James v Jandson Pty Ltd

1. [1]

   By amended summons filed on 27 October 2021, the plaintiffs, Brett and Liza James (“the owners”), seek leave to appeal from the decision of the Appeal Panel of the NSW Civil and Administrative Tribunal (“NCAT”) under s 83 of the Civil and Administrative Tribunal Act 2013 (NSW) (“the NCAT Act”).

2. [2]

   The owners entered into a contract with the defendant, Jandson Pty Ltd (“the builder”) on 23 March 2009 to build them a home in Jannali. Shortly after the owners moved in, they observed water leakage into a garage forming part of the residence.

3. [3]

   On 28 June 2018, the owners commenced proceedings against the builder for breach of the statutory warranties in s 18B of the Home Building Act 1989 (NSW) (“the HB Act”). The proceedings were commenced in the Local Court and subsequently transferred to NCAT.

4. [4]

   It is common ground that the owners did not commence proceedings within the statutory time limit arising from the 2009 contract (as set out in s 18E of the HB Act prior to its amendment). But the owners contend that towards the end of the relevant statutory time limit under the 2009 contract a new contract was formed between the parties such that any breaches of the statutory warranties occurred under that new contract and hence proceedings under the new contract were brought within time.

5. [5]

   On 17 July 2020, Senior Member GK Burton SC (“the Senior Member”) found in favour of the plaintiffs and made the following orders:

6. [6]

   The builder then appealed to an Appeal Panel of NCAT and was successful: Jandson Pty Ltd v James [2021] NSWCATAP 274 (“the Appeal Panel Decision”). The appeal to this court is against that decision under s 83 of the NCAT Act which is in these terms:

7. [7]

   Section 84(2) of the NCAT Act provides that an appeal under s 83 must be made:

8. [8]

   Rule 50.3 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) provides that a summons commencing an appeal must be filed:

9. [9]

   The decision appealed against was delivered on 15 September 2021 and the summons seeking leave to appeal was filed on 13 October 2021 and thus within time.

10. [10]

    There are two statutory hurdles for the plaintiffs to overcome: the appeal is confined to questions of law and leave is also required under s 83(1) of the NCAT Act.

Grounds of Appeal

1. [11]

   The amended summons filed on 27 October 2021 identifies the following four grounds of appeal all of which were stated to raise questions of law:

2. [12]

   As is apparent from the amended summons extracted above, ground 1, which was the focus of oral submissions at the hearing of this appeal, in fact comprised nine different sub-grounds. Moreover, the summons identified 17 separate complaints in total all said to raise questions of law. The manner in which the appeal was brought, in reliance upon so many discrete complaints (not all of which in fact raised questions of law) has required these reasons to be lengthier than one might have anticipated from an appeal on a question of law arising from facts of such a relatively narrow compass.

The hearing of the appeal

1. [13]

   At the hearing before me on 2 June 2022, the plaintiffs tendered a court book comprising three volumes which became exhibit A. Volume 1 comprised the amended summons with the parties’ submissions and their lists of authorities in this court. Volume 2 comprised the pleadings before both the Senior Member and the Appeal Panel and the plaintiffs’ seven sets of submissions before the Appeal Panel, the defendant’s evidence. Volume 3 comprised the transcripts of the proceedings below, both before the Senior Member and the Appeal Panel, and the relevant decisions.

2. [14]

   Counsel for both parties agreed that I did not need to read all of the submissions and transcripts below; they were tendered by the plaintiffs to establish the negative proposition that the builder had not sought a Jones v Dunkel direction before the Appeal Panel: Jones v Dunkel (1959) 101 CLR 298. One of the complaints made under ground 1 is that such an inference was drawn without any invitation by the builder to do so. Accordingly, I have not read any of the submissions or transcripts of what occurred before the Appeal Panel which were included in the court book.

3. [15]

   The nub of this appeal concerns events which occurred from July to September 2017 and turns on some limited written correspondence and conduct of the parties including some unsuccessful attempts by the builder to carry out remedial work at the property. My summary of these facts is based on the findings of the Appeal Panel.

Factual background

1. [16]

   As stated above, the parties entered into a residential building contract on 23 March 2009 (“the 2009 contract”). Clause 14 of Schedule 1 to that contract specified that Tender No 2277 dated 22 January 2009 (the Tender) formed part of the contract. The terms of the 2009 contract are relevant to grounds 3 and 4 in this court and I have extracted the relevant clauses in my consideration of those grounds below.

2. [17]

   The 2009 contract stipulated that the builder would build a home for the plaintiffs on their land at Jannali (“the property”) for $352,005.00. The building works commenced in March 2009 and concluded in mid-2010. Possession of the building works was given to the owners on 13 July 2010. A Final Occupation Certificate (“FOC”) was provided on 20 October 2010.

3. [18]

   Shortly after they moved in, the owners complained of water ingress into the home, specifically into the stairwell at basement level, resulting in damage to, inter alia, the internal wall and floor and garage entryway. They complained that such ingress and damage constituted breaches by the defendant of the statutory warranties set out in s 18B of the HB Act.

4. [19]

   The builder attended the property intermittently between 2010 and 2016 in an attempt to remedy the water ingress issue, to no avail.

5. [20]

   In early 2017, the owners engaged the services of an engineer from Building and Waterproofing Reports Australia (BWR Australia), Mr Pickering.

6. [21]

   On 19 July 2017, the plaintiffs through their solicitor sent a letter of demand to the defendant regarding the water penetration:

7. [22]

   On 1 August 2017, a site inspection was arranged at the residence with representatives of both the builder and the owners to attend.

8. [23]

   On 15 August 2017, four persons attended the site inspection: Mr Matherson (the builder’s director) and the foreman (Mr Jerochim) as well as Mr Pickering and another structural engineer, Mr Donovan. Following that meeting, Mr Pickering sent an email to the plaintiffs’ solicitor, Mr Wells, relevantly stating:

9. [24]

   This email reflected Mr Pickering’s account of that occurred at the site meeting. It was not sent to the builder at that time and nor was there any written acceptance that this email reflected the agreed position as to what occurred at the site meeting.

10. [25]

    On 18 August 2017, Mr Wells notified the builder’s director by email that Mr James (one of the two owners) consented to the builder having access on the following Monday 21 August 2017. That email included the following:

11. [26]

    The builder attended the property to commence remedial works on 21 August 2017.

12. [27]

    Three days later, on 24 August 2017, the builder’s director, Mr Matherson, sent an email to Mr Wells rejecting the offer of 19 July 2017 and making a counteroffer. The email was in these terms:

13. [28]

    Attached to that email was a letter dated 22 August 2017 which proposed an alternative scope of rectification in these terms:

14. [29]

    There was no further written correspondence entered into between Mr Wells and Mr Matherson. There was no counteroffer or acceptance of these terms in writing from either Mr Wells or the owner, Mr James. Despite this, the builder continued to undertake remedial works for the owner and the owners did not prevent the builder’s workers from doing so.

15. [30]

    On 27 September 2017, the builder’s workers attended the residence to undertake remedial works at which time a dispute arose. Mr James told the builder’s workers not to paint over what he saw as a mould-affected wall without replacing the gyprock. The builder’s workers left the site and did not return.

16. [31]

    The evidence as to what happened between the date of the 24 August 2017 letter (in which the owners’ offer was rejected) and 27 September 2019 (when the builders walked off the property and never returned) came from the evidence of Mr James and Mr Matherson at the hearing before the Senior Member.

17. [32]

    The evidence of Mr James was summarised by the Appeal Panel at [52]-[58]. Mr James swore an affidavit on 10 April 2019 in which he stated the following as to his understanding of the agreement:

18. [33]

    As the Appeal Panel observed at [53], Mr James did not refer to the contents of the builder’s email of 24 August 2017 or the letter attached to that email in his affidavit; that is, he made no mention of the fact that his offer was rejected, and a counteroffer made. Based on this, the Appeal Panel concluded (also at [53]) that there was “nothing” in Mr James’ affidavit to suggest that the owners had accepted the counteroffer made by the builder in the 22 August 2017 letter or that they even knew about it before 27 September 2017. I note that despite the fact that there was nothing in Mr James’ affidavit deposing as to when he became aware of the 24 August 2017 counteroffer, a copy of it was attached to his affidavit.

19. [34]

    Mr James was cross-examined at the hearing before the Senior Member. The Appeal Panel summarised Mr James’ evidence on this issue (at [54]) in these terms:

    1. (1)

       He could not recall when he had seen Mr Pickering’s 15 August 2017 email sent to his solicitor;

    2. (2)

       He retained his solicitor prior to 17 November 2016;

    3. (3)

       He had no independent recollection of when he first saw the builder’s letter dated 22 August 2017;

    4. (4)

       He understood from the builder’s response to Mr Pickering’s report that the builder disagreed with part of Mr Pickering’s proposed scope of work.

20. [35]

    The only other evidence before the Senior Member came from Mr Matherson. The Appeal Panel summarised his evidence at [55]-[56]. It noted Mr Matherson’s evidence that he denied that any agreement was reached with Mr Pickering at the site meeting on 15 August 2017 and stated that the only work the builder agreed to undertake was that set out in the builder’s letter dated 22 August 2017. Specifically, of the items listed in Mr Pickering’s 15 August 2017 email, the only item he had agreed the builder would do was at point 2; that is, “[r]e-route the downpipe at the front of the garage so that it does not block the cavity outlet”.

21. [36]

    The Appeal Panel went on at [57]-[58] to note that Mr Pickering gave expert evidence, but no lay evidence in relation to the site meeting on 15 August 2017 or his email to the owners’ solicitor of that date and that Mr Wells did not give any evidence at the hearing.

The Home Building Act

1. [37]

   Part 2C of the HB Act provides for the operation of the statutory warranty scheme. The presently relevant provisions are ss 18B and 18E. As at the date of the 2009 contract, s 18B was in these terms:

2. [38]

   The time limit of such warranties was provided for in s 18E which at the relevant time was in these terms:

3. [39]

   The HB Act was amended by the Home Building Amendment Act 2011 (NSW) which came into force, variously, on 25 October 2011 and 1 February 2012. The limitation period in s 18E was altered from seven years to six years for “structural/major” defects and two years in any other case.

4. [40]

   In the present appeal, the parties proceeded on the basis that the relevant limitation period was seven years as this was the state of the legislation at the time the 2009 contract was entered into. I accept that to be the case given the relevant transitional provision in Schedule 4 Pt 19 cl 109 of the HB Act.

5. [41]

   Under s 18E, time for commencing proceedings against a builder commences to run from the “completion of the work”. That term was not defined in the HB Act at the time of the 2009 contract but s 3B was subsequently enacted by the 2011 amendments which reads, relevantly as follows:

6. [42]

   The transitional provision in cl 109 in Schedule 4 Pt 19 of the HB Act, (extracted above) is an exception to the general rule provided for in cl 106 which is in these terms:

7. [43]

   Thus, by force of cl 106(a), s 3B is applicable to the residential building works the subject of this appeal. This is consistent with the finding of the Appeal Panel: see at [112]. Accordingly, the two relevant statutory provisions are s 18E (as in force in 2009 providing for a seven-year limitation period) and s 3B as now in force.

The decision of the Senior Member

1. [44]

   Senior Member G K Burton SC heard the owner’s complaint on 2 December 2019. Subsequent submissions were filed by 25 May 2020. The Senior Member delivered his decision on 16 July 2020. The issues before the Senior Member were summarised by the Appeal Panel at [13] as follows:

2. [45]

   As will be seen below, only the first of those two issues are relevant to the appeal before this court.

3. [46]

   The Appeal Panel summarised the findings of the Senior Member at [14]. With one minor exception (which I address under ground 1, sub ground 2(a) below), counsel for the plaintiffs in this appeal accepted the accuracy of that summary, which was as follows:

4. [47]

   As stated above, the Senior Member found in favour of the owners and made the orders extracted above at [5].

The internal appeal

1. [48]

   The builder lodged an internal appeal under s 80 of the NCAT Act which is in these terms

2. [49]

   The relevant sub-section which governed the defendant’s internal appeal was sub s (2)(b). The circumstances in which the Appeal Panel may grant leave to appeal on a ground other than a question of law are set out in Schedule 4 Pt 6 cl 12 of the NCAT Act. Ground 2 of the plaintiff’s appeal to this court alleges error in the manner in which the Appeal Panel dealt with that clause. It is in these terms:

3. [50]

   Although a number of grounds were raised in the internal appeal, the nub of the complaint was that the Senior Member erred in finding that a new contract was entered into between the parties in August 2017.

4. [51]

   The owners took issue before the Appeal Panel as to the vagueness of the builder’s grounds of appeal and in particular, whether the builder had complied with the relevant procedural requirements. Although the Appeal Panel accepted (at [30]) that there are deficiencies in the Notice of Appeal and in the Amended Notice of Appeal, it was satisfied that the submissions made on behalf of the builder make the basis for the appeal sufficiently clear. Those appeal grounds were identified by the Appeal Panel as follows (at [31]):

5. [52]

   The Appeal Panel went on to conveniently group the grounds under the following three questions for determination:

The decision of the Appeal Panel

1. [53]

   The Appeal Panel considered grounds 2, 3 and 8 first and held that grounds 2 and 3 were established. It was satisfied that the questions raised were ones of law; being whether it was open on the evidence to find that a second separate contract had been entered into between the parties, citing: Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390 at 418 [90]–[91]; The Australian Gas Light Company v Valuer-General (1940) 40 SR (NSW) 126 at 138 and Haider v JP Morgan Holdings Aust Ltd t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158, Basten JA (McColl JA agreeing).

2. [54]

   The Appeal Panel accepted that it would also be an error of law if there had been misapplication of legal principles regarding the formation of the contract to the facts citing R v Clarke [1927] HCA 47, (1927) 40 CLR 227. The Appeal Panel then set out some of the relevant principles governing the formation of contracts (at [41]) including: Hendriks v McGeoch [2008] NSWCA 53; (2008) Aust Torts Reports 81-942 and Ormwave v Smith [2007] NSWCA 210. The Appeal Panel also noted Suncorp Metway Insurance v Owners Corporation SP 64487 [2009] NSWCA 223 at [54], in which Sackville AJA cited McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117-11,118. It then noted the decision in Kriketos v Livschitz [2009] NSWCA 96 regarding the principles to be applied in determining the formation of a contract in the absence of conventional offer and acceptance.

3. [55]

   No complaint is made in this court under any of the grounds as to the Appeal Panel’s application of any of those authorities and I do not consider it necessary to consider them any further.

4. [56]

   The Appeal Panel then applied the principles derived from these decisions to the evidence before the it, which I have summarised above at [16]-[36].

5. [57]

   Having considered that evidence, the Appeal Panel concluded (at [59] that it was not open to the Senior Member to find the builder’s email/letter of 24 August 2017 satisfied the required elements of a separate, new contract which provided a promise to undertake a “defined scope of works”. Its reasons were set out at [60]-[63]). Nearly all of those reasons were individually challenged under the sub grounds to ground 1 and I will address them in turn in my consideration of ground 1. Those findings are as follows:

6. [58]

   The Appeal Panel went on (at [64]), to note the owner’s submission that “attempts to straight-jacket analysis of the creation of contracts to traditional forms are misconceived”. It accepted that there was obvious force in that argument and then stated:

7. [59]

   Having found that it was not open to the Senior Member to conclude that a new contract was formed (or that the original contract was varied in the conventional sense), the Appeal Panel went on to consider whether a contract could be inferred from the evidence before the Tribunal. It was not satisfied that it could for the three reasons provided at [67]-[69] as follows:

8. [60]

   The Appeal Panel then observed the following at [70]-[72]:

9. [61]

   Having upheld grounds 2 and 3 as raising questions of law, the Appeal Panel then went on to uphold them on an alternate basis as being one of mixed fact and law. It granted leave in the event that it was wrong that those grounds raised questions of law at [74]-[75]. These two paragraphs form the basis of the owners’ second ground of appeal in this court. I have extracted them in my consideration of ground 2 below

10. [62]

    The Appeal Panel then considered grounds 4 and 5 at [76]-[88] which concerned the question of consideration; being the owners’ offer not to bring proceedings against the builder. The Appeal Panel did not uphold those grounds and they do not form part of the arguments in this court.

11. [63]

    The Appeal Panel then turned to consider grounds 6 and 7. Ground 6 concerned whether the Senior Member made an error of law in finding that the completion date of the works undertaken pursuant to the 2009 contract was 20 October 2010 rather than 17 July 2010. The Appeal Panel was satisfied that ground 6 involved the proper construction of the contract, which is a question of law and thus leave was not required. The findings under this ground form the basis of the owners’ complaints under ground 3 and 4 in this court.

12. [64]

    It was not necessary for the Appeal Panel to determine these grounds, but it did so for completeness. It concluded that the Principal Member erred in its interpretation of the relevant terms of the contract in finding that the builder was responsible for obtaining the FOC as part of the works to be carried out and thus the works were not complete until the FOC was provided to the owners. For ease of cross-reference, I have extracted the paragraphs of the Appeal Panel decision to which grounds 3 and 4 in this court pertain ([92]-[116]) in my consideration of those grounds below at [165]-[171].

Ground 1: Error in finding that there was no new contract entered into

1. [65]

   Ground one alleges that the Appeal Panel erred in law in finding that there was no contract between the plaintiffs and defendant. Although nine sub grounds were raised under this ground, they were said to support two primary errors: that the Appeal Panel mischaracterised the Senior Member’s findings as to the composition of the contract and that the Appeal Panel misconstrued and overlooked elements of the evidence that underlay the Senior Member’s findings. Neither of those two errors were separately identified in the summons.

2. [66]

   The threshold question is whether any of these sub grounds raise a question of law.

3. [67]

   Both parties accepted that the question of whether parties have entered into a contract requires the application of the relevant legal principles to the facts of the case and that a misapplication of those legal principles gives rise to a question of law. But, with some exceptions, that is not the way in which this ground was argued.

4. [68]

   Nor did the plaintiffs argue that the Appeal Panel found facts where there was no basis to do so. It is uncontroversial that to do so would give rise to a question of law: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 326; [1990] HCA 33 per Mason J.

5. [69]

   The plaintiffs contended that all of the arguments raised under this ground raised questions of law as they all concerned the formation of a contract.

6. [70]

   I do not accept the plaintiffs’ submission that in every case a ground of appeal alleging error in finding that a contract was formed raises a question of law, although it might, depending on the way in which the ground is pleaded. I considered a similar ground and whether it raised a question of law in Sand Ground Engineering Pty Ltd v Super Render Pty Ltd [2020] NSWSC 458 at [51]-[56] as follows:

7. [71]

   Thus, although questions as to the evidence of any offer and acceptance and the subject of the agreement are questions of fact, the question of whether certain facts are capable of giving rise to a finding that a contract was formed gives rise to a question of law as does error alleging misapplication of relevant contract law to those facts. But, as I observed at [55]-[56] in Sand Ground Engineering Pty Ltd, it is well settled that questions as to the terms of any offer and any consensus reached, including the subject matter of any agreement, are questions of fact as are allegations that factual findings regarding contract formation were unreasonable.

8. [72]

   Under this ground it was contended that the Appeal Panel should have found different facts and if it had, it would have held that a new and separate contract had been formed regarding the rectification works. Considerable time was spent during the hearing before this court on this ground in seeking to persuade the court that this ground raised a question of law.

9. [73]

   In oral submissions, it was further contended that the question of law was that, contrary to the terms of s 80 of the NCAT Act, the Appeal Panel treated the internal appeal as a re-hearing. It seems to me that if there was sufficient evidence before the Senior Member to find a new contract was entered into in August 2017 and the Appeal Panel simply took a different view, then that would involve a question of law because the Appeal Panel would have misapplied the “no evidence” test of appellate review.

10. [74]

    But even if I was satisfied such error was shown (which I am not) the difficulty for the plaintiffs is that they would then have to also establish error under Ground 2. That ground alleges error in the finding by the Appeal Panel that even if it was wrong in characterising the complaint the subject of this ground as one of “no evidence”, it would grant leave to the builder to rely on it as a question of mixed fact and law in any event.

11. [75]

    When pressed during the hearing to identify how the complaint that the Appeal Panel mischaracterised the contract found by the Senior Member was a question of law, counsel submitted that the question of law arose in this way:

12. [76]

    Given the way ground 1 was argued it is necessary to address each of the sub grounds in turn to consider three questions: do they raise questions of law, should leave be granted to bring them and has any error is established.

Ground 1(2)(g): Error in failing to have regard to fact that Mr James’ solicitor was acting on his behalf

1. [77]

   There was considerable overlap between these two sub grounds and I propose to address them together.

2. [78]

   The plaintiffs submitted that the Appeal Panel erred because it failed to address all of the relevant and necessary evidence in relation to the new contract considered by the Senior Member, in particular, that the plaintiffs acted at all material times through their solicitor acting as agent. The plaintiffs contended under this sub ground that the Appeal Panel failed to acknowledge that the conduct of the plaintiffs’ solicitor should be taken to be conduct on Mr James’ behalf rendering their personal knowledge (or lack of knowledge of matters) irrelevant to overall consideration as to whether there was an agreement.

3. [79]

   It was further submitted that Mr James had personal knowledge of the agreement based on his affidavit and evidence given to the Tribunal.

4. [80]

   It was contended that the Appeal Panel misconstrued the relevant findings of the Tribunal at [24] summarised at the second bullet point in [14] extracted above at [49] when it referred to the “offer” on 19 July 2017 and found that Jandson’s email of 24 August was not acceptance of that offer. As I understand it, the complaint is that it was not open to the Appeal Panel to find that it was not open to the Senior Member to find that the correspondence constituted acceptance in the sense.

5. [81]

   It was further submitted that it “misses the point” to observe (as the Appeal Panel did at [63]) that there was no evidence that Mr Wells was authorised to accept offers, although regard was had to the sequence of correspondence which would justify an inference that he had. In this way, it was submitted, the Appeal Panel erred in overturning the Senior Member’s finding without having engaged at all with the basic elements of their finding, and without having dealt with or accounted for the basic, salient features of the contract finding itself.

6. [82]

   It was submitted that the solicitor’s conduct should have been treated as conduct of Mr James and that the relevant conduct expressing acceptance of the builder’s offer was Mr James’ conduct, as set out in his affidavit. Reliance was placed on Dal Pont’s Law of Agency [1] and the relevant principles concerning agency.

7. [83]

   In response the defendant submitted that this argument was being raised for the first time and should not be entertained on that basis. It was further submitted that even if Mr Wells was the agent of the owners, the finding made by the Appeal Panel that there was an absence of any evidence to confirm Mr Wells accepted the counteroffer conveyed by the builder on 24 August 2017 made any agency relationship redundant.

8. [84]

   The defendant further submitted that Mr Wells’ conduct goes no further than sending an email to the builder on 18 August 2017 granting access. Even if treated as the conduct of the owners, that could not constitute acceptance of the counteroffer conveyed a week later.

9. [85]

   The Senior Member found that despite the fact that Mr James gave access to the builder for the rectification work to commence before the scope of that work was finally agreed, that was sufficient to constitute acceptance of the scope of works outlined in a subsequent email of 24 August 2017. The Appeal Panel found such a finding was not open.

10. [86]

    I am not satisfied that this sub ground raises a question of law. It contends, in effect, that the Appeal Panel erred in taking a different view of the evidence. I am not satisfied that is what the Appeal Panel did.

11. [87]

    Even if I am wrong as to whether this ground raises a question of law, I am not satisfied that any error has been established in any event.

12. [88]

    The owners’ reliance on the presumption that, unless the contrary is established, any document prepared by a solicitor is on instructions does not assist him. The last correspondence from Mr Wells was on 18 August 2017 granting the builder access. On its face, that was written on instructions. But that access was granted before the 24 August email, which was the last document between the parties prior to when the builder’s workers walked off the site in late September. It was a document from the builder to Mr Wells rejecting the offer and making a counteroffer offer. There was no written acceptance of that offer by the plaintiffs’ solicitor.

13. [89]

    As for the claim of error in the second bullet point of the summary at [14] of the Appeal Panel judgment, I do not accept any such error is disclosed. The claim that it (incorrectly) summarises [24] of the decision before the Senior Member cannot be sustained for two reasons. First, I do not read that summary as stating that the Appeal Panel treated the 24 August email as acceptance. But in any event, the second bullet point was a summary of [24] of the decision of the Senior Member which was extracted in full by the Appeal Panel at [34] in any event.

14. [90]

    I can find no error in the finding by the Appeal Panel that the Senior Member could not have been satisfied that the owners were aware of the builder’s counteroffer during the period in which the builder was undertaking work during August–September 2017 (at [62]). The Senior Member’s finding was inconsistent with Mr James’ evidence. The sole fact that the owners were acting through Mr Wells could not outweigh Mr James’ evidence on this issue.

15. [91]

    Even if there had been evidence that the owners’ solicitor was authorised to accept offers on the owners’ behalf (contra [63]), there was no evidence to infer it had done so beyond the fact that the builder’s workers continued to do some remedial work.

16. [92]

    No error is established.

Ground 1(2)(e): Error in having regard to subjective matters

1. [93]

   Again, there was considerable overlap between these two sub grounds.

2. [94]

   Under sub ground 2(b) it was contended that the Appeal Panel erred in relying upon what it suggested was the subjective knowledge of Mr James to support its findings rather than applying the conventional objective theory of contract and the terms of the documents exchanged. It was submitted that the Appeal Panel should have accepted that the relevant “intentions” of a party to a contract lie in the intentions to be inferred objectively from the parties’ conduct.

3. [95]

   The plaintiffs relied upon the offer in the 24 August 2017 email, the fact that Mr Wells received it, the fact that Mr James did not sue the builder and that he continued to allow access to the site as objective evidence as to the contract formation. It was submitted that Mr James’ conduct on his own part or by his solicitor is what mattered, from an objective stance, and the Appeal Panel failed to engage in this point.

4. [96]

   It was submitted that the observation at [53] that there was no evidence that Mr James knew about the contents of the 24 August email was incorrect because Mr James exhibited a copy of that email to his affidavit.

5. [97]

   It was submitted on behalf of the owners that the error under this sub ground arises in two ways. Firstly, it is a clear principal of law that a person can act by a solicitor as agent. Counsel referred to Mr James’ evidence that “[b]ased on the outcome of the 15 August site inspection and the respondent's request for access I understood that an agreement was in place whereby the defects would be rectified."

6. [98]

   It was further submitted in support of this ground that Mr James deposed to the provision and continuation of access and the forbearance of suit and that those were the relevant matters, not his subjective belief.

7. [99]

   The defendant accepted that these sub grounds raised an error of law, but it was submitted that it is patently clear from the Appeal Panel’s reasons that it correctly considered and applied the objective theory of contract when considering the conduct of the parties at paragraphs [44] and [70].

8. [100]

   These sub grounds allege error in the Appeal Panel’s consideration of Mr James’ evidence (as summarised above at [32]-[34]) as to what he understood the agreement was when he provided access to the builders.

9. [101]

   The overarching error alleged is that the Appeal Panel relied upon the subjective knowledge of Mr James to support its findings rather than applying the conventional objective theory of contract and so having proper regard to the terms of the documents exchanged.

10. [102]

    I am satisfied that these sub grounds raise a question of law to the extent of the complaint regarding the misapplication of contract law to the facts in this case, namely the objective theory of contract formation. The principle of objectivity by which the rights and liabilities of the parties to a contract are determined was described this way by the High Court (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ) in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]:

11. [103]

    I am not satisfied that the Appeal Panel applied a subjective theory of contract formation. In fact, it stated its conclusion at [70] in this way”: “when viewed objectively as a whole, the dealings between the parties do not demonstrate that they had a concluded agreement”. The Appeal Panel provided numerous reasons as to why it was satisfied that it was not open to the Senior Member to find that a new contract was formed. The paragraphs in which those reasons appear, when read together, state the somewhat obvious proposition that in circumstances where the onus was on the owners before the Senior Member to establish that a new contract was formed the bare fact that access to the premises was not withdrawn by the owner, in the absence of any other evidence, was not sufficient to establish any “tacit understanding or agreement with the builder”. In other words, that fact alone could not establish what scope of works was agreed to.

12. [104]

    As for the complaint concerning [53], it is also misconceived. Mr James would clearly have been made aware of the 24 August 2017 letter in the course of the proceedings. The fact that it was annexed to his affidavit says nothing about when he was made aware of it. Moreover, he was cross‑examined about this and the Appeal Panel was satisfied that he had not seen it at the relevant time. No error is disclosed in that factual finding.

13. [105]

    I do not accept the plaintiffs’ submission that Mr James’ evidence (summarised at [54]), including that he could not recall when he saw that letter, is irrelevant “on an objective basis of conduct” because he had a solicitor acting for him for the reasons I have already provided. The Appeal Panel simply noted that there was, objectively, no knowledge as to when Mr James became aware of that letter.

14. [106]

    No error is established under these sub grounds.

Ground 1(2)(c): Error as to significance of evidence that builder returned and did some work: [69]-[70]

1. [107]

   This sub ground alleged error at [69]-[70] as to the adequacy of the foundation for the inference as to the existence of a contract by reference to basic facts, including that the builder returned to the site and undertook work.

2. [108]

   The plaintiffs submitted that it was an error for the Appeal Panel to find there was no contract reached between the parties arising from the letter of 22 August because there was no ‘meeting of the minds’ between the parties: This was because the fact that Mr James continued to allow the builder to attend the site was an indication that the relevant “offer” of Jandson made on 24 August was accepted.

3. [109]

   The defendant did not specifically address this sub ground.

4. [110]

   I am not satisfied that this sub ground raises a question of law. Nor is it established in any event.

5. [111]

   At [69]-[70], the Appeal Panel provided some of its reasons for not being satisfied that any contract could be inferred from the evidence before the Senior Member. Those reasons were that, in effect, given that there was no evidence as to why that continued access was granted by the owner it was an insufficient basis to infer acceptance of the counteroffer made in 24 August letter in its terms. That was just one of the reasons enumerated.

6. [112]

   No error is established.

Ground 1(2)(d): Error in attempting to re-evaluate the evidence of witnesses

1. [113]

   Sub ground (2)(d) of appeal was a complaint that the Appeal Panel erred in attempting to re-evaluate the evidence of witnesses, in circumstances where the Senior Member was best placed to evaluate the evidence having regard to his observations of the witnesses in the witness box. It was submitted that the Appeal Panel failed to give proper regard to the advantage of the member hearing and seeing Mr James’ evidence dealing with that issue.

2. [114]

   With reference to this submission, the plaintiffs cited (but did not discuss) a number of cases: Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 at 178-179; Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 160 ALR 588; Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434 at 448.

3. [115]

   It was accepted by the owners’ counsel that the Appeal Panel referred to the nature and extent of Mr James’ knowledge of the relevant events, but it was submitted that it overlooked the fact that Mr James was cross-examined, and the Senior Member had the opportunity of seeing him give evidence as to his understanding and belief.

4. [116]

   The builder submitted that Mr James oral evidence regarding the content of the letter confirms there was a dispute as between what works were appropriate, which supports the conclusion reached by the Appeal Panel that the parties did not have the same understanding as the builder as to what works it would undertake. It was further submitted that the plaintiffs had failed to demonstrate or otherwise articulate how any impression Mr James’ conveyed to the Tribunal giving his evidence is of any import.

5. [117]

   This ground does not raise a question of law and is not established in any event

6. [118]

   I am not satisfied that the Appeal Panel “re-evaluated” the evidence of witnesses in the sense of re-assessing their credit or demeanour. Nothing in the Reasons supports such a conclusion. What the Appeal Panel was required to do was to consider the ground of appeal before it which alleged error in the findings of the Senior Member as to the adequacy of the evidence before the Tribunal as to the formation of a new contract. In complying with that statutory task, it was required to assess the sufficiency of evidence and identify any error in the decision of the Senior Member. That is a different matter to simply revaluating all of the evidence.

7. [119]

   Nor did the Appeal Panel state anything from which it could be inferred that it made any credit findings about Mr James.

Ground 1(2)(f): Failure to have proper regard to the reasoning that the new contract was a compromise agreement

1. [120]

   Sub ground (2)(f) alleged that the Appeal Panel erred in failing to have proper regard to the finding of the Senior Member that the new contract was a compromise agreement. It was submitted that in reaching its findings the Appeal Panel overlooked the critical elements of the contract found by the Tribunal, namely, compromise and forbearance. It was submitted that the Appeal Panel mischaracterised the access finding at [67] in referring to the builder having had access before the 24 August offer; that was said to overlook Mr James’ argument that it was the continuation of permitting access, which was the relevant element combined with the evidence of forbearance that was accepted by the Senior Member.

2. [121]

   The defendant did not separately address this sub ground.

3. [122]

   The complaint that the Appeal Panel overlooked the question of consideration cannot be sustained. Grounds 4 and 5 before the Appeal Panel were directly concerned with the question of consideration. The builder unsuccessfully contended before the Appeal Panel that the Senior Member had erred in his conclusion that sufficient consideration existed provided that the owners held a belief in good faith that they had an arguable claim and that it failed to provide reasons or adequate reasons for its decision in that regard. The Appeal Panel addressed these complaints at [76]-[88] and found no error in the Senior Members’ finding on this issue.

4. [123]

   In these circumstances it cannot be said that the Appeal Panel “overlooked” the issues of the compromise and forbearance.

5. [124]

   The focus of the reasons of the Appeal Panel under grounds 2 and 3 below, which form the basis of ground 1 in this court, was that there was no evidence that the scope of the works had agreed upon. The only evidence in support of that aspect was the continued access to the site. Whether or not there was consideration is irrelevant to the question as to what was actually agreed to.

6. [125]

   No error is established under this sub ground.

Ground 1(2)(h): Error in drawing a Jones v Dunkel inference when not sought

1. [126]

   The complaint under this sub ground is that the Appeal Panel erred in drawing a “Jones v Dunkel” inference when it noted the absence of Mr Wells at [58]. It was submitted that such a finding was inappropriate and without foundation and could not be used to fill a gap in a party’s evidentiary case. It was submitted that it only rises to the point of a conclusion that the absent witness’ evidence “would not have assisted the asserting party’s case”.

2. [127]

   Reliance was placed on the fact that the builder did not seek such an inference be drawn and had it done so it could have been answered. It was submitted that Mr Wells’ evidence was all conveyed by objective documents and the case did not turn on any non-documentary conduct on his part.

3. [128]

   Reliance was placed on the reference to “unexplained absence” at [71]. It was submitted that this was “plucked out of the air” by the Appeal Panel without any foundation or any submission or any allegation being highlighted.

4. [129]

   The defendant accepted that this sub ground was a question of law but submitted that the complaint is unsustainable. It contended that the reasons go no higher than stating Mr Wells did not give evidence, that there were evidentiary deficiencies as a result, and that his unexplained failure to provide evidence made it harder to draw an inference that the owners were made aware of the builder’s counteroffer conveyed on 24 August 2017. It was accepted that the builder had not sought that such an inference be drawn before the Appeal Panel.

5. [130]

   It was submitted that the three conditions that are required for the operation of the principle are: the missing witness would be expected to be called by one party rather than the other; the witness’ evidence would have clarified a matter; and the witness’ absence is unexplained. It was submitted in the circumstances that Mr Wells was the relevant witness who could clarify whether the owners were made aware of the builder’s counteroffer on 24 August 2017, the three conditions were satisfied in any event. It was submitted that the Appeal Panel was permitted to infer that Mr Wells evidence would not have assisted the owners establish that they were made aware of the counteroffer.

6. [131]

   This ground raises a question of law.

7. [132]

   It is to be accepted that the Appeal Panel noted the absence of Mr Wells at [58], but only in the context of its summary of the evidence as to what Mr James knew about the 24 August letter and when he did so. It made no comment about that absence; it was simply noted.

8. [133]

   The other reference to Mr Wells, which forms the basis of the complaint under this sub ground, is at [71]. In that paragraph, the Appeal Panel noted the absence of any evidence from Mr James that he was aware of the counteroffer at the time it was made and found that in that context the continued access granted by the owners was insufficient to infer acceptance of the terms of the counteroffer. I have already found no error in that finding. It was in that context that the Appeal Panel went on to note that the “unexplained absence of evidence from the owners’ solicitor further militates against the drawing of any inference in the owners’ favour”.

9. [134]

   I am not satisfied that any Jones v Dunkel inference was drawn by the Appeal Panel in this matter thus the denial of any procedural fairness cannot be sustained. Mr James did not give evidence that he was aware of the scope of the works (from the 24 August email) when he granted access. All the Appeal Panel noted was that any inference that he was in fact aware could not be drawn and a further basis for that was the absence of Mr Wells.

10. [135]

    Even if the Appeal Panel did draw such an inference (which I do not accept) there are limits to such an inference as Sackville AJA observed in Lim v Cho [2018] NSWCA 145; (2018) 84 MVR 514 at [41]:

11. [136]

    I am not satisfied such an inference was drawn. No error is established under this ground.

12. [137]

    Not all of the sub grounds to this ground raised a question of law. In relation to those that did, no error is established.

13. [138]

    I would refuse leave to appeal on ground 1.

Ground 2: Error in consideration of clause 12(1) of Schedule 4 of the NCAT Act.

1. [139]

   The scope of the grant of leave under s 80(2)(b) is set out in Schedule 4 Pt 6 cl 12 of the NCAT Act which I have extracted above at [51]. The discretion to grant leave in s 80(2)(b) of the NCAT Act can only be exercised if the Appeal Panel is satisfied the appellant may have suffered a “substantial miscarriage of justice” on one or more of three bases as set out in cl 12, namely:

2. [140]

   The Appeal Panel addressed the relevant circumstances in which such leave can be granted at [18]-[21] of its reasons as follows:

3. [141]

   After concluding that ground 1 raised a question of law and should be upheld, the Appeal Panel went on to uphold ground 1 on an alternate basis in the event that it was wrong as to whether it did in fact raise a question of law. The reasons for doing so are at [74]-[75] of the reasons as follows:

4. [142]

   The plaintiffs contended under ground 2 that the Appeal Panel erred in granting leave on the basis that the decision of the Senior Member was “against the weight of evidence” as it misapplied its discretion to grant leave.

5. [143]

   It was submitted that it is “clear” the legislature intended a narrow route to bring internal appeals from findings of fact. The plaintiffs noted that the standard limit regarding the requirements for leave are set out in NCAT Act s 81(2)(b) and the right to appeal is further narrowed by requirements regarding “fairness & equity” and the “weight of evidence” as set out in Schedule 4 cl 12 of the NCAT Act.

6. [144]

   In this vein, the plaintiffs submitted that the legislation contemplates that a party may identify error in the Tribunal’s fact finding that is not an error that warrants leave. It was submitted that the grounds of appeal put to the Appeal Panel were not adequately articulated and as such the Appeal Panel and the plaintiffs were “burdened by the inadequacies” in the way that they were drafted, and the Appeal Panel only dealt with the foundation for the grant of leave in “passing comments” at [74] and [116].

7. [145]

   It was submitted that in finding that the Senior Member’s findings were against the weight of evidence, the Appeal Panel relied on the Appeal Panel’s own view of the evidence which was neither comprehensive or complete and which overlooked critical features of the evidence before the Tribunal, including the role of the plaintiffs’ solicitor in acting on their behalf. It was submitted in reaching those findings (at [74] and [116]) the Appeal Panel spent no time either in referring or evaluating the evidence with respect to which it granted leave. It was submitted that at a minimum a finding that a decision below was against the weight of evidence should at least identify the evidence whose weight is said to have been against the finding

8. [146]

   It was contended that the Appeal Panel’s findings fail to have regard to the evidence as a whole. It was submitted that it spent “no time” referring to or evaluating the evidence with respect to which it granted leave. It was submitted that the Appeal Panel misconstrued and misapplied the principles in s 80(2)(b) of the NCAT Act when read with Schedule 4 Part 6 cl 12(1). It was submitted in exercising the discretion to grant leave, the Appeal Panel should have articulated the statutory elements required for the grant of leave, as specified in the legislation rather than justifying its conclusion in the event that it is ‘wrong’.

9. [147]

   A further complaint was made as to the inadequacy of the reasons for its findings as to relative weight of evidence or basis of its finding of a ‘substantial miscarriage of justice’.

10. [148]

    As for the complaint that the Appeal Panel failed to have regard to the evidence as a whole, this argument was put this way in oral submissions:

11. [149]

    Further arguments were raised under this ground during the hearing of this appeal. It was submitted that it is a jurisdictional questions and that in order to make a competent finding that a finding is against the weight of fact the Appeal Panel should identify what the error was and identify why it is an error.

12. [150]

    It was submitted that the grant of leave under s 80(2)(b) is not a default power to simply make another finding; the Appeal Panel was required to at least go through the process or demonstrate they have gone through the process that is required in order to allow an appeal on those grounds.

13. [151]

    The defendant did not address this ground in his written submissions. At the hearing, it was submitted that the Appeal Panel was satisfied there was an injustice that was reasonably clear, in relation to cl 1 of Schedule 4 cl 12 of the NCAT Act. With regard to whether the Appeal Panel dealt with the rigors of the need for the builder to establish a foundation for the grant of leave at [74]-[75], the defendant submitted that although the Appeal Panel did not describe what the weight of evidence was, this is because the Appeal Panel already did so at [60].

14. [152]

    This ground alleges error in the exercise of the discretion to grant leave to the builder to appeal against the decision of the Senior Member on a question of mixed fact and law. It is to be accepted that a “discretion” may refer to a number of different legal concepts: Norbis v Norbis (1986) 161 CLR 513 (“Norbis”) at 518 (Mason and Deane JJ); [1986] HCA 17. But it still seems to me that the finding of the Appeal Panel is subject to the constraints on the review of the exercise of discretionary power identified in House v The King, (1936) 55 CLR 499; [1936] HCA 40 at 504-505 (Dixon, Evatt and McTiernan JJ) and restated in Norbis. My only reservation in that regard turns on the fact that the discretion conferred on the Appeal Panel was not a broad one; rather, it was a binary one: either leave would be granted or refused.

15. [153]

    During the hearing of this appeal, I inquired of the plaintiffs’ counsel what the standard of appellate review relevant to this ground was, given that it is an appeal against the discretionary decision to grant leave. It was submitted that the relevant test was Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 but, as I indicated during the hearing, I do not accept that to be the case. Ultimately, I have arrived at the conclusion that no error is established under this ground on any of the tests of error on appellate review.

16. [154]

    To the extent that this ground complains of a failure to provide adequate reasons, I do not accept that to be the case. At [46]-[72], which immediately precede [74]-[75], the Appeal Panel provided detailed reasons as to why the decision of the Senior Member was not open on the evidence. In finding in the alternative that, to the lesser standard, the decision of the Senior Member was also “against the weight of the evidence” the Appeal Panel clearly did so for the same reasons.

17. [155]

    To the extent that this complaint is made under this ground that the Appeal Panel did not refer to the statutory language of cl 12 in Schedule 4. I note that at [18]-[21] the Appeal Panel set out the relevant statutory test and the principles derived from the decision in Collins v Urban [2014] NSWCATAP 17 as to their application. There can be no doubt that the Appeal Panel was aware of the relevant statutory test.

18. [156]

    At [74], express reference is made by the Appeal Panel to the language in cl 12 (b) when it stated that the decision under appeal was “against the weight of the evidence”. The Appeal Panel also stated that the decision of the Senior Member gave “rise to an injustice to the builder which is reasonably clear”. Although it is to be accepted that the statutory language of cl 12 refers to the need for a “substantial miscarriage of justice”, the decision in Collins v Urban, extracted by the Appeal Panel at [21] of its reasons, uses the language of “injustice” in consideration of the statutory test.

19. [157]

    It is to be accepted that it is preferable to use the statutory language rather than any judicial gloss put on them (see for example the consideration of what is a “substantial miscarriage of justice” in a different statutory context in Weiss v The Queen [2005] 224 CLR 300; HCA 81), but I am satisfied that when [74]-[75] of the reasons are read with [18]-[21] and [65]-[72] it is abundantly clear that the Appeal Panel applied the proper test and did not err in its discretion to grant leave to the builder to appeal on a mixed question of fact and law.

20. [158]

    It could not be said, as was submitted under this ground, that the Appeal Panel did not perform its statutory function to assess whether there was a substantial miscarriage of justice, analysing the evidence and explaining why the decision of the Senior Member was against the weight of the evidence.

21. [159]

    I would dismiss this ground.

Ground 4: Error in construction of s 3B(1) of the HB Act

1. [160]

   Grounds 3 and 4 in this appeal contend that the Appeal Panel erred in upholding the builder’s grounds 6 and 7 in the internal appeal. Ground 3 contends that the Appeal Panel erred in finding that a FOC does not fall with the meaning of “building works” in the 2009 contract and ground 4 contends that the Appeal Panel erred in its finding of when “completion” occurred for the purposes of s 3B(1) of the HB Act.

2. [161]

   It seems to me, given my earlier findings and those of the Appeal Panel (at [76]-[91]) (dismissing grounds 4 and 5 below), that any further arguments raised under these grounds cannot advance the plaintiffs’ case as to whether a new contract was formed in August 2017. They both concern when it was that the (then) seven-year period for bringing proceedings commenced under the 2009 contract. The Senior Member found that it was on 20 October 2010 (when the FOC was obtained) whereas the Appeal Panel found that it was 13 July 2010 (when the works were handed over to the owners).

3. [162]

   The owners’ offer that in return for the works being rectified they would not sue was contained in a letter dated 19 July 2010. On the Senior Member’s construction, the owners were still within the defects period at that time. On the Appeal Panel’s construction, they were already out of time to commence proceedings by then. On either finding, the owners did not commence proceedings within time on the 2009 contract. Given that I have found no error in the Appeal Panel’s conclusion that no new contract was formed in August 2017, the question of whether it erred in its conclusion regarding the date of completion could make no difference to the result for the owners. Similarly, if I had upheld the plaintiffs’ appeal on ground 1, the determination of these grounds could make no difference to the result either.

4. [163]

   The defendants accepted that this ground raises a question of law but submitted that it cannot succeed, and no leave should be granted.

5. [164]

   Despite my reservations as to the need to consider these grounds, I propose to do so for completeness.

The Appeal Panel’s findings

1. [165]

   The Senior Member’s findings were summarised by the Appeal Panel at [92] in these terms:

2. [166]

   At [93], the Appeal Panel observed that this finding was relevant to its finding that there was consideration in respect of the new contract it found that the parties had entered into.

3. [167]

   At [94], the Appeal Panel concluded that the Senior Member erred in its interpretation of the 2009 contract. It set out the relevant provisions of that contract (which was a standard form Housing Industry Association (HIA) contract) at [96]-[102] as follows:

4. [168]

   After setting out the relevant provisions, the Appeal Panel provided its construction of the relevant clauses in the 2009 contract at [103]-[107]:

5. [169]

   The final finding of the Appeal Panel (which forms the basis of ground 4) concerned the construction of ss 3B and 48K of the HB Act insofar as they provide for the time limit for bringing proceedings of this nature. The Appeal Panel set out the relevant legislation at [110]-[113] as follows:

6. [170]

   The Appeal Panel then set out s 3B of the HB Act (extracted above at [41]).

7. [171]

   The Appeal Panel’s conclusion as to the time limit and when ‘completion’ occurred are at [114]-[116] as follows:

8. [172]

   Ground 3 had three sub grounds which were described in the summons as sub grounds (5)(a), (b) and (c).

Ground 3, sub ground 5(a)

1. [173]

   Under ground 3 sub ground (5)(a), the plaintiffs contend that the Appeal Panel erred in its finding at [103] because it overlooked Schedule 1, item 11 which references cl 7 of the 2009 contract. It was submitted that without an FOC the residence could not lawfully be occupied. It was submitted that the Appeal Panel’s finding was “bizarre”. It was submitted that it was an error not to expressly refer to Schedule 1 item 11 in that context.

2. [174]

   It was submitted that “practical completion” means when the “building works” are complete and that the definition of building works incorporates the definition of contract documents which incorporates the full general terms and conditions, special conditions, plans and specifications. This means, it was submitted, that “building works” for the purposes of the contract means all of the work set out in the contract, in the specifications, in the plans and the specific specifications. The error was said to be that cl 7 includes the phrase "planning and building approvals". It was submitted that regardless of what that phrase may mean in other contexts, that concept is embraced by item 11.

3. [175]

   In response, the defendant submitted that no error is disclosed at [105] given the nature of the contract. It was noted that this contract was not a “turnkey” solution; certain works were excluded from the contract which needed to be done by the owners prior to an FOC issuing. There are other exclusions that are not included in the reasons of the Appeal Panel which reinforce this point. Those exclusions include driveways and paths.

4. [176]

   The complaint under this sub ground as set out in the summons is that the Appeal Panel “overlooked” Schedule 1, item 11 in its finding at [103]. But counsel for the owners accepted in oral submissions that at [104] the Appeal Panel observed that this finding was made “notwithstanding item 11 of schedule 1". Any complaint that it overlooked that item cannot be sustained. The plaintiffs then submitted in the alternative that despite that express reference, the Appeal Panel did not include it in their reasoning process and the finding was “bizarre”.

5. [177]

   Not only am I satisfied that the Appeal Panel did not overlook Schedule 1, item 11, nor am I satisfied that it was ignored in the reasoning process. The fact remains that there is a specific reference to a certificate of occupancy or final inspection in cl 27 which provides that the builder is not responsible for obtaining “any certificate of occupancy or final inspection certificate” relating to the building work. There is no specific reference to those terms anywhere else in the 2009 contract. That is why the finding was made by the Appeal Panel “notwithstanding item 11 of Schedule 1 of the contract”.

6. [178]

   The Appeal Panel resolved the tension between cl 27 of the contract (which states the builder is not responsible for obtaining a final inspection certificate) and cl 7 which requires the builder to obtain “planning and building approvals” by finding the FOC is not a building or planning approval for the reasons stated at [105] which forms the basis of the second sub ground.

7. [179]

   Nowhere else in the contract is there a clause stating that the builder is to obtain any certificate of occupancy or FOC relating to the building works. Accordingly, as provided for by cl 27, it was not the builder’s obligation to do so.

8. [180]

   It was common ground that that when cl 7 was read with item 11 of Schedule 1, the builder was required to obtain and pay for “all building and planning approvals”; the dispute was as to whether an FOC is a building or planning approval. For the owners to succeed they must establish that the Appeal Panel erred in finding that an FOC is not a “building and planning approval” for the purposes of cl 7.

9. [181]

   I do not accept that the reference to "building approval" is a specific reference to a FOC such that it is in fact stated elsewhere in the contract for the purposes of cl 27.

Ground 3, sub ground (5)(b)

1. [182]

   Under Ground 3, sub ground (5)(b) the plaintiffs contend that the Appeal Panel erred in its finding at [105] as to the character of an FOC by reference to the EPA Act. Complaint was made that the Appeal Panel did not explain its reasons why a FOC was not a “building or planning approval” and that this finding was not forecast in the course of the appeal.

2. [183]

   It was further submitted that Part 6 of the EPA Act embraces a sequence of certificates, including construction certifications, without which work cannot be done. In that context the Appeal Panel’s finding overlooks the role of the contract in determining the concept of completion for the purposes of s 3B(1) of the HB Act. It was submitted that it does not matter what “planning and building approval” means generally, it has been specifically defined in this contract in cl 7 which picks up item 11 on the Schedule at page 101.

3. [184]

   In response, the defendant submitted that the plaintiff has not identified any authority to support the contention that the FOC is a planning or building approval. Nor has the plaintiff identified how the Appeal Panel failed to properly apply the principles governing construction of a written agreement. It was submitted that the Appeal Panel’s construction regarding the FOC was open on material before it.

4. [185]

   The complaint under this ground was that the Appeal Panel erred in its finding that a FOC is not a building or planning approval by relying on a definition under the EPA Act at [105]. I am not satisfied any error is established.

5. [186]

   I can see no error in the Appeal Panel noting the observations of Moore J in Toplace Pty Ltd v The Council of the City of Sydney [2020] NSWLEC 121 at [16]. His Honour held that an FOC can be issued when all aspects of an approved development have been finalised and no further interaction between the developer and the consent authority is required concerning that development. The plaintiffs accepted that definition to be correct in the context of the EPA Act but contended that a different definition of FOC was stipulated by the parties in the 2009 contract. I do not accept that to be the case for the reasons already stated.

6. [187]

   Further, I accept the defendant’s submission that the tender stipulated that included in the tender price was "council development application and inspection fees" without any reference to any FOC.

7. [188]

   Nor is there any definition of a “planning approval” in the 2009 contract. Although it is to be accepted that the definition is somewhat circular, what is clear is that a “planning approval” must be something separate and distinct from an “occupation certificate” because they are separate and distinct named items in the contract.

Ground 3, sub ground (5)(c)

1. [189]

   Under Ground 3, sub ground (5)(c), the plaintiffs contend that the Appeal Panel erred in its finding at [108] as to the meaning of “building works” as it was “contrary to the plain wording of the Building Contract and contrary to authority and which extended to the rectification of defects in the original work pursuant to the defects liability period provisions in the Building Contract”.

2. [190]

   The defendant did not separately address this sub ground.

3. [191]

   No error is established under this sub ground either.

4. [192]

   As the Appeal Panel observed at [106], under the contract, the owners were required to undertake works prior to an occupation certificate being issued. This means that technically the FOC might not be able to be obtained until later. It could not be the case that the seven-year period could commence years after the owners moved in if they failed to undertake works that were required to complete before a FOC could be obtained. As the Appeal Panel found, the building works “handed over” to the owner could not, in such circumstances, include the provision of the FOC.

5. [193]

   The plaintiff took issue with [106] of the Appeal Panel’s decision where it stated that an FOC is a certification of completed building works, not a part of the building works. They argued that obtaining an FOC is part of the “building works”. But, as the Appeal Panel found, given that cl 27 refers to a certificate “relating to the building works”, a certificate that relates to building works cannot be part of those building works

6. [194]

   Further, as the Appeal Panel held at [109] the definition of “building works” in cl 1 of the contract are those “carried out, completed and handed over to the owner”. That is inconsistent with the definition including the provision of an FOC. I am satisfied no error is established for the four reasons provided for by the Appeal Panel in [109].

Ground 4: Error in interpretation of s 3B of the HB Act

1. [195]

   Under this ground it was contended that the Appeal Panel erred at [114-115] in its construction of s 3B of the HB Act and the application of those provisions to the building contract.

2. [196]

   The plaintiffs’ written submissions in support of this ground, in their entirety were as follows (at [65]-[68]:

3. [197]

   The defendant’s written submissions did not address this ground beyond a submission that the plaintiff had not properly identified the question of law in the summons or its submissions nor any error at all. Counsel for the defendant submitted at the hearing that this ground was “enmeshed” with ground 3 and turned on the finding of when there was “completion”.

4. [198]

   During the hearing, the plaintiff’s counsel identified the separate error as being the construction of s 3B and its application to the 2009 contract, but the submissions went no further than a repeat of the arguments under ground 3. It was submitted that the finding at [114] is unreasonable because the conclusion that "the issue of FOC is not the completion date of the works under 3(b)" could only be correct if the provision of the FOC was not “building works”. It was submitted that the reasoning did not “hang together”. It was further submitted under this ground that the Appeal Panel did not go through the reasons of the Senior Member and engage with them.

5. [199]

   This ground concerns [114]-[115] of the decision of the Appeal Panel.

6. [200]

   The Senior Member held that completion was the date of the issue of the FOC. The Appeal Panel held that was an error and was satisfied (at [114]) that the contract provided that works reached practical completion when the owners took possession on 13 July 2017 and that that was the relevant date for the purposes of s 3B of the HB Act.

7. [201]

   I am not satisfied that any separate error has been identified under this ground. It follows that I have reached the same result under ground 4.

Leave to appeal

1. [202]

   As I recently observed in McDonnell v The Owners – Strata Plan No 64191 [2022] NSWSC 1631 at [65], the principles regarding the granting of leave under s 83 of the NCAT to bring an appeal such as this were summarised by Gleeson JA (with whom Macfarlan and Payne JJA agreed) in Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28] as follows:

2. [203]

   I am not satisfied that this appeal involved any questions of general public importance. It is to be accepted that the owners are aggrieved; having won before the Senior Member they lost before the Appeal Panel. But most of the complaints in this court went no further than an underlying complaint that the Appeal Panel should not have rejected their case that a new contract was formed in August 2017. It is to be accepted that some of the grounds, in part, raised some discrete questions of law but none of them have been established. Despite this, rather than go through each of the sub grounds in order to consider which of them went beyond being “merely arguable”, I am prepared to grant leave to bring this appeal but would dismiss it.

ORDERS

1. [204]

   Accordingly, I make the following orders:

   1. (1)

      The summons is dismissed.

   2. (2)

      The plaintiffs are to pay the defendant’s costs.