upper level and bottom $ 1,000.00 Service NSW receipt $ 500.00 Exhaust fan garage bathroom $ 280.00 Repair and install 5 columns 2 front and 3 rear $ 2,600.00 Sub Total $ 84,596.00 Balance Payable $ 14,404.00 1. The deductions from the claimed balance due to the Builder of $99,000.00 were made on the basis that these were items paid by the Home Owners for work and materials in carrying out the contract and, hence, were expenses the Builder was saved from incurring in performing the contract. However, two of the items, namely, "Application fees" and "Service NSW receipt" were costs incurred by the Home Owners in connection with the proceedings they commenced in the Tribunal to claim the money allegedly due to them. 2. The Paragraph 38 Schedule appeared to indicate that the items deducted from the "Balance Due" were "PC Allowance – Items included in the Contract – below" (see the fourth entry). However, the signed contract between the parties dated 14 July 2014 revealed that only 8 of the items deducted were specified as PC allowances in the contract. 3. As to the amount found due to the Builder of $14,404.00, the Tribunal Member concluded that this amount was owing on the basis of the Home Owners' concession in circumstances where there was an absence of supporting evidence for the Builder's claim (at [40]; see also [34]). The Tribunal noted that the Builder had provided little evidence to support the claim and had not provided any schedule or document setting out how they arrived at the claimed amount of $20,000.00 (at [34]). 4. In so finding, the Tribunal Member rejected the Builder's claim for alleged variations for the total sum of $13,400.00 including GST, the subject of a "Variations List" (at [35] and [16(3)]. The Tribunal Member found that there were no variation documents signed by the parties and there was no evidence that these variations were agreed by the Home Owners [35]. 5. The Orders made on 20 October 2016 were the subject of amendment pursuant to s 63 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act). On 21 November 2016, an order was added as follows: "The respondent N & L Daoud is to provide the applicants Ali Hammoud and Mary Hammoud all relevant certificates of compliance no later than 2 December 2016". 1. A further amendment was then made on 5 December 2016, as follows: "In application HB 16/18392, at the request of the parties: 1. TGI Homes Pty Ltd 2. Najib and Laila Daoud 3. Najib Daoud 4. Laila Daoud are joined as respondents on HB 16/18392 only." The Builder's Appeal 1. This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal. The Builder has a right of appeal on a question of law and on any other grounds with the leave of the Appeal Panel: s 80(2)(b) of the NCAT Act. 2. The grant of leave is regulated by cl 12 of Schedule 4 of the NCAT Act, which provides: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. As far as the Paragraph 28 Schedule was concerned, on the appeal, the Builder sought to challenge six out of the 12 items, namely those in 2a, 2b, 2c, 2e, 2j, and 2l. Initially, by the Notice of Appeal, the Builder had also challenged the amount awarded in respect of item 3i, but in the Builder's submissions dated 6 March 2017 it was stated that there was no objection to this item. 2. As far as the Paragraph 38 Schedule was concerned, on the appeal, the Builder sought to challenge: 1. the Tribunal's rejection of the claim for variations. 2. The "Bank Transfers" in the amount of $275,000.00. During the hearing of the Appeal on 20 February 2017 the Home Owners conceded that this sum was an error in the Schedule they had supplied and that the amount paid by them was $272,000.00. 1. In addition, on the appeal, the Builder complained about other items in the Paragraph 38 Schedule that were costs said to be paid by the Home Owners that were deducted from the amount payable to the Builder. Initially, by a three page document attached to the Notice of Appeal dated 7 November 2016 containing handwritten headings "Reasons For Appeal" and "Orders to be Corrected", the Builder challenged six items of these costs, namely the amounts concerning, "Deposit of bathroom and laundry tiles" (Item 1), "Full payment for internal tiles 10/3/2015" (Item 2), "Application Fees" (Item 3), "Excavation front yard upper for level and bottom" (Item 4), "Service NSW receipt" (Item 5), and "Repair and install 5 columns 2 front and 3 rear" (Item 6). The numbers in parenthesis after these items are the numbers we will use in dealing with these items in these reasons. 2. Later, by submissions dated 15 March 2017, the Builder extended his challenge to a further six items, namely "Rubbish removal", "Rough floor sanding from water damage", "Gas Heater repair", "Simon Gyprocker", "Brian Booth for installing architraves and door in garage" and "Exhaust fan garage bathroom". 3. In the Notice of Appeal the Builder makes the following statement under heading 5B 'Grounds of Appeal': "I have attached a separate sheet with reasons for each item. These reasons are based on the existing evidence we and [the] other party provided. It is how the calculations and the sums don't add up to the evidence and facts available. In the 3 hearings we attended, we never once were (sic) got a chance to defend or challenge these decisions or sum calculations". 1. Under heading 6B 'Application for Leave to Appeal from a Consumer and Commercial Division Decision' the Builder also states: "i. Decision not fair and equitable - There are obvious calculation errors in deriving order amounts - In the hearings we attended we never got a chance to challenge the evidence of the other party - Decision was against the weight of evidence and misinterpreted facts available. See attached documents. ii. Decision of the Tribunal against the weight of evidence What evidence did you give at the hearing? What documents did the other party show the Tribunal? Please see attached doc's that show obvious discrepancies and errors in calculations. Items that the other party had been awarded twice for something. What evidence should the Tribunal have given more weight to? Why? - Please see explanation document date 7/11/16 by N & L Daoud. 3 pages attached - Items that have been awarded to parties that were clear and obvious not part of the Contract between the parties. Included in evidence previously submitted." Consideration – the Paragraph 28 Schedule Issues 1. As explained below, in our opinion, the Builder's appeal in respect of items 2a, 2b and 2j must be upheld because of a lack of reasons for decision. This was an error of law. Items 2a and 2b 1. As to items 2a and 2b, no reasons were given by the Tribunal Member to explain how he arrived at an allowance of $12,000.00 from the higher figure given in the quote referred to of $19,965.00. That quote does not provide any assistance in arriving at a figure for the specific items in issue, nor, as we understood it, was there any other evidence before the Tribunal to support an amount of $12,000.00 for these items. 2. In making his allowance of $12,000.00 for these items, the Tribunal Member relied upon a quotation from Ada Carpentry and Joinery Services dated 30 May 2016 (ACJS Quotation) provided by the Home Owners. The ACJS Quotation contained seven items totalling $19,965.00 including GST but without any breakdown between these items. Some of the seven items (to install subfloor gate, to install quad to rear eave lining and to supply and install various doors) did not relate to items 2a and 2b. 3. Item 2b refers to 'unitex' moulding which is a reference to materials supplied by Unitex Granular Marble Pty Ltd ("Unitex"). A Unitex quotation dated 30 April 2015 in an amount of $1,093.52 (listing prices for Unitex materials) was a document provided to the Member at first instance by the Builder. Also provided to the Member (in this instance, by the Home Owners) was a copy of a Tax Invoice dated 5 April 2016 from Hardcote Trading Pty Ltd ("Hardcote") in the amount of $3,574.08 for materials relating to 'Mould dentils' and 'Moulding's gables'. We also know from the sound recording of the hearing that the Hardcote quotation was challenged by the Builder as a reasonable basis for assessing the cost of mouldings (see also paragraph [19] of the reasons). 4. The Tribunal Member's reasons ([17], [27]) note the difficulty he had with the parties' evidence (in some instances, the paucity of evidence) and also with their presentation of the issues. The Member stated that he had done: "his best to provide a reasonable estimate of the proportion of the total quotation to be allocated to each item". 5. We recognise that in relation to such an issue of quantum concerning amounts of this size the reasons should not be elaborate. Nevertheless, the Tribunal did not explain the reasoning process that led to his conclusion to allow $12,000.00 for items 2a and 2b, nor did the Tribunal Member deal with the competing evidence that was adduced in respect of the quantification of the cost of these items. In this respect, the Tribunal made an error of law : see Collins v Urban [2014] NSWCATAP 17 at [48] to [57]; Hernady v Raccani [2016] NSWCATAP 67 at [37],[43],[44] and [52] to [54]. 6. At the hearing of the appeal, we explored with the parties what other evidence, including fresh evidence, there was from which an amount for these items could be determined. The Builder submitted that the allowances for items 2a and 2b should be substantially reduced from $12,000.00 to $5,000.00 (or even lower), if one takes into account the Unitex quotation dated 30 April 2016 for materials in the amount of $1,093.52 (which was in evidence before the Member), and a quotation dated 10 June 2016 from Carpentry One Group in the amount of $1,000.00 for labour (which was not in evidence before the Member). The Home Owners sought to rely upon another Unitex quotation dated 29 June 2016 in the amount of $6,028.90 (materials) that was presented to the Tribunal at first instance and a Tax Invoice of Rogertex NSW dated 15 November 2016 in the amount of $4,224.00 (labour) that was obtained after the hearing at first instance. 7. Regrettably, given the nature of the differences between the parties on a range of matters bearing upon the cost of these items and the difficulty we experienced in trying to understand these differences on the state of the evidence, we have concluded that the assessment of an amount in respect of items 2a and 2b must be remitted to the Tribunal at first instance for redetermination. Item 2j 1. After noting that item 2j is included in the ACJS Quotation, the Member's Reasons state that he had allowed: "a proportion of that quotation in the sum of $1,500.00". However, as with the conclusion concerning items 2a and 2b, the reasons do not explain how such a figure was arrived at. The item 'to install subfloor gate' is one of seven items in the ACJS Quotation, but without any individual amount attributable to that item. Item 2c 1. In our opinion, the Builder's appeal in respect of item 2c should be rejected. 2. Up until the time of the hearing before the Tribunal Member, there had been no competing quotation supplied by the Builder to the quotation from Australian Colourful Painting and Decorating that the Tribunal Member accepted. However, at the hearing the Builder sought to rely on two emails from Mr Elkahim dated 12 July 2016 in support of an amount for this item of $6,500.00. This was very late evidence – 12 July 2016 was the day before the hearing. There was no reasonable explanation for this delay (see further below concerning the orders made for the provision of evidence in advance of the hearing). 3. In our opinion, it is implicit in the reasons of the Tribunal Member that he was rejecting the admission of this very late evidence from the Builder, although it would have been preferable for his reasons to have referred to this aspect. Items 2e and 2l 1. We also reject the Builder's appeal in relation to the balance of the Paragraph 28 items in issue, namely items 2e and 2l. This is because the points made by the Builder on appeal, as outlined below, raise new and controversial factual issues that were not raised in the hearing below: see Hudson v Arp 1 (NSW) Pty Ltd [2014] NSWCATAP 31; Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418 at 438; Coulton v Halcombe [1986] HCA 33; 162 CLR 1. As was said by the High Court in Suttor's case, generally new points will not be permitted to be raised on appeal where "evidence could have been given which by any possibility could have prevented the point from succeeding". 2. In relation to item 2e, on appeal the Builder contended that all material waste had been removed by him. That was disputed by the Home Owners. 3. In relation to item 2l, the Builder disputed that all this work remained to be completed and that only minor work was outstanding. This was disputed by the Home Owners. Consideration – denial of procedural fairness 1. At this point, it is convenient that we deal with the Builder's contention on the appeal that at the hearing below he was not given the opportunity to challenge the individual items making up the Homeowners' claim and the deductions in the Paragraph 38 Schedule and/or the Home Owners' evidence in support of these items. This amounts to a contention that he was denied procedural fairness, which would be an error of law. 2. For the reasons below, we disagree with this contention. 3. First, the orders made in the proceedings by the Tribunal on 20 May 2016 provided the parties with an opportunity to present evidence from witnesses and documents in support of their positions on the issues in the proceedings. In this regard, in the renewal proceedings, order 4 identified the particular items in respect of which the Home Owners sought relief with a direction to the parties to 'address each point'. It did so by reference to the consent orders made in the original proceedings. Also, in respect of the Builder's cross-application, by order 7, the Builder was required to specify the reasons for the orders sought accompanied by all supporting documents. 4. Second, on 3 June 2016 the Builder received the Home Owners' documents to be relied upon. This included documents which formed the basis of the Tribunal's findings in the Paragraph 28 Schedule and in the Paragraph 38 Schedule. The Builder was provided with the material to be relied upon against him and had almost six (6) weeks to prepare his response. 5. Third, the Builder's documents provided to the Tribunal and the other party on 7 June 2016 did not address the particular items identified in the renewal proceedings as order 4 made on 20 May 2016 had directed. No written statement (such as the three page document dated 7 November 2016 attached to the Notice of Appeal) was provided by the Builder to challenge the items in dispute on the renewal application or to articulate reasons why the Home Owners' calculations as to contractual adjustments (and which formed the basis of the findings in the Paragraph 38 Schedule) could not be relied upon by the Tribunal. No statutory declarations or written statements of evidence were provided by the Builder to point out errors in any of the Home Owners' calculations of damages. 6. Fourth, despite directions on 20 May 2016 indicating under the heading 'IMPORTANT NOTE' the nature of documents required, the Builder did not provide any evidence, or other written statement, as to the manner of calculation of his claim in the cross application. 7. Fifth, we have listened to a tape recording of the hearing of the proceedings on 13 July 2016. It is clear that on a number of occasions the Builder was given the opportunity to state what his position was in relation to both claims and to identify the evidence he relied upon. In relation to each claim, the Builder raised particular points and referred to specific evidence. However, the Builder did not take the opportunity that he was given to challenge or dispute most of the Home Owners' claims and the quotations supporting those claims. Consideration - The Builder's claim for variations 1. On the appeal, there was no challenge by the Builder to the Tribunal's finding that there were no variation documents signed by the parties (at [35]). 2. At the hearing before the Tribunal Member, and on appeal, the Builder relied upon a two page document headed Variations setting out a number of items of work and materials with prices attributed to each of them with a total price stated of $13,400 including GST. 3. In the Builder's document dated 7 November 2016, supplied with the Notice of Appeal, it was contended that the variations were agreed by the Home Owners and that text messages had been supplied to the Tribunal Member in support of that contention. It was also stated that the Builder did not have any quotations for these variations as they were completed by the Builder's employees. 4. The Builder made no argument about the statutory provisions concerning the enforceability of these alleged variations. 5. The Home Owners denied that there was any agreement for variations. They contended that the emails and text messages evidenced enquiries only regarding costings. 6. The parties' contract is evidenced in the Scope of Works document dated 14 July 2014 signed by the parties containing a contract price of $374,000.00, the HOW Certificate issued by QBE Insurance on 28 July 2014, and the plans and drawings of Parker & Associates dated January 2013. These documents do not expressly require that variations are in writing and signed by the parties. However, a contract for residential building work worth more than $5,000.00 made before 1 March 2015 is taken to include a term requiring any agreement to vary the contract to be in writing and signed by the parties: see the Home Building Act (the HB Act), s 7E, Home Building Regulation 2014 (HB Regulation), Reg 9, which incorporates the terms of contract set out in Part 1 of Schedule 3 including cl 1(2). 7. Moreover, the statutory requirements as to the form and content of contracts for residential building work worth more than $5,000.00 entered into before 1 March 2015 as set out in s 7, s 7B and s 7E of the HB Act and in the HB Regulation (see particularly Regulation 8 and the Checklist in the form set out in Schedule 2) apply to any variations to a contract for residential building work: see s 6(1) (b) of the HB Act. The consequence is that in respect of any oral variation (if found) to the parties' contract or any written variation not signed by the parties the Builder is not entitled to damages or to enforce any other remedy in respect of a breach of contract: see s 10 of the HB Act; Xu v Jihong Design & Constructions Pty Ltd [2011] NSWCA 277, [25], [29] & [105 - 106]; M&M Building Pty Ltd v Keith [2017] NSWCATAP 88 at [173] to [184]. 8. Given the Builder's lack of compliance with the statutory requirements for variations, the Builder's claim could only have been a claim in restitution for the value of work done at the request (if any) of the Home Owners; Xu's case at [106]; Pavey & Matthews v Paul [1987] HCA 5; (1987) 162 CLR 221. 9. Even if it be assumed that all of the variations were agreed with the Home Owners through text messages (a matter which we do not accept the Builder has demonstrated), the Builder did not supply any material beyond assertion to establish the value of the work and materials supplied. 10. In the circumstances, the Builder has not established any error of law or ground for the grant of leave to appeal based upon a substantial miscarriage in relation to the issue of variations. Consideration - the Paragraph 38 Schedule issues 1. For the reasons set out below, in our opinion, the Builder's appeal in respect of items 3, 5 and 6 in the Paragraph 38 Schedule, as referred to in paragraph 36 above, should be upheld. The challenge on appeal to all other items contained in the Paragraph 38 Schedule, including the challenge to the additional items made by the Builder's submissions dated 6 March 2017, is rejected. Items 3 and 5 (Application fees and Service NSW receipt) 1. Although these are new points raised on appeal, it is incontestable that items 3 and 5 are not contractual costs incurred by the Home Owners in connection with the performance of the contract. They are costs of the proceedings in the Tribunal brought by the Home Owners to enforce their rights. They should not have been included as deductions from the amount due to the Builder under the contract. Item 6 (Repair and install 5 columns 2 front and 3 rear) 1. We uphold the appeal in relation to item 6 in the Paragraph 38 Schedule. 2. Again, this is a new point raised on appeal. However, it is sufficiently clear that this item is a repeat of the work and material already covered by item 2l in the Paragraph 28 Schedule. Hence, to allow the Home Owners to deduct this cost would be to allow them to twice recover the same cost. The remaining Paragraph 38 Schedule disputed items 1. We reject the appeal in respect of the balance of the items in the Paragraph 38 Schedule challenged by the Builder on the appeal. In respect of each of them, the points raised by the Builder raise new and controversial factual issues that were not raised in the hearing below. In this regard, we repeat what we have already said about the raising of such points on appeal. Orders on Appeal 1. For the above reasons, we make the following orders: 1. The appeal is allowed in part. 2. The orders made by the Tribunal Member on 20 October 2016 are set aside. 3. In substitution for the orders made by the Tribunal Member on 20 October 2016, order that the Tribunal Member reconsider the amount payable by the Builder to the Home Owners in the renewal proceedings brought by the Home Owners, being File number HB 16/18392, and the amount payable by the Home Owners to the Builder in the cross-application brought by the Builder, being File number HB 16/26546, and the net amount payable after setting off these two amounts, but that such reconsideration by the Tribunal Member is to proceed on the basis that the amounts payable are the same amounts as were determined to be payable by the Tribunal Member in the decision dated 20 October 2016, save that: 1. The sum total of amounts paid by bank transfers to the Builder is to be $272,000.00 and not $275,000.00; 2. In File Number HB 16/18392 the quantum of the amounts to be paid by the Builder to the Home Owners in respect of items 2a, 2b and 2j in the Paragraph 28 Schedule is to be reconsidered by the Tribunal Member with leave for the parties to adduce further evidence. 3. In File Number HB 16/26546 the amounts of $500.00 in respect of "Application Fees", $500.00 in respect of "Service NSW receipt" and $2,600.00 in respect of "Repair and install 5 columns 2 front and 3 rear" as set out in the Paragraph 38 Schedule are not to be deducted from the amount to be ordered to be paid by the Home Owners to the Builder. 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 May 2017