DeMarco v Macey

1. [1]

   PRICE AJA: This is an appeal under s 83(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (“CAT Act”) from a decision of the Appeal Panel of the New South Wales Civil and Administrative Tribunal (“the Tribunal”). Pursuant to s 83(1) of the CAT Act, a party may appeal to this Court confined to questions of law but only with leave being granted by the Court.

2. [2]

   Leave to appeal will ordinarily only be granted “concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond what [is] merely arguable”: Jaycar Pty Limited v Lombardo [2011] NSWCA 284 at [46] (Campbell JA, Young and Meagher JJA agreeing); see also Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[37] (Basten JA, Tobias AJA agreeing); Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28] (Gleeson JA, Macfarlan and Payne JJA agreeing).

Background

1. [3]

   On 22 September 2016, the plaintiff, Godfrey DeMarco, a builder, entered into a written contract (“the DeMarco Contract”) with the defendants, David Macey and Debbie Macey, to perform residential building works in the form of renovations and additions to the defendants’ property located at East Street, Blakehurst.

2. [4]

   The contract price for the scope of works was an agreed lump sum of $770,000 (including GST) subject to adjustment for:

3. [5]

   The provisional sum allowance in the DeMarco Contract (including GST) was $200,950 and the prime cost allowance was $48,000, being a total of $248, 950 (Ex GDM-1, p 160). The contract price of $770,000 included those amounts.

4. [6]

   The plaintiff submitted 3 variations to the DeMarco Contract totalling $41,124.88, which were agreed and are not in dispute. The total cost of the variations were added to the contract price.

5. [7]

   The building works commenced in October 2016. The defendants paid to the plaintiff the sum of $714,674 for the building works including variations in accordance with cl 12 of the DeMarco Contract which provided for progress payments.

6. [8]

   On 26 February 2019, the defendants terminated the DeMarco Contract as a result of the plaintiff’s delay in completing the building works required under the contract. It is not in dispute that the plaintiff was at fault for the delay in breach of the contract and the defendants were entitled to terminate the DeMarco Contract. Clause 25 of the DeMarco Contract which applied in the circumstances when the contract was terminated by the defendants due to the fault of the plaintiff relevantly provided as follows:

7. [9]

   On 15 May 2019, the defendants then entered into a contract with David Swingler, another builder (“the Swingler Contract”), and Mr Swingler completed the works which were the subject of the DeMarco Contract.

8. [10]

   Under the Swingler Contract, Mr Swingler also performed some additional building works for the defendants that had not been the subject of the DeMarco Contract. The Swingler Contract Price was a lump sum of $489,337 (including GST) and contained the following:

9. [11]

   The additional building works which was outside the scope of the DeMarco Contract were valued at $42,873.

10. [12]

    On 15 February 2019, the defendants commenced proceedings in the Tribunal against the plaintiff. The Tribunal found that it had jurisdiction to determine the defendants’ claim under the Home Building Act 1989 (NSW).

11. [13]

    On 8 July 2020, the Tribunal awarded damages for breach of contract in favour of the defendants against the plaintiff in the amount of $317,919.

12. [14]

    The plaintiff appealed the Tribunal’s decision to the Appeal Panel. On 21 September 2021, the Appeal Panel dismissed the plaintiff’s appeal but varied the amount of damages payable to the defendants by increasing the award from $317,919 to $389,184.

13. [15]

    The plaintiff appealed to this Court against the Appeal Panel’s decision. On 5 October 2022, the plaintiff’s appeal heard before Harrison AsJ was allowed on the ground of apprehended bias and the matter was remitted back to the Tribunal for redetermination: DeMarco v Macey [2022] NSWSC 1348.

14. [16]

    The matter was heard by a differently constituted Tribunal on 16 and 17 October 2023, with written submissions filed following the hearing. The defendants’ claim before the Tribunal was as follows:

15. [17]

    The plaintiff made a quantum meruit claim in the amount of $34,675.

16. [18]

    On 29 August 2024, the Tribunal ordered the plaintiff to pay the defendants $416,508.40 plus the defendants’ costs. The Tribunal found that the plaintiff’s documents had failed to provide sufficient evidence to establish its quantum meruit claim.

Proceedings before the Appeal Panel

1. [19]

   By notice of appeal filed on 25 September 2024, the plaintiff appealed to the Appeal Panel relying on six grounds of appeal. The parties provided written submissions to the Appeal Panel which heard oral argument on 28 January 2025. In the proceedings before the Appeal Panel and in this Court, Mr Bolger of counsel appeared for the plaintiff and Mr Hyde of senior counsel for the defendants. The plaintiff sought orders that he pay the defendants $102,609, in lieu of the order that he pay the defendants $416,508.40 and that the defendants pay his costs.

2. [20]

   The Appeal Panel delivered its decision on 11 June 2025 in which it allowed the plaintiff’s appeal in part and decreased the amount payable to the defendants to $372,579.42: DeMarco v Macey [2025] NSWCATAP 131. The Appeal Panel ordered the plaintiff to pay 90% of the defendants’ costs of the appeal on an ordinary basis, subject to either party making an application to vary the costs order. Neither party made an application to the Appeal Panel to vary the costs order.

3. [21]

   In its decision, the Appeal Panel noted at [16] that an internal appeal “may be made in the case of any kind of decision (including an ancillary decision) other than an interlocutory decision as of right ‘on any question of law’, or with the leave of the Appeal Panel, on any other grounds”.

4. [22]

   The Appeal Panel considered the three principal issues in the appeal before it were whether (at [9]-[13]):

5. [23]

   The Appeal Panel stated at [14]:

6. [24]

   The Appeal Panel detailed the parties’ submissions at [79]-[110]. When dealing with the quantum meruit claim, the Appeal Panel said at [116]-[120]:

7. [25]

   As to the issue of whether the Tribunal had erred when ascertaining the defendants’ damages by not applying cl 25 in the DeMarco Contract, the Appeal Panel found at [130] that the DeMarco Contract did not provide that cl 25 was the exclusive remedy for the defendants in the event of termination of the contract for the plaintiff’s breach and did not exclude the defendants from remedies available at common law. The Appeal Panel went on to consider at [132] the question of whether or not the defendants’ position with “respect to the amount of any money order in their favour would be different if the amount of their claim was assessed under clause 25 of the [DeMarco Contract] or at common law”. The Appeal Panel stated that if the position was different, the Appeal Panel could then assess whether the Tribunal’s assumption that common law principles applicable to the assessment of damages should apply was material to the outcome.

8. [26]

   The Appeal Panel at [133] then considered the plaintiff’s submissions about how adjustments should have been made to the “contract price” to take account of the prime cost items and provisional sums, when assessing the amount of the money order in favour of the defendants.

9. [27]

   The Appeal Panel referred to the table at paragraph 57 of the plaintiff’s written submissions and found that the plaintiff did not supply any of the items (j), (k), (m) and (p) because no figure appeared against each of those items in column 3. The Appeal Panel observed at [142] that “there is no basis for there to have been any adjustment to the ‘contract price’ for the purposes of [clauses] 11 and 25 in the [DeMarco Contract]” for prime cost items not supplied by the plaintiff.

10. [28]

    The Appeal Panel stated at [144] that the “[p]rime cost items that Swingler supplied to [the defendants] under the Swingler contract and any 10% builder’s margin that Swingler was permitted to claim from [the defendants] in certain circumstances under clause 11 of the Swingler contract, were not amounts, for the purposes of clause 25 in the [DeMarco Contract]”. The Appeal Panel observed at [145] that the plaintiff had not put a case that some or all of the new builder’s costs “involved an unreasonable or wanton expenditure by [the defendants], that was not consistent with [the defendants’] so-called ‘duty’ to mitigate their loss”.

11. [29]

    The Appeal Panel at [146] stated that where in the table at paragraph 57 in the written submissions it points to an increased cost in a prime cost item supplied by Swingler, it was not accompanied by any evidence or submission that the cost of any of those prime cost items “was in any way unreasonable or has been incurred by [the defendants] unreasonably”.

12. [30]

    The Appeal Panel then considered at [147]-[149], item (e) the “windows item”, which on the plaintiff’s case he had supplied. The Appeal Panel noted that the plaintiff’s evidence included two invoices from the plaintiff’s building consultant Mr John Hickey totalling $47,720.99, which exceeded the $37,000 in the prime cost schedule for “windows” by $10,720.99. The Appeal Panel stated at [148] that they did not discern any error of law in the Tribunal’s approach to the “windows” prime cost item. The Appeal Panel went on to say at [149]:

13. [31]

    The Appeal Panel found at [152] that “[w]ith respect to the prime cost items, [the plaintiff] has not established that the Tribunal, applying cl 25 of the [DeMarco Contract], would have reached a different assessment of damages to the assessment it reached applying common law principles”.

14. [32]

    The Appeal Panel next considered the plaintiff’s submissions concerning “provisional sums” and noted the plaintiff’s submission that items (a), (b), (c), (d), (f), (g), (h), (i), (l), (n), (o), (q), (r) and (s) in the table at paragraph 57 were provisional sums which should lead to an adjustment of the contract price. The Appeal Panel observed that items (i), (l), (n), (o), (p), (q), (r) and (s) had not been supplied or installed by the plaintiff. The Appeal Panel found for the purposes of cl 10 of the DeMarco Contract, the plaintiff did not incur “any actual cost” in relation to these items which could have led to any adjustment of the contract price either by way of addition or subtraction from the contract price.

15. [33]

    As to items (a), (c), (f), (g) and (h) in the table at paragraph 57 of the plaintiff’s written submissions, the Appeal Panel said at [157]:

16. [34]

    The Appeal Panel at [157] calculated the total of the items in respect of which the plaintiff’s actual cost of supplying these provisional sum items was $52,379.13, and that amount was less than the provisional sum allowed in the DeMarco Contract for these items. The Appeal Panel found at [158] that in respect of items (b) and (d) in the table at paragraph 57, the actual cost to the plaintiff for both items was greater than the provisional sums allowed by $8,871.67. The Appeal Panel stated at [159]:

17. [35]

    The Appeal Panel concluded at [164] that the plaintiff’s evidence failed to establish that had the Tribunal considered and applied cl 25, “that would have resulted in the Tribunal finding that [the plaintiff] should be obliged to pay [the defendants] only $102,609.00 in damages or an amount different to the amount of damages ordered by the Tribunal”.

18. [36]

    When considering the position at common law, the Appeal Panel at [169] calculated the amount owed by the plaintiff to the defendants to be $386,437.42. The Appeal Panel then turned to consider the position under cl 25 of the DeMarco Contract and said at [173]:

19. [37]

    The Appeal Panel made the orders at [20] above.

Grounds of Appeal

1. [38]

   On 9 July 2025, the plaintiff filed a summons seeking leave to appeal from part of the Appeal Panel’s decision.

2. [39]

   The summons identifies the following nine grounds of appeal:

3. [40]

   The plaintiff submitted that his appeal raises three discrete issues:

Legal principle

1. [41]

   The relevant principles relating to an appeal under s 83 of the CAT Act were conveniently set out by Griffiths AJ in Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2) [2023] NSWSC 416; (2023) 20 BPR 43,135 at [33] and restated in Dokas v Gallagher (No 2) [2024] NSWCA 236 at [66] (Kirk JA and Griffiths AJA):

Grounds 1, 2, and 3 – the plaintiff’s quantum meruit claim

1. [42]

   The plaintiff submitted that the Appeal Panel erred in finding that the defendants only admitted in the evidence that $13,858 of the plaintiff’s quantum meruit claim was accepted and or in rejecting the balance of the plaintiff’s quantum meruit claim.

2. [43]

   Before the Appeal Panel, the plaintiff relied on the claims admitted in the defendants’ evidence and material at page 3 of Ex A (a document titled “Extras to Original Plans (Previously Claimed)”; Ex GDM-1, p 138) and Annexure A to Ex B (the affidavit of David Macey affirmed 5 May 2023 (“Mr Macey’s affidavit”); Ex GDM-1, pp 292-294). The plaintiff submitted that the Appeal Panel correctly found that there was evidence of the plaintiff’s quantum meruit claim and that the defendants had made admissions of that claim. However, the plaintiff contended that the Appeal Panel “inexplicably” did not refer to the defendants’ evidence at page 3 of Ex A notwithstanding Annexure A to Mr Macey’s affidavit cross references and accepts those claims.

3. [44]

   The plaintiff accepted that the manner in which the defendants expressed the “disagreement” in Annexure A to Mr Macey’s affidavit could be considered confusing. The plaintiff pointed out that the defendants had stated in Annexure A to Mr Macey’s affidavit that items (or claims) QM2, QM5, QM6, QM7 and QM10 had already been allowed in (or at) page 3 of Ex A. The plaintiff argued that it followed that these claims were not disputed but had been allowed by the defendants in their calculations, and consequently they were placed in the “disagree” column so that the claim was not double counted.

4. [45]

   The plaintiff submitted that the work for QM12 was performed but the defendants had disputed the claim on the basis that there was no evidence of payment to the roofing contractor. The plaintiff contended that this was not a proper basis to reject a claim when the work had been admitted as being performed and was outside the scope of the DeMarco Contract.

5. [46]

   In oral submissions, Mr Bolger said that “the Appeal Panel properly found, or at least it can be inferred, that the use of the words ‘quantum meruit’ is incorrect. These are essentially additional variations and that is how Mr Macey deals with them and that is why they are added in, we say, to the moneys that were payable to [the plaintiff], or should have been deducted from the moneys payable by way of damages for the repudiation to [the defendants]”: Tcpt, 14 November 2025, p 3(39-45).

6. [47]

   Mr Bolger referred to the document annexed as Annexure A to the plaintiff’s written submissions and amended the total of the plaintiff’s quantum meruit claim to be $30,881 plus an additional 10% builder’s margin of $3,088, which then totalled $33,969.

7. [48]

   The plaintiff contended that the Appeal Panel erred at law in rejecting the quantum meruit claim and in doing so:

8. [49]

   In oral submissions, Mr Hyde referred to Annexure A to Mr Macey’s affidavit in which the defendants’ position as to quantum meruit was “clearly set out in terms of agreed and disagreed, and the sum [of $13,858] is replicated there”: Tcpt, 14 November 2025, p 11(1-3).

9. [50]

   Mr Hyde submitted that what Mr Bolger sought to do was to say “that admission actually is more than what it truly says, and you have to go back and look at other documents … [b]ut that doesn’t make the admission better or worse than what is on the face of the document because that is what the [A]ppeal [P]anel relied upon, and leave simply should not be granted because it is not clear, it is merely arguable that the admission should have included more, but it is not”: Tcpt, 14 November 2025, p 11(5-12).

10. [51]

    In the defendants’ written submissions, Mr Hyde contended that what is set out in Annexure A to the plaintiff’s written submissions did not accurately reflect the evidence. Furthermore, the defendants’ submissions raised that a quantum meruit claim is a question of fact.

Determination

1. [52]

   At the heart of the plaintiff’s submissions, which I have summarised at [42]-[48] above, are what are asserted to be admissions made by Mr Macey in Annexure A to his affidavit of 5 May 2023 (Ex B; Ex GDM-1, pp 288-300). It is evident from the whole of the Appeal Panel’s decision that the Appeal Panel had regard to the plaintiff’s evidence and submissions on this issue.

2. [53]

   Before venturing further, it is convenient to refer to the relevant principles relating to admissions.

3. [54]

   Admissions made in Mr Macey’s affidavit may be distinguished from admissions made in pleadings or quasi-pleadings such as points of claim or points of defence in the Tribunal. Any admissions in Mr Macey’s affidavit are part of the evidence before the Tribunal which must be weighed together with all relevant evidence as a whole and which the Tribunal might ultimately accept or reject: The Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52 at [103]-[113] (Campbell JA, Hodgson JA agreeing); Dr N Kalokerinos Pty Ltd v Jain [2025] NSWCA 137 at [63]-[67] (Adamson JA, Ward P and Price AJA agreeing).

4. [55]

   Admissions must be clear and unambiguous. This point was considered by Barrett JA (with whom Basten and Ward JJA agreed) in Moon v Mun [2013] NSWCA 217 at [41] where his Honour observed that:

5. [56]

   Although those observations were made about admissions contained in pleadings, in my view they apply with equal force to informal admissions such as in the present case.

6. [57]

   A failure to respond to a demand for payment may amount to an admission if there are circumstances which render it more reasonably probable that a person who denied liability for the claim would answer that the claim than would not: Roude v Helwani [2020] NSWCA 310 at [33] (White JA, Brereton and McCallum JJA agreeing) (“Helwani”) and the authorities there cited; see also Locke v H.C. Loneragan & Company Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions [2025] NSWCA 166 at [72] (McHugh JA, Bell CJ and Adamson JA agreeing).

7. [58]

   As will be seen from Annexure A to Mr Macey’s affidavit below, Mr Macey answered all of the plaintiff’s quantum meruit claims.

8. [59]

   Annexure A to Mr Macey’s affidavit is as follows:

9. [60]

   Paragraph 8 of Mr Macey’s affidavit contained the following table:

10. [61]

    Neither the plaintiff nor the defendants gave oral evidence before the Tribunal.

11. [62]

    The admission made by Mr Macey at paragraph 8 of his affidavit and in Annexure A that he agreed to $13,858 of the plaintiff’s quantum meruit claim were clear and unambiguous. The Appeal Panel accepted at [118] that Mr Macey had made an admission that the amount of $13,858 in the plaintiff’s quantum meruit claim was accepted. However, “as to the balance of the claim”, the Appeal Panel at [120] agreed with the Tribunal that the plaintiff’s evidence did not establish his claim for the balance. Mr Macey’s statements in respect of items QM2, QM3, QM5, QM6, QM7, QM10 and QM12 are far from clear and unambiguous admissions and the Appeal Panel was entitled to reject the plaintiff’s submissions that the items had been admitted. Furthermore, the Appeal Panel was not obliged to accept the plaintiff’s submission that Mr Macey’s response to QM12 was not a proper basis to reject that claim. No reasonably clear injustice has been demonstrated.

12. [63]

    The ultimate task for the Appeal Panel was to determine whether on the whole of the evidence the plaintiff had proven his quantum meruit claim on the balance of probabilities. As was observed in the joint judgment of Nettle, Gordon and Edelman JJ in Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32 at [203] quoting what was said by Dixon J (with whom Evatt and McTiernan JJ agreed) in South Australian Harbours Board v South Australian Gas Co (1934) 51 CLR 485 at 499; [1934] HCA 45 (“South Australian Harbours Board”), the Appeal Panel’s assessment of the plaintiff’s quantum meruit claims raised was a “question of fact”. This was restated in Helwani by White JA at [44]:

13. [64]

    By analogy, the extent to which the plaintiff has in this Court sought to establish that he was entitled to a quantum meruit claim raises questions of fact.

14. [65]

    I do not grant leave for Grounds 1, 2 and 3.

Grounds 4, 5, 6, 7 and 8 – contract price for the DeMarco Contract, the unpaid balance for the DeMarco Contract and the defendants’ reasonable costs to complete

1. [66]

   The plaintiff contended that the Appeal Panel erred at law for the following reasons:

2. [67]

   The plaintiff submitted that the Appeal Panel’s construction was wrong as the determination of the monies payable by reason of cl 25 of the DeMarco Contract required the following:

3. [68]

   The plaintiff contended that the amount that was “otherwise due” required the adjustment of the contract sum for the prime cost and provisional sum items as provided by cll 10 and 11 of the DeMarco Contract. The plaintiff argued if no adjustment is made, then “estimates” are used to determine the contract price and “estimates” are not and never could be what is “due” to be paid.

4. [69]

   The plaintiff submitted that the Appeal Panel at [142] had confused the concept of “performance” of the DeMarco Contract and the discharge of the obligations with the object of cl 25, which is to determine what amount, if any, is payable to complete the building works where the termination is due to the plaintiff’s conduct.

5. [70]

   Another submission was that the Appeal Panel’s approach at [143] ignored that the prime cost and provisional sums were estimates only. The consequences of the Appeal Panel’s construction of cll 10, 11 and 15, the plaintiff submitted, is that the actual price of the building works which were completed was reflected in the “reasonable costs to complete”, but in this case unfairly to the plaintiff as the plaintiff is held to the “estimate” of these items when determining the “amount due”.

6. [71]

   Another matter raised was that the Appeal Panel “bizarrely found that they were not satisfied that the invoices for windows were for the windows the subject of the prime cost item”. The plaintiff submitted that this “difficulty” was not raised by the Appeal Panel during the hearing; that there were no other windows and it was not suggested by the defendants that the invoices did not relate to the windows for the DeMarco Contract. The plaintiff contended that the Appeal Panel’s finding at [149] that the evidence was unsatisfactory was not open to the Appeal Panel.

7. [72]

   The plaintiff referred to [154]-[163] of the Appeal Panel’s decision in relation to the “provisional sum” items and repeated the submissions made on the Appeal Panel’s approach to the “prime cost” items. The plaintiff submitted that where the price incurred was less then, as provided by cl 10, the contract price was to be adjusted down.

8. [73]

   The plaintiff pointed to Annexure B of the written submissions which was the same schedule as was before the Appeal Panel and cross references the evidence relied upon. The plaintiff submitted that the contract price should have been adjusted by $116,474 (accepting the Appeal Panel’s finding that the percentage builder margin was not specified in cll 10 and 11 of the DeMarco Contract and was not claimed).

9. [74]

   At paragraphs 58 to 70 of the written submissions, the plaintiff provided calculations which included the adjusted price for the DeMarco Contract, the quantum meruit claim, the payments made, the reasonable costs to complete and a reconciliation of those reasonable costs and the amounts otherwise due. The total of the plaintiff’s calculations was $106,336.08. Amendments were made at the time of the hearing in this Court to adjust the calculations and increase the total to the amount of $123,254: Tcpt, 14 November 2025, pp 1(34)-2(1).

10. [75]

    In oral submissions, Mr Bolger said that if the Court accepted the plaintiff’s submission that the Appeal Panel applied the incorrect principle to determine damages the matter should be remitted to a differently constituted Tribunal to determine this discrete issue: Tcpt, 14 November 2025, p 9(21-25).

11. [76]

    The defendants submitted that the matters advanced by the plaintiff do not merit a grant of leave. The defendants argued that it is entirely unexplained by reference to case law or otherwise how the Appeal Panel’s decision was incorrect or at odds with cl 25 of the DeMarco Contract.

12. [77]

    The defendants contended that the plaintiff’s evidence on this issue was set out in the report of John Hickey dated 24 March 2023 (“the Hickey Report”) and referred in particular to Mr Hickey’s statement at 5.01(h): Ex GDM-1, pp 432-433.

13. [78]

    In the Hickey Report, when referring to his construction of the DeMarco Contract reconciliation spreadsheet, Mr Hickey said he had taken into consideration (Ex GDM-1, p 432):

14. [79]

    The defendants referred in particular to [150]-[151]; [159]-[160], [161]-[164] and [173]-[174] of the Appeal Panel’s decision and submitted that given the evidence there was no error in the Appeal Panel reaching the conclusions it did in these paragraphs. The defendants contended that the plaintiff’s submissions did not grapple with these aspects of the Appeal Panel’s reasoning and leave ought not to be granted.

Determination

1. [80]

   One of the principal issues before the Appeal Panel was that the Tribunal had erred when ascertaining the defendants’ damages by not applying cl 25 in the DeMarco Contract. The Appeal Panel decided that the Tribunal had not erred in determining the defendants’ damages recoverable on the basis of common law principles (see Appeal Panel’s decision at [130]-[131]; see also [25] above). The plaintiff does not challenge that aspect of the Appeal Panel’s decision.

2. [81]

   In determining the damages at common law, the Appeal Panel at [166] referred to the well-established general rule that the proper measure of damages in an action by a homeowner against a builder is “the cost, in excess of any amount of the contract price unpaid, of reasonable and necessary work to make the building to conform to the contract, together with any consequential losses served by the breach” citing Wabbits Pty Limited v Godfrey [2009] NSWSC 1299 at [101] (Ward J, as the President then was) (“Wabbits”). In Wabbits, Ward J at [102] cited a passage from the High Court’s judgment in Bellgrove v Eldridge (1954) 90 CLR 613 at 617-618 (Dixon CJ, Webb and Taylor JJ); [1954] HCA 36 (“Bellgrove”), which expresses the general principle that the measure of damages is the difference between the contract price of the work contracted for and the cost of making the work conform to the contract, with the addition of any appropriate consequential damages: Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 at [13]-[15] (French CJ, Gummow, Heydon, Crennan and Kiefel JJ).

3. [82]

   The Appeal Panel further referred at [167] to Wabbits in which her Honour had referred at [106]-[107] to the principle stated by Giles JA (with whom Sheller JA agreed) in Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd [2001] NSWCA 313; (2002) 18 BCL 122 at [96]-[99] (“Hyder”), that where work has been carried out and the actual cost is known, the actual price known provides sound evidence of the reasonable cost of the work to make the building work conform to the contract and should ordinarily provide the basis for damages rather than the assessment of damages being based on some theoretical cost of the works.

4. [83]

   One of the plaintiff’s complaints is that the Appeal Panel did not accept at [168], Mr Jamieson’s assessment that the reasonable cost to complete the works should be $370,150. Another complaint summarised at [71] above concerned the Appeal Panel’s findings in relation to the windows. These were questions of fact. It has long been held that the assessment of damages is a question of fact in each case: Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88 at 94 (Moffitt P, Hutley JA agreeing); Hyder at [40], [47] (Giles JA).

5. [84]

   In any event, the Appeal Panel was not obliged to accept Mr Jamieson’s assessment. The Appeal Panel had observed in its decision that the plaintiff had not submitted that any of the work conducted by Swingler was “in an unreasonable fashion”: at [168]. There was ample evidence before the Appeal Panel to conclude that the “reasonable cost of the work to make the building conform to the contract” was $446,885.40 (“reasonable cost”).

6. [85]

   The reasonable cost was calculated as follows: $471,511.50 (Swingler Contract) minus $59,158 (work outside the scope of DeMarco Contract and cost of rectifying defects) which equals $412,353.50 plus $34,531.90 (defendants’ payments not paid under Swingler Contract).

7. [86]

   The Appeal Panel calculated the unpaid contract price as follows: $770,000 (DeMarco Contract price) plus $41,124.88 (variations) which equals $811,124.88 minus $714,762.90 (a minor typographical error the amount should be $714,672.90) which equals $96,451.98. The unpaid contract price of $96,451.98 was then subtracted from $446,885.40 which equals $350,433.22. To that amount, $19,719 (storage costs) and $16,285 (rectification costs) were added which equals $386,437.22 being the amount owed by the plaintiff to the defendants.

8. [87]

   The Appeal Panel’s calculations (save for a minor typographical error) conform with the general principles stated in Bellgrove and the approaches to the calculation of damages set out in Wabbits at [111].

9. [88]

   When turning to consider the position under cl 25 of the DeMarco Contract, the Appeal Panel adopted the same calculations as in their assessment of common law damages and found at [173] the reasonable cost to complete the work ($463,170.40) exceeds “that which would have otherwise been due under the [DeMarco Contract] ($96,451.98)”. The Appeal Panel found that the difference of $366,718.22 was claimable by the defendants as a debt pursuant to cl 25. To this amount, storage costs of $19,719 were added pursuant to cl 30.

10. [89]

    The plaintiff’s principal contention of error are the Appeal Panel’s findings concerning the “prime cost” and “provisional sum” items. Contrary to the Appeal Panel’s findings that there should be no adjustment for these items, the plaintiff submitted that an adjustment of $116,474 should have been made. The plaintiff pointed to Annexure B to his written submissions which were in similar form (subject to an arithmetical adjustment made in oral submissions in this Court) to paragraph 57 in the plaintiff’s written submissions to the Appeal Panel. The plaintiff contended that the adjusted contract price should be $770,000 plus adjustments for provisional and prime cost items of $116,474 plus variations of $41,124.88 reaching a total of $927,598.88.

11. [90]

    The Appeal Panel assiduously considered the issue of the prime cost items and provisional sum items at [134]-[164]. I do not discern any error in the Appeal Panel’s conclusion at [142] that there was no basis for there to have been any adjustment to the DeMarco Contract price for prime cost items not supplied by the plaintiff. I do not agree that there is confusion in the conclusion that the Appeal Panel reached. A similar finding was made in respect of provisional sum items at [156]. Furthermore, I do not discern error in the Appeal Panel’s conclusion at [159] that the exercise undertaken when engaging with the plaintiff’s table in the context of the provisional sum items supplied by the plaintiff “tends to suggest that” the contract price “should be reduced, rather than increased”. Another assertion of error with which I disagree was the finding by the Appeal Panel at [144] that the prime cost items supplied to the defendants under the Swingler Contract and the 10% builder’s margin were not amounts for the purposes of cl 25 “which would have otherwise been due under the [DeMarco Contract]”. The Appeal Panel’s approach to these issues conforms with the principles in relation to the assessment of damages enunciated in Bellgrove and Wabbits, and the proper construction of cl 25.

12. [91]

    I am not persuaded that the approach taken by the Appeal Panel to the assessment of damages either at common law or under cl 25 of the DeMarco Contract involved errors of law. The plaintiff’s submissions do not arise beyond the “merely arguable”.

13. [92]

    I do not grant leave for Grounds 4, 5, 6, 7 and 8.

Costs

1. [93]

   Although not addressed in a specific ground of appeal, prayer 3 of the summons seeking leave to appeal includes a challenge to “the determination and finding as to costs”.

2. [94]

   The plaintiff submitted that it was successful on two of the three issues raised in the appeal before the Appeal Panel. In respect of the third issue which dealt with the provisional sum and prime cost items, the plaintiff contended that he was successful on the issue regarding the application of cl 25, though the Appeal Panel found that the Tribunal’s failure was immaterial notwithstanding the Appeal Panel proceeded to approach the assessment of damages pursuant to that clause.

3. [95]

   In oral submissions, Mr Bolger submitted that a “reasonable sitting Judge” would never arrive at a conclusion where it was 90% of the costs of the appeal in the circumstances of this case: Tcpt, 14 November 2025, p 9(46-49).

4. [96]

   The defendants referred to the exercise of costs being a discretionary matter which was only appealable in accordance with the principles in House v The King (1936) 55 CLR 499 at 505; [1936] HCA 40 (“House v The King”). The defendants pointed out that it was difficult to understand the plaintiff’s position having regard to the Appeal Panel granting each party the right to make an application to vary the costs order and neither party making such an application. Furthermore, in light of the plaintiff’s limited success before the Appeal Panel, it could not be said that the costs order was manifestly wrong, unreasonable or plainly unjust.

Determination

1. [97]

   The power to award costs is inherently discretionary and it is necessary for the plaintiff to establish an error of the kind described in House v The King. A House v The King error requires the Court to be satisfied that the Appeal Panel acted upon a wrong principle, took into account extraneous or irrelevant matters, mistook the facts, failed to take into account a material consideration, or where upon the facts the outcome is unreasonable or plainly unjust: CJZ Pty Ltd v Giant Dwarf Pty Ltd; CJZ Pty Ltd v Morrow [2023] NSWCA 135; (2023) 416 ALR 415 at [327] (Adamson JA, Ward P and Mitchelmore JA agreeing); Flynn v PPK Mining Equipment Pty Ltd [2025] NSWCA 10 at [15] (Payne JA and Price AJA).

2. [98]

   The plaintiff’s submissions tend to overstate his success before the Appeal Panel. Whilst successful on the arithmetical error and partially successful on the quantum meruit submissions, he did not succeed on his claim that the Tribunal had erred by determining damages on the basis of common law principles. The Appeal Panel went on at [130] to consider the question of whether the assessment of damages would have been different if the assessment was undertaken pursuant to cl 25.

3. [99]

   The Appeal Panel observed at [13] (see [22] above) that the issue of the prime cost items and provisional sums was the issue that absorbed most of the Appeal Panel’s time during the hearing before it. This is further evidenced by the comprehensive consideration of this issue in the Appeal Panel’s decision on which the plaintiff did not succeed.

4. [100]

   The plaintiff has failed to demonstrate any House v The King error in the Appeal Panel’s decision to make a 90% costs order in favour of the defendants.

5. [101]

   Another matter that supports leave to appeal being refused is that the plaintiff did not avail himself of the opportunity to make an application to the Appeal Panel to vary the costs order. The plaintiff’s arguments that were raised in this Court concerning the costs order were not raised before the Appeal Panel. In such circumstances, this Court will be reluctant to entertain a point asserting that the Appeal Panel committed an error when that issue was not argued before it: Vitality Works Australia Pty Ltd v Yelda (No 2) (2021) 105 NSWLR 403; [2021] NSWCA 147 at [113] (Bell P and Payne JA, McCallum JA agreeing); see also, Larsen as trustee for the Larsen Superannuation Fund v Tastec Pty Ltd (formerly Wonders Building Company Pty Ltd) (No 2) [2025] NSWCA 210 at [55] (Adamson JA, Stern JA and Price AJA agreeing) and the authorities there cited.

6. [102]

   I do not grant leave to appeal against the costs order made by the Appeal Panel.

Orders

1. [103]

   Accordingly, I make the following orders:

   1. (1)

      Leave to appeal is refused.

   2. (2)

      The plaintiff is to pay the defendants’ costs.