Casey v Retford [2025] NSWDC 1 | Case summary

District Court of NSW|2024-06-27

JUDGMENT

On 16 July 2021, the plaintiffs, Mr Craig Casey and Ms Katy Casey, entered into a written contract with the defendant, Mr Hayden Retford, a builder, which provided for Mr Retford to undertake alterations and additions to the dwelling ("the house") on land owned by Mr and Ms Casey ("the property") for the price of $624,475.
In their amended statement of claim, in summary, the plaintiffs allege that, by 19 December 2022, the defendant was in breach of contract, and in breach of the Home Building Act 1989 ("the Act"), in that he had failed to complete the works provided for in the contract within 26 weeks from the date of the commencement of the works. It was further alleged that some of the work done was defective and had not been rectified. It is common ground that the works the subject of the contract are "residential building works" under the Act.
The plaintiffs also allege, in their amended statement of claim, that they paid $818,862.51 for the works and that this sum represented an overpayment. They allege that the defendant has received a benefit at their expense, that it would be unjust or unconscionable for the defendant to retain that benefit and that the defendant is liable to repay to them the amount of the overpayment.
The plaintiffs say that they terminated the contract by email to the defendant on 19 December 2022. The Defendant says that the termination by email was ineffective, and that the contract ended on 8 February 2023 when he gave notice to the plaintiffs that their purported termination was a repudiation of the contract, which he accepted.
The plaintiffs seek damages or, alternatively, restitution, and interest and costs. In relation to their claims, the plaintiffs bear the onus of proof on the balance of probabilities.
In his defence, the defendant admits that the building works were not complete by 19 December 2022 and pleads that he was entitled to reasonable extensions of time.
In his defence, the defendant admits that he did not carry out any works after 28 September 2022, but says that the plaintiffs denied him access to the property after that date.

The building project

On 18 March 2021, the plaintiffs obtained development consent for alterations and additions to the house on the property ("the building works"). The building works involved the partial demolition of the house, the addition of a new garage and a new deck and storage shed at ground floor level and the expansion of living areas on the ground floor and the first floor including a new kitchen, laundry and bathrooms.
The plaintiffs entered into negotiations with the defendant with a view to entering into a contract for the performance of the building works.
On 19 March 2021, the parties entered into a contract for the undertaking of the building works by the defendant ("the superseded contract"). The contract price was $398,475 (including GST).
It was Mr Retford's evidence that, in July 2021, the plaintiffs' mortgage broker, on their behalf, requested that a new Home Building Contract be entered into by the parties which would include "prime cost" items (often referred to as PC items). No prime cost items had been included in the superseded contract. The purpose of this request was to facilitate the approval of the plaintiffs' loan application.
The parties entered into a new Home Building Contract on 16 June 2021 ("the contract"). The contract price was $624,475 (including GST). The contract included, as an annexure, a list of external works and internal works. There was a further annexure which was a list of external finishes, a list of internal finishes and a list of "*All PC items to be supplied by Skope Construction" (Skope Construction being the defendant's business name).
The list of PC items to be supplied by the builder was as follows: - All tapware for bathroom, kitchen and laundry - All toilets, vanities and shower screens - All tiles for wet areas - All internal door furniture
It is common ground that the allowance for the PC items within the contract price was $226,000.
The contract defined terms in clause 1, and the definition of "Prime Cost Item" was as follows: 1.5 "Prime Cost Item" shall mean an item that either has not been selected, or whose price is not known, at the time this contract is entered into and for the cost of supply and delivery of which the Contractor must make a reasonable allowance in the contract.
The defendant prepared the contract, and he did that by amending the form used for the superseded contract, presumably by deleting unwanted text and inserting new provisions in the document on a computer. In his affidavit, the defendant says: 9. On or about 16 July 2021, to accommodate the Mortgage Broker's request, I amended the Original Contract to include PC items and the Caseys and I signed an updated Home Building Contract ("Updated Contract") for a price of $624,475.00 inclusive of GST, which was to do the Works at the Property and included an allowance for PC Items totalling $226,000.00 inclusive of GST. Again such payments were to be made by way of progress payments. I did not amend everything from the Original Contract. For example, the date recorded as the date I signed the Updated Contract remained stated at 15 March 2021, even though I signed it on or about 16 July 2021. Another example is that the timing of the Contract was not changed from the Original Contract, so the date of commencement remained stated at 21 June 2021, and the date of completion remained stated at 20 December 2021, despite the fact this Updated Contract was signed on about 16 July 2021, which was approximately four months after the date of the Original Contract. I accept this evidence.
In clause 7 schedule F, the contract set out a payment schedule, expressed to be GST inclusive, as follows: Deposit $19,923.75 Ist Progress Payment Demolition $120,910.25 2nd Progress Payment Concreting/ Wall Framing /Roof Framing $151,137.81 3rd Progress Payment Roofing/Windows/Cladding/Lock up $90,682.68 4th Progress Payment Plumbing/Interior Linings/Electrical $120,910.25 5th Progress Payment Wet areas $90,682.68 6th Progress Payment Site Clean/Completion $30,227.58

By May 2021, the plaintiffs had moved some of their furniture and belongings into storage.
The plaintiffs obtained a construction certificate from Mr Jaryd Fox of Central Coast Certifiers dated 17 June 2021.
It was Mr Casey's evidence that the defendant began the building works on about 24 June 2021. In cross-examination, the defendant accepted that this was so.
On 27 July 2021, the plaintiffs sent an email to the defendant requesting six changes to the building works the subject of the contract. On 17 September 2021, in response, the defendant generated Variation 1 (changes to windows and doors) and Variation 2 (additional structural works), signed and dated those variations, and emailed them to the plaintiffs saying "Please kindly sign and return". The plaintiffs have paid for those variations and do not dispute them. The plaintiffs did not, however, sign and return either of the variations.
The plaintiffs obtained a landscape design and quote from Habitat Landscape dated 16 August 2021. The total quote was $84,497.
On 1 October 2021, the plaintiffs sent an email to the defendant setting out some items and changes they were considering and seeking "an indication of variation costs". The email, printed out, is eleven pages long and includes photographs of items which are similar to the items which the plaintiffs are considering, and floor plans with possible changes drawn on them in red.
Some of the changes being considered subsequently became part of Variation 3 (carpentry), Variation 4 (skylights) and Variation 6 (yellow tongue flooring). I will refer to these and the invoice for the shower screens as variations, for convenience, without intending that any finding as to the validity of the characterisation of the document in question as a variation to the contract should be implied.
On 8 October 2021, the plaintiffs sent an email to the defendant. It said, in part: Hi Hayden We thought we would send you this email to do a breakdown of number, what inclusions we would like provided by you, the costs of them that were presented to us, and to just put it all in writing to you. Contract price was $625,000 minus initial build contract of $398,475, thus the differential is $226,525. On top of that, we paid the deposit of $19,923.75 (with our own cash), so the actual borrowed funds that we have to spend is $246,448.74. These are the "inclusions" we are looking at working with you: Kitchen/Joinery $103,191 (Mick Turner) Vanities $15,440 (Loughlin Furniture) Sinks $1,319 (Loughlin Furniture) Appliances $35,474 (Winnings Appliances) Fireplace $12,156 (Central Coast Bricks) Bath $1,850 (Reece Erina) Toilets $3,500 (Reece Erina) Tapware $6,448.50 (ABI Interiors) This all adds up to $179,378.50 and then we know you need to put on your 15% margin, which takes us up to $206,284.70. Obviously, we hope that you could secure a trade price for things such as the bath, toilets, fireplaces and taps, and this may bring the cost down a little. In regard to the fireplace, we didn't negotiate or anything on that, and were just emailed a price. In reference to our conversation with you last week about what items may be exempt from your margin, as you said you will essentially play no role in them being purchased or managed, we were looking at the flooring ($19,600) and wardrobes ($16,159). Including these two would take us to $242,043. The final price for the wardrobes isn't exactly finalised until Katy makes a final decision for some finishes. ….
In October 2021, after a request from the defendant, the plaintiffs vacated the property to allow the building works to continue. The plaintiffs rented a three bedroom house in Kincumber for $600 per week until 18 February 2022, at which time they moved to rent free accommodation with family and friends.
On 28 January 2022, the defendant sent Mr Casey an email which attached a cost breakdown and said: At this stage we are over your allowance of $246,448.75 by $45,844.17.
The cost breakdown sent with the email was as follows (CB 1 p 379): ABI $7,114.50 Reece Plumbing $4,561.07 Loughlin $14,036.80 Neff $4,689.50 Zip Tap $3,856.36 Winnings $24,860.90 Flooring $15,672.72 Fire Place $11,050.90 Sinks $1,199.09 Joinery $93,810.00 Skylights $11,200.00 Electrical $15,454.54 Plumbing $4,500.00 Carpentry $19,054.54 TOTAL excluding GST and Builders margin $231,061.02 15% Builders Margin $34,659.15 10% GST $26,572.08 TOTAL $292,292.92
On 7 March 2022, the defendant sent Variation 3 to the plaintiffs (see CB 1 p 386). Variation 3 listed 17 carpentry items and claimed $57,065.80, inclusive of GST. It is asserted on the variation that the works itemised have been completed. The defendant signed and dated the invoice but the plaintiffs did not. The plaintiffs paid $50,000 on account of this invoice.
On 14 March 2022, the defendant sent Variation 4 to the plaintiffs (see CB 1 p 388). Variation 4 was for "As requested supply and install additional skylights not originally quoted". The amount claimed was $15,433.00. It is asserted on the variation that the work has been completed. Once again, the defendant signed and dated the invoice and the plaintiffs did not.
On 25 March 2022, the defendant issued a tax invoice to the plaintiffs for $5,841 (CB 1 p 173). The work described on the tax invoice was "Supply and install shower screens as requested".
On 31 March 2022, the defendant sent an email to the plaintiffs which said: Hi Craig Firstly, thanks again for your time on the phone yesterday. As requested, please see cost breakdown attached. PAYMENT UPDATE: - Progress payment #5 $90,682.69 still owing appreciate bank is locked in for this Friday. - Variation #3 $57,065.80 appreciate you have paid $50,000.00 of this, still owing $7,065.80 - Variation #4 $15,443.01 still owing - Invoice # 639 $5,841.00 still owing STILL TO BE INVOICED: - Variation electrical - Variation plumbing - Variation painting - Variation garage door - Variation internal stairs Hope this all makes sense, happy to chat this through further as mentioned. I understand your frustration in regards to the timeline, I hope you can both understand the position this has put us in financially as I'm sure you are both aware unfortunately - Covid, Materials, Rain have all impacted your project.
The cost breakdown attached to the email gave prices for 15 of the 17 items set out in Variation 3, which totalled $51,878 (see CB 1 p 107). An invoice was issued on 13 March 2022 for $7,065.80, being $51,878 plus GST of $5187.80 minus $50,000 which the plaintiffs had paid in response to the invoice.
On 14 April 2022, Mr Casey sent an email to the defendant referring to a "site meeting" on 12 April 2022 and setting out the following under the heading "Defects and or not to design brief": 1. Overhead cupboard height on the Northern external wall of the kitchen installed too high with reference to the kitchen drawings and client directions - This item is outstanding yet to be resolved. 2. Dryer slide out draw [sic] - Resolved and closed. 3. Outdoor kitchen bench tops - Resolved - discussed stone joint to be made underneath the window and stone to be matched with the inside, with the exception of the pizza oven. 4. Bench height - Accepted - resolved, client to accept the min finished bench height of 930mm instead of 950mm. 5. Front door Jam damage, and corner setting - This item is outstanding yet to be resolved - jam to be replaced and corner to be straightened then set. 6. Basins wiped with SIKA, This item is outstanding yet to be resolved - sika to be removed. 7. Further floor prep required to remove deviation and steps in floor. Hayden informed these works taking place 13/04/22 and has emailed to say that they have been done. 8. Eastern side light in MSTR bed broken - This item is outstanding yet to be resolved - electrician taking back to Beacon for a replacement. 9. Incorrect balustrade - This item is outstanding yet to be resolved - Hayden is to have Central Coast Stairs replace - no cost to client. 10. Wall linings in entry hallway have deviations and need straightening - This item is outstanding yet to be resolved. 11. Access panels for roof access not installed This item is outstanding yet to be resolved.
On 27 April 2022, the defendant sent a statement to the plaintiffs, listing the payments made and the payments said to be outstanding. The sums said to be outstanding were $7065.80 with respect to Variation 3, $15,443.01 for Variation 4 and $5,841 for the invoice issued on 25 March 2022 for shower screens supplied and installed, giving a total of $28,349.81. In the email, it was foreshadowed that the plaintiffs would be able to move back in to the house on or before 20 May 2022 and said that a temporary OC (occupation certificate) would be provided. A final completion date of 30 June 2022 was set out in the email, and the defendant asked to be informed when outstanding payments would be made. An updated cost breakdown was provided which related to variations already invoiced and further variations predicted in the future.
On 15 May 2022, the plaintiffs moved back into the property.
On 19 May 2022, the plaintiffs sent an email to the defendant responding to his request for payment. In the email, the plaintiffs raised questions about the accuracy of the cost breakdown provided to them. They also raised five questions regarding Variation 3 (carpentry) which amounted to a challenge to the amount charged. The email concluded: This means that there is $12536.69 which have been billed to us that we feel we should not have to pay. We also feel that other credits may be applicable. So therefore, out of the $28349.81 you have listed as outstanding by us, we currently only feel comfortable paying $15813.12. And we would like to have further discussion with you regarding other possible credits. As previously explained to you we will be happy to pay these monies after our move in date of the 20th of May.
On 21 May 2022, the plaintiffs made a payment of $15,813.12 as foreshadowed in their email.
On 27 June 2022, the defendant sent Variation 6, for yellow tongue sheeting to the store room wall on the house side, for $814 to the plaintiffs. This variation is not in dispute but has not been paid.
On 12 July 2022, the plaintiffs sent a long email to the defendant. Among other things, the plaintiffs complained that the works were not complete even though the completion date in the contract had passed. The completion date stated in the contract was 20 December 2021 and the completion period was 26 weeks. There was reference in the email to a meeting with "the Tribunal".
On 28 September 2022, the defendant ceased work at the property and did not return. The defendant's reason for ceasing work was that there were outstanding invoices that the plaintiffs had not paid.
On 25 November 2022, the defendant's building licence expired.
On 19 December 2022, the plaintiffs sent a document, signed by both of them, titled "Notice of Termination Clause 21 of the Contract" to the defendant. The document said, in part: Clause 21.1(b) provides that the Owner may terminate this Contract if the Contractor (you) fails to complete the works within the completion period or if no completion period is stated within a reasonable time. Schedule H of the Contract provides that the works were to commence on 21 June 2021 and were to be completed by 20 December 2021 (the Completion Period). We confirm you have committed a fundamental breach of the Contract by not completing the works by the end of the Completion Period. This is a breach which can not be remedied by You. Please take this as notice that the Contract is terminated pursuant to Clause 21 of the Contract, effective immediately. Alternatively, we terminated the Contract at common law and rely on: (a) Your failure to complete the contract works within the contract period (b) Any other breaches that currently exist, (as a matter of fact) but are not known to us at this stage or have not otherwise been set out above As constituting breaches of essential terms or sufficient breaches of non-essential terms of the Contract. You no longer have possession of the Site. All unfixed materials and fittings on the Site are to remain on the Site and You are not permitted to remove them.
On 23 January 2023, the defendant's Builders licence was renewed.
On 8 February 2023, the defendant, by means of a letter to the plaintiffs from his solicitors, communicated that he "accepts your repudiation of the Contract and elects to terminate the Contract effective today". In the letter, a demand for the payment of $66,979.47 within fourteen days was made.
The evidence before me does not establish that the defendant would have been entitled to terminate the contract prior to the plaintiffs terminating it. I find, below, that the plaintiffs' termination was effective (see [77] - [88]).

The plaintiffs' claim for restitution

As I have said above, at [21], the contract defines "Prime Cost Item" in clause 1.5 as follows: 1.5 "Prime Cost Item" shall mean an item that either has not been selected, or whose price is not known, at the time this contract is entered into and for the cost of supply and delivery of which the Contractor must make a reasonable allowance in the contract.
Clause I on page 4 of the contract provides: I Provisional Sum Items & Prime Cost Items (see Definitions) The Contractor warrants that any Provisional Sum has been calculated with reasonable care and skill taking account of all the information reasonably available at the date the contract is made, including the nature and location of the building site. Note: The installation of Prime Cost Items and connection to services, unless otherwise specified, is included in the Contract Price. … All PC items to be supplied by Skope Construction specified on tender spec sheet … If the cost of a Provisional Sum Item or Prime Cost Item is less than the above estimated cost the Contract Price will be reduced to take the difference into account. If the cost of a Provisional Sum Item or Prime Cost Item is more than the above estimated cost the Contract Price will be increased to take the difference into account and an additional amount equal to the percentage of the difference indicated as the Contractor's Margin shall be added to cover the Contractor's profit and additional services and overheads. Any variations to the Contract Price as a result of the cost of any Provisional Sum Item or Prime Cost Item shall be taken into account in the calculation of the Progress Payment due after completion of the relevant Provisional Sum Item or installation of the relevant Prime Cost Item.
I have set out the list of "PC items" which was attached to the contract at [19] above. It is plain from Clause I, quoted above, that the contract provided for Skope Construction to supply all PC items. This is consistent with the definition of "Prime Cost Item" in the contract.
The principles to be applied in the interpretation of a contract are set out in Realestate.com.au Pty Ltd v Hardingham and Others; RP Data Pty Ltd v Hardingham and Others [2022] HCA 39 by Gordon J at [43]: Principles 43 The rights and liabilities of parties under a contract - whether oral, in writing, or partly oral and partly in writing - are determined objectively. The concern is "not with the real intentions of the parties, but with the outward manifestations of those intentions". As this Court said in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd: "It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean." And where the contract is commercial, it is necessary to ask what reasonable persons engaged in the respective businesses of the parties would have understood the words and conduct to mean.
I accept that the "PC Items" listed on the document attached to the contract are Prime Cost Items as defined under the contract.
I have set out at [31] an extract from an email sent by the plaintiffs to Mr Retford on 8 October 2021, which said that "the actual borrowed funds that we have to spend" is $246,448.74 and set out a list of items which it was calculated would add up to $206,284.70 once the builder's margin was added.
The plaintiffs argued that the items listed in the plaintiffs' email of 8 October 2021 were also "Prime Cost Items" under the contract.
The definition of "Prime Cost Items" in the contract only includes items "for the cost and delivery of which the Contractor must make a reasonable allowance in the contract". In the context of the contract between the parties in this matter, that means the "PC Items" listed in the annexure in the contract, which are set out in [19], above. The plaintiffs cannot unilaterally seek to expand the category of Prime Cost Items by simply emailing a list of items they want to the builder. If further Prime Cost Items are to be included, a Variation would need to be entered into under clause 3 of the contract, which would give the builder an opportunity to amend the contract price to accommodate the new Prime Cost Items. There is no evidence of any such variation.
The list of items in the plaintiffs' email of 8 October 2021 overlapped with the PC Items listed in the annexure in the contract. The list in the email included vanities, toilets and tapware. However, it also went beyond the original list of PC Items. For example, the email referred to Kitchen/Joinery for $103,191, when there is no reference to joinery in the original PC Items. I note that the "Internal Works" specified in the annexure to the contract include "Supply and install new kitchen and joinery as per plans", which indicates that the kitchen joinery was part of the basic contract price. The list in the email includes "Appliances" for $35,474 ,"Fireplace" for $12,156, "Sinks" for $1,319 and a bath for $1,850, none of which come within the original list of PC Items. Those items in the email which are not included in the PC Items on the document annexed to the contract are not Prime Cost Items under the contract.
The plaintiffs, in their written submissions, have set out two pages of items they say that they have either paid for entirely or made a payment towards. They do not assert that they have paid the defendant for the items on this list. The plaintiffs have paid or part-paid suppliers for the items. The list includes 37 items, and the total of the payments the plaintiffs say that they have made is $136,278.16. These items are characterised, in the written submissions, as Prime Cost Items.
The list includes many items which are clearly not on the PC Item list annexed to the contract, including, but by no means limited to, "Winning Appliances", "BSH Home Appliances". "Bosch - stacking kit", 'Auburn woodturning", "Balcony works" and "B W Graf Concreting". The list also includes some items which might be PC Items listed on the document annexed to the contract, such as tiles and handles. However, there is no evidence as to where or if those tiles and handles were used on the property. There is no suggestion that any of the $136,278.16 was paid to the defendant, either by the plaintiffs or by the suppliers.
As I understand it, the plaintiffs claim restitution from the defendant in the sum of $128,396.38. The plaintiffs calculate that they have "made payments" of $770,790.38 in relation to the renovation of their house, including the sum of $136,278.16 for the items in the list referred to in [62] above. They accept an adjusted contract price of $642,394, which includes Variations 1, 2 and 6 which are agreed. Subtracting the adjusted contract price from the "payments" the plaintiffs say that they have made (which includes payments to both the defendant and to suppliers), results in the sum of $128,396.38.
If the sum of $136,278.16, paid by the plaintiffs to suppliers for the items referred to in [62], above is subtracted from $770,790.38, then the payments the plaintiffs say that they have made to the defendant total $634,512.22, which is below the adjusted contract price that the plaintiffs say they accept.
Restitution is a remedy available in circumstances where a payment of money has been made under a fundamental mistake. The recipient of the money paid under the fundamental mistake has been unjustly enriched by the payment, and the law imposes a prima facie obligation upon that recipient to return the money to the person who paid it to them under the mistake (see ANZ Banking Group Limited v Westpac Banking Corporation (1988) 164 CLR 662 at [11]-[12]).
The plaintiffs are not entitled to the restitution from the defendant of money paid by the plaintiffs to suppliers. It cannot be asserted that the payments were made under a mistake in the relevant sense when the contract expressly provides, in clause I, that the PC items are to be supplied by Skope Constructions, the definition of Prime Cost Items in clause 1.5 of the contract says that the builder must allow for the supply and delivery of them in the contract, and many of the items fall outside of the PC items allowed for in the contract price in any event. The money was not paid to the defendant, either by the plaintiffs or by the supplier. The plaintiffs chose to purchase items for their own home from suppliers who supplied the items to them in exchange for payment. The defendant was not unjustly enriched by the wrongful receipt of money. The plaintiffs' claim for restitution is rejected.

Defects and incomplete works

In paragraph 14 of their Statement of Claim, the plaintiffs allege that the defendant is in breach of s 18B(1)(a), (b), (c), (d), (e) and (f) of the Act and is therefore also in breach of the contract (see clause 16 of the contract). The particulars of paragraph 14 refer to the defects set out in Mr Bournelis' report of 31 March 2023.
The Act, in s 18B(1) provides: 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.
In paragraph 15 of the Statement of Claim, the plaintiffs claim the following loss and damage: 15.1 Costs of identifying and determining the method of rectification for the Defects. 15.2 The cost of rectifying the Defects. 15.5 Costs, losses and liabilities incurred and to be incurred relating to the presence and rectification of the Defects to be itemised in due course. 15.6 Alternative accommodation whilst the rectification works are being carried out. 15.7 Holding costs incurred with respect to the Property whilst the rectification works are being carried out. 15.8 In the alternative, the diminution in value of the Property due to the Defects.
The plaintiffs claim damages. They also claim restitution, alleging that the payments they have made to the defendant with respect to the contract represent an overpayment.

The Plaintiffs' claim in relation to defective and incomplete works

In Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253 Giles JA, with whom McColl and Campbell JJA agreed, said: 42 The fundamental principle in the assessment of damages for breach of contract is that the damages should put the plaintiff, so far as money can do so, in the position it would have been in had the contract been performed: Robinson v Harman (1848) 1 Exch 850 at 855. In The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Mason CJ and Dawson J said at 80 - "The award of damages for breach of contract protects a plaintiff's expectation of receiving the defendant's performance. That expectation arises out of or is created by the contract. Hence, damages for breach of contract are often described as 'expectation damages'." 43 Since the remedy is for disappointed expectation, a plaintiff's position is not found solely in any monetary loss it has suffered. In a contract for the performance of building work, the plaintiff can recover the cost of rectifying defective or incomplete work because, by receipt of the money in substitution for performance, it is given the means of putting itself in the position it would have been in had the contract been performed. 44 This is the basis of Bellgrove v Eldridge, in which defective foundations seriously threatened the stability of the plaintiff's house and it was held that she was entitled to recover the cost of demolition and re-erection. The damages provided her with the means of obtaining the performance expected under the contract. The primary measure of loss was the cost of the rectification work; the Court said at 617 - "In the present case, the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she has sustained by the failure of the appellant to perform his obligation to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building on her land which is substantially in accordance with the contract." 45 But recovery according to the rectification measure is subject to the rectification work being necessary and reasonable. If it is not, then the plaintiff is left to diminution in the value of the property as the measure of damages. There may or not be a diminution in value, and if there is not the plaintiff recovers nothing; but the alternative diminution measure arises only if the rectification work is not necessary and reasonable. So the Court said at 619 - "Many examples may, of course, be given of remedial work, which though necessary to produce conformity would not constitute a reasonable method of dealing with the situation and in such cases the true measure of the building owner's loss will be the diminution in value, if any, produced by the departure from the plans and specifications or by the defective workmanship or materials."
The defendant is liable under the contract and the Act to the plaintiffs for the cost of the reasonable and necessary works to remediate any defective works.
When, as in this case, it is found that the plaintiffs validly terminated the contract, the defendant will also be liable for the cost of completing incomplete works (see McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 per Starke J).
This court has jurisdiction to award damages for breach of contract. It does not have power to make a work order under s 48O(1)(c) of the Act, which gives that power only to the Civil and Administrative Tribunal.
The plaintiffs have not sought specific performance, and there is some doubt as to whether that remedy would be available under s 134 of the District Court Act 1973. In any event, it would not be an appropriate remedy in circumstances where the relationship between the parties to the home building contract has broken down.
In relation to termination, the contract provided (relevantly) as follows: 21.1 The Owner may terminate this contract (Subject to clause 22.2) if the Contractor: (a) has its licence cancelled; or (b) fails to complete the Works within the completion period specified in this contract (subject to clause 7.2) or if no completion period is stated within a reasonable time; or (c) fails to rectify defective Works or replace faulty or unsuitable Materials; or (d) becomes insolvent, goes into liquidation or administration. 21.2 Where the Owner believes that the defaults in clause 22.1 can be rectified then the Owner shall advise the Contractor in writing that they have ten (10) working days (from the date of the letter) in which to do so. If the Contractor fails to rectify any default within that period then the Owner shall advise the Contractor in writing that they are cancelling the contract. 21.3 The Contractor may cancel this contract (Subject to clause 22.4) if the Owner: (a) fails to make payment due under this contract; or (b) fails to provide Evidence under Clause 4.6; or (c) denies the Contractor access to the worksite to complete or undertake any Works, or (d) becomes insolvent, goes into liquidation or administration. 21.4 Where the Contractor believes that the defaults in clause 22.3 can be rectified then the Contractor shall advise the Owner in writing that they have ten (10) working days (from the date of the letter) in which to do so. If the Owner fails to rectify any default within that period then the Contractor shall advise the Owner in writing that they are cancelling the contract. 21.5 If the contract is ended under this clause, the Contractor shall be entitled to a reasonable price for the Works carried out under this contract to the date the contract is ended (including the cost of any Materials delivered to the worksite or already ordered from suppliers but not yet paid for by the Owner). 22 Disputes 22.1 If the Owner or Contractor believes a dispute has arisen in relation to any matter under this contract, then that party must promptly give the other party written notice setting out the matter in dispute. 22.2 Both parties shall meet within fourteen (14) days of the giving of such notice to attempt to resolve the dispute. 22.3 In the event that the dispute cannot be resolved then the matter shall be referred to a mutually agreed third party or, failing agreement on a third party, to the Office of Fair Trading for assistance in the resolution of the dispute.
In Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (No 9) [2016] NSWSC 1005 at [170]-[177] Ball J set out the legal principles relating to the termination of a contract: 170. A party is entitled to terminate a contract in accordance with an express term in the contract: Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418 at 441-2. A party may also be entitled to terminate the contract for breach of an essential term (a condition) of the contract or a serious breach of an intermediate term: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115. Lastly, a party may be entitled to terminate the contract if the other party repudiates the contract. Repudiation occurs where one party evinces an intention "no longer to be bound by the contract … or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way": Shevill v Builders' Licensing Board [1982] HCA 47; (1982) 149 CLR 620 at 625-6 per Gibbs CJ, referred to with approval in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623 at 634; see also Koompahtoo at [44]. 171. A party who gives reasons for termination is not bound by those reasons. The termination is effective so long as a basis for termination existed at the time of termination: Sunbird Plaza Pty Ltd v Maloney [1988] HCA 11; (1988) 166 CLR 245 at 262. 172. A party in breach of a non-essential term is not prevented by that breach from terminating the contract for a fundamental breach or repudiation by the other party. An exception exists where the breach or the repudiation was caused by the terminating party's breach. A party whose breach causes a breach by the other party or makes performance by the other party futile is not entitled to terminate the contract for non-performance by that party: Nina's Bar Bistro Pty Ltd v MBE Corporation (Sydney) Pty Ltd [1984] 3 NSWLR 613 at 632; Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (Rec and Mgr apptd) (1997) 42 NSWLR 462, 479ff per Gleeson CJ, Handley JA and Brownie AJA. 173. There is a question whether that principle applies where the terminating party has itself repudiated the contract or breached a fundamental term of it. There is conflicting authority on that question. In Emhill Pty Ltd v Bonsoc Pty Ltd (No 2) [2007] VSCA 108, Warren CJ at [68] (with whom Buchanan and Ashley JJA agreed), quoting with approval the following passage from N C Seddon and M P Ellinghaus, Chesire & Fifoot's Law of Contract (8th ed, 2002) at 943, concluded that a party who had breached a fundamental term of a contract was not entitled to terminate the contract for breach of a fundamental term by the other party: A party need only be ready and willing to perform the contract in substance. A party who is in breach may nevertheless have the right to terminate, so long as the breach is not repudiatory or of an essential term or such as to deprive the other party of the substantial benefit of the contract. See also Geraldton Building Co Pty Ltd v Christmas Island Resort Pty Ltd (1992) 11 WAR 40 at 50-1. 174. However, other cases have taken a different view, on the basis that it makes no sense to treat both parties as bound by a contract which neither is willing to perform in a fundamental respect: see, for example, Highmist Pty Ltd v Tricare Ltd [2005] QCA 357 at [61], where Keane JA explained the principle in these terms: It makes commercial sense to allow a party to recover damages for loss of bargain only where that party was itself in a position to perform its side of the bargain. If it were otherwise, it could not sensibly be said that it was the other side's conduct which caused the loss of the profit involved in the bargain. That advantage could not have been obtained even if the other side had fulfilled its obligations. On the other hand, it does not make much sense to say that, where both parties to a contract declare to each other their fixed resolve not to perform their contract, the contract continues in existence in some legal limbo for the reason that neither party is ready, willing and able to perform the contract. Such a proposition may be intelligible to metaphysicians, but it is of little use in terms of the regulation of commerce according to the reasonable expectations of honest people. 175. The same approach was taken by Gleeson CJ, Handley JA and Brownie AJA in Roadshow at 481, who, referring to State Trading Corporation of India Ltd v Golodetz Ltd [1989] 2 Lloyd's Rep 279 at 286 (Kerr LJ), stated the principle in these terms: A party in breach of non-essential terms who has not repudiated may rescind for fundamental breach … A party in breach of an essential but independent term may also rescind for fundamental breach … See also Craftsmen Restoration & Renovations Pty Ltd v Boland [2011] NSWCA 147 at [51] per Basten JA (with whom Allsop P and Sackville AJA agreed). 176. In my opinion, I should apply the principle stated in Highmist and Roadshow in this case. Even if obiter, the statement in Roadshow represents a considered statement of the Court of Appeal, which was followed in Craftsmen. For the reasons given by Keane JA, the statement of principle seems to me to be correct. 177. As Keane JA pointed out in Highmist, even assuming that a party that has breached a fundamental term of the contract or has repudiated the contract retains a right of termination for breach or repudiation by the other party, the party in breach who terminates the contract will not be entitled to claim damages.
The plaintiffs argued that they terminated the contract with the defendant by their email of 19 December 2022, in which they relied upon the defendant's failure to complete the building work within the completion period stated in the contract or within a reasonable time and asserted that this was a fundamental breach of the contract.
The plaintiffs pointed out that the expiration of the defendant's builders licence before 19 December 2022 was a further basis for termination.
The defendant's initial position concerning the termination of the contract was that he had been excluded from the property from 28 September 2022 and that the email of 19 December 2022 was a repudiation of the contract by the plaintiffs which he accepted on 8 February 2023, so that he terminated the contract on that date. However, at the hearing, the defendant resiled from that position and agreed that the plaintiffs, in an email to him on 16 November 2022, said that they were waiting for the works to be completed. There was no evidence that either of the plaintiffs had ever excluded the defendant or his workers from the property prior to 19 December 2022.
In the plaintiffs' email to the defendant on 16 November 2022, they said: … As per our conversation on the phone on October 21, it was agreed that you and I are in two very different places when it came to this situation. As such, your email below isn't entirely accurate, as I was certainly not going to come back to you regarding how any suggested outstanding payments would be made. You are of the belief that you should receive monies before contracted works are completed, and I made it very clear of our position that contracted works need to be completed before any further monies are paid to Skope Construction. Further correspondence will be made in writing to you, however, for the meantime, we will continue to wait for the contracted works to be completed. The defendant did not return to the site in response to this email, or at all.
The defendant sought to characterise Mr Casey's email of 16 November 2022 as an election by the plaintiffs to affirm the contract. The defendant argued, in effect, that the plaintiffs elected to affirm the contract on 16 November 2022 and, because of that, they could not subsequently terminate the contract on the basis of the defendant's failure to complete the works within the timeframe. The defendant relied upon the decision of the High Court in Sargent v ASL Developments Ltd (1974) 131 CLR 634.
The doctrine of election as between two inconsistent rights was considered by the NSW Court of Appeal in Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd [2019] NSWCA 185. The decision was a majority decision, but there was agreement as to the following explanation by Bell P: 86. The primary judge noted that the act constituting an election must be unequivocal in the sense that "it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other": Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 646; [1974] HCA 40 per Stephen J. After also referring to Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 at 30; [1993] HCA 27, the primary judge went on to state (at [104]) that "[t]he mere fact that a party's conduct is consistent with a continuation of the contract does not necessarily amount to an election to affirm the contract. The question is whether, having regard to all the facts, the conduct can only be explained as involving a decision to affirm the contract rather than to terminate it." He then referred to the decision of Glass JA (with whom Street CJ agreed) in Champtaloup v Thomas [1976] 2 NSWLR 264 at 269 (Champtaloup) where his Honour had said: It is always necessary to examine the conduct relied upon as an affirmation in its particular evidentiary setting. The question must then be answered whether the party able to rescind has communicated to the other party an unequivocal election to affirm, i.e. to renounce its right to rescind. The materials upon which the decision is to be made will include any reservations which have also been communicated. The answer to be given is a decision of fact based upon all the evidentiary data. There is no overriding principle of law that an act done under the contract will always communicate the decision to affirm, regardless of the surrounding circumstances. … 91. I agree with the primary judge's reasoning on the question of election, as reproduced in [89] above.
The defendant was in continuing breach of the contract before, during and after 16 November 2022 in that he continued, every day, to fail to complete the building works that he had, in the contract, undertaken to complete by 20 December 2021. The defendant argued that the Covid pandemic and a number of periods of rain prevented him from completing the work in the time contracted for. However, at no time did the defendant seek to extend the building period by giving the plaintiffs written notice under clause 7.2 of the contract, which sets out a process, beginning with the giving of written notice, by which the building period could have been extended. Mr Retford did send an email to the plaintiffs in relation to the Covid lock downs during the period from 19 July 2021 to 27 August 2021, indicating that he would be complying with the requirements of the lock downs. Mr Casey, in his affidavit of 16 May 2024, says that the construction industry shutdown for the relevant period of time was from 19 July 2021 to 30 July 2021, and I accept that evidence. Even if that period were to be considered to be an extension of the building period, by 19 December 2022, the defendant was still 11 and a half months overdue on the completion of a contract for a 26 week building period. Even if rain, Covid, and the error in the starting date of the contract is taken into account, the completion of the building works was well overdue. It was argued, on behalf of the defendant, that an email on 31 March 2022, in which the defendant wrote to the plaintiffs "I understand your frustration in regards to the timeline,…Covid, Materials, Rain have all impacted your project", amounted to a claim for an extension of time by the giving of written notice under clause 7.2 of the contract. I reject that argument. The email was giving general explanation for the gross delay. It did not, on any reading, claim an extension of the building period by a specified period or at all. In that context, the plaintiffs' email of 16 November 2022 was not an unequivocal election to affirm the contract in the sense of representing that they would never rescind on the basis of an ongoing failure to complete the building works. The email communicated that the plaintiffs' present expectation was that the contract was still on foot, but that was not inconsistent with the maintenance of a right to rescind for a continuing breach. I reject the defendant's contention that the plaintiffs made an election on 16 November 2022 which prevented them from terminating the contract.
It was acknowledged, in the defendant's submissions, that the expiry of Mr Retford's builders licence could have formed a valid basis for the termination of the contract by the plaintiffs on 19 December 2022, but it was argued that the contractual entitlement to terminate for that reason, under clause 21.1 of the contract, was subject to clause 22.2, which was "never engaged". Those clauses are set out at [77] above. Clause 21.1 gives the plaintiffs the right to terminate the contract if Mr Retford's builders licence is cancelled. Clause 22 provides for the giving of notice by either party to the contract who "believes a dispute has arisen in relation to any matter under this contract" and the giving of that notice triggers a conciliation meeting (clause 22.2) followed by other alternative dispute resolution measures under clause 22.3 if the dispute is not resolved. The difficulty with the defendant's argument that the plaintiffs cannot rely upon the expiration of Mr Retford's builders licence is that no dispute arises as to the expiration of the builders licence. It is and has always been common ground that Mr Retford's licence expired on 25 November 2022. The expiration date is set out in the contract. It is also common ground that, as at 19 December 2022, the builders licence had not been renewed and was not renewed until 23 January 2023. Mr Retford could not, during that period, lawfully continue with the building works. In these circumstances, the plaintiffs were not required to give notice under clause 22.1 of the contract and were entitled to rely on the expiration of the builders licence from 26 November 2022.
The defendant argued that the plaintiffs were in breach of the contract by 19 December 2022 in that they had failed to pay him money due to him under the contract. The plaintiffs owed the defendant the sum of $814 with respect to Variation 6 at the relevant time (see [135] - [147] below), which does not constitute a serious breach of the contract justifying repudiation by the defendant.
The plaintiffs validly terminated the contract on 19 December 2022. The defendant is liable for the cost of incomplete works.

Claim that landscaping constitutes an item of incomplete works

The plaintiffs claim that the defendant is liable for the cost of landscaping under the contract.
The Skope Construction document entitled "Proposed Alterations and Additions" which, I understand, was annexed to the contract when it was executed, has two main headings: 'External Works' and 'Internal Works'.
Under 'External Works' the subheadings are Demolition/Excavation Works, Concreting, Scaffolding, Carpentry, Roofing/Gutters/Downpipes, Bricklaying, Electrical, Balustrade, Painting and Landscaping. The last item listed reads: Landscaping - No allowance has been made for this this [sic]
Under 'Internal Works' the subheadings are Structural/Demolition Works, Carpentry, Plumbing, Kitchen/Joinery, Waterproofing, Floor and Wall Tiling, Electrical, Doors and Windows, Plastering, Painting and Landscaping. The last item listed reads: Landscaping - Supply and install landscaping as per landscape design.
The plaintiffs argued that they provided the landscaping plan to Mr Retford and that the plans which form part of the contract show landscaped areas. They also say that landscaping was not expressly excluded in the contract.
Mr Retford says, in his affidavit of 17 May 2024, that he was provided, by the plaintiffs, with a landscaping plan by email on 28 May 2021 (see Court Book p 145). He says that the email was sent to him and to others, including the plaintiffs' interior designer. Mr Retford also knew of a document by Habitat Landscape identifying a scope of works. This document forms part of the exhibit to Mr Casey's affidavit of 16 January 2024. It is a quote from Habitat Landscape identifying a scope of works for the landscaping of the property and giving a quote of $84,497 plus GST to perform the works. Mr Retford says, in his affidavit of 17 May 2024, that he was never asked to give a quote for landscaping and he never did so. Mr Retford said that he never had any contact with anyone from Habitat Landscape. There is no evidence to the contrary. The plans annexed to the contract have indicative landscaping stamps on them, which do not constitute a landscaping plan but merely indicate likely landscaped areas. In all of these circumstances, I find that the contract between the plaintiffs and the defendant did not include an obligation upon the defendant to perform landscaping works. The entry under 'Internal Works' on the "Proposed Alterations and Additions" document is clearly an error. The landscaping works do not form part of the works required to be performed under the contract.

The plaintiffs' claim for alleged items of defective or incomplete work

Evidence was given concurrently in relation to the defective or incomplete work claimed by building consultants Mr Mario Bournelis (for the plaintiffs) and Mr Graham Thorpe (for the defendant). The experts produced a joint report to assist the Court in the assessment of the claimed defective or incomplete works (Exhibit A). The experts reached agreement in relation to some of the items claimed but were at odds on others. Where the experts have reached agreement, I accept and adopt their assessment of the cost of remediation. It is necessary to go through the items one by one.
In their assessments, Mr Bournelis and Mr Thorpe differ, from time to time, in their opinion as to the applicable hourly rates charged by painters, plasterers and carpenters. When giving evidence, Mr Thorpe said that he had considered the 2024 trade rates in Rawlinsons Construction Cost Guide (Rawlinsons) but had relied on it "very little". He relied, instead, he said, on his own "building knowledge and experience of contract rates and prices" and "talking to local trades". No further detail was given of his process of ascertaining the applicable rates. In the course of the experts' concurrent evidence, Mr Thorpe conceded that it was possible that a rate of $80 per hour should be given for a painter. Mr Bournelis relied upon Rawlinsons and his own experience, and his rates are close to the rates set out in Rawlinsons, whereas Mr Thorpe's rates, in some cases, are well below Rawlinsons' rates. Where the experts differ in their estimates of rates charged by painters and carpenters, I prefer the evidence of Mr Bournelis. I do not believe that Mr Thorpe had sufficient regard to the rates in Rawlinsons. The data base relied on in the compilation of Rawlinsons is superior to the information a single expert could gather, which is why it is invariably referred to in matters of this kind for guidance about trade prices. I note that Rawlinsons takes into account the geographical location at which the work is to be performed. Having said that, the experience of an expert, and other factors, may also come into play when prices are considered. Rawlinsons is a guide, not a code. Mr Thorpe is a carpenter. Where the experts differ in relation to an item, and specialist carpentry knowledge is relevant, I have generally preferred Mr Thorpe's evidence as to the method of remediation. Item 2(5) is an exception to this, for the reasons given below.
Both experts included painting in their assessments. Mr Thorpe was, of course, instructed in the defendant's case. I note that the contract, in Clause K, under "Special Conditions" said "Painting to be completed by other. All electrical works to be completed by other". There has been no reference by either party to Clause K. I note that "Electrical" is expressly included in Clause F in the 4th progress payment, so I infer that Clause K does not mean that the builder was not to be responsible for painting or electrical works. I note that painting works have been done. As neither party relied upon Clause K, or even referred to it, I will not further consider it.

Item 1 Front door

The front door is delaminating at the internal and external faces. The front door handle is loose and there is white paint on the inside of the front door which is poorly finished and has overpainting from the painting of the walls. The cost of remediation is agreed at $965.

Item 2 Hallway

Item 2 has several components: 1. The Hardies VJ Groove Panelling is coming apart in sections within the hallway. The wall on the north side of the hallway curves in a range from 10 to 11 mm. In the joint report, the experts agreed that a total of 10 joints have separated and there are two areas on either side of the ground level hallway which show excessive peaking to wall joints. The experts agreed that only those two areas of wall panels, comprising a total of 4 panels, need to be removed. The remaining 10 joints can be filled and repainted. Immediately prior to the trial, the experts had a conversation in which their costings with respect to this sub-item became closer. Mr Bournelis, who had estimated that this would take 2 carpenters 4 days reduced that time to 2 days. Mr Bournelis' original estimate was based upon the removal of all of the panelling, but, on reflection, he came to believe that the removal of four of the panels would suffice. The estimates at the trial were: Mr Bournelis said that the work would cost $2,720 for 2 carpenters for 2 days (32 hours) at $85 per hour plus $600 for materials. Mr Thorpe said that the work would cost $450 for 2 carpenters for 5 hours at $75 per hour plus $350 for materials. Mr Thorpe agreed that the materials might be up to $125 more than he estimated. In their submissions, the plaintiffs suggested that a compromise of $475 for materials would be appropriate. I agree. As I have said, I accept Mr Bournelis' rate. I will allow for 2 carpenters for 2 days (32 hours) at $85 per hour totalling $2,720 for labour plus $475 for materials giving a total of $3,195. 1. Sub-item 2(2) is included in the consideration of sub-item 2(1). 2. The hallway skirtings are poorly painted, nail heads are visible and should be filled with putty and sanded and there is no sealant to the base of the skirtings to close unsightly gaps. Mr Bournelis included, in the remedial work assessed for this item, the painting of the entire internal area of the house except for bedrooms 2 and 3 on level 1. Mr Bournelis assessed the cost at $8,160 for 3 painters for 4 days at $85 per hour plus $2,500 for materials. Mr Thorpe confined his assessment to the remediation of the skirtings. Mr Thorpe said that the work would cost $1,120 for 2 painters for 8 hours at $70 per hour. Mr Bournelis believed that it would be more efficient to have the painters come on one occasion near the end of the remediation process to paint the whole interior of the house except for bedrooms 2 and 3 on level 1. Mr Thorpe believed that it would be less expensive to have only those areas which require painting painted. For that reason, Mr Thorpe assessed each painting task either by itself or with a related work. It was pointed out that the painter could still do all of the remedial paint work at the end of the works. I agree that these painting works should be costed separately. Mr Thorpe does not give a figure for materials. He said, in evidence, that materials were included in the $70 per hour he used to calculate the cost. I consider, having regard to Rawlinsons, which sets out a rate for a painter of $91.20 per hour, plus 8% for the regional location, that Mr Bournelis' rate of $85 per hour is the preferable rate for a painter of the rates proposed by the experts. Materials must be in addition to that. Sub-item 2(3) is therefore costed at 2 painters for 8 hours at $85 per hour totalling $1,360 plus $1,250 for materials giving a total of $2,610. 1. The hallway light fitting is loose and has an excessive and unsightly hole. Mr Bournelis' response to this item included having an electrician check and secure the light fittings to the hallway and also included further work to be done by an electrician. The further work was the supply and installation of dimmer switches to bedroom 2, the supply and installation of under shelf lighting to the lounge room, the supply and installation of cabling and an antenna for a television, the supply and installation of NBN cabling, the supply and installation of a power point to the drawer desk under the stairs, the supply and installation of strip lighting above the desk under the stairs, the supply and installation of power points to the kitchen island bench, the supply and installation of strip lighting to the level 1 study desk, the supply and installation of lighting internally and externally to the storeroom, the supply and installation of a barbecue with a range hood in the alfresco area and the rectification of the heaters on the rear deck which were not working. Mr Bournelis said that the work would cost $7,040 for 2 electricians for 4 days at $110 per hour plus $2,900 for materials. Mr Thorpe said that the remedial work for this item would require an electrician to remove the light fitting and instal a mounting block with a small hole to accommodate the wire. He did not make any allowance for the additional items listed by Mr Bournelis. Mr Thorpe said that the work would cost $110 for 1 electrician for one hour at $110 per hour plus $37.50 for a timber block. I note that Mr Thorpe and Mr Bournelis both adopt $110 per hour as the hourly rate for an electrician. When Mr Thorpe's estimate of the cost of all of the works taken into account in Mr Bournelis' estimate in this sub-item are added together, the amount arrived at is $825 (for 7.5 hours) plus $30 for materials. However, there are items with respect to which Mr Thorpe has not allowed for materials when, clearly, materials would be consumed. The work costed by Mr Bournelis for this sub-item includes twelve tasks, several of which may not be straightforward. However, the estimate of two electricians for 4 days (ie 8 days work) is over generous. On the other hand, Mr Thorpe's estimate of 7.5 hours is not adequate. For all of the work costed by Mr Bournelis for this sub-item, I will allow for one electrician for 4 days (or two electricians for two days) at $110 per hour plus $2,000 for materials, giving a total of $5,520. 1. The finished floor at ground floor level is uneven in the hallway and has a 10mm fall per metre. Mr Bournelis believes that the remedial work requires removal of the skirting, removal of the engineered floating flooring to the ground floor and the raising of the timber substrata to a level position, followed by reinstatement of the floor and skirting. Mr Bournelis costs the work at $10,200 for 3 carpenters for 5 days at $85 per hour plus $1,950 for materials. Mr Thorpe's evidence was that, in his opinion, the subfloor bearers and joists could be adjusted by a carpenter crawling into the subfloor space carrying a bucket, hammer and wedges. A second carpenter would stand on the floor above and ascertain, with the use of "a long straight edge" where the floor needed to be lifted. The second carpenter would then tap on the floor to indicate to the carpenter below where to insert a wedge, and the carpenter below would crawl to that point and hammer a wedge between the floor joist and the bearer. Mr Thorpe noted that two areas are involved, namely the hallway and the lounge room. He conceded that he had not inspected the subfloor area and could not say what type of piers are present. Mr Thorpe costs the work at $450 for 2 carpenters for 3 hours at $75 per hour. Mr Bournelis did not believe that there is sufficient area in the subfloor space to allow a carpenter to get under the floor and perform the work outlined by Mr Thorpe. The extent of portion of the subfloor space can be seen at p 1003 of the Court Book. Mr Thorpe said, in evidence, that the space was 400mm high. Mr Bournelis pointed out that there are areas where the floor needs to be raised by about 10mm. Although I accept Mr Thorpe's evidence that it would be possible, in some circumstances, to remedy an uneven ground floor by means of the method he proposes, I find that, in the plaintiffs' house, on the balance of probabilities, the subfloor space is too restricted to permit a carpenter of average height, weight and flexibility to get to the critical areas and manoeuvre in the required way to achieve the required result. I prefer Mr Bournelis' assessment in relation to this defect and I accept his costing at $10,200 plus $1,950 for materials giving a total of $12,150. 1. The linen press door scrapes on the floor when opened. The cost of remediation is agreed at $160. The total cost for Item 2 is $23,635.

Item 3 Downstairs bathroom

Item 3 relates to the downstairs bathroom. It has four components. 1. The fall of the floor to the floor waste measures 2 to 4mm to the metre in some areas instead of 10mm to the metre which is the fall set out in Australian Standard 3740 paragraph 3.3. The experts conducted a flood test on the floor which showed water ponding on 5 tiles. The floor tiles are 600mm x 600mm. Mr Bournelis proposed the removal of all fittings and fixtures in the bathroom, except for the shower screen, followed by the removal of the floor tiles, and one row of wall tiles, the tile screed and the waterproof membrane. A new membrane is to be installed, screed is to be laid with the correct fall and the tiles are to be laid, including skirting tiles. Then the fittings and fixtures are to be reinstated. Mr Bournelis' estimate of the cost of these works, including materials, is $10,895. In his report of 3 June 2024, Mr Thorpe quoted AS 3740-2010 Appendix B: Falls in Floor Finishes B1 General The primary consideration for falls in floor finishes is to ensure water does not remain on the finished floor in a manner that can adversely affect the health or amenity of the occupants or deteriorate building elements. Falls in floor finishes should ensure water exits the area at the floor waste or doorway if that is the designated exit point (eg laundry door to exterior). Water should not pond on the floor, with the exception of residual water remaining due to surface tension. B2 Factors Affecting Falls The ratio of fall achieved in a fall may vary depending upon the - (a) finished height requirement at doorways; (b) height of fixtures or fittings; (c) dimensions of the tiles used, adequate falls become more difficult to achieve as the size of the tiles increases; (d) area of the floor to be drained; and (e) requirements of persons with disabilities. B3 Fall Ratios Clause 3.4 specifies a fall ratio of 1:100 in shower areas. Where falls flatter than 1:100 are proposed, the effectiveness of the floor drainage should be confirmed to ensure the primary consideration given in Paragraph B1 has been met. B4 Diagonal Cutting of Tiles Tiles may require diagonal cutting in the area around the waste to achieve the required falls, sufficient drainage and to ensure lipping is kept within the guidelines of AS 3958.1 It is clear that a fall of 1:100 in a bathroom floor outside of a shower is not mandated by the AS and that an assessment is to be made, taking into account the matters set out in the AS. AS 3958.1-2007 Appendix D D1 says: The primary consideration for falls in floor finishes is to ensure water does not remain on the finished floor in a manner that can adversely affect the health of the occupants or deteriorate building elements. Mr Thorpe proposed the removal of the five tiles upon which water is pooling. A waterproof membrane would be applied in the space created by the removal of the tiles and the tiles would then be re-laid with an adequate fall towards the floor waste, which, I infer, would be a fall sufficient to prevent the pooling of water on those tiles. This would be achieved by using a thicker layer of glue on part of each tile. The minimum fall sought by the AS, being 1 in 100mm would not, however, be achieved. Mr Thorpe's estimate of the cost of his remediation strategy is included in Item 15(1), below. The difference in remedial measures proposed under Item 2(1) was discussed at some length in evidence. I am confident that Mr Bournelis' method would result in there being no further ponding on the floor, and the falls sought by the AS may be achieved, or nearly achieved. Mr Bournelis' method will ensure that the floor is properly waterproofed. I am not persuaded that Mr Thorpe's method would result in a coherent bathroom floor. It seems to me that it may result in a new kind of unevenness being introduced into the floor. Both experts acknowledged that the issue was difficult to address when, as here, the floor tiles are large. If Mr Thorpe's method were implemented and the removal of the tiles caused damage to the waterproofing membrane, the result would be a "patched" membrane, with the patch under only the tiles which had been removed and then replaced. A risk would arise that the floor would not be waterproof. A wet area floor which is not waterproof can bring about the deterioration of building elements. I accept Mr Bournelis' costing of this sub-item at $10,895 including materials. 1. The cavity sliding door is loose and catches on the bottom guides. 2. Floor trim to door threshold has dislodged. 3. The shower screen door impacts on the fixed panel when closed and requires adjustment. The experts agree that the cost of rectification of Item 3(2), (3) and (4) is $112.50 including materials. I accept that estimate. Both experts included the cost of rectifying Item 5(2) in this item also. The total cost of Item 3 is $11,007.50

Item 4 Media Room

The paint to the media room is poorly applied and patchy. Cracks are evident and there are divots in the walls. Mr Bournelis included this work in the work he set out for Item 2(3), which included the repainting of most of the interior of the house. Mr Thorpe estimated the cost of having a painter prepare the walls and apply two coats of paint at $280 (1 painter for 4 hours at $70 per hour). I have accepted Mr Thorpe's overall approach in relation to painting, except that the hourly rate should be $85 per hour and materials should be added. I will allow 1 painter for 4 hours at $85 per hour totalling $340 plus $100 materials. The total cost of Item 4 is $440.

Item 5 Downstairs Bedrooms

There are three defects included in Item 5: 1. The wall paint to the bedroom is poorly applied and patchy. The painting works are incomplete. Mr Bournelis included this in the painting works for Item 2. Mr Thorpe estimated a cost of $280 for 1 painter for 4 hours at $70 per hour. I will allow 1 painter for 4 hours at $85 per hour totalling $340 plus $100 for materials giving a total of $440. 1. The door handle is crooked and loose and needs to be secured. Both experts included this defect as part of Item 3(2). No further allowance is required. 1. The dimmer switch has not been installed. Mr Bournelis included the cost of remedying this with Item 2(4). Mr Thorpe costed it at $140 for 1 electrician for 1 hour at $110 plus $30 for materials. I have included the cost of this item in Item 2(4). The total cost of Item 5 is $440.

Item 6 Linen Press Downstairs

This item has been dealt with above at Item 2(6).

Item 7 Lounge Room

There are 9 alleged defects in the lounge room: 1. The Hardies wall panels are cracked and need to be secured. Mr Bournelis included his costing of remedying this in Item 2(1). Mr Thorpe found no panel coming apart. Any panels requiring securing can be secured by the painter costed in Item 7(3). No further allowance is required. 1. The painting is poorly applied, patchy and incomplete. Mr Bournelis includes this in the painting work in Item 2(3). Mr Thorpe includes it in Item 2(3). No further allowance is required. 1. No undershelf lighting Mr Bournelis includes this in Item 2(4) Mr Thorpe says that this is incomplete works. The works can be done for $165 being for 1 electrician for 1.5 hours at $110 per hour. I have included this sub-item in Item 2(4). 1. No fireplace trim. Mr Bournelis allows $450 for the supply and installation of trim to the fireplace. Mr Thorpe allows $145 for 1 carpenter for 1 hour at $75 per hour plus $70 materials. I accept Mr Bournelis' assessment of $450. 1. There is a hole in the wall above a joinery unit in the lounge. Both experts include this in Item 2(3). No further allowance is required. 1. No working TV aerial socket. Mr Bournelis includes this work in Item 2(4). Mr Thorpe estimates the cost at $55 for 1 electrician for half an hour at $110 per hour. I have included this item in the costing for Item 2(4). 1. Poor painting around the louvre window. Mr Bournelis has included this in Item 2(3). Mr Thorpe estimates the cost of remediation at $70 for 1 painter for 1 hour at $70 per hour. I accept Mr Thorpe's estimate of one hour but the hourly rate should be $85 giving a total of $85. 1. The floor to the lounge is uneven with falls of 7mm to the metre. Both experts dealt with this with Item 2(5). No further allowance is required. 1. Wiring for the NBN. The plaintiffs have arranged for this work to be completed. Mr Bournelis has included this in Item 2(4). Mr Thorpe noted that the plaintiffs have made arrangements for the NBN connection to be completed. I have included the costing for this sub-item in Item 2(4). The total cost of Item 7 is $535.

Item 8 Desk under stairs

There are four sub-items: 1. The skirtings have large gaps and nail heads are evident. Mr Bournelis included this in Item 2(3). Mr Thorpe costed it at $140 for 1 painter for 2 hours at $70 per hour. I will allow 1 painter for 2 hours at $85 per hour totalling $170 plus $50 materials totalling $220. 1. Painting poorly applied and patchy. Mr Bournelis included this in Item 2(3). Mr Thorpe included it in his costing for Item 8(1) and so have I. 1. Missing power point in drawer. Mr Bournelis included this in Item 2(4) and so have I. Mr Thorpe included this in Item 7(3). 1. No undershelf strip lighting. Mr Bournelis included this in Item 2(4) and so have I. Mr Thorpe included this in Item 7(3). The total cost of Item 8 is $220.

Item 9 Kitchen

Item 9 has 5 parts: 1. Bin drawer will not close. This item was not pressed. 1. No power points in island bench. Mr Bournelis included this in Item 2(4) and so have I. Mr Thorpe costed this at $220 for 1 electrician for 2 hours at $110 per hour. 1. No trim beneath the warming tray in the oven. Mr Bournelis allows $250 for the supply and installation of the trim. Mr Thorpe does not cost this item as he believes it is incomplete works by the cabinetmaker. I reject this approach, in relation to this and the other items in which Mr Thorpe has adopted it. The builder is responsible for the incomplete works of his employees and sub-contractors under the contract. I allow $250 for this item. 1. No opening handles on the two cupboard doors next to the hinged window. Mr Bournelis allows $60 for the supply and installation of the handles. Mr Thorpe thinks this is incomplete works by the cabinetmaker. I allow $60. 1. There is a significant gap evident below the hinged servery window which allows wind to enter the house. The gap is 10mm overall and 5mm from the underside of the felt strip. Mr Bournelis allows $350 for the supply and installation of a thicker felt strip. Mr Thorpe thinks that this is incomplete works which are the responsibility of the cabinetmaker. I allow $350. 1. Both rangehoods are not vented and the second one is not connected to power. Mr Bournelis included the rectification cost in Item 2(4) and so do I. Mr Thorpe included it in Item 9(2). 1. Gas stove lacks regulator/sensor. The experts agree the cost of remediation at $350. 1. This sub-item is no longer pressed. 2. Paint poorly applied and patchy in the kitchen. Mr Bournelis has included this in Item 2(3). Mr Thorpe includes it in Item 10(1) and so do I. 1. Poor skirting excessive gaps. Mr Bournelis has included this in Item 2(3). Mr Thorpe includes it in Item 10(1) and so do I. 1. Drawers under fruit bowl jut out and are not flush with the joinery unit. Mr Bournelis allows 1 joiner for 3 hours at $85 per hour = $255. Mr Thorpe says this is incomplete works which are the responsibility of the cabinetmaker. I will allow $255. The total cost of Item 9 is $1,265.

Item 10 Laundry

There are seven sub-items: 1. Unfinished and water damaged skirting. Mr Bournelis has included this in Item 2(3) above. Mr Thorpe believes that this is not water damage, but incomplete work. He allows $70 for 1 painter to paint the skirting and touch up as required. I will allow $85, which will include sub-item 10(6). 1. Incorrect colour hanging rack. Mr Bournelis allowed $150 to replace the copper rail with a brass rail. Mr Thorpe did not allow this item because the plaintiffs have not substantiated their asserted nomination of a brass rail with documentation or oral evidence. This item has not been substantiated and I make no allowance for it. 1. No towel rack in the cupboard below the sink. Item 10(3) was not pressed. 1. No cupboard door above where the dryer should be. Mr Bournelis allows $390 for the supply and installation of a cupboard door. Mr Thorpe says that the works are incomplete works by the cabinet maker and does not assess the cost of supplying and installing a door. I will allow $390. 1. Power point behind the dryer is not fitted properly. Mr Bournelis allows $65 to secure the power point. Mr Thorpe has included this in Item 9(2). I will allow $65. 1. Damage to walls and cupboards from dryer falling out whilst in use. This is not a building defect and no allowance will be made. 1. Dryer has not been reinstalled. This is also not a building defect. The total cost for Item 10 is $540.

Item 11 Stacker door

There are three sub-items in Item 11: 1. The Stacker doors are crooked as there is a bow in the centre of the door head. The experts agree quantum at $170 for 1 tradesman for 2 hours at $85 per hour. 1. The bottom track is scratched where the panels slide on and the doors are difficult to operate smoothly. Mr Bournelis allows $450 for the re-spraying of the bottom track. Mr Thorpe says that this is incomplete works and the track and the panel above the door require repainting. He allows $70 for 1 painter for an hour. I agree with Mr Bournelis that the bottom track should be re-sprayed. I allow $450. 1. One wall cladding panel remains unpainted above the stacker door unit. Mr Bournelis includes the painting of the panel in the cost set out for Item 16(2). Mr Thorpe includes the cost of rectification in Item 11(2) and so do I. The total cost for Item 11 is $620.

Item 12 Stairs

There are three sub-items concerning the stairs: 1. Wall finish at the top of the stairs and the ceiling above the stairs shows poor and patchy painting. Mr Bournelis included the works to rectify this in Item 2(3). Mr Thorpe assessed the remediation works at $140 for 1 painter for 2 hours at $70 per hour. I will allow 1 painter for 2 hours at $85 per hour = $170. 1. Head height clearance at the bottom of the stairs is 15mm less than the minimum clearance of 2 metres required (AS 1657). Mr Bournelis proposed that the stair head (ie, the ceiling to the stairs) be removed and chamfered to increase the height above the stairs. He estimates the cost at $680 for 1 carpenter for 8 hours at $85 per hour, $450 for materials and $950 for a gyprocker to dress up the finished chamfer ceiling, including materials. Mr Bournelis believes that the painting should be completed to the nearest architectural break. Mr Thorpe proposed that a plasterer remove the square set angle and replaster on a 45 degree angle. He estimated $175 for 1 plasterer for 2.5 hours at $70 per hour. He included painting costs in Item 12.1. Mr Thorpe believes that the painting can be done to where the patching of the adjusted ceiling works occurred. This is the only item for which Mr Thorpe suggests that the painting be patching. In all other items, when he suggests painting he means painting from architectural break to architectural break. Mr Bournelis' gave further information about his scope of work in evidence. He believed that it would be necessary for a frame to be created for the chamfered stair head. When he conceived of that plan, he believed that the stair head was 190mm too high. At the trial, he agreed that he had not measured correctly, and the stair head was, in fact, only 15mm too high. Mr Bournelis then raised a concern, for the first time, that there might be a steel beam concealed behind the stair head. However, he was unable to say precisely where it was, or what its impact would be. He said that he would not know until the plasterboard was removed. This does not support Mr Bournelis' costing any more than it supports Mr Thorpe's costing. Both remediation plans could be rendered unfeasible if there is a steel beam running over the width of the stairs at a non-compliant height. Mr Thorpe is a carpenter, and he was very confident that his method of rectification would be adequate and would resolve the defect. Doing the best I can in the circumstances, I assess the loss for Item 12(2) using Mr Thorpe's method, but with an increase in the rate for the plasterer to $85 per hour. I allow for 1 plasterer for 2.5 hours at $85 per hour totalling $212. I note that the painting is included in Item 12(1). 1. Floor at the top of the stairs is uneven. Mr Bournelis proposed the removal of the skirting and the floating flooring to the first floor and the raising of the timber sub strait to a level position, followed by reinstatement. It became clear during the experts concurrent evidence that Mr Bournelis proposed the removal of the floor from the top of the stairs, down the hallway and into the master bedroom. This was based on measurements he took which showed a fall of 2 to 3mm more than the tolerance of 10mm allowed for in The Guide to Standards and Tolerances 2017, clause 15.8. The work will cost $8,160 for 3 carpenters for 4 days at $85 per hour plus materials of $1,350. Mr Thorpe proposed the same type of works but confined the area for the works to the top of the stairs, and estimated the cost at $2,400 for 2 carpenters for 2 days at $75 per hour plus $160 materials (2 sheets of flooring) and $210 for packing materials. This should be followed by a painter making good the area for $560 for 8 hours at $70 per hour. I accept Mr Thorpe's evidence in relation to the area of the works. I accept his method of costing, but with an adjustment of the rates and the addition of materials for the painter. I will allow $2,720 for 2 carpenters for 2 days at $85 per hour plus $370 for materials, plus $680 for one painter for 8 hours at $85 per hour plus $100 materials resulting in a total cost of $3870. The total cost for Item 12 is $4,252.

Item 13 Upstairs bathroom

Item 13 has 3 sub-items: 1. The window installed to the upstairs bathroom is an awning window but architectural detail indicates a louvre window. The experts agree that replacing the window with a louvre window will cost $625. 1. Two drill holes are evident on the wall tiles behind the heated towel rail. The experts agree that the cost of remediation is $500. 1. There are non-compliant falls to floor wastes of 0-3mm per metre which should be 10mm per metre. The experts conducted a flood test. Mr Bournelis said that, after 20 minutes, 4 tiles had water ponding on their surface. The tiles are 450 x 450. Mr Thorpe did not believe the water was "ponding". He said the water was simply droplets, as referred to in AS 3740-2010 Appendix B. He thinks that the bathroom floor satisfies AS 3958.1-2007 Appendix D D1 General which states: The primary consideration for falls in floor finishes is to ensure water does not remain on the finished floor in a manner that can adversely affect the health of the occupants or deteriorate building elements. Mr Bournelis proposed the following works at the following cost: - the removal of all fittings and fixtures and the capping of services - two plumbers for one day at $110 per hour totalling $1,760, - the removal of the shower screen plus the reinstatement of the shower screen at the end of the remedial works at $700, - the removal of floor tiles and one row of wall tiles, tile screed and waterproof membrane followed by the cleaning of the substrate and the removal of debris - 2 labourers for 8 hours at $65 per hour plus $1,040, - reinstate new waterproof membrane supply and install at $950, - supply and lay screed - 2 tilers for 8 hours at $85 per hour at $1,360, - materials and sand/cement at $350, - supply and lay second layer of membrane at $950, - supply and lay floor tiles, sealants including grouting, fixings and one row of skirting tiles - 2 tilers for one day at $85 per hour totalling $1,360, - materials at $950, - reinstate fittings and fixtures - 2 plumbers for 8 hours at $110 per hour totalling $1,760. Mr Bournelis' total cost for Item 13(3) is $11,480. Mr Thorpe did not believe that any work was necessary to bring the upstairs bathroom into compliance with the AS. He said that there were no unsafe conditions and no risk of deterioration of building elements. Droplets of water remaining on 4 tiles was not "ponding". Mr Bournelis did not argue that the bathroom was unsafe or that building elements were at risk of deterioration. I accept Mr Thorpe's evidence. The plaintiffs have not established that this work is required. No allowance will be made for this sub-item. The total cost of Item 13 is $1,125.

Item 14 Upstairs Bedrooms (General)

Item 14 has eight sub-items: 1. Door handles are crooked and loose. The joint report records that Mr Bournelis allowed $680 for a carpenter to adjust, taking one hour at $85 per hour, plus $100 worth of materials. This is clearly a typing error and the figure of one hour should have been 8 hours, as in the Scott Schedule which is annexure D to Mr Bournelis' report of 17 October 2023. Mr Bournelis subsequently amended his time estimate to 4 hours and his materials to $50, resulting in a cost of $390. Mr Thorpe said, initially, that he included this sub-item in Item 5(2), but Item 5(2) was subsequently included in Item 3(2). As he maintained his position in the joint report, I assume that he meant that he had allowed for the cost of remedying the defects to the door handles in Item 3(2). I do not think that sufficient allowance has been made in Item 3(2) for the upstairs bedroom door handles. I accept Mr Bournelis' costing at $390. 1. Patchy walls poorly painted. Mr Bournelis included this in the painting works in Item 2(3) Mr Thorpe made an allowance of $840 for one painter to sand and paint the incomplete walls and skirtings to upstairs areas for 12 hours at $70 per hour. He included the work in Item 14(5), (7) and (8) in his costing. I note that the work in sub-item 14(5) is included in Mr Thorpe's estimate of time. I have not included this item in Item 2(3). I accept Mr Thorpe's time estimate, taking into account the work in Item 14(5), (7) and (8), but the rate should be $85 per hour, resulting in a cost of $1,020. 1. No light over desk in the study. Mr Bournelis included this in the electrical works in Item 2(4). Mr Thorpe included it in Item 7(3). I have included this sub-item in Item 2(4). 1. Manhole is not painted. This item is no longer pressed. 1. Skirtings poorly painted. Mr Bournelis included this in Item 2(3). Mr Thorpe said it was incomplete works and included it in Item 14(2). No further allowance is required. 1. Built in robes require adjustment. This item is no longer pressed. 1. Paint to master bedroom remains incomplete. Mr Bournelis included this in the painting works for Item 2(3) Mr Thorpe included it, as incomplete works, in Item 14(2). I have done the same. 1. Architraves pulling apart to master bedroom. Mr Bournelis allowed $170 for one carpenter for 2 hours at $85 per hour totalling $170. He included the painting in Item 2(3). Mr Thorpe included all of the work as work to be done by the painter in Item 14(2). I accept that the work can be done by a painter and I also include it in the costing for Item 14(2). The total cost for Item 14 is $1,410.

Item 15 Master Bedroom Ensuite

Item 15 concerns the measurement of falls to the floor waste of 2 to 3 mm when falls should be 10mm to the metre. Mr Bournelis proposed the same works that he proposed in relation to the upstairs bathroom, except that the shower screen would not be required to be removed, so that the cost estimate is $700 less, bringing it to $10,780. Mr Thorpe disagreed with the testing method, because the water was applied to the floor from the door entrance, where water would not usually come from, instead of the vanity basin, which is where it is more likely to come from. Mr Thorpe noted that only 4 tiles had water pooled on them from the test, and he believed that this could be remedied by the careful removal of the four tiles, with the application of a further waterproof membrane and the application of a thicker glue under the tiles. I note that three of the four tiles in question were in front of the vanity. Mr Thorpe said that this work could be done at the same time as the downstairs bathroom at a total cost, including both bathrooms, of $3,820. For the same reasons as set out in relation to Item 3(1), I accept Mr Bournelis' evidence. This item is costed at $10,780.

Item 16 External Defects and Incomplete Works

Item 16 has 9 sub-items: 1. No internal or external lighting to the storeroom left elevation. Mr Bournelis included the work to address this in Item 2(4). Mr Thorpe allowed for one electrician to fit the light fittings for one hour at $110 per hour = $110. I have adopted Mr Bournelis' approach in relation to this sub-item. 1. Brickwork incomplete at north elevation window. The experts agreed that the remediation work would comprise one bricklayer to complete the brickwork and window sill to the north elevation window for 8 hours at $95 per hour = $760 plus $220 materials = $980. 1. Holes in wall above storeroom on the south elevation which leaked water into the lounge room and have been filled with sealer. Mr Bournelis allowed for the patching of holes and gaps, sanding where required, the sealing of unprepared surfaces, the application of a bagged finish and the application of one undercoat and two finish coats to external surfaces. He costed 4 painters for 4 days at $85 per hour = $10,880 plus materials at $2,850. He allowed a further $900 for the hire of a mobile scaffold. Mr Bournelis includes the painting in Item 16(5), (6), (7) and (8) and Items 17(6), 18(5), 18(8) and 18(9) in his costing for Item 14(3). Mr Thorpe took the view that these were incomplete works, and included them with other costings. I accept Mr Bournelis' costing for sub-items 16(3), (5), (6), (7) and (8) and Items 17(6), 18(5), 18(8) and 18(9) at $14,630. I have included the mobile scaffolding on account of the height of the wall and the nature of the work, which will require materials to be taken to considerable heights. 1. Concrete render debris all over the fence and windows south side. Mr Bournelis allowed for one labourer to clean the splatter from the fence and windows at $65 per hour for two days totalling $1,040 plus cleaning materials at $200. Mr Thorpe said that this was incomplete work and allowed one labourer for 5 hours at $65 per hour totalling $325. I accept Mr Thorpe's costing for this item, except that I will add $100 for materials, resulting in a cost of $425. 1. Inconsistent bagged finish on walls on the south side with unsightly gaps evident to the fascia. Mr Bournelis included this in the painting works provided for in Item 16(3). Mr Thorpe said that sub-items 16(5), (6), (7), (8) and (9) were all incomplete works. He allowed for one painter for 5 days at $70 per hour = $2,800 for all of the external painting in those sub-items. As I have said, above, I have accepted Mr Bournelis' approach to sub-items 16(5), (6), (7), (8) and (9). 1. Architraves to windows south elevation are not painted adjacent to the rainwater tank. Mr Bournelis allowed for this work in Item 16(3). Mr Thorpe allowed for it in Item 16(5). 1. Painting incomplete to existing brickwork on the north elevation. Mr Bournelis allowed for this work in Item 16(3). Mr Thorpe allowed for it in Item 16(5). 1. Seal penetrations to wall north side. Mr Bournelis allowed for this work in Item 16(3). Mr Thorpe allowed for it in Item 16(5). 1. Excessive gap to window head north elevation requires sealing. Mr Bournelis allowed for this work in Item 16(3). Mr Thorpe allowed for it in Item 16(5). The total cost for Item 16 is $16,035.

Item 17 Garage

Item 17 has six sub-items: 1. No steps to the ground outside the garage. Mr Bournelis allowed for one carpenter for 8 hours at $85 per hour plus $450 materials for a total of $1,130. Mr Thorpe said that this was incomplete work and allowed for one carpenter to instal H3 treated pine stairs for 2 hours at $75 per hour = $150 plus $427 materials. I accept Mr Thorpe's costing for this sub-item except that the rate should be $85 per hour. The cost is therefore $597. 1. Garage door poor painting application uneven surfaces. Mr Bournelis allowed for this work in Item 16(3) and so have I. Mr Thorpe allowed for it in Item 16(5). 1. Gap underneath the garage door to the side path. Plaintiffs assert that this was to be a glass door, but a timber door has been installed. The experts were unable to establish any requirement for a glass door. They agreed that the gap could be fixed for $284. 1. Missing remote for the roller door. The experts agreed that the supply of two remotes would be $92. 1. Entry corners/reveals at the bottom of the garage door have gaps and are poorly finished. Mr Bournelis allowed for $300 for one carpenter to add two sections of timber to the garage reveal and apply sealant to the base to prevent the ingress of water to the timber ends. Mr Thorpe believes that the gap is required to prevent fungal decay. I accept that this gap requires remediation. From the photographs, it is clear that the gap is noticeable for its height. I accept Mr Bournelis' costing of $300. 1. Poor finish of steps from the garage to the laundry. Mr Bournelis included this in Item 17(1). Mr Thorpe included it in Item 17(3). The total cost of Item 17 is $1,273.

Item 18 Rear Deck Alfresco

These items are dealt with elsewhere.

Item 20 Ground floor timber works

The experts agreed that no breaches have occurred with the wall frames, bearers and joists to the existing home portion. No remedial work is required.

Item 21 Timber deck rear elevation and sub floor area

There are three sub-items to Item 21: 1. About 35 decking screws are missing. The experts agree that the cost of remediation will be $100. 1. The rear decking requires sanding, cleaning and staining. This sub-item duplicates Item 18(2). 1. The ant caps to the brick piers under the new deck for the rear elevation require repair or reinstatement. Mr Bournelis allows for 2 tradesmen for 3 days at $85 per hour = $4,080 plus $900 materials. Mr Bournelis says that the work must be done because the ant caps have not been installed in accordance with AS 3660.1-2000 clause 5.4 which requires a sheet metal shield to cover the top of the pier, post of horizontal surface of the wall, and that it must project on all sides, with no edge to be less than 40 millimetres from the vertical face of the pier or the wall when the edges are turned down at an angle from the horizontal. Mr Thorpe says that the rear deck has been inspected and passed by the certifier on 18 February 2022, so that no action is required. I accept Mr Bournelis' evidence in relation to this sub-item. The cost is $4,980. 1. The tie down straps to the brick piers under the new deck at the rear require repair or reinstatement. Mr Bournelis allows for 2 tradesmen for 1 day at $85 per hour to undertake this work + $1,360 plus $250 for materials. Mr Bournelis has included photographs of a damaged tie down strap and piers without straps. Mr Thorpe says that the rear deck has been inspected and passed by the certifier on 18 February 2022, so that no action is required. I accept Mr Bournelis' evidence on this sub-item and I will allow $1,610. The total cost for Item 21 is $6,690.

Item 22 Windows and Balcony Doors

This item is not pressed.

Item 23 Structural certification

The plaintiffs say that the internal beams and columns require certification from a structural engineer. In the event that such a certificate cannot be provided, the plaintiffs say that they will need to carry out invasive investigations of the walls and ceilings so that structural members can be certified, followed by reinstatement. Mr Bournelis said that no structural certification had been provided by the builder (to him, presumably) and costed the invasive investigation and reinstatement at $8,190. Mr Thorpe said that the defendant is in possession of all of the required structural certificates and that an occupation certificate can be obtained when all of the incomplete works are finished. He says no works are required under Item 23. I note the Inspection Report 2021-245 - Framing Inspection Certificate dated 18 February 2022 from Central Coast Certifiers which says "Framing Inspection - Satisfactory (no issues) - No reinspection required for this inspection" and also "Additional Inspection Notes - All framework to rear deck satisfactory" (Court Book p 1005). The plaintiffs have not established that any remedial work is required in relation to Item 23.

Item 24 Roof Sheets

The experts agree that no further work is required in relation to the roof sheets.

Item 25 Gutters and downpipes

Mr Bournelis believes that the gutters and downpipes need remediation. His photographs at Court Book p 1014-1019 show that some of the gutters have no fall. Mr Bournelis said that he saw stagnant water in some gutters, and the photographs support that. He allows for 2 roof plumbers for one day at $110 per hour = $1,760 plus materials for $250. The work he thinks is required is the disconnection of the downpipes from the gutters, the dismantling of the gutters, the adjustment of the brackets and the reinstatement of the gutters with the required fall, followed by the reconnection of the downpipes. He also allowed for the adjustment of the spreader pipe to avoid the discharge of stormwater over the roof flashing. Mr Thorpe said that the gutters were operating correctly, with no water ponding, so that no work was required to the gutters. However, he agreed that an adjustment to the spreader to take stormwater off the flashing was required, and he included this in Item 18(7). I accept Mr Bournelis' evidence as to Item 25. I will allow $2,010. The total cost for Item 25 is $2,010.

Item 26 Final Clean and Removal of Builder's Debris

It appears from the plaintiffs written submissions and Schedule of Damages that this item is no longer pressed.
The total cost for remediation works and the completion of incomplete works is $83,242.50.

Preliminaries

Mr Bournelis allowed 5% for preliminaries, saying that a new remedial builder on the site will charge 5-8% of the cost of the works for preliminaries (ie, costs which will be incurred in performing the works which cannot readily be attributed to any particular item). Mr Thorpe did not allow for preliminaries, though he has indicated that 5% would be appropriate for remedial work in excess of $100,000. I agree that a remedial builder will charge preliminaries. I will allow 5% of $83,242.50 which is $4,162.12. The total therefore increases to $87,404.62.

Builders overheads and profit.

Mr Bournelis allowed 30% for the remedial builders overheads and profit. Mr Thorpe allowed 20%.
I will allow 20% for overheads and profit. 20% of $87,404.62 is $17,480.92. The total increases to $104,885.54. GST of 10% will be charged, resulting in a figure of $115,374.09.

Home Warranty Insurance

Mr Bournelis allowed 1.9% for home warranty insurance. Mr Thorpe said that it was already in place and therefore not required, but agreed that if the cost of the works were to be more than $100,000, a new home warranty insurance policy would be required. (Mr Bournelis is correct, see s 97 of the Home Building Act (1989). I will allow 1.9% for home warranty insurance. 1.9% of $115,374.09 is $2,192.11. The total increases to $117,566.20.
The plaintiffs also sought to recover some of their accommodation costs and some of the costs of the storage of some of their furniture. The contract does not oblige the builder to arrange his work so that the plaintiffs or their furniture can remain in the property. I note that the works require an occupation certificate, so that it would have been clear to the plaintiffs that they would not be able to live in the house for the whole of the time the works were being undertaken. The evidence did not establish that the storage of furniture was necessary at any particular relevant time, and accommodation costs specifically attributable to the defendant's breach were not proven.
The contract provides, in clause 7.5: The Contractor shall not be liable for any costs incurred by the Owner due to any unforeseen delays in completing the works.
Clause 7.5 does not, in its terms, require the Builder to obtain an extension in order for the clause to operate.
I find that the plaintiffs are entitled to damages on account of the loss they have suffered arising from the defendant's defective works and incomplete works in the sum of $117,566.20.

The defendant's cross-claim

In his Amended First Cross-Claim, the defendant pleads: The Cross-Claim relies on the following facts and assertions: 1. The Cross-Claimant (the Builder) claims: 1.1 Money payable by the Cross-Defendants (the Owners) to the Builder for work done and materials provided by the Builder for the Owners at their request, being: 1.1.1 $18,499.68 for Additional Works (variations) or such other sum as may be determined; and 1.1.2 $30,277.58 for Contract Works or such other sum as may be determined; and whether by way of restitution (including quantum meruit), entitlement in contract, or otherwise. 1.2 Money payable by the Owners to the Builder for money paid by the Builder for the Owners at the Owners' request being $21,645.98 paid to FCEM Pty Ltd Trading as First Choice Electrical and Maintenance ABN 26 639 198 093. 2. And the Cross-Claimant claims: 2.1 Judgment for $70,423.24, or such other amount as the Court or Tribunal determines. 2.2 Interest. 2.3 Costs. 2.4 Interest on costs.
The plaintiffs deny that the defendant is entitled to the relief sought in the defendant's cross-claim.

The claim for the price of Variations

The defendant claims payment under Variation 3 (Carpentry 7 March 2022 $57,065.80), Variation 4 (Skylights 17 March 2022 $15,443.01), Variation 5 (Supply and instal shower screens $5,841) and Variation 6 (Yellow tongue sheeting to storeroom wall 27 June 2022 $814). The plaintiffs do not dispute that Variation 6 is payable. In some of the evidence, the work that I have called Variation 6 is referred to as Variation 5.
Variation 3 was described as being for "Carpentry". It was priced, by the defendant, at $57,065.80. It was Mr Casey's evidence, in his affidavit of 16 January 2024, that he paid $50,000 towards Variation 3, leaving $7,065.80 unpaid.
It was Mr Casey's evidence, in his affidavit of 16 January 2024, that he paid the invoice for Variation 4. Mr Casey says that Mr Retford's email to the plaintiffs of 15 June 2022 thanking them for a payment of $15,813.12, related to the payment for Variation 4. Mr Retford, in his affidavit of 17 May 2024, agreed that this payment was made. Neither Mr Casey nor Mr Retford explained why the payment exceeded the amount claimed for Variation 4 by $370.11. I accept the evidence that Variation 4 was paid for. No alternative explanation was offered for the payment.
It was Mr Casey's evidence that no quote was provided for Variation 5 prior to the work being done. It was Mr Casey's evidence, in his affidavit of 16 January 2024 at paragraph 66, that he paid the tax invoice issued by the defendant for Variation 5. I accept this evidence.
The unpaid sum in relation to Variations 3 and 6 is $7,879.80, $814 of which the plaintiffs have agreed to pay.
The contract, in clause 3.3, says: All variations to this contract (including those to the plans and specifications) must be in writing, dated and signed by both parties to the contract.
The Act provides, in s 7(1), that a home building contract for the sum of $20,000 or more "must be in writing and be dated and signed by or on behalf of each of the parties to it". The Act, in s 7AAA, imposes the same requirement upon home building contracts for the sum of $5,000 or more. Both s 7(1) and s 7AAA apply to contracts to vary a residential building contract under s 6 of the Act. Section 7(1) of the Act is applicable to "Variation 3".
The Act provides, in s 7E and Schedule 2 Part 1 s 1: 7E Terms of contracts (1) A contract must include (and is taken to include) each of the terms set out in Part 1 of Schedule 2. A contract that contains a term that is inconsistent with a term set out in Part 1 of Schedule 2 is unenforceable to the extent of the inconsistency. … 1 Plans and specifications (1) All plans and specifications for work to be done under this contract, including any variations to those plans and specifications, are taken to form part of this contract. (2) Any agreement to vary this contract, or to vary the plans and specifications for work to be done under this contract, must be in writing signed by or on behalf of each party to this contract. (3) This clause only applies to a contract to which section 7AA (Consumer information) of the Home Building Act 1989 applies.
The Act, in s 7AA, provides that s 7AA applies to "a contract to which section 7 or 7AAA applies" except for two classes of contract which are not relevant in this matter. Variation 6 does not come within s 7 or s 7AAA because it is for an amount less than $5,000 (see Home Building Regulation 2014 reg 5).
The Act says, in ss 10 and 11: 10 Enforceability of contracts and other rights (1) A person who contracts to do any residential building work, or any specialist work, and who so contracts - (a) in contravention of section 4 (Unlicensed contracting), or (b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6(2)), or (c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person. (2), (3) (Repealed) (4) This section does not affect the liability of the person for an offence against a provision of or made under this or any other Act. 11 Other rights not affected This Division does not affect any right or remedy that a person (other than the person who contracts to do the work) may have apart from this Act.
In Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327 ("Wright") Giles JA, Basten JA and Handley AJA agreed and each wrote a judgment. Handley AJA said, at [56] - [57]: 56. A contract in writing that is varied informally ceases to be "a contract in writing". The contract as varied was not enforceable by the builder, and the informal variation may have prevented him enforcing the original written contract because "the contract" was no longer in writing. It is clear however that a contract still exists in such a case which is fully enforceable by the owner. 57. The Act does not prevent the builder relying on the contract as a defence because that does not involve its enforcement. Although the contract is not enforceable by the builder the owner cannot recover moneys paid under it unless there has been a total failure of consideration. This is implicit in Pavey & Matthews Pty Ltd v Paul [1987] HCA 5, 162 CLR 221 which decided that a builder who performed home building work under an informal contract could recover the fair value of that work in an action for restitution. Deane J, at p 257, held that the builder could rely on the unenforceable contract defensively for a number of purposes but did not specifically refer to the builder's right to retain moneys paid by the owner for work done, or to defend proceedings brought on the wrong contract.
Variation 3 was not signed or dated by the plaintiffs, so it is not compliant with clause 3.3 of the contract. The process set out in clause 3 of the contract was not followed. Variation 3 did not comply with s 7(2) of the Act, which is implied into the contract by s 7E Schedule 2, Part 1 s 1(2) of the Act. The variation document says that the work has been done, and yet the price is stated for the first time. There is no evidence that the plaintiffs ever agreed to the price. In fact, they explicitly questioned it when giving the defendant $50,000 in part payment. In the absence of acceptance by the plaintiffs of the defendant's offered price, Variation 3, which might otherwise have constituted an informal contract is not a contract at all.
The defendant cannot succeed in a claim for breach of contract for payment for "variations" which are not in writing, dated and signed in accordance with the requirements of the contract and the Act. They are not "variations" under the contract. In the case of Variation 3, additionally, on the evidence before me it lacks the essential elements of a contract.

Quantum Meruit

The defendant argues that, if he does not have the ability to claim payment under the contract for the work done pursuant to the "variations" and for the work done after the payment of the 5th progress payment, then he has a claim for payment by way of restitution on the basis of quantum meruit.

The work done after the payment of the 5th progress payment

The final progress payment under the contract, which is the 6th Progress Payment for Site Clean/Completion for $30,227.38 has not been made by the plaintiffs. The other five progress payments have been paid.
The defendant concedes that he has not accrued a contractual right to payment for works performed after he received the 5th progress payment. The contract provides for the payment of each progress payment at the completion of the works (an entire obligation), and there is no doubt that the works encompassed in the 6th progress payment, namely Site Clean/Completion have not been completed by the defendant (see Mann v Paterson Constructions Pty Ltd [2019] HCA 32 ("Mann") at [173] per Nettle, Gordon and Edelman JJ).
Mr Casey, in his affidavit of 16 January 2024, said that he paid the 5th progress payment on 22 February 2022.
Mr Casey said, in his affidavit of 16 January 2024, that the defendant's "last day on the property was on or around 28 September 2022". There is no evidence to the contrary.
The defendant concedes that he has not completed the building works contracted for. Nevertheless, he claims portion of the 6th progress payment. He quantifies that claim by reference to the whole of the 6th progress payment of $30,227.58 minus the cost of finishing the uncompleted work, which he estimated at $17,526.96, which equals $12,700.62.
A builder who has committed a fundamental breach of the contract, leading to the termination of the contract by the other party, cannot claim restitution on the basis of quantum meruit for work provided for in the contract for which no contractual right to payment had accrued at the time of the termination of the contract. In Matthew Lumbers and Anor v W Cook Builders Pty Ltd [2008] HCA 27, the High Court considered a claim for restitution by a builder who had undertaken building work believing that it was the assignee of the building contract entered into by another corporation with the property owner. In rejecting that claim, Gummow, Hayne, Crennan and Kiefel JJ (Gleeson CJ agreeing) said: 78. The application of a framework for analysis expressed only at the level of abstraction adopted in this case, by reference to "benefit", "expense" and "acceptance" coupled with considerations of unconscionability, creates a serious risk of producing a result that is discordant with accepted principle, thus creating a lack of coherence with other branches of the law. There are two reasons of particular relevance to this case why that is so. They may be identified by reference to two questions which, although expressed separately, will later be seen to intersect in several ways. First, does applying the posited framework for analysis to the facts of the present case extend the availability of recovery beyond the circumstances in which a claim for work and labour done (or money paid) for and at the request of the defendant would be available? Secondly, and no less importantly, how is the result of applying this framework for analysis consistent with the obligations relevant parties undertook by their contractual arrangements? 79. The doing of work, or payment of money, for and at the request of another, are archetypal cases in which it may be said that a person receives a "benefit" at the "expense" of another which the recipient "accepts" and which it would be unconscionable for the recipient to retain without payment. And as is well apparent from this Court's decision in Steele v Tardiani, an essential step in considering a claim in quantum meruit (or money paid) is to ask whether and how that claim fits with any particular contract the parties have made. It is essential to consider how the claim fits with contracts the parties have made because, as Lord Goff of Chieveley rightly warned in Pan Ocean Shipping Co Ltd v Creditcorp Ltd, "serious difficulties arise if the law seeks to expand the law of restitution to redistribute risks for which provision has been made under an applicable contract". In a similar vein, in the Comments upon s29 of the proposed Restatement, (3d), "Restitution and Unjust Enrichment", the Reporter says: "Even if restitution is the claimant's only recourse, a claim under this Section will be denied where the imposition of a liability in restitution would overturn an existing allocation of risk or limitation of liability previously established by contract."
In Mann, Kiefel CJ, Bell and Keane JJ said at [30]: To allow a restitutionary claim for quantum meruit in respect of work done before termination, but in respect of which a right to payment has not yet accrued, on the basis of a total failure of consideration is to apply the rescission fallacy under another guise because it treats the contract as if it were unenforceable as having been avoided ab initio. If it be accepted that the better course is now to acknowledge that to allow an unconditional entitlement to payments for stages of work completed by a builder to be divested at its election in order to clear the way for the recovery of a reasonable sum for that work is so clearly inconsistent with the principle stated in McDonald that it should no longer be maintained, then the law should not allow a right of election on the part of the builder to claim a reasonable payment for work done under the contract in respect of which an unconditional entitlement to payment has not yet accrued. To recognise such rights would necessarily introduce a degree of novelty for no reason other than to preserve the vestigial operation of what is, ex hypothesi, now recognised as a fallacy. In addition, to recognise such rights would give rise to complex questions of proof and evaluation necessitated by the multi-partite analysis required as a result. It is no part of the duty of the courts to complicate litigation in this way for the parties.
The effect of these decisions is that the defendant, who is in fundamental breach of the contract, is not entitled to claim restitution on the basis of quantum meruit for building works performed which are the subject matter of the contract and for which a contractual right to payment has not accrued to him.
If I am wrong about that, and the defendant is entitled to claim in restitution for the 6th progress payment, the difficulty becomes the failure, in the defendant's case, to identify any work done by him and attributable to the categories of work covered by the 6th progress payment. There is no evidence of Site Clean/Completion works being undertaken by or on behalf of the defendant between 22 February 2022, when the 5th progress payment was paid, and 28 September 2022, when the defendant abandoned the property, or subsequently.
I reject the defendant's method of quantifying the payment claimed by him, set out above at [153]. No proper factual basis has been provided for the figure of $17,526.96. No attempt has been made to prove that the defendant has actually performed $12,700.62 worth of work in the nature of Site clean/Completion works on the property (see Paraiso v CBS Build Pty Ltd [2020] NSWSC 190 at [43]).
I am not able to find, on the balance of probabilities, that any work referable to the 6th progress payment, was performed by the defendant.

The work done under the "variations"

For the reasons set out above at [148] to[159], the extent of the claim for restitution on the basis of quantum meruit is confined to the unpaid portion of the work set out in Variation 3, which is $7,065.80.
In order to succeed in a claim for restitution for the unpaid portion of the price stated by the defendant for Variation 3, the defendant would have to establish that the work in question has been performed and not otherwise charged for and that the price claimed is a reasonable price. The defendant has not adduced any evidence as to either of these things. No basis has been established for a claim for restitution in respect of the work listed in Variation 3.

Estoppel

The defendant pleaded in his Amended Defence, in effect, that the plaintiffs were estopped from opposing his claim for the variations in reliance upon clause 3.3 of the contract because they accepted and paid Variations 1 and 2 without complaining of the failure to comply with the contract and the Act. This argument was not developed, and there is no need to consider it. The circumstances of Variation 3 were different from the circumstances of Variations 1 and 2 in that the plaintiffs did not, at any time, agree to pay the price asked for in Variation 3.

The claim for the payment to First Choice Electrical and Maintenance

The defendant, in his affidavit of 22 December 2023, in summary, says that the plaintiffs arranged for work to be performed by First Choice Electrical without his approval. First Choice Electrical and Maintenance then sent the defendant a quote and subsequently sent him invoices for the work. This process went from 8 December 2021 to August 2022. The defendant paid $21,645.98 to First Choice Electrical and Maintenance which, he said, was in addition to the $19,800 inclusive of GST allowed for under the contract.
In his affidavit of 22 December 2023, the defendant says "I reluctantly paid on the basis that I was to recover from the Caseys for this work".
There is no evidence that the plaintiffs agreed to repay Mr Retford for the payments he made to First Choice Electrical and Maintenance, either before or after he made the payment.
The defendant says that the price of the works done by First Choice Electrical and Maintenance was in excess of the amount he allowed for electrical works under the contract. I note that the contract does not say that a figure of $19,800 inclusive of GST is to be attributed to electrical works. No specific figure is allocated to those works, standing alone, in the contract, though I note that "Electrical" is one item in the 4th progress payment of $120,910.25 (together with "Plumbing" and "Interior Linings").
The defendant has not specified whether any of the works performed by First Choice Electrical and Maintenance were works which came within the ambit of the building works under the contract.
Assuming that all of the works undertaken by First Choice Electrical and Maintenance were not provided for in the contract, then the performance of them constituted an undocumented, and therefore informal, variation of the contract.
As the evidence stands, however, the defendant has not proven that there was a variation because there is no evidence that the plaintiffs agreed to the price of the works. It may be that the plaintiffs believed that the works fell within the ambit of the existing contract. I note that Mr Casey, in his affidavit of 16 May 2024 says, in response to the paragraph in Mr Retford's affidavit relating to this part of Mr Retford's cross claim: 24. In response to paragraph 50: (a) Electrical Work was included in the Contract with an allowance. (b) Hayden's email dated 9 December 2021 was the first time he advised us of the allowance he had allocated for electrical work.
There is no evidence of the plaintiffs agreeing to repay the defendant for money paid by him to First Choice Electrical and Maintenance. There is no evidence that the plaintiffs authorised the defendant to pay any account on their behalf.
The defendant has no claim in restitution for money paid to First Choice Electrical and Maintenance.

Summary, conclusion and orders

The plaintiffs have not succeeded in their claim for restitution of payments made by them to suppliers for items for their house.
The plaintiffs have partially succeeded in their claims for the rectification of defects and the completion of incomplete works. The sum awarded will be $117,566.20.
The defendant has not succeeded in his claim under the contract for the unpaid portion of Variation 3.
Neither has the defendant succeeded in his claim for restitution on the basis of quantum meruit in relation to the unpaid portion of Variation 3. The plaintiffs have conceded liability in the sum of $814 for Variation 6.
The defendant concedes that he is not entitled to the payment of the 6th progress payment under the contract. I have determined that he has not established at law or on the evidence on the balance of probabilities that he is entitled to any part of it by way of restitution on the basis of quantum meruit.
The defendant's claim for the restitution of money paid to First Choice Electrical and Maintenance is also unsuccessful.
The following orders will issue: 1. Judgment for the plaintiffs in the sum of $117,566.20. 2. Judgment for the defendant on the cross-claim in the sum of $814.
I will hear the parties as to interest and costs.

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 February 2025

Casey v Retford

At a glance

Court

Decision date

Source

Judgment (45 paragraphs)

Parties

Cases Cited (32)