Bartlett v Contrast Constructions Pty Ltd [2016] QCA 119

SUPREME COURT OF QUEENSLAND CITATION: Bartlett v Contrast Constructions Pty Ltd [2016] QCA 119 PARTIES: BRETT ANDREW BARTLETT (applicant) v CONTRAST CONSTRUCTIONS PTY LTD ACN 100 835 934 (respondent) FILE NO/S: Appeal No 9767 of 2014 QCATA No 332 of 2013 QCATA No 370 of 2013 DIVISION: Court of Appeal PROCEEDING: Application for Extension of Time Queensland Civil and Administrative Tribunal Act ORIGINATING COURT: Queensland Civil and Administrative Tribunal at Brisbane – [2014] QCATA 262 DELIVERED ON: 4 May 2016 DELIVERED AT: Brisbane HEARING DATE: 3 August 2015 JUDGES: Margaret McMurdo P and Fraser JA and North J Separate reasons for judgment of each member of the Court, each concurring as to the orders made ORDERS: 1. Grant leave to appeal. 2. Allow the appeal. 3. Set aside orders 2 and 3 made by the Appeal Tribunal on 9 September 2014 and instead order as follows: (2) Set aside the order made in the tribunal on 5 August 2013 and order instead that Contrast Constructions Pty Ltd is to pay Mr Bartlett the sum of $402,037.17, plus interest on that sum in an amount to be fixed by the Court. 4. Direct that, in the event that the parties do not agree upon the amount of interest, the parties file within 14 days a written submission limited to two pages as to the calculation and amount of interest. 5. The respondent pay the appellant’s costs of the application for leave to appeal and of the appeal, including the costs associated with the respondent’s notice of contention. -- 1 of 33 -- 2 CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – GENERALLY – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where leave to appeal was filed one day late – whether an extension of time be allowed ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – GENERALLY – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where an error of law was made by the member at first instance – where the member of the QCAT Appeal Tribunal dismissed the appeal – whether the nature of the error of law caused an injustice requiring a grant of leave to appeal CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY – where the applicant contracted with a building company – where the applicant claims for contractually prescribed liquidated damages arising from a change to the date of practical completion – where the builder abandoned the works under the contract – whether the applicant’s claim to contractually prescribed liquidated damages succeeds Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 14(3), s 15(3)(a), s 100, s 102, s 151(2)(b) Banque Commerciale SA (In liq) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11, cited Chandra v Queensland Building and Construction Commission [2014] QCA 335, considered Contrast Constructions Pty Ltd v Bartlett [2013] QCAT 322, related Contrast Constructions Pty Ltd v Bartlett [2013] QCAT 399, related Contrast Constructions Pty Ltd v Bartlett [2014] QCATA 262, related Niall v Mangrove Housing Association Inc [2014] QCA 58, followed Pialba Commercial Gardens Pty Ltd v Braxco Pty Ltd & Ors [2011] QCA 148, distinguished Queensland Building and Construction Commission v Arthurs [2014] QCA 307, cited Rana v Repatriation Commission [2011] FCAFC 124, considered Underwood v Department of Communities [2013] 1 Qd R 252; [2012] QCA 158, cited White & Carter (Councils) Ltd v McGregor [1962] AC 413; [1961] UKHL 5, followed COUNSEL: P W Hackett for the appellant B O’Donnell QC, with D Thomae, for the respondent -- 2 of 33 -- 3 SOLICITORS: Smith Leonard Fahey for the appellant Mills Oakley Lawyers for the respondent [1] MARGARET McMURDO P: I agree with Fraser JA’s reasons for extending time, giving leave to appeal and allowing the appeal. I agree with the orders he proposes. [2] FRASER JA: I have had the advantage of reading in draft the reasons of North J. [3] Mr Bartlett applies for an extension of time within which to apply for leave to appeal against that part of a decision of the QCAT Appeal Tribunal which dismissed his appeal from a decision by a QCAT Member rejecting his claim for liquidated damages under a contract with the respondent builder. [4] For the reasons given by North J, Mr Bartlett should be given the extension of time he requires to apply for leave to appeal. For the following reasons, I would grant the application for leave to appeal, allow the appeal, and make consequential orders. Background [5] The Appeal Tribunal set out the following uncontentious facts in its reasons: “[2] Mr Bartlett contracted with a building company, Contrast Constructions Pty Ltd, on 23 June 2006 to build a house … at a cost of $2,302,000. That sum was adjusted to $2,520,097.96. [3] The contract was administered by an architect who also acted as an assessor. The role of the architect was to provide instructions to the builder, to act independently in assessing claims for delay costs, costs for completion of work and any claims for liquidated damages arising from a change to the date of practical completion. [4] The architect for the purpose of administering and assessing the contract was initially Bligh Voller Nield Pty Ltd. The parties had agreed at the hearing of this matter that DM2 Architecture became the architect from 14 October 2008. … [7] There were many disputed issues during the construction of the house, a change of architect and issues about incomplete and defective works. The parties could not resolve the issues and proceedings were commenced in the former Commercial and Consumer Tribunal in September 2009. [8] The contract came to an end on 15 December 2009.” [6] Following a five day hearing and an application to adjust the Member’s initial orders, the Member ordered the builder to pay Mr Bartlett $218,940.17 (plus interest of $130,363.36), as money owing to Mr Bartlett for incomplete and defective work after deduction of money payable to the builder (including the balance contract sum and adjustment of time and cost claims). -- 3 of 33 -- 4 [7] The Member rejected Mr Bartlett’s claim for liquidated damages under the contract for the builder’s delay in completion. In that respect, the Member made the following findings of fact: “3. The entitlement to liquidated damages is prescribed in clause M8 of the Contract. The requirements for that clause to operate are that the works had not reached practical completion (as defined in clause Ml.l) by the date for practical completion. 4. The parties agreed that the adjusted date for Practical Completion was 21 March 2008 and that the Contract was terminated on 15 December 2009. 5. Mr Bartlett claimed liquidated damages between 21 March 2008 and 15 December 2009 (inclusive) plus interest at 10%. 6. That Mr Bartlett gave notice of the intention to claim liquidated damages as required by the contract on 30 September 2008. 7. The builder's contention was that they were awaiting instructions. 8. In late December 2008 and early January 2009 the builder elected to no longer proceed with the works. 9. That as at 12 January 2009 notwithstanding the outstanding instructions there were incomplete works for which instructions had been provided. 10. As at 12 January 2009 the builder abandoned the works under the contract. 11. Mr Bartlett accepted the builder's repudiatory conduct on 14 September 2009 by serving a Notice to Remedy Default.”1 [8] The Member gave the following reasons for rejecting Mr Bartlett’s claim for liquidated damages: “[80] The claim for liquidated damages by Mr Bartlett must fail on the basis that there were outstanding issues including instructions that would delay practical completion and that would otherwise give rise to an extension of time claim in the builder's favour for the delay caused in providing the instructions. Mr Spender, the builder’s expert witness, gave evidence at the hearing that the installation of the hot water system was necessary for practical completion to be reached. The Tribunal has already made a finding that this instruction was outstanding as at 18 December 2008. [81] Mr Bartlett has otherwise failed to act reasonably by issuing the notice to remedy breach some 9 months after the builder abandoned the site. It would not be fair to allow Mr Bartlett's claim for liquidated damages in circumstances where he knew the builder had abandoned the site in late December 2008 and early January 2009…” 1 Mr Bartlett’s “Appeal Outline” in the Appeal Tribunal. The Appeal Tribunal adopted this part of Mr Bartlett’s submission: [2014] QCATA 262 at [28] – [37]. -- 4 of 33 -- 5 [9] Mr Bartlett appealed against parts of the Member’s decision, including the rejection of his claim for liquidated damages. That appeal was pursued only upon questions of law. The Appeal Tribunal upheld Mr Bartlett’s challenge to the finding in [80], upon the ground that the Member erred in law because there was no evidence to support that finding. [10] The Appeal Tribunal rejected Mr Bartlett’s contention that the Member erred in law in making the finding in [81]. It was for this reason that the Appeal Tribunal dismissed Mr Bartlett’s appeal. [11] Mr Bartlett contends that the Appeal Tribunal erred in law in that respect. The builder argues that this is not a proper case for the grant of leave to appeal for various reasons, including that the Appeal Tribunal did not err in law in rejecting Mr Bartlett’s claim for liquidated damages. Alternatively, the builder argues that the Appeal Tribunal’s dismissal of Mr Bartlett’s appeal should be affirmed on the different ground that the Appeal Tribunal erred in law by upholding Mr Bartlett’s challenge to the finding in [80] of the Member’s reasons. [12] The hearing of Mr Bartlett’s application proceeded on the expressed basis that the merits of Mr Bartlett’s proposed appeal and the builder’s notice of contention would be considered together with Mr Bartlett’s application for leave to appeal. [13] Section 150 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) allows an appeal to this Court only on a question of law. Section 149, which provides for appeals to the Court of Appeal from certain Tribunal decisions at first instance, draws a distinction in s 149(3) between an appeal “only on a question of law” and an appeal “on a question of fact, or a question of mixed law and fact”. That context puts it beyond doubt that the provision in s 150(3)(a) for an appeal against a decision of the Appeal Tribunal “only on a question of law” does not comprehend an appeal on a question of mixed law and fact. The purpose of the right of appeal in s 150 is to enable the Court “to correct an error of law”.2 [14] I will first discuss the merits of the proposed appeal. Appeal ground 1 [15] Ground 1 of Mr Bartlett’s amended notice of appeal contends that the Appeal Tribunal erred in law in finding that the Member’s finding in [81] “that Mr Bartlett had failed to act reasonably by issuing the notice to remedy breach … some nine months after the builder abandoned the site by 12 January 2009 disentitling Mr Bartlett to liquidated damages was a question of fact when: (a) There was no issue before the Tribunal raised on the pleadings or submissions as to the reasonableness of Mr Bartlett’s timing of his Notice to Remedy Default on 30 September 2009 in relation to Mr Bartlett’s entitlement to liquidated damages; (b) The only pleaded basis for disentitling Mr Bartlett to liquidated damages was the assertion that there were outstanding issues including instructions that would delay practical completion and that would otherwise give rise to an extension of time claim in the builder’s favour, 2 Federal Commission of Taxation v Crown Insurance Services Ltd (2012) 207 FCR 247 at [9]. (Lander and Foster JJ). -- 5 of 33 -- 6 a matter which [the] Appeal Tribunal determined against the builder in favour of Mr Bartlett; (c) Liquidated damages were a contractual entitlement between two dates (the extended date for practical completion and the date of termination of the Contract), neither of which were in dispute; (d) There is no duty to mitigate liquidated damages prescribed by a contract prior to termination for breach; (e) In so far as there was evidence before the Tribunal concerning the nine month period prior to the Notice, it was from the builder and established that during that period there were without prejudice negotiations including two mediation conferences that ultimately did not result in a concluded agreement. Paragraphs (a) and (b) of appeal ground 1 [16] Paragraphs (a) and (b) of appeal ground 1 contend, in effect, that the Appeal Tribunal erred in law by treating the finding in [81] of the Member’s reasons as a finding of fact when the builder did not allege or argue before the Member that Mr Bartlett’s claim to liquidated damages should be rejected for the reasons given in [81]. [17] The builder argued that this point was in issue before the Member and that Mr Bartlett did not argue in the Appeal Tribunal that it was not in issue. [18] As to the first limb of that argument, the builder relied upon the fact that one of the questions which the parties agreed should be answered by the Member was: “Is Mr Bartlett entitled to liquidated damages and if so, for what period and in what amount?” That question was expressed with such generality as to be capable of comprehending numerous contentions by both parties. It is necessary to refer to the parties’ pleadings and their conduct of the litigation before the Member to identify what was in fact in issue in relation to that general question. [19] In the builder’s statement of claim and again in its reply and answer the builder made many allegations about the conduct of Mr Bartlett and the architect he appointed, including allegations that Mr Bartlett failed to act reasonably in various ways. None of those allegations suggested that Mr Bartlett failed to act reasonably in relation to the timing of his termination of the contract for the builder’s wrongful repudiation, much less that a consequence of any such failure was that Mr Bartlett lost his contractual entitlement to liquidated damages (or, as the Member put it, it “would not be fair to allow Mr Bartlett’s claim for liquidated damages”.) [20] Before the Member, the builder made detailed submissions under the heading “[i]s Mr Bartlett entitled to liquidated damages and if so, for what period and what amount?”. The builder relied upon paragraphs 58 and 59 of those written submissions as raising the relevant issue. In paragraphs 46-56 the builder referred to the liquidated damages provision and contended that: the provision had not been followed because the builder was not given prompt notice of the owner’s intention with respect to liquidated damages, before the first such notice (30 September 2008) the owner had evinced an intention not to apply liquidated damages, that amounted to a waiver, and there was a basis for an estoppel with respect to any claim for liquidated damages before 30 September 2008. The Member did not deny liquidated damages to Mr Bartlett upon the basis of those contentions. -- 6 of 33 -- 7 [21] Paragraphs 57 - 59 of the written submissions continued: “57. It is also relevant that there was a clear failure by the Respondent to issue at least one critical instruction (RFI1 hot water system vent) which prevented practical completion of the works. As identified above, by virtue of clause L1.1 of the contract there can be no claim for liquidated damages for the period following that failure (i.e. 20 December 2008 until termination of contract) by reason that: a. the Applicant would have been entitled to an extension of time with costs pursuant to clause L1.1 of the contract as the failure by the Respondent to Issue this instruction prevented practical completion (as defined in the contract), notwithstanding the state of completion of any other aspect of the works; or b. the Applicant was entitled to be indemnified by the Respondent (pursuant clause A4.2 of the contract) if the failure to issue the instruction was as a result of the default of the Architect. 58. It is a fundamental matter of fairness that the Respondent should not be entitled to liquidated damages flowing from failures by the Respondent or the Architect or both. 59. Further, the Respondent was not called to give evidence with respect to the quantum [of the] liquidated damages claimed. There was no opportunity to cross examine the Respondent with respect to the claim, nor was Mr Durkin cross-examined on this issue.” [22] Those paragraphs concern grounds for extensions of time of the date for practical completion, rather than the timing of Mr Bartlett’s termination of the contract. Paragraph 58 did not raise the relevant issue. The word “failures” in that paragraph is not an apt reference to Mr Bartlett’s conduct in exercising his right to accept the builder’s continuing wrongful repudiation of the contract when he did rather than at an earlier time. Even if that word was capable of comprehending the relevant issue, it was too generally expressed to amount to notice of the point upon which the Member rejected Mr Bartlett’s claim. Paragraph 59 also did not raise the issue. It apparently related only to the quantum of liquidated damages, and there was no description of what evidence Mr Bartlett or Mr Durkin might have been able to give about liquidated damages. Furthermore, the context supplied by paragraphs 46 - 57 makes it plain that paragraphs 58 and 59 did not raise any issue about the timing of Mr Bartlett’s termination of the contract. [23] In short, none of the builder’s submissions included a contention to the effect of the finding in [81] of the Member’s reasons, or, indeed any contention about the timing of Mr Bartlett’s termination of the contract. [24] In oral argument, before the Court, the builder’s senior counsel acknowledged that the builder had not in terms submitted before the Member that Mr Bartlett’s failure to terminate the contract earlier than he did was unreasonable in a way which impacted upon his entitlement to liquidated damages. Senior counsel submitted, however, that a passage in the builder’s submission in reply before the Member was “essentially saying Mr Bartlett should have done more than he did to mitigate his loss with respect -- 7 of 33 -- 8 to liquidated damages” and that “the obvious thing would have been, once the builder abandoned the site in January, as the Member found he [Mr Bartlett] knew, to have then terminated the contract and engaged someone else, not wait nine months or so while liquidated damages were owing.”3 In the cited passage (paragraph 14) of the builder’s reply submission, the builder submitted: “The calculation of liquidated damages is not merely arithmetic as submitted by the Respondent, particularly in circumstances where the amount claimed is inclusive of GST. The Respondent’s failure to give evidence with respect to its alleged entitlement to liquidated damages included a failure to give evidence as to what steps he took to mitigate it his [sic] loss with respect to liquidated damages. The Respondent’s alleged entitlement has not been established or justified for the period claimed or at all.” [25] The builder relied upon the second sentence. It is opaque to the point of being meaningless. There was uncontroversial evidence establishing Mr Bartlett’s entitlement to liquidated damages, namely, the evidence of: the relevant contractual provision, the adjusted date for practical completion, claims for further extensions by the builder (which it was for the Member to decide), and the non-completion of the work. It is hard to see what evidence Mr Bartlett could have given on that topic and this sentence does not identify any such evidence. Nor does it identify the “steps” which, the sentence implies, Mr Bartlett should have taken to mitigate his “loss with respect to liquidated damages”, what that obscure expression means, why Mr Bartlett should have taken such steps, or what effect the taking of those steps would have had upon the asserted “loss”. [26] Whatever this passage of the builder’s submission was intended to convey, it did not give notice to Mr Bartlett of a contention to the effect of the finding in [81] of the Member’s reasons. It would have been a remarkable leap for Mr Bartlett to have divined an allegation that, to avoid losing his contractual entitlement to liquidated damages, he should have terminated the contract earlier than he did. There was no hint of any such allegation in the builder’s pleadings or submissions before the Member. Mr Bartlett was not required to guess at the builder’s case. It is too much to expect him even to have guessed the point upon which the Member decided this part of the case. That is so even putting aside the additional factors that the point lacked any legal basis (see [39] of these reasons) and that there was no evidence to support it (see [40] of these reasons). [27] The ground upon which Mr Bartlett’s claim was rejected in [81] of the Member’s reasons was not in issue. Upon that basis, Mr Bartlett argued that he was denied procedural fairness. In reply however, the builder argued that Mr Bartlett had not made the alleged denial of procedural fairness an issue in the Appeal Tribunal. [28] The relevant ground of appeal in the Appeal Tribunal was the third ground, which contended that the Member “erred in law in finding that Mr Bartlett has otherwise failed to act reasonably by issuing the notice to remedy breach some 9 months after the builder abandoned the site”. That ground was developed in Mr Bartlett’s “Appeal Outline” in the Appeal Tribunal. (The parties’ arguments in the Appeal Tribunal were wholly in writing.) Relevantly, paragraphs [80] and [81] of the Member’s reasons were set out at the commencement of those written submissions under the heading 3 Transcript, 3 August 2015, 1-26. -- 8 of 33 -- 9 “Issues for determination”. A subsequent section set out the facts found by the member. Those included the paragraphs reproduced in [7] of these reasons and the following paragraphs: “12. The claim for liquidated damages by Mr Bartlett must fail on the basis that there were outstanding issues including instructions that would delay practical completion and that would otherwise give rise to an extension of time claim in the builder's favour for the delay caused in providing the instructions. 13. Mr Bartlett has otherwise failed to act reasonably by issuing the notice to remedy breach some 9 months after the builder abandoned the site. First Ground of Appeal … 20. The Member ought to have found, as was agreed between the parties, that Mr Bartlett accepted the builder’s repudiation of the contract and terminated it on 15 December 2009.4 Second Ground of Appeal 21. The finding by the Member in paragraph 12 above is wrong. 22. First, it is inconsistent with the findings of fact in paragraphs: (a) 9 above, which correctly states the position, namely, notwithstanding the outstanding instructions there were incomplete works for which instructions had been provided, and (b) 10 above, which again correctly states the position, the builder had abandoned the works. 23. Secondly, there was no evidence available to the Member from which she could find that outstanding issues including instructions that would delay practical completion and that there would have been an extension of time claim in the builder's favour for the delay caused in providing the instructions. 24. The absence of evidence in the above regard is highlighted by clause L6 of the contract in relation to simultaneous delays. What the Member ought to have appreciated was that the builder was not entitled to an extension of time for an absence of instructions if it coincided (as it did) with a period in which the builder had abandoned the site and formed the intention of not returning (unbeknown to Mr Bartlett). Third Ground of Appeal 25. The finding by the Member in paragraph 13 above is wrong. 4 The Appeal Tribunal upheld Mr Bartlett’s first ground of appeal, which challenged a finding by the Member that Mr Bartlett accepted the builder’s repudiatory conduct on 14 September 2009 by serving a Notice to Remedy Default. The Appeal Tribunal found that, as the builder conceded, the Notice of Termination on 15 December 2009, rather than the Notice to Remedy on an earlier date, accepted the builder’s repudiatory conduct. -- 9 of 33 -- 10 26. There was allegation by the builder below that Mr Bartlett had acted ‘unreasonably’ in issuing the Notice to Remedy Default 9 months after it had abandoned the site. 27. The builder's evidence was to the contrary: (a) The builder by its solicitors denied it had vacated the site and asserted that it intended to return to complete the Works. (b) Mr Durkin, the builder's director conceded for the first time shortly before the hearing and during his oral evidence that the above denial was false. (c) Mr Durkin also justified the substantial period of inaction by reference to without prejudice negotiations including two mediation conferences that ultimately did not result in a concluded agreement.” [29] The Appeal Tribunal gave the following reasons for rejecting the third ground of appeal: “[59] Mr Bartlett contends that the finding that he otherwise failed to act reasonably by issuing the notice to remedy breach some nine months after the builder abandoned the site is wrong. Although there was an allegation by the builder that Mr Bartlett had acted unreasonably in issuing the notice to remedy default nine months after it had abandoned the site, Mr Bartlett says that the builder’s evidence was to the contrary. He says that the builder by its solicitors denied it had vacated the site and asserted that it had intended to return to complete the works. He also says that the builder’s director Mr Dirking [sic] conceded shortly before the hearing and during his oral evidence that the denial that the builder had vacated the site was false. He contends Mr Dirking [sic] justified the substantial period of inaction by reference to without prejudice negotiations. [60] In my view the third ground concerns a finding of fact for which leave has not been sought or obtained. Mr Bartlett is now out of time for seeking such leave. [61] The Tribunal had found that Contrast had abandoned the site by 12 January 2009 and that Mr Bartlett had knowledge of the abandonment. That being so, in my view it was not unreasonable or wrong for the learned Member to make the finding. [62] The Tribunal was referred to Pialba Commercial Gardens Pty Ltd v Braxco Pty Ltd and others in which Wilson AJA stated: ‘Although it is commonly said that an injured party has a ‘duty’ to mitigate its loss, as Irvine CJ said in Driver v War Service Homes Commissioner: ‘This expression, I think, does not mean that he is under any duty in the ordinary sense, towards the party breaking the contract, but that he cannot be said to have really incurred any loss which might have been avoided by his taking such steps as a reasonably prudent man in his position would have taken to -- 10 of 33 -- 11 avoid further loss to himself; and the best test is, what would such a man do to avoid such a further loss to himself, supposing that, from insolvency (sic) the other party, or for some other reason, he could not get any damages.’ [63] In my view, on the material before me, it was open for the learned Member to determine that Mr Bartlett had acted unreasonably and was not entitled to liquidated damages.”5 [30] In paragraph 59, the Appeal Tribunal construed paragraph 26 of Mr Bartlett’s Appeal Outline as a submission that there was “an” allegation by the builder that Mr Bartlett had acted unreasonably. The builder argued that was correct. Mr Bartlett’s counsel informed the Court that the word “no” was accidentally omitted from paragraph 26; it was intended to state that there was “no” allegation. [31] In my respectful opinion, the builder’s argument should be accepted. If it were appropriate to take into account the facts that Mr Bartlett’s counsel accidentally omitted the word “no” before “allegation” and that there was in truth no such allegation, the paragraph could be construed in accordance with its author’s intention, but the Appeal Tribunal was not informed of either fact. Upon the face of the written submissions in the Appeal Tribunal it was not necessary for the Appeal Tribunal to investigate the question whether or not the builder had made such an allegation. The Appeal Tribunal acted upon the natural reading of paragraph 26, which is that the builder alleged that Mr Bartlett acted unreasonably. That does not result in any incongruity in Mr Bartlett’s submissions. In particular, paragraph 27 makes sense on either reading of paragraph 26 (although its connotation varies according to which construction is adopted). Furthermore, the insertion in paragraph 26 of the word “an” before “allegation” would merely render the text grammatically correct without changing its apparent meaning, whereas the insertion of the word “no” would radically change the apparent meaning of the text. Paragraphs (c) - (d) of ground 1 of the proposed appeal [32] Paragraphs (c) - (d) of ground 1 challenge the reasoning in paragraphs [60]-[63] of the Appeal Tribunal’s reasons (which substantially reproduce submissions made by the builder to the Appeal Tribunal).6 [33] Mr Bartlett argued that the Appeal Tribunal erred in law in treating the finding in [81] of the Member’s reasons as a finding of fact when the law concerning mitigation of loss did not allow consideration of the question whether Mr Bartlett behaved reasonably in deciding to discharge the contract or to continue with its performance following the occurrence of a breach by the builder of a kind which resulted in the appellant’s right to terminate the contract; no question of mitigation of loss could arise until Mr Bartlett accepted the repudiation as an anticipatory breach. [34] The builder did not argue that the Appeal Tribunal erred by accepting the proposition in paragraph 3 of Mr Bartlett’s submissions that the relevant requirements for the operation of the liquidated damages clause in the contract were that the works had not reached practical completion as defined in the contract by the date for practical completion: see [7] of these reasons. Nor did the builder contest Mr Bartlett’s argument that the law concerning mitigation of loss is irrelevant to a claim for liquidated damages 5 I have omitted footnotes. 6 Builder’s Appeal Outline 20 December 2013, paragraphs 12 – 17. AB 2027 – 2028. -- 11 of 33 -- 12 payable under the applicable contractual provision. The builder’s argument upon this aspect of ground 1 was that there was no error of law in the Appeal Tribunal’s decision. [35] The reasonableness or otherwise of Mr Bartlett’s conduct is not referred to in the applicable contractual provision. A fundamental flaw in the builder’s reliance upon the law concerning mitigation of loss is that Mr Bartlett did not sue to recover damages as compensation for loss he had sustained as a result of breach of contract by the builder. For present purposes it is not necessary to go beyond the passage in the reasons of Wilson AJA in Pialba Commercial Gardens Pty Ltd v Braxco Pty Ltd & Ors which the Appeal Tribunal quoted. As is apparent from that passage, the law about mitigation of damages is concerned with the causal relationship between a breach of contract and a loss which the innocent party claims to have suffered as a result of that breach.7 Where the innocent party does not take a step to avoid such loss which a reasonably prudent person in the same position would have taken, the innocent party cannot recover that loss as damages for the breach of contract. [36] That topic is irrelevant to Mr Bartlett’s claim for liquidated damages. This aspect of his claim was not for damages for breach of contract or for damages which reflected any loss actually sustained by Mr Bartlett. As was made clear in the introductory parts of Mr Bartlett’s written submissions, he sued upon the builder’s contractual promise to pay him liquidated damages in a specified event, and that event had occurred. The builder did not argue that the liquidated damages clause was unenforceable for any reason, that Mr Bartlett’s entitlement to liquidated damages depended upon performance of any contractual obligations which required the builder’s cooperation, that Mr Bartlett failed to perform any contractual obligation upon which his entitlement depended, or that there was any applicable exception to Lord Reid’s proposition in White & Carter (Councils) Ltd v McGregor that “it has never been… the law that a person is only entitled to enforce his contractual rights in a reasonable way….”.8 The builder did cite the obligation in clause A1.1 of the contract that both parties “must act reasonably and cooperate in all matters relating to this contract”, but that obligation is immediately qualified by the statement that it “does not affect either party’s rights or responsibilities under this contract”. Thus, even if that obligation was in terms capable of applying to the timing of Mr Bartlett’s termination for the builder’s wrongful repudiation, it did not affect Mr Bartlett’s contractual right to liquidated damages. Subject only to a possible question whether any extension of time should be granted to the builder in addition to those granted by Mr Bartlett’s architect (a question which was agitated in connection with the builder’s notice of contention), Mr Bartlett was entitled to recover the agreed liquidated damages as money payable to him under the contract. [37] The builder argued that Mr Bartlett did not contend in the Appeal Tribunal that he did not owe a duty to mitigate such as was found by the Member. That is so and it is a very relevant consideration in deciding whether leave to appeal should be granted. Nevertheless, 7 I also note that in TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 at 157, Hope JA (Priestley and Meagher JJA agreeing) quoted with approval a passage in the judgment of Irvine CJ in Driver v War Services Homes Commissioner which immediately preceded the passage quoted by Wilson AJA in Pialba Commercial Gardens Pty Ltd v Braxco Pty Ltd & Ors. Priestley JA pointed out at 162 that Irvine CJ was referring to the plaintiff’s obligations to “prove what damage it is that has flowed from the defendant’s breach of contract”. 8 [1962] AC 413 at 430. Possible exceptions are discussed in Tall-Bennet & Co Pty Ltd v Sadot Holdings Pty Ltd (1988) NSW ConvR 55-248 (Young J) and Continuing contractual conundrums: ‘Repudiating’ a contract, penalties, ‘good faith’ and the scope of the ‘legitimate interest’ principle in White & Carter (Councils), Lee Aitken, (2015) 40 Australian Bar Review 112. -- 12 of 33 -- 13 it remains the case that the Appeal Tribunal erred in deciding that the Member’s conclusion in [81] was open and should not be set aside. That was an error of law. [38] The builder argued that the Appeal Tribunal correctly found (in [60] of its reasons) that Mr Bartlett’s appeal to it was based upon an error in fact rather than error in law. However the finding in [60] was itself informed by the Appeal Tribunal’s reasons in [61] – [63]; those were the only reasons the Appeal Tribunal gave for the conclusion that Mr Bartlett’s argument did not raise a question of law. In those reasons, the Appeal Tribunal invoked the law concerning mitigation of damages as the underlying legal basis for the conclusion in [63] that, upon the material available to the Appeal Tribunal, the finding that Mr Bartlett was not entitled to liquidated damages was “open” to the Member. [39] Because the law concerning mitigation of damages was irrelevant to Mr Bartlett’s claim for liquidated damages, the Appeal Tribunal erred in law in accepting the builder’s argument that the finding in [81] was open to the Member. Paragraph (e) of Ground 1 of the proposed appeal [40] In my respectful opinion, even upon the assumption that the law concerning liquidated damages was applicable the Appeal Tribunal erred in law for the additional reason that the Member’s decision was not open upon the material available to the Appeal Tribunal. [41] This point is raised by paragraph (e) of ground 1 of the proposed appeal. The parties presented competing arguments upon the question whether this aspect of ground 1 raised a question of law. [42] If paragraph 27 of Mr Bartlett’s submission in the Appeal Tribunal were construed in isolation from its context, that paragraph could readily be understood as arguing only that the Member’s finding was against the weight of the evidence because the finding was contrary to the evidence of the builder itself. As the builder also argued, such a construction derives some support from the circumstance that in Mr Bartlett’s argument upon the second ground in the Appeal Tribunal he submitted that “there was no evidence available to the Member” to support the finding challenged by that ground of appeal. [43] In my respectful opinion, however, when account is taken of the context and the content of the relevant finding, it sufficiently appears from Mr Bartlett’s submissions that he contended that there was no evidence to support the Member’s finding in [81] of the Member’s reasons. In a decision cited for the builder, Rana v Repatriation Commission,9 the Full Court of the Federal Court held, with reference to an “appeal” on a question of law under s 44 of the Administrative Tribunal Act 1975, “[t]hough care must be taken, especially in the face of an objection to competency, not to visit on a respondent party a judicially attractive question of law which the notice does not fairly raise, there is authority which would support the reading as a whole and in context of a notice of appeal so as to give precision to an inelegantly specified question of law”. No stricter approach should be taken in the Tribunal, which is obliged to ensure that “proceedings are conducted in an informal way that minimises costs to parties …”.10 9 [2011] FCAFC 124 at [14]. 10 Queensland Civil and Administrative Tribunal Act 2009, s 4(c). -- 13 of 33 -- 14 [44] It should first be noted that the builder appears to have understood Mr Bartlett’s submissions in the Appeal Tribunal as calling for a decision whether the Member’s conclusion was open upon the evidence. Paragraphs [62] and [63] of the Appeal Tribunal’s reasons adopted paragraphs 15 and 16 of the builder’s submissions without material change. Whilst the builder’s submissions also contended that Mr Bartlett’s third ground of appeal was from a finding of fact, for reasons already given (see [38]) that contention was necessarily based upon the builder’s argument that the Member’s rejection of the liquidated damages claim was “open”. [45] The facts underlying the Member’s conclusion that Mr Bartlett acted unreasonably were identified in [81] of her reasons as being that Mr Bartlett did not issue the notice to remedy breach until some nine months after he learned that the builder had abandoned the site. That there was no dispute about those facts was made clear in Mr Bartlett’s written submissions, which set out paragraph [81] at the commencement of those submissions and substantially repeated it in paragraph 13 after setting out the underlying facts in paragraphs 3 - 11. (Mr Bartlett did not give evidence, as was made clear in the Member’s reasons and drawn to the Appeal Tribunal’s attention in the builder’s written submission.11) Under the heading “Third Ground of Appeal”, paragraph 26 again invoked the facts identified in [81] of the Member’s reasons as the factual basis of the builder’s case upon liquidated damages. [46] It was in that context that paragraph 27 argued that the builder’s own evidence contradicted the Member’s conclusion that Mr Bartlett thereby acted unreasonably. The evidence cited in paragraph 27 is summarised in the statements in (a) – (c). It is sufficient to refer only to the evidence cited for the summary in (c), which comprised one paragraph of an affidavit by the builder’s director, Mr Durkin. Mr Durkin deposed that the parties attended a mediation on or about 4 February 2009, thereafter the builder supplied several draft agreements to Mr Bartlett up until 4 August 2009, and terms of settlement between the builder and Mr Bartlett were never finalised. [47] In summary, Mr Bartlett’s submission to the Appeal Tribunal conveyed that the relevant evidence was to the effect that Mr Bartlett commenced the process of terminating the contract some nine months after he first became aware of the builder’s wrongful repudiation of the contract, during which period he and the builder were attempting to resolve their dispute by mediation and negotiation. The identified factual substratum of the Member’s conclusion that Mr Bartlett acted unreasonably and the description of the builder’s (narrow) case in paragraph 26 of Mr Bartlett’s written submissions excluded the possibility of there being evidence of different facts supporting the Member’s conclusion. The builder’s written submission in the Appeal Tribunal referred to some evidence,12 but that evidence relevantly concerned only Mr Bartlett’s knowledge of the builder’s abandonment of the site as recorded in [81] of the Member’s reasons. The builder did not argue that there was any other relevant evidence. [48] In response to a question from the Court whether Mr Bartlett’s conduct in waiting nine months to terminate was evidence of unreasonableness, senior counsel for the builder submitted that “the theory seemed to be that Mr Bartlett was under a duty to mitigate his loss with respect to liquidated damages [that] should have caused him to terminate earlier and engage another builder to finish the job”. The latter part of this proposition, that Mr Bartlett should have engaged another builder to complete the outstanding work, was not within the builder’s case on liquidated damages as described in Mr Bartlett’s written submissions, it was not within the summary of the facts in 11 Member’s reasons at [8] - [9]; Builder’s Appeal Outline, paragraph 13(a). AB 2027. 12 Builder’s Appeal Outline, paragraphs 13(b), 14. -- 14 of 33 -- 15 Mr Bartlett’s written submissions, and it was not found as a fact or relied upon by the Member. [49] The necessary but incorrect assumption that the law about mitigation of damages was potentially applicable in this context makes any analysis artificial, but (adapting the language of the passage quoted in Pialba Commercial Gardens Pty Ltd v Braxco Pty Ltd) the present question may be expressed as being whether it was open upon the evidence to conclude that a reasonably prudent person in Mr Bartlett’s position would have terminated the contract earlier than he did so as to avoid incurring the (supposed) loss reflected in the builder’s liability for the accruing liquidated damages. [50] There are many reasons why this question must be answered in the negative. One reason is that such a conclusion could not be reached without taking into account what Mr Bartlett should have foreseen (without the benefit of hindsight) as the adverse economic consequences for him of terminating the contract rather than waiting for the outcome of his negotiations with the builder. (If the builder’s economic interests were relevant (as the Member assumed), in order to decide which option would best serve those interests it would also be necessary to compare (without the benefit of hindsight) the reasonably foreseeable total of the accruing amounts of the liquidated damages and any other contractual liabilities with the reasonably foreseeable adverse consequences for the builder of an earlier termination (such as, for example, the builder’s loss of any profit upon the work yet to be completed under the contract and whatever liability the builder would accrue upon termination for its wrongful repudiation to pay any loss of bargain damages incurred by Mr Bartlett). Nothing of that kind was the subject of evidence, argument, or findings. [51] Mr Bartlett’s written submissions invoked the additional and critical point that the builder’s own evidence explained the lapse in time before Mr Bartlett gave the notice to remedy breach. On any reasonable view, the mere fact that Mr Bartlett could have terminated the contract many months earlier than he did, thereby substantially reducing the amount of liquidated damages for which the builder was liable, could not conceivably justify a conclusion that Mr Bartlett acted unreasonably in such a way as to deprive him of his entitlement to any liquidated damages particularly in circumstances in which Mr Bartlett commenced the process of termination only shortly after the unsuccessful conclusion of negotiations with the builder to resolve their dispute. [52] Mr Bartlett’s submissions to the Appeal Tribunal on this point did not express the conclusion that there was no evidence to support the Member’s finding. Nevertheless, that is the effect of those submissions when they are read as a whole and in context. [53] The builder argued that the Member’s conclusion was not a finding of fact which required evidence but was instead “an inference which could be justified, as long as there were primary facts found which were capable of giving rise to that inference” and the “primary facts found by the [Member] had that capacity.”13 Those facts were wholly incapable of justifying any such inference for the reasons already given. As was common ground, questions whether there is any evidence to support a finding (as opposed to whether a finding is against the weight of the evidence), and whether it is open to draw a particular inference (as opposed to whether or not such an inference should be drawn) from the facts found are questions of law.14 13 Respondent’s outline, paragraph [13]. 14 Roads Corporation v Dacakis [1995] 2 VR 508 at 517 (Batt J, citing Australian Gaslight Company v Valuer General (1940) 40 SR (NSW) 126 at 138 per Jordan CJ, Transport Accident Commission v Hoffman [1989] VR 197 at 199, and Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355-6 (per Mason CJ, with whom Brennan, Deane, Toohey and Gaudron JJ agreed). -- 15 of 33 -- 16 Ground 2 of Mr Bartlett’s proposed appeal [54] Ground 2 of Mr Bartlett’s proposed appeal contends that the Appeal Tribunal erred in law “in not awarding Mr Bartlett, any contractually prescribed liquidated damages for the period 21 March 2008 to 15 December 2009 (90.57 weeks @ $2,100 per week = $190,197) when: (a) the only period of contention on the reasoning of both the Tribunal and Appeal Tribunal was the period from 12 January 2009 to 15 December 2009; and (b) the entitlement for the period 21 March 2008 and 12 January 2009 was not contentious and the entitlement would be 42.42 weeks @ $2,100 per week = $89,009.99.” [55] Mr Bartlett argued that the quantum of his entitlement to liquidated damages was purely arithmetic upon agreed facts, and that even if the Member’s finding concerning unreasonableness was correct, Mr Bartlett retained an entitlement to liquidated damages for the period 21 March 2008 to 12 January 2009, in the sum of $89,099.99. The builder argued that this ground involved questions of mixed fact and law, rather than a question of law only. [56] The relevant ground of appeal in the Appeal Tribunal contended that the Member “erred in law in not awarding Mr Bartlett, any contractually prescribed liquidated damages for the period 21 March 2008 to 15 December 2009 (90.57 weeks at $2,100 per week) = $190,197”. That was sufficient to raise an issue whether there was an error in law in not awarding Mr Bartlett liquidated damages for part of the period. The word “any” allowed for the possibility that some, but not all, of the total claim of the loss of $190,197 was affected by an error in law, but the builder’s submissions in the Appeal Tribunal did not make the point that the only period of contention was 12 January 2009 to 15 December 2009. [57] I accept the builder’s argument that this issue was not raised in the Appeal Tribunal. In view of my conclusions upon ground 1 it is not necessary to discuss this further. Ground 3 of Mr Bartlett’s proposed appeal [58] Ground 3 of Mr Bartlett’s proposed appeal contends that the Appeal Tribunal erred in law in not awarding Mr Bartlett interest on liquidated damages at the rate of 10 per cent per annum compounding monthly as prescribed by the contract. It is necessary to seek further submissions from the parties concerning the calculation of interest: see [84] of these reasons. Notice of contention [59] The builder filed a (proposed) notice of contention in which it contended that the Appeal Tribunal’s decision should be affirmed on the ground that the Appeal Tribunal erred in law in concluding that there was no evidence to support the finding in [80] that the builder had been delayed and prevented by Mr Bartlett from achieving practical completion. The question of law identified in the notice of contention was whether there was no evidence to support that finding. [60] The relevant finding by the Member is that Mr Bartlett’s claim for liquidated damages failed “on the basis that there were outstanding issues including instructions that would delay practical completion and that would otherwise give rise to an extension of time claim in the builder’s favour for the delay…”.15 15 [2014] QCATA 262 at [58]. -- 16 of 33 -- 17 [61] The essence of Mr Bartlett’s response to the notice of contention is that the Appeal Tribunal’s finding was correct because (apart from specified extensions of time which were or should be taken into account in the adjusted date for practical completion) there was no evidence that any conduct of Mr Bartlett or his architects caused any delay to the critical path to practical completion. [62] It is appropriate first to refer to the relevant contractual provisions. Clause L1.1 of the contract16 empowered the builder to “make a claim for an adjustment to the date for practical completion and adjustment of time costs, in respect of a delay affecting working days, caused by” ten specified causes. Relevantly, causes 6 and 10 referred to “the owner’s consultants failing to promptly provide necessary information which is properly due to the contractor or which the contractor has specifically requested in writing” and “an act of prevention by the owner not otherwise covered by this clause”. Clause L1.2 provides that the builder “must take all reasonable steps to minimise the impact of the delay on the progress of the works”. Clause L1.5 provides that the requirements for making the relevant kind of claim and the procedures to be followed are stated in section H. Clause H4 obliges the architect to give a written decision specifying any adjustment to the contract price or the date for practical completion within 20 working days after receiving a claim, and that the builder may dispute the architect’s decision (in accordance with a specified provision) “but must continue to perform its contractual obligations” under the contract. Clause H6 empowers the architect to adjust the contract at any time up to the issue of the final certificate in relation to changes which result from various causes, including causes of delay noted in clauses L1. [63] The matters upon which the builder relied for its notice of contention fall within three categories. [64] First, the builder referred to evidence recorded in findings by the Member that the builder was entitled to a number of extensions for practical completion totalling 85 days. As Mr Bartlett submitted, it is apparent from the Member’s findings that these extensions were taken into account in the adjusted date for practical completion of 21 March 2008 determined by Mr Bartlett’s architect.17 [65] The second category concerns the builder’s claim that it was obstructed in carrying out its contractual obligations for 13 days as a result of the failure by Mr Bartlett to promptly appoint and instruct an architect to replace the original architect appointed on the contract, who Mr Bartlett removed from that role on 2 October 2008.18 In support of that claim the builder relied upon correspondence dated 16 October 2008, which listed what were said to be outstanding items requiring information or instructions, and other correspondence. The replacement architect replied on 31 October 2008 that it had been retained to complete the administration of the contract: that architect issued instructions identifying incomplete and defective work and otherwise responding to issues raised by the builder in letters dated 16 and 29 October 2008.19 The Member accepted that “there was a delay caused by the [replacement] architect … in providing instructions to the builder during the period of transition from when [the original architect] ceased acting in the role of architect in October 2008 to the 16 In Schedule 2. 17 Member’s reasons for decision paragraphs [17]-[30], esp. [30] (“the time assessed was 50 days”); [31]-[35], esp. [35] (“the number of days assessed by the architect was 15 days”; [36]-[40], esp. [40] (“the number of days assessed by the architect was 20 days”). 18 Member’s reasons [41]-[42]. 19 Member’s reasons at [45]-[48]. -- 17 of 33 -- 18 date when further instructions were provided by [the replacement architect] by letter dated 18 December 2008 and that this caused a delay in the works and a delay in reaching practical completion”.20 The Member accepted that the builder had notified its intention to claim an extension of time with costs in relation to that delay.21 [66] Mr Bartlett conceded that the 13 days determined by the Member was not taken into account in the adjusted date for practical completion and should be added to it, thereby reducing the liquidated damages by two weeks ($4,200).22 The builder did not advance any argument in reply upon that point. The concession by Mr Bartlett should be adopted. The date for practical completion should be extended, and the amount in issue reduced accordingly. [67] The third category of delays contended for by the builder concerned what the builder submitted were additional causes of delay which should have attracted additional extensions of time23: (a) The builder argued that the instructions given by the replacement architect in December 2008 did not include instructions about some issues, in relation to which instructions were never received; that the Member accepted Mr Durkin’s evidence upon that topic and that the builder was thereby obstructed in reaching practical completion. The builder referred to a statement in the builder’s letter to Mr Bartlett dated 16 October 2008 that “Information/instruction required 1. Position of the gas outlet. These a problem as previous Architect could not solve. [sic] This is becoming urgent as we have been talking about this for a long time.” (b) The builder argued that the Member also accepted Mr Durkin’s evidence that an additional obstruction to the builder bringing the work to practical completion was that Mr Bartlett did not supply certain basins for bathrooms in the house which he was obliged to supply. In this respect the builder referred to the statement in the same letter of 16 October 2008 that, “Information/instruction required … 2. When are we going to receive the vanity basins missing as we are trying to have the plumber finalise, as per previous architect’s [advice] the vanities are not defective, plumbing [provisional costs] are a client supplied item and request the products be supplied.” [68] The builder relied upon the evidence referred to in the following findings by the Member: “[45] The builder also relies on correspondence and emails sent to Mr Bartlett and DM2 to support their claim that they were 20 Member’s reasons at [55]. 21 Member’s reasons at [56]. 22 Transcript, 3 August 2015, 1-45. 23 Respondent’s outline filed 16 February 2015, paragraphs 17(b), 8(f)-(h); Transcript 3 August 2015 at 1-36, 1-37. Letter from builder to Mr Bartlett 16 October 2008. -- 18 of 33 -- 19 obstructed in carrying out their obligations under the contract - the builder sent correspondence dated 16 October 2008 listing outstanding items that require information and/or instructions, a notice of the architect's failure to act in relation to assessing claims dated 22 October 2008 and an email was sent to DM2 dated 23 October 2008 referring to outstanding assessments. … [52] During cross-examination Mr Durkin was referred to various documents prepared by the former architect (BVN) and newly appointed architect DM2, providing further instructions and information in relation to some of the alleged outstanding items. Mr Durkin gave evidence that despite numerous discussions the issues identified by the builder were never resolved, for example, the flu in the gas hot water system. [53] Mr Durkin also gave evidence during cross-examination about the basin issue which he says contributed to a delay in completing the works – the basins were to be supplied by Mr Bartlett and installed by the builder. Mr Durkin gave evidence that the basins were never supplied. … [55] I am satisfied that there was a delay caused by the architect DM2 in providing instructions to the builder during the period of transition from when BVN ceased acting in the role of architect in October 2008 to the date when further instructions were provided by DM2 by letter dated 18 December 2008 and that this caused a delay in the works and a delay in reaching practical completion.” [69] Those findings do not assist the builder. They appear in the section of the Member’s reasons concerning the second category, for which the Member accepted the builder’s claim in relation to this period for an extension of 13 days. [70] The builder also relied upon the evidence referred to in the following findings by the Member: “[66] The builder's contention that they were awaiting instructions in relation to outstanding items, for example the hot water system, and this would give rise to an extension of time claim under the contract, is accepted based on the findings previously made by the Tribunal. The builder has identified outstanding items awaiting instruction in their letter dated 16 October 2008 and Mr Durkin gave evidence at the hearing that some of the items awaiting instruction would delay practical completion and there were otherwise items that were variations under the contract.” [71] The conclusion that the builder was entitled to an extension of time in relation to certain delayed instructions (including in relation to the hot water system) was again referrable to the previous findings, for which I have accepted that a 13 day extension should be allowed for the period up to 20 December. [72] As to the period after that, in [67] the Member went on to observe that, “there were instructions provided, however, by [the replacement architect] on 18 December 2008 -- 19 of 33 -- 20 responding to outstanding issues raised by the builder to enable works to be continued.” In the next paragraph, the Member referred to the builder having elected to no longer proceed with the works in the period late December 2008 to early January 2009; in that context the Member referred to Mr Durkin’s evidence that on 18 December 2008, “the builder took the scaffolding down and removed materials from the construction site.” [73] The reasons continued: “[70] Mr Durkin was questioned at the hearing about the inconsistency between his evidence given at the hearing, that the builder had vacated the site on 18 December 2008, and the correspondence sent by the builder's solicitors to Mr Bartlett's solicitors, after 18 December 2008, in which the builder's solicitors state that their client would be returning to the site. Mr Durkin gave evidence that the parties were "in discussions". [71] The builder's solicitors, by letter dated 8 January 2009, state that the builder had not abandoned the site and had left the site due to an "industry shutdown period" and would continue works from 12 January 2009. The builder's solicitors further state that they would be delayed from "meaningfully" progressing the works to reach practical completion due to Mr Bartlett's failure to nominate an architect under the contract and to provide further instructions such as design details and clarifications. [72] The builder's solicitor's contentions raised on 8 January 2009 were clearly misapprehended based on the evidence given by Mr Durkin at the hearing with respect to the completion of the works under the contract and the evidence before the Tribunal in relation to the appointment of an architect.” [74] The Member went on to find that: “notwithstanding the outstanding instruction in relation to, for example, the hot water system and vanity basins, there were incomplete works for which instructions had been provided by [the replacement architect] to enable the builder to continue progress of the works” and that there was evidence of “several incomplete items for the builder to complete as at 18 December 2008”; the replacement architect “provided details of the incomplete and defective items to the builder by letter dated 19 November 2008”; “the builder has at 12 January 2009 abandoned the work under the contract and has otherwise failed to continue completion of the works”; and its “failure to return to the site and continue completion of the work was repudiatory conduct such as to evince an intention to no longer be bound by the contract, or to be bound by the contract only on terms other than those provided for in the contract…”.24 [75] It should also be noted, notwithstanding any outstanding instruction to the builder at the time he abandoned the site on 18 December 2008, that there was a great deal of contract work available and required to be completed by the builder is consistent with the Member’s assessment that the total cost of the defective and incomplete work (excluding builder’s preliminaries and margin and excluding GST) was $306,380.25 24 Member’s reasons [76]-[78]. 25 Reasons of the Member [97], and the subsequent reasons of the Member of 5 August 2013 at [25]. -- 20 of 33 -- 21 [76] The builder did not argue that the evidence to which it pointed justified the Court in setting aside any of the Member’s findings on this topic. In light of those findings, it does not avail the builder now to point to evidence merely that when the builder abandoned the site there was an outstanding instruction (such as the instruction in relation to the hot water system mentioned in [80] of the Member’s reasons) or the non-supply of an item to be supplied under the contract by Mr Bartlett (such as the basins mentioned in [53] of the Member’s reasons). Nor is it relevant to consider whether or not such work was required in order to achieve practical completion. The findings establish that when the builder ceased work there was work to be completed under the contract apart from the work now referred to by the builder. The Member rejected the builder’s case that when it ceased work it was prevented from progressing the works towards practical completion by any defaults of Mr Bartlett and his architect. In that context, as was submitted for Mr Bartlett, the evidence to which the builder pointed was not evidence that the allegedly outstanding matters affected the critical path. To express it in the terms used in the contract, the suggested defaults could not be regarded as having caused “a delay affecting working days” (cl L1.1) or a delay in respect of which the builder complied with its obligation in cl L1.2 to “take all reasonable steps to minimise the impact of the delay on the progress of the works”. [77] In my respectful opinion the Appeal Tribunal was correct in finding that there was no evidence to support the relevant finding by the Member. [78] I would add that my reasons should not be construed as conveying that, if the Member’s findings of fact upon this topic were supported by evidence, those findings were capable of justifying a conclusion that Mr Bartlett was not entitled to recover liquidated damages. That topic was not in issue. Leave to Appeal [79] In my respectful opinion, leave to appeal should be granted because Mr Bartlett will suffer a very substantial injustice unless the legal errors in the Appeal Tribunal’s decision are corrected. [80] I also would reject the builder’s argument that leave should be refused because no question of law identified by Mr Bartlett would have ramifications in other cases or raise a matter of general importance. Unless the decision rejecting Mr Bartlett’s third ground of appeal is set aside, that decision might be regarded as authority in the Tribunal for the erroneous legal proposition that an owner’s contractual entitlement to liquidated damages for a builder’s delay in completion under a building contract might be defeated by a finding merely that it was “unreasonable” for the owner to defer terminating the contract after the owner first became aware that it had a right to terminate the contract. [81] The strongest ground for refusing leave to appeal is that, although the legal errors fell within Mr Bartlett’s grounds of appeal to the Appeal Tribunal, those grounds of appeal were expressed in very general terms, Mr Bartlett’s submissions in the Appeal Tribunal did not advert at all to the legal error that the Member wrongly assumed that the law concerning mitigation of damages was applicable to his claim, and his submissions should more clearly have made the point that there was no evidence or finding of fact capable of supporting the Member’s finding or inference that Mr Bartlett acted unreasonably. Those considerations militate against the grant of leave to -- 21 of 33 -- 22 appeal, notwithstanding the contribution to the Appeal Tribunal’s decision which was made by the inadvertent typographical error in Mr Bartlett’s submissions. [82] On balance, however, the fundamental nature of the legal errors and the magnitude of the injustice which Mr Bartlett would sustain unless the errors are corrected requires the grant of leave to appeal. Disposition and proposed orders [83] The builder did not contest the arithmetic in Mr Bartlett’s submissions that the amount for liquidated damages between the (adjusted) date for practical completion of 21 March 2008 and 15 December 2009 is $190,197. Deducting the amount for liquidated damages for the additional extension of 13 days, the net increase in the amount awarded in the Appeal Tribunal should be $185,997. [84] The Appeal Tribunal allowed in part both the appeal by Mr Bartlett and an appeal by the builder. In the result the amount of the award by the Member ($218,940.17 plus interest of $130,363.36) was reduced by $2,900 (for claim) to $21,604.17 plus interest at 10 per cent per annum compounding monthly between 15 December 2009 and 4 February 2013. The addition of $185,997 for claim results in a total amount for claim of $402,037.17. The effect of the third ground of Mr Bartlett’s appeal to this Court is that compound interest as provided by the contract should run from a date or dates which differ from the date specified by the Member (the date of termination). The builder did not contradict Mr Bartlett’s argument that compound interest should run from a date earlier than that which the Member fixed, but the Member’s order did not comprehend liquidated damages. If the parties cannot resolve this issue by agreement, they should have the opportunity of making further submissions upon. [85] Upon the footing that Mr Bartlett’s appeal to this Court should substantially succeed, he should have the costs of his application and appeal in this Court. [86] Section 100 of the Queensland Civil & Administrative Tribunal Act 2009 states the general rule that: “Other than is provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceeding.” Section 102 of that Act empowers the Tribunal to make an order requiring a party to a proceeding to pay all or some of the costs of another party if the Tribunal considers that the interests of justice require it. The Appeal Tribunal considered that there had been limited success by each party and that it was appropriate that each party bear their own costs. The orders I propose would very substantially increase the magnitude of Mr Bartlett’s success, but it would remain the case that each party succeeded to some extent in the Appeal Tribunal. It is also relevant that one of the errors of law I have found was not articulated in Mr Bartlett’s argument in that tribunal. In those circumstances I consider that there should be no order as to costs in the Appeal Tribunal. Proposed orders [87] In my opinion the following orders are appropriate: 1. Grant leave to appeal. 2. Allow the appeal. 3. Set aside orders 2 and 3 made by the Appeal Tribunal on 9 September 2014 and instead order as follows: -- 22 of 33 -- 23 (2) Set aside the order made in the tribunal on 5 August 2013 and order instead that Contrast Constructions Pty Ltd is to pay Mr Bartlett the sum of $402,037.17, plus interest on that sum in an amount to be fixed by the Court. 4. Direct that, in the event that the parties do not agree upon the amount of interest, the parties file within 14 days a written submission limited to two pages as to the calculation and amount of interest. 5. The respondent pay the appellant’s costs of the application for leave to appeal and of the appeal, including the costs associated with the respondent’s notice of contention. [88] NORTH J: The applicant seeks leave to appeal a decision of the Queensland Civil and Administrative Appeal Tribunal made on 9 September 2014. Section 151(2)(b) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“the QCAT Act”) requires that an application for leave to appeal must be made within 28 days after “the day the person is given written reasons for the decision being appealed against”. [89] For reasons not attributable to any fault on the part of the applicant, his application for leave to appeal was filed one day late, consequently the applicant requires both an extension of time in which to apply for leave to appeal and for leave to appeal. The respondent did not oppose the grant of an extension of time within which to apply for leave to appeal with the consequence that at the hearing full argument was heard from both parties upon the applicant’s grounds for a grant of leave to appeal and those in support of the appeal. In addition argument was heard upon a Notice of Contention filed by the respondent.26 Introduction and Contractual Provisions [90] By a written contract27 which was signed by the parties on 23 June 200628 the applicant as owner and the respondent as contractor contracted for the construction of a new detached two-storey house with basement and other features at 32 Hiron Street, St Lucia, Brisbane. Clause A1.1 of the contract provided:29 “Cooperative contracting 1 The contractor and the owner must act reasonably and cooperate in all matters relating to this contract and avoid obstructing the other in its performance under this contract. This obligation does not affect either party’s rights or responsibilities under this contract.” [91] Clause M1 of the contract dealt with practical completion of the works and relevantly provided:30 “Practical completion 1 The contractor must bring the *works to *practical completion by the date for practical completion shown in Item 16 of schedule 1 as adjusted in accordance with this contract. The *works are at *practical completion when, in the reasonable opinion of the architect: … 26 Filed 31 July 2015. 27 AR V 4 p 1821. 28 AR V 4 p 1828-1829. 29 AR V 4 p 1831. 30 AR V 4 p 1853. A1 M1 -- 23 of 33 -- 24 2 Subject to clause M7, at 4.00pm on the date the architect issues the notice of practical completion, the owner takes possession of the *works.” [92] The date specified in Schedule 1 of the Contract for Practical Completion was 22 June 2007.31 [93] Clauses M8 and M9 of the contract dealt with liquidated damages32 and relevantly provided: “Liquidated damages may be payable 1 If the *works have not reached *practical completion by the date for practical completion as adjusted, the architect must *promptly notify the owner and the contractor in writing of the owner’s entitlement to liquidated damages. 2 The owner may then, or at any time until the final certificate is issued under clause N11 or a certificate under clause Q9 or Q17 is issued, advise the architect in writing whether it intends to enforce its entitlement to liquidated damages against the contractor. 3 The contractor is liable to pay or allow to the owner liquidated damages at the rate shown in item 18 of schedule 1. Deduction of liquidated damages 1 If the owner advises the architect in writing that it wishes to enforce its entitlement to liquidated damages against the contractor, the architect must immediately advise the contractor in writing of the owner’s decision. 2 When the architect prepares the next certificate, it must deduct the amount of liquidated damages to which the owner is entitled. 3 If, after the architect has issued a certificate in which an allowance for the owner’s entitlement to liquidated damages has been made, an adjustment is made to the date for practical completion, with the result that the owner’s entitlement to liquidated damages is altered, the architect must make an appropriate adjustment in the next certificate.” [94] Schedule 1 to the contract provided that liquidated damages were payable at the rate of $2,100 per calendar week inclusive of GST.33 [95] With respect to claims for an adjustment under the contract clause H334provided: “Architect to assess claim 1 The architect must *promptly assess the *claim to adjust the contract and in so doing the architect must consider:  the detailed claim submitted by the contractor and any further information the architect requests the contractor to supply 31 AR V 4 p 1872. 32 AR V 4 p 1854. 33 AR V 4 p 1872. 34 AR V 4 p 1845. M8 M9 H3 -- 24 of 33 -- 25  any bill of quantities, if applicable  the schedule of rates, if applicable  the extent to which the claim will affect the contractor’s ability to complete the *works by the date for practical completion and  a reasonable allowance for the contractor’s overheads and profit. 2 If the architect needs additional information to assess the claim, the architect must ask the contractor for it. 3 The contractor must *promptly give to the architect any additional information the architect reasonably requests.” [96] Schedule 2 to the contract set out the particulars of the causes of delay which might entitle making a claim for an adjustment of time with costs and relevantly provided:35 “Causes of delay which entitle making claim for adjustment of time with costs 1 The contractor may make a claim for an adjustment to the date for practical completion and *adjustment of time costs, in respect of a delay affecting *working days, caused by: … cause 3 an architect’s instruction … cause 6 the owner’s consultants failing to *promptly provide necessary information which is properly due to the contractor or which the contractor has specifically requested in writing … cause 10 an act of prevention by the owner not otherwise covered by this clause.” [97] The remedy sought by the applicant in this appeal is the recovery of liquidated damages for the period from 21 March 2008 to 15 December 2009 in the amount of $190,197.00 calculated at the rate of $2,100 per week36. In support of that claim the applicant submits that at the hearing before the primary Tribunal Member it was not contentious in so far as the applicant claimed an entitlement for liquidated damages from 21 March 2008 to 12 January 2009 and that the only period in contention was that from 12 January 2009 to 15 December 2009.37 In order to understand the submission in light of the evidence and the facts found and considered by the Tribunal at first instance it is relevant to set out parts of the reasons. [98] In the Tribunal at first instance below38 the member said:39 35 AR V 4 p 1879. 36 See para [94] above. In addition the applicant sought interest on that sum at 10 per cent compounding as provided in cl N25. See AR V 4 p 1859 and Schedule 1, Item 22 at AR V 4 p 1873. 37 With the consequence that some $89,099.99 with interest should have been allowed in any event. 38 Reasons delivered 5 July 2013. 39 AR V 4 p 2049-2052. L1 -- 25 of 33 -- 26 “Is Mr Bartlett entitled to liquidated damages and if so, for what period and in what amount? [58] Clause M8 of the contract gives Mr Bartlett an entitlement to claim liquidated damages in the event the builder fails to complete the works by the date of practical completion (as adjusted). The entitlement begins from the date notice is given to the architect and will end when the works have been completed. The builder is then entitled to issue a final claim or a certificate for final payment will be issued by the architect in the event that there has been a termination of the contract. [59] There is no evidence before me and no submissions were made by either parties’ legal representatives that practical completion has been reached. The parties agree the adjusted date for practical completion is 21 March 2008 and the contract came to end on 15 December 2009. [60] Mr Bartlett claims liquidated damages for the period from 21 March 2008 to 15 December 2009 (inclusive) plus interest at the rate of 10%. … [65] I am satisfied based on the evidence before me that Mr Bartlett did not give notice of his intention to claim liquidated damages as required under clause M8.2 of the contract and notice was otherwise given on 30 September 2008. [66] The builder’s contention that they were awaiting instructions in relation to outstanding items, for example the hot water system, and this would give rise to an extension of time claim under the contract, is accepted based on the findings previously made by the Tribunal. The builder has identified outstanding items awaiting instruction in their letter dated 16 October 2008 and Mr Durkin gave evidence at the hearing that some of the items awaiting instruction would delay practical completion and there were otherwise items that were variations under the contract. [67] There were instructions provided, however, by DM2 on 18 December 2008 responding to outstanding issues raised by the builder to enable works to be continued. [68] In late December 2008 and early January 2009, the builder elected to no longer proceed with the works. Mr Durkin gave evidence at the hearing that on 18 December 2008 the builder took the scaffolding down and removed materials from the construction site. Mr Durkin agreed, during cross-examination, that the builder had vacated the site. [69] Following the builder leaving the construction site on 18 December 2008 there was an exchange of correspondence between the parties’ legal representatives making various assertions about purported breaches of the contract. -- 26 of 33 -- 27 [70] Mr Durkin was questioned at the hearing about the inconsistency between his evidence given at the hearing, that the builder had vacated the site on 18 December 2008, and the correspondence sent by the builder’s solicitors to Mr Bartlett’s solicitors, after 18 December 2008, and the correspondence sent by the builder’s solicitors to Mr Bartlett’s solicitors, after 18 December 2008, in which the builder’s solicitors state that their client would be returning to the site. Mr Durkin gave evidence that the parties were “in discussions”. [71] The builder’s solicitors, by letter dated 8 January 2009, state that the builder had not abandoned the site and had left the site due to an “industry shutdown period” and would continue works from 12 January 2009. The builder’s solicitors further state that they would be delayed from “meaningfully” progressing the works to reach practical completion due to Mr Bartlett’s failure to nominate an architect under the contract and to provide further instructions such as design details and clarifications. [72] The builder’s solicitor’s contentions raised on 8 January 2009 were clearly misapprehended based on the evidence given by Mr Durkin at the hearing with respect to the completion of the works under the contract and the evidence before the Tribunal in relation to the appointment of an architect. … [76] The Tribunal finds that as at 12 January 2009 notwithstanding the outstanding instructions in relation to, for example, the hot water system and vanity basins, there were incomplete works for which instructions had been provided by the architect DM2 to enable the builder to continue progress of the works. Mr Spender also gave evidence at the hearing that there were several incomplete items for the builder to complete as at 18 December 2008. [77] The architect DM2 provided details of the incomplete and defective items to the builder by letter dated 19 November 2008. There is also evidence before the Tribunal in relation to the works and the incomplete and alleged defective items referred to in the expert reports of Ms Russell and Mr Spender. [78] The Tribunal finds that the builder has as at 12 January 2009 abandoned the works under the contract and has otherwise failed to continue completion of the works. The builder’s failure to return to the site and continue completion of the work was repudiatory conduct such as to evince an intention to no longer be bound by the contract, or to be bound by the contract only on terms other than those provided for in the contract. [79] Mr Bartlett has accepted the builder’s repudiatory breach some 9 months later, on 14 September 2009, when a notice to remedy default referring to, amongst others, the builder’s abandonment of site and a failure to complete works, was issued. Mr Bartlett elected to terminate the contract by notice dated 15 December 2009. -- 27 of 33 -- 28 [80] The claim for liquidated damages by Mr Bartlett must fail on the basis that there were outstanding issues including instructions that would delay practical completion and that would otherwise give rise to an extension of time claim in the builder’s favour for the delay caused in providing the instructions. Mr Spender, the builder’s expert witness, gave evidence at the hearing that the installation of the hot water system was necessary for practical completion to be reached. The Tribunal has already made a finding that this instruction was outstanding as at 18 December 2008. [81] Mr Bartlett has otherwise failed to act reasonably by issuing the notice to remedy breach some 9 months after the builder abandoned the site. It would not be fair to allow Mr Bartlett’s claim for liquidated damages in circumstances where he knew the builder had abandoned the site in late December 2008 and early January 2009. Mr Bartlett is entitled, however, to be put in the position he would have been in had the contract been performed properly but he must give credit to the builder for work performed or any money outstanding in relation to work performed under the contract. [82] Mr Bartlett is only entitled to recover damages for any defective work so long as rectification of the defect was reasonable and necessary to enable the works to conform with the contract. Mr Bartlett is entitled to be put in the position had the works been completed by the builder as provided under the contract.” (Footnotes omitted) [99] Mr Bartlett sought to appeal to the Appeal Tribunal against the decision. That Tribunal, for the reasons it gave40 confirmed the finding made in paragraph [80] of the reasons below:41 “Third ground of appeal [59] Mr Bartlett contends that the finding that he otherwise failed to act reasonably by issuing the notice to remedy breach some nine months after the builder abandoned the site is wrong. Although there was an allegation by the builder that Mr Bartlett had acted unreasonably in issuing the notice to remedy default nine months after it had abandoned the site, Mr Bartlett says that the builder’s evidence was to the contrary. He says that the builder by its solicitors denied it had vacated the site and asserted that it had intended to return to complete the works. He also says that the builder’s director Mr Dirking [sic] conceded shortly before the hearing and during his oral evidence that the denial that the builder had vacated the site was false. He contends Mr Dirking [sic] justified the substantial period of inaction by reference to without prejudice negotiations. 40 Reasons dated 9 September 2014. 41 AR V 4 p 2076-2077. -- 28 of 33 -- 29 [60] In my view the third ground concerns a finding of fact for which leave has not been sought or obtained. Mr Bartlett is now out of time for seeking such leave. [61] The Tribunal had found that Contrast had abandoned the site by 12 January 2009 and that Mr Bartlett had knowledge of the abandonment. That being so, in my view it was not unreasonable or wrong for the learned Member to make the finding. [62] The Tribunal was referred to Payalba Commercial Gardens Pty Ltd v Braxco Pty Ltd and others in which Wilson AJA stated: ‘[97] Although it is commonly said that an injured party has a ‘duty’ to mitigate its loss, as Irvine CJ said in Driver v War Service Homes Commissioner: … This expression, I think, does not mean that he is under any duty in the ordinary sense, towards the party breaking the contract, but that he cannot be said to have really incurred any loss which might have been avoided by his taking such steps as a reasonably prudent man in his position would have taken to avoid further loss to himself; and the best test is, what would such a man do to avoid such a further loss to himself, supposing that, from insolvency form [sic] the other party, or for some other reason, he could not get any damages.’ [63] In my view, on the material before me, it was open for the learned Member to determine that Mr Bartlett had acted unreasonably and was not entitled to liquidated damages.” (Footnotes omitted) Grounds of Appeal [100] The applicant seeks leave to challenge what he submits are errors of law in findings by the Tribunal at first instance and the Appeal Tribunal concerning his claim for liquidated damages. The grounds of appeal as outlined in the proposed Notice of Appeal42 are:- “1. The Appeal Tribunal erred in law in finding that the Tribunal’s finding that Mr Bartlett had failed to act reasonably by issuing the notice to remedy breach (“Notice”) some 9 months after the builder abandoned the site by 12 January 2009 disentitling Mr Bartlett to liquidated damages was a question of fact when: (a) There was no issue before the Tribunal raised on the pleadings or submissions as to the reasonableness of Mr Bartlett’s conduct or the timing of his Notice to Remedy Default on 30 September 2009 in relation to Mr Bartlett’s entitlement to liquidated damages; (b) The only pleaded basis for disentitling Mr Bartlett to liquidated damages was the assertion that there were 42 Exhibit 1. -- 29 of 33 -- 30 outstanding issues including instructions that would delay practical completion and that would otherwise give rise to an extension of time claim in the builder’s favour, a matter which Appeal Tribunal determined against the builder in favour of Mr Bartlett; (c) Liquidated damages were a contractual entitlement between two dates (the extended date for practical completion and the date of termination of the Contract), neither of which were in dispute; (d) There is no duty to mitigate liquidated damages prescribed by a contract prior to termination for breach; (e) In so far as there was evidence before the Tribunal concerning the nine month period prior to the Notice, it was from the builder and established that during that period there were without prejudice negotiations including two mediation conferences that ultimately did not result in a concluded agreement. 2. The Appeal Tribunal erred in law in not awarding Mr Bartlett, any contractually prescribed liquidated damages for the period 21 March 2008 to 15 December 2009 (90.57 weeks @ $2,100 per week) = $190,197.00 when: (a) the only period of contention on the reasoning of both the Tribunal and Appeal Tribunal was the period from 12 January 2009 to 15 December 2009; and (b) the entitlement for the period 21 March 2008 and 12 January 2009 was not contentious and the entitlement would be 42.42 weeks @ $2,100 per week = $89,099.99. 3. The Tribunal erred in law in not awarding Mr Bartlett interest on the liquidated damages at the rate of 10% per annum compounding monthly as prescribed by the Contract.” The Rival Submissions [101] The applicant submitted that the Tribunal Member’s decision at first instance, that the applicant had failed to act reasonably by issuing the Notice to Remedy Breach some nine months after the builder had abandoned the site and that it was not fair to allow the applicant to claim liquidated damages in circumstances where he knew the builder had abandoned the site, was not merely a finding of fact contrary to the reasoning of the Appeal Tribunal.43 In support of the submission, counsel for the applicant pointed to the submissions made by the respondent to the Member at first instance44 concerning “fairness” and the discussion of that in the context of the instructions and outstanding issues. He submitted that no submission had been made at first instance that the timing of any of the notices was unreasonable conduct disentitling the applicant to liquidated damages. That in the circumstances where the issue had not been advanced 43 See para [81] of the reasons of the Tribunal at first instance quoted at [98] above and see further paras [59] and [60] of the Appeal Tribunal’s reasons quoted at [99]. 44 AR V 4 p 1952 at [58]. -- 30 of 33 -- 31 before the Tribunal Member her determination to disallow the claim for liquidated damages on the grounds of unreasonable conduct was a denial of natural justice and an error of law. He further submitted that the holding by the Appeal Tribunal that the Tribunal Member’s decision on this ground was a finding of fact for which no leave to appeal had been granted was also an error of law. In the circumstances where the other basis upon which the Member at first instance had disallowed the claim for liquidated damages had been overruled by the Appeal Tribunal45 counsel submitted that the applicant was entitled to an award of liquidated damages as claimed. [102] In its outline and in submissions in argument the respondent contended that leave should not be granted for two grounds. It was submitted that in respect of five of the arguments advanced by the applicant in the outline and in submissions46 they had not been raised before the Appeal Tribunal and that leave should not be granted to raise them having not been the subject of submissions at the hearing at first instance or before the Appeal Tribunal. In respect of some of those grounds and remaining arguments it was further submitted that the applicant was attempting to challenge findings of fact and that for that reason leave to appeal should be refused because it was not “only on a question of law” as required by s 150(3) of the QCAT Act. Discussion [103] The finding at the heart of the application for leave to appeal concerns that made by the Tribunal Member at first instance that the applicant had failed to act reasonably by delaying by some months after the respondent abandoned the works and repudiated the contract before issuing a Notice to Remedy Default on 14 September 2009 and the holding that in such a circumstance it was “unfair” to allow the applicant’s liquidated damages under the contract.47 The disallowance of the claim for liquidated damages at first instance was challenged in the Appeal Tribunal in what the Appeal Tribunal described as the third ground of appeal. That appeal was heard on the papers and the Appeal Tribunal held that the ground raised a question of fact (one which the applicant had neither sought leave nor obtained leave to appeal contrary to s 142(3)(b) of the QCAT Act)48 and that on the evidence the conclusion of the Tribunal Member below, that the applicant had acted unreasonably, was open with the result that the Appeal Tribunal held that the applicant was not entitled to liquidated damages.49 [104] The respondent’s submission in response to the applicant’s complaint concerning the Tribunal’s finding (that it had not been raised before the Appeal Tribunal and that consequently upon discretionary grounds should not be permitted to be raised in this Court) proceeds, at least in part, upon an interpretation of the written submissions in support of this ground made by the applicant in the Appeal Tribunal below.50 The respondent’s contention that this ground was not raised before the Appeal Tribunal should be rejected. There is a typographical error in paragraph 26 of the applicant’s submissions to the Appeal Tribunal but on any fair reading of it the applicant was contending that the particular allegation of “unreasonable” conduct had not been in issue at first instance. 45 See AR V 4 p 2075 at [52] – [58]. 46 See para 1(a)-(e) at [100] above. 47 See para [81] of the reasons at first instance at [98] above. 48 See para [60] of the reasons of the Appeal Tribunal at [99] above. 49 See para [63] of the reasons of the Appeal Tribunal at [99] above. 50 See AR V 4 p 2016 under the heading “Third Ground of Appeal”. Cf respondent’s outline in this Court at para [3] ff. -- 31 of 33 -- 32 [105] Correspondingly, the applicant’s contention that the particular allegation of unreasonable conduct did not emerge from the written submissions made before the Member at first instance should be accepted. A submission was made concerning fairness51 but was made in the context of complaints that the applicant had not been called to give evidence and that there were outstanding instructions which prevented practical completion of the works. The finding by the Member at first instance that it was unreasonable to delay by nine months after abandonment of the works and repudiation of the contract before service of a Notice on 14 November 2009 was made without the applicant having an opportunity to address the issue. It was not joined between the parties in their submissions to the Member. In Banque Commerciale SA, en Liquidation v Akhil Holdings Ltd52 Mason CJ and Gaudron J said: “The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq.), per Isaacs and Rich JJ. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities. See, e.g., Browne v Dunn; Mount Oxide Mines. (Footnotes omitted) [106] True it is that under the QCAT Act proceedings are to be conducted in an informal way and the discretion of the Tribunal53 and the proceedings in the Tribunal are not governed by pleading requirements such as those found in relevant rules of court but nevertheless the Tribunal is obliged to accord parties natural justice, to give parties a reasonable opportunity to be heard54 and in the context of a nature such as this the written submissions, prepared by legal advisers, will frequently provide a guide as to the issues joined between the parties to the dispute. [107] The respondent’s submission that a consideration of whether the applicant’s conduct was reasonable or unreasonable in the context of his dealings with the respondent in 2008 and 2009 culminating in the termination of the contract “involves a question of fact” but the failure of the Tribunal at first instance to accord the applicant natural justice by resolving a claim for damages on a ground that had not been joined between the parties, and denying the applicant an opportunity to address, was in breach of the Act55 and constitutes an error of law.56 [108] In the circumstances I accept that the decision of the Tribunal at first instance as confirmed by the Appeal Tribunal to dismiss his claim for liquidated damages was 51 AR V 4 p 1952 at para 58. 52 (1990) 169 CLR 279 at 286-287. 53 See for example s 4(c) and s 28(3). 54 Chandra v Queensland Building and Construction Commission [2014] QCA 335 at [23], [42], [68] and [89]. 55 See s 28(3)(a) of the QCAT Act. 56 See for example Chandra v Queensland Building and Construction Commission [2014] QCA 335 at [23], [42], [68] and [89]. -- 32 of 33 -- 33 affected by an error of law. Section 150(3) of the QCAT Act provides that an application to this Court can be made “only on a question of law” and only if the party who wishes to appeal has obtained the leave of this Court to appeal. In Queensland Building and Construction Commission v Arthurs, McMeekin J57 said:58 “[35] The circumstances in which a disappointed litigant before QCAT may appeal to this Court is severely circumscribed. Section 150(3) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) makes plain that appeals to this Court ‘may be made only on a question of law’ and are by leave. Absent a question of law the application for leave must be refused.” When considering an application for leave to appeal the court will “have high regard for the prospects of success … of demonstrating error on the part of the Appeal Tribunal with respect to the question or questions of law concerned. There must be reasonable prospects of success to warrant a grant of leave.”59 Stated more elaborately, it is well established that the grant of leave to appeal requires this Court to be satisfied both that it is necessary to correct a substantial injustice and that there is a reasonable argument that there is an error to be corrected.60 [109] The finding of unreasonable conduct61 led the Member to hold that the applicant could not recover liquidated damages. Whether conduct of the nature found by the Member in the circumstances that applied can be a ground for denying recovery of liquidated damages is a question of law. I have had the considerable benefit of reading the reasons of Fraser JA. I agree with his Honour’s reasons concerning paragraphs (c)–(d) and (e) of ground 1 of the proposed appeal62 and upon the Notice of Contention.63 I agree with Fraser JA that unless the errors of law in the decision below are corrected a very substantial injustice would be suffered by the applicant. [110] For these reasons the applicant should be granted an extension of time within which to appeal and I agree with the orders proposed by Fraser JA. 57 With whom Holmes JA and Fraser JA agreed. 58 Queensland Building and Construction Commission v Arthurs [2014] QCA 307 at [35]. 59 See Niall v Mangrove Housing Association Inc [2014] QCA 58, [6] and [7] and see further Underwood v Department of Communities [2013] 1 Qd R 252, [18] and [68]. 60 See Underwood v Department of Communities [2013] 1 Qd R 252, [68]; Smith v Ash (2011) 2 Qd R 175, [50] and Pickering v McArthur [2005] QCA 294 per Keane JA [3] and Maksymiuk v Savage [2015] QCA 177, [3]. 61 Which “involves a question of fact”, see [107] above. 62 See paras [32]-[53] above. 63 See paras [59]-[78] above. -- 33 of 33 --