Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Beveridge v Style Tiles and Bathrooms Pty Ltd [2018] NSWCATAP 183 Hearing dates: 12 July 2018 Date of orders: 27 July 2018 Decision date: 27 July 2018 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member J Currie, Senior Member Decision: (1) Leave to appeal is refused and the appeal is otherwise dismissed. Catchwords: CONTRACT LAW – formation of contract – "refundable" deposit – uncertainty. HOME BUILDING ACT – Unenforceable contract – claim by homeowner – requirements of s 7AAA of Home Building Act, 1989 (NSW). COSTS – special circumstances – original orders set aside due to non-appearance of respondent – subsequent rehearing – party partially successful. Legislation Cited: Civil and Administrative Tribunal Act, 2013 (NSW) Civil and Administrative Tribunal Rules, 2014 (NSW) Home Building Act, 1989 (NSW) Home Building Regulation, 2014 (NSW) Cases Cited: Australian Woollen Mills Pty Ltd v The Commonwealth 92 CLR 424; [1954] HCA 20 Collins v Urban [2014] NSWCATAP 17 Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235 Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 Whitlock v Brew (1968) 118 CLR 445; [1968] HCA 71 Texts Cited: Nil Category: Principal judgment Parties: Geoffrey Beveridge (First Appellant) Karen Beveridge (Second Appellant) Style Tiles and Bathrooms Pty Ltd (Respondent) Representation: In person (Appellants) No appearance (Respondent) File Number(s): AP 18/15692 Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 16 March 2018 Before: P French, General Member File Number(s): HB 17/52808 reasons for decision Introduction 1. The appellants own a property at Mittagong (Premises) at which they wished to carry out renovations to their ensuite bathroom (ensuite) and laundry. They had, apparently, attended the respondent's showroom to inspect various fixtures and fittings for use in the proposed renovations. 2. While at the respondent's showroom, the respondent asked the appellants whether they would like the respondent to provide a free measure and quote to carry out the proposed renovation work. On 24 June 2017, a representative of the respondent attended the Premises to measure the proposed works. Quotations were sent to the appellants in respect of proposed renovations to the ensuite and the laundry. These quotations were for $26,900.00 and $14,900.00 respectively. 3. Following a further attendance at the respondent's showroom on 27 June 2017, the appellants paid to the respondent an amount of $1000 being a deposit of $500 each in respect of the proposed renovations to the ensuite and the laundry. 4. Ultimately, the proposed renovations to the ensuite and the laundry did not proceed and the appellants sought a refund of the $1000 deposit. When this did not occur, they filed home building application HB 17/52808 seeking an order that the respondent repaid to them this amount. 5. On 16 March 2018, the Tribunal made an order in favour of the appellants requiring the respondent to repay an amount of $500 in connection with the proposed renovation to the ensuite. However, the Tribunal determined that the appellants were not entitled to a refund of the $500 deposit in connection with the laundry renovation. The Tribunal also rejected an application for costs made by the appellants. The Tribunal provided written reasons for decision (Reasons) 6. The appellants appeal the decision. History of proceedings at first instance 1. It is necessary to set out a brief history of the proceedings at first instance, these issues being relevant to an application for costs. 2. As indicated above, the transaction, the subject of the dispute, occurred in about June 2017. A home building application was filed in the Consumer and Commercial division of the Tribunal on 6 September 2017. That application sought a refund of the both deposits, totalling $1000. 3. From the submissions we have received and from the Reasons, it appears the following occurred: 1. The application was listed for Conciliation and Hearing in a Group List at Moss Vale on 25 September 2017. The appellants attended but there was no appearance on behalf of the respondents. The Tribunal made directions for the exchange of documentary evidence and for the matter to be allocated a hearing date. 2. The application was fixed for hearing on 13 November 2017. Again the appellant appeared however there was no appearance by the respondent. Orders were made in favour of the applicant in an amount of $1000. A certificate under s 78 of the Civil and Administrative Tribunal Act, 2013 (NSW) (NCAT Act) was issued for the purpose of enforcement proceedings. 3. On 20 November 2017, the respondent applied to the Tribunal to set aside the decision made on 13 November 2017 on the basis they did not receive notice of the hearing. Ultimately, the application to set aside was granted and on 1 December 2017 orders were made to set aside the decision. 4. The proceedings were relisted for Conciliation and Hearing in a Group List on 30 January 2018. Again, the respondent did not attend, on this occasion a representative of the respondent, Ms Bridges, sending an email to the Tribunal advising that the respondent was "understaffed" but saying that it wished to defend the claim and that the appellants were not entitled to a refund they sought. Consequently, the proceedings were adjourned for hearing, with directions being made for any additional material the parties sought to rely on. 5. The proceedings were finally listed before the Tribunal for hearing on 16 March 2018, the appellants appearing in person and the respondent's representative, Ms Graham, appearing by telephone. At this hearing, the Tribunal noted the respondent's representative gave oral evidence under oath and that the respondent had provided a bundle of evidence to the Tribunal which had not been sent to the appellants. 1. It was against this background that the Tribunal came to make the orders on 16 March 2018. Notice of Appeal and history of appeal proceedings 1. The Notice of Appeal is dated 3 April 2018. There is no dispute it was filed in time. 2. On 8 May 2018 the Appeal Panel made directions for the filing and service of submissions and evidence from the original proceedings, including the sound recording of the hearing at first instance and a typed copy of the relevant parts of the sound recording upon which each party relied. 3. Prior to the hearing, the respondent had applied for its representative to appear by telephone. The reason given was that there was a party, the respondent was a family company and the representative was going on a cruise the day after the hearing. The request to attend by telephone was refused prior to the hearing of the appeal. The respondent had then written to the Tribunal advising that no representative would be appearing at the hearing and asked for the matter to be determined on the basis of the documents submitted. Again the reason given was that no one from the respondent could attend having regard to the planned cruise. In the meantime, the appellants also applied to have the appeal determined on the papers. 4. Ultimately, when the matter was called for hearing, the appellants did appear. There was no appearance by the respondent. The Appeal Panel considered the correspondence of the respondent concerning determining the matter on the papers and noted that the respondent was otherwise unable to send a representative to the hearing by reason of the matters stated above. The Appeal Panel decided to treat this correspondence as an application for an adjournment. The application was opposed by the appellants and was ultimately dismissed by the Appeal Panel. Oral reasons were given. 5. At the commencement of the hearing of the appeal, the Appeal Panel identified the documents upon which the parties intended to rely. It was apparent that all documents from the original hearing had not been provided. It is also apparent that the Appeal Panel had not been provided with a copy of the sound recording nor a typed copy of all relevant parts upon which either party intended to rely. 6. During the hearing, the Appeal Panel was provided with a copy of the quotation dated 24 June 2017 in respect of the laundry, the deposit for which was the subject matter of the present appeal. This quotation became Exhibit A in the appeal. In addition, the appellants handed up a typed copy of further extracts of the sound recording (but not a copy of the sound recording) being evidence given by Ms Graham at the hearing on 16 March 2018. This document became MFI 1. 7. It is also relevant to note that the Appeal Panel asked the appellants whether they wished to seek an adjournment on the basis that certain material from the original hearing had not been provided for the purpose of the appeal. As necessary, we will identify this material in our reasons below. For present purposes it is sufficient to record that the appellants did not seek an adjournment and elected to continue with the appeal notwithstanding they were informed the appeal might be resolved adversely to them in the absence of all relevant information. Grounds of appeal and submissions 1. The grounds of appeal can be summarised as follows: 1. The Tribunal was in error in finding the appellant had cancelled the laundry project. This was against the weight of evidence, the Tribunal accepting what the respondent had said and not considering the evidence that "there was no final agreement as the respondent had failed to provide a satisfactory plan" for that work. The laundry project plans were never completed or nor was a "final quote" agreed. 2. The Tribunal was in error in dismissing the costs application. The Tribunal should have found there were special circumstances due to the "elongated nature of the proceedings, failure of the Respondent to appear at the Hearings and failure to serve evidence resulting in (and continuing) unnecessary expenses". 3. The Tribunal offered the appellants a "short adjournment" during the hearing to read evidence given to the Tribunal which the respondent had not given to the appellants prior to the hearing. The failure to provide the evidence prior to the hearing was in breach of the orders made by the Tribunal. The offer was declined by the appellants and having regard to the "limited time" given to read the material the decision of the Tribunal was against the weight of evidence and not fair and equitable. 1. The appellants' submissions can be summarised as follows: 1. There was no contract between the parties. A deposit had been paid but there was no entitlement to retain the deposit, there being no contract finalised or any agreement on the scope of work to be undertaken. 2. The documents attached to the respondents Reply to Appeal were not received by the appellants. In particular they did not receive the letter dated 27 June 2017 entitled "Terms and Conditions of Renovation Deposits". In any event, no relevant agreement was made in connection with the deposit, the agreement not being certain, the terms not being sufficient to constitute a relevant agreement and there being no voluntary assumption of any obligation between the parties. In this regard the appellants relied on various decisions including Whitlock v Brew (1968) 118 CLR 445; [1968] HCA 71, Australian Woollen Mills Pty Ltd v The Commonwealth 92 CLR 424; [1954] HCA 20 and Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235. 3. Further, any contract between the parties did not comply with the requirements of the Home Building Act, 1989 (NSW) (HB Act) and was unenforceable. 4. In respect of the decision concerning cost, the appellants referred to a chronology of events of the proceedings at first instance and said that they had been unnecessarily disadvantaged, that the respondent had failed to comply with its duty under s 36(3) of the NCAT Act and that having regard to the strength of the appellants' case the Tribunal ought properly to having concluded special circumstances exist. The appellants also sought to rely on additional documents relating to the cost they had incurred in the proceedings at first instance. In doing so, there was no dispute that this material could have been provided to the Tribunal originally, a matter relevant to determining whether leave should be granted having regard to the provisions of Sch 4 cl 12(1) of the NCAT Act. 5. The appellants also sought costs of the appeal. However, during oral submissions, the appellants accepted that there was no feature of the appeal which was "out of the ordinary" so as to constitute special circumstances. Consequently, there is no power for the Appeal Panel to make an order for costs in connection with the appeal and it is unnecessary to consider this point further. 1. In making their submissions, the appellants referred the Appeal Panel to various parts of the transcript, MFI 1, which they provided at the hearing. 2. In reply, the respondent provided written submissions, electing not to attend the hearing. The respondent maintained its position that the laundry contract had been "cancelled" because the appellants did not wish to proceed with the laundry work. 3. The respondent referred to the contention at the original hearing that they would only enter into a contract if there was an opportunity to carry out substantial work with a sufficient profit margin to justify the costs of managing a project in Mittagong from the Sydney showroom. 4. The respondent submitted that the appellant had accepted the quotations and paid the "pre-contractual deposit" and in circumstances where the respondent had spent "many hours … On the selection process, having plans drawn over and over again" that they were entitled to retain the deposit of $500. Consideration 1. This appeal is from a decision of the Consumer and Commercial Division. 2. There is a right of appeal on a question of law. Otherwise leave to appeal is required: s 80(2)(b) of the NCAT Act. Leave to appeal may only be granted if the Appeal Panel is satisfied the appellants may have suffered a substantial miscarriage of justice because the decision was not fair and equitable, against the weight of evidence, or significant new evidence has arisen that was not reasonably available at the time of the original hearing: Sch 4 cl 12(1) of the NCAT Act. The principles applicable to the grant of leave are set out by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17. 3. The first issue raised on appeal is whether there was an enforceable contract the terms of which enabled the respondent to retain the deposit paid in connection with the proposed laundry renovation. 4. From the material we have been provided, the following is evident: 1. There was a quotation for the carrying out of the laundry renovation dated 24 June 2017 for an amount of $14,900. 2. While the appellants denied having received the letter dated 27 June 2017 setting out the terms and conditions of the renovation deposit, oral evidence was given at the hearing by Ms Graham on behalf of the respondent to the effect that this document was provided to the appellants and that the deposit was a payment required "to secure a start date for the renovations" and that the terms of payment were that "the deposit is fully refundable right up to when the renovation selection is done" whereupon the "deposit will form part of [the] final contract": MFI 1 at time mark 42:30. 3. There was evidence that a "selection" had been made by the appellant and that the events giving rise to a contract contemplated by the terms of the letter dated 27 June 2017 had "crystallised": MFI 1 time mark 43:07 and 43:15. 1. As we stated above, the Appeal Panel has not been provided with all documents from the original proceedings nor a complete copy of the sound recording of those proceedings. In this regard, there is no evidence of the appellants from the proceedings at first instance to which we have been referred responding to the oral evidence of Ms Graham nor setting out the factual circumstances in which the deposit came to be paid by the appellants 2. On this aspect of the case, the Tribunal made the following findings: 1. A representative of the respondent attended the Premises on 24 June 2017 and provided a quotation for the renovation of the laundry in the sum of $14,900: Reasons at [14]; 2. On 27 June 2017 the appellants again attended the respondent's showroom to inspect bathroom furniture and fittings, at which various selections were made concerning these items, design plans and selections being subsequently revised: Reasons at [15]; 3. After making the selections on 27 June 2017, the appellants proposed an August date for commencement and were told that they would "need to pay holding deposit totalling $1000.00 ($500.00 for each of the ensuite and laundry) to secure the dates upon which the work would be carried out". The deposits were paid by transfer to the respondent's bank account later that day: Reasons at [16]; 4. Shortly afterwards, the appellants notified the respondents they would not be proceeding with the laundry renovation,: Reasons at [17]. 1. The Tribunal found there was a contract between the parties and that it was necessary for the Tribunal to determine the terms of that contract: reasons at [20]. 2. The Tribunal found that there was no entitlement to retain the deposit as compensation for the work done in preparing the "free measure and quote", the work in preparing the quotation being work being carried out prior to the payment of the holding deposits and at the "commercial risk" of the respondent: Reasons at [21]. However, the Tribunal found there was a contract and which had been unilaterally cancelled by the appellants. In these circumstances, the Tribunal determined that the deposit should be forfeited: Reasons at [22]. 3. The Appellants submitted that the Tribunal was in error in concluding there was a contract. As outlined above, the submissions are that the terms of the contract were uncertain, that there was no concluded contract and/or that the contract did comply with the requirements of the HB Act and was therefore unenforceable. 4. In our view, these submissions should be rejected. 5. While the reasons are brief, it seems to us that the Tribunal had before it, in the form of written and oral evidence, the terms of the letter dated 27 June 2017 titled "Terms and Conditions of Renovation Deposits. It also had before it the quotation for the laundry work (Exhibit A). The letter of 27 June 2017 provided: $500.00 Deposit is paid upon acceptance of any quotation and this secures the start date for the renovations to commence. This deposit also allows you to book a date for a full selection to be done in the showroom. This deposit is fully refundable right up until the renovation selection is done. This deposit will form part of your final contract. 1. There was also evidence that the letter had been given to the appellants. 2. The Tribunal concluded from these documents and from the evidence to which it referred in the Reasons that there was a binding contract between the parties. It is evident from the Reasons that this contract was constituted by the quotation which was accepted following the selection of "bathroom furniture and fittings" on 27 June 2017. It is also evident from the Reasons that the Tribunal accepted the deposit was paid to "secure the dates upon which the work would be carried out". 3. The appellants contended that the contract is uncertain. However, from a review of the quotation, Exhibit A, it sets out the work to be performed, the price for those works, the supply items included and the supply items for which there are prime cost allowances (referred to as "PC Allowance"). 4. In our view, it could not be said that the terms of the contract are uncertain. As the Tribunal concluded, there was a simple contract, constituted by an offer, acceptance and consideration. The consideration was the promise to pay the contract price of $14,900, including part payment by way of the deposit of $500. 5. In relation to the deposit, as found by the Tribunal, this was paid on 27 July 2017. This conclusion was not challenged on appeal. Rather, the appellants said that the payment of the deposit could not have given rise to any contract because the quotation had not been accepted and any relevant "renovation selection" had not been done. 6. This submission involves a consideration of what is meant by the words "This deposit is fully refundable right up until the renovation selection is done". 7. It is clear from these words that where a deposit is paid, there is a condition precedent to be satisfied and until then the deposit is refundable. 8. The question is what is meant by the expression "renovation selection is done" and whether that condition has been satisfied. 9. In our view, the expression "renovation selection is done" means when plans are agreed, PC items are selected and the quotation accepted. This interpretation is consistent with the oral evidence of Ms Graham about what was said concerning the deposit and the letter of 27 June 2017. At 42:30 of MFI 1 Ms Graham says: [The] deposit also allows a date for a full selection of things found in the showroom. The deposit is fully refundable right up to when the renovation selection is done.. 1. As to the process of selection, the Tribunal found at [15] of its Reasons that the appellants attended the respondent's showroom on 27 June 2017 and made selections of PC items. The Tribunal found at [16] of its Reasons that a deposit was paid later that day. 2. That is, the relevant selections had been made before the deposit paid. 3. There was no challenge to the finding of fact in the Reasons at [15] concerning the selection on that day of bathroom furniture and fittings. In these circumstances, there is no reason to conclude that the condition had not been satisfied or that a contract had come into existence between the parties at this point in time. 4. The fact that "these selections and the design plans subsequently went through several iterations due to changes requested by the applicants" does not alter this fact. Rather, in the context of a contract to do residential building work, such changes are properly to be viewed as proposals to vary the original contract. 5. Further, there is no evidence to suggest that the parties had entered into an agreement on terms that an initial free measure and quotation would be provided and thereafter an unlimited number of changes could be made by the appellants at no cost. Nor is there evidence to suggest that a contract would not come into existence in circumstances where initial selections had been made. Rather, the communications to which we have referred record the terms of an agreement which became binding upon the parties upon acceptance of the quotation and selection of relevant furniture and fittings, a deposit of $500 being payable to secure the start date for the works in August 2017. 6. The appellants said that there was no binding contract because the provisions of s 7AAA of the HB Act had not been complied with. This section applies to the particular contract because the amount of the contract was less than $20,000 as prescribed by the Home Building Regulation, 2014 (NSW): see reg 5. 7. There are a number of problems with the appellants' submission. Firstly, we have not been referred to any provision of s 7AAA which has not been complied with. The quotation provides the name of the parties, including the contractor licence details, a description of the work in the contract price. While we have not been provided with the design plans prepared as part of the original quotation, it is clear from the Reasons that such design plans exist and form part of the contract. Consequently, it seems to us the provisions of s 7AAA(3) have been satisfied. 8. Secondly, s 7AAA does not, by its terms, render invalid and unenforceable a contract which does not comply with the statutory requirements of s 7AAA. Rather, s 10 of the HB Act provides that a person who contracts to do residential building work (in this case the respondent) "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 (in this case the appellants), and the contract is unenforceable by the person who contracted to do the work". In the present case the respondent does not seek to enforce the contract. It is the appellants who have bought these proceedings. Consequently, the proceedings are to be determined in accordance with the terms of the contract, even if not complying with the provisions of s 7AAA, subject to any limitations imposed by the HB Act. 9. This ground of appeal fails. 10. In relation to the application for leave to appeal, we have not been provided with all of the evidence and so it is not possible to evaluate whether or not a relevant error was made other than by reference to the reasons. In this regard, we note the appellant elected to continue with their appeal rather than to seek an adjournment and produce all evidence from the original hearing. 11. Having regard to the findings made and the evidence to which we has been provided, we are satisfied that the findings made by the Tribunal were open to it on the evidence. 12. There was otherwise no evidence explaining the circumstances in which the contract was "put on hold". There was no term of the contract to which we have been referred that allowed the appellants to suspend the work under the contract or to vary the time for performance. The Tribunal found at [17] that the appellant's "notified the respondent they would not be proceeding with the laundry renovation" and that the respondent "cancelled the laundry project": Reasons at [23]. The Tribunal found that the appellants had thereby "forfeited the holding deposit of $500 they paid the respondent to hold the August dates for this project in accordance with the terms on which the holding deposit was paid": Reasons at [23]. 13. In effect, the Tribunal found that the deposit of $500 was the amount agreed to be paid to hold open the August date for construction work and was therefore appropriate compensation arising from the appellants' wrongful repudiation of the contract which was accepted by the respondent. 14. The amount of compensation has not been challenged in these proceedings. The amount of $500 can properly be seen as a sum that "secures the start date for the renovations to commence" (see letter of 27 June 2017), namely the preliminary cost to the respondent to make resources available to carry out work at that time. In these circumstances, we see no error in the Tribunal making an award refusing return of the deposit. 15. In relation to the claim the Tribunal acted unfairly in the conduct of the hearing, we do not accept this submission. The appellants were afforded an opportunity to read material provided by the respondent, even though it was provided late. They declined to do so. There is no relevant unfairness in these circumstances. 16. There is no suggestion that an application to adjourn the original hearing was made by the appellants and therefore no reason to conclude the appellants have been denied a reasonable opportunity to be heard or to have their submissions considered. 17. The appellants say that they were unaware of what the respondent had given to the Tribunal in relation to the laundry case and that the laundry case "was not discussed in detail at the Hearing". We do not have a copy of the sound recording nor a complete transcript of the proceedings to evaluate whether or not there has been any relevant denial of procedural fairness, other than it is clear from the appellants' submissions that they declined an opportunity to read the respondent material when given the material and an opportunity to do so at the hearing. 18. Consequently, leave to appeal should be refused and this aspect of the appeal dismissed. 19. The final matter to deal with is the question of costs. In short, the appellants say that special circumstances exist and that the Tribunal should have made an order for costs in their favour. 20. "Special circumstances" means circumstances out of the ordinary, but not necessarily extraordinary or exceptional: see eg Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]. 21. The appellants refer to the history of the proceedings and say what occurred is out of the ordinary and/or that the respondent has prolonged the proceedings. 22. As is evident from the chronology of events which we have set out above, the respondent did not appear at the hearing of the proceedings at first instance because it did not receive notice of the hearing. It subsequently applied to set aside the orders. This application was allowed, the matter was relisted for directions and the proceedings continue to a hearing in the usual way. Unfortunately, while this is not a frequent event, it is not out of the ordinary that a person applies to set aside a decision where they have not received notice of the hearing. Further, in the absence of some proven conduct of the respondent, there is no basis to conclude that this event unnecessarily prolonged the proceedings or that responsibility for the extended time to complete the proceedings should lay at the feet of the respondent. 23. Otherwise, there is no basis to conclude that the proceedings were in any relevant sense prolonged. While the respondent may have failed to provide a copy of its documents to the appellants, the rehearing of the proceedings at first instance being dealt with on the appointed day, namely 16 March 2018. Similarly, even though there was a failure to comply with directions of the Tribunal, it could not be said that this had any relevant consequence for the appellants in having their claim heard or that cost were unnecessarily incurred. 24. Lastly, in relation to the relative strengths of the case and whether the proceedings were frivolous, vexatious or otherwise misconceived and lacking in substance, having regard to the Tribunal's findings and having regard to our decision to dismiss the substantive appeal, it is clear that each of the parties have had some success in respect of the original application. As such, there is no basis to conclude special circumstances have been established on these grounds. Orders 1. It follows from what we have said above that leave to appeal should be refused and the appeal otherwise dismissed. Accordingly, we make the following order: 1. Leave to appeal is refused and the appeal is otherwise dismissed. ********** ​ 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: 27 July 2018