Add-Vantage Systems Pty Ltd v Ameks Developments Pty Ltd

The builder's claim

1. The builder's claim was pleaded in an annexure to its application. It is based on breaches of implied terms that the works would be completed in : 1. a proper and workmanlike manner; and 2. accordance with all relevant codes, standards and specifications that the work is required to comply with under any law.
2. The builder states that as a result of the breaches alleged the following defective work has been carried out: 1. Improper workmanship of the aluminium framing; 2. failure to install appropriate drainage slots; 3. installed aluminium frames that are not fit for purpose; and 4. selection of glass and frames not fit for purpose
3. In addition, the builder pleads that the statutory warranties contained in section 18B of the Act applied and that those warranties were breached.
4. At the time the contract was entered into, s18B of the Act provided: '(1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work: (a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new, (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time, (e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling, (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment.'
5. The builder alleges that in breach of s18B the supplier carried out defective building work contrary to: 1. The requirements of the plans and specifications; 2. the Building Code of Australia; and 3. relevant Australian Standards.

The supplier's defence

1. The supplier did not file a defence to the builder's claim as pleaded in the annexure to its application.

The Experts

1. The builder relied upon the expert evidence of Dr Jacob and the supplier relied upon the expert evidence of Mr Gramlick. There is no challenge by either party as to the ability of either expert to give expert opinion in the Tribunal. I therefore accept that they are appropriately qualified to give opinion evidence in the Tribunal. It will be necessary for me to consider whether the expert's written reports provide a proper process of reasoning to explain the conclusions reached. In the NSW Court of Appeal decision of Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 Heydon JA makes it clear that a reasoning process is to be provided by an expert when giving opinion evidence. In the course of his judgement, commencing at [80], Heydon JA referred with approval to a number of decisions of Anderson J. in the Supreme Court of Western Australia. In Pownall v Conlon Management Pty Ltd (1995) 12 WAR 370 at 389-90 his Honour Anderson J. stated: 'Expert opinion is to be judged like any other evidence. It must be comprehensible and reach conclusions that are rationally based. The process of inference that leads to the conclusions must be stated or revealed in a way that enables the conclusions to be tested and a judgment made about the reliability of them.'
2. I would add that although what was stated in Makita (Australia) Pty Ltd v Sprowles is a rule of evidence and that I am not bound to apply by the rules of evidence, I regard what was stated in Makita regarding the conclusions of experts to be rationally based and the process by which conclusions are based to be exposed to be compelling and authority which should be applied when considering competing expert evidence in this Tribunal. Without a rational explanation of the process by which conclusions are reached, the conclusions in themselves are of little assistance to me and certainly do not provide a persuasive basis for their acceptance.
3. It may also be necessary for me to express a conclusion about whether I prefer the evidence of one expert over the other in making critical findings in order to determine the builder's claim.

The hearing and the evidence

1. The proceedings were heard on 18 October 2018, 14 December 2018, 17 December 2018 and 1 March 2019.
2. The evidence in the proceedings was: 1. Exhibit A, 2 volume bundle of documents; 2. Exhibit B, Construction management Plan; 3. Exhibit C, 1 page from the supplier's outline submissions bundle; 4. Exhibit D, Complete copy of AS 2047 - 2014; 5. Exhibit E, email 28 April 2010 Alex Chatirichvili to Michelle Woods; 6. Exhibit F, version 49 of quote; 7. Exhibit G, AS/NZS 1170.0:2002; and 8. Exhibit H, Mrs Woods 'Quote Sheet'.
3. The parties provided written submissions in support of their respective cases. I have been provided with a transcript of the hearing on 18 October and 14 December 2018. I will have regard to transcript references for those days, but not in reference to a day on which I have not been provided with a copy of the transcript.

The contract

1. The contract between the parties was constituted by a quote prepared by the supplier and accepted by the builder. There were a number of quotes provided as the final requirements of the builder were 'worked up'. The supplier contends that the primary contract was dated 9 May 2016. This quote is at tab 18 of exhibit A. It is made up of 47 items with numerous sub-items. It is stated to be quote 41778 - Ver 30. The total amount quoted was $157,867.00 inclusive of GST. Page 18 contains commercial conditions.
2. The supplier submits that the contract contained a term that the 'accuracy of the ordering rests entirely with the purchaser'.
3. Annexure A to Mr Andrew's 25 July affidavit is a document signed by the builder's representative titled 'Quotation'. It is dated 9 May 2016 and states, among other things: 'It is your responsibility to ensure that the detail contained on the documents are accurate in every respect before signing the acceptance. Responsibility of accurate ordering rests entirely with 'you'.
4. I accept the supplier's submission by reason of the fact that the document signed by the builder's representative contains such a term. However I find that this term does not relieve the supplier form liability in these proceedings. The substance of the builder's claims and the evidence in these proceedings does not indicate that details such as dimension are the source of the builder's complaints. If it is asserted that technical details such as DWP, SLS, ULS or Pw and their accuracy are the substance of the builder's complaint and as such the builder's responsibility, I reject that submission on the basis that the term set out above will not operate to defeat the provisions of the Act and in particular the warranties ats18B(1). Refer s18G of the Act.
5. I also find that the contract between the parties was that contained at tab 18 of exhibit A and in the terms contained in the document signed by the builder's representative on page 18 titled 'Quotation' dated 9 May 2016.
6. In addition I find that the work to be undertaken by the supplier was residential building work as defined by the Act and that the warranties set out in s18B of the Act were implied into the contract between the parties for the supply and installation of the aluminium windows and doors referred to in the quote dated 9 May 2016. I accept the builder's submission at [38] of its written submissions that s18B(2) applies.

High standard of finish and high standard of safety

1. At [5] of its closing submissions the builder submits that: 'This expectation of a high standard of finish and a high standard of safety for this Property given the nature of the home that was being built, is an essential factor in Amek's claim under the building contract,'
2. One might expect that something that is characterized as 'an essential factor' to a party's case under a building contract would be pleaded or advanced as a term or condition of the contract or as an essential or intermediate term of the contract. The builder's claim as referred to at [10] contains no such allegation.
3. I find that there was no express term of the contract that the windows and doors supplied and installed by the supplier would be of a high standard of finish and a high standard of safety. The builder makes no submission to support that proposition.
4. I further find that the warranties implied by s18B of the Act would not of themselves imply a warranty that windows and doors would be of a high standard of finish and a high standard of safety.
5. If, however, a law of New South Wales required the supply of aluminium windows and doors to be of a high standard of finish and a high standard of safety such a requirement would be implied into the contract via s18B(1)(c) of the Act. However the builder makes no submission to that effect.
6. Despite its submission at [5] of its closing submission, the builder makes no submission that there was an implied term of the contract that the windows and doors being supplied and installed by the supplier would be of a high standard of finish and a high standard of safety. However, the builder contends for implied terms of a different nature. At [34] of its written submissions the builder states that it: 'relies on an implied term that the work will be conducted in a proper and workmanlike manner and in accordance with all codes and standards. Reference is made to BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266'
7. I reject this submission for the reason that the implied terms contended for are already implied into the contract by s18B of the Act. The implication of such terms is not necessary.
8. Based on the reasons set out in the preceding paragraphs, I reject any suggestion that there was an express or implied term of the contract that the windows and doors being supplied and installed by the supplier would be of a high standard of finish and a high standard of safety.
9. Moreover, even if I were to accept that the matrix of background facts included an appreciation by the supplier that the supply and installation of aluminium doors and windows was to be at a building site where a high quality residence was being constructed, that is not enough in my view to create contractual obligations in circumstances where the documents prepared and accepted by the parties do not address the substance of what the builder now seeks to advance as an essential requirement as referred to at [5] of its submissions. If the expectation of a high standard of finish and a high standard of safety was so important to the builder, one might expect it to have said something about it to the supplier in writing, or orally. However there is no evidence of either of those things. And as I have said, the builder makes no submission about why such an expectation should be an implied term of the contract, in circumstances where the supplier's quote was detailed in terms of what it was supplying, in any event detailed enough for the builder to have understood and accepted it.

Alleged defective work

1. In its final written submissions the builder alleges the following defective work.
2. Defective installation of windows, more particularly defective framing and gaskets.
3. Defective use of sealants in attempted rectification by the supplier.
4. Defective selection of window and frame systems, including sliding doors that are difficult to operate and which contain glass panels which vibrate excessively. Defective panels in bathrooms are also alleged as well as the issue of whether or not safety glass has been installed.
5. Defective thresholds and sliding door mechanisms. The complaint about sliding door mechanisms is also referred to in the preceding paragraph by reference to sliding doors that are difficult to operate.
6. Failure to insert drainage slots into windows and doors.

The expert evidence

1. The parties relied on a number of reports prepared by their experts which are contained in exhibit A.
2. In his first report prepared for the supplier on 23 November 2017, Mr Gramlich provided an opinion on a number of issues. He stated that: 1. So far as joint details were concerned, his opinion was that the joint seals inspected were in line with general commercial quality; 2. glazing rubbers and wedges should be checked to ensure that the glazing wedge was not short in the jamb; 3. The thresholds in the sills of the sliding doors were found to be loose and rattled slightly such that they (the thresholds or fillers) needed to be removed and refitted with a run of sealant; and 4. He found that the glass in the sliding doors was compliant
3. Mr Gramlick stated that he found some items that needed to be attended to, but the level of quality was of an acceptable commercial quality.
4. Dr Jacob's report was prepared for the builder on 9 April 2018. His report contains a number of photographs of the aluminium doors and windows supplied and installed by the supplier. He states it would appear that the manufacture of the aluminium framing system was poor because of: 1. improper cutting - not square; 2. improper measuring prior to cutting; 3. improper attention to gasket and sealant application; and 4. improper sealant application between frames and wall.
5. Dr Jacobs also stated that the thresholds in the sills and sides of the sliding doors were loose and rattling, appeared to be very thin and in danger of bending when stood upon. In addition he believed that the rollers and sills of all sliding doors needed to be repaired or changed as the operation of opening or closing the sliding doors was difficult, as it required significant force to be able to operate them.
6. Under the heading 'Site Exposure' Dr Jacobs stated that in his opinion AS 4055 - 2012 'Wind loads for housing' was not appropriate for the calculation of design wind pressures and that AS 1170 Part 2 was the appropriate standard to be used. That standard states at 1.1 of section 1: 'The standard sets out procedures for determining wind speeds and resulting wind actions to be used in the structural design of structures subject to wind actions other than those caused by tornadoes.'
7. Following his inspection Dr Jacobs at 5.1 of his report identifies the following issues in connection with aluminium frame which he states are not fit for purpose because: 1. the aluminium joints are unsatisfactory; 2. there are there are no proper drain holes as required for pressure equalisation; 3. the joint widths are excessive and only reliant on the performance of the applied sealants; 4. the application of sealants to act as small joint sealants poses a risk of future performance; 5. the installation shows gaps that are aesthetically unacceptable; 6. the installation with inadequate gaskets and sealants have compromised the performance of the door and window systems; and 7. there are improper joint details.
8. As regards the sliding doors, Dr Jacobs observed that the sliding door systems appeared to be excessively flexible indicating that inadequate frames or inadequate glass was used.
9. When I carried out my inspection I observed that there were large sliding doors on various levels of the dwelling, with at least 2 sets of sliding doors facing the view to Sydney harbour and being effectively a glass wall separating the interior of the residence from an exterior balcony. In addition it became apparent that the glass in the sliding doors would vibrate when pressure was applied to it. In that regard Dr Jacob's report at page 21 prepared a table which showed maximum deflections calculated by him. He states that his table provides maximum stress and deflection using the supplier's wind pressures taken from its quotation. Dr Jacobs does not explain on what basis his comments were made, namely whether they were his subjective comments or were comments based on some un named standard. I do not find his table to be particularly persuasive, because of a lack of an appropriate explanation of how the table was derived. In that regard the first two written paragraphs on page 21 of his report do not explain these matters, and do little to explain in a clear way how the table was prepared. Further it seems to me that an expert reading Dr Jacob's report might understand exactly what he is saying. However this section of his report is not helpful or persuasive to me.
10. Dr Jacobs also states at page 21: 'It is my opinion that these deflection levels are excessive and will make the occupants of the house very uncomfortable making the installation not fit for purpose. It is my opinion that these deflection levels are excessive and will make the occupants of the house very unsafe and uncomfortable during storm and wind events making the installation not fit for purpose.'
11. I have set out this extract from Dr Jacobs report in order to state that I have no hesitation in completely rejecting this approach. How Dr Jacobs can tell what deflection levels in the glass sliding doors will make an occupant very uncomfortable is not stated. I can only assume that Dr Jacobs is speculating about this. In addition a finding that the installation of windows and doors are not fit for purpose does not depend upon the level of discomfort that an expert subjectively considers an occupant may experience. More is needed and in having regard to the wording of the warranty contained in s18B(1)(f) of the Act, it is relevant to note that the terms of that sub section refer, on the facts of this particular case, to the person for whom the work is done, the builder, expressly making known to the supplier the particular purpose for which the work is required, or the result that the builder desires the work to achieve.
12. There is no reference in s18B(1)(f) to the ultimate occupants of the residential dwelling.
13. Mr Gramlick responded to Dr Jacobs report on 13 May 2018. He agrees that AS 4055 is not the applicable standard and that AS/NZS1170.2 is the appropriate standard. Mr Gramlick disagrees with various aspects of Dr Jacob's report, while agreeing to some points raised by Dr Jacobs.
14. In his report of 29 May 2018 Dr Jacobs stated the doors, windows assemblies and other fixed glazing systems required remediation before they could be considered fit for purpose and suitable. He also stated that all of the sliding doors, four sets, would require to be replaced and that six panels of fixed windows located along the side of the staircase would also need to be rectified.
15. A report was then filed on behalf of the builder prepared by Kanvat Consultants which costed the work referred to in Dr Jacobs' reports of 9 April and 29 May 2018. The estimate of the cost of rectification work was the sum of $223,273.00.
16. The supplier produced its own estimate of the cost of rectification of the defective work referred to by Mr Gramlick which totalled $9,300.00. I will treat this document with caution as it was prepared by a director of the supplier, Mr Andrews. While I have no doubt that he has the expertise to cost work relating to the supply and installation of aluminium doors and windows, there remains the issue of him approaching the task of assessing rectification costs in a completely impartial way. I cannot accept that he has approached the issue impartially as the financial consequences of the cost of rectification will directly affect the company of which he is a director.
17. At this point it is appropriate to point out that because of the highly technical nature of the dispute between the parties and the need for clarity as to what precisely was said to be the defective work carried out by the supplier, a scott schedule completed by both experts would have been a highly effective and conventional way of preparing these proceedings for hearing. The benefit that a scott schedule would have conferred is that each alleged defect would have been individually identified, with an associated rectification cost, enabling a decision on each particular defect to be made. Regrettably that did not occur.
18. A meeting of experts did take place on 24 August 2018 a signed record of which is at tab 11 of exhibit A. That document does contain some agreements. I would add that the document is not particularly effective in articulating the experts' positions in some instances. There is also a note on the joint site inspection which has only been signed by Dr Jacob. While this has been tendered as part of exhibit A, I would observe that a note following a joint report is of greater use to the Tribunal if it is signed by both experts.
19. In order to determine the builder's claim which I must say, due to the absence of a scott schedule, is inadequately set out, I will first have regard to the joint report prepared by the experts using the headings they have used in the 'Basis Alleged' column and make appropriate findings. I will then review Dr Jacob's reports to ascertain if there is any matter raised by him in his reports that were not dealt with in the experts' joint report.

Quality of installation of aluminium framing

1. The experts agree that the frames are not cut correctly because of gaps and there is inadequate sealant sealant/gasket installation. In addition there were a number of admissions made by Mr Andrews when being cross examined, such as referred to at T.120 on 18 October 2018 and at T.121 when he agreed that the system of machining and cutting and abutting frames didn't work properly. At T.123 and 124 Mr Andrews agrees that there are problems with rubber gaskets.
2. There is no attempt by the builder to state specifically which of the s18(B)(1) implied warranties have been breached because of the matters agreed upon by the experts. There is a broad reference by the builder to a reliance on the terms contained in s18B(1)(a), (b), (c) and (f). No doubt I am expected to state which of those sub-sections applies to the various matters complained of. I find that the agreements between the experts and the concessions made by Mr Andrews, as referred to above, establish that the supplier breached s18B(1)(a) of the Act by reason of the fact that the frames are not cut correctly because of gaps and there is inadequate sealant sealant/gasket installation.

Frame quality

1. The experts agree that there is an absence of drain holes in the sills of the stackable door panels, but are unable to agree that there is an absence of adequate drain holes in the frames. In cross examination at T.126 and 127, Mr Andrews also agreed that that there was an absence of drainage holes in the sub-sill of the sliding door assemblies of the top two levels of the residence.
2. Insofar as the experts agree that there is an absence of drain holes in the sills of the stackable door panels, I will make a finding that the supplier's failure to provide drain holes in the sills of the stackable door panels constitutes a breach of s18B(1)(a) and/or (b) of the Act.
3. So far as there being an absence of adequate drain holes in the frames, Dr Jacobs addresses this at photographs 10 and 11 of his 9 April 2018 report. At paragraph 5.1 he states that there are no proper drain holes as required for pressure equalization. In his 13 May 2018 report in reply, Mr Gramlick does not disagree with or address Dr Jacob's evidence that there is an absence of adequate drain holes in the frames. On the basis of Dr Jacob's un-contradicted evidence I will find that the supplier's failure to provide drain holes in the frames of the aluminium windows constitutes a breach of s18B(1)(a) and/or (b) of the Act. I find that this failure was not present in all aluminium windows. In his brief 29 May 2018 report Dr Jacobs states: 'Some of the door and window assemblies do not have suitable drain holes'

Fit for purpose criteria

1. The experts agree that there is a difficulty in operating door leaves, because of door sizes. Although they do not take the trouble of saying so, I assume that the experts are referring to the sliding doors as installed in all locations. The experts then refer to the flexibility of door panels. I have concluded that they do not agree, although what they are attempting to say is not clear to me. In addition their reference to 'flexibilty' is not clear. I assume they mean that the glass vibrates when pressure is manually applied. I will consider this issue under the heading stated below, 'Glass thickness & Deflection'.
2. Dr Jacob's notes on the joint site inspection do provide some clarity. I accept that the experts are referring to the 'Stackable door systems'. Dr Jacobs states that the stackable door assemblies are difficult to operate, in particular the door assembly to the pool area. My inspection of the residence and the operability of the stackable door assemblies leads me to find that Dr Jacob's evidence in this regard should be unequivocally accepted.
3. I assume in the absence of anything said about this issue that the builder contends that the difficulty in operating the stackable door systems or assemblies constitutes a breach of s18B(1)(f) of the Act. There is also the possibility that the difficulty in operating the stackable door systems or assemblies constitutes a breach of s18B(1)(b) of the Act which is a warranty that: 'all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new'
4. I find that the experts agreement that there is a difficulty in operating door leaves, which I take to mean the stackable door systems or assemblies, because of door sizes, which my observations at the site visit confirm as an entirely reasonable and sensible agreement, is a basis for my finding that such difficulty in operating the stackable door systems or assemblies is a breach of s18B(1)(b) of the Act. In particular, I find that the stackable door systems or assemblies are not good and suitable for the purposes for which they are used because they cannot easily and conveniently be opened and closed.

Glass - thickness & deflection

1. This category which is referred to by the experts refers in my view to the thickness of glass and the manner in which it deflects (or is flexible). This category of complaint by the builder relates to the thickness of glass in the stackable door systems and in the bathroom glass panels and the deflection of that glass.
2. The experts do not agree on the issues of the thickness and deflection of the glass in the stackable door systems and in the bathroom glass panels.
3. From a legal perspective in the sense of the builder framing its cause of action in connection with this subject matter, the fact that the builder is unable to state in clear terms whether this subject matter is contended to be a breach of the implied terms referred to at [34] of its written submissions or if not, a breach of an identified warranty in s18B(1) of the Act is, if I may say, unhelpful.
4. The builder's expert has characterized this issue as being a breach of the fitness for purpose warranty. At [53] I rejected his speculation that flexible glass panels might make an occupant uncomfortable. I also rejected his suggestion that an occupant's subjective feeling of being unsafe and uncomfortable would make the supply and installation of the windows in issue unfit for purpose.
5. I would also state that I regard Mr Andrew's concessions in cross examination about what a home owner in Rose Bay could expect or what might make a home owner to be of little assistance to me. Given that Mr Andrews was not involved in the meetings and discussions at the contract inception stage, I find that his views about these matters while being cross examined to be of little importance in considering a fitness for purpose warranty. The issue is whether by providing glass of a certain thickness, the builder has breached a term of the contract which can be identified with precision. In my view the resolution of the issue must proceed on an objective basis unless there is a clear concession of breach. In that regard I do not regard Mr Andrew's concessions as referred to above as being a concession of a breach of contract.
6. I would state at this point that I do not consider the builder's complaints regarding the thickness and flexibility of glass in the stackable door systems to be a breach of s18B(1)(b) of the Act, namely that the glass would be good and suitable for the purpose for which it was used. I find that the glass has been in position since 2016 or early 2017 and despite all of the criticisms made, has not failed. In the case of the glass in the stackable door systems on the top two floors which overlook Sydney Harbour, that glass has not been damaged or destroyed in the weather that it has been subject to since installation. On that basis I am unable to conclude that the glass is not good and suitable for the purposes for which it is used.

Section 18B(1)(f)

1. Section 18B(1)(f) of the Act provides an implied warranty: 'that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment.'
2. The builder apparently relies on this implied warranty in connection with glass thickness and deflection, although that is not stated in terms.
3. In The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612 Ward J. considered among other things s18B(1)(f) of the Act. At [109] - [111] of the judgement Ward J. discusses how a purpose might be disclosed in context of a warranty that requires one party to make known to the other party the particular purpose for which work was required, or the result that the party desired the work to achieve. By reference to the decision in Feast Contractors v Ray Vincent Limited [1974] 1 NZLR 212, attention is drawn to the wording in s18B(1)(f) that the requirement of making known a purpose or a result 'shows' that one party relies on the others skill and judgment. However as stated in that decision: 'But it has been said in many cases that mere disclosure of the particular purpose will often be sufficient to raise the inference that the buyer is relying on the seller's skill and judgment'
4. At [111] Ward J. stated: 'Although Feast was in a different context, by analogy it might well be contended that something more than statement of a requirement for there to be an air-conditioning system installed (even of a particular type) [is necessary] in order to impose on the Builder the burden of a warranty that the air-conditioning system so specified is reasonably fit for purpose.' (Words in italics added.)
5. At [329] Ward J. stated in connection with the air conditioning system the subject of the proceedings: 'I would be inclined to accept that where a party (here, in effect, the Owners Corporation through the Developers' consultant) nominates that a particular air-conditioning system is to be installed that party is not (unless expressly so stating) specifying a particular purpose for which that system must be reasonably fit so as to call into operation the warranty in s 18B(f)'
6. On the facts in that case it seems that there was more involved than nominating a particular air-conditioning system that was to be used. At [330] of the decision Ward J stated: 'The approval given by the Developers' consultant to an amendment of the air-conditioning specifications does not alter the fact that the Builder was obliged under the contract to provide an air-conditioning system that met the mechanical specifications in all other regards, including that it ensure an even temperature, achieve comfort conditions within the entire unit and be capable of providing full capacity to living areas as demanded. That seems to me to be a very clear specification of purpose so as to give rise to a s 18B(f) warranty. In other words, what the Builder warranted was that the system (with the specifications as approved by the Developers) would nevertheless meet the overall requirements of the air-conditioning system as specified.'
7. I will have regard to the passages cited above in The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd in determining whether there has been a breach of s18B(1)(f) of the Act.
8. In considering this warranty the first factual matter which the builder must establish is whether the builder, by its representative Mr Alex Chatirichvili, made known to the supplier the particular purpose for which the work was required, or the result that he desired the work to achieve.
9. Mr Chatirichvili's affidavit is in exhibit A. He states that he told the supplier's representative, Mrs Michelle Wood that he needed them to design and install the window system and that she replied that they would take measurements and undertake the work in accordance with approved BASIX and relevant Australian standards.
10. Apart from what I have stated, Mr Chatirichvili does not give any further detail as to what he may have said about the particular purpose for which the work was required, or the result that he desired the work to achieve, or whether he even discussed a particular purpose that the work was intended to achieve.
11. Mrs Woods' evidence is also in exhibit A. She agrees that she said to Mr Chatirichvili that the supplier would be responsible for all measurements and that all work would be in accordance with Australian Standards. Mrs Woods evidence is that the builder provided the supplier with a copy of the architectural drawings but she, as the supplier, could not quote based on the drawings because there was no window schedule or wind load reference. She states that she met Mr Chatirichvili on site to discuss the quotation for windows and doors that he had asked the supplier to provide and that he gave her a hand written window schedule and in answer to her question told her that the wind load for the property was N4. Her evidence was that she recorded that information on her take off sheet which is exhibit H. In cross examination Mrs Woods states that Mr Chatirichvili gave her measurements for the windows for quoting purposes when she was first on site.
12. Mr Chatirichvili denies that he told Mrs Woods the wind load and stated in cross examination that he didn't know what wind loads were.
13. In cross examination Mrs Woods said that she didn't recall that Mr Chatirichvili's said to her that he needed the supplier to design and install the window system.
14. I accept Mr Chatirichvili's evidence on this issue. The reason for this finding is that it is clear that Mr Chatirichvili didn't give Mrs Woods window and sliding door designs and specifications and ask the supplier to fabricate what was shown on the drawings. Mrs Wood's evidence is that the architectural plans that Mr Chatirichvili gave her were of no help because they didn't have a window schedule. I accept Mrs Wood's evidence in that regard. In addition, Mr Chatirichvili agreed that he provided architectural plans and a BASIX to the supplier. I find that it is to be inferred from these facts that since the architectural drawings (which are not in evidence) were of no assistance to the supplier for the purposes of quoting, the design of what was to be provided as shown on Mrs Woods make up sheet, exhibit H, was to be undertaken by the supplier. In my view this conclusion must be reached since the supplier was not given a design to follow and there was no other party that could or would be responsible for the design.
15. This evidence establishes to my satisfaction that the builder did not provide a design for the windows and doors that he was ordering from the supplier. In that context I accept Mr Chatirichvili's evidence that he asked the supplier to carry out the design.
16. The above evidence goes no higher than the builder requested that the supplier design, fabricate and install the window and glass door system. The evidence establishes to my satisfaction that Mr Chatirichvili did not make any effort to explain to the supplier the result that he desired the work to achieve.
17. Having considered the evidence of Mr Chatirichvili and Mrs Woods, I make the following findings: 1. They met on site in or about April 2016 to discuss the builder's request for the supplier to quote for the supply and installation of aluminium doors and windows at the property under construction at Rose Bay which is the subject of these proceedings; 2. Before the meeting Mr Chatirichvili gave the supplier a copy of the architectural plans for the building and a BASIX certificate which stated what type of windows needed to be done. T.36; 3. The architectural plans were of little assistance to Mrs Woods because they did not contain a window schedule or a wind load; 4. At the site meeting Mr Chatirichvili gave Mrs Woods measurements of the windows required for the purposes of preparing a quotation; 5. Mrs Woods prepared a make-up or quote sheet when she met Mr Chatirichvili on site which is exhibit H; 6. Mr Chatirichvili told Mrs Woods that the wind rating would be N4 or 1500/300 at the site meeting; 7. Mr Chatirichvili asked Mrs Woods to quote for the design, fabrication and installion of the window systems; and 8. Mrs Woods told Mr Chatirichvili that the supplier would be responsible for all measurements and that all work would be in accordance with Australian Standards. 9. Mr Chatirichvili made it known to the supplier that he required the doors and windows for the purpose of forming part of the works depicted in the architectural plans that he provided to Mrs Woods.
18. Based on the above findings of fact and guided by the passages extracted from The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd above, and in reliance on what was stated in Feast Contractors v Ray Vincent Limited, I find that disclosure of the purpose referred to in [93(9)] is sufficient to raise an inference that the builder was relying on the supplier's skill and judgment in the supply of the doors and windows referred to in the contract, including the thickness of the glass in the stackable door systems and in the bathroom glass panels, limited to the purpose of those doors and windows forming part of the works depicted in the architectural plans that the builder provided to Mrs Woods.
19. As a result I find that the findings of fact enliven the warranty in s18B(1)(f) of the Act to the extent found in the preceding paragraph.

Applicable wind pressure

1. The issue of the applicable wind pressure has a direct bearing on the question of the thickness of the glass used in the stackable door systems which face the view to Sydney Harbour.
2. The experts do not agree on experts wind pressure.
3. Again, how this subject matter is legally characterised by the builder is not explained in plain terms. It is not mentioned in its Points of Claim which were attached to its application. There is however a reference to Dr Jacob's report as a particular of a breach of s18B. There is no specific statement by the builder which links complaints about wind pressure to a breach of a particular implied term or a particular implied warranty referred to in in s18B of the Act.
4. At [48] I noted that under the heading 'Site Exposure' Dr Jacob states that in his opinion AS 4055 - 2012 'Wind loads for housing' was not appropriate for the calculation of design wind pressures and that AS 1170 Part 2 was the appropriate standard to be used. Mr Gramlick agrees with this point.
5. At page 20 of his report dated 9 April 2018 Dr Jacob states: 'The original design assessment used for the selection of glass and frame sizes appears to be flawed because: The building is not a standard type of (residential10 building in keeping with the residential type structure covered in AS 4055. It requires a more detailed analysis based on AS1170 Part 2 to determine the applicable design wind pressures (the building has five distinct levels) balconies, recesses and varied widths requiring a detailed analysis. These issues have made the aluminium framing and glass as installed unsuitable for its intended application. It will require substantial remediation to make good.'
6. The above statement indicates that the determination of applicable design wind pressures relates to both the design of the aluminium framing and glass selection.
7. Dr Jacob then observes in 5.2 that the glass in the stackable door systems appeared to be excessively flexible when pushed against indicating that inadequate frames or inadequate glass was used. He then undertakes what he describes as 'fine element analysis' which leads him to say that he has found that theoretical deflection would make the stackable door systems not fit for the intended purpose.
8. He then proceeds to make the statement which I have extracted and rejected at [52] and [53] of these reasons.
9. Having stated that AS 1170 Part 2 was the appropriate standard to be used, in paragraph 5.4 Dr Jacob conducts an evaluation based on AS 1288 which is not in evidence. Dr Jacob provides no explanation of the relevance of AS 1288. He concludes that if wind pressures are as he states them to be in paragraph 5.4 of his report, this will 'make the glass and frames more flexible and deflect more than they do currently'
10. Dr Jacob's calculations based on AS 1170 Part 2 are disputed by Mr Gramlick in his reply report dated 13 May 2018.
11. At [53] of these reasons I have rejected Dr Jacob's comments at paragraph 5.2 of his 9 April 2018 regarding fitness for purpose. I have stated that the builder has not assisted by failing to identify the particular warranty in s18B(1) of the Act which it is alleged has been breached because of the glass thickness issue.
12. A failure to design glass thickness in accordance with an applicable Australian Standard would in my view breach the warranty in s18B(1)(a) of the Act.
13. I find that in his comments regarding wind pressure, Dr Jacob's report of 9 April does not in a comprehensible and analytical way explain the reasoning process by which conclusions are reached to demonstrate that the supplier made errors in calculating wind pressure when designing the glass thickness or aluminium framing in accordance with the applicable Australian Standard. It is not to the point to state that glass and frames deflect more that he considers acceptable. It is necessary to explain the process by which he can demonstrate that the design of the glass and frames do not comply with the requirements of the applicable Australian Standard. In that regard Dr Jacob has not explained why he has used AS 1288 when he and Mr Gramlick have agreed that that AS 1170 Part 2 was the appropriate standard to be used. Mr Gramlick disputes Dr Jacob's calculations based on AS 1288.
14. Dr Jacobs evidence does not provide me with the necessary degree of actual persuasion that the supplier failed to design and provide the correct thickness of glass used in the stackable door systems in accordance with the applicable Australia Standards, or that the supplier made errors in calculating the applicable design wind pressures such as to adversely affect the design of the aluminium framing and the glass selection and as such was in a breach of the warranty in s18B(1)(a) of the Act that such work would be done with due care and skill.
15. At [95] of these Reasons, I found that the warranty in s18B(1)(f) of the Act had been enlivened. However the specified purpose or result that I found, namely that the thickness of the glass in the stackable door systems and in the bathroom glass panels was limited to the purpose of those elements forming part of the works depicted in the architectural plans that the builder provided to Mrs Woods, does not impose a particularly onerous purpose or result, especially since the architectural plans are not in evidence. I find that in the absence of the builder establishing that the thickness of the glass was in breach of some applicable Australian Standard, or the Building Code of Australia and in the absence of an unambiguous agreement by the experts that the glass thickness is unacceptable, there is no basis for finding that the thickness of the glass is not fit for the purpose that I have referred to. As stated elsewhere in these Reasons the glass in the stackable door systems which face Sydney Harbour have been in situ for a number of years and have not failed. As also stated, the subjective opinion of Dr Jacobs that the glass thickness is not fit for purpose based on what he assumes a home owner might consider to be unacceptable is rejected.
16. However as an exception to the finding in the previous paragraph, I have had regard to the item 4 of the experts' 24 August 2018 Joint Report where Mr Gramlick states that the glass thickness with associated deflection on the upper level 'is excessive but within standard'. His acknowledgement of excessive deflection, albeit with the statement that in his opinion is the thickness is 'within standard' leads me to find that the glass thickness on the upper level is not fit for the purpose to which I have referred thereby placing the supplier in breach of s18B(1)(f) of the Act. I find that Mr Gramlick is referring to the thickness of glass which was in the stackable door system which was installed in the upper level of the residence, and which relates to item 6 of quote 41778 Ver30 dated 9 May 2016.
17. Subject to what is stated above, I reject the builder's case concerning applicable wind pressure.

Other issues

1. The experts agree that: 1. There is an over run of interlocks; 2. in the rear stacking doors the interlock appears not to be adequately fixed to the rails; 3. drainage slots in sub sills are covered in some instances; 4. there are no toughened glass labels on a number of panels; and 5. there is a leaking stairway window on the left-hand side.

Building and Construction Industry Security of Payment Act 1999

1. The supplier has submitted that in July 2017 that it suspended work under s27 of the Building and Construction Industry Security of Payment Act 1999 (the 'Security of Payment Act'). That section states: 'A claimant may suspend the carrying out of construction work (or the supply of related goods and services) under a construction contract if at least 2 business days have passed since the claimant has caused notice of intention to do so to be given to the respondent under section 15, 16 or 24.' 'This Act does not apply to:
2. The builder submits that the Security of Payment Act has no application because of s7(2)(b) of that Act which states: (b) a construction contract for the carrying out of residential building work (within the meaning of the Home Building Act 1989) on such part of any premises as the party for whom the work is carried out resides in or proposes to reside in',
3. I have had regard to the affidavits of Mr Andrew of the supplier sworn on 26 April, 20 June and 25 July 2018. There is no evidence in these proceedings or annexed to those affidavits of a notification of suspension of work given by the supplier to the builder under either of ss 27, 15, 16 or 24 of the Security of Payment Act.
4. As a result the supplier has not established that it is entitled to any relief under the Security of Payment Act and particularly that claimed under s27(3).

Findings

1. In its written submissions the supplier accepted that it was liable for workmanship issues which I would equate with a concession that it had breached s18B1(a) of the Act. Those matters are described generally as follows: 1. rectify gaps in the aluminium framing members of items 4 and 5 of the accepted quote with small joint sealant or aluminium member; 2. rout appropriate drainage slots in the sills in item 34 of the accepted quote; 3. replace all short rubbers and gaskets where necessary; 4. remove jamb infills and thresholds in sliding door assemblies where applicable and apply a run of sealant to snap ins; 5. provide flyscreens to 2 awning windows, item 15 of the of the accepted quote; 6. fit buffer rubbers into over engaging interlocks where necessary; 7. assess and rectify loose interlocks on the sliding door, item 34 of the accepted quote; 8. re-seal the sub-sill end cap of item 5 of the accepted quote; and 9. supply items 8 and 9 of the accepted quote.
2. Earlier in these Reasons I found that the experts had agreed to certain matters. The matters listed below may be a repetition of what is stated in the preceding paragraph. Nonetheless it is relevant to record what the experts have agreed.
3. As stated under the heading of 'Quality of installation of aluminium framing', I found that the supplier breached s18B(1)(a) of the Act because the frames were not cut correctly because of gaps and there is inadequate sealant sealant/gasket installation.
4. As stated under the heading 'Frame quality' I found that the supplier's failure to provide drain holes in the sills of the stackable door panels constitutes a breach of s18B(1)(b) of the Act. I also found that the supplier's failure to provide drain holes in the frames of the aluminium windows constituted a breach of s18B(1)(b) of the Act. I found that this failure was not present in all aluminium windows. In his 29 May 2018 report Dr Jacobs states: 'Some of the door and window assemblies do not have suitable drain holes'
5. As stated under the heading 'Fit for purpose criteria" I found that the difficulty in operating the stackable door systems or assemblies was a breach of s18B(1)(b) of the Act. I also found that the stackable door systems or assemblies are not good and suitable for the purposes for which they are used because they cannot easily and conveniently be opened and closed.
6. I will accept the expert's agreements that: 1. There is an over run of interlocks; 2. in the rear stacking doors the interlock appears not to be adequately fixed to the rails; 3. drainage slots in sub sills are covered in some instances; 4. there are no toughened glass labels on a number of panels; and 5. there is a leaking stairway window on the left-hand side.
7. are a basis for finding that the supplier has breached of s18B(1)(a) of the Act, in that the matters identified by the experts arose because the work was not carried out with due care and skill.
8. At [111] of these reasons based on what was said by its expert in the Joint report, I found that the glass in the stackable door system installed in the upper level of the residence, and which relates to item 6 of quote 41778 Ver30 dated 9 May 2016 was not reasonably fit for the specified purpose placing the supplier in breach of s18B(1)(f) of the Act. The supplier is therefore responsible for replacing the glass in the stackable door system installed in the upper level of the residence with glass of a thickness which complies with the applicable Australian Standard and in any event with glass that is thicker than 6mm and which no lesser in quality than that stated in item 6 of quote 41778 Ver30.

S48MA of the Act

1. This section of the Act states: 'A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.'
2. A typical position exists in these proceedings, namely that the party who carried out the work, the supplier seeks a work order. The builder submits that a work order should not be made. It seeks monetary compensation.
3. These issues were recently considered by Senior Member Corsaro SC in Kostos Pty Ltd v Vellios; Vellios v Kostos Pty Ltd [2019] NSWCATCD 13 who stated at [198] and [199]: 'The Tribunal has a discretion under s 48 O(1) of the HB Act. This allows the Tribunal to make an order for compensation, an order in the nature of a work order or some other order of the type set out in the section: Leung v Alexakis [2018] NSWCATAP 11 (Leung) at [139]. The application of s 48MA is almost presumptive. The Tribunal would tend to make a rectification order "unless the facts of a particular case make it inappropriate to order rectification of the defective work by the responsible party, an order should be made in terms that give effect to the principle": Leung at [140]. According to Leung, as further discussed by the Appeal Panel in Kurmond Homes Pty Ltd v Marsden [2018] NSWCATAP 23, there is considerable guidance to be found on the way that s 48MA is intended to operate in the Minister of Fair Trading's Second Reading Speech which introduced the relevant amendment: (1) a homeowner should not to be permitted to unreasonably refuse a builder access to a building site to rectify defective work; (2) s 48MA was intended to ensure that, at least, builders who were liable to a person for defective work, should be able to return to carry out necessary rectification work if they are willing; and (3) the amendments were to "further support the timely and cost-effective resolution of disputes"; and (4) s 48 MA is to operate as a preference, not an absolute right. It was introduced to prevent unreasonable refusal of a homeowner to permit access to a building site to a builder who was willing to carry out rectification work.'
4. The affidavit of Mr Andrews of the supplier satisfies me that the supplier has in the past carried out rectification work on numerous occasions and has always been amenable to carrying out rectification work. I find that the builder has been the party who failed to pay the supplier's invoices and ultimately ceased discussions with the supplier about resolving all outstanding issues by agreement using the Australian Window Association report that had been obtained to assist in a resolution of outstanding issues associated with the work that the supplier carried out. Mr Andrew's 26 April 2018 affidavit sets out all of these facts in detail and I accept his evidence.
5. The builder's submission is that the supplier has failed to acknowledge the deficiencies in the work that it carried out and has had a number of opportunities to rectify defective work, but that it has failed to do so in an effective way. This leads it to submit that a work order should not be made.
6. The supplier submits that it has always been willing to carry out rectification work and that the builder's failure to pay the balance due led it to suspend the work.
7. I am unable to find that the facts of this particular case are such that it is inappropriate to make a work order. I find that the supplier is both willing and capable of carrying out a work order. Accordingly I will make a work order pursuant to s48O1(c)(i) of the Act in the builder's application.
8. I am of the view that it would be in both parties best interests for the work order to be detailed and specific about what the supplier must do, and including work method statements where necessary having regard to the fact that rectification will have to be carried out in what should by now be a completed residence and access to work areas may be difficult requiring scaffolding in some instances. I am also of the view that it would be in both parties best interests for the work order to allow for a third party such as one of the experts in these proceedings to inspect the work carried out by the supplier and to certify that it has been carried out in accordance with the terms of the work order.

Determination of HB 18/15665

1. I have decided to make a work order pursuant to s48O1(c)(i) of the Act. The work the subject of the work order is that described in the section of these Reasons titled 'Findings' at [119] - [125].
2. I will order the parties to agree the terms of an appropriate work order by preparing a list of all items of work with the necessary work method statements where required and with appropriate provision for inspection and certification of all work carried out by an appropriately qualified person, which may include Dr Jacobs. The work order must specify the date by which the work must be completed. Once the parties have agreed the terms of the work order they may, not later than 35 days after the date of this decision, file it in the registry of the Tribunal and I will formalise the orders without the need for them to appear in the Tribunal to have the orders entered.
3. In the event that the parties are unable to reach agreement on the terms of the work order as referred to in the preceding paragraph, they must not later than 45 days after the date of this decision file in the registry: 1. the work order which they seek; 2. short written submissions including a statement whether or not they consent to the form of the work order being determined on the basis of the parties written submissions and attached documents without the need for a hearing; and 3. any necessary supporting evidence.

The supplier's claim in HB 17/45163

1. As stated at [1] the supplier claims $25,844.00 for the supply and installation of aluminium windows and doors.
2. The supplier's written submissions do not detail how this amount is made up, although reference is made to the sum of $25,844.00 at [67] of its submissions.
3. Mr Andrews affidavit of 26 April 2018 sets out a history of the contract between the parties commencing with the original contract between the parties in the sum of $157,867.00 to which I have referred at [22] of these Reasons.
4. His evidence that is that the contract work was varied on 27 May 2016 in the sums of $182.00 and $423.00 respectively. In addition he states that on 17 June 2016 the contract work was further varied by variation works in the sum of $4,747.00. He states that there were further variations in August 2016 in the sum of $11,207.00 and that the original contract price, together with all variations lead to a total contract price of 174,426.00.
5. Mr Andrew's evidence of invoices issued and payments made is referred to in the table below. The documents that Mr Andrew refers to in his affidavit which would substantiate the supplier's money claim were not included in exhibit A. 142 Invoice issued 143 Payment received 144 Balance owing 145 15 November 2016. Invoice 6381:$4,747.00 146 $2,373.50 147 $2,373.50 148 30 November 2016. Invoice 6380:$11,207.00 149 $5,603.50 150 $5,603.50 151 30 November 2016. Invoice 6829:$30,000.00 152 $20,000.00 153 $10,000.00 154 8 June 2017, $7,867.00 155 $7,867.00 156 Total : $53,821.00 157 $25,844.00

1. If one were to assume that the supplier's 8 June 2017 $7,867.00 invoice was not paid, the unpaid balance is that claimed by the supplier, namely $25,844.00. At [22] of his 26 April 2018 affidavit Mr Andrews refers to a reconciliation and the supplier's supporting documents which regrettably are not in evidence.
2. It can be seen from the above table that Mr Andrew's evidence is unsatisfactory as he refers to a to a total contract price of 174,426.00, yet refers to only 4 invoices which total $53,821.00. The only inference which can be drawn from Mr Andrew's evidence and the table which I have created based on that evidence, is that the sum of $120,605.00 was claimed by the supplier and paid by the builder and it is therefore not necessary to refer to the invoices relating to those payments.
3. This evidence is not contradicted by the builder. However in its written submissions at [8] the builder asserts that 2 windows items, 8 and 9, were not delivered. There is no reference given for the evidentiary source to support the submission. The transcript P.2 14 December 2018 indicates that the work for windows 8 and 9 has been carried out in accordance with the builder's instruction, that the frames have been installed and the glass has been fitted and that the builder would later apply to council for access and the supplier would then supply door panels at a later date. I reject the builder's submission despite the fact that the supplier has agreed to carry out rectification work regarding items 8 and 9 because the evidence does not support the submission that these items were not supplied.
4. I will make an order that the builder must pay the supplier the sum of $25,844.00 immediately.

Costs

1. In the event that either party wishes to bring a costs application, the costs application must be lodged in the Tribunal and served on the costs respondent within 14 days of the date of this order either attaching or referring to the documents relied upon in support of the application.
2. The costs respondent will have 14 days after the date it receives the application to lodge in the Tribunal and serve on the costs applicant its submissions, if any, in response to the cost applicant's costs application, such submissions either attaching or referring to the documents relied upon.
3. The cost applicant will have 14 days after the date it receives the cost respondent's submissions to lodge in the Tribunal and serve on the costs respondent its submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon.
4. The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.
5. Subject to the parties' submissions, the Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 October 2019