Civil and Administrative Tribunal New South Wales Medium Neutral Citation: K&J Vision Pty Ltd v Jows Construction Pty Ltd [2019] NSWCATAP 112 Hearing dates: 12 December 2018 Date of orders: 02 May 2019 Decision date: 02 May 2019 Jurisdiction: Appeal Panel Before: R. L. Hamilton SC R Perrignon Decision: (1) Grant leave to the Appellant to rely on its Amended Notice of Appeal, noting that Grounds 1 and 5 are not pressed. (2) Set aside orders no 1, 2 and 3 below. (3) Remit the matter to the Tribunal differently constituted for rehearing, limited to an assessment of damages for breach of contract by the Owner, and the issue of costs, on the basis of such evidence or further evidence as the Tribunal may in its discretion allow. (4) Each party to pay its own costs of the appeal, unless it makes written application for costs with submissions in support by 10 May 2019. (5) In the event that either party applies for its costs on appeal, the other shall file written submissions in reply by 17 May 2019. Catchwords: APPEALS - Home building contract – outstanding progress claims – repudiation of contract – termination of contract – calculation of damages for breach - adequacy of reasons - error of law Legislation Cited: Civil & Administrative Tribunal Act 2013, Home Building Act 1989 Cases Cited: Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64 Robinson v. Harman [1848] EngR 135 Category: Principal judgment Parties: K&J Vision Pty Ltd – Appellant Jows Construction Pty Ltd - Respondent Representation: Counsel: Mr Klooster – Appellant Ms Granger – Respondent Solicitors: Michael Atkinson & Associates - Appellant Lionheart Lawyers - Respondent File Number(s): AP18/41269 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: [2018] NCAT Date of Decision: 23 August 2018 Before: G Meadows, Senor Member File Number(s): HP16/45323 REASONS FOR DECISION 1. This is an appeal from a decision of the Tribunal in its Consumer and Commercial Division, in respect of a dispute under the under the Home Building Act 1989. The Tribunal ordered the appellant Owner to pay the respondent Builder the sum of $117,181.66 for breach and wrongful repudiation of a home building contract. The Owner seeks that the order be set aside. 2. The Appellant was the Owner of a property in Northmead NSW. Under a home building contract dated 2 October 2015, the respondent Builder agreed to build a residential duplex on the property, and proceeded with the works. Clause 12 of the contract provided for the contract sum of $670,000 to be paid by meeting progress claims in accordance with the following schedule. Stage Amount i. 5% deposit $32,500.00 ii. 15% slab footing laid OSD constructed $97,500.00 iii. 20% stud wall roof trusses in position $130,000.00 iv. 20% external brickwork, roof, windows $130,000.00 v. 15% internal linings fit out $97,500.00 vi. 15% pre-final kitchen cupboards, PC items, plp, ele $97,500.00 vii. 10% final occupational certificate one week after defect walk through $65,000.00 1. The first four progress claims were made and paid. On or about 20 June 2016 the builder issued the fifth progress claim in the sum of $97,500. The Owner paid $50,000, leaving $47,500 of that claim unpaid. 2. On 29 July 2016, the Builder ceased work itself on the site, though its contractors continued to work there for a time. On 2 September 2016, the Builder's director, Mr Saad, wrote to the Owner explaining that the Builder had ceased work until the fifth invoice is paid. By return email, the Owner's representative Mr Changizi noted that work had ceased on 29 July 2016, and purported to terminate the contract on the grounds of abandonment. There was other correspondence. 3. The Builder commenced proceedings in this Tribunal, seeking damages for breach of contract as follows: 1. $47,500, being the outstanding balance of the fifth progress claim. 2. $44,681.66, being amounts paid by the Builder to subcontractors for works done in respect of Stage 6. 3. Loss of profit from the building contract in the sum of $35,000. 1. The Owner brought a cross-claim, which was dismissed for want of prosecution. An appeal was brought in respect of that dismissal, but forms no part of this appeal. 2. The Tribunal at first instance made adverse credit findings against Mr Changizi. In respect of the fifth progress claim, it found "that Stage 5 was complete and that the tax invoice for that stage was issued by the builder in accordance with the contract. I find also that the owner had no valid reason under the contract or at all for not paying that mount in full. That is, the owner was in breach of the contract (Reasons, par 88). At par 96 the Tribunal found that "the evidence discloses that the stage 5 works were complete and as a result the Owner owes the builder the sum of $47,500.00." It also found that on 2 September 2016 the Owner breached clause 25 of the contract (par 85). That clause outlines the circumstances in which, and the method by which, an owner may terminate the contract due to the default of the builder. It found that his "firing of the Builder was a repudiation of the contract, that repudiation being accepted by the Builder". 3. In relation to the sub-contractor's invoices paid by the Builder in the sum of $44,681.66, the Tribunal found (at par 97): "those invoices sufficiently evidence the claims made by the sub-contractors in circumstances where the evidence of both parties shows that works were continuing on the site during August 2016. I find the Builder has proved that claim on the balance of probabilities." 4. The Tribunal also found that the Builder had lost profits in the sum of $25,000 as a result of the wrongful repudiation of the contract (par 97-99). It ordered the Owner to pay the Builder $117,181.65, being the sum of these three amounts. It also made orders as to costs. 5. The Owner appeals against the decision and orders of the Tribunal below. On 12 October 2018, by consent, the order that the Owner pay damages to the Builder was stayed until further order. 6. By its Amended Notice of Appeal, the Owner appeals on five grounds: 1. The Tribunal failed properly to construe the terms of the contract and apply them to the facts as found in respect of findings on termination of the contract. 2. The Tribunal erred in assessing by reference to lost profits, because the claim for loss of profits was abandoned by the Builder at hearing. 3. The Tribunal erred in assessing damages by reference to the unpaid balance of the fifth progress claim ($47,500), because on termination of the contract the only claim available to the Builder was a claim for lost profits (expectation damages), and the progress payments were payments on account of the final contract sum. 4. The Tribunal erred in awarding damages for amounts paid to subcontractors in respect of Stage 6 of the works, because reliance damages were not available in circumstances where (as here) the value of the contractual promise is known, and are purely an alternative to expectation damages. 5. The Tribunal failed to provide adequate reasons for its findings. 1. An appellant may appeal to the appeal panel as of right on any question of law: s80(2)(b) Civil & Administrative Tribunal Act 2013. Leave was neither sought nor granted to appeal on any ground other than error of law. 2. At the appeal hearing, the Builder by its counsel abandoned its attacks on the Tribunal's findings with respect to termination of the contract. According, grounds 1 and 5 do not fall to be determined. Nevertheless, for the benefit of the parties, we indicate our views on those grounds as follows. 1. In respect of Ground 1, in determining whether the contract had been repudiated by the Builder, the Tribunal found that the Builder's actions and correspondence did not evince an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with its obligations. This was a finding of fact. To that finding, the learned Member applied the correct legal test – that is, the test in Shevill v Builders Licensing Board (1982) CLR 620. There was no error of law. If pressed, Ground 1 would fail. 2. In respect of Ground 5, the learned Member set out in detail his findings of fact with respect to the allegation of repudiation by the Builder, and his reasons for those findings (par 90-95). There was no failure to provide reasons in respect of his findings of fact. As indicated, the correct legal principle applied to the facts. If pressed, Ground 5 would fail. 1. As we understand it, the parties are agreed that Ground 2 should succeed, because the Builder abandoned its claim for lost profits in its final submissions below. It follows that order no 1 below (that the Owner pay $117,181.66 to the Builder) should be set aside at least to the extent it includes lost profits in the sum of $25,000. 2. Grounds 3 and 4 (concerning the unpaid balance of the fifth progress claim and amounts paid to subcontractors for work done on Stage 6 respectively) remain to be determined. Each raises an issue of law. 3. Both parties made written and oral submissions which have been taken into account. The Appellant's written submissions do not follow the same order as the grounds of appeal in its Amended Notice of Appeal, making it difficult to identify which submission applies to a particular ground. Doing our best, the relevant submissions may be summarised as follows. Ground 3 - Unpaid balance of fifth progress claim 1. The Tribunal found that the Owner had repudiated the contract. On repudiation by a party, the other party may elect either to keep the contract on foot and sue for damages for breach, or to accept the repudiation and terminate the contract. In the latter case, the party may sue for loss of expected profits from the contract, or "expectation damages". 2. Though it made no express finding to that effect, by assessing damages as it did, the Tribunal must have found, impliedly, that the Builder accepted the repudiation and terminated the contract. In those circumstances, the only claim available to the Builder was a claim for lost profits, or expectation damages. 3. To assess these, it was necessary to deduct from the contract price of $670,000 the Builder's cost of performing the works prior to termination, plus its reasonable cost to complete the works if the contract had remained on foot. In failing to assess expectation damages in that fashion, the Tribunal erred. As the Builder failed to bring evidence of the reasonable cost to complete the works, its claim for expectation damages should have been dismissed. 4. In any event, progress claims are merely demands for payment on account of the final contract price in accordance with an agreed schedule. The making of such a claim does not give rise to an accrued right which survives termination of the contract. On termination, the unpaid balance of the fifth progress claim was not available to be claimed as expectation or reliance damages. 5. The fifth progress claim was not made in accordance with the contract, because Clause 12 authorised such a claim only when the internal fittings and fit out were complete, which they were not. The fit out was mostly complete, as evidenced by a quotation dated 14 August 2015 by JOWS Construction Pty Limited. Ground 4 – sums paid to subcontractors 1. The amounts paid to subcontractors in respect of Stage 6 were amounts paid in reliance on the Owner's contractual promise to pay for them in accordance with the contract. The unpaid balance of the fifth progress claim was also a form of reliance damages. 2. Reliance damages are only available on termination if the defendant's promise cannot be valued. In this case, the value of the promise was the contract price of $670,000. Accordingly, reliance damages were unavailable. 3. In any event, reliance damages cannot be awarded in addition to expectation damages. They are alternative methods of assessment. In awarding both reliance damages and expectation damages of $25,000, the Tribunal erred. In the result, the Builder has been overcompensated for its loss. 1. It is unnecessary to set out here in full the respondent Builder's submissions in respect of Grounds 3 and 4. They may be summarised as follows: 1. The submission that reliance damages cannot be awarded together with expectation damages was first raised by the Owner after the hearing in its final written submissions. It ought not be entertained on appeal. 2. It was appropriate to order payment of the outstanding amount of progress payment 5 because, had the Owner not breached the contract, that amount would have been paid, and the purpose of damages is to put the innocent party in the same position as if the contract had not been breached. 3. The right to payment of the fifth progress claim was an accrued contractual right which survived termination by the Builder on repudiation of the contract by the Owner. By abandoning its claim for lost profits at hearing below, the Builder elected to claim reliance damages only. 4. Progress payments are not payments on account of the contract sum. The contract is divisible and the right to payment of each progress payment is a severable debt. 5. The Builder was entitled to claim reliance damages because it could not prove the amount of its lost profits. It does not matter that the contract sum enabled the Owner's promise to be valued. The Builder abandoned its claim for expectation damages below because it could not prove the value of its lost profits under the contract if completed. Consideration 1. The Builder submits that the distinction between expectation damages and reliance damages, raised by the Owner, ought not be considered on appeal, because it was first raised by the Owner in written submissions after the hearing below. It does not allege that Owner was not entitled to make those submissions. In the circumstances, the matter was raised below, and we are not satisfied there is sufficient reason to decline to consider the issue on appeal. 2. Before considering the relevance of the distinction to Grounds 3 and 4, it is appropriate to elucidate the distinction by reference to the decision of the High Court in Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64. 3. In that case, the High Court found that an aviation company was entitled to reliance damages for wrongful repudiation of an aerial surveillance contract by the Commonwealth. At first instance, the Federal Court had assessed damages at $410,000, being the profits which the Plaintiff would have earned from the contract if completed, less a deduction of 50% to take account of the likelihood that the Commonwealth would have properly terminated the contract in accordance with its terms. On appeal to the Full Court, damages were assessed on a reliance basis at about $6.6 million, being the sum of pre-operational expenses, the difference between the purchase cost of aircraft and their current value (after modification for the purposes of performance of the contract), and other expenses, plus interest. The Commonwealth appealed to the High Court. It submitted that reliance damages were only available where the nature of the breach, having regard to the subject-matter of the contract, is such as to render proof of the loss caused by the breach impossible. Otherwise, it said, damages must be assessed on a loss of profits basis. 4. The High Court found that reliance damages were available, as the Commonwealth had failed to discharge its onus of proving that, even if the contract had been completed, the contractor would not have recouped its expenses. 5. The High Court approved the general rule at common law, expressed in Robinson v. Harman [1848] EngR 135: "that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed" (per Mason CJ and Dawson J at 80). 1. The plurality explained the difference between expectation damages and reliance damages in the following way (at 81): In the ordinary course of commercial dealings, a party supplying goods or rendering services will enter into a contract with a view to securing a profit, that is to say, that party will expect a certain margin of gain to be achieved in addition to the recouping of any expenses reasonably incurred by it in the discharge of its contractual obligations. It is for this reason that expectation damages are often described as damages for loss of profits. Damages recoverable as lost profits are constituted by the combination of expenses justifiably incurred by a plaintiff in the discharge of contractual obligations and any amount by which gross receipts would have exceeded those expenses. This second amount is the net profit. The expression "damages for loss of profits" should not be understood as carrying with it the implication that no damages are recoverable either in the case of a contract in which no net profit would have been generated or in the case of a contract in which the amount of profit cannot be demonstrated. It would be an invitation to the repudiation of contractual obligations if the law were to deny to an innocent plaintiff the right to recoupment by an award of damages of expenditure justifiably incurred for the purpose of discharging contractual obligations simply on the ground that the contract breached would not have been or could not be shown to have been profitable. If the performance of a contract would have resulted in a plaintiff, while not making a profit, nevertheless recovering costs incurred in the course of performing contractual obligations, then that plaintiff is entitled to recover damages in an amount equal to those costs in accordance with Robinson v. Harman, as those costs would have been recovered had the contract been fully performed. Similarly, where it is not possible for a plaintiff to demonstrate whether or to what extent the performance of a contract would have resulted in a profit for the plaintiff, it will be open to a plaintiff to seek to recoup expenses incurred, damages in such a case being described as reliance damages or damages for wasted expenditure. A further example of the application of Robinson v. Harman which will result in a plaintiff being entitled to claim damages for wasted expenditure is in a contract for services such as that between a solicitor and a client. Where a solicitor has breached his or her contractual duty of care, the measure of damages to which a client will be entitled will be such an amount as would put the client in the position he or she would have been in had the contract of retainer been performed without negligence. In cases where, had non-negligent advice been given, the client would not have entered into a subsequent transaction, for example a purchase of real property, then, in conformity with Robinson v. Harman, the client will be entitled to recover as damages expenditure wasted on account of the negligent advice, less anything subsequently recovered and given reasonable acts of mitigation: Hayes v. Dodd [1988] EWCA Civ 8; (1990) 2 All ER 815, per Staughton LJ. at p 820. The amount of wasted expenditure will be the appropriate measure of damages in such a situation because, it having been established that the client would not have entered into the subsequent contract if proper advice had been given, it is not sensible to speak of loss of profits. Hayes v. Dodd is a useful illustration of the statement that the expressions "expectation damages", "damages for loss of profits", "reliance damages" and "damages for wasted expenditure" are simply manifestations of the central principle enunciated in Robinson v. Harman rather than discrete and truly alternative measures of damages which a party not in breach may elect to claim. 1. They outlined the circumstances in which damages could be assessed on a reliance basis as follows (at 85): Naturally, the categories of case in which a plaintiff is likely to make a claim for the recovery of expenditure incurred are those in which the plaintiff has not suffered a loss of profits and those in which it is impossible to assess what would have been the outcome had the contract been performed or those in which that outcome is otherwise uncertain. So much is acknowledged by Lord Denning in the passage from Anglia Television already cited. The manner in which a plaintiff frames his or her claim for damages will be dictated not so much by a choice of alternatives giving rise to an election but simply according to whether the contract, if fully performed, would have been and could be shown to have been profitable (even if the actual amount of profit is not readily ascertainable). If this can be demonstrated, a plaintiff's expectation of a profit, objectively made out, will be protected by the award of damages. Otherwise, subject to it being demonstrated that a plaintiff would not even have recovered any or all of his or her reasonable expenses, a plaintiff's objectively determined expectation of recoupment of expenses incurred will be protected by the award of damages. …… It should be observed that, in a case where it is not possible to predict what position a plaintiff would have been in had the contract been fully performed, as was the case in both McRae and Anglia Television, it is not possible as a matter of strict logic to assess damages in accordance with the principle in Robinson v. Harman. But the law considers the just result in such a case is to allow a plaintiff to recover such expenditure as is reasonably incurred in reliance on the defendant's promise. In this case, the law assumes that a plaintiff would at least have recovered his or her expenditure had the contract been fully performed. It will still be open to a defendant, however, to argue that, notwithstanding the fact that it is impossible to assess what profits, if any, the plaintiff would have made had the contract been fully performed, the expenditure claimed by a plaintiff would nevertheless not have been recovered even if, to use the examples of McRae and Anglia Television, the tanker had existed or the defendant actor, Oliver Reed, had participated in the production of the film. In essence, such an argument is to the effect that, far from being impossible to predict what the result of the contract would have been, if fully performed, it is possible to demonstrate that performance of the contract would not even have resulted in the recovery by the plaintiff of reasonable expenses incurred. 1. Where it is not possible to predict the loss of profits if the contract was fully performed, a rebuttable presumption arises that the innocent party would not have entered into a contract unless it was able to at least recoup its expenditure from the contract price: Amann at 87. The defendant bears the onus of defeating the claim for reliance damages by proving that, even if the contract had been fully performed, the innocent party would not have recovered its costs (ibid). 2. The presumption arises even where, as in Amann, it is theoretically possible to establish what profits would have been made if the contract were fully performed. The plurality explained (at 89): The present case differs from McRae in that it was not impossible, as a matter of theory, for Amann to establish what its profits (if any) would have been had the Commonwealth not repudiated the contract. Indeed, the trial judge's assessment of damages proceeded on that footing although, significantly, he did not take into account the value to Amann of the prospects of renewal of the contract. But the difficulties attending that undertaking were legion, as appears from the judgments in the Full Court. Not the least of those difficulties were the problems of assessing what were the prospects of early termination of the contract by the Commonwealth had the contract proceeded and, more importantly, the prospects of Amann securing a renewal of the contract. Add to those uncertainties the fact that, on any view, the most substantial part of Amann's damages flowing from the Commonwealth's breach of the original contract was represented by the wasted expenditure. In this respect it is significant that the contract was of such a kind that the parties clearly contemplated that the contractor would be in an advantageous and preferred position to secure a renewal of the contract had it run its expected course. In that event Amann would, subject to any variations in the Commonwealth's requirements, have had the necessary equipment (written down in value), facilities and personnel in place at the relevant time. The prospect of renewal was an important commercial benefit which would then have accrued to the contractor. Amann was looking to that commercial benefit as well as revenue receipts arising under the original contract as the reward which it would obtain under that contract. In other words, it was a contract which enabled the contractor to recoup part, if not all, of its expenditure during the currency of the original contract and placed the contractor in a favourable position to secure a renewal of the contract and earn substantial profits under any renewed contract. On this score alone it was a case in which, it being natural and appropriate for Amann to sue to recover its wasted expenditure by way of reliance damages, the onus rested on the Commonwealth of establishing that the reliance expenditure would have been wasted even if the contract had been performed. 1. After considering the prospect that the contract might be renewed because the modification of aircraft for the purposes of the first contract put the contractor in a competitive position, the plurality found as follows (at 94): … the Commonwealth must demonstrate that the value to Amann of the prospect of renewal of the contract when combined with those expenses that would have been recovered by way of gross receipts was less than the total expenses to be incurred by Amann in the performance of its contractual obligations. If the Commonwealth was able to demonstrate that this would have been the result, had the contract been fully performed, then, in conformity with Robinson v. Harman, Amann would not be entitled to all of its expenditure incurred in reliance on the Commonwealth's promise to perform and wasted as a result of the Commonwealth's breach. The Commonwealth was unable, however, to demonstrate this and so discharge the onus. Accordingly, the presumption that Amann would not have entered into a contract in which it would not recover the value of its expenditure incurred remains undisturbed. We agree with the Full Court's conclusion that Amann was entitled to recover as damages an amount commensurate with what it had expended in reliance upon the Commonwealth's promise to perform its contractual obligations. … 1. The circumstances in which a plaintiff may rely on a rebuttable presumption that, but for breach, profits would have exceeded expenditure were explained by Brennan J as follows (at 104 – emphasis added): Where a contract has been rescinded for breach, the amount which a plaintiff has reasonably expended in reliance on the defendant's promise and which is wasted by reason of the defendant's breach of his promise is a proper subject of damages for breach of contract: McRae v. Commonwealth Disposals Commission, at pp 412, 414. Damages assessed for wasted expenditure incurred in reliance on the defendant's promise may be described as reliance damages to distinguish them from damages assessed for loss of the benefits which the plaintiff expected from performance of the contract (expectation damages). A plaintiff who seeks to recover reliance damages must ordinarily prove that the net value of the benefits to which he would have been entitled if the contract had been performed ($B - $y) would have exceeded the wasted expenditure incurred in reliance on the defendant's promise ($x) and, to the extent that he fails to do so, his claim will fail. To discharge the onus of proof, however, the plaintiff may be able to raise and rely on an inference that a party would not incur expenditure in reliance on the other party's promise without a reasonable expectation that, on performance of the contract, the expenditure would be recouped. That is an inference of varying strength according to the circumstances. Sometimes, the inference would be of sufficient strength to enable the plaintiff to discharge the onus; sometimes, the inference would be too weak. However, when a contract is rescinded for breach and that breach, by preventing the performance of the contract, has made it impossible for the plaintiff to prove that the net value of his contractual benefits ($B - $y) exceeds the wasted expenditure incurred in reliance on the defendant's promise prior to rescission ($x), it is just to shift to the defendant the ultimate onus of proving that, had the contract been performed, the net value of the plaintiff's benefits would not have covered the expenditure he had incurred before rescission. 1. There can be no duplication of reliance damages and expectation damages (per Brennan J at 107): The point of distinction between the method of assessment of expectation damages and the method of assessment of reliance damages is the reversal in the case of reliance damages of the onus of proof of the net value of the plaintiff's contractual benefits. There can be no duplication of reliance damages and expectation damages. The compensable losses in reliance damages do not include possible lost profits but both cover expenditure reasonably incurred in preparing to perform and in performing the contract within the limits prescribed by Robinson v. Harman. The measure of damages prescribed by Robinson v. Harman governs each method of assessment. Where justification for reversing the onus exists, reliance damages may be recovered; absent that justification, the plaintiff must recover expectation damages, if any, by proof of the value of benefits and the cost of performance; that is, by proof that $B - $y is greater than $x. These are alternative methods of assessing damages, but the plaintiff does not have an election as to the method. The plaintiff who seeks recovery of reliance damages must show that justification for reversing the onus of proof exists. Otherwise, he must endeavour to prove his damages on the ordinary basis. Ground 3 - Unpaid balance of fifth progress claim 1. In this case, the Tribunal ordered the Owner to pay an amount of damages assessed by reference to, among other things, the unpaid balance of the fifth progress claim. In its submissions, the Appellant Owner described this as reliance damages but, in the absence of evidence that the claim contained no profit component, we are not satisfied that they can properly be so characterised. Though he found that the Owner was in breach of the contract by failing to pay the balance of the progress claim, the learned Member did not say why damages after termination of the contract should be assessed by reference to this amount. If he was of the view that the right to payment of the unpaid balance represented an accrued contractual right which survived termination, he did not say so. If he was of that view, he needed first to consider whether, and to find that, the building contract was severable and not entire, and that progress payments were not merely payments on account of the ultimate contract price. No such findings were made. 2. In these circumstances, the Appeal Panel has no way of identifying the basis for assessing damages by reference to the unpaid balance of the fifth progress payment. In our view, inadequate reasons have been given for the assessment. The failure to provide reasons amounts to an error of law. It is appropriate to set aside Order no 1, at least to the extent that it includes an order to pay the unpaid balance of the fifth progress payment. Ground 4 – sums paid to subcontractors 1. The Tribunal ordered the Owner to pay damages assessed, in part, by reference to payments made to subcontractors in part performance of stage 6 of the works. 2. In order to assess damages on a reliance basis, it was first necessary for the Tribunal to find that breach by the Owner – in this case, his wrongful repudiation of the contract – had made it impossible for the Builder to prove its likely loss of profits if the contract had been completed. No such finding was made. In our view, there was no evidentiary basis for making such a finding. 3. The value of the Owner's promise – namely, the contract price of $670,000 - was quantifiable by reference to the terms of the contract. Had the Builder adduced evidence proving its expenditure to date, and the likely expenditure required to complete the contract if not terminated, expectation damages could have been assessed by reference to the difference between the two, less the amounts actually paid to the Builder under the contract. 4. No finding was made to the effect that the Owner's repudiation prevented the Builder from adducing that evidence, or that for some other reason it would have been impossible or practically so to prove the loss of profit with appropriate evidence. There was no evidentiary basis on which to make such a finding. In the absence of such a finding, it was not open to the Tribunal to assess damages by reference to wasted expenditure. Even it were open, reliance damages fell to be assessed by adding together all amounts expended by the Builder in performance of its contractual obligations – not just amounts expended in respect of Stage 6 - and taking into account the extent to which they already recouped by amounts received under the contract. That assessment was not done. 5. For those reasons, it was not open to the Tribunal to assess damages by reference to wasted expenditure on Stage 6 of the works. Even if it were, the method of assessment was not appropriate. The order that the Owner pay damages by reference to that expenditure was affected by error of law. That order must be set aside. Orders 1. We make the following orders: 1. Grant leave to the Appellant to rely on its Amended Notice of Appeal, noting that Grounds 1 and 5 are not pressed. 2. Set aside orders no 1, 2 and 3 below. 3. Remit the matter to the Tribunal differently constituted for rehearing, limited to an assessment of damages for breach of contract by the Owner, and the issue of costs, on the basis of such evidence or further evidence as the Tribunal may in its discretion allow. 4. Each party to pay its own costs of the appeal, unless it makes written application for costs with submissions in support by 10 May 2019. 5. In the event that either party applies for its costs on appeal, the other shall file written submissions in reply by 17 May 2019. 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: 02 May 2019