Catapult Constructions Pty Ltd v Denison No 2

(3) Install waterproofing (tanking) to the internal face of the footing and retaining walls to the full height of the unexposed surface of the retaining walls.

(4) Install subsoil AG drainage behind the full length of retaining walls at the base of the excavation discharging at external ground level of the northern end of the western retaining wall and south-eastern corner of southern retaining wall, with connection to stormwater system in accordance with Clause 3.1.2.4 of the NCC.

(5) Install a compliant Kordon termite protection system at the granny flat level.

(6) Rectify all defects in the balcony balustrade to a workmanlike standard and in compliance with the NCC or BCA as appropriate.

(7) Back-fill behind all retaining walls and seal the external ground surface at the western wall as shown on the NiTmA Drawing.

(8) Install underfloor structural supports for the existing timber framed residence which comply with Clause P21.1 of the NCC.

(9) Clean up and remove all unused excavated material.

(10) Rectify all damage to the internal finishes caused by water damage in a proper and workmanlike manner including, replacing water damaged plasterboard and ceiling linings, replacing damage to internal trims and kitchen and laundry joinery and repaint all damaged painted surfaces and remove all debris and final clean.

As to the performance of the Rectification Work: (11) The Appellant is to pay for all costs associated with obtaining any relevant approval/s for the rectification work.

(12) The Respondent is to provide sufficient and appropriate access to the site to enable the Appellant to perform the Rectification Work.

(13) Before commencing work on site the Appellant is to provide copies of: (a) certificates of currency for insurance for: (i) Contract Works Insurance (ii) Public Liability Insurance (iii) Workers Compensation Insurance, and (b) Building and Trade licences for the Appellant and all subcontractors and trades undertaking the Rectification Work.

(14) The Rectification Work, the subject of subparagraphs 1 to 10, is to be inspected by Mark Brentnall Pty Ltd (certifier) at such times and in such manner as is necessary for the certifier to confirm in writing at the conclusion of the work that all work has been done in accordance with subparagraphs 1 to 10.

(15) The Appellant is to provide all certificates of compliance relating to the works performed under the contract and under this Order, required by the certifier to enable the certifier to confirm conformance of the work with the development approvals and other requirements applicable to that work and to issue an Occupancy Certificate.

(16) The costs of the certifier are to be paid by the Respondent.

(17) The performance of the Rectification Work is to commence within 30 days of the date of these Orders and shall be completed within 90 days of these Orders, subject to any agreement between the Appellant and the Respondent as to the amendment of the dates for either commencement or completion. Non-Compliance and Renewal of Proceedings

(18) Pursuant to Schedule 4 Clause 8 of the Civil and Administrative Tribunal Act, 2013 the Respondent has leave to renew the proceedings if these orders are not complied with by the Appellant.

2. As to costs of the proceedings HB 15/52872 and HB 15/53181; and of AP 17/46569.

(1) The Appellant is to file and serve submissions within 28 days of these Orders.

(2) The Respondent is to file and serve any submissions in addition to those dated 18 July 2018 within a further period of 21 days.

(3) The Appeal Panel will make Orders as to costs on the papers.

(1) Either party may make submissions as to any outstanding Order including any order as to the transfer of funds held in an account under an order of the Tribunal. Catchwords: APPEAL--Home Building Act - s 48O, terms of order to rectify" Legislation Cited: Home Building Act 1989 Category: Costs Parties: Catapult Constructions Pty Ltd (Appellant) Julia Anne Denison (Respondent) Representation: On the papers: File Number(s): AP 17/46569 Publication restriction: Unrestricted Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 03 October 2017 Before: G Meadows, Senior Member File Number(s): HB 15/52872 and HB 15/53181

Introduction

1. On 28 June 2018 the Appeal Panel made orders in this internal appeal under s 80(2) (b) of the Civil and Administrative Tribunal Act 2013 ('the NCAT Act'): 1. Appeal allowed in part. 2. Costs of the appeal reserved. 3. Within 28 days of the date of the decision, each party to file and serve a proposed scope of works; proposed work order; and any written submissions in regards to the proposed work order to reflect the findings of the Appeal Panel in these proceedings. 4. The submissions under Order 3 are to also address; 1. The orders to be made as to the orders of the Tribunal which have been stayed, and 2. Whether the Appeal Panel should proceed to make final orders, including orders as to any application and submissions as to costs, without conducting a further hearing.
2. The paragraph references in the decision are to the 28 June 2018 decision. Both decisions need to be read together.
3. Both parties filed submissions on 19 July 2018. The Respondent's submissions focussed upon the matters identified in Order 3 and in relation to costs generally. They did not however address the issue as to orders which had been stayed.

Submissions

1. The Respondent's submissions included a number of amendments which might be made to the proposed work order such that it more accurately reflects the contractual obligations of the Appellant. These issues are addressed at paragraphs 23 to 32 below.
2. The Appellant took a quite different approach and seems to wish to re-agitate the matters already determined and submits that Orders 1, 2, 5 and 6 made by the Tribunal should be set aside.
3. The issues which the Appellant seeks to re-agitate involve the primary grounds of appeal concerning the issue of whether the Appellant was in breach of the contract and the statutory warranties under the Home Building Act 1989 (the Act), which the Appeal Panel summarised in [6] as being: 6. That the Tribunal erred in law in determining the claim and making the Orders under section 48O(1) of the Act without proof by the homeowner as to, and the Tribunal having made findings as to: (i) the existence, nature and extent of any defect or defects; (ii) the scope and cost of any remedial works reasonably necessary to rectify the defect or defects, and (iii) the basis of liability of the builder for a breach of an obligation under the Act or the contract.
4. The Appeal Panel concluded that the Tribunal was correct to proceed on the basis that there were defects in the building of the masonry pier supports, and further concluded at [29] to [33], in relation to that work, that the Appellant was in breach of statutory warranties. The Appeal Panel also concluded that the Tribunal was correct to proceed on the basis that there were defects in the installation of the waterproofing, or that the waterproofing had not been installed, and further concluded at [36] to [38] that the Appellant was in breach of statutory warranties in this respect.
5. The Appeal Panel at [40] dismissed the Appeal on the basis of the primary grounds of appeal.
6. The Appellant's submissions appear to involve a refinement of the case as pursued by the Appellant in support of the primary grounds of appeal in the first round of the appeal.
7. That refinement is that notwithstanding the conclusions as to the liability of the builder by the Appeal Panel at [33] in relation to collapse of the supports as built, and at [38 and 39] in relation to the abundant water penetration through a wall, there can be no determination of the work required to rectify because there was no direct evidence of the precise nature of the cause of the collapse and the significant water entry into the habitable rooms.
8. This approach has more than a touch of unreality about it. As to the collapse of the supports it might be said, simplistically, that 'the supports collapsed because of the way the builder built them' and that the Appellant was accordingly in breach as explained at [34] to [39]. The precise details of the failure to comply would be difficult, if not impossible to establish when the structure concerned has collapsed and the evidence of what was built has been destroyed.
9. The course of the execution of construction work is not akin to an orchestral performance. The definition of the manner in which construction work is to be carried out is frequently in abbreviated terms, however it involves a range of imprecise, but clearly understandable, obligations of skill, care and common-sense. It is realistically expected that a builder when carrying out any work will apply the level of skill and care necessary to ensure compliance with the particular regulatory performance standard. The ingredients of care and common-sense are not easily defined as a series of precise activities. The suggestion that they could be so defined simply misconceives the nature of construction work and presumes that it, in effect, could be set to music.
10. An element of the required skill and care is the occasional necessity to obtain professional advice, particularly when the actual extent or method of work required can only be discerned progressively.
11. The first relevant obligation upon the Appellant under the contract was to install masonry pier supports for the existing timber framed building. The coincidental legal obligation was to comply with the relevant performance provisions of the NCC, or the BCA, as to the stability of the product of that work.
12. The description in the contract, of the work required by way of propping of the existing timber residence was in extremely abbreviated terms. There does not appear to be identification of how many pier supports were needed, or precisely where they were to be located. It seems the supports were to be provided where necessary. Necessity is determined in the course of the work.
13. The Appellant would have been required to apply skill and care in the assessment of where they should be provided and in the construction of the supports to ensure that they complied with the performance requirements. Whatever was built clearly did not comply, and the piers collapsed. The Appellant was thereby in breach. The Appeal Panel does not accept that there is any practical necessity for any greater definition of the work required by way of rectification than was required under the contract.
14. A similarly straightforward approach could be taken in relation to the water penetration. The Tribunal at first instance recognised the fact, and extent, of water penetration. The Tribunal at [123] stated: "…It is abundantly plain, and as conceded by the building consultants for both parties, that there has been a major failure in the building works in relation to waterproofing of the granny flat. "
15. There was also evidence of an agreement, see [15], between the experts as to the fact of "absent or defective waterproofing".
16. The incontestable conclusion must be, as the Tribunal found, that whatever waterproofing the Appellant installed, or failed to install, has caused the water penetration to occur. It is quite frankly fanciful to expect a homeowner to establish the precise details of the failure. In many respects it is unnecessary to do so. At [19] the Appeal Panel referred to the difficulty of identifying the complete extent of work required when the first element of the rectification work is invasive inspections or demolition.
17. There was no uncertainty as to the work which the Appellant was to perform under the contract. There was no necessity to specify the manner in which the work was to be performed. The work required was not complicated, or technically difficult to understand. As to waterproofing the simple requirement was that the work performed be effective in preventing water penetration into the building. The Appeal Panel does not accept that there needs to be any substantially greater specificity within the rectification order than was required under the contract. The definition of the rectification work required will however have to reflect that that is what is being undertaken is remedial.
18. The submission that there can be no definition of the work required to ensure compliance fails to recognise that the contractual documentation along with the regulated performance standards identifies as precisely as is necessary what was required. It is the failure to execute the work as identified in the relevant documentation in accordance with the contract, and in accordance with reasonable standards of materials and workmanship and the regulatory performance standards that constitutes the breach.
19. It follows that the contractual documentation forms a sound basis for the definition of the rectification work to be undertaken. This is the approach which the Appeal Panel adopted. The Appeal Panel rejects the submissions of the Appellant that there is no evidence before the Tribunal and the Appeal Panel which can be employed in the course of defining the rectification work to be undertaken.
20. The Respondent has included submissions as to necessary refinements of the terms of the Appeal Panel's proposed work order pursuant to section 48O(1)(c) of the Home Building Act 1989. These are considered in sequence with limited commentary:

Additional Contractual Drawing

1. The NiTma Drawing only applied to the western wall. The southern wall was addressed in ADC Design Group S3A and S2C.

AG Drainage

1. The precise location and separate discharge points for the drainage should be identified and compliance with Clause 3.1.2.4 of the NCC noted.

Termite protection.

1. The Specified termite protection should be identified.

Detail Drawings Waterproof membrane and backfilling

1. Both drawings with which compliance is required should be included. The reference to sealing of backfill to the western wall seems to misunderstand what is required at the external ground surface.

Water damage

1. Rectification of internal water damage should be included.

Proof of Insurance - Licences

1. Policies for insurance and licences should be provided.

Certifier Identified

1. Mark Brentnall Pty Ltd included.

Compliance Certificates

1. Appellant should provide certificates of compliance as per development approvals.

Commencement and Completion Dates

1. From date of Order 30 days to commence and 90 days to completion. This aspect ought to be open to the possibility of the parties reasonably agreeing to alter the dates included in the Order.

Consideration

1. The Appeal Panel accepts that the suggested amendments are all required to define the standard required in the course of the performance of the rectification work. Subject only to the parties being able to reach agreement as to the dates for commencement and completion, the proposed work order will be amended accordingly.
2. The Appeal Panel notes that the Respondent did not address the issue concerning orders which have been stayed. This will be addressed in the Orders. The Appeal Panel understands that an order for payment by the Respondent to the Appellant of an amount under the contract has been made for the amount to be held in an account. It seems to the Appeal Panel that orders should be made as to how the funds should be dispersed in the future.
3. Orders as to costs are required for both matters and the proceedings before the Tribunal and the Appeal.

Orders

1. The Appellant shall execute the following Rectification Works to the residence of the Respondent generally in accordance with: 1. NiTma Project 1658S drawing 3 of 4 dated 13 October 2014 (the NiTmA Drawing), and 2. ADC Design Group Drawings S3A (FB4 Detail) and S2C for the Southern Wall (the ADC Drawings): As to the scope of work: (The Rectification Works) 1. Excavate behind the western and southern retaining walls to the base of the concrete footings. 2. Install compliant temporary shoring in the course of excavation and execution of work. 3. Install waterproofing (tanking) to the internal face of the footing and retaining walls to the full height of the unexposed surface of the retaining walls. 4. Install subsoil AG drainage behind the full length of retaining walls at the base of the excavation discharging at external ground level of the northern end of the western retaining wall and south-eastern corner of southern retaining wall, with connection to stormwater system in accordance with Clause 3.1.2.4 of the NCC. 5. Install a compliant Kordon termite protection system at the granny flat level. 6. Rectify all defects in the balcony balustrade to a workmanlike standard and in compliance with the NCC or BCA as appropriate. 7. Back-fill behind all retaining walls and seal the external ground surface at the western wall as shown on the NiTmA Drawing. 8. Install underfloor structural supports for the existing timber framed residence which comply with Clause P21.1 of the NCC. 9. Clean up and remove all unused excavated material. 10. Rectify all damage to the internal finishes caused by water damage in a proper and workmanlike manner including, replacing water damaged plasterboard and ceiling linings, replacing damage to internal trims and kitchen and laundry joinery and repaint all damaged painted surfaces and remove all debris and final clean. As to the performance of the Rectification Work: 1. The Appellant is to pay for all costs associated with obtaining any relevant approval/s for the rectification work. 2. The Respondent is to provide sufficient and appropriate access to the site to enable the Appellant to perform the Rectification Work. 3. Before commencing work on site the Appellant is to provide copies of: 1. certificates of currency for insurance for: 1. (i) Contract Works Insurance 2. (ii) Public Liability Insurance 3. Workers Compensation Insurance, and 1. Building and Trade licences for the Appellant and all subcontractors and trades undertaking the Rectification Work. 1. The Rectification Work, the subject of subparagraphs 1 to 10, is to be inspected by Mark Brentnall Pty Ltd (certifier) at such times and in such manner as is necessary for the certifier to confirm in writing at the conclusion of the work that all work has been done in accordance with subparagraphs 1 to 10. 2. The Appellant is to provide all certificates of compliance relating to the works performed under the contract and under this Order, required by the certifier to enable the certifier to confirm conformance of the work with the development approvals and other requirements applicable to that work and to issue an Occupancy Certificate. 3. The costs of the certifier are to be paid by the Respondent. 4. The performance of the Rectification Work is to commence within 30 days of the date of these Orders and shall be completed within 90 days of these Orders, subject to any agreement between the Appellant and the Respondent as to the amendment of the dates for either commencement or completion. Non-Compliance and Renewal of Proceedings 1. Pursuant to Schedule 4 Clause 8 of the Civil and Administrative Tribunal Act, 2013 the Respondent has leave to renew the proceedings if these orders are not complied with by the Appellant.
2. As to costs of the proceedings HB 15/52872 and HB 15/53181; and of AP 17/46569. 1. The Appellant is to file and serve submissions within 28 days of these Orders. 2. The Respondent is to file and serve any submissions in addition to those dated 18 July 2018 within a further period of 21 days. 3. The Appeal Panel will make Orders as to costs on the papers.
3. As to Outstanding Orders. 1. Either party may make submissions as to any outstanding Order including any order as to the transfer of funds held in an account under an order of the Tribunal.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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: 01 August 2018