Bowman v Curtis

Jurisdiction

1. Section 48K (1) of the Home Building Act 1989 (NSW) (HBA) provides that the Tribunal has jurisdiction to hear and determine a building claim.
2. The Tribunal's jurisdiction to determine a building claim is subject to whether certain time limits for the making of the claim are complied with.
3. Section 48K (7) of the HBA provides that the Tribunal does not have jurisdiction to determine any building claim for a breach of a statutory warranty if the claim is made after the period provided by section 18E for commencing such a proceeding.
4. The provisions of the section 18E (1) (a) and (b) of the HBA relevant at the time the contract between the parties was entered into (ie, on or about 19 June 2020) are to the effect that proceedings for a breach of statutory warranty must be commenced before the end of the "warranty period". The warranty period is a period of six years for a breach that results in a major defect or two years in any other case.
5. Section 18E (1) (c) provides that the warranty period starts on completion of the work to which it relates.
6. According to the respondent, the relevant works were completed in December 2020 (see paragraph 9 of affidavit dated 4 May 2022).
7. The Application was therefore lodged within 2 years from the completion of the relevant work thus making it unnecessary for the Tribunal to determine whether the defects complained of are major defects.
8. For the above reasons, the Tribunal has jurisdiction to hear and determine the Application pursuant to section 48K of the HBA.

The Applicable Law

1. Section 18B of the HBA provides as follows: 18B Warranties as to residential building work (1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work - (a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new, (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time, (e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling, (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment.
2. Section 48MA of the HBA provides as follows: 48MA Rectification of defective work is preferred outcome in proceedings A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.

Review of the Evidence and Findings of Fact

1. On or about 19 June 2020, the respondent provided a quotation to the applicant for building renovation works at her residential premises in Cronulla, New South Wales. The proposed scope of works included the removal of an existing front deck to the premises and the building of a new deck "to match existing area". The quotation provided by the respondent also specified "waterproof deck area to Australian Standards". I find that shortly after the provision of the quotation on 19 June 2020, the parties entered into a contract for the respondent to carry out works in relation to the front deck of the applicant's house in accordance with the scope of works specified in the quotation.
2. The respondent gives evidence in paragraph 9 of his affidavit made on 4 May 2022 that the works to the front deck commenced on or about 29 June 2020. He also gives evidence that completion of these works occurred in early December 2020 when the handrail was installed. I find that these were the commencement and completion dates in relation to the works to the front deck.
3. On 14 October 2020, the applicant sent an email to the respondent. In the email, she noted that plumbing work which she had engaged the respondent to perform in her bathroom was not "Australian Standards compliant". She sought assurance from the respondent that the front deck "has been constructed to Australian Standards and is 100% safe, including the balustrade installation". The respondent responded by email to the applicant stating, in part, "I can assure you the deck is built to the BCA code".
4. On 4 February 2021, the applicant sent an email to the respondent which included the following: I have attached photos of my front balustrade. The first one shows the top railing detached at the corner and the second one is a video of the balustrade wobbling badly and very unstable when I push it. As you know, I emailed you at the end of last year seeking assurance of the balustrade installation compliance after the non-compliant work carried out in my bathroom. This broken, unstable balustrade cannot possibly be Australian Standard compliant. …My old balcony was demolished on 29 June 2020 and I still am unable to use the new one due to the unsafe railing. Even when after work has been done, how will I know it is safe?
5. It appears from the evidence that the respondent arranged for Daniel Lewins, a glazier, to rectify the problems with the railing which the applicant notified the respondent of in her email referred to above.
6. On 9 March 2021, the applicant sent an email to the respondent in which she raised concerns about Mr Lewins' proposed method of rectifying the problem with the railing of the front deck. She stated the following in her email: Daniel said he was going to drill holes in my balcony and ceiling below to affix the new balustrade. This would not only damage the ceiling below, but also damage the water roofing [sic], compromising its integrity and lead to the balcony ceiling below leaking. Please find a different solution, I do not want to be ringing you in the future with a problem, like I had to with my ensuite.
7. It appears from the evidence that rectification work to the balustrade was carried out by Mr Lewins, however, the precise timing at which this occurred is unclear. Mr Lewins provided a certificate dated 3 May 2022 which stated that the aluminium external balustrading complied with AS/NZS 1664.1:1997.
8. In June 2021, the applicant's fears that the rectification of the railing would compromise the water proofing of the front deck materialised. On 9 June 2021, she sent a text message to the respondent notifying him of a water leak. In a further text message sent on 1 July 2021, the applicant again notified the respondent of a "leak in [her] balcony ceiling".
9. In or about early August 2021, the applicant arranged for a report to be prepared by Neale Johnstone, a building consultant. Mr Johnstone prepared a report based on his inspection of the premises on 2 August 2021. He identified the following problems with the construction of the front deck: 1. New holes to the surface of the front deck, made when the hand rail was repaired, had penetrated the water proofing membrane; 2. The gyprock to the ceiling installed under the front deck was exposed to the weather and was not a product which was weather resistant; 3. The tiles on the front deck were at the same level as the internal surface so that there was "no drop down which is required by the BCA code of Aust min 50mm"; and 4. There was "the potential for water to enter the rooms inside as there is no clear space for water to drain away safely".
10. I note that as part of her evidence, the applicant has included photographs of black plastic sheeting on the front deck with water pooling on it. At the hearing, the respondent gave evidence that this had been done by him and his workers to "prevent water penetration". He conceded that this was unsatisfactory and that it created a trip hazard.
11. On 9 August 2021, the applicant provided Mr Johnstone's report to the respondent by email.
12. The respondent has included in his evidence various text messages between him and the applicant exchanged in the period between July and November 2021. The text messages indicate that the applicant was at all times willing to provide access to the respondent to rectify the defects to the front deck subject to her being provided with prior notification as to when workers would be attending her premises. I consider this to have been a reasonable request by the applicant. There is nothing in the evidence to suggest that the applicant was not at all times willing to provide reasonable access to the respondent to rectify the problems with the front deck which were identified in Mr Johnstone's report. Notwithstanding this, the problems with the front deck identified by Mr Johnstone have not been rectified by the respondent.
13. On 13 December 2021, the respondent sent an email to the applicant in which he stated the following: It has been brought to my attention that the deck must have a 50mm step down to comply with BCA even thou [sic] as your [sic] aware the leaking issues have nothing to do with the step around your sliding doors.
14. It is unclear why the respondent was stating in December 2021 that the issue of the "step down" had been brought to his attention. It had, in fact, been brought to his attention some four months prior to this when the applicant forwarded to the respondent Mr Johnstone's report. Mr Johnstone's report expressly noted the requirement for a 50mm "drop down".
15. The respondent has obtained a report dated 30 April 2022 from Stephen Webster, a building consultant. In his report Mr Webster identifies the following problems with the construction of the front deck: 1. There is tannin staining of the tiles from the unpainted hardwood posts; 2. There is calcification residue on the Colorbond fascia immediately below each of the hand rail posts; 3. There is water staining of the "raw plasterboard soffit"; 4. The upper deck was covered in black builder's plastic which was "holding water"; 5. There was no "fall" or gradient of the balcony deck for drainage; 6. No grout existed to the tile joints and several tiles had been "significantly chipped along their edges"; 7. There is no adequate step down of the balcony deck creating the "potential for wind driven rain to well up against the sliding door units and for water to push over the door threshold profiling and enter the house"; 8. Sill flashing had not been installed or alternatively needed to be installed in a manner that "provided for the ability of water to drain adequately"; and 9. The flush connection of the balcony structure to the brick façade of the house has a high likelihood of water transfer from the brick exterior of the house to the deck.
16. The applicant has obtained a quote from Michael Hickey Building dated 28 February 2022. The quote is for the demolition and replacement of the front deck. The quote sets out the steps required to achieve this. The quote also indicates that Mr Hickey is a licensed builder. The amount quoted for this work is $25,652 inclusive of GST. The applicant has also obtained a separate quote in relation to the tiles on the front deck which need to be replaced in the sum of $838.89. No evidence was presented by the respondent to counter these quotes. No submissions were made by the respondent that the amounts contained in the quotes were not a reasonable amount for the rectification of the front deck in the event that the Tribunal was minded to make a money order as opposed to a work order.

Decision

1. At the hearing, it did not appear there was any real dispute by the respondent that he had breached the warranties stipulated in s18B of the HBA. The expert evidence establishes that the works do not comply with relevant building standards, especially, in relation to the requirement for a 50mm step down between the floor of the front deck and the adjoining internal floor of the premises. The respondent appeared to have accepted in his email of 13 December 2021 that he had breached this requirement. This supports a conclusion that the respondent did not perform the works with due care and skill: see Wheeler and Anor v Ecroplot Pty Ltd [2010] NSWCA 61 at [10] where the Court observed that an Australian Standard was "an external standard available to be considered" in assessing whether the builder had complied with its obligation to perform the building works in a proper and workmanlike manner.
2. Other defects have been identified by the experts (see paragraphs 25 and 31 above), including in relation to the water proofing of the front deck. This was a breach of the express specification in the letter dated 19 June 2020 from the respondent that the works would be "water proof" to Australian Standards.
3. I therefore conclude that the respondent breached the warranties stipulated in s 18B of the HBA in relation to the works carried out to the front deck of the applicant's premises.
4. The dispute between the parties largely centres on whether the Tribunal should make a work order or a money order.
5. Section 48MA of the HBA provides that in respect of defective residential building work, the Tribunal is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome. Section 48MA does not prescribe or mandate a work order as the appropriate remedy for defective residential building work. The Tribunal is to make a discretionary decision.
6. In Morrison v Moss [2019] NSWDC 746 at [453], Abadee DCJ considered factors relevant to the discretion as being the distrust and protracted disputation between the parties, the significance of the defects and whether the owner can have confidence that the rectification work will be performed properly by the builder who originally did the work.
7. In Kurmond Homes Pty Ltd v Marsden [2018] NSWCATAP 23 at [31], the Appeal Panel noted that the legislative intent which section 48MA gives expression to is to promote "the timely and cost-effective resolution of disputes".
8. Based on the available evidence, I do not consider that a work order will achieve a timely and cost-effective resolution of the dispute between the parties. In my assessment, it is likely to have the opposite effect.
9. The applicant engaged the respondent to perform the relevant works in June 2020. The works were completed in December 2020.
10. The respondent was given the opportunity by the applicant to rectify the defective installation of the railing to the front deck. It appears that as a result of the rectification works in relation to this, further defects were created by damaging the water proofing of the front deck.
11. The respondent was notified by the applicant of defects with the water proofing in mid 2021. The applicant provided the respondent with the report of Mr Johnstone on 9 August 2021. Notwithstanding that Mr Johnstone expressly identified the need for the 50mm drop down between the surface of the deck and the adjoining internal surface of the premises, the respondent only acknowledged this requirement very belatedly in his email of 13 December 2021, ie, some four months after he was provided with Mr Johnstone's report.
12. The evidence does not indicate that the respondent has acted with any measure of diligence in the period between being provided with Mr Johnstone's report and the lodging of the Application to address the problems identified with his work in Mr Johnstone's report.
13. In paragraph 16 of his affidavit, the respondent himself acknowledges that the relationship with the applicant has "deteriorated". The respondent attributes this to "a result of discrepancies and increased fault finding of works by [the applicant]". The problem with the respondent's contention in this respect is that the applicant has been vindicated in her "fault finding", ie, both Mr Johnstone and Mr Webster have corroborated the applicant's concerns that there are defects in the respondent's work. It is regrettable that the respondent regards the deterioration in the relationship with the applicant as being attributable to the applicant's "fault finding" whereas it is in fact attributable to the faults in the respondent's works.
14. For all of the above reasons, I decline to make a work order. The respondent has now had more than reasonable time to rectify the defects in the works if he was minded to do so. The defects with the water proofing appear to be attributable to rectification work carried out by the respondent in relation to the railing. I do not consider it to be unreasonable of the applicant to have lost confidence in the willingness or ability of the respondent to rectify the ongoing defects with the respondent's works. In my opinion, there is a real risk that a work order will prolong the disputation between the parties.
15. Accordingly, I will make an order that the respondent is to pay the applicant the sum of $26,490.89 within 21 days. That amount is based on the evidence identified in paragraph 32 above. Having regard to the matters I have noted in paragraph 32 above, I consider this to be a reasonable amount for the works required to rectify the defects in the respondent's works.

Orders

1. I make the following order: 1. The respondent must pay the applicant the sum of $26,490.89 within 21 days of the date of this order.

            I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.

Registrar I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

Amendments 04 October 2023 - Formatting amendments. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 October 2023