Mr Rutland Cheung, solicitor, appeared for and with the owner

Building contract - repudiation - acceptance - breach of statutory warranties - remedy - damages - quantum meruit -restitution

Home Building Act 1989 NSW ('the Act');

Consumer Trader and Tenancy Tribunal Act NSW 2001 ('the Tribunal Act')

Legal Profession Act 2004

Robinson v Harman [1848] EngR 135; (1848) 1 Ex 850 at 855;

Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81; (1986) 161 CLR 653 at 667;

Hadley v Baxendale [1854] EngR 296; (1854) 9 Exch 341 at 354; 156 ER 145 at 151;

Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613;

Brooks Robinson Pty Ltd v Rothfield [1951] VicLawRp 58; [1951] VLR 405 at 409;

Pavey v Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221; and

Gino D'Alessandro Constructions Pty Ltd v Powis [1987] 2 Qd R 40

1. On the application, the Tribunal orders Cai Hua Li t/as Lee Hua Properties Company to pay George Chang the sum of $9,000.00.

2. On the cross application, the Tribunal orders George Chang to pay Cai Hua Li t/as Lee Hua Properties Company the sum of $13,100.00.

3. The Tribunal directs that the sum ordered to be paid by Cai Hua Li t/as Lee Hua Properties Company to George Chang pursuant to order 1, be set off against the sum ordered to be paid by George Chang to Cai Hua Li t/as Lee Hua Properties Company pursuant to order 2, with the balance of $4,100.00 to be paid by George Chang to Cai Hua Li t/as Lee Hua Properties Company on or before 30 June 2009; and

4. The builder is to pay the owner's costs, as agreed or assessed in accordance with Division 11 of Part 3.2, Legal Profession Act 2004.

1. Both parties filed evidence in accordance with directions made on 8 July 2008 and 7 October 2008. Leave was granted to the parties to be legally represented. The owner seeks an order that the builder pay him $9,000.00. The builder seeks an order that the owner pay him $31,590.00.

2. On 15 October 2007, the parties entered into a contract whereby the builder would carry out renovations including painting to a residential dwelling located at Mayfield Avenue, Pymble NSW ('the October contract'). The contract was not in standard form but was written in the language of Mandarin, being a language common to both parties. For the purpose of these proceedings, the contract was translated into English. The terms of the contract were particularised under 15 sub-headings. Each sub-heading specified the monetary sum allocated to the scope of works set out under that sub-heading. The sum total of the sub-headings results in a contract price of $85,888.00. There were no plans of the works to be undertaken.

3. Work commenced on or about the day the contract was made. The builder requested a deposit of $20,000.00 which the owner paid. Following a dispute between the parties with respect to painting, work ceased on or about 6 November 2007, when, according to the builder, the owner asked the builder to '... stop work on the basis that the Works had not been carried out in proper and workmanlike manner' (see Defence to owner's Points of Claim at [4]). The parties differ as to the circumstances leading to the termination of the contract.

4. From October 2007 to January 2008, a stalemate existed. In January 2008, following a complaint made by the owner to the Office of Fair Trading ('OFT'), an inspector of the OFT attended the site, together with the owner and the builder. An inspection took place which resulted in a Complaint Inspection Advice being issued by the inspector to the builder. The document was tendered into evidence by the owner and on it, the following words appeared: 'Painting not completed (preparation work to be done before painting) ... the work is to be completed by 19 February 2008.' The builder attended to the rectification work; however, the work was not done to the satisfaction of the owner. On 2 April 2008, the inspector again inspected the site in the presence of the owner and observed '... some section (sic) of the work is not completed to standard ...'

5. The owner's case is that the builder's painting work was defective and required rectification. (The Tribunal notes that all rectification work has now been carried out by a third party.) Although the owner complains of other defects, he seeks damages only in relation to the painting. In support if his claim, the owner tendered a report by Paint Solutions & Associates dated 11 June 2008. The report is prepared by Mr Brian Tompson who carried out an inspection on 7 June 2008. Mr Tompson's qualifications as an expert were annexed in the form of Curriculum Vitae. The report made specific findings of defective work in 23 areas of the dwelling. In particular, the following are typical of the criticisms made: 'poor opacity overall ... paint over-runs ... multiple missed areas ... joints ... not filled ... poor cut lines ... inadequate preparation ... uneven colour application where brush work has met roller-painted work ... colour variations noticeable ... unfilled holes in frames.' In summary, the report states that: 'items identified in the report do not meet the requirements of either "Guide to Standards & Tolerances, 2007", AS.2311 nor accepted industry best practice and need to be re-visited; re-prepared; sealed or undercoated as required and receive one full finish coat.' The report estimates the cost to rectify the work at $9,000.00.

6. Whilst the builder disputed the findings of Mr Tompson, he did not file an expert report or expert evidence in any form. Furthermore, on 6 November 2008, the then solicitor's for the builder, Deacons, wrote to the owner's solicitor stating that '... our client is not disputing the items identified as defects but objects to the quantum (cost of rectification) estimated by Paint Solutions and Associates of $9,000.00.' When this letter was drawn to the builder's attention, he repudiated the advice contained therein and claimed the defects were caused by the owner, to which the owner replied that such allegations had never been raised before the hearing, either in the builder's Defence or elsewhere. The builder offered no evidence on quantum.

7. In his Points of Claim, the builder's claim was stated as $30,605.12, being made up of:

d) National Apollo Bathrooms Pty Ltd $3,550.00; and

8. The builder stated that the sum claimed exceeds the $20,000.00 paid by the owner at the commencement of the works.

9. It is common ground that at all material times the builder held a licence under the Act (No: 55250C), entitling him to contract to do building work.

10. There is no expert evidence as to whether any work (other than painting), set out in the contract was in fact carried out. However, it is common ground that the only work carried out by the builder after November 2007, was the painting work which became the subject of the rectification order.

11. Oral evidence was taken from the builder with respect to his claim against the owner. The 15 sub-headings contained in the contract were adopted as a convenient format for this evidence.

The builder claims $550 being one day's labour for two workers to remove the kitchen cupboards. No material had been purchased at the time. The owner replies that the builder removed only two cupboard doors.

The builder claims $3,550.00 for materials (being frameless shower screens and one mirror), ordered from National Apollo. The materials remain in the possession of National Apollo, as the builder has not yet paid for them. He tendered a letter dated 31 March 2008, in which National Apollo requests payment. The builder gave evidence to the effect that as each shower screen is a unique size, being tailored to the specific job, they have no practical use elsewhere. The owner's evidence is that he has since completed the works and has no use for further materials. Furthermore, the owner submits that he has gained no benefit and accordingly the builder's claim is not a proper claim in restitution.

The builder states that the contract provided for the removal of old railings (not carried out), to be replaced with new railings to be painted at the manufacturer's factory. He tendered an invoice issued by Star Welding in the sum of $3,850.00 for which he is liable. He stated that as the railings have been manufactured to specifications unique to the subject site and, as with the shower screens, they have no practical use elsewhere. The owner reiterates his submissions made in 2. above.

The builder's claim of $600.00 for this item is conceded by the owner.

7. 8. & 9. Install new bar; Clean Marbles & Paint and Lay Ceramic tiles

This part of the contract is the single largest item ($22,000.00). The builder states that he completed all seven items of work listed under the sub-heading. If the contract is enforceable, and as the painting is complete (if defective), the builder is entitled to the unpaid portion of the contract price for this item. Having received payment of $20,000.00, it is open to the Tribunal to find that the builder is entitled to the balance of $2,000.00. It is convenient here to note the owner's submission that as the builder is in breach of s7 and s94 (1) of the Act, he is not entitled to recover on the contract by virtue of s10. Detailed consideration will be given to this issue below. It is also convenient here to note that the owner does not seek to recover the $20,000.00 paid to the builder.

The contract provided that a new garage door was to be supplied and installed. It is common ground that the builder removed the existing door and carried out some work in preparation for the installation of the new door. The builder claims that such work was nearing completion when the contract was terminated. He gave evidence that he allowed $2,000.00 for the supply of the door and tendered quotations by Gliderol in the sum of $2,311.10 (not including installation) and by Door Man Automation Group in the sum of $1,980.00 (not including installation). The contract price for this item was $7,800.00. Accordingly, the builder submits he is entitled to his labour for the work done. The owner concedes that the builder is entitled to recover labour costs on a restitution basis.

The builder states that he carried out $200.00 worth of work on this item, the contract price of which was $1,800.00. He does not claim the balance. The owner disputes that any work was done in relation to this item and notes that the claim was not made in the letter of demand dated 5 November 2007.

14. & 15. Gas pipes in kitchen and Mend carport roof etc

12. The builder makes the following additional claims.

The builder claims that he expended labour to the value of $500.00 when plugging holes left exposed following the removal of an electric ceiling fan by an electrician engaged by the owner. The owner replied that this was part of the painting contract.

The builder claims $1,200.00 for labour and materials expended in the preparation for the painting of the exterior of the house. In particular, the builder says that he painted, sanded and erected scaffolding. The owner denies any such work was agreed to or in fact carried out. It is noted that no reference is made in the contract to painting the exterior of the house; indeed such work is expressly excluded. Furthermore, there is no reference in the documents filed by the builder including the Points of Claim, or in the owner's expert report, and no invoice or other evidence to support the claim. It is also noted that when in February 2008, the builder attempted to remedy the omissions in the October contract, by drafting a new standard form contract (which, incidentally, the owner refused to sign - 'the February contract'), painting of the exterior of the dwelling was again expressly excluded. (See page 7 of the February contract. See also the attachment behind the application form on the builder's file where Part A provides that 'painting of external of dwelling is not included', however in Part B, 'hire and erection of scaffolding for preparation of external of dwelling - $1,200.00' is included.) No evidence as to hire costs has been presented.

The builder claims the owner requested this additional work in February 2008. Labour in the sum of $200.00 is claimed. The owner agrees the builder did the work, but only by way of rectification. The owner states that the builder damaged paint on the railing when using a ladder as a form of staging whilst painting the ceiling.

Having had the requirement of home owners warranty insurance drawn to his attention by the OFT inspector, the builder obtained a Certificate of Insurance at a cost of $1,290.00 and supplied it to the owner. The owner disputes the claim for payment and states that as the certificate was issued after the work was completed and the contract terminated, it is of no value. The certificate was returned to the builder at hearing.

The builder claims a 'cancellation fee' which amounts to claim for loss of profit. The loss claimed is $9,000.00. No evidence has been filed to support the claim.

13. The owner makes the following submissions in relation to the builder's entitlement to recover monies under the contract. The owner points to the form of the contact and submits that the contract is in breach of s7 of the Act, as the name of the builder's business appears on the contract when the licence is held by the builder in person (s7(2)(a)); there is no licence number on the contract (s7(2)(b)); there is no sufficient description (s7(2)(c)); there is no reference to the statutory warranties (s7(2)(f)); and no statement (s7(2)(g)). Furthermore, the owner submits that the contract is in breach of the Regulation, specifically cl12 and cl13 (1), with respect to conditions not included and a checklist. Accordingly, submits the owner, s10 renders the contract unenforceable. The sections are set out below.

(1) A contract must be in writing and be dated and signed by or on behalf of each of the parties to it.

(a) the names of the parties, including the name of the holder of the contractor licence shown on the contractor licence, and

(c) a sufficient description of the work to which the contract relates, and

(f) any statutory warranties applicable to the work, and

(g) in the case of a contract to do residential building work - a conspicuous statement setting out the cooling-off period that applies to the contract because of section 7BA.

(3) The contract must comply with any requirements of the regulations.

(4) If the contract price is known, it must be stated in a prominent position on the first page of the contract.

(5) If the contract price is not known or may be varied under the contract, the contract must contain a warning to that effect and an explanation of the effect of the provision allowing variation of the price. The warning and explanation must be placed next to the price if the price is known.

(6) A contract must not include in the contract the name of any person other than the holder of a contractor licence as, or so it may reasonably be mistaken to be, the holder's name.

(7) This section does not prevent the holder of a contractor licence with a business name registered under the Business Names Act 2002 from also referring in such a contract to the business name.

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.

(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.

14. The owner relies in particular upon the provisions of s10 (as underlined above). The owner states that although the contract is in writing it '...does not have sufficient description of the work to which it relates...' and is '...in contravention of...' the other provisions, namely, of s7 and of s94 (1). Section 94(1) is set out below. So too s92, and for convenience, the relevant Regulation.

(1) A person must not do residential building work under a contract unless:

(a) a contract of insurance that complies with this Act is in force in relation to that work in the name of the person who contracted to do the work, and

(b) a certificate of insurance evidencing the contract of insurance, in a form prescribed by the regulations, has been provided to the other party (or one of the other parties) to the contract.

Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case.

(2) Except as provided by section 94 (1A), a person must not demand or receive a payment under a contract for residential building work (whether as a deposit or other payment and whether or not work under the contract has commenced) from any other party to the contract unless:

(a) a contract of insurance that complies with this Act is in force in relation to that work in the name of the person who contracted to do the work, and

(b) a certificate of insurance evidencing the contract of insurance, in a form prescribed by the regulations, has been provided to the other party (or one of the other parties) to the contract.

Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case.

(3) This section does not apply if the contract price does not exceed $5,000 or (if the contract price is not known) the reasonable market cost of the labour and materials involved does not exceed $5,000.

(4) If the same parties enter into two or more contracts to carry out work in stages, the contract price for the purposes of subsection (3) is taken to be the sum of the contract prices under each of the contracts.

(5) The regulations may prescribe another amount for the purposes of subsection (3) and an amount so prescribed is to apply in the place of the amount referred to in that subsection.

(6) To avoid doubt, this section extends to residential building work that is also owner-builder work.

94 Effect of failure to insure residential building work

(1) If a contract of insurance required by section 92 is not in force, in the name of the person who contracted to do the work, in relation to any residential building work done under a contract (the uninsured work), the contractor who did the work:

(a) 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, in relation to that work, and

(b) is not entitled to recover money in respect of that work under any other right of action (including a quantum meruit).

(1A) Despite section 92 (2) and subsection (1), if a court or tribunal considers it just and equitable, the contractor, despite the absence of the required contract of insurance, is entitled to recover money in respect of that work on a quantum meruit basis.

(1B) A contractor who applies to a court or tribunal for a remedy under this section, or who is awarded money under this section, is not guilty of an offence under section 92 (2) by virtue only of that fact.

(1C) Without limiting the factors that a court or tribunal may consider in deciding what is just and equitable under subsection (1A):

(a) in relation to any contract - the court or tribunal may have regard to the impact on the resale price of the property if no contract of insurance is provided, and

(b) in relation only to a contract entered into before 30 July 1999 - the court or tribunal is not to be limited by the fact that the required contract of insurance was not obtained until after the date of the contract.

(2) However, the contractor remains liable for damages and subject to any other remedy in respect of any breach of the contract committed by the contractor.

(3) Residential building work that is uninsured work at the time the work is done ceases to be uninsured work for the purposes of this section if the required contract of insurance for the work is subsequently obtained.

(4) If a person commenced residential building work before 30 July 1999 and entered into a contract of insurance that complies with this Act in relation to that work after the contract for the residential building work was entered into, that contract of insurance is, for the purposes of this section or any previous version of this section, taken to have been in force in relation to the residential building work done under the contract for the residential building work whether that work was done before or after the contract of insurance was entered into.

Note. If a contract of insurance is in force in relation to part of the residential building work, this section applies only in relation to the part of the work that is not insured.

Home Building Regulation 2004

Clause 12 Conditions to be included in certain contracts

(1) Pursuant to section 7E of the Act, a contract to do residential building work must include each of the conditions set out in Part 1 of Schedule 2.

Schedule 2 Conditions to be included in certain contracts

Part 1 Contracts to do residential building work

(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 does not apply to a contract of the kind referred to in clause 16 of the Home Building Regulation 2004.

(1) All work done under this contract will comply with:

(a) the Building Code of Australia (to the extent required under the Environmental Planning and Assessment Act 1979, including any regulation or other instrument made under that Act), and

(b) all other relevant codes, standards and specifications that the work is required to comply with under any law, and

(c) the conditions of any relevant development consent or complying development certificate.

(2) Despite subclause (1), this contract may limit the liability of the contractor for a failure to comply with subclause (1) if the failure relates solely to:

(a) a design or specification prepared by or on behalf of the owner (but not by or on behalf of the contractor), or

(b) a design or specification required by the owner, if the contractor has advised the owner in writing that the design or specification contravenes subclause (1).

13 Requirements for contracts for residential building work

(1) A contract between a person and the holder of a contractor licence for residential building work to be done by the holder must include a checklist in the form set out in Schedule 3.

(2) This clause does not apply to a contract of a class referred to in clause 16.

Checklist for owners entering building contracts

Does the contractor hold a current contractor licence?

Does the licence cover the type of work included in the contract?

Is the name and number on the contractor's licence the same as on the contract?

Is the work to be undertaken covered in the contract, drawings or specification?

Does the contract clearly state a contract price or contain a warning that the contract price is not known?

If the contract price may be varied, is there a warning and an explanation about how it may be varied?

Are you aware of the cooling off provisions relating to the contract?

Is the deposit within the legal limit? The limit is 10% for work costing $20,000 or less or 5% for work costing more than $20,000.

Are you aware of who is to obtain any council or other approval for the work?

Do you understand that the contractor must have a policy of home warranty insurance under the Home Building Act 1989 and provide you with a certificate of insurance before receiving any money under the contract (including a deposit) or before doing any work for more than $12,000?

Has the contractor given you a document that explains the operation of the Home Building Act 1989 and the procedures for the resolution of contract and insurance disputes?

Do not sign this contract unless you have read and understand the clauses as well as the notes and explanations contained in this document.

If you have answered "no" to any question in the checklist, you may not be ready to sign the contract.

Both the contractor and the owner should retain an identical signed copy of this contract including the drawings, specifications and other attached documents. Make sure that you initial all attached documents and any amendments or deletions to the contract.

Under the Home Building Act 1989 a signed copy of the contract must be given to the owner within 5 working days after the contract is entered into.

The contractor must provide the owner with a certificate of home warranty insurance (for work over $12,000) before commencement of work and before demanding or receiving any payment.

I/we have been given a copy of the Consumer Building Guide and I/we have read and understand it.

I/we have completed the checklist and answered "Yes" to all items on it.

Where the owner is a company or partnership or the contract is to be signed by an authorised agent of the owner, the capacity of the person signing the contract, e.g. director, must be inserted.

15. The Tribunal finds that the work, the subject of the building claim, is residential building work within the meaning of the Act. Having taken all of the evidence into account, both documentary and oral, the Tribunal is satisfied that certain of the builder's work was defective. The Tribunal accepts the evidence of Mr Tompson which is conclusive and persuasive as to the defects. There is no evidence, other then the subjective and self interested opinion of the builder to the contrary. Accordingly, the Tribunal finds that the builder breached the statutory warranties contained within the Act (s 18B). As a consequence, the owner has suffered a loss for which the builder is liable.

16. The remedy is one of damages. In Robinson v Harman [1848] EngR 135; (1848) 1 Ex 850 at 855, it was said that, 'where a party sustains a loss by reason of a breach of contract he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed'. However, in Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81; (1986) 161 CLR 653 at 667, the High Court found that this general rule is limited to the rule in Hadley v Baxendale [1854] EngR 296; (1854) 9 Exch 341 at 354; 156 ER 145 at 151, that the loss must not be to remote. In Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613, the High Court held that the measure of damages recoverable for a breach of a building contract, is prima facie the difference between the contract price of the work (credit being given for any unpaid portion of the contract price), and the cost of making the work conform to the contract, subject to the qualification that the rectification work necessary to produce conformity to the contract, must be a 'necessary' and 'reasonable' course to adopt.

17. As mentioned above, the builder did not file an expert report or evidence on quantum to dispute the owner's claim. Accordingly, the Tribunal finds the reasonable sum to rectify the defective work is the estimate stated in Mr Tompson's report being $9,000.00.

18. With respect to the builder's claim, the Tribunal finds that the owner repudiated the contract when he withdrew permission to the builder to remain on site and complete the work. At that time, the contract had been partly performed. The builder accepted the owner's repudiation, thus terminating the contract. However, the owner submits restitution is the builder's only remedy and the contract is unenforceable. It is convenient therefore to first consider the basis of a claim in restitution.

19. In Brooks Robinson Pty Ltd v Rothfield [1951] VicLawRp 58; [1951] VLR 405 at 409, the court held that where a contract was unenforceable by application of the Statute of Frauds 1677 (Imp), the builder was nevertheless entitled to reasonable remuneration as a consequence of the owner having repudiated the contract after building work had been partially completed and where the builder accepted such repudiation as the basis for rescinding the contract. In the leading Australian case of Pavey v Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221, Dean J stated:

'The quasi-contractual obligation to pay fair and just compensation for a benefit which has been accepted will only arise in a case where there is no applicable genuine agreement or where such an agreement is frustrated, avoided or unenforceable. In such a case it is the very fact that there is no genuine agreement or that genuine agreement is frustrated, avoided or unenforceable that provides the occasion for (and part of the circumstances giving rise to) the imposition by the law of the obligation to make restitution' (at 256).

20. In Gino D'Alessandro Constructions Pty Ltd v Powis [1987] 2 Qd R 40, a case following Pavey, the court held that partial performance was a basis for restitution where a builder accepted an owner's repudiation of a contract rendered unenforceable by virtue of a statute with a policy objective similar to that of the Statute of Frauds. The court found that the legislative intent was not to exclude a claim in restitution. It follows from all of the above, that the builder is entitled to 'fair and just compensation' for any benefit accepted by the owner. Indeed, the owner concedes as much.

21. However, the builder's case does not rest upon a claim in restitution, but presumes an entitlement to recover damages for breach of contract. Those claims include the railings and shower screens (which were not installed, and from which no benefit has therefore been derived or accepted). The following is an analysis of the relevant provisions.

22. It is common ground that whilst the contract was in writing, signed and dated on the owner's behalf by his mother, it nevertheless suffered from several deficiencies. The owner submits that those deficiencies are such that the builder is not entitled to recover any sum under the contract and has no remedy (other than restitution where he can demonstrate that the owner has received a benefit), as the contract did not comply with the Act, as the form (see s7 and s10 of the Act and cl12 and cl13 (1) of the Regulation). Sections 10 and 94 are provisions dealing with the enforceability or otherwise of contracts. By application of the law to the facts of the matter, the Tribunal finds that s10 (1)(b) is satisfied as the contract is in writing and the work was sufficiently described as the particulars of the work (as set out under the various sub-headings), provided a clear and comprehensive explanation of the work to be done. Moreover, the scope of the work to be carried out was not in any real issue. With respect to the owner's submissions regarding s10 (1)(c), the Tribunal finds that a proper construction of the qualifying words '... that is prescribed for the purpose of this paragraph...', requires that a provision of the Act or Regulation must exist which is to have specific application to paragraph (c). The owner has not identified any such provision. Accordingly, the Tribunal finds that, notwithstanding the various irregularities as to the contract's form, the builder is not disentitled '... to damages or to enforce any other remedy...' Furthermore, with respect to the owner's arguments concerning s94 (1)(a), i.e. uninsured work being a bar to the builder's entitlement '... to damages, or to enforce any other remedy ...', the builder is able to rely upon ss(3), as he subsequently obtained '... the required contract of insurance for the work ...' In such circumstances, there is no bar to recovery by the builder arising from the insurance provisions. In any event, the Tribunal finds that it is 'just and equitable' for the builder to recover his losses (see s94(1A)).

23. Accordingly, the Tribunal finds the owner wrongfully repudiated an enforceable contract entitling the builder to damages for breach.

24. As to the builder's specific claims, the Tribunal finds as follows.

Having taken all of the evidence into account, both documentary and oral, the Tribunal prefers the evidence of the owner and finds that the builder removed only two cupboard doors, for which $100.00 only is allowed.

Having taken all of the evidence into account, both documentary and oral, the Tribunal finds that the builder has made out his claim for damages in the sum of $3,550.00 for materials (being frameless shower screens and one mirror), ordered from National Apollo. The evidence is that the shower screens were manufactured as site specific items in accordance with the contractual terms. The Tribunal accepts the builder's evidence that he is liable to National Apollo in the sum claimed and cannot make practical use of the screens. Accordingly, as there is no reasonable prospect that the builder can mitigate his loss, he is entitled to look to the owner for the whole sum.

Having taken all of the evidence into account, both documentary and oral, the Tribunal finds that the builder has made out his claim for damages in the sum of $3,850.00 for new railings ordered from Star Welding. The evidence is that, like the shower screens, the new railings were manufactured as site specific items in accordance with the contractual terms. The Tribunal accepts the builder's evidence that he is liable to Star Welding in the sum claimed and cannot make practical use of the railings. Accordingly, as there is no reasonable prospect that the builder can mitigate his loss, he is entitled to look to the owner for the whole sum.

The builder's claim of $600.00 for this item is conceded by the owner. Accordingly, the Tribunal finds the sum of $600.00 is due and owing by the owner to the builder.

Having taken all of the evidence into account, both documentary and oral, and having found that the builder was entitled to enforce the contract, the Tribunal finds that the builder has made out his claim for the balance of the contract price for this item, being $2,000.00, as the painting is complete, though defective (the measure of the owner's loss having been determined above).

Having taken all of the evidence into account, both documentary and oral, and having found that the builder was entitled to enforce the contract (and noting in any event, the owner's concession that the builder is entitled to recover labour costs on a restitution basis), the Tribunal finds that the builder has made out his claim for labour. As to quantum, the Tribunal finds, on the best available estimate, that the value of the labour is $2,900.00. This figure is arrived at by taking into account the builder's evidence with respect to the labour content allowed for this item and deducting the cost of the door.

Having taken all of the evidence into account, both documentary and oral, the Tribunal finds there is no evidence, other than the builder's oral evidence at hearing, to support the claim. The Tribunal prefers the owner's evidence that no work was done on this item and notes that the claim was not made in the letter of demand dated 5 November 2007. Accordingly, the claim is dismissed.

Having taken all of the evidence into account, both documentary and oral, the Tribunal finds that the builder carried out a variation at the request of the owner described as plugging holes left exposed following the removal of an electric ceiling fan by an electrician engaged by the owner. The Tribunal is not persuaded by the owner's argument that this work was part of the painting contract. In the circumstances, the Tribunal finds that $100.00 is a reasonable sum.

Having taken all of the evidence into account, both documentary and oral, the Tribunal finds that the painting of the exterior was no part of the contract, was not requested as a variation by the owner and, furthermore, that there is no evidence of the builder having expended any labour or materials in relation to this item.

Having taken all of the evidence into account, both documentary and oral, the Tribunal finds that the builder's claim that the owner requested this additional painting work on the staircase railing has not been made out as, on all of the evidence, the Tribunal is satisfied that the builder merely carried out rectification of damaged paint on the railing cause when the builder used a ladder as a form of staging whilst painting the ceiling. Accordingly, this claim is dismissed.

Whilst the builder satisfied his obligations pursuant to s94(3), he did so after the contract was terminated and in anticipation of a further contract - the February contract - which never eventuated. He cannot later make a claim on the owner for a cost item not contained within the terms of the contract. Accordingly, any monies expended after termination are at his own cost. It follows that the claim for this item is dismissed. In any event, as all work carried out by the builder has been rectified by others, the builder has no further liability to the owner and consequently, insurance policy is of no value to the owner who, following the hearing, returned the certificate to the builder.

Having taken all of the evidence into account, both documentary and oral, the Tribunal finds that the builder's claim for a 'cancellation fee' (being in effect a claim for loss of profit), in the sum of $9,000.00, is not supported by any evidence and is, accordingly, dismissed.

25. The sum total of the claims made out by the builder is therefore $13,100.00, which the Tribunal finds is due and owning by the owner to the builder.

26. At the conclusion of the hearing, the owner's solicitor sought costs. The Tribunal's powers to make a costs order can be found in s 53 Costs, of the Tribunal Act which provides:

(1) Subject to this section and the regulations, the parties in any proceedings are to pay their own costs.

(2) The Tribunal may, in accordance with the regulations, award costs in relation to any proceedings.

(3) If costs are to be awarded by the Tribunal in accordance with regulations, the Tribunal may:

(a) determine by whom and to what extent costs are to be paid, and

(b) order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on any other basis.

(4) In this section, costs include the costs of, or incidental to, proceedings.

(5) This section does not apply in relation to proceedings under the Strata Schemes Management Act 1996 or the Community Land Management Act 1989.

27. Regulation 20, Costs generally, of the Tribunal Regulation, provides as follows:

(1) This clause applies to the awarding of costs by the Tribunal as provided by section 53 of the Act.

(2) The Tribunal may award costs in relation to proceedings in respect of which the amount claimed or in dispute is not more than $10,000, or in respect of which no amount is claimed or in dispute, only if the Tribunal is satisfied that there are exceptional circumstances that warrant the awarding of costs.

(3) In any proceedings in respect of which the amount claimed or in dispute is more than $10,000 but not more than $25,000, the Tribunal may award costs in relation to the proceedings only if:

(a) the Tribunal is satisfied that there are exceptional circumstances that warrant the awarding of costs, or

(b) the Tribunal has made an order under section 30 (2) of the Act in relation to the proceedings.

(4) In any proceedings in respect of which the amount claimed or in dispute is more than $25,000, the Tribunal may award costs in relation to the proceedings in such circumstances as it thinks fit.

(5) Despite any other provision of this clause, the Tribunal may order:

(a) that the costs of proceedings on an application for rehearing of a matter are, if the applicant fails to attend the hearing of the application, to be paid wholly or in part by the applicant, or

(b) that the costs of any proceedings that the Tribunal considers to be frivolous, vexatious, misconceived or lacking in substance, or as otherwise not to be heard or proceeded with, be paid wholly or in part by the person who instituted the proceedings.

(6) The amount of any costs under subclause (5) is to be substantiated in accordance with directions given by the Chairperson or, in the absence of such directions, in such manner as the Tribunal thinks fit.

28. Whilst the quantum of damages sought by the owner was less than $25,000.00, the quantum sought by the builder was greater than $25,000.00. Hence, legal representation was granted to both parties. The owner was represented throughout the proceedings and the builder for part only.

29. In Building Insurer's Guarantee Corporation v CTTT & Ors [2005] NSWC 503, when considering the Tribunal's power to award costs, the court said:

The discretionary power conferred by s53 of the Act and the Regulation is cast in the widest of terms. The section does not stipulate criteria to which regard is to be had in the exercise of the discretion. Clause 20(4) enables the awarding of costs in relation to the subject proceedings in such circumstances as it sees fit (at [32]).

30. See also Vithoulkas v Owners Corporation SP 62254 & Anor [2004] NSWSC 540, 23 June 2004, BC 200403826, unreported. Whilst the power to award costs is discretionary, such power must also be 'exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent.' (See Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 81).

31. In his application, the owner was wholly successful; the builder not having filed evidence as to either liability or quantum. However, the builder was only partly successful in his application. A substantial portion of his claim was not supported by evidence e.g. his claim for the so-called 'cancellation fee.' Accordingly, having taken all of the circumstances into account, and in the exercise of its discretionary power, the Tribunal orders that the builder is to pay the owner's costs as agreed or as assessed.