Anh Tu Le v Kim Long Tran trading as Kim Thanh Constructions Pty Ltd

Representation: Counsel:
D Robertson (Plaintiffs)
D O’Connor (Defendant)
Solicitors:
Rock Legal (Plaintiffs)
Adams & Partners Lawyers (Defendant)

File Number(s): 2024/00092441

Publication restriction: Nil

JUDGMENT

1. This matter concerns a contract for the performance of residential building work entered into on 21 December 2021 between the first plaintiff, Mr Anh Tu Le, and Mr Kim Long Tran, the defendant (“the contract”). The first language of all of the parties is Vietnamese and all oral evidence given by Mr Le and Mr Tran was given with the assistance of an interpreter. Messages written in Vietnamese were translated into English for the Court.

2. The contract provides for Mr Tran to undertake specified alterations and additions to a house (“the house”) on a property in Cabramatta (“the property”) of which the second plaintiff, Ms Thi Hien Vu is the registered proprietor. Ms Vu and Mr Le are married to each other and Mr Le has an equitable interest in the property. Ms Vu authorised Mr Le to manage the renovation and additions to the dwelling (see Ms Vu’s affidavit of 6 November 2024).

3. The Home Building Act 1989 (NSW) (“the Act”) applies to the contract. At all material times, Mr Tran held an individual contractor licence under the Act.

Pleadings

4. In the amended statement of claim, in paragraph 7, it is alleged that:

7 Upon commencement of the works, the First plaintiff raised concerns with the Defendant on numerous occasions.

5. The following breaches of contract are alleged:

10 In breach of the agreement, the defendant:

a. Failed to complete the works as specified in the contract;

b. Failed to carry out the work with reasonable care, diligence or skill.

Particulars

a. The defendant failed to complete works in accordance with the specifications of the contract and engineered plans;

b. The defendant reused building materials from the house against Australian standards;

c. The defendant failed to properly secure works from the elements causing significant irreparable damage to the property;

d. The defendant failed to complete works in accordance with Australian standards;

e. The defendant failed to use materials in accordance with Australian standards;

11 The defendant failed to obtain the necessary home owners warranty insurance prior to commencing works.

Particulars

a. The defendant provided home owners warranty insurance in January 2022.

6. In the amended statement of claim, the following damages were claimed:

12 As a result of the defendant’s breaches of the agreement referred to in paragraph 10 above, the plaintiffs have suffered loss and damage.

Particulars of damage

a. The property is uninhabitable and the plaintiffs have been forced to obtain rental premises

b. Estimated cost of rectification of works is $580,000

c. Economic loss

7. In his first Schedule of damages and issues, the plaintiffs quantified the claim on two alternative bases:

a. the sum of $580,298.84, being the cost to rectify the building and complete the contracted works; or

b. the sum of $537,434.88, being the cost to demolish and replace the existing building.

8. In the course of the hearing, the plaintiffs revised the claim in an amended schedule of damages and issues to the following:

a. damages for rectification works in the sum of $43,834.37; and

b. damages for economic loss/delay (rental payments) in the sum of $59,360 (163 weeks)

9. The plaintiffs did not press the claim for the cost to demolish and replace the existing building.

The Defence

10. The defendant pleads as follows with respect to the allegation that the first plaintiff “raised concerns with the Defendant on numerous occasions”:

7. In response to paragraph 7, the Defendant says as follows:

i. The Plaintiff raised concern about that the replacement tarp in the bathroom were installed too high; [sic]

ii. The Plaintiff instructed that the old insulation from the existing roof was to be reused in the new wall;

iii. The Plaintiff complained that there were holes in the chipboard flooring;

iv. The Plaintiff complained that the frame for carport was thinner, however the Defendant had installed as per the Building Contract;

Particular

v. Denies that the concerns were raised on numerous occasions;

vi. Otherwise denies that paragraph.

11. The defendant pleads that he was denied access to the property from mid-December 2021, except for the purpose of retrieving his tools.

12. The defendant further pleads that the plaintiffs failed to mitigate their loss by failing to protect the construction works and site.

13. The defendant also pleads a set-off, but this was not pressed.

14. The defendant provided an outline of damages and issues, in which the following was included:

Damages

1. The builder admits to certain works being defective and requiring rectification to the amount of $28,078.45, identified at 6.2(1) of the expert report of SJN Building Consultants (SJN) at CB282.

Facts

15. Mr Le entered into discussions with Mr Tran, who traded under the name Kim Thanh Constructions, in the second half of 2021. Mr Le printed a floor plan of the existing house and drew upon it the proposed renovation and extension (CB p 745) and gave that document to Mr Tran.

16. Mr Le and Mr Tran signed a contract on 21 September 2021 (CB 746 – 750). The contract is rudimentary. It comprises a pre-printed form, headed “KT KIM THANH Constructions”. The works are described by means of a series of boxes next to text descriptions of work, and the boxes have either been left blank, which indicates that the work described next to them is not part of the contract, or a cross has been placed in them, indicating that the work described forms part of the contract. There is also a handwritten text description of the work in the contract, which says:

Proposed new kitchen room addition = 9.6m x 5.0m = 48m².

Greenboard wall cladding; Roof tile; Bathroom; Laundry.

New Awning = 9.6m x 5.0m roof panel 50mm thick.

Concrete floor for new awning area.

New veranda build at front house plus concrete floor and floor tile = Area = 1.2 x 5.0m.

Window replace all new windows.

Building will completion in 6 months timeframe.

17. A two page document dated 20 September 2021 and signed by both parties on 21 September 2021 forms part of the contract. It sets out the works in more detail in 19 numbered paragraphs. It also says the following:

20. WORKMANSHIP = all trademan work & material supply are AUSTRALIA standard requirement. [sic]

21. VARIATION WORK = no any variation work will not supply IF not in the contract agreement. [sic]

18. The contract provides:

Variation work agreement: owner sign:……………

NO any VERBAL agreement, between owner to builder without sign this contract. [sic]

19. The contract price is $160,000.

20. The final page of the contract provides for nine stages at which specified payments are to be made, the last stage being the completion of the renovation and addition.

21. Mr Tran arranged for plans to be drawn up by Halina Engineers and those plans are dated 10 October 2021. The Halina Engineers plans annexed to Mr Tran’s affidavit are stamped as having being “noted” by a building certifier. The stamp is not dated.

22. Mr Tran also arranged for architectural plans to be drawn up by Mr Krishnan, an architect (see CB p 957 – 971). The architectural plans are stamped as having been approved by a building certifier on 23 February 2022.

23. Mr Tran provided Mr Le with an application for a Complying Development Certificate, which Ms Vu signed on 1 November 2021 and returned to Mr Tran.

24. Mr Le was not provided with any Home Building Insurance policy in 2021.

25. It is common ground that Mr Le made the following payments to Mr Tran, totalling $82,000 (Mr Le’s affidavit CB p 733, Mr Tran’s affidavit CB p 943):

a. 1 October 2021 – First Deposit: Plan & Certifier Fees $8,000.

b. 1 October 2021 – Third Claim: internal work; bathroom renovate; window replace; wardrop [sic] claim - $22,000;

c. 1 November 2021 – Second Claim: Surveyor, engineering, stormwater claim - $8,000.

d. 8 November 2021 – Fourth Claim: veranda build; electric meter box moving; main cable reposition, down light install all room, entrance door build, gutter install; claim $22,000.

e. 8 November 2021 – Fifth Claim: demolition kitchen room; floor structure build; wall + roof frame build; plumber drainage done=kitchen; ensuites, laundry claim - $22,000.

26. Mr Tran says, in his affidavit (CB p 944), that he sent Mr Le, by SMS, on 23 November 2023, a hand drawn design for the awning framing in accordance with the engineering design. On 24 November 2021, Mr Le sent Mr Tran an SMS with a photograph of the awning/pergola that Mr Le wanted. Mr Tran says that he had a conversation with Mr Le on the property on 25 November 2021, in which he told Mr Le that he could not build a structure like the one in the picture, and that the plans show different framing. Mr Tran says that Mr Le told him to stop doing work on the awnings. Mr Tran continued to work on the interior of the house.

27. Mr Le made a payment in response to a progress claim on 8 December 2021.

28. Mr Tran says that, close to Christmas 2021, he placed a “tarp for temporary protection over the open areas”. He said that he expected to return and continue working (Mr Tran’s affidavit CB p 944).

29. In the course of the building work, Mr Le says that he noticed the following issues:

30. The taps in the existing bathroom were installed in a position that was too high and the replacement bathroom window was smaller than in the plans. Mr Tran moved the taps, but did not cure the problem with the window.

31. The insulation from the existing roof had been removed and reused inside the new walls of the addition. Mr Le said that he discussed this with Mr Tran, who said that he would install new insulation, but he did not do so.

32. Mr Le told Mr Tran that he thought that the roof frame that Mr Tran had built for the extension “did not look like it was structurally safe or properly attached”. Mr Le said that Mr Tran told him that he would guarantee it for seven years (Mr Le’s affidavit CB 735).

33. Mr Le raised concerns about the adequacy of the waterproofing being done in the kitchens and bathrooms. It seemed to Mr Le that Mr Tran was “laying black plastic cloths down in those areas”. Mr Tran reassured Mr Le.

34. Mr Le noticed holes in the chipboard flooring installed by Mr Tran. When he pointed it out, Mr Tran simply patched the holes.

35. In late December 2021, Mr Le went to the property. He formed the view, based on what he saw, that the roof was a different design from the roof shown in the plan. He also thought that the carport frame was significantly thinner than shown in the plans, and “the structural supports were much lower quality than what I had expected”. Mr Le further noticed that the eaves had not been replaced, which he said had been agreed, and that Mr Tran had “just added new boards on top and rainwater was leaking through” (Mr Le’s affidavit CB p 735). He raised these issues with Mr Tran.

36. Mr Tran says that he moved the bathroom taps to the position Mr Le wanted. Mr Tran says “there was nothing incorrect about the placing of the window in the existing bathroom” (Mr Tran’s affidavit CB p 947).

37. Mr Tran says that Mr Le agreed to the placing of the insulation which had been removed from the ceiling into the walls (Mr Tran’s affidavit CB p 947).

38. Mr Tran agreed, in cross-examination, that Mr Le raised an issue with the construction of the roof and the carport frame (T p 41). Mr Tran says, in his affidavit, that there was nothing wrong with the roof framing carried out for the extension. He denies offering a seven year guarantee of the roof framing (Mr Tran’s affidavit CB p 947).

39. Mr Tran says that Mr Le was mistaken about the waterproofing. The black plastic, he says, was used to cover the roof over the top of the kitchen and bathroom (Mr Tran’s affidavit CB p 947). Mr Tran said that proper Demco waterproofing was installed in the bathroom and no waterproofing was required in the kitchen.

40. Mr Tran said that there was some damage to the floor. He indicated that he did not get an opportunity to rectify it.

41. Mr Tran addressed the account Mr Le gave of their encounter on 21 December 2021. Mr Tran says, in effect, that the work done was in accordance with the plans, but was not finished and that he did not get the opportunity to finish it. Mr Tran says that Mr Le did not allow him to provide cover where the roof was open. Mr Tran says that, in the course of the discussion on 21 December 2021, he could see that Mr Le was becoming angry so he said:

I will give you time to cool down and then come back and finish the job.

37. Mr Le says, in his affidavit, that he asked Mr Tran to fix the issues he observed that day and Mr Tran “said that they were fine”. Mr Le said that he insisted that the issues be fixed. Mr Le said:

The Builder said that once I stopped being angry, he would come back and finish the job and left the site.

38. Mr Le said that he decided to get the opinion of an independent expert. On 27 December 2021, Mr Le sent Mr Tran a text message in the following terms (translated from Vietnamese) (CB p 994):

Please stop to repair my house. My son called the inspector to check the house to see if the repair is legal.

39. Mr Tran says that he received a text message from Mr Le on 27 December 2021 (Mr Tran’s affidavit CB 944).

40. From the evidence, it is apparent that both Mr Le and Mr Tran understood the text message to mean that Mr Le was telling Mr Tran to stop work on the property and that Mr Le had asked his son to call the inspector.

41. Mr Tran says that, on about 2 January 2022, he returned to the property intending to check on the adequacy of the temporary covering because he became aware that there was to be wet weather. However, he was unable to enter the property because “the outside gate and the main door entrance locks were changed”. Mr Tran says that the keys he had “did not allow me to enter the property” (Mr Tran’s affidavit CB 945). In cross-examination, Mr Tran said that he saw “the roof tarp fly away” on 2 January 2022 (T p 44). Mr Tran said, in cross-examination, that Mr Le changed the lock on the middle gate and the small gate and also “locked” the timber fence with a tech screw which needed a screwdriver to open (T pp 44-45, 53). Mr Tran said that he could not enter the property.

42. Mr Le denies that he changed “the keys to the property” (Mr Le’s second affidavit CB p 1017). Mr Le says that Mr Tran made the driveway inaccessible by fixing the gate with a piece of timber.

43. Mr Tran sent Mr Le (who he sometimes calls Mr Tu) an SMS on 4 January 2022 saying “Mr Tu – Please call me back”. Mr Tran sent Mr Le a further SMS on 6 January 2022, saying “9am, I go to job To get tools Please open the gate for me. Thanks a lot”. Mr Le responded on 6 January 2022.

44. Mr Tran texted Mr Le on 4 and 6 January 2022. On 4 January 2022, Mr Tran asked Mr Le to call him back. On 6 January 2022, Mr Tran asked Mr Le to open the gate to the property so that he could collect his tools.

45. There was a further exchange of text messages between Mr Tran and Mr Le on 7 January 2022, starting at 8:35am:

Mr Tran: Mr Tu – 9am I go to the job site THANKS

Mr Le: Hold on It is raining Call me when it is sunny THANKS

Mr Tran: Mr Tu – Come now

Mr Le: Come to take it in the afternoon,

I am working not at home.

Mr Tran: Yesterday we had an appointment to come today.

But now you are making it difficult.

It will be raining hard this afternoon

How could we work

More what time would it be

Ok when you and I have not resolved with Fair TRADING.

Then we should be calm and happy with each other.

I made an appointment tomorrow morning 8.30 to 9am

You come to open the gate for me.

Hope that you will co-operate.

46. As a result of these text messages, Mr Tran returned to the property on 7 January 2022, with two labourers, to collect his tools and building materials. Mr Tran says that he spoke to Mr Le at the property and offered to “fix the tarp so that the rain doesn’t come through”. Mr Tran says that Mr Le said that Mr Tran was to pick up his tools and go. Mr Tran says that Mr Le said that if Mr Tran came back, he would call the police, and that Mr Le also said that he was going to complain to NSW Fair Trading (Mr Tran’s affidavit CB p 945). In cross-examination, Mr Tran said that the arrangement to go to the property on 7 January 2022 was made in a telephone conversation between him and Mr Le (T p 47).

47. Mr Le denies saying that he would call the police (Mr Le’s second affidavit CB p 1017). In cross-examination, Mr Le denied “ordering” Mr Tran to leave the site in January 2022 (T p 12-13).

48. Mr Le said that when Mr Tran collected his tools, Mr Le asked him to cover the roof before he left. Mr Le said that Mr Tran covered the opening in the roof with “thin plastic”. Mr Le said that the plastic flew away in the wind, and that in January/February 2022 there were “significant rains in the area and entire house was damaged as a result of the roof not being properly secured”. Photographs and videos of the building were provided (Mr Le’s affidavit CB p 736). Mr Le said that the covering for the roof blew away before he changed the lock on the gate of the property (T p 20).

49. Mr Tran says, in his affidavit, that he did not return to the property following Mr Le saying that he would call the police, but that he expected that Mr Le would contact him again and ask him to return (Mr Tran’s affidavit CB p 948). In cross-examination, Mr Tran denied that he decided to abandon the project (T p 52). He said that he was waiting for the owner to call him.

50. Mr Le said, in cross-examination, that, about a week after Mr Tran had removed his tools, Mr Le changed the lock at the gate but not the house. Mr Le said that happened on 7 or 8 February 2022. He indicated that although the key Mr Tran had would no longer allow him to open the gate, his key to the house would still work (T p 14). Mr Tran would, however, have to access the house by means of the gate he had installed to the driveway, as he could not get through the front gate to get to the front of the house (T p 15).

51. In cross-examination, Mr Le agreed that the covering of the open part of the roof blew away sometime in January or February 2022. The covering was variously referred to as a piece of plastic or as a “tarp”. The following exchange took place with Mr Le in cross-examination (T p 19):

Q. Yes, and what I’m suggesting to you is that occurred, that is the plastic flew away, after you excluded the builder from the site.

A. Completely wrong.

Q. You did nothing to protect the property, you didn’t try to reattach the tarp yourself?

A. I was not a builder or handyman, so I could not do anything to it.

52. Mr Tran obtained a quote for the roof panelling that was to be fixed to the top of the awning from Austec Panel Systems on 19 January 2022. On the same day, Mr Tran sent an SMS to the building certifier seeking the Complying Development Certificate.

53. On 24 January 2022, an email was sent by iCare to Mr Le attaching the Home Owners’ Warranty insurance for the property. The documents attached to the email said that the original policy was issued on 24 January 2022, in relation to a contract price of $120,000, and that a varied policy issued on 6 June 2022 had come into effect for a contract price of $160,000 (see Mr Le’s first affidavit CB p 736).

54. In his affidavit, Mr Le says that, sometime after Mr Tran left the property with his tools, Mr Le paid “others” $2,500 to have some asbestos removed from the property (Mr Le’s first affidavit CB p 737). Mr Le, in cross-examination, said that, at the same time, he put up a new fence around the property (T p 19).

55. On 11 July 2024, subsequent to the service of the statement of claim in this matter on 11 March 2024, Mr Tran, through his solicitor, requested access to the property to clean up the site and secure the building. The plaintiffs allowed Mr Tran access on 19 July 2024. Mr Tran cleaned “a significant amount of rubbish” from the site and secured the roof “with extra tarps” (Mr Le’s first affidavit CB p 738). The plaintiffs’ solicitor wrote to Mr Tran’s lawyers on 22 August 2024 protesting that the works done on 19 July 2024 to secure the site had been “insufficient”.

56. On 26 July 2024, iCare sent an email to Mr Le saying:

Your builder has told us that your residential building project covered by a Home Building Compensation insurance policy issued by icare HBCF as detailed below is now complete.

…

Your builder’s advice that your project is complete means the builder is satisfied that the building work covered by the policy is ready for your final occupancy or possession and that the project has reached practical completion ….

57. The building works are not complete.

58. Mr Tran said that he advised iCare that the building works were complete because the owner had commenced proceedings and had not advised him to return to the site to carry out the construction work. He said that he had to advise that the work was complete because he needed to “take on another contract” (Mr Tran’s affidavit CB p 949).

Expert evidence

59. Expert reports were provided by Dr John Cunniffe, Building Consultant (instructed by the plaintiffs), Mr Steven Nakhla, Building Consultant, of SJN Building Consultants (instructed by the defendant) and Mr Gregory Beard, Civil Engineer (instructed by the defendant).

60. The building experts, Dr Cunniffe and Mr Nakhla, engaged in a conclave on 16 June 2025 and produced a joint report from that conclave (Exhibit P3).

61. In their joint report, Dr Cunniffe and Mr Nakhla agreed on the rectification work required for the dwelling. The following items were agreed:

62. The brick piers show sections in which there is inadequate mortar between the brick courses. Rectification will involve dry-packing mortar into the mortar joints where the mortar is inadequate. The building experts agreed that the rectification could be done in four hours at $92.80 per hour plus $200 for materials, giving a total cost of $571.20.

63. The particleboard flooring in the extension section of the house is contaminated with green mould and is damp. Mr Nakhla makes the point, in the joint report, that the floor has been exposed to the weather for over two years. I infer that this is the reason for the mould and the damp. The floor is not presently structurally sound and needs to be replaced. The building experts agree that the floor could be replaced by two tradespeople working for two days with materials costing $2,500, at a total cost of $5,496.60.

64. The external polystyrene cladding on the extension to the house requires full replacement because it has deteriorated due to exposure to the sun and the rain for more than two years. As a consequence, render will not adhere to the cladding in the desired way, so full replacement is necessary. The building experts agree that the cladding could be replaced by two tradespeople working for two days at a cost of $2,496.60 using a hired skip bin costing $1,050 plus materials of $1,500, giving a total cost of $5,046.60.

65. The wall and ceiling linings to the original section of the house require full replacement because of water ingress, which has caused the growth of black mould, which is visible. The rectification requires the removal and disposal of all internal wall linings and ceiling linings in the original section of the house. Mould treatment should then occur, followed by the installation of new wall and ceiling linings. The rectification can be undertaken by two tradespeople working for three days at a cost of $4,455 with materials costing $1,500, at an agreed total cost of $5,955.

66. The ceiling insulation in the original section of the house requires removal and replacement on account of water damage. The building experts agree that the area concerned is 90.4m² at $14.20 per square metre plus $5 per square metre for the removal of the insulation. The total cost agreed is $1,735.70.

67. The building experts, in the joint report, address the issue of the timber-framed walls and roof of the partially built extension to the house. Dr Cunniffe believes that it is necessary to replace the entire timber framing of the walls and roof. His costing involves two tradespeople for three days, costing $4,454.40, plus materials costing $1,651.80, which totals $6,106.20. Dr Cunniffe then discounts this figure by $742.40, yielding a total cost of $5,363.80 for full frame replacement. Mr Nakhla found, when he performed a screwdriver penetration test of the timber framed walls and roof of both the extension and original section of the house that the timber members were structurally sound with no evidence of deterioration. However, Mr Nakhla said, some of the noggins are warped and need to be replaced. Mr Nakhla costs the replacement of the noggins at $742.40. Dr Cunniffe agrees that the replacement of the noggins would cost $742.40.

68. The total cost of the remedial works recommended by Dr Cunniffe is $24,911.30. Dr Cunniffe adds preliminaries at 15% totalling $3,736.70, the builder’s margin at 20% totalling $5,729.60 and GST at 10% totalling $3,437.76, giving a grand total of $37,815.35.

69. The total cost of the remedial works recommended by Mr Nakhla is $19,547.50. Mr Nakhla adds preliminaries at 15% totalling $2,932.13, the builder’s margin at 20% totalling $4,495.93 and GST at 10% totalling $2,673.11, giving a grand total of $29,673.11

70. Mr Beard, in his report of 10 February 2025, substantially agreed that the issues set out in [61] above required remediation.

71. With respect to the timber framed walls and roof to the partially built extension to the house, referred to in [62], above, which are the subject of a disagreement between the building experts, Mr Beard said, in his report of 18 October 2024 at CB 693, in response to Dr Cunniffe’s observation, in his report, that the framing was not complete:

While the framing was indeed incomplete, my inspection did not reveal any major defects up to the point of construction. The warping of some noggins and the rusting of nails are likely due to prolonged exposure to the elements, not necessarily poor workmanship. The framing timber was dry at the time of my inspection, indicating that the structure had not retained significant moisture.

67. Mr Beard said, further, in his report, in relation to the timber framed walls and roof to the extension to the house, at CB 703:

7.3.3 New Structure

- Damage to Timber Framing: Although the moisture readings during the inspection were dry, the visible weathering indicates that the framing has deteriorated over time. The newly constructed timber framing was exposed to rain and other weather elements, causing the wood to weather, nails to rust, and structural components to weaken – particularly the bottom plate, which sits directly on the floorboards. It is likely that water infiltrated the interface between the bottom plate and floorboards and remained trapped for an extended period. This prolonged exposure would have allowed moisture absorption, softening the wood and increasing the risk of rot. While the timber appeared dry at the time of inspection, the earlier exposure likely resulted in irreversible damage, compromising its structural integrity and long-term durability. This is due to the prolonged exposure to the elements.

…

7.3.4 Based on my observations, it is evident that a significant portion of the damage to both the old and new structures is directly related to exposure to the elements. While I do not have documentation or photographs from the time work ceased in December 2021, it is my opinion that timely and adequate protection measures, particularly the proper enclosure and roofing of the structure, could have mitigated or entirely prevented much of the observed damage.

7.3.5 If the roof had been securely covered and the site adequately protected against rain and wind, the internal elements, including plasterboard, timber framing and floorboards, would have been shielded from moisture ingress. Proper tarping or temporary roofing could have preserved the integrity of the materials and prevented the mould growth, structural damage, and other weather-related issues that have since developed.

68. Mr Beard, Mr Nakhla and Dr Cunniffe gave oral evidence concurrently on the second day of the hearing.

69. In relation to the timber framing for the walls and roof of the extension, Mr Beard clarified that he did not observe any construction related defects in the timber framing. The damage that he observed to the timber framing, nails and noggins resulted from the prolonged exposure of the area to the weather (T p63 – 64). Mr Beard further clarified that the timber framing would not need to be entirely replaced, but some parts of it ought to be, specifically those parts of the timber framing which are joined to the floor because moisture will have stayed for longer at those points, so the wood will have been wetter for longer. The balance of the timber can still be used as part of the timber framing for the walls and roof of the extension (T p 65 – 66).

70. Mr Beard identified damaged floorboards in the original house, which he said have been damaged by the exposure to the weather. Mr Beard said that these floorboards would need to be replaced. This has not been the subject of consideration by the building experts in their joint report (T p 70).

71. Mr Beard also identified damaged doors, door frames and fittings in the original house which have been damaged, most likely by swelling from moisture absorption followed by contraction in dry periods which has led to misalignment, cracking and deterioration in those elements. Mr Beard said that the doors, door frames and fittings affected could probably be repaired. These items were also not considered in the joint report (T p 70).

72. In the course of the conclave, Dr Cunniffe agreed that the only item in his report which relates to defective building work was the item concerning the brick piers, which is item 1 in the joint expert report. All of the other items in his report relate to weather damage or incomplete work

Submissions

The plaintiff’s submissions

73. The plaintiffs argued that the evidence of Mr Le should be preferred over the evidence of Mr Tran.

74. The plaintiffs asked the Court to find that, on 7 January 2022 Mr Tran attended at the property with two labourers, packed up his tools and left, refusing Mr Le’s request that he secure the tarp over the building work prior to leaving. It was argued that Mr Tran had a motive for abandoning the building project in that he was concerned that he might “get into trouble” with the Department of Fair Trading and the Council because insurance had not yet been obtained in relation to the residential building work and no approval had, at that time, been obtained under the Environment**al Planning and Assessment Act 1979 (NSW). It was argued that this concern arose in Mr Tran because of Mr Le’s message of 27 December 2021 telling him to stop work. It was argued that the steps taken by Mr Tran subsequent to 7 January 2022 to obtain insurance and to obtain a Complying Development Certificate from a building certifier supported the plaintiffs’ characterisation of the events. Mr Tran denied Mr Le’s version of events in cross-examination (T p 47 – 50).

75. It was accepted in the plaintiffs’ submissions that Mr Le changed the lock on at least one entrance gate, but it was argued for the plaintiffs that this did not prevent Mr Tran from continuing with the building work. It was argued that Mr Tran never attempted to re-enter the property and therefore cannot be said to have been locked out. It was argued that Mr Tran abandoned the building project on 7 January 2022.

76. It was argued that Mr Tran’s notification to iCare in August 2024 that the work had been finished supported the contention that Mr Tran had abandoned the work and had no intention of completing it.

77. The plaintiffs asked that the Court find that the defendant abandoned the building work at the property and repudiated the contract by evincing an intention no longer to be bound by the contract on or about 7 January 2022, either when he removed his tools from the property or when he failed, subsequently, to return or to attempt to return to the property.

78. The plaintiffs cited Galafassi and Another v Kelly (2014) 87 NSWLR 119, in which Gleeson JA, with whom Bathhurst CA and Ward JA agreed, said:

62. For the conduct of a party to constitute a renunciation of its contractual obligations it must be shown that the party is either unwilling or unable to perform its contractual obligations, that is, it has evinced an intention to no longer be bound by the contract or stated that it intends to fulfil the contract only in a manner substantially inconsistent with its obligations and in no other way: Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625-626; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 634, 647-648, 658; Koompahtoo at [44]; Foran v Wight (1989) 168 CLR 385 at 423. Where inability to perform is declared the conduct amounts to a refusal to perform and the innocent party need not prove that the other party was actually unable to perform as a matter of fact: Universal Cargo Carriers Corporation v Citati at 437.

63. A renunciation can be made either by words or conduct, provided it is clearly made: Universal Cargo Carriers Corporation v Citati at 436. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it: Koompahtoo at [44]; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd at 659 (Deane and Dawson JJ) and at 647 (Brennan J).

79. The plaintiffs argued that they accepted the defendant’s repudiation of the contract by commencing these proceedings, at which point the contract was terminated (see Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 (“Beckhaus”) at [53], [68] and [73] and Janos v Chama Motors Pty Ltd [2011] NSWCA 238 at [23]). The plaintiffs say that a claim for damages cannot be made whilst a contract is on foot, so it follows that the making of a claim for damages implies the termination of the contract.

80. The plaintiffs further asked that the Court find that the defendant failed adequately to secure the property from the elements, including rain, and further failed to inform the plaintiff that it was now the plaintiff’s obligation to secure the property from the elements because the defendant was abandoning the project.

81. The plaintiffs argued that the defendant’s abandonment of the project and failure to secure it from the elements caused damage to the house from heavy rain in January/February 2022 and thereafter. The plaintiffs seek damages in relation to defective building work and in respect of damage to the house caused by its exposure to the weather.

82. The plaintiffs rely on the joint report, dated 16 June 2025, of the building experts, Dr Cunniffe and Mr Nakhla, “and any further matters emerging from experts’ cross-examination” in relation to the quantum of the damages sought with respect to defective work and damage to the house from the elements subsequent to 7 January 2022.

83. Further, the plaintiffs argued, the plaintiffs and their family have not been able to live in the house since the work began in October mid - 2021. The plaintiffs and their family have rented a two bedroom apartment at a cost of $360 per week. The evidence in Ms Vu’s affidavit of 6 November 2024 supports this submission.

The defendant’s submissions

84. In final submissions, it was submitted by the defendant that termination of the contract by the plaintiff is not pleaded in the statement of claim. The letter of 22 August 2024 from the plaintiff’s solicitors to the defendant’s solicitors was referred to. That letter records the visit to the property by the defendant on 19 July 2024 when the defendant placed “tarps” over the roof of the property. In the letter, it was asserted that the tarps used would not be sufficiently effective, and the letter ends “We put you on notice that the works completed by your client to apparently secure the property are ineffective”. The point made on behalf of the defendant in relation to the letter was that the assumption underlying the letter was that the defendant was responsible for the site although the statement of claim in this matter was filed on 11 March 2024.

85. It was submitted that the manner in which the plaintiffs dealt with the site subsequent to 7 January 2022 was consistent with an attempt to obtain an award of damages of a sufficient size that the defendant would, in effect, pay for the new house that Dr Cunniffe costed in his report.

86. The defendant objected to the inconsistent positions taken on behalf of the plaintiffs with respect to the question of whether the contract has been terminated, pointing out that Mr Le says, in his affidavit of 6 November 2024, that he did not terminate the contract “at any time” (paragraph 42, see CB 737).

87. The defendant referred to the judgment of Ipp JA (with whom Hodgson JA and McColl JA agreed) in Beckhaus, which concerned a contract for the construction of levee banks by the defendant for the Council, at [68] – [69]:

68 While, on this assumption (the Contract still being on foot), the Council may have been entitled to claim damages for delay arising out of Beckhaus’ failure to achieve practical completion by the date for practical completion, it could not sue Beckhaus for defective or incomplete work. As long as the Council maintained that the Contract was alive and had not been terminated, and held Beckhaus to its obligation to complete the work in accordance with the specification, on its contention the work remained lawfully in Beckhaus’ possession. In other words, it was an inevitable incident of the Council’s argument that the work had not been delivered to and accepted by the Council (Beckhaus – on the Council’s argument – being in possession of and obliged to complete the work). While the work was in Beckhaus’ possession, the Council suffered no loss by reason of defective or incomplete work; the work, not being in the Council’s possession, did not at that stage form part of its patrimony.

69 This situation would have changed when the Contract was terminated. When that occurred, the work (in its defective and incomplete state) was handed over to the Council. At that stage, the Council suffered loss by being in possession of defective and incomplete work.

88. The defendant argued that the works did not approach practical completion. The builder, it was argued, is entitled to complete the works, the contract remaining on foot.

89. In the alternative, the defendant argued that the parties were only $8,000 apart with respect to damages.

90. The defendant said that the evidence was that Mr Le had changed the lock to the front gate. The defendant argued that it was clear from that act that the builder was excluded from the site, which was consistent with the owner’s text message to the builder instructing him to stop work so that the work could be investigated. At the point at which the locks were changed, it was argued, Mr Le resumed control of the property and Mr Tran lost control of, and access to, the property. It was pointed out that Mr Le agreed, in cross-examination, that the builder needed the permission and co-operation of Mr Le to give him access to the property on 7 January 2022 to enable him to retrieve his tools. It was argued, for the defendant, that the plaintiff could not maintain two contradictory positions: he could not agree that he had control of the site by 7 January 2022 on the one hand, and instruct his lawyers to protest, in the letter of 22 August 2024, that Mr Tran had not adequately protected the house with the tarp placement on 19 July 2024 on the other hand. It was argued that the owners could not exclude the builder from the property and then argue that he was responsible for damages arising from the failure to protect the house from the weather.

91. It was submitted that the plaintiffs made a “definitive, forensic decision” not to terminate the contract in an effort to make the builder liable for the damage done to the house on account of its exposure to the weather once the first tarp had blown away. It was submitted that the plaintiff’s case failed completely on this basis.

The plaintiffs’ submissions in reply

92. In reply, the plaintiffs reiterated their argument that the contract was terminated upon the making of a claim for damages, and said that the claim for a set-off in the defence was inconsistent with the defendant’s argument that the contract had not been terminated.

93. It was submitted that the plaintiff did not accept that Mr Tran was excluded from the site on account of the conversation on 21 December 2021 or on account of the 27 December 2021 text message.

Consideration

What is the status of the contract?

94. I find that, on 21 December 2021, Mr Le and Mr Tran had a discussion on the property about Mr Le’s apparent perception that some of the building work was defective and some of the building work was not in accordance with the plans. I note that those perceptions have not been substantiated by evidence. Mr Tran ended the argument by saying words similar to “I will give you time to cool down and then come back and finish the job”. Mr Tran then left the property, leaving his tools and intending to return and resume work on a future day.

95. I find that, on 27 December 2021, Mr Le sent Mr Tran a text message in Vietnamese which has been translated to English as:

Please stop to repair my house. My son called the inspector to check the house to see if the repair is legal.

96. I find that Mr Le intended to convey, and did convey, by that text message, that Mr Tran was not to resume work on the property pending the outcome of the involvement of an inspector, presumably from Fair Trading, in the matter. I note that no evidence has been provided of the involvement of an inspector at Mr Le’s behest.

97. I find that, on about 2 January 2022, Mr Tran returned to the property to check the adequacy of the covering of the site. I find that he was unable to enter the property using the keys with which he had been provided because Mr Le had changed the lock on the front gate and Mr Tran’s key could no longer open the gate. I find that Mr Tran could not open the side gate without using a tool to remove fastenings. Mr Tran, reasonably, took the changing of the lock to be an indication that Mr Le was intentionally excluding him from the property. I find that it was Mr Le’s intention, in changing the lock, to convey to Mr Tran that Mr Tran no longer had free access to the property but required Mr Le’s permission to enter it. No other explanation for the change of the lock was put forward.

98. I find that, after text messages from 4 and 6 January 2022 from Mr Tran to Mr Le, Mr Le agreed to meet Mr Tran on the property on 7 January 2022. On that day, after putting Mr Tran off several times, Mr Le met Mr Tran on the property to let him in and allow him to collect his tools. At no time during the course of the text exchanges did Mr Le say to Mr Tran that Mr Tran could let himself into the property with the keys that he had been using since the beginning of the project or by using tools on the gates or the fence. It was implicit in the text exchange on 7 January 2022, in particular, that both men shared the understanding that Mr Tran was unable, at that time, to gain access to the property to collect his tools in Mr Le’s absence. Mr Tran needed to be let into the property. Mr Le admits that he changed the lock to the front gate. It was necessary to get through the front gate to get access to the front door. Mr Le said, in evidence, that he changed the lock after 7 January 2022, but I prefer the evidence of Mr Tran on this point. It is more consistent with the text messages and the events surrounding 7 January 2022. I find that Mr Le had the front gate lock changed between 27 December 2021 and 2 January 2022. I further find that the side gate was barred in such a way that it would have been necessary to apply a tool to it to remove fastenings to gain entry. I accept Mr Tran’s evidence in relation to the changing of the locks.

99. I accept Mr Tran’s evidence that, at the meeting on 7 January 2022 on the property, he offered to “fix” the tarpaulin which he had previously placed over the open roof of the partly built extension to protect the house from the weather, but that Mr Le told him to “pick up his tools and go”. I further accept Mr Tran’s evidence that Mr Le mentioned complaining to NSW Fair Trading at that meeting. This is consistent with the reference to “the inspector” in Mr Le’s text of 27 December 2021. I accept Mr Tran’s evidence that he expected that “the inspector” would get involved, and that Mr Le would then invite Mr Tran back onto the property to resume work. Subsequently, Mr Tran dealt with the obtaining of insurance and the obtaining of a Complying Development Certificate in relation to the project, I infer, to facilitate his ultimate return to the property at Mr Le’s future invitation. I accept Mr Tran’s evidence that Mr Le told him that if he returned to the property (implicitly, without Mr Le’s permission), Mr Le would call the police.

100. The plaintiff’s case, that Mr Tran “abandoned” the property and the building project by leaving the site on 7 January 2022 is inconsistent with Mr Le’s behaviour in changing the gate lock and meeting Mr Tran on site so that he could collect his tools. Mr Le knew that he had told Mr Tran to stop working in his text message of 27 December 2021. Mr Le also knew that he had changed the gate lock so that Mr Tran could no longer let himself into the property. Mr Le therefore knew that Mr Tran was waiting to be invited back on site at a future time to continue the work once Mr Le resolved his concerns about the quality of the building works, which Mr Tran had told him were unfounded. Mr Le did not, however, at any time subsequent to changing the locks, invite Mr Tran to re-enter the site or resume work.

101. I find that Mr Le took possession and control of the site from Mr Tran when he told him to stop work on 27 December 2021 and then changed the gate lock. This is further evidenced by Mr Le’s subsequent action in having a contractor unrelated to Mr Tran attend at the site to remove asbestos from the property and in arranging for a new fence to be constructed around the property. Mr Le’s actions were inconsistent with his obligations under the contract because it is necessarily implicit in the contract that the builder will have access to the property to undertake the work he is contracted to perform.

102. The plaintiffs repudiated the contract by the text message of 27 December 2021 and the changing of the lock or locks prior to 2 January 2022.

103. The breaches of contract alleged against the defendant and allegedly relied upon by the plaintiffs to exclude him from the site, namely the failure to undertake work in accordance with the plans and with reasonable care, diligence or skill, have not been made out on the evidence.

104. The plaintiffs cannot rely on the defendant’s failure to complete the works in circumstances where the plaintiffs’ own actions in removing the defendant’s access to the site prevented him from continuing with the works.

105. The Act provides, in s 18BA:

18BA Duties of person having benefit of statutory warranty

(1) Breach of a statutory warranty implied in a contract constitutes a breach of the contract and accordingly—

(a) a party to the contract who suffers loss arising from the breach has a duty to mitigate their loss, and

(b) the onus of establishing a failure to mitigate loss is on the party alleging the failure.

(2) The duty of a party to a contract to mitigate loss in respect of a breach of a statutory warranty extends to a person who has the benefit of the statutory warranty or who is entitled to the same rights as those that a party to the contract has in respect of the statutory warranty.

(3) The following duties apply to a person who has the benefit of a statutory warranty but do not limit any duty the person has to mitigate loss arising from breach of a statutory warranty—

(a) when a breach of the statutory warranty becomes apparent, the person must make reasonable efforts to ensure that a person against whom the warranty can be enforced is given notice in writing of the breach within 6 months after the breach becomes apparent,

(b) the person must not unreasonably refuse a person who is in breach of the statutory warranty such access to the residential building work concerned as that person may reasonably require for the purpose of or in connection with rectifying the breach (the duty to allow reasonable access).

(4) A breach of warranty becomes apparent for the purposes of this section when any person entitled to the benefit of the warranty first becomes aware (or ought reasonably to have become aware) of the breach.

(5) If a failure to comply with a duty under this section is established in proceedings before a court or tribunal concerning a breach of a statutory warranty, the failure is a matter that the court or tribunal may take into account. If the failure is a failure to comply with the duty to allow reasonable access, the court or tribunal must take the failure into account.

106. The plaintiffs, in their statement of claim, have not pleaded that the contract has been terminated. The plaintiffs, as the parties claiming under a statutory warranty under the Act, did not give any notice in writing of a breach to the defendant. The exclusion of the defendant from the site, pending investigation of the building work, began at the end of 2021 or the very beginning of 2022 and has continued. There is no evidence of the investigation foreshadowed by Mr Le being undertaken. The plaintiffs now argue that they terminated the contract by the service of these proceedings. In view of their own breach of contract, and their failure to identify clearly a breach of the contract by Mr Tran which would give them a right of termination, their entitlement to terminate the contract has not been established.

107. Mr Tran’s actions in seeking and obtaining access to the site on 19 July 2024 to seek to protect the timber framing is consistent with his submission that he believes that the contract continues to be on foot.

108. On both cases, the contract remained on foot at least until the service of these proceedings on Mr Tran. In those circumstances, the plaintiffs cannot claim for incomplete work, and they conducted their case accordingly.

109. I reject the contention that the plaintiffs have established an entitlement to terminate the contract, so the plaintiffs’ argument that termination occurred on the service of the statement of claim falls away.

110. Mr Tran’s conduct in telling iCare in July 2024 that the work on the property had been completed could perhaps be construed as a constructive termination of the contract, but neither party argued that this was so.

111. The plaintiffs’ claim for damages equivalent to their rent must also fail, as the delay in the completion of the house is due to their own breach of contract in excluding the builder from the property indefinitely without proper justification or notice.

112. The plaintiffs’ claim includes a claim for damages for defective work. The only “defective work” of which there is expert evidence concerns the sections of inadequate mortar between the brick courses in the extension. The building experts agreed, in their joint report, that the cost of remediation of the mortar would be $571.20.

113. If the contract had been terminated, the plaintiffs would have been entitled to an award of $571.20. However, as the contract has not been terminated, it is not possible to say at this stage whether or not the sections of inadequate mortar exist because of a breach of contract by Mr Tran. Mr Tran was excluded from the site without notice. The work may be incomplete, rather than defective. It has not yet crystallised as a loss for the plaintiffs (see Beckhaus, quoted at [87], above).

114. The plaintiffs seek to claim for damage to the building works caused by the elements between the period from 7 January 2022 to the service of proceedings on 19 June 2024, which is damage occasioned after Mr Tran was told to stop work and after he was locked out of the property. The plaintiffs resumed control of the property after 27 December 2021 and prior to 7 January 2022, by which time the gate lock had been changed. The defendant cannot be liable for damage occasioned to the building works after the plaintiffs resumed control of the property. When the plaintiffs resumed control of the property, the property was, once more, at their risk as the landowners (see Beckhaus quoted at [87], above).

115. In addition, the plaintiffs were required to take reasonable steps to mitigate their loss, both at common law and under the Act. There is no evidence that they took any steps to mitigate their loss. The photographs showing the state of the building works over time indicate that the building works were exposed to the weather, particularly the rain, for a considerable part of the period between 7 January 2022 and 19 July 2024. The evidence of the expert witnesses supports this. In cross-examination, Mr Le admitted that he did not take any steps to replace the tarpaulin when it blew away prior to 7 January 2022 (T p 18).

Conclusion

116. The plaintiffs’ claims have not been made out on the balance of probabilities.

117. The following order will issue:

118. Judgment for the defendant. The statement of claim is dismissed.

119. I will hear the parties as to costs.

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