Dyjecinska v Step-Up Renovations (NSW) Pty Ltd

[2024] NSWSC 159

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Dyjecinska v Step-Up Renovations (NSW) Pty Ltd [2024] NSWSC 159

Hearing dates:

3 July 2023

Date of orders:

26 February 2024

Decision date:

26 February 2024

Jurisdiction:

Common Law

Before:

Harrison AsJ

Decision:

1. The plaintiff’s application for leave is refused.

2. The appeal is dismissed.

3. The decision of the Appeal Panel dated 8 March 2023 is affirmed.

4. The summons filed 8 March 2023 is dismissed.

5. The plaintiff is to pay the defendant’s costs.

Catchwords:

APPEAL - statutory interpretation – signature requirement – building contracts – legislative amendments – legislative intention – secondary reading speech

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW) ss 57 and 83

Home Building Act 1989 (NSW) s 7, 7A, 7B, 10 and Schedule 2

Interpretation Act 1987 (NSW)

Statute Law (Miscellaneous Provision) Act (No 2) 2001 (NSW)

Cases Cited:

Be Financial Operations Trust Pty Ltd v Das [2012] NSWCA 164

Dyjecinska v Step-Up Renovations (NSW) Pty Ltd Step-Up Renovations (NSW) Pty Ltd v Dyjesinska [2023] NSWCATAP 36

Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd [2021] NSWDC 507

Gan v Shop 3, 228-230 Hanvaylee Parade Kensington Pty Ltd [2017] NSWSC 1322

Hayward v Timilty [2009] NSWDC 54

Lym International Pty Ltd v Marcolongo [2011] NSWCA 303

Owners of Strata Plan No 73943 v Gazebo Penthouse Pty Ltd (2014) 17 BPR 33,621; [2014] NSWSC 1536

Paraiso v CBS Build Pty Ltd [2020] NSWSC 190

Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221

Pettigrew v Gateway Fence Installations Pty Ltd [2016] NSWCATAP

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; 155 ALR 490

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52

Vujica v TNM Roofing Pty Ltd [2022] NSWCATAP 305

Wilton v Farnworth (1948) 76 CLR 646

Category:

Principal judgment

Parties:

Isabela Zofia Dyjecinska (Plaintiff)
Step-Up Renovations (NSW) Pty Ltd (First Defendant)

Representation:

Counsel:
M Sheldon with W Marshall (Plaintiff)
F Hicks SC with B Lloyd (Defendant)

Solicitors:
Lazarus Legal (Plaintiff)
Brander Smith McKnight Lawyers (Defendant)

File Number(s):

2023/00077459

Judgment

1. This appeal from NCAT turns on a question of the proper statutory construction of sections 7 and 10 of the Home Building Act 1989 (NSW) (‘Home Building Act’).

2. The plaintiff is Isabela Zofia Dyjecinska. The defendant is Step-Up Renovations (NSW) Pty Ltd. For ease of reference, I shall refer to the plaintiff as the homeowner and the defendant as the builder throughout this judgment. The homeowner was represented by M Seldon SC and W Marshall of counsel. The builder was represented by F Hicks SC and B Lloyd of counsel. The parties rely on a Court Book separated into 5 Volumes variously marked Ex A1, A2, A3, A4 and A5.

Background

3. The homeowner is the registered proprietor of a property at XXX Street, Forest Lodge, (‘the property’) on which a 2-storey terrace house is constructed. [1]

   1. First Dyjecinska Statement [1]; Exhibit BNL-1 p 1224.

4. In late 2020, the homeowner retained the builder to carry out renovation works on the terrace house on the property (‘the works’).

5. The homeowner and the builder negotiated a written residential building contract for the works in the amount $145,120, plus GST (‘the contract’). [2] On 23 December 2020, the builder provided the homeowner with a final form of the agreed document representing the contract. [3] It is common ground that the parties did not sign nor date the contract. [4]

   2. NCAT Decision [7], [122].

   3. First Abel Exhibit, pp 394-414.

   4. NCAT Decision [18].

6. In the proceedings before the Senior Member Goldstein (‘the Senior Tribunal member’) at the New South Wales Civil and Administrative Tribunal (‘NCAT’), the builder gave unchallenged evidence that to carry out the works, the property needed to be accessed through a primary school, which could only be done during the summer holiday period of 6 weeks commencing in mid-December 2020. [5] As the tender process extended into December 2020, the builder issued about seven written tenders to accommodate the homeowner’s changing requirements, [6] and the need to commence the works became urgent. Because of this urgency, the builder commenced the works on 28 December 2020 at the request or acquiescence of the homeowner. The builder asked the homeowner to provide him with the signed contract around five times, without success. [7]

   5. Abel 17 11 2021 [10]-[15]; Exhibit BNL-1 pp 2218-9.

   6. NCAT Transcript T71.3487-3496; Exhibit BNL-1 p 724; Abel 17 11 2021 [13]; Exhibit BNL-1 pp 2218.

   7. Abel 17 11 2021 [8]; Exhibit BNL-1 pp 2218.

7. On 22 February 2021, the homeowner suspended the works. [8] After this date, the homeowner did not allow the builder to return to the property to complete the works, [9] and refused to pay the builder’s invoices. [10]

   8. NCAT Decision [52].

   9. NCAT Decision [53], [62], [77], [80].

   10. NCAT Decision [30].

8. On 6 July 2021 the homeowner wrote to the builder and accused it of failing to rectify defects identified by the Principal Certifying Authority after the builder had been banned from the property. [11] In response, the builder wrote to the homeowner on 12 August 2021 and requested access to the property to rectify the defects in the works. [12]

   11. NCAT Decision [37].

   12. NCAT Decision [46].

9. The homeowner did not respond. [13] Instead, on 16 August 2021 the homeowner purported to terminate the contract on the basis that the builder had failed to rectify the defects. [14] A month later, on 16 September 2021, the builder accepted the homeowner’s repudiation (being the homeowner’s purported termination of the contract on 16 August 2021) and terminated the contract. [15]

   13. NCAT Decision [47].

   14. NCAT Decision [38].

   15. NCAT Decision [40].

The undisputed facts

10. It is common ground between the parties that there was a contract between the homeowner and the builder, and that the obligations of the parties to the contract were recorded in writing. [16] It is also accepted that there was a sufficient description of the works that were to be performed under that contract and the contract was not signed by, or on behalf of, either party to the contract [17] and it was undated. [18]

    16. Step Up Renovations (NSW) Pty Ltd v Dyjecinska [2022] NSWCATCD at [37]

    17. Appeal Panel decision at [2]

    18. Step Up Renovations (NSW) Pty Ltd v Dyjecinska [2022] NSWCATCD at [14]

11. The builder, who held a contractor licence at the relevant time, never gave to the homeowner a signed copy of the contract in the form in which it was made. It was argued at NCAT that the lack of a signed copy of the written contract in the form that it was made constituted a breach of section 7B of the Act, as there was never a signed contract.

Application before the Tribunal Member

12. The applications lodged in NCAT comprised claims by both the builder [19] and the homeowner. [20] The builder’s claim was to recover the invoiced costs of the works it had carried out before it was denied access to the property. In other words, it sought be paid for the work it had carried out on a quantum meruit basis.

    19. NCAT Proceedings HB 21/13199 commenced 23 March 2021.

    20. NCAT Proceedings HB 21/20544 commenced 11 May 2021.

The Senior Tribunal’s decision dated 11 February 2022

13. In the decision dated 11 February 2022, the Senior Tribunal Member resolved the proceedings largely in the builder’s favour, determining [122]:

“The owner entered into a contract with the builder as admitted by her legal advisers in Points of Defence and Amended Points of Defence. The evidence strongly suggests that she refused to sign the contract. She failed to pay the builder for the work it carried out. She then ordered a stop work and a suspension of work when she had no entitlement under the contract to do so and when she was in breach of contract in doing so. The effect of her breach of contract was to prevent the builder from completing the works and in doing so attending to the defective work that she had referred to in her expert’s report and in her solicitor’s letter of 6 July 2021. Despite being asked by the builder for access to the site after receiving a letter threatening termination of the contract, she chose not to respond. She then repudiated the contract by having her solicitor improperly terminate it. In these proceedings she argued that the builder was not entitled to claim under the contract to be paid for the work that it had carried out, relying on arguments that in my view are best described as barely tenable. She has sought to obtain orders that would have the builder lose any entitlement to be paid and see her receive a financially positive outcome [emphasis added].”

14. On 1 March 2022, the homeowner appealed the Tribunal member’s decision on the basis that s 10(1) of the Home Building Act rendered the unsigned and undated contract unenforceable by the builder.

15. On 8 February 2023, the Appeal Panel gave its reasons for decision. The two Appeal Panel members, Principal Member Thode (‘the Principal Tribunal Member’) and Senior Member Molony (‘the Senior member’) reached different conclusions in relation to whether pursuant to s 10(1) of the Home Building Act, the unsigned and undated contract rendered the contract unenforceable by the builder. As the presiding member, the decision of the Principal Member prevailed. [21] The Principal Member rejected the home owner’s ground of appeal.

    21. Appeal Panel Decision [211].

The decision of the Appeal Panel dated 8 March 2023

16. The Appeal Panel determined that the contract was enforceable by the builder, despite being unsigned and undated. Hence, the homeowner was ordered to pay the builder the total sum of $105,517.09, being the total of two invoices that the builder relied upon as due in accordance with the terms of the contract. [22]

    22. Appeal Panel decision at [4]

17. So far as the builder’s claim for payment was based on a quantum meruit basis, the Appeal Panel determined that the builder did not adduce evidence to support the value claimed and adduced no evidence that would support a claim for payment on this basis. [23] The builder’s case relied on demonstrating a contractual entitlement to payment independent of the fair value of the work performed.

    23. Appeal Panel decision at [5].

18. In dissent, the Senior Member stated that:

1. Because the contract was a contract to which the requirements of s 7 of the Home Building Act applies, and the contract was not in writing as it was not signed or dated, then section 10(1)(b) of the Act operates to provide that the builder is ‘not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract; [24]

2. The wording of section 10(1)(b) itself makes it clear that for a contract to be ‘in writing’ for the purposes of s 10(b), it must be signed. That sub-section applies to “a person who contracts to do residential building work under a contract to which the requirements of section 7 apply that is not in writing.” A contract in writing to which s 7 applies is one that complies with s 7(1), namely a written contract that is signed and dated, both of which require writing and, on the ordinary understanding of the work, form part of the ‘writing’ that constitutes a contract in writing;”[25]

3. This construction of s 10 is consistent with the legislative scheme created by the Home Building Act, as noted by the NCAT Appeal Panel in Vijuca v TNM Roofing Pty Ltd [2022] NSWCATAP 305 (‘Vijuca’), [26] which is, at its heart, a consumer protection statute; [27]

4. It is improbable that Parliament intended to establish a regime under which a contract to do residential building work that is not signed, is enforceable by a builder, while a variation of such contract, which forms part of the contract, must be signed to be enforceable. The Home Building Act should be interpreted to avoid such an anomaly. [28]

   24. Appeal Panel decision at [169].

   25. Appeal Panel decision at [191].

   26. Appeal Panel decision at [193].

   27. Appeal Panel decision at [199].

   28. Appeal Panel decision at [199]

19. The homeowner submitted that the decision of the Senior Member was correct, that leave to appeal should be granted, that the decision of the Appeal Panel should be set aside and that the orders set out in the homeowner’s summons should be made by this Court.

The summons

20. By summons filed 8 March 2023, the homeowner seeks leave to appeal from the decision of the Appeal Panel made on 8 February 2023, in the matter of Dyjecinska v Step-Up Renovations (NSW) Pty Ltd; Step-Up Renovations (NSW) Pty Ltd v Dyjecinska [2023] NSWCATAP 36 (‘Appeal Panel decision’).­ The grounds of appeal set out in the summons are as follows:

1. This is an appeal brought pursuant to s 83(1) of the Civil and AdministrativeTribunal Act 2013 (NSW) (CAT Act).

2.    The plaintiff appeals from orders 1, 3, 4, 6, 7, 8, 9, 10 and 11 of the decision below, being a decision in an internal appeal to the Appeal Panel of the Civil and Administrative Tribunal (Appeal Panel) dated 8 February 2023.

3. Order 4 of the decision below is the part of the decision that ordered the plaintiff to pay the defendant the sum of $102,187.30 immediately. The Order was based on a finding that there was a residential construction contract that bound the plaintiff and the defendant, and that was enforceable by the defendant, notwithstanding that the document which the defendant asserted constituted the residential building contract was not signed by the parties and was undated. Further, no contract was given to the plaintiff in contravention of section 7B of the Home Building Act 1989 (NSW).

4.   Order 6 is the part of the decision below that made orders that each party pay its own costs of both appeals.

5.   Orders 7, 8, 9, 10 and 11 were orders made regarding the service of submissions with respect to costs of both appeals.

6. Pursuant to s 83(1) of the CAT Act, a party to an internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings.

7.   The plaintiff should be granted leave to appeal because:

a. the question of law raised in this Summons gives rise to an important issues of statutory construction of commonly applied sections of the Home Building Act;

b.   the question raised is of broad commercial significance to home owners and builders of residential building work in the State of New South Wales;

c. so far as the plaintiff is aware, the proper application of Section 7(1) of the Home Building Act, and its intersection with Section 10 of that Act, has not been definitively decided by this Court, and that is part of the reason that there was a divergence in approach by the two learned Members below;

21. The orders sought in the summons are as follows:

1.    Leave to appeal from Orders 1, 3, 4, 6, 7, 8, 9, 10 and 11 of the decision below.

2.   Appeal allowed.

3.   Orders 1,3,4, 6, 7, 8, 9, 10 and 11 of the decision below be set aside.

4.   The defendant to pay the plaintiff the sum of $7,241

5.   The defendant to pay the costs of proceedings HB 21/13199 and HB 21/20544, and AP 2022/00059238 and AP 2022/00070996.

6.   The defendant to pay the costs of this appeal.

7.   Such further or other order as the Court thinks fit.

22. The homeowner seeks that orders 4 and 6 of the decision be set aside and that instead the builder be ordered to pay the homeowner the sum of $7,241 plus interest and costs (both of the proceedings below and of the proceedings in this Court). Orders 4 and 6 of the decision read:

4. Izabela Dyjecinska must pay Step Up Renovations (NSW) Pty Ltd the sum of $102,187.30 immediately.

…. 

6. Each party is to pay its own costs of both appeals.

The issue of leave to appeal

23. The first issue to be decided is whether the homeowner should be granted leave to appeal.

24. Section 83 of the Civil and Administrative Tribunal Act 2013 (NSW) reads:

83   Appeals against appealable decisions

(1)  A party to an external or internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings.

…

(3)  The court hearing the appeal may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) the following—

(a)  an order affirming, varying or setting aside the decision of the Tribunal,

(b)  an order remitting the case to be heard and decided again by the Tribunal (either with or without the hearing of further evidence) in accordance with the directions of the court.

…

The law

25. In BHP Billiton Ltd v Dunning [2013] NSWCA 421 (‘Dunning’), the Court of Appeal set out the following principles with respect to a grant to leave to appeal:

Principles relevant to leave applications

[19] In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary judge was arguably wrong in the conclusion arrived at: Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69 per Sheller JA; Zelden v Sewell [2011] NSWCA 56 at [22] per Campbell JA (Young JA agreeing).

[20] Ordinarily it is appropriate to grant leave to appeal only in matters that involve issues of principle, questions of public importance or an injustice which is reasonably clear, in the sense of going beyond merely what is arguable: Carolan per Kirby P; Jaycar Pty Ltd v Lombardo [2011] NSWCA 284, Campbell JA (Young and Meagher JJA agreeing) at [46]. See also Lee v New South Wales Crime Commission [2012] NSWCA 276 per Bathurst CJ (Macfarlan and Barrett JJA agreeing).

26. The homeowner requires leave to bring her appeal,[29] and bears the burden of establishing a basis for a grant of leave: See Be Financial Operations Trust Pty Ltd v Das [2012] NSWCA 164 (‘Be Financial’). [30]

    29. Civil and Administrative Tribunal Act 2013 (NSW) s 83(1).

    30. [2012] NSWCA 164 at [32]-[39] per Basten JA (Tobias AJA agreeing); Gan v Shop 3, 228-230 Hanvaylee Parade Kensington Pty Ltd [2017] NSWSC 1322 at [30] per Walton J.

27. With reference to the principles in Be Financial, the following factors are relevant to whether the homeowner should be granted leave to appeal:

1. an applicant for leave must demonstrate that the appeal raises issues of principle, questions of public importance or something more than the decision maker was arguably wrong in the conclusion arrived at;

2. where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute;

3. the degree of injustice that would be suffered by the respective parties as a consequence of an order allowing or refusing leave.

The homeowner’s submissions

28. In short, the homeowner submitted that the Appeal Panel erred in making order 4, because the Order was based on a finding by the Principal Member that there was a residential construction contract in place between the parties that bound the homeowner and the builder, and was enforceable by the builder, notwithstanding that the relevant document was not signed by either party and was undated, in breach of s 7(1) of the Home Building Act. Further, no signed contract was given to the homeowner, in contravention of s 7B of the Home Building Act.

29. If the Court accepts that the Appeal Panel erred in finding that the contract was enforceable by the builder, despite having never been signed by either party, being undated, and despite the builder also breaching section 7B of the Home Building Act, then Order 4 made by the Appeal Panel must be set aside.

30. Order 4 is that the homeowner pay the builder the sum of $102,187.30. This is the sum asserted by the builder to be due to it under the contract, less variations rejected by the Member at first instance and less a deduction made by the Appeal Panel with respect to the builder’s failure to install a termite barrier. [31]

    31. Appeal Panel at [123]

28. If the contract is unenforceable by the builder, there is no basis to find that the sum of $102,187.30, or any sum at all, is payable by the homeowner to the builder. The consequence that follows from that order, is that the resulting orders on costs similarly fall away. Those were orders 6 to 11 made by the Appeal Panel. Further, if the contract is unenforceable by the builder, it remains valid and enforceable by the homeowner and on that basis, the Court should find that the builder is liable for the costs of rectification of defects in the works, in the sum of $7,241. [32]

    32. As found by Senior Member Moloney, in Appeal Panel decision at [209]

29. Finally, the homeowner submitted that if the Court finds that the contract was enforceable by the builder, despite the fact that it was not signed by either party and was undated (in breach of section 7(1) of the Home Building Act), and despite the breach of section 7B of the Home Building Act, that the orders of the NCAT Appeal Panel should not be disturbed.

30. In Be Financial, in one of the most important paragraphs ([33]), the Court of Appeal reiterated that “ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance …”.

31. There is a significant matter of principle and of general public importance, namely in what circumstances will a claim for breach of contract be unenforceable by a builder. As illustrated by the Appeal Panel’s split decision, the issue is far from settled and industry participants will benefit from binding clarification by this Court.

32. The homeowner advances seven separate bases in support of her application for leave to appeal. [33] They are:

    33. Summons [7(a)]-[7(g)].

1. The question of law raised in this summons gives rise to an important issue of statutory construction of commonly applied sections of the Home Building Act;

2. The question raised is of broad commercial significance to homeowners and builders of residential building work in the State of New South Wales;

3. So far as the plaintiff is aware, the proper application of section 7(1) of the Home Building Act, and its intersection with section 10 of that Act, has not been definitively decided by this Court, and that is part of the reason that there was a divergence in approach by the Tribunal Members below;

4. The application of section 7(1) of the Home Building Act, and its intersection with section 10 of that Act, has been considered by the District Court of NSW twice in obiter, and the judicial comments on the issue are inconsistent;

5. There is a strongly arguable case of error, for reasons given below, including that the members of the Appeal Panel reached different conclusions;

6. The resolution of the proposed appeal would require no consideration of matters of disputed fact; and

7. The financial impact of the resolution of the appeal to the parties is significant, and if the plaintiff is unsuccessful, she will be required to sell her home and will be rendered bankrupt.

36. The homeowner submitted that the summons raises the following questions of law:

37. First, whether a written, but unsigned and undated document, that is accepted other than by written signature on the document, constitutes a “contract in writing” for the purposes of section 10(1)(b) of the Home Building Act.

38. Secondly, whether a contract which is undated, unsigned and not given to the homeowner (s 7B) is unenforceable by reason of section 10(1)(c) of the Home Building Act.

39. As to the first question, the plaintiff says that a document which is unsigned and undated is not a “contract in writing”, and that a contract which is partly in writing and partly oral or by conduct is unenforceable by reason of section 10 of the Home Building Act.

40. As to the second question, the plaintiff says that a document which is unsigned, undated and not given to the homeowner contravenes the Home Building Act and is therefore not enforceable by reason of section 10 of the Home Building Act.

The builder’s submissions

41. The builder submitted the homeowner should not be granted leave to appeal for the following reasons:

Taken at its highest, the homeowner’s case is simply that the decisions of the NCAT and the Appeal Panel are arguably wrong. The homeowner’s written submissions are notable for their lack of analysis of the Appeal Panel decision, and do not attempt to explain how the Principal Member erred in her well-reasoned and comprehensive judgment, other than to reject its conclusion;

The amount of the Appeal Panel decision, being the cost of the works carried out by the builder, is relatively modest and has surely been subsumed by the legal costs incurred by both parties both at first instance, on appeal, and now on further appeal. In considering this issue, it is relevant to note that the homeowner has never paid the builder any amount for the works carried out, instead preferring to fund this litigation;

The builder will suffer substantial injustice if the appeal is allowed. The Tribunal found that the subject of this appeal – the unsigned and undated contract – was likely engineered by the homeowner, who went on to breach, and later repudiate the contract in an attempt to avoid her obligation to pay for the work she had received. The homeowner has since relied upon “barely tenable” arguments to avoid paying for the works, while the builder has yet to receive any payment despite two judgments in its favour. The homeowner now seeks to appeal on a technicality – the purposely unsigned contract – in a further attempt to avoid paying for the work she continues to enjoy the benefits of. In circumstances where the homeowner does not challenge the quantum of the Appeal Panel Decision, such that she is taken to accept the value of the work, there can be no injustice to the homeowner if the appeal is not allowed.

42. The builder further submitted that the homeowner is seeking to avoid paying for her home renovations on the basis that her contract with the builder was not signed or dated. The homeowner pursues this course notwithstanding findings made by the NCAT at first instance, and undisturbed by the Appeal Panel that:

1. the evidence strongly suggested that homeowner refused to sign the contract;

2. the homeowner engineered the dispute with the builder;

3. the homeowner prevented the builder from returning to site to complete the work or rectify defects; and

4. the homeowner repudiated the contract by purporting to terminate on the basis that the builder had failed to complete the work expediently. [34]

   34. NCAT Decision dated 11 February 2022 [122].

43. The homeowner was ordered to pay the builder for the invoiced costs of the works performed following the proceedings in the NCAT and the Appeal Panel decision, [35] but to date has not paid any amount to the builder.

    35. Adjusted for the cost of rectifying a number of defects.

44. Submissions are made in relation to what is described as the “primary basis”, comprising the first four (4) bases in the summons, (set out earlier in this judgment), which is that the appeal involves an issue of principle, namely the statutory construction of an “important section” of the Home Building Act. Central to the homeowner’s argument is the asserted inconsistent decisions of the District Court and the Appeal Panel. [36]

    36. Homeowner’s Appeal Submissions [13]-[18].

45. However, as was noted by the Principal Member in the Appeal Panel decision, the District Court and NCAT Appeal Panels ostensibly supporting the homeowner’s construction of s 10(1)(b) are distinguishable, [37] such that the judgment in Hayward v Timilty [2009] NSWDC 54 (‘Hayward’) and the Appeal Panel decision provide uniform guidance as to whether breaches of s 7 not referred to in s 10(1) prohibit a builder from enforcing a contract.

    37. Appeal Panel decision at [47], [52]-[59].

46. As to the remaining bases relied upon by the homeowner in support of the application for leave:

1. Differing conclusions by the members of the appeal panel in the Appeal Panel decision does not, of itself, amount to a “strongly arguable case for error”;

2. Whether the appeal would need to consider matters of disputed fact is not a relevant consideration for the grant of leave;

3. There is no evidence to support the homeowner’s contention that “the financial impact of the resolution of the appeal to the parties is significant, and if the homeowner is unsuccessful, she will be required to sell her home and will be rendered bankrupt”. Even if there was evidence, the facts of this case strongly suggest the homeowner is the architect of her own misfortune, such that this would not be a compelling ground for seeking leave.

Resolution

47. The central point on this appeal is whether a written, but unsigned and undated document, that is accepted other than by written signature on the document, constitutes a “contract in writing” for the purposes of section 10(1)(b) of the Home Building Act and whether a contract which is undated, unsigned and not given to the homeowner (as required by section 7B) is unenforceable by reason of section 10(1)(c) of the Home Building Act.

48. The issue of the proper statutory construction of s 10 of the Home Building Act has been considered, in obiter, twice by the District Court of NSW,[38] and twice by an NCAT Appeal Panel. [39] The two District Court decisions adopt inconsistent approaches, as do the two NCAT Appeal Panels. However, it is important to appreciate that each case depends on its facts. The facts in these cases are distinguishable.

    38. Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd [2021] NSWDC 507 and Hayward v Timilty [2009] NSWDC 54.

    39. Vujica v TNM Roofing Pty Ltd [2022] NSWCATAP 305 (‘Vujica’) and the Appeal Panel decision.

49. I acknowledge that there appears to be no decisions of a superior court in NSW with respect to the consequence of a residential building contract under the currently formulated version of the Home Building Act not being signed and dated by the parties and, specifically, if the consequence of this failure is to render the contract unenforceable by the builder, by operation of s 10(1) of the Home Building Act. However, because the plaintiff homeowner:

50. The builder further submitted that the homeowner is seeking to avoid paying for her home renovations on the basis that her contract with the builder was not signed or dated. The homeowner pursues this course notwithstanding findings made by the NCAT at first instance, and undisturbed by the Appeal Panel that the evidence strongly suggested that homeowner refused to sign the contract, the homeowner engineered the dispute with the builder, the homeowner prevented the builder from returning to site to complete the work or rectify defects; and the homeowner repudiated the contract by purporting to terminate on the basis that the builder had failed to complete the work expediently. [40]

    40. NCAT Decision dated 11 February 2022 [122].

51. A persuasive reason for refusing to grant leave to appeal is that even if my interpretation of s 10(1) of the Home Building Act is wrong, the homeowner agrees that the builder is entitled to payment. On a quantum meruit basis, the Tribunal Member made a factual finding that the builder was entitled to be paid the sum of $107,662.50 in debt based on the total of outstanding invoices for progress payment sums of $63,800 + $43,862.50.

52. I do not accept that there is a ‘strongly arguable case of error’ in the Appeal Panel’s decision merely because the Principal Member and the Senior Member came to different conclusions. Leave to appeal on ground (5) is refused. Nonetheless, I discuss my preference of the Principal Member’s decision later in this judgment. Appeal Grounds (6) and (7), appealing on a question of law of public importance, do not fall into any of the categories set out in Dunning or Be Financial to support the granting of leave to appeal. Appeal Grounds (6) and (7) are refused.

53. Even though I have refused to grant leave to appeal to the homeowner, in the event that I am wrong, I will consider the main issue in dispute to be whether the contract did not satisfy the requirements of section 7(1) of the Home Building Act and that as a consequence of this is the contract is unenforceable by the builder, by operation of section 10(1).

The law

54. Sections 7 and 10 both fall within Division 1 that is headed ‘Contracting for work’ and Part 2 is headed ‘Regulation of residential building work and specialist work’. They read:

7   Form of contracts (other than small jobs)

(1A) This section applies to a contract only if the contract price exceeds the prescribed amount or (if the contract price is not known) the reasonable market cost of the labour and materials involved exceeds the prescribed amount. The prescribed amount is the amount prescribed by the regulations for the purposes of this section and is inclusive of GST.

(1)  A contract must be in writing and be dated and signed by or on behalf of each of the parties to it.

(2)  A contract must contain—

(a)  the names of the parties, including the name of the holder of the contractor licence shown on the contractor licence, and

(b)  the number of the contractor licence, and

(c)  a sufficient description of the work to which the contract relates, and

(d)  any plans and specifications for the work, and

(e)  the contract price if known, and

(f)  any statutory warranties applicable to the work, and

(f1) the cost of cover under Part 6 or 6B (if insurance is required under Part 6), and

(g) in the case of a contract to do residential building work—a conspicuous statement setting out the cooling-off period that applies to the contract because of section 7BA, and

(h)  in the case of a contract to do residential building work (other than a construction contract to which the Building and Construction Industry Security of Payment Act 1999 applies)—details of any progress payments payable under the contract, and

(i)  in the case of a contract to do residential building work—a statement that the contract may be terminated in the circumstances provided by the general law and that this does not prevent the parties agreeing to additional circumstances in which the contract may be terminated, and

(j)  any other matter prescribed by the regulations for inclusion in the contract.

(3)  The contract must comply with any requirements of the regulations.

(4)  If the contract price is known, it must be stated in a prominent position on the first page of the contract.

(5)  If the contract price is not known or may be varied under the contract, the contract must contain a warning to that effect and an explanation of the effect of the provision allowing variation of the price. The warning and explanation must be placed next to the price if the price is known.

(6)  A contract must not include in the contract the name of any person other than the holder of a contractor licence as, or so it may reasonably be mistaken to be, the holder’s name.

(7)  This section does not prevent the holder of a contractor licence with a business name registered under the Business Names Registration Act 2011 of the Commonwealth from also referring in such a contract to the business name.

(8)  This section does not apply to—

(a)  a contract that is made between parties who each hold a contractor licence and is for work that each party’s contractor licence authorises the party to contract to do, or

(b)  a contract to do specialist work that is not also residential building work.

…

10   Enforceability of contracts and other rights

(1)  A person who contracts to do any residential building work, or any specialist work, and who so contracts—

(a)  in contravention of section 4 (Unlicensed contracting), or

(b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6(2)), or

(c)  in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph,

is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person.

(2), (3) (Repealed)

(4)  This section does not affect the liability of the person for an offence against a provision of or made under this or any other Act.

The homeowner’s submissions

The overriding purpose of the Act

55. The Act is intended to perform a consumer protection purpose. That much was accepted by both the Principal Member [41] and Senior Member Moloney. [42]

    41. Appeal Panel decision at [67]

    42. Appeal Panel decision at [199]

56. The Appeal Panel also identified, the importance of legislative purpose as an aid to statutory interpretation. The Principal Member referred, at [36], to the well settled principle of statutory interpretation set out by the plurality in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; 153 ALR 490 at [69]:

“The primary objective of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all of the provisions of the statute. The meaning of the provisions must be determined ‘by reference to the language of the instrument viewed as a whole.’ In Commissioner v Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning that the logic with which it is constructed.” Thus, the process of construction must always begin by examining the context of the provision that is being constructed.”

57. The Home Building Act achieves its consumer protection purpose by requiring the contract to be in writing, and signed and dated by both parties. [43] It requires the works to be described in sufficient detail. [44] And it requires variations to the works to be also evidenced in writing and signed by both parties, to be enforceable. [45] It also requires a holder of a contractor licence to give the other party to the contract a signed copy of the contract in the form in which it was made. [46]

    43. Home Building Act 1989 (NSW) s 7(1)

    44. Home Building Act 1989 (NSW) s 7(2)(c)

    45. Home Building Act 1989 (NSW), Schedule 2, Part 1, s 1

    46. Home Building Act 1989 (NSW) s 7B

58. Section 10 renders contracts that are not in writing and that do not contain a sufficient description of the works unenforceable by the builder. This is consistent with the consumer protection purpose of the Act, and the fact that it is the builder who should be aware of the requirements of the Act (and on whom the Act places the obligations) and who could, and should, refuse to perform any works or take any other steps under the contract, until the parties have signed and dated the contract.

59. Similarly, no change can be made to the plans or specifications unless such are in writing signed by or on behalf of each party. While the Act is silent on the consequence of a putative variation that is not in writing and signed by the parties, this Court has found that such a variation is not binding, does not serve to vary the plans and specifications, and the builder has no contractual right to payment of any works performed in reliance on such a putative variation. [47]

    47. Paraiso v CBS Build Pty Ltd [2020] NSWSC 190.

60. The issue of the requirement for variations to be in writing and signed by the parties, and the intersection between this issue and section 10 of the Act, was considered by an NCAT Appeal Panel in Vijuca. In that decision, the Appeal Panel noted, at [79]:

“…it would be a curious result if, as required by cl 1(2) of Sch 2, that “[a]ny agreement to vary (a contract to which s 7 applies) or to vary the plans and specifications for work to be done under the contract, must be in writing signed by or on behalf of each party to this contract” but the original contract did not have to meet this [sic] requirements. Rather, applying the principles in Project Blue Sky, the language in s 10 and the requirements for writing should be construed in a manner ‘consistent with the language and purpose of all of the provisions of the statute…[and] by reference to the language of the instrument viewed as a whole’.”

61. Similarly, the Tribunal Member noted that “it would be both confusing and anomalous were the Home Building Act to provide those variations to a contract, which contract can be enforced when unsigned, are ‘taken to form part of this contract,’ but must be signed to be enforceable. This inconsistency is patent. The potential for confusion and uncertainty is significant.” [48]

    48. Appeal Panel decision at [198]

Consideration

62. The homeowner’s submissions asserted that the Home Building Act is “at its heart a consumer protection statute” (T11.5-10). Oddly, while there is as an “objects” section the commencement of the Home Building Act, it makes no reference that identifies consumer protection as being within the objects of the statute, for which the legislature is presumed to intend (T41.25-30).

63. However, Senior Member Molony stated at [199] in his decision in the Appeal Panel:

“The HB Act is, at its heart, a consumer protection statute which seeks to protect consumers by, among other things, regulating residential building work in terms of who may undertake such works; the contractual requirements relating to residential building works; providing for statutory warranties relating to such works; the discipline of licence holders; and, by providing a dispute resolution mechanism. As such, it should be interpreted beneficially for consumers and any ambiguity resolved with that object in mind: see Hall and Macken, Statutory Interpretation: Principles and Context 2021, Lexis Nexis at 6.13 to 6.13 and Pearce and Geddes, Statutory Interpretation in Australia (9^th Ed), Lexis Nexis at 9.6.”

…

64. On a proper construction, I agree with the Senior Member that the Home Building Act is a consumer protection statute and should be interpreted as such. Even upon such a finding, the Principal Member stated at [61] of the Appeal Panel decision:

“[61] In this case the Tribunal accepted the HB Act is consumer protective legislation and should be interpreted as such. The findings made by the Tribunal do not undermine or impugn the effect of the protective elements of s 7, nor are the written reasons inconsistent with the approach taken by the Appeal Panel in Vujica. The decision currently under appeal preserves consumer protection by accepting the basic requirements at the heart of each contract: that the contract be in writing and sufficiently described to give certainty. Providing for adequate description of work avoids uncertainty regarding the terms upon which work is to be carried out and the nature of the work to be performed. Here, the omission of a signature from an otherwise standard contract did not create uncertainty of the type requiring specific legislative intervention.”

…

65. I agree with the opinion of the Principal Member that the omission of a signature, particularly where the homeowner chose to not sign the contract but wanted the work to be undertaken in the school holiday, does not create statutory uncertainty of the type requiring specific legislative intervention.

The Interpretation Act and the meaning of ‘signed’

The homeowner’s submissions

66. Section 7(1) of the Act requires a contract to be in writing, and dated and signed by, or on behalf of, each of the parties to it.

67. Dating and signing a contract constitutes an act of writing, such that if a contract the subject of the Act is to be ‘in writing,’ it must necessarily contain all of the required elements of that contract in writing.

68. If it is a statutory requirement that a contract be in writing, and signed and dated, and if the signing and dating is either absent or not in writing, the contract cannot be a contract in writing.

69. When considering what constitutes the ‘signing’ of a contract, or the requirement that a contract be ‘signed’, guidance can be taken from the Interpretation Act 1987 (NSW), which identifies that the definition of ‘sign’ “includes the affixing of a seal and the making of a mark.”[49] One can sign a contract by affixing a seal or making a mark, in a manner akin to writing, but one cannot ‘sign’ a contract by not undertaking any such task at all.

An unsigned, undated contract is not a contract wholly in writing

49. Interpretation Act 1987 (NSW) s 21.

70. It is, of course, possible for a written contract to exist and for parties to bind themselves to that contract by operation of the common law principles for contract formation, including where acceptance of the contract is provided orally or by conduct. But a situation of that nature does not give rise to a contract in writing. It is a contract the terms of which are set out or evidenced (in part or whole) in writing, but the acceptance of which is not in writing. It is a contract partly in writing and partly by conduct or partly oral.

71. Section 10 of the Act recognises this clear distinction, in that it provides that a contract not in writing is unenforceable by the builder, but the builder can be liable to the homeowner for a breach of the contract and can be liable for damages or any other remedy flowing from such a breach.

72. Where, as in the current situation before the Court, a contract is formed between parties on written terms, but is unsigned and undated, a contract exists but by operation of the Act, is unenforceable by the builder.

73. In such a situation, the builder cannot claim a contractual right to payment for works performed. The builder does have a right to advance a claim for a quantum meruit if the builder can make a case for unjust enrichment, but the builder cannot seek to enforce the contract that, by operation of law, is partly written and partly oral.

The legal consequence of signing a contract

74. As the Court of Appeal explained in Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 at [141]–[143], there is a “vast difference” between the task that is involved in interpreting a wholly written contract, and the task involved in finding what has been agreed in a contract that is not wholly in writing. Where there is a contract that is wholly in writing, there is no doubt what the contract is — it is the writing. The task of interpretation is ascertaining the meaning that the bystander who knows all the relevant surrounding circumstances would understand from the parties using the words in that writing. By contrast, the task in ascertaining what are the terms of a contract that is not wholly in writing is quite different — the task is finding as a fact what the parties have agreed.

75. Section 10 of the Home Building Act is there to prevent disputes about the latter issue, namely “what the parties have agreed”.

76. An almost identical rationale was applied by this Court in Paraiso v CBS Build Pty Ltd [2020] NSWSC 190 (‘Paraiso’) at [39] in holding that variations which were not in writing were not enforceable under the Home Building Act, because the purpose “is to avert disputes about what extra work the owner requires to be performed, for which the builder may require the owner to pay.”[50]

    50. Paraiso v CBS Build Pty Ltd [2020] NSWSC 190 at [39]

77. Requiring a contract and variations to be signed avoids the otherwise inevitable debate (as occurred at first instance in this case) as to exactly what it was that the parties agreed would be performed, for what price, and on what terms. A signed contract (and signed variations) provides the builder with the protection of knowing what he or she is required to build and exactly what it is that the owner wants. A signed contract (and signed variations) provides the homeowner with the protection of knowing that the builder knows what the owner wants, the comfort of knowing what will be built and the protection of knowing how much will be owed for the construction of that which has been expressly agreed.

78. By requiring a contract to be signed by both parties, the Home Building Act intended to remove a question as to whether or not the document had been agreed, and further whether or not both parties had read and understood the terms and agreed to be bound by them. This risk, and potential dispute, is obviated by the need for signing.

79. In the well-known Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 (‘Toll’), the High Court also referred to the decision of Lathan CJ in Wilton v Farnworth [51] , on the following terms at p. 649:

“In the absence of fraud or some other of the special circumstances of character mentioned, a man cannot escape the consequences of signing a document by saying, and proving, that he did not understand it. Unless he was prepared to take the chance of being bound by the terms of the document, whatever they might be, it was for him to protect himself by abstaining from signing the document until he understood it and was satisfied with it.”[52]

51. (1948) 76 CLR 646 at 649

52. Wilton v Farnworth (1948) 76 CLR 646 at 649, referred to in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 at [43]

80. Finally, the High Court relevantly stated in Toll at [45]:

“It should not be overlooked that to sign a document known and intended to affect legal relations is an act which itself ordinarily conveys a representation to a reasonable reader of the document. The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents, as Latham CJ put it, whatever they may be.” [53]

53. Toll at [45]

81. A significant recognised legal consequence to signing a contract, both from the perspective of evidencing acceptance and also in conveying a representation to the reader of the document that the signatories understood the contract and agreed to be bound by it. The act of signing completes a wholly written contract, constitutes largely irrefutable evidence that the signing parties agreed to be bound by the contract and identifies to the parties to the contract, and the world at large, that the signatories agreed to the terms as set out in the contract. Each of these outcomes are important consumer protections for homeowners seeking to enter into residential building contracts.

82. In the proceedings before the court, the contract was not signed. It was not dated. It was not a wholly written contract. It did not satisfy the requirements of section 7(1) of the Act. The homeowner submitted that the consequence of this is the contract is unenforceable by the builder, by operation of section 10(1) of the Act. This is consistent with the consumer protection purpose of the Act, and provides a harmonious reading of the requirements for a valid and enforceable contract[54] and the requirements for valid and enforceable variations. [55]

The issue of law regarding non-compliance with section 7B of the Act

54. Home Building Act 1989 (NSW), Section 7(1)

55. Home Building Act 1989 (NSW), Schedule 2, Part 1, Section 1

83. In addition to the contract not being signed or dated, the builder, being a holder of a contractor licence, did not provide to the homeowner, a signed copy of the contract in the form in which it was made. The builder was required to do so not later than 5 clear business days after entering into the contract.

84. By failing to so provide the signed contract to the homeowner, the builder contravened section 7B of the Act.

85. Section 10(1)(c) states that a person who contracts to do any residential building work “in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph” is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract.”

86. The builder’s contravention of section 7B of the Act is a further reason why the builder is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract.

The builder’s submissions

87. The homeowner’s basic contention is that for the purposes of s 10(1)(b) of the Home Building Act, a contract is not “in writing” if it is not signed and dated. [56] In support of this argument, the homeowner points to the common law emphasis placed upon signatures as an indication of a concluded agreement. [57] Having traversed a number of authorities, the homeowner concluded that because the contract does not contain her signature, it is not a “wholly” written contract and therefore falls with the ambit of s 10(1)(b) and is unenforceable by the builder.

    56. Homeowner’s Appeal Submissions [37]-[41].

    57. Homeowner’s Appeal Submissions [42]-[54].

88. The builder submitted that there are a number of flaws with the homeowners arguments.

89. First, s 10(1)(b) does not refer to “wholly” written contracts and the words “contract ... in writing” cannot be interpreted as such. The subsection applies to “a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates”. This language is broad enough to accommodate a contract that is in writing but does not contain a sufficient description of the work. Such a contract would not be a “wholly” written contract.

90. If the homeowner’s construction was correct, it would mean that the words “that is not in writing or that does not have sufficient description of the work to which it relates” serve no function; a contract without a sufficient description of the work (being a contract not wholly in writing) would be captured by the words “contract ... in writing”. This would be contrary to the established principles of statutory construction that all words within a provision should be given meaning and that “no words should prove superfluous, void or insignificant, if by any other construction they may be allowed useful and pertinent”. [58]

    58. Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [71] per McHugh, Gummow, Kirby and Hayne JJ.

91. Section 10(1)(b) can only be interpreted on the basis that a distinction is drawn between contracts that are not in writing and contracts that do not contain a sufficient description of the work. This can only be done if the words “contract ... in writing” are given their ordinary meaning (that is, a written document) and not the homeowner’s advocated meaning, which is, in effect, a written contract that contains every single piece of information relevant to the bargain between the parties, including their signatures.

92. Second, the importance attributed to signatures under the general law is not germane to the construction of s 10(1)(b) or this case generally.

93. Third, the “significant recognised legal consequence of signing a contract” and the absence of signatures on the contract is entirely academic in the present case because the homeowner admitted that she entered into a written contract with the builder, notwithstanding the absence of her signature. As was noted in the Appeal Panel decision at [40]: [59]

“At [19] the Tribunal makes the critical findings that the contract, a Master Builders Association Residential Building BC4 standard contract, is in writing and does have sufficient description of the work by the reference to “extension of existing house”, to drawings prepared by ‘OC Innovative Designs’, a specification prepared by the builder and to the tender letter. That finding of fact is not impugned and not appealed. The formation of the contract and its terms are not in contention and the owner, in her pleadings, admitted she entered into a written contract for the provision of building goods and services and that the contract has been performed.” [emphasis added]

59. Appeal Panel Decision [40] per Principal Member Thode.

94. Fourth, unlike a contract in writing and a sufficient description of the work, responsibility for which lies exclusively with the builder contracting to carry out the work, the presence of a signature on a home building contract remain in the control of the homeowner. If the absence of a signature on a contract automatically disentitled the builder from enforcing it, homeowners could manipulate the system by arranging for work to be carried out on the promise of a signature, only to refuse to sign once the work was done. This is a likely reason why unsigned contracts are not included in s 10(1)(b) of the Home Building Act.

95. This argument has resonance in the present case, noting the following:

1. The builder’s unchallenged evidence was that the works needed to be commenced urgently to utilise a finite window of opportunity to access the property;

2. The builder’s evidence was that it requested the homeowner provide it with the signed contract around 5 times during the course of the works;

3. The tribunal found that the evidence strongly suggested the homeowner refused to sign the contract;

4. There was and is no dispute as to the terms of the contract;

5. The NCAT found the homeowner breached and later repudiated the contract by refusing the builder access to the property to complete the works and later purporting to terminate the contract on the basis the builder had not completed the works.

96. Fifth, a further difficulty with the homeowner’s proposed construction is that the legislative history of s 10 of the Home Building Act shows that the prohibition placed upon builders enforcing unsigned contracts was expressly removed in the 2001 amendments to the Act.

97. As a final matter, the builder observes that s 10(1) of the Home Building Act imposes severe sanctions upon the most fundamental of contractual rights – to receive payment for works performed, and to enforce a contract against a party in breach – and so should not be given an expansive interpretation in the absence of express wording. In particular, s 10(1)(b) should not be interpreted with reference to only some of the wording in s 7(1); consideration must be given to s 7 as a whole.

98. Section 7 of the Home Building Act imposes at least 15 separate requirements for home building contracts. The repeated use of the word “must” establishes that each of these requirements is mandatory. As to this:

1. Section 7(1) contains three (3) separate requirements: that contracts must be in writing and must be dated and must be signed;

2. Section 7(2) contains a further ten (10) requirements, some of which – such as the need for the contract to contain the name of the parties (s 7(2)(a)) – may be considered fundamental. Equally important are requirements that the contract contains a “sufficient” description of the works (s 7(2)(c)), along with the details of any progress payments to be paid (s 7(2)(h)), which are all but ubiquitous in residential building;

3. Extrapolating on the requirement that, if it is known, the contract must state the contract price (s 7(2)(e)), s 7(4) further mandates that the price be stated in a prominent position on the contract’s front page; and

4. Section 7(5) requires the contract to contain precise warnings and explanations if the contract price is not known.

99. Having so precisely identified these mandatory requirements in s 7, it would be a simple matter for s 10(1) to state that a builder’s failure to comply with these requirements would result in the builder’s inability to enforce the contract. Section 10(1)(b) could state that any non-compliance with the requirements of s 7 would render the contract unenforceable by a builder. Alternatively, s 10(1)(b) could expressly identify each of the fifteen (15) mandatory requirements in s 7.

100. The legislature has not taken either approach. Instead, it has precisely identified but two (2) of the (15) mandatory requirements that warrant the most consequential of limitations of the builder’s common law rights. Other fundamental requirements in s 7 – such as the names of the parties and the contract price – are not included. Quite plainly, the two (2) requirements have been selected with care and purpose.

101. In the circumstances, there is simply no currency to the homeowner’s argument that one (1) requirement should be interpreted as including another precisely-worded requirement. In the absence of express wording, the exclusion of basic common law rights is not a matter that should be interfered with.

99. Separately, the homeowner places significance on the fact that the builder did not provide her with a signed copy of the contract in breach of s 7B of the Home Building Act. This, the homeowner submitted, constitutes a contravention of “any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph” and so pursuant to s 10(1)(c), the contract is unenforceable by the builder. [60] The homeowner does not explain why she says a breach of s 7B is a contravention of the Home Building Act “that is prescribed for the purposes of this paragraph”.

    60. Homeowner’s Appeal Submissions [55]-[58].

100. This meaning of s 10(1)(c) of the Home Building Act was considered by Williams DCJ in Hayward at [90]:

“Section 10(1)(c) is in somewhat strange terms. One needs to be careful to look at the whole of the subsection because to quote it only in part leads to misinterpretation. The subsection does not provide that “in contravention of any other provision of this act or the regulations (the builder) is not entitled to damages etc.” This leaves out the important words “that is prescribed for the purpose of this paragraph”. I would regard the sections ordinary meaning to be that, if the Act or regulations prescribe that a breach of the act or regs is a breach under s.10(1)(c), then such a contract to do building work in contravention of a breach of such a provision, renders the builder not entitled to damages or to enforce any other remedy. The important words are “that is prescribed for the purposes of this paragraph”, which I interpret to mean, for the purposes for s.10(1)(c). I am not aware of, nor has it been submitted, that any provision of the Act or regulations has been so prescribed.”

104. In Pettigrew v Gateway Fence Installations Pty Ltd [2016] NSWCATAP (‘Pettigrew’), [61] the Appeal Panel considered that, for the purposes of s 10(1)(c), references to matters that may be prescribed applied to both provisions of the Home Building Act and provisions of the regulation, and continued at [32]:

“Such a construction is harmonious with the text of the whole of s.10, which is not the case if s.10(1)(c) is construed as if references to matters to be prescribed applied only to the regulations. This is because there would no point to the separate identification of the matters in ss 10(1)(a)-(b) if the intention was that a contravention of all of the provisions of the Act resulted in contracts being unenforceable. If that had been the intention, one would have expected to see s.10 stating just that and also stating that a contravention of prescribed provisions of the regulations would result in contracts being unenforceable.”

61. [2016] NSWCATAP 181 at [31]-[32].

105. Consistent with the analyses in Hayward and Pettigrew, the builder submitted that a breach of s 7B does not fall within the ambit of s 10(1)(c) because neither the Home Building Act not the Home Building Regulations 2014 (NSW) prescribed s 7B as such.

The homeowner’s written submissions in reply

106. The homeowner submitted that contrary to the builder’s submissions and although irrelevant for the purposes of the proper legal analysis - the homeowner does not seek to avoid paying for her home renovation. The homeowner accepts, and at trial always did accept, [62] that the builder has a right to payment for the fair value of the works performed on a quantum meruit basis: Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221. What the builder does not have the right to do, however, is to enforce its contractual rights against the homeowner. The homeowner seeks to do no more than protect her statutory rights pursuant to section 10(1)(b) of the Home Building Act.

     62. Exhibit BNL-1, pp.567-569.

107. What these proceedings are really about is an attempt by the builder to avoid the operation of section 10 for its significant financial benefit.

108. At first instance, the Tribunal found that the mere act of issuing invoices (irrespective of the true value of the work) and the failure of the homeowner to take specified steps under the contract in response to those invoices, rendered the homeowner liable to pay the full amount of the invoices. [63] The quantum of the invoices issued by the builder was a little in excess of $107,000. However, the Homeowner’s evidence of the fair value of the works performed (quantum meruit), taking into account defects and rectification costs, was no more than $12,000. [64]

     63. NCAT decision 11 February 2022 [30]; Exhibit BNL-1, p.75.

     64. Exhibit BNL-1, p.542 at [9.7].

109. Therefore, in the circumstances of this case, there is nothing unjust about the homeowner relying on her statutory rights. To the contrary, the injustice arises in circumstances where the builder did not comply with its statutory obligations and denied the homeowner the certainty and protection of a signed and dated written contract, but seeks to maintain a significant windfall by reason of a technical construction of the payment obligations in the contract.

110. However, ultimately whether or not the result is fair in this particular case is immaterial. The legislature made a deliberate policy decision to impose consequences on builders (which at times may operate against a builder’s financial interests) so as to provide clear incentives for builders to comply with their statutory obligations. Compliance was wholly within the power of the builder (despite its submissions to the contrary). It could, and should, have informed the homeowner that no works could commence while the contract remained incomplete. The builder’s contravention of the Home Building Act means it has a right to payment on a quantum meruit basis, but not under the contract.

Consideration

111. Turning to the substance of what divides the parties;

112. First, the builder seeks to draw a distinction between a contract in writing and a contract “wholly” in writing. Either the contract is in writing, or it is not. If a part of a contract is not in writing (whatever the cause, be it a term, the assent or something else), then it is not a contract in writing, but a contract partly in writing and partly by something else. Such a contract therefore contravenes section 7 of the Home Building Act.

113. Turning specifically to each of the builder’s submissions.

114. The builder’s submissions do not assist him. Section 10(1)(b) uses the disjunctive “or”, that is, damages is not enforceable by a builder where the contract is “not in writing” or “does not have sufficient description of the work”. Contrary to the builder’s submissions, it is perfectly possible to have a contract in writing, but for that written contract to not contain a sufficient description of the work, such that section 10(1)(b) applies.

115. There is undue emphasis on the absence of a signature. The requirement in the legislation is that the contract be in “writing”. There are any number of ways that a contract may not be in writing. It may be wholly oral, it may contain part of the scope in a form other than writing, or, as in this case, the assent may not be in writing, but may require examination of oral conversations or conduct. In all those circumstances, the contract is not in writing and section 10(1)(b) applies.

116. The plain legislative purpose of section 10(1)(b) is to ensure certainty as to obligations, such that there is no question about what is required to be performed, whether that question arises because of a dispute about the scope, the terms of acceptance or any other matter.

117. When a contract is not signed, a Tribunal or Court is required to consider matters extraneous to the written document to determine exactly what was accepted and whether it accords or departs from the writing. The uncertainty that would otherwise ensue is the very problem that section 10(1)(b) seeks to avoid that is that such a contract is unenforceable by a builder. That is so whether the contract not in writing ultimately accords with the written instrument because the whole of the writing was accepted or not. That question is irrelevant for the purposes of section 10(1)(b). It is the question itself that the legislation seeks to avoid.

118. The above construction is entirely consistent with the provisions requiring variations to be signed to be enforceable and this Court’s decision in Paraiso. The builder’s construction is entirely inconsistent. The builder has failed to grapple with this matter in its submissions.

119. The builder submitted that the absence of a signature may be in the control of the homeowner and a homeowner “could manipulate the system by arranging for work to be carried out on a promise of a signature, only to refuse to sign once that work was done”.

120. That submission emphasises the builder’s lack of understanding of its obligations under the Home Building Act and the importance of the protections built into the legislation.

121. A builder should refuse to commence any work until a contract is signed. To fail to do so is an offence pursuant to section 7A of the Home Building Act. In addition, section 10(1)(b) places a potential financial penalty on a builder who breaches the Home Building Act so as to encourage compliant behaviour, namely a refusal to commence work in breach of the Home Building Act. In that sense, whether to require a signature before commencing work is entirely in the hands of the builder.

122. The homeowner relies on words in section 10(1)(b) which are almost identical to the words extracted at the builder’s submissions in the previous version of section 10, namely “[a] contract to which the requirements of section 7 apply that is not in writing may not be enforced by the holder of the licence against any other party to the contract”.

123. Further, section 10(1)(c) of the current Act is in a materially similar form to the previous section 10(3), except that section 10(1)(c) of the current version provides not only that a contravention of any other provision of this Act (which includes a signature, see s 7(1)) disentitles a person from enforcing damages, but it also provides a contravention of regulations specifically prescribed for the purpose of the paragraph will cause the contract not to be enforceable.

124. Section 10 does not prohibit a builder from recovering payment, but rather only from recovering payment as provided for by the contract. A builder remains able to recover payment on a quantum meruit basis. There is no reason to construe that requirement against a homeowner. It is a remedial statute and should be construed expansively and beneficially to homeowners. [65]

     65. IW v City of Perth (1997) 191 CLR 1 at 12.

125. The builder’s submissions set up an irrelevant strawman and also ignore section 10(1)(c). The builder submitted that although section 7 of the Home Building Act requires a contract to be signed, section 10(1)(b) does not mention a signature, and therefore section 10 does not apply to the absence of a signature.

126. That submission misstates the homeowner’s position. The homeowner’s position is that section 10(1)(b) applies because the contract was not in writing. As noted above, a contract may not be in writing for a variety of reasons. In this case the contract was not in writing because assent was not given in writing.

127. Further, and in any event, the failure to sign the contract and the failure to deliver it in accordance with section 7B is further caught by section 10(1)(c) being a contravention of any other provision of this Act. Section 7(1) and 7B are provisions of the Act.

128. Contrary to the builder’s submissions, section 10(1)(c) is contravened in two circumstances. First, where there is a contravention of any other provision of the Act “or” where there is a contravention of the regulations prescribed for the purposes of that paragraph. The words “prescribed for the purposes of this paragraph” do not naturally connect to a provision of the Act. Something is only prescribed in a regulation.

129. Support for that construction is gained from the version of section 10(3) of the Home Building Act prior to 14 December 2001. In the previous version of section 10, a contract was void where a person contracted to do work in contravention of the Division. Materially similar words remain in section 10(1)(c) and should have the same meaning.

130. The additional words in the previous version of section “who contracted to do work under a contract that does not comply with this Division” were removed from the present version of the Act so as to remove minor non-compliances (but not contraventions), but in their place the legislator reserved for itself the ability to add regulations that were specifically prescribed for the purposes of the paragraph which may fall short of contraventions of the Act.

Consideration

131. The formation of the contract and its terms are not in contention and the owner, in her pleadings, admitted she entered into a written contract for the provision of building goods and services and that the contract has been performed.”

132. The central issue in this appeal is whether a written, but unsigned and undated document, that is accepted other than by written signature on the document, constitutes a “contract in writing” for the purposes of section 10(1)(b) of the Home Building Act and whether a contract which is undated, unsigned and not given to the homeowner (as required by section 7B) is unenforceable by reason of section 10(1)(c) of the Home Building Act.

133. Signing a contract, whether by a full signature or making a mark, engages the significance which the law attaches to the signature (or execution) of a contractual document. [66] In Toll, the High Court referred to comments of Mellish LJ with approval in Parker v South Eastern Railway Co (1877) 2 CPD 416 at 421, on the following terms:

“In an ordinary case, where an action is brought on a written agreement which is signed by the defendant, the agreement is proved by proving his signature, and, in the absence of fraud, it is wholly immaterial that he has not read the agreement and does not know its contents. The parties may, however, reduce their agreement into writing, so that the writing constitutes the sole evidence of the agreement, without signing it; but in that case there must be evidence independently of the agreement itself to prove that the defendant has assented to it.”[67]

66. Toll at [42]

67. Parker v South Eastern Railway Co (1877) 2 CPD 416 at 421, referred to in Toll at [42]

134. An essential reason for the Home Building Act requiring that residential building contracts, and variations thereto, be in writing, and signed and dated by the parties is that a contract wholly in writing clearly and unambiguously sets out what the parties have agreed will be done and on what terms. It ensures that the parties have a clear and precise record of their agreement, and that any court or tribunal required to interpret or give effect to their agreement, can do so by reference to the written text. This strict interpretation of signature requirements aligns with the homeowner’s submissions.

135. However, prior to 14 December 2001, s 10 of the Home Building Act (which, like s 7, formed part of Division 1 of Part 2) stated:

136. A contract to which the requirements of section 7 apply that is not in writing or that does not have a sufficient description of the work to which it relates is not enforceable by the holder of the licence against any other party to the contract.

137. Subsection (1) does not apply to a contract entered into in the circumstances described in section 6(2).

138. A person who contracts to do work in contravention of this Division or who contracts to do work under a contract that does not comply with this Division:

139. is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, but

140. is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person.

141. This section does not affect the liability of the person for an offence against a provision of or made under this or any other Act.

142. Under these provisions, and in particular s 10(3), an unsigned contract was in contravention of “this Division” (i.e. s 7(1)). As such, a builder was not entitled to damages under that contract and would not be entitled to enforce any remedy in respect of a breach of that contract by another party: s 10(3)(a).

143. In the current version of the Act, s 10 does not have the blanket prohibition on builders enforcing non-compliant contracts. It was replaced with precisely-worded language describing the disentitling conduct. As was noted in the Appeal Panel decision, the second reading speech to the legislation that amended s 10 stated that amendments “ensure that [s 10] [does] not have the unintended effect of rendering a building contract wholly unenforceable at the suit of the builder merely because of the builder’s very minor contravention of certain provisions of the Act”. [68]

This analysis strongly suggests that the drafters of the legislation specifically intended to remove the prohibition on builder’s enforcing unsigned contracts on the basis this was a minor contravention of the Home Building Act. This is another reason why the homeowner’s construction of s 10(1)(b) should be rejected.

If the drafters of the legislation had considered unsigned home building contracts to be sufficiently problematic that they should not be enforceable by builders, then s 10(1) would have included an express reference to signatures. The clear and unambiguous wording of the legislation cannot be supplanted by common law inferences.

68. NSWCATAP decision [45], [64].

144. In the first instance NCAT decision dated 11 February 2022, the question of law the subject of the present appeal was resolved in the builder’s favour. [69] It was found, as a question of fact, that the contract was in writing and did contain a sufficient description of the work,[70] such that s 10(1)(b) of the Home Building Act did not apply to render the contract unenforceable by the builder.

     69. NCAT Decision [11]-[27].

     70. NCAT Decision [19].

145. In reaching this view, reliance was placed on the following passage from Hayward at [91]:[71]

“In any event, having regard to the terminology of s 10(1)(b), I would interpret that subsection to mean that a failure to comply with the provisions of s 7 other than those requiring the contract to be in writing and to contain a sufficient description of the work, does not necessarily make the contract unenforceable or render the builder not entitled to damages. This interpretation makes practical sense as s 10(1)(b) singles out the two most important aspects of a contract, that it be in writing and that it sufficiently describes the work. In other words, leaving out the contractor’s licence number, for example, won’t render the agreement invalid if indeed the builder is licensed.”

71. [2009] NSWDC 54 at [91].

146. In contrast, in Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd [2021] NSWDC 507 (‘Dyna’), Scotting DCJ stated at [141] and [144]:

“[141] It is well settled that a builder without a written and signed contract for residential building work is not entitled to damages for breach of contract and cannot enforce the contract: Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 and Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327.

…

[144] Section 10(1) of the Act applied to that agreement if it came into existence, which I have found it did not, and precludes Dyna from seeking damages or enforcing any other remedy in respect of a breach of contract. For these reasons, Dyna’s contract claim must also fail.”

147. I prefer the position taken in Hayward to the view expressed in a line of authorities based upon legislation that predated the relevant parts of the Home Building Act and which, in contrast to s 10(1)(b), expressly stated that builders without a written and signed contract for residential building work were not entitled to enforce that contract. [72]

     72. Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Dyna Constructions Pty Ltd v Bocco Developments Pty Ltd [2021] NSWDC 507 at [141].

147. In the Appeal Panel decision dated 8 February 2023, the Principal Member decided that the Homeowner’s interpretation of s 10(1)(b) of the Home Building Act was contrary to the plain wording of that section:[73]

“The unambiguous wording of s.10(1)(b) anticipates a situation where a contract is “in writing” but does not contain a “sufficient description” of the work. This result is only possible if a written contract that does not comply with other requirements in s.7(1) and (2) is still classified as a contract “in writing” for the purposes of s.7(1) and s.10(1)(b). The relevance for present purposes is that a written contract that is not signed and dated may still be “in writing” for the purposes of s.10(1)(b). If that is not correct, s.10(1)(b) would simply have said “in breach of Section 7”. The language adopted in s.10 is concise and unambiguous and the precise and specific wording is a powerful indicator of intention.”

73. NSWCATAP Decision [65].

149. Second, having regard to the Second Reading Speech of the legislation that introduced the current version of s 10 into the Home Building Act, [74] the Principal Member in the Appeal Panel decision held at [69] that it was not the intention of the legislation that a builder should be deprived of its rights under an otherwise conforming contract simply because it has not been signed:[75]

“In the present case it is difficult to reconcile the owner’s pleaded admission that she entered into a standard Master Builders Association BC4 contract, as found by the Tribunal, only to insist that the contract, albeit performed, is unenforceable only by reason of lack of a signature. The evidence strongly suggested that the consumer refused to sign the contract, but insisted the builder perform and vary the work. Applying his Honour’s findings at [42] above,[76] it is apparent that the builder in this case contracted upon terms entirely in conformity with the legislation. In circumstances such as these, it is clear that the Legislature did not intend to deprive the builder of its contractual rights. Indeed, it was the intent of the legislative amendment “to ensure that [s 10] [does] not have the unintended effect of rendering a building contract wholly unenforceable at the suit of the builder merely because of the builder’s very minor contravention of certain provisions of the Act.”

74. Statute Law (Miscellaneous Provision) Act (No 2) 2001 (NSW); see Appeal Panel decision [44]-[45], [63].

75. Appeal Panel decision at [69].

76. Appeal Panel decision at [42].

Result

150. For these reasons, it is my view that the Principal Member’s interpretation of s 10 of the Home Building Act is not arguably wrong.

151. Even if I am wrong, the builder was entitled to his damages, the homeowner agrees both the Tribunal Member and the Appeal Panel made a factual finding that on a quantum meruit basis the builder was entitled to $107,662.50 in debt, being the total of outstanding invoices for the first and second claims for progress payments in the sum of $63,800 and $43,862.50 respectively.

152. In the Appeal Panel decision, by operation of s 57(3) of the Civil and Administrative Tribunal Act 2013 (NSW), the decision of the Principal Member prevailed. In this appeal, the Principal Member’s analysis and construction of s 10(1)(b) is affirmed. The appeal is dismissed. The summons filed 8 March 2023 is dismissed.

Costs

153. Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant’s costs.

THE COURT ORDERS THAT:

1. The plaintiff’s application for leave is refused.

2. The appeal is dismissed.

3. The decision of the Appeal Panel dated 8 March 2023 is affirmed.

4. The summons filed 8 March 2023 is dismissed.

5. The plaintiff is to pay the defendant’s costs.

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Endnotes

Amendments

06 March 2024 - Heading format

Decision last updated: 06 March 2024