Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Kapeller v BH Australia Constructions Pty Ltd [2019] NSWCATAP 40 Hearing dates: 21 January 2019 Date of orders: 13 February 2019 Decision date: 13 February 2019 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President Prof G Walker, Senior Member Decision: (1) Leave to appeal is granted; (2) The appeal is upheld; (3) The Tribunal orders made on 19 September 2018 in HB 17/39359 and HB 17/46098 are set aside; (4) Both applications are remitted to the Consumer and Commercial Division to a Tribunal differently constituted for redetermination; (5) If either party to the appeal wishes to make an application for costs of the appeal, such application and documents in support are to be filed and served within 14 days from the date of this decision; and (6) Submissions and documents in opposition to any costs application are to be filed and served within 14 days after the date in Order 5. Catchwords: Appeal – contract – identity of contracting builder – Home Building Act 1989 – error of law Legislation Cited: Civil and Administrative Tribunal Act 2013 Fair Trading Act 1987 Home Building Act, 1989 Cases Cited: Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334 Codelfa Construction Pty Ltd v State Rail Authority Of NSW (1982) 149 CLR 337 Collins v Urban [2014] NSWCATAP 17 Dennis Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 Dennis Pethybridge V Stedikas Holdings Pty Ltd [2007] NSWCA 154 Harold R Finger & Co Pty Ltd v Karellas Investments Pty Ltd [2015] NSWSC 354 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 The Owners – Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1916 Collins v Urban [2014] NSWCATAP 17 Texts Cited: Nil Category: Principal judgment Parties: Phillip Kapeller and Rachael Cesnik (Appellants) BH Australia Constrictions Pty Ltd (Respondent) Representation: Counsel: Mr Bland (Appellants) Solicitors: Roberts Legal (Appellants) Mr Furnie, as City Agent (for McDonald Johnson, Respondent) File Number(s): AP 18/44602 Publication restriction: Unrestricted Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 19 September 2018 Before: K Ross, Senior Member File Number(s): HB 17/39359 & HB 17/46098 REASONS FOR DECISION Background 1. This is an appeal from a decision made in the Consumer and Commercial Division of the Tribunal published on 19 September 2018. The decision concerned an application brought by the appellants against the respondent in respect of a home building contract regulated by the Home Building Act, 1989 (HB Act). 2. The decision under appeal (which we will refer to as the Decision) dismissed the application of the appellants (who we shall refer to as the homeowners) against the respondent (which we shall refer to as BH Constructions) upon the basis that BH Constructions was not a party to the home building contract. Rather, the Decision held that the contracting entity was a related company which we shall refer to as BH Developments. 3. It is helpful in understanding this decision if we set out in summary the essential reasoning of the Decision. This summary is as follows: 1. On 12 September 2017 the homeowners filed an application in the Tribunal against BH Developments. There was a directions hearing on 6 October 2017 and that company was directed to provide an ASIC search concerning BH Constructions and details of the homeowners warranty insurance; 2. On 30 October 2017 an application was filed by BH Constructions. We note that the document forming part of the application described as "Points of Claim – Cross Application" stated that on 10 November 2015, the homeowners and BH Constructions entered into a contract for the performance of residential works at the homeowners' property. The document stated that the contract incorrectly named the builder as BH Developments; 3. On 1 December 2017 the applications came before the Tribunal. The Tribunal made directions for the provision of an affidavit by a director of BH Constructions and/or BH Developments explaining apparent discrepancies in the contract concerning the name of the builder, the holder of the builder's licence and the identity of the contractor contained in the homeowners' warranty insurance certificate; 4. On 18 December 2017 an affidavit of Daniel Roberts was filed with the Tribunal. In the Decision, the Tribunal states that Mr Roberts's affidavit deposed that the naming of BH Developments in the contract as the builder was an error; 5. On 16 February 2018 the matters came before the Tribunal again for directions. There was no appearance for either BH Constructions or BH Developments. The Tribunal made an order that the respondent's name, BH Developments be amended to BH Constructions. These directions applied to both the homeowners' application and to the builder's application; 6. On 16 April 2018 BH Developments went into liquidation; 7. On 5 June 2018 a Mr Shankar swore an affidavit which was filed and served. His affidavit stated that the contract was between the homeowners and BH Developments, and that BH Constructions was not a party to the contract and did not receive any payments from the homeowners either directly or indirectly; 8. The Decision set out the contentions between the parties and then made the following findings: * The contract names BH Developments as the contracting party; * BH Developments owned the business name "Blissful Homes"; * At the time the contract was entered into and during the contract period, BH Developments did not hold a builders licence and did not hold homeowners warranty insurance for this job; * BH Constructions held a builders licence which licence number appeared on the contract between the homeowners and BH Developments; * BH Constructions is named as the builder on the homeowners' insurance warranty certificate; and * On 16 April 2018 BH Developments went into liquidation. 1. The Tribunal found that the homeowners contracted with BH Developments and gave these reasons: 1. the named builder on the contract was BH Developments; 2. BH Developments owned and traded under the business name "Blissful Homes"; 3. Mr Roberts with whom the homeowners dealt, was a director of BH Developments (although also employed by BH Constructions); and 4. both parties at the time the dispute first arose appear to have accepted that the contract was with BH Developments. The Decision referred to the fact that the homeowners took the view that BH Developments was in breach of the HB Act in failing to hold a licence and in failing to hold homeowners' warranty insurance. The builder accepted the proposition of the homeowners and sought their consent to a novation of the contract to BH Constructions to avoid the consequences of breaches of the HB Act, but the homeowners refused to consent to a novation; 5. the homeowners commenced proceedings against BH Developments; 6. little weight could be given to the evidence of Mr Roberts that the naming of the builder as BH Developments was a mistake. That claim was made in the context of the fact that the homeowners were asserting, in reliance upon s 10 of the HB Act, that BH Developments could not enforce the contract and that they were thus relieved from the obligation to pay any monies owing. Mr Roberts was not available for cross examination even though a summons for his attendance had been issued; 7. BH Developments received payments under the contract according to the evidence of Mr Shankar and to the fact that the homeowners' evidence was that payment claims were made by BH Developments; and 8. the assertion by the homeowners that the contract was with BH Constructions was "convenient" in circumstances where BH Developments was in liquidation. 1. In consequence, the Tribunal ordered that the applications be dismissed. This constituted a dismissal of both the homeowners' application and the application brought by BH Constructions. 2. BH Constructions has not appealed the Decision. Notice of Appeal 1. The following is a summary of the Grounds of Appeal as stated in the Notice of Appeal: Estoppel and procedural fairness 1. The re-agitation by BH Constructions of the issue of the correct contracting entity should have been prevented by the Tribunal at the final hearing because "of issues of estoppel and procedural fairness" and the final determination of the Tribunal was "based upon the respondent's submissions made during the re-agitation"; and Against the weight of evidence 1. The determination of the Tribunal was against the weight of evidence as the Tribunal should not have given any weight to submissions of BH Constructions made at the hearing on the issue of the correct contracting entity as they were directly contradictory to both BH Constructions' pleadings and earlier sworn evidence, and were convenient for BH Constructions on the basis that BH Developments had been placed into voluntary liquidation in April 2018. 1. In addition, the Notice of Appeal sought leave to appeal submitting the following: 1. BH Constructions had pleaded that it was the correct party. Accordingly, the homeowners proceeded on the basis that the party named was the correct party. The issue of the identity of the contracting party was re-agitated at the hearing despite the earlier determination of the Tribunal in February 2018. This caused "procedural unfairness and a denial of natural justice"; 2. It ought to be be a matter of Tribunal policy having general application that orders of the Tribunal changing the name or identity of parties to proceedings can be relied upon by all parties "as giving finality as to the issue of party's identity"; 3. There is a clear injustice in that the final determination of the Tribunal as to the correct identity of the contracting party contradicts the earlier decision of the Tribunal on the same point and that it would be unjust to allow the finding to stand in the face of the doctrine of estoppel; 4. The finding of fact of the identity of the contracting party in the final determination was unreasonably arrived at, as the evidence of the witness for BH Constructions who had prepared the contract was given no weight; 5. The Decision was not fair and equitable, as there was a denial of procedural fairness as the submissions of BH Constructions at the hearing were directly contrary to their pleadings and previous submissions. The homeowners were unaware of the case it was required to meet. BH Constructions ought to have been prevented from re-agitating the issue of the correct identity of the contractors because of the doctrine of either issue or Anshun estoppel; and 6. The decision of the Tribunal was against the weight of evidence. The Tribunal should have given more weight to the evidence of Mr Roberts and less weight to the evidence of Mr Shankar. Reply to Appeal 1. BH Constructions filed and served a Reply to Appeal. The Reply to Appeal submitted that the homeowners' Grounds of Appeal lacked substance and merit, and that the appeal should be dismissed. Submissions of the Homeowners 1. The following is a summary of the written submissions relied upon by the homeowners: 1. The appeal raises four issues for determination; 2. The first issue is whether it was open to the Tribunal at the final hearing on 25 and 27 July 2018 to accept submissions on and make determinations regarding the correct identity of the correct respondent party when the Tribunal had previously done so in an interlocutory directions hearing; 3. The second issue is whether the Tribunal made a finding of fact against the weight of evidence; 4. The third issue is whether the Tribunal made an error of law when it considered post contract events in determining the identity of the correct respondent party; and 5. The fourth issue is whether the Tribunal made an error of law in not accepting the submissions that the homeowners could proceed against BH Constructions on the basis that that company had supplied the warranty insurance and supervised the subject works. 1. The homeowners submitted that they accepted the version of events put forward in Mr Roberts's affidavit (namely that the contracting entity was BH Constructions) and that that version of events is reflected in the order of the Tribunal made without objection on 18 February 2018. Neither party appealed that order. The homeowners say that they were therefore not on notice that the identity of the correct contracting entity was to be an issue for determination at the final hearing. However, on the first day of the hearing on 25 July 2018, BH Constructions led evidence by reading the witness statement of Mr Shankar which included statements to the effect that BH Constructions was not a party to the contract and therefore not the proper respondent to the proceedings. This evidence was diametrically opposed to the position of BH Constructions which had been pleaded in both its cross claim application, points of claim and points of defence; 2. The homeowners submitted that the Tribunal failed to adjourn the matter to consider the "surprise threshold issue of the identity of the correct contracting respondent", despite counsel for the homeowners submitting that the matter ought to be adjourned pending determination of that issue; 3. The Tribunal's decision to press on whilst the issue of the correct respondent was unresolved had the effect of denying the homeowners the reasonable opportunity to assess whether there was sufficient evidence available to it and to adduce any further evidence to support their claim that BH Constructions was the correct contracting entity and to withdraw their claim pursuant to s 48I(2) of the HB Act). The homeowners submitted that the they were denied the reasonable opportunity to consider and prepare submissions on evidence for hearing supporting their contention that they could proceed against BH Constructions pursuant to s 18D(1A) of the HB Act on the basis that that company supplied the homeowners warranty insurance and a supervisor for the residential building works, and distinguishing their case from the subcontract limitations presented to that argument by the decision in The Owners – Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1916. The homeowners submitted that there was a failure in the way the matter was conducted which may have deprived the homeowners of a chance that was fairly open of achieving a better outcome than what occurred. 4. The homeowners referred to the Appeal Panel decision in Collins v Urban [2014] NSWCATAP 17 and submitted that the Decision raises an issue of principle, that a party must know the case it has to meet and have a reasonable opportunity to consider their own position and prepare their evidence and submissions. That opportunity was not afforded to the homeowners as they were not on notice that the identity of the contracting entity was to be an issue in the proceedings. In addition, the proceedings were not adjourned to enable them to prepare submissions and evidence on the threshold issue or to discontinue their case, if appropriate. 5. The homeowners submitted that there is a clear injustice to them in that they were deprived of an opportunity to prove an entitlement to the benefit of the statutory warranty schemes of the HB Act as well as their entitlement to the benefit of the home building compensation fund insurance held by BH Constructions. 6. The homeowners submitted that because of the failure by BH Constructions to appeal the decision of 18 February 2018, or to seek orders from the Tribunal for a further amendment to their application pursuant to s 53 of the Civil and Administrative Tribunal Act 2013 (NCAT Act), BH Constructions was prevented from again raising the issue of the correct identity of the contracting party because of issue estoppel. 7. The homeowners submitted that the principle of finality also prevents the issue of the correct identity of the contracting builder to have been re-agitated. The homeowners submitted that the principles of finality and estoppel apply to interlocutory decisions and referred to the decision in Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334 at [57]. The homeowners submitted that the High Court decided that once an issue is determined at an interlocutory stage and the Tribunal continues, the primary judge's hand is tied in respect of all matters of fact and law involved in the decision. The homeowners submitted that the Tribunal did not have any statutory power to revise the Tribunal's earlier findings as to the identity of the correct respondent and that that determination could only be re-determined on an appeal. 8. In support of the submission that the Tribunal's findings of fact were against the weight of evidence the submissions state: 1. Mr Roberts's affidavit states that he was an employee of BH Constructions and a director of BH Developments. The affidavit states that the name of BH Developments was erroneously inserted into the contract and that that error was not detected prior to the contract being given to the homeowners. Further, the affidavit states that BH Constructions was the correct contracting entity; 2. Mr Shankar provided a witness statement dated 5 June 2018 that BH Developments (then in liquidation) was the correct contracting entity. He was not involved in the negotiation of the contract. Mr Robert's negotiated the contract. The source of knowledge as to the details of the contract was his reading of the contract subsequent to his employment which was in or around mid-2017. He was the author of subsequent correspondence dealing with the contract; 3. The homeowners submitted that Mr Robert's evidence ought to have been given more than the weight given in the Decision, and that the Tribunal should have given less weight to the evidence of Mr Shankar. Mr Shankar was not a director of either company, did not prepare the contracts and was not a party to the contract negotiations. He was not employed by BH Constructions until more than 18 months after the contract was formed; and 4. The fact that the homeowners warranty policy and builders licence was in the name of BH Constructions supports Mr Roberts's evidence. 1. The homeowners further submitted that the Tribunal made an error of law when it considered post contract events in determining the correct contracting entity. The Tribunal should not have taken into account the evidence of post contract events given by the evidence of Mr Shankar. The homeowners submitted that the current state of the law is that a Court cannot have regard to post contractual conduct to ascertain the true identity of the parties to a contract, although this issue has not been finally settled: see Dennis Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154. However, the Tribunal is entitled to have regard to the surrounding circumstances and the subject matter of the contract to resolve any ambiguity about the identity of the parties to the contract: see Codelfa Construction Pty Ltd v State Rail Authority Of NSW (1982) 149 CLR 337 at [352]. The homeowners submitted that the statement that little weight can be given to the evidence of Mr Roberts was a mistake. The evidence was un-contradicted. 2. The homeowners submitted that the surrounding circumstances are: 1. BH Developments was unable to perform the work lawfully as it was both unlicensed and did not hold insurance; 2. BH Constructions was able to perform the work lawfully as it had both the licence and insurance; 3. The supervisor of the works was the nominated supervisor for BH Constructions and was an employee of that company according to the evidence of Mr Shankar; and 4. The Tribunal failed to give proper weight to the un-contested evidence of Mr Roberts and gave too much weight to the post contractual behaviour of the parties when, even if such course was permissible as a matter of law, evidence was sworn by a person who did not have any knowledge of the contract negotiations. 1. The homeowners rely upon the evidence of Mr Shankar to the effect that the supervising builder for the works was Mr P Lanser who is described as the "nominated supervisor" for BH Constructions and was an employee of that company; 2. The homeowners rely on s 53 of the HB Act which provides that the holder of an endorsed contractor licence is to be presumed, in the absence of evidence to the contrary, to have control over the doing of all work for which the holder is a nominated supervisor. The homeowners submitted that BH Constructions therefore was undertaking supervision works in respect of the works described in the building contract. The homeowners refer to s 18D(1A) of the HB Act and submit that it entitles the homeowners to the benefit of the statutory warranty in the circumstances where they are a non-contracting owner in relation to a contract to do residential building work on land, and it provides that they are entitled to the same rights as those that a party to the contract has in respect of a statutory warranty. If BH Constructions were not the correct contracting entity then the homeowners were non-contracting owners for the purposes of the statutory warranty scheme of the HB Act as they were not in a contractual relationship with BH Constructions. The decision in The Owners – Strata Plan No 74602 v Brookfield is authority for the proposition that s 18D(1A) does not extend the benefit of the s 18B warranties to an owner against a subcontractor to a builder with whom the homeowners have contracted. However, in this case, BH Constructions was not the subcontractor to the builder with whom the homeowners arguably contracted as the evidence of Mr Shankar confirms that they did not receive any payment from BH Developments. It is submitted that it is open to the Tribunal to accept that the homeowners were entitled to the benefit of the statutory warranties attached to the residential building works of BH Constructions. 3. The homeowners submitted that the appeal should be upheld, the orders made in the Decision set aside and that the matter be remitted to the Consumer and Commercial Division for rehearing before a differently constituted Tribunal. Costs of the appeal are also claimed. Submissions of BH Constructions 1. BH Constructions has provided written submissions and these may be summarised as follows: 1. The weight of evidence before the Tribunal clearly indicated that BH Developments was the contracting entity. All parties were aware of the contracting parties to the building contract; 2. Mr Roberts did not have authority to swear an affidavit or speak on behalf of BH Constructions and that the "office holders" of BH Constructions were not aware that the affidavit had been filed. The building works were performed by BH Developments, all subcontractor invoices were directed to BH Developments and progress payments were paid to BH Developments. BH Constructions did not enter into any contractual negotiations, gave no consideration and received no benefit, and nor did it execute the contract; 3. BH Constructions further submitted that it acknowledges that it provided supervisor services to BH Developments but says that it does not follow that the homeowners have a claim against BH Constructions as BH Constructions did not supply goods or services in accordance with s 79G of the Fair Trading Act 1987 (FT Act). BH Constructions further submitted that s 18D(1A) of the HB Act is not relevant to this matter as the homeowners are parties to the building contract; and 4. BH Constructions submitted that the appeal should be dismissed and its costs paid by the homeowners. Consideration 1. The Decision under appeal is an internally appealable decision and s 80 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) is applicable. This means that the appeal may be made as of right on any question of law or with leave of the Appeal Panel on other grounds. However, appeals requiring leave are regulated by cl 12 of Sch 4 of the NCAT Act. Clause 12(1) is relevant and it 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). Note. Under section 80 of this Act, a party to proceedings in which a Division decision that is an internally appealable decision is made may appeal against the decision on a question of law as of right. The leave of the Appeal Panel is required for an internal appeal on any other grounds. 1. The central issue identified and dealt with in the Decision was the identity of the contracting builder. In addressing that issue, the Tribunal made a number of findings of fact (which have been set out earlier in these reasons) and extracted a portion of the judgment in Dennis Pethybridge V Stedikas Holdings Pty Ltd [2007] NSWCA 154. The extract includes the statement that: It was the Respondent who bore the legal onus of proving that the Appellant was the other party to the contract that had undoubtedly been entered for the performance of the work on the two carparks. It was relevant, for that purpose, to establish who was carrying on business under the name C & D Asphalt Service. That is because the correct conclusion to draw from the objective evidence is that a reasonable observer of the communications that led to the entering of the contract, together with the background facts known to the parties, would conclude that the parties intended that the contract would be with whomever it was that was carrying on business under the name C & D Asphalt Service. 1. The above extract does not, comprehensively describe the relevant principles to be considered when a Court or Tribunal is required to determine the identity of a party to a contract. That extract was merely an example, of a case where the contracting entity was, by reason of the objective evidence and background facts, the entity that was carrying on business under the business name. 2. More comprehensive statements of the legal principles that govern how parties to a contract should be identified are contained in paragraphs 80 to 86 of the decision in Harold R Finger & Co Pty Ltd v Karellas Investments Pty Ltd [2015] NSWSC 354. Those paragraphs state: 80 In Air Tahiti Nui Pty Ltd v McKenzie [2009] NSWCA 429; (2009) 77 NSWLR 299 at [28], Allsop P and Handley AJA in a joint judgment (Hodgson JA agreeing) said the following: [28] The identity of the contracting party is to be determined looking at the matter objectively, examining and construing any relevant documents in the factual matrix in which they were created and ascertaining between whom the parties objectively intended to contract. This is, to a point, a process of construction similar to the task of identifying whether a clearly contractual document (such as a bill of lading) is made with one party or another (such as a shipowner or time charterer): The Starsin at 770 and the cases considered in Wilford et al Time Charters (5th Ed Informa Publishing 2003) Ch 21. Where the documents are silent or ambiguous, but there is undoubtedly a contract, the identity of the parties must be determined objectively from the surrounding circumstances: see Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170 at 174; Protean (Holdings) Ltd v American Home Assurance Co (1985) 4 ANZ Ins Cas 60-683 at 74,055–74,056; Coulls v Bagot's Executor and Trustee Co Ltd [1967] HCA 3; 119 CLR 460 at 477 at 478-479 and 486. 81 The Victorian Court of Appeal in Lederberger v Mediterranean Olives Financial Pty Ltd [2012] VSCA 262; (2012) 38 VR 509 at [19] put the principle in the following way: Identification of the parties to a contract must be in accordance with the objective theory of contract. That is the intention that a reasonable person, with the knowledge of the words and actions of the parties communicated to each other, and the knowledge that the parties had of the surrounding circumstances, would conclude that the parties had. The process of construction requires consideration of not only the text of the documents, but also the surrounding circumstances known to the parties and the purpose and object of the transaction. This, in turn, presupposes knowledge of the genesis of the transaction, the background, and the context in which the parties are operating. [Footnotes omitted] 82 There is also a question of whether, and if so how, the Court may have regard to the conduct of the parties after the date of the contract to identify the intended parties. 83 The Court of Appeal in Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 left open the question whether it is permissible to look at post-contractual communications and conduct in order to determine whether a contract with a particular party existed: at [2] (Basten JA); at [59] (Campbell JA, Beazley JA agreeing). 84 In Tomko v Palasty [2007] NSWCA 25, Basten JA (Mason P agreeing) added that "[e]xcept to the extent that [subsequent conduct of the parties] constitute admissions by one or other party, they are largely equivocal". In that same case, Einstein J (Mason P agreeing) considered the Pethybridge case and found that "evidence of post-contractual conduct is admissible on the question of whether a contract was formed": at [67]. In his Honour's view (at [68]), that meant that: subsequent communications may legitimately be used against a party as an admission by conduct of the existence or non-existence, as the case may be, of a subsisting contract, where an issue concerns whether a particular person was a party to that contract. 85 In Lederberger, the Victorian Court of Appeal considered the question whether the trial judge erred in determining the identity of the parties by reference to post-contractual conduct. The Court set out the key principles elucidated by Heydon JA (as he then was, Mason P and Ipp AJA agreeing) in Brambles Holdings Pty Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 163-4, particularly the following: The second relevant principle is that post-contractual conduct is admissible on the question of whether a contract was formed. [Citations omitted] 86 The Court accepted an argument that the general principle in contractual interpretation does not permit the use of post-contractual conduct of the parties as an aid to the construction of the contract. The Court continued (at [31]): But we are not inclined to think that this now well-settled principle has affected the second principle stated by Heydon JA in Brambles Holdings so as to have precluded the trial judge from relying upon tax returns filed after the tax effective scheme contracts had been signed, in order to ascertain whether the respondents and the partners of the partnership had entered into the agricultural contracts. The legitimacy of the Court's taking into account conduct after the date of the contract to determine the identity of the parties was accepted by Ball J in Filadelfia Projects Pty Ltd v Entirity Business Services Pty Ltd [2011] NSWSC 116, where his Honour said: [38] There are two principal difficulties with Mr Barlow's second submission… Second, it is clear that post-contractual conduct can be taken into account in determining whether a contract was formed: see, for example, Geebung Investments Pty Ltd v Varga Group Investments (No 8) Pty Ltd (1995) 7 BPR 14,551 at 14,569–70 per Kirby P; Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 at [25]. Necessarily, that extends to the question whether it was formed between particular parties, since contracts do not exist in the abstract… 1. The principles set out above relevant to this appeal are in our view, the following: 1. The identity of the contracting party is to be determined looking at the matter objectively, examining and construing any relevant documents in the factual matrix in which they were created and ascertaining between whom the parties objectively intended to contract; 2. Identification of the parties to a contract must be in accordance with the objective theory of contract. That is the intention that a reasonable person, with the knowledge of the words and actions of the parties communicated to each other, and the knowledge that the parties had of the surrounding circumstances, would conclude that the parties had; 3. There is also a question of whether, and if so how, the Court may have regard to the conduct of the parties after the date of the contract to identify the intended parties. Except to the extent that subsequent conduct of the parties constitute admissions by one or other party they are largely equivocal; 4. post-contractual conduct is admissible on the question of whether a contract was formed but not as an aid to the construction of the contract; and 5. The legitimacy of the Court's taking into account conduct after the date of the contract to determine the identity of the parties has been accepted in some cases. 1. In the Decision, the Tribunal set out its reasons for its conclusion that BH Developments was the contracting entity. There are eight reasons under paragraphs 14(a) to 14(h). Each reason requires comment. 2. The first reason is that the builder named on the contract was BH Developments. There is obviously no error in that finding. 3. The second reason is that BH Developments owned and traded under the business name "Blissful Homes". The relevance of that finding is not clear as there is no finding that the pre-contract communications were with a person or company using that business name; 4. The third reason is that the person with whom the homeowners dealt (Mr Roberts) was a director of BH Developments. The reasons acknowledge that Mr Roberts was also employed by BH Constructions but do not explain why Mr Roberts's position as a director was determinative. 5. The fourth reason is that subsequent to when the contract had been entered into, namely when the dispute first arose, both parties appear to have accepted the contract was with BH Developments. The homeowners took the view that BH Developments was in breach of the HB Act in failing to hold a licence and in failing to take out homeowners warranty insurance. It was proposed by either BH Developments or BH Constructions (or both) that the contract be novated to BH Constructions. These facts are used to conclude that they demonstrate an intention by the homeowners to have contracted with BH Developments and an admission by BH Developments to have done so (albeit willing to novate the contract in favour of BH Constructions). In our view, these facts are equivocal in attempting to ascertain what a reasonable observer would conclude as to the identity of the contracting builder. These facts could also reflect an intention by the homeowners to seek a forensic advantage after ascertaining that BH Developments may be unable to enforce the building contract (by reason of being unlicensed) and an intention by BH Developments to solve that problem by novating the contract to BH Constructions. 6. The fifth reason is that the homeowners commenced proceedings against BH Developments. The same comments apply as for the fourth reason. 7. The sixth reason is that the evidence of Mr Roberts stating that the naming of BH Developments was a mistake should be given little weight. The Tribunal attributed that evidence to a motive held by Mr Roberts that it would be disadvantageous for BH Developments to be treated as the builder because it could not enforce the building contract by reason of the provisions of s 10 of the HB Act. The second reason for discounting the weight of the evidence of Mr Roberts was that he was not available for cross examination. There was no explanation as to what motive Mr Roberts might have had in mind by exposing BH Constructions to the contractual claims agitated by the homeowners. In addition, we are not persuaded that adverse inferences can be drawn by the non-availability of Mr Roberts for cross examination at the final hearing. He swore an affidavit at a time when both BH Developments and BH Constructions were jointly represented. By the time of the hearing, BH Constructions had resiled from its earlier stance and had then maintained that it was not the contracting entity. That was convenient given the liquidation of BH Developments. Mr Roberts's evidence was in conflict with the position then taken by BH Constructions. His failure to be present for cross examination cannot, in our view, be used to draw an adverse inference against the interests of the homeowners. The transcript discloses that the homeowners sought to have him summonsed to attend. His failure to attend was more capable of leading to an inference that his evidence on cross examination would have further assisted the homeowners and contradicted the evidence of Mr Shankar. There was in our view, no basis for giving Mr Roberts's affidavit little weight. 8. The seventh reason was that BH Developments received payments under the contract and related to that was the evidence of one of the homeowners to the effect that claims for payments were made by BH Developments. In our view, these facts are equivocal in assisting to identify the contracting entity. There is the possibility of other explanations for BH Developments making claims for payment and receiving payments under the contract. 9. The eighth reason is that the assertion by the homeowners that the contract was with BH Constructions was said by the Tribunal to be "convenient" in circumstances where BH Developments was in liquidation. This (i.e. the assertion by the homeowners) is also equivocal given the concession was made by Mr Roberts and the orders made by the Tribunal occurred before the liquidation of BH Developments. Indeed, from October 2017 both companies asserted that BH Constructions was the contracting entity. 10. We are of the view that the finding that BH Developments owned and traded under the business name is not relevant given that there were no other findings as to the use of that business name in the context of contractual negotiations. The extract from the Pethybridge case suggests that the Tribunal thought that the identity of the owner of the business name, Blissful Homes was relevant in determining that BH Developments was the contacting entity. However, in Pethybridge the communications were largely to and from an entity that used the business name C & D Asphalt Services. Hence, the conclusion that a reasonable observer would think that the parties intended that the contract would be with whomever it was that carried on business under that business name. Here, there is no finding that pre-contract communications were with or on behalf of an entity that used the name Blissful Homes. 11. The principles referred to above state that post contract conduct is largely equivocal except to the extent that subsequent conduct may constitute admissions. Here, from the commencement of the dispute until February 2018, the homeowners asserted that the contract was with BH Developments (and thus implicitly conceded that they had no contract with BH Constructions). The homeowners from February 2018 accepted the effect of the order of the Tribunal then made that their claim in contract was against BH Constructions. BH Constructions admitted that it was the contracting party in documents filed in October 2017 and in the affidavit filed by Mr Roberts. Its position that it was not the contracting entity does not appear to have become apparent until the hearing in July 2018 although the statement of Mr Shankar dated 5 June 2018 foreshadowed a change in position. 12. In our view, the post contract conduct does not assist either party in the determination of the contracting entity. There is no evidence of the pre-contract communications other than the finding that Mr Roberts was the person who dealt with the homeowners. In our view, the crucial facts are contained within the contract itself, namely: 1. The factors pointing to the entity being BH Developments is that its name and ABN number appear on the contract; 2. The factors suggesting that the contracting entity was BH Constructions is that its building licence appears on the contract and it was that company that obtained a homeowners warranty insurance certificate that was referred to in the contract; and 3. The contract was signed by Mr Roberts without identifying on behalf of which company he was signing and in circumstances where he was a director of one company and an employee of the other. 1. In our view, a reasonable person with knowledge of the above matters would have concluded that the parties intended to contract with BH Constructions. To put it in the negative: in our view, it seems unlikely that a reasonable observer would have concluded that the parties intended to contract with BH Developments in circumstances where that would have had the consequence that the homeowners were contracting with an unlicensed builder and BH Developments was entering into a contract that it could not enforce. Section 10 of the HB Act provides that an unlicensed builder is not entitled to enforce a remedy in respect of a breach of the contract committed by the other party. In addition, s 92 of the HB Act provides that a builder must have homeowners warranty insurance. This section also provides that a person must not demand or received a payment under a contract for residential building work unless such insurance is in place. Contravention imposes the potential for the imposition of a penalty. Section 94 of the HB Act also provides that if insurance is not in place, the contractor who did the work is not entitled to damages or to enforce any other remedy in respect of the breach of contract. In our view, a reasonable observer knowing of these provisions of the HB Act and the apparent inconsistency between the name of BH Developments and its ABN number appearing on the contract and the inclusion of licence and insurance details associated with BH Constructions would have concluded that the parties intended to contract with BH Constructions. The explanation of Mr Roberts that the inclusion of BH Developments name and its ABN number was an error made at the time the contract was prepared is plausible. In our view, the Decision fails to adequately consider the fact and the effect of the presence in the contract of the licence and insurances details associated with BH Constructions. 2. It is our view that the Decision demonstrates that there has been a failure to provide proper reasons in that the Decision does not deal with the fact that the contract contained the licence and insurance details of BH Constructions or the consequences referred to above having regard to the provisions of s 10, 92 and 94 of the HB Act. A failure to provide proper reasons constitutes an error of law (Prendergast v Western Murray Irrigation Ltd). 3. In addition, we are satisfied that the provisions of cl 12(a) and (b) of Sch 4 of the NCAT Act apply in that the Decision is not fair and equitable and is against the weight of evidence. In our view, excessive weight has been given to post contract evidence which, in our view is incapable of leading to unequivocal conclusions and, in addition, insufficient weight was given to the evidence of Mr Roberts. 4. Clause 12 requires us to form the view that there has been a substantial miscarriage of justice, in that the homeowners have lost a chance which was fairly open to them of achieving a different outcome (see Collins v Urban [2014] NSWCATAP 17 at [76]). 5. As Collins v Urban makes clear, we must consider whether we should exercise the discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act. The general principles applicable to the granting of leave include the principle that it is appropriate to grant leave if we are of the view that an injustice which is reasonably clear has occurred or an error that is plain and central to the Tribunal's decision. That is our view in this case. For the reasons set out earlier the Tribunal's decision is such that it would be unjust to allow the Decision to stand. 6. Thus far, we have not yet dealt with the other issues raised on appeal, namely whether the decision made in February 2018 constitutes an estoppel thereby depriving BH Constructions from changing its position at the hearing. We have also not considered whether the homeowners were denied procedural fairness at the hearing. These two issues are dealt with in the following paragraphs. 7. We turn to the Grounds of Appeal described earlier under the heading "Estoppel and procedural fairness". The homeowners' submissions are based upon the view (which we regard as misconceived) that the Tribunal determined in February 2018 that the contracting entity was BH Constructions. In our view, that was not the case. The Tribunal's orders of 16 February 2018 record the removal of BH Developments and in its place, the insertion of BH Constructions as the respondent to the homeowners' application and as the applicant in the builder's application. That substitution of respondent in one application and applicant in the other application occurred in circumstances where the affidavit of Mr Roberts had been filed by a solicitor acting for both BH Developments and BH Constructions. That affidavit, as previously discussed, contained evidence from Mr Roberts, an employee of BH Constructions that that company was the contracting entity and that the name of BH Developments in the contract was an error. That assertion was consistent with the points of defence filed in October 2017 by BH Developments which had asserted that it had not contracted with the homeowners and that BH Constructions had done so. In our view, when the Member made the order on 16 February 2018 removing BH Developments and inserting BH Constructions, the Member did so because both companies agreed with that course. The homeowners' position is not recorded, but there is no evidence that they objected to that course. The Tribunal made the orders but in doing so, did not determine the identity of the contacting entity. Accordingly, the submissions concerning estoppel are not relevant to the circumstances of this case. The principle which BH Constructions relies upon is set out in their submissions in the form of an extract from the High Court decision in Bass v Permanent Trustee Co Ltd at [57]. The relevant portion of that paragraph commences towards the top of page 360 and is as follows: Once an issue is determined at the interlocutory stage, and the trial continues, the primary judge's hand is tied in respect of all matters of fact and law involved in that determination. In Fidelitas Shipping Co Ltd v V/O Exportchleb[65], Diplock LJ pointed out : "Where the issue separately determined is not decisive of the suit, the judgment upon that issue is an interlocutory judgment and the suit continues. Yet I take it to be too clear to need citation of authority that the parties to the suit are bound by the determination of the issue. They cannot subsequently in the same suit advance argument or adduce further evidence directed to showing that the issue was wrongly determined. Their only remedy is by way of appeal from the interlocutory judgment and, where appropriate, an application to the appellate court to adduce further evidence". 1. The above extract explains that the principle of estoppel applies once an issue has been determined even at an interlocutory stage, but there was no determination in this case. 2. We refer to the homeowners' submission that it was denied procedural fairness at the hearing. That submission asserts that at the hearing there was confusion arising by reason of the evidence of Mr Shankar which was according to the homeowners, diametrically opposed to the respondent's position which had been pleaded in its cross claim application, points of claim and points of defence. In our view, the transcript does not demonstrate confusion. The transcript reveals that BH Constructions had done an about face. The homeowners submitted that the Tribunal should have adjourned the proceedings to consider this "surprise threshold issue of the identity of the contracting respondent". The submissions allege that counsel for the homeowners submitted that the matter ought to be adjourned. 3. Whether or not counsel for the homeowners applied for an adjournment and whether or not the Tribunal should have granted one, the position is that by reason of our view that the Tribunal was in error in its determination as to the contracting entity, ultimately the homeowners have not suffered any prejudice by reason of the failure to grant an adjournment. In view of our decision as to the correct contracting entity, it is not necessary for us to determine whether the proceedings should have been adjourned. 4. It follows from our conclusions that the appeal must be upheld. 5. It is our tentative view that costs of the appeal should be paid by the respondent and in the absence of receipt of submissions to the contrary within the timeframe below, we propose to make such an order. 6. We note that BH Constructions has not submitted that in the event that we uphold the homeowners' appeal we should allow the cross claim filed by BH Constructions to be reinstated. In our view, justice requires that if the homeowners are now in the position of being able to agitate their claim, BH Constructions should not only be in a position to defend that claim but also to prosecute any cross claim it may have. Accordingly, it is our view that the Appeal Panel should make a further order setting aside the dismissal of the application brought BH Constructions. 7. We understand that the Tribunal has not made a costs order in respect of the proceedings under appeal. It is our view, that any claim for costs incurred in those proceedings to date should be dealt with on the remittal. Orders 1. The Appeal Panel makes the following orders: 1. Leave to appeal is granted; 2. The appeal is upheld; 3. The Tribunal orders made on 19 September 2018 in HB 17/39359 and HB 17/46098 are set aside; 4. Both applications are remitted to the Consumer and Commercial Division to a Tribunal differently constituted for redetermination; 5. If either party to the appeal wishes to make an application for costs of the appeal, such application and documents in support are to be filed and served within 14 days from the date of this decision; and 6. Submissions and documents in opposition to any costs application are to be filed and served within 14 days after the date in Order 5. ********** 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: 13 February 2019