Berhan v Westacres Property Consultants Pty Ltd t/as Divine Homes [2025] NSWCATCD 103;

1. The respondent relied on a bundle of documents filed with the Tribunal on 15 November 2024 which included:

(1) the respondent's Defence to Points of Claim; and

(2) an affidavit of Akish Palan, an employee of the respondent, and the annexures to that affidavit.

1. The application dated 16 May 2024 (the Application) sought the following order:

"I want NCAT to help get the builder to respond. Cancel contract and get full refund back."

(1) attached a letter from the NSW Building Commission informing the applicant to the effect that his dispute with the respondents related to "the terms and conditions of your contract" and that the Building Commission is therefore unable to intervene; and

(2) under the heading "Why the orders are being sought", stated to the effect that:

(a) In breach of the Building Contract, the respondent received payment of the Deposit despite not having issued the applicant with a home warranty insurance certificate;

(b) A letter had been sent by the applicant's lawyer to the respondent advising of various breaches, but that a response had not been received;

(c) That since the land was registered, he had talked to the respondent to start work but that the respondent had requested the applicant to pay extra money and demanded to change the price and that no work has been done.

1. The Points of Claim repeats the contents of a letter from the applicant's then solicitor to the respondent on 8 March 2025 (the 8 March letter) which I have referred to in more detail below.
2. In summary, it includes an invitation to "both parties to mutually agree to terminate the [Building Contract] and for [the respondent] _to refund to [_the applicant] the [Deposit]" and includes the following complaints and assertions:

(1) Referring to s 127 of the Corporations Act 2001 (Cth), that the Building Contract and Tender Contract are invalid because they were only signed by one director of the respondent and that the Deposit was therefore taken "illegally";

(2) That the respondent is in breach of the Building Contract because it had not yet confirmed easement boundaries, obtained a contour survey, or obtained a s 88B instrument or a s 10.7 planning certificate;

(3) That the Deposit was received in breach of the HBA and the Building Contract because it was received before the applicant had been provided with a certificate of home warranty insurance;

(4) That the respondent pressured the applicant to sign the Building contract;

(5) That the respondent should have but failed to invite the applicant to obtain independent legal advice.

1. A difficulty the applicant faced is that he had not filed and served any affidavit or statement setting out a version of events that could support what was alleged and was left with relying on the contract documents and emails and letters exchanged between the parties and their lawyers.
2. By its Defence to Points of Claim, the respondent, in summary:
   • affirms the Building Contract and says that the director who signed it had authority to do so;
   • generally, disputes the allegations made by the applicant;
   • does not agree to mutually rescind or terminate the Building Contract;
   • says that home warranty insurance has now been obtained;
   • says that the applicant was represented by solicitors when he entered the Land Contract and the Building Contract;
   • says that it proceeded with preliminary works diligently;
   • says that the applicant failed to provide instructions to allow the works to commence; and
   • seeks for the proceedings to be dismissed.
3. It also contends that the Deposit was not paid as a deposit under the Building Contract.
4. Ultimately the case concerns whether the applicant is entitled to an order that the respondent refund the Deposit.
5. Mindful that the applicant, although having previously been legally represented, appeared for himself, it seems to me that the issues for consideration are:

(1) whether the Building contract has been terminated or otherwise rescinded; and

(2) whether:

(a) in that circumstance; or

(b) otherwise having regard to the facts (as found) and the terms of the Building Contract,

the applicant is entitled to an order that the Deposit be refunded.

1. Section 48K (1) of the Home Building Act 1989 (NSW) (the HBA) provides that the Tribunal has jurisdiction to hear and determine "any building claim" that is brought before it under Pt 3A of the HBA, and which is for an amount under the $500,000 limit, and is within time.
2. Section 48A (1) of the HBA relevantly defines "building claim" to mean a claim for the specified relief (empowered by s 48O) that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services.
3. "Building goods or services" are relevantly defined in the same provision to mean "goods or services supplied for or in connection with the carrying out of residential building work".
4. "Residential building work" is relevantly defined in HBA Sch 1 para 2(1) to mean "any work involved in or involved in co-ordinating or supervising any work involved in: (a) the construction of a dwelling". The proposed house was clearly a dwelling as defined in para 3.
5. Although jurisdiction was not raised as an issue, I note that the work performed by the respondent could only have been preparatory work including, the preparation of amended drawings and the preparation of a variation which I have referred to below.
6. In Syed Ahmad Shoaib Ali Pty Ltd v Jandson Pty Ltd [2018] NSWCATP 228 (Syed) the Appeal Panel:

(1) commented (at [280]) that

"[t]he language and purpose of the provisions relating to insurance seem to us to favour an interpretation of residential building work as including the preparatory work which precedes construction"; and

(2) concluded (at [298]) that the preliminary work done in that case, which consisted of obtaining structural engineering drawings, a BASIX report, a BAL certificate, a s149 certificate, a pre-assessment for the CDC application and landscape architectural services, was "residential building work".

1. In circumstances where jurisdiction was not raised as an issue and mindful that there could be no issue that the Contract was for the provision of residential building work and of what the Appeal Panel said in Syed and in Issa v K & K Quality Constructions Pty Ltd [2020] NSWCATAP 74 (4 May 2020) at [37], I am satisfied that the claim concerned goods or services supplied for or in connection with the carrying out of preparatory work as that term is used in Syed.
2. Relevant to the relief claimed, s 49 O of the HBA provides that in determining a building claim, the Tribunal is empowered to make orders that relevantly include:

an order that one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person;

...

1. I am therefore satisfied that the Tribunal has jurisdiction to hear and determine the application.

1. The applicant did not rely on an affidavit or statement setting out a version of events. He relied on the contract documents and emails and letters between the parties, and although the respondent relied on an affidavit, in my view, its primary value was in the identification of documents annexed to it.
2. Having regard to the documents relied on by the parties, I:

(a) am satisfied of the facts; and

(b) make the determinations

1. On 12 May 2023 the respondent emailed the Tender Contract and the Building Contract to the applicant for review.
2. The Tender Contract was initialled on behalf of the applicant and signed on 20 May 2023. It relevantly provides for a price of $396,000.00 incl GST and including a Contract deposit of 10 %, being $39,600.00.
3. The Building Contract signed for the respondent and by the applicant is also dated 20 May 2023. It relevantly provides that:

(1) The Contract Price was $360,000.00

(2) The first payment was to be a 10% Deposit of $39,600.00.

(3) The Building Works must reach the stage of practical completion no more than 36 weeks after the building period commenced (which is to be determined by reference to clause 12and Special Conditions Clause 49), subject to clause 19 which concerns Delays and Extensions of Time.

(4) The builder must not carry out any building work or demand or receive any part of the contract price until warranty insurance is in force and the owner is provided with the certificate of insurance.

1. Clause 54 of the Special Conditions to the Contract provided:

"The owner acknowledges and agrees that:

The deposit to divine homes as the preliminary tender fees will be non-refundable. The fees will be used to generate the preliminary contract, tender, draught HIA and the draft plan.

If the client decides not to go further with Divine Homes, the client does not hold any right to claim the refund of the fees paid initially stop"

1. In my view, that wording is ambiguous and not clear as to whether it refers to the 10% Deposit or something else and I am not satisfied that it applies to the Deposit of $39,600,00 that was paid by the applicant.
2. A "paid" tax Invoice from the respondent to the applicant dated 4/05/2022, with a due date of "19/05/2022" and what appears to be paid date of "12/05/2922" states under the heading Description "Contract Deposit" (10% of $396,000.00) and confirms that the amount of $39,600.00 incl GST had been paid.
3. In respect of the Deposit, Mr Palan refers to the applicant being informed that he would need to pay a consultancy fee of $39,300.00 to cover the respondent's costs and a fee to be paid to the vendor and that the consultancy fee of $39,30000 was paid and annexes at "D" what he refers to as receipt for the consultancy fee.
4. The difficulty I have with that evidence is that Annexure D is a copy of the "paid" invoice I have referred to above.
5. Having regard to the "paid" tax Invoice issued by the respondent, I am satisfied and find that the applicant paid the Deposit of $39,600.00 to the respondent under the Building Contract.
6. Contrary to the Building contract and s 92 (2) of the HBA, the responded received the Deposit prior to obtaining home warranty insurance and providing the applicant with any home warrant insurance.
7. A certificate of Home Warranty Insurance has however since been obtained by the respondent.
8. The Land Contract is dated 19 May 2022 and identifies the purchaser i.e. the applicant's solicitor as Kazi and Associates.
9. The Building Contract was then signed on 20 May 2025.
10. That fact is confirmed in an email from the respondent to the applicant on that date. The email also referred to the design of the house to be built and possible variations / changes to the plan that were discussed.
11. The respondent says that following the signing of the Building Contract it conducted various preliminary works including consultations with the client, organising contractors, securing materials and preparing preliminary design document and preliminary plans.
12. The only work that is supported by any objective record is:

(1) the design and preparation of concept plans (which include the address of the Property and name the applicant as the client) that were referred and attached to an email from the respondent dated 31 October 2023 (the Plans); and

(2) a variation dated 12 January (the Variation) for $ 149,000.00.

1. Having regard to the email and the attached plans and the Variation, I am satisfied and find that the respondent attended to preparatory work which at least included the preparation of the Plans and the Variation.
2. The respondent emailed the applicant on 18 December 2023 referring to a conversation and acknowledging that the purchase of the Land will settle on 29 December 2023 and seeking advice as to the "upgrades" the applicant was looking for.
3. The respondent then emailed the applicant on 6 January, congratulating the applicant on settling the purchase of the Land, and requesting a "s 10.7(2) Planning Certificate", "88B", "title Search" and noting that:

"The final area of the snow gum design with the balcony is 269.89 SQM (29SQ) for the price of $545,000.00 inc. GST.

The inclusion stays the same which is Divine Home Elegant inclusions.

Please consider this offer and when you are ready to proceed, we would like to invite you to the office for finalising the documentation."

1. On 8 January 2024, the applicant emailed the respondent stating:

"Could you please get back to me with a fixed price on the build that I have chosen as we would like to start the build as soon as possible, last time ask you guys reduced the price to $550,000 however I have been comparing the market another builders and this price still seems too expensive, I'm sure you can do better for us, And when you are reducing the price are you also reducing the quality of the build?"

1. On 9 January 2024, the respondent emailed the applicant stating:

We have already gone through this, but I will summarise again.

The price stays at $545,000 for 269.89 sqm (29SQ) (Snowgum Design with Balcony)

The inclusions are the same, the quality is the same that has been originally offered"

1. A further email from the respondent to the applicant on 9 January stated

"I am preparing the documents for you to sign, when can you visit us

I will schedule the meeting accordingly"

1. The Variation from the respondent to the applicant for $149,000.00 was dated 12 January 2024. When added to the Building Contract Price, it brings the revised price (as noted in the respondent's emails) to $545,000.00.
2. Further emails dated 11, 17 and 18 January 2024 include:

(1) a meeting for 15 January being confirmed,

(2) the applicant seeking "some discount"; and

(3) the respondent confirming the price, including the variation of $149,000.00 would be $545,000.00.

1. The applicant then emailed the respondent on 19 January 2024 stating:

"Good afternoon, guys, unfortunately I have decided that I'm not going ahead with the build because the price is way too high and out of my budget, I would highly appreciate if you guys can release my deposit back as soon as possible,

Thank you"

1. The 19 January email, save for stating did that he was not going ahead with the build, did not identify a clause under the Building Contract or any other basis pursuant to which the applicant was entitled to a return of the Deposit.
2. On 8 March 2024, Zena Dabboussy Bardouh of ZDB Legal services acting on behalf of the applicant, emailed the 8 March Letter to the respondent referring to the Deposit and stating:

"I am instructed to invite both parties to mutually agree to terminate the purported Home building contract and Tender document, and for you to refund my client the entire deposit he has paid, in an effort to prevent legal proceedings being commenced against you severally and individually."

(1) asserts that the Building Contract and tender document are invalid because one director of the respondent signed the Building Contract and that the Deposit was therefore taken "illegally";

(2) asserts that the respondent is in breach of the Building Contract because it had not yet confirmed easement boundaries, obtained a contour survey, or obtained a s 88B instrument or a s 10.7 planning certificate;

(3) notes that the Deposit was received in breach of the HBA and the Building Contract because it was received before the applicant was provided with a certificate of home warranty insurance;

(4) notes that the writer is advised that the respondent pressured the applicant to sign the Building contract;

(5) asserts that the respondent should have, but failed to invite the applicant to obtain independent legal advice;

(6) alleges various breaches of the Building Contract by the respondent and takes issue with the conduct of the respondent in respect of the applicant; and

(7) state that the writer's client's rights are reserved.

1. The 8 March Letter was followed up by several emails from ZBD Legal to the respondent's solicitors, Johnson's Law Group in March and April 2024 seeking a response to the 8 March Letter.
2. None of the emails indicated that the Building Contract was terminated or rescinded.
3. The Application was then filed on 17 May 2024.
4. A letter from the respondent's Lawyers, Johnsons Law Group to ZDB Legal Services, dated 21 May 2024 (21 May Letter) was tendered by the applicant.
5. Although headed "without prejudice save as to cost", the respondent did not object to its tender.
6. The 21 May Letter:

(1) Denies allegations that were made in the 8 March Letter;

(2) Notes that by entering the house and land package including entering the Building Contract, the applicant was offered the Land at a discounted rate and that following settlement of the purchase of the Land, the applicant is now seeking to withdraw from the Building Contract having purchased the Land at a discounted price.

(3) Notes that the respondent has incurred costs which it says exceed the Deposit paid.

(4) Advises that the respondent would agree to mutually rescind the Building Contract on the basis that the respondent keeps the Deposit.

(5) Notes that should the Building Contract be terminated because of the applicant's breach or repudiation, it would seek to recover, inter alia the loss of expected profit from the Building Contract.

1. The applicant also relied on a letter from his solicitor attaching the 21 May Letter.
2. The evidence did not include any document or evidence of a communication in which one or other of the parties in any way notified the other that to the effect that it was terminating or rescinding the Building Contract, or the building contract was at an end.
3. The Points of Claim (which as noted above largely repeat what was stated in the 8 March Letter) were thereafter filed on 17 October.
4. A defence to the Points of Claim was filed on 15 November 2025.

1. Having regard to the Building Contract, the emails between the parties, the 8 March letter and the 21 May Letter, what has occurred is that:

(1) The work contemplated by the Building Contract could not commence until at least after settlement of the purchase of the Land;

(2) The purchase of the Land settled in late December 2023;

(3) In around January 2024, the applicant wanted to change the house to be built from that originally contemplated in the Building Contract;

(4) The respondent issued the Variation and informed the applicant of the increase in the price;

(5) The applicant sought to negotiate a reduced price;

(6) Agreement was not reached for a new price with the applicant considering that the price proposed by the respondent was to high;

(7) The applicant, by his solicitors, wrote to the respondent on 8 March 2024 inviting the respondent to agree to mutually terminate the Building contract and making various complaints or allegations in respect of the respondent;

(8) the Application was then filed in May 2024, shortly after which, the respondent, by letter from its solicitor denied the assertions in the 8 March Letter and stated that the respondent would agree to mutually terminate the Building Contract on the basis that the respondent keeps the Deposit.

(9) The parties did not thereafter agree to "mutually terminate" the Building Contract and there was no evidence from one or other of the parties informing the other that the Building Contract was terminated or rescinded.

1. Mindful that the applicant was self-represented, to the extent the applicant contends that the Building Contract has been terminated, although the commencement of proceedings can itself be evidence of a termination of the contract, the difficulty here, is that the parties' communications reflect offers to agree to "mutually" bring the Contract to an end without any agreement having been reached and without either of the parties informing the other to the effect that it was terminating or rescinding the Building Contract or that the Building Contract was at an end.
2. I therefore find that the Building Contract remains on foot.
3. Even if it had been terminated, it is not clear to me, mindful that the Builder has at least performed work in respect of the preparation of plans, how the applicant, without more, would be entitled to a refund of the Deposit.
4. The applicant did not point to a clause in the Building Contract entitling the applicant to otherwise recover the Deposit.
5. Mindful that the applicant was self-represented, I could also not locate a clause in the Building Contract that would entitle the applicant to, in the circumstances, recover the Deposit.
6. Although not clear whether and of so the extent to which the applicant relies on the matters stated in the Points of Claim or the Application, mindful that the applicant appeared self-represented, I will consider each below,
7. The Building Contract and tender document are invalid because only one director of the respondent signed the documents and that the Deposit was therefore taken "illegally".
8. This item was not expanded on by the applicant and I am not satisfied that the Contract is not binding and the receipt of the deposit "illegal" because the Building Contract was only signed by one director for the respondent.
9. The respondent is in breach of the Building Contract because it had not yet confirmed easement boundaries, obtained a contour survey, or obtained a s 88B instrument or a s 10.7 planning certificate.
10. I was not taken to a clause in the Building Contract requiring the Builder to have attended to that work, and even if they hadn't, there was no evidence of a notice of default having been issued and I am not satisfied that consequent on any such an alleged breach the Building Contract was terminated, or the applicant is entitled to a refund of the Deposit.
11. Deposit was received in breach of the HBA and the Building Contract because it was received before the applicant was provided with a certificate of home warranty insurance.
12. In my view, the fact that the Deposit was received before home warranty insurance was obtained, of itself, does not entitle the applicant to a refund of the Deposit, particularly in circumstances where a certificate of Home Warranty Insurance has now been obtained and provided to the applicant.
13. The respondent pressured the applicant to sign the Building contract.
14. Noting that the applicant did not file and serve any affidavit or statement and there was no evidence otherwise to support such an assertion, I am not satisfied that that respondent was pressured in a way that would entitle him to a refund of the deposit.
15. Failed to invite the applicant to obtain independent legal advice.
16. Noting that the applicant did not file and serve any affidavit or statement and there was no evidence otherwise to support such a requirement, I am not satisfied that any such obligation arose.
17. Having regard to the Application which asserts that no work has been done, I am satisfied that the respondent has performed work in respect of the preparation of Plans and the Variation, and to the extent no building work has been formed, having read to the correspondence between the parties, I am satisfied that it is because the applicant has requested a change in the house to be constructed and has not agreed to the Variation price offered by the respondent.
18. For the above reasons, and mindful that there is no allegation of any defective work, I am not satisfied of any basis on which the applicant is entitled to an order to the effect that the respondent refund the Deposit of $39,600.00 that was paid by the applicant to the respondent.
19. I will therefore order that the application be dismissed.

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.