Bergman v Hobbs Plumbing and Drainage Company Pty Ltd [2025] NSWCATCD 106;

1. The application was made under the Home Building A (the "HB Act"). The parties agree and the Tribunal is satisfied on the evidence before it that that the two bathroom and laundry renovation works (the "Works") meet the definition of residential building works within section 2 of Schedule 1 to the HB Act. The amount of the claim is $77,954.67, which is less than the jurisdictional limit of $500,000. The application was field in June 2024, where the work was completed in December 2023. Consequently the Tribunal is satisfied that the Tribunal has jurisdiction to hear and determine the application.

1. Section 18B of the HB Act contains warranties that are implied into every contract for residential building works. Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd v Deacon [2017] NSWCATAP 185 ('Deacon') states that a Tribunal must consider:

(1) whether the homeowner has established on the balance of probabilities that the works have not been performed in accordance with the warranties set out in s 18B of the HB Act; and

(2) then, where a defect is established, what is the appropriate method to rectify that defect and the cost of rectification.

1. Section 48MA of the HB Act also states that the Tribunal must consider an order that the contractor rectify the work is the "preferred outcome".
2. If assessing damages, it is well established that damages should be used to put the party affected by the breach into the position they would have been in if the breach had not occurred: Haines v Bendall [1991] HCA 15.
3. However, Bellgrove v Eldridge [1954] HCA 36 (Bellgrove) further clarifies that the rectification method must be both necessary and reasonable, and the rectification cost must be reasonable.
4. Section 18E of the HB Act sets out differing warranty periods for breaches that are major defects and minor defects. It is not necessary to consider this distinction in this decision since this application was filed prior to the two year limitation for defects other than major defects, and 6 year limitation for major defects.

1. At the hearing, the owners relevantly relied on the expert report of Mr Jarratt Hadid dated 7 June 2024, photos, emails and text messages between the parties.
2. The builder relevantly relied on correspondence between the parties and witness statements of its employees.
3. The builder also sought to rely on an expert report Mr Craig Spratling dated 20 February 2025. This expert report was filed some four months after the date for the respondent to provide its evidence.
4. The sole reason given by the builder for the late provision of evidence was that the builder only determined that they would require an expert report in January. The owners objected to the builder being able to rely on the expert report at the hearing on the basis that the two experts were unable to meet prior to the hearing to produce a joint Scott Schedule.
5. During the morning of the hearing the experts were able to discuss the defects to identify areas of agreement and areas of disagreement. Mr Hadid confirmed at 10:40 AM that he was sufficiently able to understand and respond to Mr Spratling's views.
6. I have reviewed the experience of Mr Spratling. He has acknowledged the Expert Witness Code of Conduct. I find that he is qualified to give evidence in relation to the issues in dispute in these proceedings, and is aware of his obligations as an expert witness.
7. The issue in dispute is the method of rectification for the defects. The existence of the defects is agreed. The Tribunal was satisfied that the parties experts had an adequate opportunity to confer prior to giving evidence and for the applicants expert to adequately respond to the report of Mr Spratling. The Tribunal granted leave for the respondents to rely on the report of Mr Spratling.

1. Based on the evidence before it, the Tribunal makes the findings set out below. Whilst this decision may not refer to all evidence before the Tribunal, it has considered all evidence when making these findings.
2. I find that the parties entered into a contract for the renovation of bathroom and laundry at the property on 23 October 2023 in the amount of $105,649.20 ("the Contract"). The Contract was in the form of the NSW Government Home Building contract for work over $20,000. The scope of the works to be performed included renovating the main bathroom, studio bathroom in the garage and laundry.
3. The works were substantially completed in November 2023. In December 2023 and January 2024 the respondents returned to the property to rectify defects.
4. The owner reported defective grout on 19 December 2023. The parties engaged in discussions as to the appropriate rectification method from 19 December 2023 to May 2024, but did not agree. No rectification works were performed in relation to the grout.
5. At the hearing, the builder confirmed that it agrees the items listed in the report of Mr Hadid dated 7 June 2024 ("the Hadid Report") in section 11 are defects. The Tribunal is satisfied that the builder has breached the warranty contained in s 18B(1)(a) that the work will be performed with due care and skill.
6. The parties differ as to the method of rectification for these defects, and whether a work order or money order is appropriate.

1. It is common ground that all three wet areas (bathroom, laundry and studio bathroom) have non-compliant tile falls to the floor waste, in breach of the warranty in s 18B(1)(a) of the HB Act that the works will be performed with due care and skill. Rectifying this item in each of the three rooms will rectify all other defects claimed, with the exception of the cornices which will be addressed separately.
2. The critical issue to be determined is the scope of rectification. The applicant claims this requires the three floors to be stripped to bare concrete floors, all wall tiles and wall fixtures removed then new waterproofing can be laid including laying it up the wall to the top and sufficient fall on the floor included. The applicant and Mr Hadid claim this is necessary, because the waterproofing sub screed contains protrusions which compromise the waterproofing.
3. A summary of the respondent's proposed scope is that the floor tiles and adhesive should be removed, the first layer of wall tiles removed, then a topping layer of sand and cement screed be installed with the correct falls, before a waterproofing layer and retiling occurs. Wall grout is to be replaced to ensure consistency of grout colour and rectify grout defect.
4. The two key differences with the applicant's proposed scope are:

(1) whether a topping layer of sand and cement screed above the existing screed is appropriate to rectify the fall (or if the flooring should be ground down to the bare concrete); and

(2) whether a lap join of the new waterproofing with the existing waterproofing on the walls is appropriate, or whether all the wall tiles need to be removed and the new waterproofing layer extended the full length.

1. In relation to fall construction method, I prefer the evidence of Mr Hadid. He has inspected the property, whereas Mr Spratling has not inspected the property. In considering the test in Bellgrove, I am satisfied that grinding the substrate to the bare concrete is necessary and reasonable to rectify the insufficient falls in each of the three wet rooms
2. In relation to waterproofing of the walls in the bathroom and studio bathroom, Mr Hadid acknowledged at the hearing that a 100mm lap can be created, however in his experience tiles can fall off the wall after this rectification method is adopted.
3. It is not established that with proper workmanship, the 100mm lap on the wall for waterproofing will be inadequate to rectify the defect in the floor. In considering the test in Bellgrove, I consider that the scope of work proposed by Mr Spratling in respect of the wall waterproofing is the necessary scope to rectify insufficient fall in the waterproofing. I therefore do not find it is necessary to extend the re-waterproofing up the wall. I am satisfied that a lap of the waterproofing on the first wall tile is reasonable and necessary to rectify the defective floor fall.
4. I therefore adopt the rectification method set out in item 2 of the Spratling Report on page 392-393 in respect of both the bathrooms, and item 8 on pages 395-396 in respect of the laundry, except that the existing cement screed on the floor is to be removed.
5. This rectification scope will address all defects contained in the Hadid Report, with the exception of the laundry cornices. It will also rectify the additional defects claimed on page 213 of the tender bundle, which the builder has not objected to.
6. In relation to defect 3, item 3 of Mr Hadid's report - Laundry Cornices, the builder confirmed that it is common ground that the item is a defect. I am satisfied that in respect of the laundry cornices, the builder is in breach of the warranty set out in s 18B(1)(a) of the HB Act that the work be done with due care and skill. The builder confirmed at the hearing that it agreed with the scope of work proposed by Mr Hadid. I therefore adopt the scope set out at paragraph 11.256 of the Hadid Report, being at page 124 of the tender bundle. I find this scope is reasonable and necessary to correct the defect.

1. The owner seeks a money order on the basis that:

(1) the owner has lost faith in the builder as a result of failed attempts to rectify the defects; and

(2) The second applicant is not comfortable with the builders returning to site after an incident with a builder employee.

1. The builder seeks a work order on the basis that it is willing and able to rectify these defects, it has been denied access to do so to date and it has changed personnel to address concerns of the homeowners with any particular member of staff.
2. Section 48MA states that a work order is the 'preferred outcome', however the appeal panel in Galdona v Peacock [2017] NSWCATAP 64 noted that it not a mandatory outcome. The Tribunal's appeal panel noted that a work order would not be appropriate where either the relationship between the parties has broken down, the builder has not acknowledged a poor standard of work, and/or there are concerns about whether the builder has the ability to rectify the work with due care and skill.
3. In determining whether to depart from the preferred outcome, the Tribunal is required to weight up the factors in each case.
4. Here, there Tribunal is satisfied that the parties were engaged in discussions to rectify the defects. Prior to the commencement of proceedings, the parties continued to be engaged in communications and defect rectification or alteration of works performed.
5. The builder has accepted the defects, including additional defects claimed that are not set out in the expert's report.
6. The owners raise concerns with the builders ability to perform the works, on the basis that the work has already been defective. The Tribunal is not persuaded that the fact that work is defective, and has not yet been rectified, is a sufficient grounds to make a money order. Here, the Tribunal is satisfied that the method of rectification was not agreed for the key issue, being the insufficient falls. The grout rectification method was not agreed. However the need for rectification was agreed.
7. There is no evidence from the second applicant as to the second applicant's concerns about the builders returning to site. No witness statement was filed by the second applicant. There is a text message on 3 December 2023 from Mr Bergman to the designer stating "berni is not comfortable with Vince and Andy and talking to them." The Tribunal accepts that this is a reference to Vince Bezzina, the builder's initial project manager. Mr Faber took over as project manager of the defect rectification on 19 December 2025. The Tribunal is not satisfied on the evidence before it that the concerns of Ms Bergman are established. Even if they were, such concerns are appropriately addressed by the builder agreeing, as it has done since 19 December 2023, to use staff other than Mr Bezzina to perform the works.
8. In consideration of all the circumstances in this matter, the Tribunal is not satisfied that the concerns, if any of Ms Bergman and the current lack of rectification of the works is sufficient to displace the preferred outcome in s 48MA where the builder is willing and able to perform the rectification works. I therefore find a work order is appropriate.

(1) The Tribunal orders the respondent and or their contractor, carry out the following work within 8 weeks of the date of these orders in a proper and workmanlike manner.

(a) the rectification work set out in items 2, 5 and 8 of the report of Mr Spratling dated 20 February 2025, except that the existing cement screed on the floors must also be removed prior to re-screeding the floors; and

(b) the rectification work set out in paragraph 11.256 of the report of Mr Hadid dated 7 June 2024.

NOTE: If the work order is not complied with, an application to renew the proceedings can be made. There is a filing fee to make an application for renewal.

(2) Any application for costs, of no longer than three pages length, is to be made in writing to the Tribunal within 14 days of the date of these orders.

(3) Any response to an application for costs, of no longer than three pages length, is to be sent to the Tribunal and the other party within 28 days of the date of these orders.

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.