Champion Homes Sales Pty Ltd v Voulgaris

1. [1]

   By a Summons filed on 23 December 2024, Champion Homes Sales Pty Ltd (“the builder”) sought to appeal (“the appeal”), pursuant to s 83 of the Civil and Administrative Tribunal Act 2013 (NSW) (“NCAT Act”), a decision of the New South Wales Civil and Administrative Tribunal (“NCAT”) Appeal Panel made on 29 November 2024: Champion Home Sales Pty Ltd v Voulgaris [2024] NSWCATAP 244 (per D G Charles, Senior Member, and P H Molony, Senior Member) (“the Appeal Panel Decision”).

2. [2]

   The Appeal Panel Decision concerned a decision by Senior member R C Titterton OAM (“the Tribunal”) dated 29 July 2024: Champion Homes Sales Pty Ltd v Voulgaris (NSWCATCD, R Titterton OAM, Senior Member, 29 July 2024, unrep) (“the Tribunal Decision”).

3. [3]

   The proceedings before the Tribunal concerned an application that was brought by the builder against Evonne Voulgaris ("the owner"), for damages claimed under a building contract dated 23 June 2022, for the construction of a new two-storey residential dwelling (“the contract”) on the owner’s property at 5 King Street Eastlakes, NSW ("the site") (“the builder’s claim”).

4. [4]

   The Tribunal concluded that the builder’s claim was precluded by both the terms of the contract and the provisions of s 92(2) of the Home Building Act 1989 NSW ("the HB Act").

5. [5]

   The Appeal Panel confirmed the Tribunal Decision as to the operation of the HB Act, and accordingly, dismissed the appeal. However, the Appeal Panel also made observations as to the correctness of the Tribunal Decision with respect to the operation of the contract. That approach conformed with the position that the builder brought no ground of appeal to the Appeal Panel expressly challenging the Tribunal Decision as to the contract barring the builder’s claim because of the absence of insurance.

6. [6]

   In this appeal, the builder relied upon eight grounds of appeal, six of which challenged the Appeal Panel Decision as to the operation of the HB Act. Only one ground, Ground 5, concerned the contract. However, Ground 5 was expressed in terms which did not engage directly with the Tribunal Decision or Appeal Panel Decision going to the operation of the contract itself in excluding the builder’s claim.

7. [7]

   In describing the type of appeal, the Summons stated as follows:

8. [8]

   That was the first and last occasion in these proceedings that any reference was made to relief in the form of judicial review. No submissions were developed in support of that relief, nor was there any challenge made by way of judicial review to the Tribunal Decision per se. To the extent that it has any relevance to the present proceedings, this aspect of the Summons must be seen to be coextensive with the appeal under s 83 of the NCAT Act itself.

9. [9]

   The relief sought by the builder pursuant to the Summons was, inter alia, as follows:

10. [10]

    Accordingly, the relief sought, in that respect, corresponds to the actual appeal brought by the builder from the Tribunal Decision, with the limitations I have discussed above. The relief sought, that the Tribunal Decision and the Appeal Panel Decision be set aside, are predicated on that approach.

FACTUAL BACKGROUND

1. [11]

   There was no dispute as to the material facts as set out by the Appeal Panel, the Evidentiary Statement of Steve Malesev dated 25 October 2023 (“the Malesev Evidentiary Statement”) and the builder’s written submissions dated 20 May 2025. They were, in summary, as follows:

   1. (1)

      The builder carried on business as a residential builder and was predominant engaged in the construction of houses and duplexes within the Greater Sydney area.

   2. (2)

      The owner was the registered proprietor of a property at 5 King Street Eastlakes.

   3. (3)

      The contract price was for an amount of $530,000 (“the contract price”), with a $15,000 tender fee that had previously been paid to the owner on 4 May 2022, to be credited towards the contract price in the event that a contract was entered into.

   4. (4)

      The owner was required to establish that she had sufficient funds to pay the contract price, including written advice to the builder of the finance she had obtained from a lending body, pursuant to cl 4.1(d) of the contract.

   5. (5)

      Under cl 7.1 of the contract, the owner was required, when requested by the builder at any time, to deposit part of the contract price not being supplied by a lending body into an account of a bank, building society, or similarly recognised financial institution (this was referred to as a “security account”). The security account was held in the joint names of the builder and the owner.

   6. (6)

      The builder commenced work on obtaining development approval shortly after 23 June 2022. To that end, the builder arranged for a contour survey of the site dated 31 August 2022, and had also previously obtained a site and wind classification report dated 23 May 2022.

   7. (7)

      On receipt of the contour survey, the builder's architectural drafting team commenced working on the architectural plans.

   8. (8)

      On 7 September 2022, the builder lodged the development application (“DA”), together with the architectural plans and supporting documentation, with the Bayside Council through the NSW planning portal.

   9. (9)

      On 7 October 2022, the builder received a letter from the Bayside Council requesting additional information and amendments to the plans.

   10. (10)

       On 27 October 2022, the builder submitted amended plans and supporting documentation to the Bayside Council.

   11. (11)

       On 29 November 2022, the Bayside Council issued development consent to the builder for the demolition of the existing structures on the site, and the construction of a two-storey dwelling.

   12. (12)

       On 6 December 2022, the builder sent a copy of the development consent for the DA and associated plans to the owner.

   13. (13)

       As part of the DA process, the builder arranged for a permeability assessment (dated 23 February 2023) to be carried out on the site, because a condition of the development consent for the DA required the builder to engage a geotechnical engineer to determine the infiltration/absorption rate of the site prior to the final design of the drainage system for the proposed development.

   14. (14)

       As part of the tender for the job, the builder included a “$5,000 demolition promotion”. The promotion was for the demolition of the existing dwelling only and stated that no allowance was made for the removal of any hazardous materials or contaminants encountered during the demolition works (see cl 51.2 of the contract).

   15. (15)

       On 2 March 2023, Site Demolition Pty Ltd, a demolition contractor engaged by the builder, issued two quotations in respect of the proposed demolition and removal of the existing house, driveway and outbuildings. The “Part 1 quotation” was for removal of asbestos, the concrete driveway and shed, and front brick fence, for $5,000 plus GST. The “Part 2 quotation” was for removal of the house for $23,000 plus GST.

   16. (16)

       The costs associated with the Part 1 quotation were to be payable by the owner. The costs associated with the Part 2 quotation would be absorbed by the builder as part of its $5,000 demolition promotion.

   17. (17)

       The builder also:

   18. (18)

       At [54] of the Malesev Evidentiary Statement, Mr Malesev sets out, in summary form, the content of the work undertaken by the builder in connection with the obtaining of the DA together with the fees and charges for those works. I extract [54] from the Malesev evidentiary statement below:

   19. (19)

       I pause to note that there was a dispute as to one aspect of the building works concerning “sewer peg out”. That is the last item referred to in the list of building works referred to in the immediately preceding paragraph. The same entry appears in the builder’s Points of Claim filed with NCAT.

   20. (20)

       There was a dispute in the submissions of the parties as to whether a sewer peg out actually required the pegging out of the site. Mr C Stomo of counsel for the builder suggested that the sewer peg out did not involve “any physical activity on site” and merely involved getting “the plans from Sydney Water so you know where the sewers are”. Mr M Bennett of counsel for the owner suggested that the work involved actual pegging out on the site.

   21. (21)

       The work of obtaining a sewer peg out arose directly as a requirement by the Bayside Council in consequence of the DA seeking the Council’s consent for the “Demolition of the structures, tree removal and construction of a two (2) storey building on the above premises”. Having considered the DA, the Bayside Council identified a number of issues, one of which concerned Sydney Water assets. That issue was stated in the following terms:

   22. (22)

       In support of his contention that the sewer peg out did not involve any physical activity on site, Mr Stomo referred to [53] of the Malesev Evidentiary Statement. In that paragraph, Mr Malesev referred to the sewer peg out survey providing “information as to the location of any existing Sydney Water Asset within or adjacent to the proposed development”. Mr Malesev attached a document in Exhibit SM-1 which was in the form of a survey report bearing the heading “Service Protection Report”.

   23. (23)

       It is unclear from Mr Malesev’s evidence whether the survey diagram was obtained from drawings held by the Bayside Council, or from pegs situated on the site by a surveyor, or both. I will proceed on the basis that the sewer peg out was as suggested by Mr Stomo, given the appearance of the drawing in Exhibit SM-I, without suggesting that this view necessarily conforms with the ordinary understanding of a sewer peg out.

   24. (24)

       Nonetheless, the investigations in relation to the sewer peg out, together with other aspects of the building works, had significant implications for the building project as contemplated by the contract.

   25. (25)

       On 10 May 2023, the builder issued a “Notice of Breach” to the owner regarding an alleged failure by the owner to provide evidence of her ability to pay for the cost of the building works (in accordance with cl 4 of the contract), despite the builder’s requests

   26. (26)

       On 17 May 2023, the owner sent, by email, a screen shot of a bank account showing an amount of $539,404.27 in funds said to be available for the construction of the dwelling on the site.

   27. (27)

       On 19 May 2023, the builder requested that a security account be established in the joint names of the builder and the owner pursuant to cl 7.1 of the contract. That step was not undertaken.

   28. (28)

       The parties exchanged emails, some marked “Without Prejudice”. On 29 May 2023, the builder issued a further “Notice of Breach” and a “Notice to Perform Contract” to the owner.

   29. (29)

       On 2 June 2023, the owner’s solicitors sent correspondence marked “Without Prejudice” to the builder, with further correspondence on a without prejudice basis in relation to various matters now in dispute between the parties.

   30. (30)

       The builder terminated the contract on 25 July 2023 pursuant to cl 27 of the contract.

   31. (31)

       While the builder, by its employees and/or contractors, was present on the site for the building works, no physical building works were undertaken prior to the end of the contract.

   32. (32)

       The contract contained a cl 44.15, which entitled the builder to damages in an agreed sum equivalent to 15% of the contract price, which the parties acknowledged to be a genuine pre-estimate of the builder’s loss or damage.

   33. (33)

       Following termination of the contract, the builder sought payment of 15% of the contract price pursuant to cl 44.15, although, the amount claimed before the Tribunal was adjusted by reference to a reimbursement of fees and charges and a credit for the tender fee paid by the owner. I will discuss that claim in the context of discussing the Tribunal proceedings and decision.

   34. (34)

       The owner did not pay this amount, and the builder lodged an application in NCAT to recover those monies on 2 August 2023.

ISSUES ON THIS APPEAL

1. [12]

   A primary issue in this appeal was the construction of ss 10, 92, 94 of the HB Act, and, in particular, the definition of “residential building work” in cl 2 of Sch 1 of the HB Act. The builder sought to challenge the Appeal Panel’s definition of “residential building work” which adopted an expanded definition of “residential building work” so as to include preparatory work as per Syed Ahmad Shoaib Ali Pty Ltd v Jandson Pty Ltd; Jandson Pty Ltd v Syed Ahmad Shoaib Ali Pty Ltd [2018] NSWCATAP 228 (“Syed”). The owner resisted the builder’s contentions in this respect.

2. [13]

   Notwithstanding that approach, the operation of the terms of the contract was central to the determination of this appeal. In fact, the owner contended that the provisions of the contract were fatal to the appeal. The owner contended that the builder may not raise issues as to the construction of the contract on this appeal, as no challenge was made to the Tribunal’s findings in that respect before the Appeal Panel. I have earlier expressed a view as to the limits of the builder’s appeal, in that respect.

3. [14]

   How that issue emerges in the appeal is best understood after the discussion of the Tribunal Decision and Appeal Panel Decision. The examination of those decisions will be assisted by a closer examination of the contract and relevant statutory provisions.

The contract and the HB Act

1. [15]

   In the light of those issues, I set out the relevant provisions of the contract and the HB Act below.

2. [16]

   The construction of the contract was contentious.

3. [17]

   The contract appeared at page 43 of Volume 2 of the Joint Court Book and consisted of 7 Schedules, “Signatures”, “General Conditions”, “Special Conditions”, and a “Deed of guarantee and Indemnity”. The Court Book also contained a “Checklist” and a “Consumer Building Guide” which were annexed, respectively, as Attachment A and B of the contract, but not forming part of the contract.

4. [18]

   The Tribunal Decision provided a useful overview of the contract, as follows:

5. [19]

   The owner also made reference to the following provisions of the contract:

6. [20]

   As I will discuss later in this judgment, the contract contains (in various places), a narrative that the builder cannot “demand or receive any of the contract price until warranty insurance [1] is in force and the owner is provided with a certificate of insurance”. Each of those entries was preceded by the word “Note”. Those notations were found at cl 2(a) of Sch 1, Sch 6, immediately below the signature of the builder (in the Signature section of the contract). The Schedules formed part of the contract. I will refer to those each of those notes as the “Notation” or “Notations”.

7. [21]

   The builder contended that these terms did not form part of the contract, or have any legal effect.

8. [22]

   Clause 38.2 of the contract was as follows:

9. [23]

   Clause 38.2 formed part of the General Conditions of the contract and, therefore, does not warrant the description of a Notation. As I will discuss later, it should be read in conjunction with cl 3.1 and 38.1 of the contract, in order to properly understand it’s operation.

10. [24]

    Item 13 of Attachments A and Attachment B, which both also contained the Notation, do not form part of the contract, but may, as I will discuss, assist in understanding the intention of the authors of the contract.

11. [25]

    Given the various grounds of appeal raised in the Summons involve the interpretation and application of the HB Act, it is pertinent to set out the relevant positions of that Act:

Principles regarding Leave under s 83 of the NCAT Act

1. [26]

   The appeal brought by the builder is an appeal on a question of law pursuant to s 83 of the NCAT Act, and therefore, requires the grant of leave by the Supreme Court.

2. [27]

   Section 83 of the NCAT Act is as follows:

3. [28]

   There are many cases which deal with the principles governing leave to appeal under s 83 of the NCAT Act. The following extract from Gan v Shop 3, 228-230 Hanvaylee Parade Kensington Pty Ltd [2017] NSWSC 1322 at [27]-[37] (per Walton J) provides a relevant summary of those principles:

Principles in relation to construction of contract

1. [29]

   As to the principles of construction, the owner made reference to a passage approved by Gleeson CJ, Gummow & Hayne JJ in Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; [2001] HCA 70 at [11], citing Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912:

2. [30]

   The owner submitted that the primary task of the Court is to give the contractual terms their proper meaning: the Court should give “primacy to its text but read in light of the contract as a whole and where appropriate its surrounding circumstances”: Cirrus Real Time Processing Systems Pty Ltd v Jet Aviation Australia Pty Ltd (2023) 113 NSWLR 80; [2023] NSWCA 280 at [79] (per Leeming JA).

3. [31]

   The owner also placed reliance on the following passage in Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402 at 411 (per Lockhart and Hill JJ):

4. [32]

   Lastly, the owner submitted that “notwithstanding arguable deficiencies in a contract, a court must strive to give meaning and effect to all of its clauses”: Price v Spoor (2021) 270 CLR 450; [2021] HCA 20 at [60] (per Steward J).

5. [33]

   For present purposes, I also adopt the following principles stated in Tin-Tagel Majikk Pty Limited v Hockey [2025] NSWSC 578 (at [149] – [151]) for the principles on construction:

6. [34]

   Further, as Bathurst CJ observed in Lawrence v Ciantar [2020] NSWCA 89 (“Lawrence Appeal”) at [98]:

The tribunal proceedings and decision

1. [35]

   On 2 August 2023, the builder brought proceedings in NCAT as a "building claim" relating to "building goods and services" (as those terms are defined in s 48A(1) of the HB Act), and sought an order under s 48(1)(a) of the HB Act, that the owner pay an amount of $74,374.63 for breach of the contract, comprising damages of $79,000 (the equivalent of 15% of the contract’s purchase price (pursuant to cll 29 and/or 44.15 of the contract), plus $9,874.63 (being reimbursement of fees and charges) less $15,000 (being a credit for the tender fee paid by the owner)).

2. [36]

   The issue as to whether the contract precluded the builder’s claim was a key issue before the Tribunal. The Points of Defence for the owner included:

3. [37]

   The Tribunal summarised, in part, the builder’s submissions in the following paragraphs of the Tribunal Decision.

4. [38]

   I interpose to note that, in reply dated 7 February 2024, the builder submitted to the Tribunal (“the builder’s Tribunal reply”), that the owner’s submissions should be rejected because (at [75] of the Tribunal Decision):

5. [39]

   The builder made further submissions in the builder’s Tribunal reply, in that respect, including:

6. [40]

   Hence, the builder engaged with the Points of Defence by reference to the terms of the contract but also relied upon an argument that the HB Act impacted the construction of the contract.

7. [41]

   While it was not expressed with clarity, the builder seemed to develop an argument that the contract provisions should be construed in such a way that the requirement to obtain warranty insurance, and the limit on claims by builders if no such insurance has been taken out, needs to be read in conjunction with, or co existing with, the HB Act such that the requirements of the HB Act would govern (and limit) the scope of the contract.

8. [42]

   On this contention, the prohibition on claims where no warranty insurance had been taken out only applied with respect to “residential building work” as defined in Sch 1 of the HB Act.

9. [43]

   The following submissions by the builder were recorded as having been made before the Tribunal (at [54], [59] – [61] and [64] of the Tribunal Decision):

10. [44]

    The Tribunal summarised the gravamen of the owner’s submissions as follows:

11. [45]

    In respect of damages and the interpretation “residential building works”, the owner further submitted to the Tribunal, in their submissions dated 29 January 2024 (“owner’s Tribunal submissions”), as follows:

12. [46]

    At [67] – [68] of the Tribunal Decision, the Tribunal referred to the owner’s submission that the contract itself defeated the builder’s claim:

13. [47]

    With that background in mind, I turn first to the Tribunal Decision, in so far as it related to the contract, noting that the Tribunal dealt separately with the issues arising in contract and the issues arising under the HB Act. The Tribunal’s conclusions, in dismissing the builder’s claim, in that respect, were discrete.

14. [48]

    The Tribunal discussed the issues of the contract at [18] – [21], [67] – [68], [75(1)] and [87] – [89] of the Tribunal Decision.

15. [49]

    The Tribunal found that there were two issues to be determined by the Tribunal (at [46] – [48] of the Tribunal Decision):

    1. (1)

       “First, should the application of Champion Homes be dismissed for the reasons submitted by Mrs Voulgaris?”

    2. (2)

       “Secondly, if not, what order should the Tribunal make?”

16. [50]

    Under the heading “Consideration of the first issue – should the application be dismissed for the reasons submitted by Mrs Voulgaris?”, the Tribunal found in favour of the owner in relation to issues arising with respect to the contract, observing that the owner’s "submissions [were] plainly correct and supported by abundant authority".

17. [51]

    The Tribunal Decision held that the builder could not, on the contract alone, recover the claimed sum. The Tribunal reasoned that the contract itself prohibited the demand for, or receipt of, the contract price, until the certificate of insurance had been given to the owner. That condition precedent in the contract was, as found by the Tribunal, not satisfied.

18. [52]

    The relevant passages of the Tribunal Decision with respect to that finding, were as follows:

19. [53]

    The Tribunal found that there was “no persuasive response” by the builder to the owner’s submissions, in this respect.

20. [54]

    The Tribunal Decision recorded that, following the hearing, the parties were invited to make submissions on the following issue (at [84] of the Tribunal Decision):

21. [55]

    The Tribunal did not refer at length to the submissions received, in that respect, but disposed of that issue by its finding at [88], which is extracted above. The summary of the parties’ submissions was as follows (at [85] of the Tribunal Decision):

22. [56]

    I turn then to those aspects of the Tribunal Decision regarding the operation of the HB Act.

23. [57]

    At [92] of the Tribunal Decision, the Tribunal accepted the owner’s submission that:

24. [58]

    The Tribunal ultimately found (at [96] of the Tribunal Decision):

25. [59]

    Hence, the Tribunal found:

    1. (1)

       That the contract itself barred the builder form claiming any part of the contract price, including the 15% damages amount, unless it had obtained warranty insurance and provided the certificate to the owner, which it had not done (at [67] – [68], [86] – [90] of the Tribunal Decision).

    2. (2)

       That the provisions of the HB Act also precluded the builder from recovering the amount claimed (at [86], [90] – [96] of the Tribunal Decision).

THE APPEAL PANEL PROCEEDINGS AND DECISION

1. [60]

   On 21 August 2024, the builder brought an internal appeal against the Tribunal Decision, pursuant to s 80(2) of the NCAT Act.

2. [61]

   As a Costs Decision was published after the lodgement of appeal, the builder further sought to appeal that Costs Decision in their written submissions dated 2 October 2024.

3. [62]

   Section 80 of the NCAT Act permits an appeal from a first instance decision of NCAT “as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds”: s 80(2)(b) of the NCAT Act.

4. [63]

   The builder articulated 12 grounds of appeal in their Notice of Appeal, all of which, they submitted, raised questions of law. The grounds of appeal were as follows (at [47] of the Appeal Panel Decision):

5. [64]

   On 29 November 2024, the Appeal Panel dismissed the builder’s appeals to the Tribunal Decision and Costs Decision brought by the builder (at [120] of the Appeal Panel Decision).

6. [65]

   The Appeal Panel made the following orders (at [122] – [123]):

7. [66]

   The Appeal Panel observed (at [40(2)] and [40(4)]), that, contrary to Ground 1, the Tribunal had found that the contract precluded the builder’s claim:

8. [67]

   I turn then to the Appeal Panel’s consideration in respect of each other ground of appeal raised by the builder.

Grounds of appeal: introduction

1. [68]

   Having dispensed with Ground 1 concerning the adequacy of reasons, the Appeal Panel then proceeded to deal, in groups, with various grounds for the disposition of the remainder of the appeal.

2. [69]

   The Appeal Panel explained their reasons for grouping certain grounds of appeal together, as follows:

   1. (1)

      Grounds 2, 3 and 4 concerned [88] of the Tribunal Decision, The Appeal Panel described those issues, and their correlation, in the following way:

   2. (2)

      Grounds 4 and 11 were grouped together on the basis that they concerned the interpretation of the HB Act, and in particular, s 92 of the HB Act, although the Appeal Panel considered that s 94 of the HB Act was pivotal to the resolution of those issues.

   3. (3)

      Grounds 4, [2] 5, 6 and 7 were addressed collectively, as those grounds of appeal were said to challenge the decision in Syed with respect to the meaning of “residential building work”.

   4. (4)

      Grounds 8 and 9 were grouped together because they were said to deal with the following issue:

   5. (5)

      Ground 10 was addressed independently and addressed the decision in Champion Homes Sales Pty Ltd v Biggs; Biggs v Champion Homes Sales Pty Ltd [2023] NSWCATCD 117 (“Biggs”).

   6. (6)

      Ground 12 was also addressed independently and bore the heading “Grounds 12 – The contra preferentem rule and Mann v Paterson”.

The Appeal Panel Decision:

1. [70]

   On appeal, the builder submitted that 15% was not part of the contract price, inferring that it was "independent of the Contract" and merely "a formula to calculate damages". I have earlier set out the builder's submissions, in this respect, as summarised in the Appeal Panel Decision.

2. [71]

   In respect of Grounds 2, 3 and 4, the Appeal Panel found:

3. [72]

   The Appeal Panel then made the following conclusions, in this respect:

4. [73]

   That paragraph represented a further limb of the Tribunal’s reasoning for rejecting grounds 2, 3 and 4. In substance, the Appeal Panel found that the builder’s claim was unsustainable as a result of the fact that:

   1. (1)

      the builders’ claim formed part of the contract price; and

   2. (2)

      the builder had not taken out warranty insurance (as required by cl 38 and the Notations).

5. [74]

   The Appeal Panel further rejected Grounds 2, 3 and 4 as a result of the operation of s 92(2) of the HB Act. In this respect, the Appeal Panel held (at [61] of the Appeal Panel Decision):

6. [75]

   Grounds 4 and 11 referred to the Tribunal having erred in its interpretation of ss 92 and 94 of the HB Act, by concluding that those provisions precluded the builder’s claim for orders under the HB Act.

7. [76]

   In relation to these grounds, the Appeal Panel upheld the Tribunal’s interpretation of ss 92 and 94 of the HB Act, as follows (at [63] of the Appeal Panel Decision):

8. [77]

   The Appeal Panel rejected the builder’s submission that no “residential building work under a contract” (within the meaning of the HB Act) had occurred because the builder had only done preparatory work, with no physical construction undertaken on the site.

9. [78]

   In that respect, the Appeal Panel found as follows:

10. [79]

    It is plain that the Appeal Panel considered that the building works the builder undertook constituted “residential building work” within the meaning of the HB Act, and accordingly, determined that Grounds 4 and 11 failed.

11. [80]

    In the Tribunal Decision, the Tribunal had applied a decision of another NCAT Appeal Panel, Syed (see [93] and [96] of the Tribunal Decision). In that respect, Grounds 4, 5, 6 and 7 of the appeal challenged the reasoning in Syed (at [263] – [275] and [295]) in relation to the meaning of “residential building work”.

12. [81]

    The builder’s challenge before the Appeal Panel, referred to Lawrence Appeal where Bathurst CJ (with whom Meagher & Gleeson JJA agreed) stated (at [128] – [131]):

13. [82]

    The builder submitted before the Appeal Panel, that it could be inferred from the above passage, that the view reached in Syed, that preparatory work can be “residential building work” for the purposes of the HB Act, is not maintainable and should not have been followed by the Tribunal in the Tribunal Decision.

14. [83]

    The builder further submitted that the Court of Appeal had found the words of Basten JA in Grygiel v Baine & Ors [2005] NSWCA 218 (“Grygiel”) at [57], were limited to jurisdiction and not to preparatory work: Lawrence Appeal at [127].

15. [84]

    In this respect, the Appeal Panel made the following conclusions (at [75] – [80]):

16. [85]

    Ultimately, the Appeal Panel dismissed Grounds 4, 5, 6 and 7 (at [81] of the Appeal Panel Decision).

17. [86]

    Grounds 8 and 9 referred to the amounts totalling $9,874.63, which were claimed by the builder under cl 5 of the contract.

18. [87]

    The Appeal Panel dismissed grounds 8 and 9, providing the following reasons (at [83] of the Appeal Panel Decision):

19. [88]

    The Appeal Panel dismissed this ground of appeal, observing the ground had no merit. The Appeal Panel concluded as follows (at [85] of the Appeal Panel Decision):

20. [89]

    In approaching the Appeal Panel’s reasoning as to this ground, it is important to understand the true significance of the ground.

21. [90]

    Whilst the ground referred to “the interpretation of the Contract”, the ground does not, in substance, challenge the determination of the Tribunal, to which I have earlier referred, that the contract precluded the builder’s claim because the builder failed to take out warranty insurance. To demonstrate the basis for that conclusion, a closer examination of the ground and the Tribunal Decision is required.

22. [91]

    To commence this discussion, and for convenience, I set out again Ground 12 of the appeal to the Appeal Panel:

23. [92]

    The Ground is unclear in its terms. It refers to the interpretation of the contract, but then joins to that issue a challenge to the Tribunal’s application of the contra proferentem rule.

24. [93]

    The ground also makes reference to [89] of the Tribunal Decision. The Tribunal Decision at [89] has been earlier set out in this judgment at [52]. That paragraph of the Tribunal Decision consists of a primary finding and a secondary finding. The primary finding is that the contract is “clear” and that the builder is bound by its terms. By having regard to [86] to [88] of the Tribunal Decision (again earlier set out), it is plain that the Tribunal concluded that the builder was precluded from recovering the damages it sought by the operation of the contract itself.

25. [94]

    The Tribunal then considers a second or alternative position in the event that, contrary to its primary finding, there is some ambiguity in the terms of the contract, in which case the Tribunal sought to interpret the contract using the contra proferentem rule and placed reliance on Mann v Paterson Constructions Ply Ltd [2019] HCA 32; (2019) 267 CLR 560 (“Mann v Paterson”).

26. [95]

    In substance, the builder did not challenge the primary finding of the Tribunal. Ground 12 became a challenge to the Tribunal’s application of the contra proferentem rule. That conclusion is reinforced by an examination of the position of the builder during the course of the Appeal Panel proceedings.

27. [96]

    I turn firstly to the builder’s submissions to the Appeal Panel.

28. [97]

    The written submissions of the builder referred to the central issues in the appeal as follows:

29. [98]

    The builder’s submissions do not challenge the primary finding of the Tribunal at [89] of the Tribunal Decision.

30. [99]

    As to Ground 12, it is plain that the challenge was confined to the issues of the application of Mann v Paterson and the contra proferentem rule. It was submitted:

31. [100]

    Paragraphs [29] and [30] of the builder’s submissions in reply are to the same effect:

32. [101]

    The builder’s approach to Ground 12 accounts for the manner in which the Appeal Panel approached that ground.

33. [102]

    As earlier set out in this judgment, the Appeal Panel first referred to the primary decision of the Tribunal at [89] of the Tribunal Decision in the summary provided at [40(2)] of the Appeal Panel Decision.

34. [103]

    That issue is then only returned to in the course of dealing with Grounds 2, 3 and 4, as another basis for rejecting those grounds, before the Appeal Panel Decision squarely deals with Ground 12 at [87] – [90] as follows:

35. [104]

    Thus, Ground 12 was dismissed on the basis that, whilst error was demonstrated in the Tribunal Decision with respect to Mann v Paterson and the contra proferentem rule, that aspect of the Tribunal Decision was not dispositive.

36. [105]

    The Tribunal Decision, in that respect, was not dispositive because the Tribunal did not find any ambiguity, but found that the contract was clear on its terms as to excluding the builder’s claim. Hence, it was unnecessary for the Appeal Panel to pass separately upon the construction of the contract, in this respect, because neither the ground of appeal nor the builder’s submissions agitated such a point. The Tribunal Decision was simply found to stand unchallenged (as was reflected in [60] of the Appeal Panel Decision).

Nature of appeal

1. [106]

   By a Summons, the builder sought an appeal in relation to the decision of the Appeal Panel dated 29 November 2024, pursuant to s 83 of the NCAT Act.

2. [107]

   In these proceedings, the parties confined the material before the Court to a Joint Court Book consisting of two volumes, which included written submissions. This Court also received a note titled ’Respondent’s Further Note’, provided to the Court on 18 September 2025 by the owner (“owner’s further note”) with two annexures.

3. [108]

   The owner’s further note concerned the status of challenges to the Tribunal Decision or the Appeal Panel Decision or lack thereof as to the operation of the contract in precluding the builder’s claim. Despite being provided an opportunity to produce a note on this topic, the builder did not do so.

Appeal grounds and relief sought

1. [109]

   The builder sought to appeal the Appeal Panel decision with respect of eight grounds, purported to be questions of law. Those grounds were as follows:

2. [110]

   The Summons sought the following relief:

Introduction

1. [111]

   It is necessary to make some preliminary observations regarding Ground 5.

2. [112]

   Mr Bennett was correct to submit that Ground 5 was the only ground of appeal concerning the construction of the contract.

3. [113]

   The owner correctly submitted that Ground 1 concerned Syed. Ground 2 concerned s 92(1) of the HB Act. Ground 3 concerned s 92(2) of the HB Act. Ground 4 concerned the issue of the nature of liquidated damages and s 92(2). Ground 6 concerned s 94 of the HB Act. Ground 7 concerned s 10 of the HB Act. Ground 8 concerned costs. Each of those grounds (other than Ground 8) all had a common basis, that the Appeal Panel had misconstrued the definition of “residential building work”.

4. [114]

   Ground 5 does not specifically address the Appeal Panel’s findings in relation to Ground 12 of the builder’s appeal to the Appeal Panel. That is, the Ground does not engage with the Appeal Panel’s reasoning at [87] – [90] of the Appeal Panel Decision, nor does the Ground or the builder’s submissions in relation to it adequately engage with the observations of the Appeal Panel at [60] of the Appeal Panel Decision, although Ground 5 does appear to recognise that the Appeal Panel’s remarks at [60] concerned the matters raised under Ground 4 of the current appeal by the use of the words “its related findings at AP [60]”.

5. [115]

   However, as is apparent from the earlier discussion in this judgment, the following is the true context in which Ground 5 must be considered:

   1. (1)

      In the Tribunal Decision, the Tribunal decided that the builder was precluded under the contract from claiming the contract price because of a failure to take out warranty insurance (see the reference by the Appeal Panel to that effect at [40(2) and (4)] of the Appeal Panel Decision).

   2. (2)

      Paragraph [60] of the Appeal Panel Decision concerned Grounds 2, 3 and 4 of the appeal before it, which concerned liquidated damages.

   3. (3)

      Whilst the Appeal Panel confirmed (at [60]) the Tribunal Decision vis-à-vis the construction of the contract, it did so only as a further step in its reasoning to reject the appeal at Ground 2, 3 and 4 and without determining any ground of appeal challenging the Tribunal’s construction of the contract, namely, the builder being precluded from making any demands under the contract because the builder had failed to take out warranty insurance. In substance, the Appeal Panel had no appeal before it by the builder as to any finding that the contract, in and of itself, precluded the builder’s claim. As mentioned earlier, this accounts for the structure of the Appeal Panel Decision.

   4. (4)

      The Appeal Panel proceeded on the basis that the Tribunal had precluded the builder’s claim by virtue of the clear provisions of the contract. That approach was referrable to the summary of the Tribunal’s conclusions as set out at [40] of the Appeal Panel Decision and confirmed at [60] of the Appeal Panel Decision.

   5. (5)

      It is apparent that the Appeal Panel did not undertake any more detailed analyses of the construction of the contract (or the various arguments raised about the same), because the grounds and arguments on appeal did not require it to do so.

6. [116]

   It is in that light that reference should be made to some of the passages of the transcript of the proceedings before this Court.

7. [117]

   This Court inquired whether the contract operated with respect to the preparatory work which had been undertaken by the builder:

8. [118]

   This Court later turned directly to the question as to whether the contract itself precluded the builder’s claim. That lead to the following exchange:

9. [119]

   It is apparent from that exchange that what is suggested by counsel for the builder is that the question of the construction of the contract, and its capacity to bar the builder’s claim, did not arise on this appeal when expressed in that way.

10. [120]

    It was in that light that provision was made for a note to be made by the builder and the owner, as to that question. As mentioned earlier, no note was received from the builder.

11. [121]

    It has recently been observed in Lam v Liu [2025] NSWCA 254 (“Lam”) (per Free JA at [40] – [43] with Bell CJ and Payne JA agreeing) that “[i]n determining whether a party is raising a new issue on appeal it is necessary to look to the actual conduct of the proceedings”

12. [122]

    Having reviewed the conduct of the Appeal Panel proceedings (and the Tribunal proceedings to which they related), I accept the submission made by counsel for the owner, in the owner’s further note, as follows:

13. [123]

    It was in this light that the owner made the following further submission:

14. [124]

    In Larsen as trustee for the Larsen Superannuation Fund v Tastec Pty Ltd (formerly Wonders Building Company Pty Ltd) (No 2) [2025] NSWCA 210 (“Larsen”) Adamson JA (with whom Stern JA and Price AJA agreed) stated at [55]:

15. [125]

    The construction of the contract is a question of law. The determination of the question does require a sub-stratum of facts for its determination, however, it is conceivable, at an abstract level, that the exception referred to in Larsen may apply.

16. [126]

    However, the evidence as to the fact of the contract, the work undertaken by the builder, and the failure of the builder to take out warranty insurance (as pleaded as particulars in the Points of Defence by the owner before the Tribunal) were not contentious before the Tribunal or in any later proceeding, including the present proceedings. It is not evident what additional evidence could have been led bearing upon the question of whether the contract precluded the builder from recovering any amounts from the owner: Lam at [44] – [48] (per Free JA).

17. [127]

    The owner is nonetheless correct to submit that, even if the appeal were allowed, the judgment of the Court would have no impact upon the Tribunal Decision vis-à-vis the operation of the contract. That consideration has wider implications.

18. [128]

    Whilst the builder sought that his appeal from the orders of the Tribunal in the Tribunal Decision be “upheld”, and the Tribunal Decision be set aside, the leave to appeal in this Court was confined to a challenge to the Appeal Panel Decision.

19. [129]

    As to the Tribunal Decision, there was:

    1. (1)

       No ground of appeal to the Appeal Panel in relation to the Tribunal’s construction of the contract or the Tribunal’s finding that the contract prohibited the builder’s claim.

    2. (2)

       The Appeal Panel’s view as to the corrections of the Tribunal Decision in that respect (at [60]) did not concern any ground of appeal directed to whether the contract did or did not prohibit the builder from recovering any amounts from the owner. Nor did it purport to be dispositive of that question. That is the effect of [89] of the Appeal Panel Decision.

    3. (3)

       The significance of these considerations is not only that the builder brings a new point not argued before the Appeal Panel, but it seeks to challenge findings which simply have not been made by the Appeal Panel. In substance, the builder’s challenge must be seen as a defacto challenge to the Tribunal Decision as to the operation of the contract vis-à-vis the builder’s claim, as there was no appeal in this respect to the Appeal Panel. There is certainly no appeal in that respect in the Summons.

20. [130]

    These considerations raise, in my view, real questions concerning whether the Court should grant leave to appeal. However, I propose to approach that question after consideration of the issues which the parties sought to ventilate in relation to the construction of the contract.

Interpretation of the contract

1. [131]

   Notwithstanding the deficiencies in the builder’s appeal, I propose to briefly pass upon the issues of interpretation of contract, ultimately reaching the conclusion, on any of these bases, that Ground 5 of the appeal should fail.

2. [132]

   It is in that context that I will now turn to consider the submissions advanced by the parties under Ground 5.

3. [133]

   The submissions for the builder were, in summary, as follows:

   1. (1)

      The Appeal Panel’s construction of the contract was erroneous. In this respect, the builder relied upon [60] of the Appeal Panel Decision.

   2. (2)

      In relation to the issue of Notations in the contract, and whether the builder’s requirement for insurance was a precondition:

   3. (3)

      In oral submissions, Mr Stomo maintained that that the Notations, referenced in [60] of the Appeal Panel Decision, were in the nature of “marginal” or “side notes” and did not form part of the operative terms of the contract, because the “contract specifies [in] clause 1.2… that the marginal note is not to be taken into account”.

   4. (4)

      The clauses referenced in [60] of the Appeal Panel Decision do not specify that “none of the contract price can be claimed or retained by the builder without it having obtained home warranty insurance”.

   5. (5)

      Clause 3 of the contract is a reference to the owner’s obligations that the owner must pay money when money “becomes payable under the contract in the manner and at the times stated in the contract”.

   6. (6)

      Clause 38 of the contract reproduces the statutory requirement that the builder must insure:

   7. (7)

      The balance of cl 38 of the contract relates to procedural aspects about providing insurance.

   8. (8)

      Clause 39 of the contract reproduces the statutory warranties under s 18B of the HB Act.

   9. (9)

      None of the above clauses carries any side notations in the manner suggested by the Appeal Panel.

   10. (10)

       Attachment B, the “Consumer Building Guide”, which is a mandatory requirement under the HB Act, makes no reference to the builder being precluded from payment under the contract until the requisite insurance is in place.

   11. (11)

       Attachment B, the Checklist, which accompanied the contract, is also a statutory requirement and it contains the notation (“Checklist Notation 13”) that insurance under the HB Act must be provided “before the contractor commences working before the contractor can request to receive any payment”. However, the Checklist Notation 13 is a reference to insurance under Pt 6 or Pt 6B of the HB Act and is a reference to the insurance required to carry out “residential building work”.

   12. (12)

       The Appeal Panel erroneously attempted to reinforce its position with the following paragraph at [61], that it considered “[f]undamentally” that the builder’s claim could not succeed because the builder’s claim for liquidated damages was “a payment under a contract to do residential building work”. It was submitted that that notion was an erroneous construction of contract. In that respect, Mr Stomo stated in oral submissions:

4. [134]

   From the above exchange, it is apparent that the builder relied upon Checklist Notation 13 to say that the contract must be read in conjunction with the HB Act such that, a prohibition to make a claim for work under the contract unless warranty insurance has been obtained, is confined to “residential building work” for the purposes of the HB Act.

5. [135]

   On 5 July 2025, the builder provided reply submissions before this appeal. In this respect, the builder submitted:

   1. (1)

      The contract terms bind the parties. There is nothing opportunistic in pursuing a right as submitted by the owner in her submissions.

   2. (2)

      The owner is relying on the decision of the Appeal Panel and has not engaged in the builder’s submissions.

   3. (3)

      The terms relied upon by the Appeal Panel and the owner do not assist the owner.

6. [136]

   The submissions for the owner, in summary, were as follows (excluding the submissions provided in the owner’s further note):

   1. (1)

      The builder’s bespoke contract is clear on its terms, and stated in at least five places, including immediately after the builder’s signature space, that none of the contract price can be claimed or retained by the builder, or that any payment of money can made by the owner, without the builder having obtained warranty insurance (which the builder did not obtain) and provided the certificate of insurance to owner (which the builder did not do).

   2. (2)

      The Notations are provisions of the contract.

   3. (3)

      Critically and independently of the HB Act, cl 3.1 of the contract (that contains the owner’s obligations) only obliges the owner to pay “the contract price and other money that becomes payable under this contract in the manner and at the times stated in this contract”, which is subject to the regime described in the paragraph immediately above.

   4. (4)

      The only relationship between the builder and the owner is via the contract. In that respect, Mr Bennett relied upon the Appeal Panel’s observation (at [58] of the Appeal Panel Decision) in making the following submission:

   5. (5)

      Ground 5 overlaps with Ground 4.

   6. (6)

      The builder’s submission on this ground demonstrates the builder’s opportunistic approach to the owner. The builder is content to prepare documents that represent one position, but, upon locking in the owner by signature, resiles from the representations and contends an automatic entitlement to over $75,000 for no consideration from the builder.

   7. (7)

      Further, as to the Notations forming part of the contract, Mr Bennett stated during the course of his submissions:

   8. (8)

      Further, as to the disposition of this ground (and in light the entirety of this appeal) the owner submitted:

7. [137]

   The Court was referred to page 51 of the contract, which under the heading “Signatures”, contained the following entries:

8. [138]

   Mr Bennett then referred to Sch 6 of the contract and noted that the only provision contained in Sch 6 is a notation that confirms the requirement for insurance:

Consideration: Ground 5

1. [139]

   The contract was between the owner and the builder (see the statements in the Signature section).

2. [140]

   The contract is defined as meaning the agreement between the builder and the owner set out in the “contract documents”, which include “general conditions, special conditions, the plans, the specifications and other documents specified in [Sch] 5”. The Schedules to the contract also form part of the contract (see the Signature section). These provisions constitute the terms of the contract.

3. [141]

   Attachment A and Attachment B (the Checklist and the Consumer Building Guide) do not form part of the contract.

4. [142]

   The contract price is defined in cl 1.1 of the general conditions to the contract as the amount stated in cl 2(a) of Sch 1. As stipulated in Sch 1, the contract price is $530,000. The builder claimed under cl 44.15 of the contact, a sum equivalent to 15% of the contract price (adjusted, as earlier discussed in various respects).

5. [143]

   It is in cl 2(a) of Sch 1 that a Notation first appears, which for convenience I will set out again:

6. [144]

   That Notation appears immediately after a warning concerning variations to the contract price and before, inter alia, the specification of the deposit, owner and builder details, the description of the site and “building period”.

7. [145]

   An almost identical note appears immediately after the provision for signatures in the Signature section.

8. [146]

   There is no reference to the Notations in the HB Act, but it does include a reference to “warranty insurance”. That expression is defined in cl 1.1 of the general conditions as “insurance under the Home Building Compensation Fund as referred to in the [HB Act]”.

9. [147]

   Again, that definition does not import the provisions of Pt 6 of the HB Act, but directs that the contract of insurance must be taken under the Home Building Compensation Fund (see s 103B(1) of the HB Act).

10. [148]

    Clause 2.1 of the general conditions of the contract provides that “the builder must carry out… building works in accordance with this contract”. Building works are defined in cl 1.1 of the general conditions as, inter alia, building works “carried out” in “accordance with this contract as shown in the contract documents.”

11. [149]

    It was common ground that the “building works” carried out by the builder at the site fell within this definition.

12. [150]

    Presumably, the “building works”, as earlier described in this judgment, is work the builder considered occurred prior to the physical commencement of works on the site, as the builder relied upon cl 44.15, which only operates in those circumstances.

13. [151]

    The builder devoted considerably less attention to Ground 5 than other grounds and directed most attention to provisions of the Notations, as did the owner.

14. [152]

    However, in my view, it is important to focus attention initially and substantially upon the provisions of cl 38.2.

15. [153]

    This clause provided that the builder must have insurance in place “before” the builder commences any building works.

16. [154]

    It is true that, as the builder submits, this provision does not expressly prohibit the builder from making a demand for payment in circumstances where the builder has not taken out warranty insurance, but the provision expressed, in my view, the clearest intention, entirely consistent with the Notations, that the builder was not to commence the work he did undertake at the site (which was part of the “building works” in the contract) without the requisite insurance.

17. [155]

    Where the provisions of cl 38.2 gain even greater significance is when they are read together with the provisions of cl 3.1. Clause 3.1 refers to an obligation to pay “other money that becomes payable under this contract” (other than the contract price). This expression is wide enough to engulf a demand under cl 44.15 (and does not depend on whether moneys due under cl 44.15 constitute payment of the contract price). I will return to this question in considering Ground 4.

18. [156]

    Clause 3.1 states that the owner is obligated to pay such monies under the contract “in the manner and at the times stated in this contract”. The words “in the manner”, in the way that expression is used in cl 3.1, means, in my view, the way in which something is done or happens or the method of action (Shorter Oxford English Dictionary, 6th ed (2007)).

19. [157]

    Whilst the provision may simply refer to the way the owner will provide payment, the expression, in my view, has a wider meaning, namely, a stipulation of what is proposed to be granted or done. If the contract does not contemplate building works will be done without insurance, then no payment is required for such work if that condition is not fulfilled. In any event, it must be at least implicit from the provisions of cl 3.1 that the owner would not be required to pay for work which is prohibited by the contract pursuant to cl 38.2.

20. [158]

    I turn then to the submission of the builder that the Notations do not form part of the contract.

21. [159]

    The owner is correct to submit these Notations are in the body of the contract, are set out in the same style and form as other contractual terms, and are clear and direct in what they address.

22. [160]

    The builder relied, however, on the provisions of cl 1.2 of the general conditions to submit that the Notations do not form part of the contract (and, it would appear, contended the Notations could not be used in its interpretation).

23. [161]

    In order to make good that proposition the builder relied upon the words “side notes” in cl 1.2; suggesting that the Notations are such notes.

24. [162]

    The rejoinder by the owner, correctly, in my view, was to the effect that it was obvious the reference to side notes in cl 1.2 was a reference to the entries on the left-hand side of each page of the contract, which appear in smaller font and obviously do not form part of the text of the contract.

25. [163]

    However, neither party addressed the question as to whether the Notations were “general notes” for the purpose of cl 1.2 of the contract.

26. [164]

    That expression is not defined in the contract. However, there are no other entries in the contract bearing any reference to notes other than the Notations, each being proceeded by the word “Note”.

27. [165]

    Whilst I agree with the owner that the Notations at cl 2(a) and the Signatures Section are indistinguishable from the remaining text of the contract, they are preceded by the word ‘Note’ and there no other obvious alternatives to which the expression ’general notes’ in cl 1.2 may apply.

28. [166]

    However, the construction of the Notations needs to take place in the light of the whole contract, and, despite their grouping in the Tribunal Decision and Appeal Decision (and by the parties).

29. [167]

    The position of the Notation in the Signature section may be suggestive that they act as a non-binding advice or reminder, as to limitations on claims that may be brought by the builder. However, that construction is impermissibly strained with respect to the Notation in cl 2(a) in Sch 1 and Sch 6.

30. [168]

    As earlier mentioned, the contract expressly states the Schedules form part of the contract. Whilst preceded by the word “Note”, the words accompanying the note fall squarely within that Schedule, with respect to cl 2(1) and Sch 6.

31. [169]

    When Sch 6 is examined, this consideration becomes even stronger. The provisions of Sch 6 effectively would have no content if the builder’s construction were to be accepted. Further, the provision concerns the obligation of the builder to have warranty insurance (the second sentence of Sch 6 coincides with the first sentence dealing with the requirement to have insurance and the prohibition on claims in the absence thereof).

32. [170]

    Where the terms of Sch 6 are terms of the contract, the Court should not construe this provision in such a way that the provision has no work to do. Nor should the Court read down the provisions of Sch 6 when there are no inconsistent terms with the contract.

33. [171]

    To the extent of any inconsistency between the provisions, the Court should approach the construction upon the specific terms of Sch 1, cl 2(a) and Sch 6: Lewis Construction (Engineering) Pty Ltd v Southern Electric Authority of Queensland (1976) 38 LGRA 242; (1976) 11 ALR 305 (per Stephen and Murphy JJ) and George v Cluning (1979) 28 ALR 57 at 61-62 (per Mason J). The provisions do more than simply act as a reference or mention of the HB Act.

34. [172]

    Schedule 6 of the contract provides strong confirmation of the above interpretation of cll 3.1 and 38.2. Schedule 6 is particularly significant because it coalesces the requirement the builder not carry out building work (cl 38.2) or receive any part of the contract price (the Notations) until warranty insurance is in force.

35. [173]

    It follows that a further and independent bases for construing the contract as prohibiting the builder’s claim where no warranty insurance was taken out, is to be found in the Notations in cl 2(a) in Sch 1 and Sch 6, which are clear in their terms in precluding the builder’s claim. They are also, as I have mentioned, an aid to the interpretation of cll 3.1 and 38.2.

36. [174]

    These conclusions are consistent with the NSW Government’s guidance on what is to be included in a compliant home building contract. That is, the builder’s inclusion of the terms as a term of the contract is commercially understandable given the NSW Government guidance and given ss 92 and 94 of the HB Act.

37. [175]

    There was a suggestion in earlier versions of the builder’s submissions that the contract and the HB Act should be read together (at least in the formulation of the ground), namely, the contract should be construed so that the scope of the prohibition upon claims by the builder is to be read down to conform with the operation of ss 92 and 94 of the HB Act. Thus, on this approach, the contract should be read as operating co-extensively with the terms of s 92(2) of the HB Act and the prohibition within the contract would extend only to circumstances where the builder undertook “residential building work” as defined in cl 2 of Sch 1 of the HB Act.

38. [176]

    However, I do not consider that any such approach is properly available.

39. [177]

    The contract and the statute create separate and potentially different legal obligations. As was observed by the High Court in Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24 at 420 (per Brennan CJ, Dawson J and Toohey J):

40. [178]

    It was not suggested by the builder that an implication arose in the contract such that the definition of “residential building work” in the HB Act would be incorporated into the contract. Nor could such an implication properly arise. The Notations do not express dependence, for their operation, on the HB Act. It is not necessary to imply such a term from the HB Act for the reasonable and effective operation of the contract.

Submissions for the builder

1. [179]

   In Ground 4, the builder contended that the Appeal Panel erred (at [57] and [60] of the Appeal Panel Decision) in holding that the damages claim of $79,500 was part of the contract price.

2. [180]

   The builder submitted that the Appeal Panel misconceived the nature of agreed damages. The "legal basis of what the amount of $79,500 is compensating" is cl 44.15 of the contract. To recover in an action for breach of contract damages more than nominal, those damages must be proved unless they are admitted. If they are admitted there is an end of it.

3. [181]

   The builder made the following submissions, in this respect:

   1. (1)

      The Appeal Panel erred in equating damages with a "payment under the contract”. A formula used to calculate agreed damages is fundamentally different from a payment for work done under the contract. Damages are intended to compensate for loss and damage resulting from a breach of contract, not to pay for a contractual obligation.

   2. (2)

      Where a breach of contract occurs the party not in breach is entitled to recover damages. This right is implied by law unless the contract provides to the contrary.

   3. (3)

      Fundamentally, damages are compensatory, and the plaintiff has the onus of proving what loss and damage has been suffered by the breach. The damages do not relate to the payment of any obligation but are compensatory for the default.

   4. (4)

      A payment under the contract, on the other hand, is triggered by the fulfilment by a party of an obligation under the contract requiring the corresponding payment. A claim for damages, on the other hand, is triggered by the default of an obligation under the contract.

   5. (5)

      An agreed damages clause obviates the necessity of “proving” what is the fair and reasonable amount of compensation, either arising naturally from the breach or contemplated by the parties, and, in effect, not being too remote. It does this by fixing the amount of liquidated damages as agreed by the parties as being a fair and reasonable estimate of the possible loss and damage that may be suffered as a consequence of the breach

   6. (6)

      Mason & Wilson JJ in AMEV-UDC Finance v Austin (1986) 162 CLR 170; [1986] HCA 63 (“Austin”) at 193 expressed the proposition for agreed damages as one that instead of providing an award under the general law, an agreed damages clause will be allowed to give greater certainty by allowing the parties to determine more precisely their rights and liabilities, especially in situations where “loss may be difficult or impossible to quantify or, if quantifiable, may not be recoverable at common law”. Mason & Wilson JJ [3] laid out the contours of such claim, as follows (Austin at 193):

   7. (7)

      In Boucaut Bay Co Ltd v The Commonwealth (1927) 40 CLR 98 at 106, Isaacs ACJ put the proposition of liquidated damages in the following terms:

   8. (8)

      Any such pre-assessment may be greater or less than what might be obtained under general law damages. That would not of itself invalidate the clause nor classify it as a penalty unless it bears a disproportionate assessment to a genuine estimate, with the onus being on the defendant to show it is a penalty.

   9. (9)

      Clauses 29 and 44.15 of the contract are agreed damages clauses calculated using a formula (namely, 15% of the contract price), as a genuine pre-estimate of the loss and damage which may be suffered by the builder. It represents a contractually agreed value of what the builder would otherwise be entitled to prove as general damages. The fact that it was referrable to the contract price does not make it a payment of the contract price, as appears to be the position taken by the Appeal Panel at [57] of the Appeal Panel Decision.

   10. (10)

       The proposition posed by the Appeal Panel at [57], that the formula “does not address adequately, or at all, the legal basis of what the amount of $79,500 is compensating to it, if that amount is not an entitlement arising under the contract” is the incorrect approach. The amount of $79,500 constitutes an agreed amount between the parties representing the loss and damage suffered upon an unlawful breach by the other party. The fact that it refers to the contract price does not, of itself, make it payable as part of the contract price.

   11. (11)

       The builder, as part of the pre-contractual process, received a tender fee in the sum of $15,000 which was to be credited towards the contract price upon entering into the contract. The contract was entered into and, therefore, the amount was credited towards the contract price under the contract. The tender fee was non-refundable, and its purpose was for the builder to proceed to do the preliminary work required by the contract in order to obtain development consent prior to proceeding to construction. Some work had been carried out, and the builder has made a claim for this work in its application before the Tribunal in the amount of $9,874.63. There is no claim for refund of the $15,000. Nor is there a challenge to the appropriateness of the monies expended by the builder.

   12. (12)

       The sum claimed by the builder takes into account damages and the amount spent, and from that it has deducted the amount of $15,000, effectively making a claim for damages in the sum of $74,374.63.

   13. (13)

       The builder would be double dipping in receiving and retaining the $15,000 and claiming damages. This would not be permissible either at law or under the contract.

   14. (14)

       In a matter consistent with the builder’s approach to reliance upon the HB Act as governing the construction of the contract, the builder submitted that insurance is not required until such time as work which satisfies the criteria of being “residential building work” is undertaken, as this is the natural meaning of the definition and concurs with the position taken by the Court of Appeal in Lawrence Appeal.

   15. (15)

       There was an unlawful termination by virtue of the owner’s repudiation of the contract. Those circumstances entitled the builder to damages. The value of damages in that event was expressly agreed.

   16. (16)

       To characterise the builder’s claim for damages based on this deduction as a contract payment is therefore incorrect. Mr Stomo stated the following in reply, during oral submissions:

Consideration: Ground 4

1. [182]

   By this ground, the builder challenged the Appeal Panel Decision at [57] – [61] in holding that the damages claim by the builder was part of the contract price.

2. [183]

   The Appeal Panel held, in essence, that the damages claim failed for three distinct reasons, as follows:

   1. (1)

      damages compensate for contract price;

   2. (2)

      the terms of the contract preclude recovery absent the building insurance; and

   3. (3)

      section 92(2) (and by implication, s 10) of the HB Act preclude recovery.

3. [184]

   As to the second bases for rejecting the builder’s claim I observed in discussing Ground 5, that it was unnecessary, in order to resolve the question of whether the builder’s claim was precluded by the contract (given the builder’s failure to take out warranty insurance), to determine whether the builder’s claim concerned to contract price because of the operation of cll 38.2 and 3.1 (even though the Notations only operate with respect to the contract price).

4. [185]

   I will return to the third bases in considering s 92(2) of the HB Act in the context of Grounds 1 and 2, 3 and 7 below, even though the determination of those grounds and the construction of s 92(2) is not necessary to determine the appeal.

5. [186]

   For completeness, however, I deal with the first bases identified by the Appeal Panel in determining the damages claim by the builder was part of the contract price.

6. [187]

   In this appeal, the builder properly accepted that damages are compensatory. No other bases have been identified by the builder as to what the agreed damages are compensating, other than the contract price. This is no doubt because that is the only conceivable bases upon which the builder may be compensated. As the Appeal Panel correctly points out, the only connection between the parties is the contract. The builder was not entitled to any payment from the owner except for the contract price for building the home. Further, the connection is evident by the builder’s acceptance that the $15,000 paid by the owner should be credited towards the contract price.

7. [188]

   I agree with the submission of the owner that the authorities relied upon by the builder (which I have set out above) only establish the agreed damages, or a pre-estimate of damages, obviate the need to quantify. The inherent nature of the damages as compensatory is not altered by that approach.

8. [189]

   It follows that Ground 4 should be rejected. The related consideration is that the Notations, to which I have referred above, do operate to prohibit the builder from making the claim in circumstances where the builder did not take out warranty insurance.

Submissions for the builder

1. [190]

   I shall refer to the entirety of the builder’s submissions corresponding to the heading above at the outset, divided by a summary of those submissions as to Ground 1, followed by Grounds 2, 3 and 7, and finally, Ground 6.

2. [191]

   Ground 1 contends that the Appeal Panel erred at [81] (and related findings at [55], [67], [70], [75] & [79] – [80]) of the Appeal Panel Decision in agreeing with the reasoning in Syed (at [263] – [275] and [293]) about the meaning of “residential building work” under the HB Act for the purposes of ss 92 and 94 of the HB Act, on the basis that the decision in Lawrence v Ciantar [2019] NSWSC 464 (“Lawrence”) ought to have caused the Appeal Panel to arrive at a different conclusion.

3. [192]

   The builder’s rather lengthy submission on this issue were as follows:

   1. (1)

      The builder discussed at length many authorities of the Tribunal, the Appeal Panel, this Court and the Court of Appeal. The builder submitted that a stream of decisions which the Appeal Panel adopted (most relevantly, Syed) are in error and inconsistent with Grygiel, Lawrence and Lawrence Appeal.

   2. (2)

      The Appeal Panel followed the decision in Syed which found that preparatory work in the construction of a residential dwelling was covered by the definition “residential building work” found in cl 2 of sch 1 of the HB Act.

   3. (3)

      The foundation of the Appeal Panel’s findings were the comments by Basten JA in Grygiel at [57], which the Appeal Panel in Syed acknowledged were obiter.

   4. (4)

      Mr Stomo made reference to Grygiel, stating: “[i]n Grygiel's case it was an attempt by the builder to join his solicitor as a party under the [HB Act] and the question in that case was whether or not the court, or the [T]ribunal, would have jurisdiction to hear a dispute of that nature where the builder is complaining that he entered into a contract as a result of bad advice."

   5. (5)

      The builder submitted that the Appeal Panel in Syed made the following conclusions as to the dicta of Basten JA (which were, in fact, not supported by the reasoning of Basten JA in Grygiel):

   6. (6)

      That error was identified by the Court of Appeal in Lawrence Appeal at [123] – [130].

   7. (7)

      Significantly, the Appeal Panel in Syed noted (at [260]) that they did not consider themselves bound by the earlier decisions because “their Honours’ consideration of the issue was part of the reasoning process on jurisdiction which is inconsistent with that in Grygiel.”

   8. (8)

      That is, on its own reasoning, the Appeal Panel acknowledged that all the reasoning process goes to the question of jurisdiction and not to the more specific requirement for warranty insurance for “residential building work” required under ss 92 and 94 of the HB Act.

   9. (9)

      Thus, the conclusion in Syed (at [262]) that the Tribunal is “free to follow Basten JA’s obiter observations as to the meaning of “residential building work”” by expanding it to ss 92 and 94, lacks support from Basten JA’s dicta.

   10. (10)

       The expansion of preliminary work to ss 92 and 94 of Basten’s JA dicta at [57] of Grygiel was based on nothing more than his Honour’s opening words that “on one view…” residential building work could have a wider meaning, was taken to be a direct reference to the definition of residential building work in cl 2 of Sch 1. However, Basten JA made no such finding nor connection. There can be no such inference in the passage at [57] and [58] of his Honour’s decision as noted by Bathurst CJ, which was limited to the question of jurisdiction.

   11. (11)

       The interpretation of and conclusion based on the comments of Basten JA made by the Appeal Panel in Syed as argued (and was argued before the Tribunal and on appeal) was misunderstood and misconstrued by the Appeal Panel. The Appeal Panel in the Appeal Panel Decision, by following that interpretation, fell into error.

   12. (12)

       There is simply no foundation to reject the builder’s proposition that Basten JA was dealing only with jurisdiction as to the meaning of the term “residential building work” in relation to the supply of building goods and services which has a wider ambit than the reference to “residential building works” in the context of ss 94 and 95 of the HB Act.

   13. (13)

       The Appeal Panel only asserts that it appears to be a contradictory proposition. The Appeal Panel in Syed (at [269]) says what Basten JA is describing is “two pathways to a finding of jurisdiction”. It then goes on (at [270]) to say that “Basten JA’s preferred view of the meaning of “residential building work” … should be preferred” but ignores the context that it is in relation to determining jurisdiction and does not say that it applies generally to all preliminary work. His Honour was clearly not thinking of the definition in terms of ss 92 and or 94 of the HB Act, which ae not even referenced in the decision.

   14. (14)

       The builder’s contention in Lawrence Appeal was that the terminology “involved in” meant that the work was required to be part of the actual construction of the dwelling (at [124]). The builder in the case before this Court adopts that contention.

   15. (15)

       The Court of Appeal then considered the passage of Basten JA which the present Appeal Panel relied upon and by the Appeal Panel in Syed, identifying that his Honour there was discussing the issue of jurisdiction under s 48A (Lawrence Appeal at [126]).

   16. (16)

       After discussing the issues in Grygiel the Court of Appeal concluded (Lawrence Appeal at [128]):

   17. (17)

       The Court of Appeal acknowledged that preparatory work may be included in the definition but the ultimate sentence in [128] of the Lawrence Appeal emphasises that it must require a closer connection with the construction of a dwelling than that required for the claim to fall within the definition of “building goods or services”.

   18. (18)

       On the normal reading of the Court of Appeal’s reasoning, that connection must be integral to construction, and it is the normal reading of Basten JA’s reasoning and also of the relevant sections of the HB Act. The normal reading of the sections does not lend to an expansive interpretation of the definition of “residential building work” as suggested by the Appeal Panel in Syed and adopted in the Appeal Panel Decision. This is consistent with decisions such as McClellan J in Woolfe at [18].

   19. (19)

       The Court of Appeal in Lawrence Appeal then considered the particular facts and said (at [129]):

   20. (20)

       The Appeal Panel wrongly decided that the preparatory or investigatory work in this case, such as liaising with the council and obtaining information regarding the site prior to commencing construction, was the close connection referred to in Lawrence Appeal (at [128]).

   21. (21)

       In Lawrence Appeal (at [129]) Bathurst CJ (in relation to Basten JA in Grygiel) makes clear Basten JA’s comments relate to jurisdiction. Had Basten JA intended to depart from the earlier decisions on the definition of “residential building work” by the Supreme Court, his Honour would have made that point in the judgment rather than preface his comments to jurisdiction. There is no room to infer what his Honour might have meant.

   22. (22)

       The Appeal Panel in the present matter misunderstood and misapplied what was said in Lawrence Appeal and relied on Syed to come to a wrong conclusion.

   23. (23)

       There is a difference between “building goods and services” and “residential building works”. The term "building goods and services" is by necessity much wider than "residential building work" which is the type of work that needs to be carried out by the goods or services supplied.

   24. (24)

       The contention that Biggs referred to in the owner’s submissions as being against the builder is incorrect and does not assist the owner, for the following reasons:

4. [193]

   Grounds 2, 3 and 7 concern the Appeal Panel’s consideration of the statutory construction issues arising under the HB Act.

5. [194]

   The builder sought to group grounds 2, 3 and 7 on the basis that there was an overlap between these grounds because of the nexus of the term under the HB Act for “residential building work”.

6. [195]

   Excluding repetition with the builder’s submissions as to Ground 1 or repetition more generally, the builder’s submissions, in this respect, may be summarised as follows:

   1. (1)

      The interpretation placed on the definition by the Appeal Panel (adopting Syed) creates arbitrary difficulties. It is not, for example, uncommon for contracts to be entered into, but construction or work done to be delayed. An agreed damages clause, such as the one in place, would be effective if the owner terminated the contract before work could begin. The interpretation by the Appeal Panel that, in effect, if a contract is for residential building work, it is a contract that, because of that fact alone, is required to have warranty insurance, would deny the builder its right to claim damages. This would be contrary to basic contractual principles, and the HB Act does not abrogate these principles. It is not a contravention of the HB Act not to have insurance if you are not carrying out such construction work.

   2. (2)

      In Syed, the matters which the Appeal Panel considered to be preparatory work and subject to the definition of “residential building work” included the obtaining of a zoning certificate (s10.7(2) Certificate) and environmental requirements under BASIX.

   3. (3)

      The Appeal Panel erroneously followed the Appeal Panel decision of Syed, by saying that “[p]ertinently, investigative works were performed at the site in compliance with the DA for the owner's dwelling…” (Appeal Panel Decision at [80]).

   4. (4)

      Henry J in Lawrence took a different approach and looked at it from the perspective of accepting how Basten JA’s comments were interpreted in Syed and considered how necessary the actual work was involved in the overall construction rather than the connection to the actual construction. This is the approach that the Appeal Panel took in the Appeal Panel Decision. That approach results in an arbitrary distinction as to what is closely related or not to the actual construction.

   5. (5)

      Bathurst CJ’s comments in Lawrence Appeal clearly limit the concept of “residential building work” to the actual construction of a building. Neither the Appeal Panel nor the owner’s submissions in this matter address this issue, except to say that the Appeal Panel, and by extension, the decision in Syed were correct. His Honour’s comments on this point sensibly refined the question of “preparatory works” in the context of ss 92 and 94 of the HB Act to require a physical proximity to construction in order to give true expression to the consumer protection ethos of the HB Act (i.e. to protect the consumer from defective or incomplete building work, undertaken by a builder and/or its employees and contractors).

   6. (6)

      The builder submitted that the Court should adopt the approach to the construction of ss 10, 92, 92(2A) and 94 of the HB Act as summarised below.

   7. (7)

      Section 10 of the HB Act disentitles a builder from claiming damages or enforcing any remedy in respect of a breach of a contract where the builder is “in contravention of any other provision of this Act or the Regulations that is prescribed for the purposes of this paragraph”: s 10(1)(c). There is no prescription in the HB Act or Regulations in relation to that paragraph of s 10 (1).

   8. (8)

      The builder submitted that the reference to “that work” and “the work” in ss 92(1) and 92(2) clearly refers to the “residential building work” referred to in the chapeau of both sections.

   9. (9)

      Section 92 of the HB Act draws attention to a prohibition on the actual doing of construction work without insurance by noting that “A person must not do… work involved in the construction…”.

   10. (10)

       The requirement for insurance under s 92 of the HB Act is not so broad as simply saying that because the contract involves the construction of a dwelling somewhere down the line, insurance is mandatory for all stages, or all work.

   11. (11)

       Section 94 of the HB Act disentitles any claim for damages if a contract of insurance under s 92 is not in force “in relation to any…. residential building work”.

   12. (12)

       Sub-sections 92(1) and 92(2) of the HB Act specifically relate to “residential building work” requiring warranty insurance under the HB Act. It is that work which must be insured. If that work is not carried out it need not be insured and the disentitlement to any remedy does not apply because there has been no contravention of the HB Act (s 10 of the HB Act)

   13. (13)

       These provisions are specific to the concept of residential building work as defined in the schedule by reference to “construction”. Given the criminal nature of a failure to have insurance under s 92(2A) of the HB Act, the provisions should not be given any expanded and subjective interpretation of the meaning or definition without good cause. The provisions should be interpreted strictly (see also s 94(1) of the HB Act).

   14. (14)

       It can be accepted that the purpose of the HB Act is to provide protection to a recipient of services in the construction of a dwelling. Such protection in the context of litigation is to be simple and affordable to most people. The Tribunal’s procedures are to that end.

   15. (15)

       The Lawrence Appeal was an appeal from Henry J who had to decide whether certain work was “residential building work” requiring insurance under the HB Act. Her Honour, Henry J, relied on Syed and the comments of Basten JA in the Lawrence Appeal to conclude that some of the preliminary work was residential building work, and referenced both Syed and Grygiel for this conclusion. Her Honour said (Lawrence at [143]):

   16. (16)

       It was this proposition that was challenged successfully in Lawrence Appeal and led the Court of Appeal to pronounce that the term “residential building work” relates to the actual construction and not to preliminary work.

   17. (17)

       The purpose of the HB Act can still be fulfilled. The position in Syed that preconstruction work can be just as damaging, is difficult to accept in view of the fact that the damage can only occur at the time of construction. Plans may be erroneously drawn, and other investigative matters may be missed or misunderstood which could lead to compensable damage. Until then, however, no compensable damage can occur. It is this which the insurance is designed to cover.

   18. (18)

       The second reading speeches on the question of insurance point to the same conclusion, that it is the dwelling which is protected from faulty workmanship. The preliminary works are not subject to faulty workmanship.

   19. (19)

       Hansard records that in the Legislative Council of New South Wales of 19 October 2011, when introducing the amendments including insurance, the Hon Greg Pearce (Minister for Finance and Services) explained:

   20. (20)

       The emphasis of insurance in the legislation defines it as such for the protection of the homeowner for faulty workmanship, as it is that aspect of the work which causes damage which needs to be corrected. This is consistent with the earlier Supreme Court decisions of Collings, Provincial Homes, Woolfe and Lawrence Appeal that “residential building works” is limited to the actual construction phase of the building works.

   21. (21)

       The setting of formwork or digging trenches is work which can be done incorrectly and require immediate rectification. This is work that is preparatory work in construction and “may” be considered “residential building work” simply because it is part of the construction in most cases, if not all (Lawrence Appeal at [128]).

   22. (22)

       The builder’s claim, however, is a building claim because it is in the course of supply of work which will lead to the construction of a dwelling, and, upon the commencement of construction, warranty insurance will be required and is thus a supply in connection to that end.

   23. (23)

       However, accordingly in the present case, no construction work having been carried out, there was no need for warranty insurance to be taken out, and no such requirement is required to fulfil the purpose of the HB Act.

   24. (24)

       There is therefore no contravention of the HB Act to prohibit a claim for damages pursuant to section 10 of the HB Act, and neither ss 92 and 94 of the HB Act (or in combination) prevents the builder’s claim as found by the Appeal Panel at [70] - [71] of the Appeal Panel Decision.

7. [196]

   The builder’s submissions as to Ground 6 were as follows:

Consideration: the operation of ss 10, 92 and 94 of the hb act and grounds 1; 2, 3 and 7 and 6

1. [197]

   In essence, the builder contended that, on the true construction of s 92(2) of the HB Act, the Appeal Panel erred in finding that the builder was precluded from claiming damages under the contract because of the prohibition in that provision. The premise for that contention was that that the building works did not fall within the definition of “residential building work” in cl 2 of Sch 1 of the HB Act.

2. [198]

   Section 10 of the HB Act precludes, inter alia, the builder recovering any remedy, including damages, if a provision of the HB Act is breached (s 10(1)(c)). In that event, the builder “is not entitled to damages or to enforce any other remedy in respect of a breach of contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work” (s 10(1)). Thus, if there is any breach of the HB Act, namely, in this case, if there is a breach of s 92(2), the builder is so precluded from making any claim under the contract, whether or not the claimed amount is part of the contract price, or a damages claim.

3. [199]

   In Field v Dettman [2013] NSWCA 147, Preston CJ of LEC (with whom Beazley P and Meagher JA agreed) described the work done by s 92(2) of the HB Act as follows (at [43]):

4. [200]

   His Honour expanded on that description together with a discussion of the operation of s 92(1) of the HB Act as follows (at [47]):

5. [201]

   As the owner pointed out, s 92(2) of the HB Act operates so as to prevent, inter alia, a demand for “a payment under a contract for residential building work”. The provision applies whether or not work under the contract has commenced.

6. [202]

   Section 94(1) of the HB Act is expressed differently. Under that provision, if a contract of insurance required by s 92 is not in force, in the name of the person who contracted to do the work, in relation to any residential building work, under a contract, the contractor who did the work is not entitled to, inter alia, damages.

7. [203]

   Hence, s 94 of the HB Act operates only in circumstances where the contractor who actually did “residential building work” was uninsured. In that case, the contractor was not entitled to damages. In contrast, s 92(2) relates to a demand under “a contract for residential building work”, irrespective of whether work is undertaken.

8. [204]

   The expression “residential building work” is defined in cl 2(1) of Sch 1 of the HB Act. The provisions of cl 2 of Sch 1 are as follows:

9. [205]

   That definition was considered in Lawrence Appeal. Particular consideration was given to the words “involved in” in cl 2(1) of Sch 1, in the context of the particular work being undertaken in that matter.

10. [206]

    In Lawrence Appeal (at [18]), Bathurst CJ referred to the terms of an agreement described in the judgment as the “November Agreement”. The relevant aspect of that agreement for present purposes was as follows:

11. [207]

    His Honour observed that the primary judge identified the issue before her to be as follows (Lawrence Appeal at [56]):

12. [208]

    It should be noted, however, that Bathurst CJ focused on a particular aspect of the preparatory works, as did Henry J in Lawrence (see the summary of the findings of Henry J in the Lawrence Appeal in the extract of [73] below).

13. [209]

    The relevant aspects of the primary judge’s decision in that respect were summarised by his Honour as follows (Lawrence Appeal at [71] – [73]):

14. [210]

    The grounds of appeal in the Lawrence Appeal referred to the above-mentioned issues identified by the primary judge. The relevant grounds of appeal for the purposes of this matter were grounds 7 and 8. Those grounds were as follows (Lawrence Appeal at [79]):

15. [211]

    In commencing a discussion of Ground 7 (and Ground 8), Bathurst CJ referred to Grygiel as follows (Lawrence Appeal at [123] – [127]):

16. [212]

    I interpose to mention that paragraph [58] of the judgment of Basten JA in Grygiel was as follows:

17. [213]

    In the Lawrence Appeal (at [128]), Bathurst CJ drew a distinction between the definition of “building goods or services” and “residential building work”.

18. [214]

    His Honour further observed (Lawrence Appeal at [128] – [130]) as follows:

19. [215]

    It is clear from the judgment of Bathurst CJ in Lawrence Appeal, and the judgment of Basten JA in Grygiel (at [57] and [58]), that preparatory work for building and construction may constitute “residential building work” for the purposes of s 92(2) and cl 2 of Sch 1 of the HB Act, although the words “involved in” or “involvement in coordinating or supervising any work involved in” in the definition of residential building work requires a “closer connection” with the construction of the dwelling than the requirement for a claim to fall within the definition of “building goods or services”. Nothing in the Bathurst CJ’s judgment in the Lawrence Appeal necessarily requires that any preparatory work for building must necessary include physical work on a building site.

20. [216]

    In Lawrence Appeal, the “feasibility” investigations or the “looking at potential issues on site” did not have the requisite connection. However, in this case, the property was owned by the owner, and the preparatory works were directly linked to the proposed building works. The “building works” were necessary for the house to be built on the site and were directed to the achievement of that objective. As was found by both the Tribunal and the Appeal Panel, the building works were for the house the subject of the contract, and the builder was paid for those works.

21. [217]

    In this matter, in my view, there is a sufficient connection between the “building works” (being preparatory in nature) and the carrying out of the work of actually constructing the dwelling on the site.

22. [218]

    In my view, the “building works” involved residential building works for the purposes of cl 2 of Ach 1 of the HB Act. That approach is consistent with the principles enunciated in the judgment in the Lawrence Appeal, even though the facts and circumstances between the two cases are distinguishable.

23. [219]

    Even if it were to be found that obtaining the DA in the context of the building works was not residential building work, the outcome in this case would, in my view, be no different – the prohibition in s 92(2) of the HB Act nonetheless applied.

24. [220]

    That conclusion follows because, unlike s 94(1) of the HB Act, s 92(2) does not concern work, as such, being undertaken. The provisions of s 92(2) expressly eschew that the provision requires for its operation, that the building work is done.

25. [221]

    Section 92(2) of the HB Act operates when a demand is made “under a contract for residential building”. There was no dispute in this matter that the contract was for residential building work and the building works, even though preparatory in nature, were caught by the contract.

26. [222]

    Section 92(2) captures both claims for deposit “or other payment”. That latter expression is broad enough to encompass claims under the contract for either the contract price or damages.

27. [223]

    It follows that, as no insurance was taken out by the builder compliant with the HB Act, and in particular s 92(2), the builder is precluded from making demands including the builder’s claim for damages in this case.

28. [224]

    Thus, irrespective of whether “building works” were for residential building work (and I have found it was), the contract was for residential building work, and no claim related to the contract can be made, absent the requisite insurance being in place pursuant to s 92(2) of the HB Act. The consequential prohibition in s 10 of the HB Act also operates in these circumstances.

29. [225]

    None of the grounds considered under this heading can survive that conclusion and accordingly must fail.

CONCLUSION

1. [226]

   The failure of the builder to challenge the Tribunal Decision that the contract unambiguously precluded the builder from making the builder’s claim when the builder had not taken out warranty insurance in the Appeal Panel proceedings results in the Tribunal Decision in that respect being undisturbed by the Appeal Panel Decision.

2. [227]

   The present appeal does not address, and does not affect, the Tribunal Decision, in that respect. Nor, for the reasons I have given, may it have any consequence for the Appeal Panel Decision.

3. [228]

   Ground 5 does not address the observations of the Appeal Panel confirmatory of the Tribunal Decision, namely, that the contract, by its terms, precluded the builder’s claim because the builder had not taken out insurance. Paragraph [60] of the Appeal Panel Decision recognised (and agrees with) the Tribunal Decision in that respect, but it is not dispositive of that question, as the Appeal Panel was not required to deal with that question (the Appeal Panel Decision concerned other grounds of appeal).

4. [229]

   This is a compelling reason to refuse leave with respect to Ground 5. In any event, I have observed that the Tribunal Decision (as reflected in paras [40] and [60] of the Appeal Panel Decision) is correct. That conclusion may be sustained by the operation of cl 3.1 and 38.2 of the contract alone. However, in view of my rejection of Ground 4, the Notations (at least as to cl 2(a) of Sch 1 and Sch 6 of the contract) operated not only to buttress the conclusion deriving from cl 3.1 and 38.2 (on the basis that the contract must be read as a whole in ascertaining it true legal effect) but independently operated so as to preclude the builder’s claim.

5. [230]

   The balance of the grounds of appeal concerning whether the HB Act precluded the builder’s claim are effectively rendered nugatory in that context because the prohibition in the builder’s claim would operate irrespective of the operation of the HB Act.

6. [231]

   Nonetheless, I have given consideration, albeit compendiously, to the various grounds of appeal concerning the HB Act in so far as they concerned the interpretation of the words “residential building works” in ss 92(2), 94(1)(a), and cl 2 of Sch 1 of the HB Act. The builder made lengthy and often repetitive submissions challenging the Appeal Panel Decision so far as it concerned the construction of the HB Act and, more particularly, the construction of ss 10, 92 and 94 of the HB Act. Those submissions travel across grounds 1, 2, 3, 6 and 7. My analysis of them was dealt with as a group because the premise of the grounds was that the appeal panel had erred in its construction of s 92(2) of the HB Act and the definition of “residential building work” in cl 2 of Sch 1 of the HB Act. The Court has rejected those contentions.

7. [232]

   As earlier mentioned, to the extent that any relief was sought under s 69 of the Supreme Court Act, it was coextensive with the grounds of appeal and the issues of construction of the contract and the HB Act. In so far as in any reliance was placed on that cause of action by the builder, on that basis, it must also fail.

8. [233]

   It is unnecessary to consider Ground 8 which concerned the question of costs given the conclusion I have reached in this judgment.

9. [234]

   I have paused to consider whether in these circumstances the Court should simply refuse leave to bring the appeal. However, in the course of reasoning the Court has traversed the operation of the contract and the construction of ss 10, 92(2), 94(1) and cl 2 of Sch 1 of the HB Act. In those circumstances, the preferable course is to refuse leave as to Ground 5 and otherwise dismiss the appeal.

10. [235]

    Costs should follow the event. Accordingly, I shall award costs on an ordinary basis to the owner.

ORDERS

1. [236]

   The Court makes the following orders:

   1. (1)

      Leave to bring Ground 5 of the appeal is refused.

   2. (2)

      The appeal is otherwise dismissed.

   3. (3)

      In so far as judicial review was sought, the application is dismissed.

   4. (4)

      Champion Homes Sales Pty Ltd shall pay the costs of the appeal of Evonne Voulgaris as agreed or in default as assessed.