Chouhan v Morrison Homes Pty Ltd

Chouhan v Morrison Homes Pty Ltd - [2021] NSWCATCD 155 - NSWCATCD 2021 case summary — Zoe

[5]

The evidence

The owners filed submissions dated 7 April 2021 with 7 annexures which included a Standard Owner Builder Warranty Inspection Report dated 19 March 2020. The owners did not rely on this report as their expert evidence in the hearing. Nonetheless, when appropriate I referred to the report as evidence of what was observed as at the date when the report was provided.
The owners also filed submissions dated 27 April 2021 (received in the Tribunal on 3 May 2021) with 15 annexures. Annexure 6 was a special Expert Technical Report dated 29 March 2021 prepared by Mr Valstar. There was no objection to Mr Valstar's ability to give opinion evidence in the Tribunal. I accept him as an expert who is able to give opinion evidence regarding the owners' defect claims.
Annexure 14 was a scott schedule of 41 items. At page 10 of Annexure 14 was a document prepared by Mr Valstar which stated that the owners had prepared the list of defects (scott schedule). He also stated: 'My opinion as to the defects vary showing: some items (matters) are acceptable, void of concerns, seen as typical and expected findings. items requiring further investigation and are worthy of consideration. The defects reported on exist, where a remedial work or replacement would be required.'
The scott schedule was prepared by the owners in that they filled out the second column. The Expert's Comments column, the Remedial work required column and the Estimation of cost column were filled out by Mr Valstar, or his comments from other documents were placed in those columns
The builder relied upon a report dated 18 May 2021 prepared by Mr B Frizzell. There was no objection to Mr Frizzell's ability to give opinion evidence in the Tribunal. I accept him as an expert who is able to give opinion evidence regarding the owners' defect claims. Mr Frizzell provided evidence on 41 of the owners defect items. He stated that the builder was to rectify or complete remedial work in connection with defect items, 1 (part thereof), 3, 8, 9, 11, 23, 25, 27 and 30. As regards the other items, Mr Frizzell states in some instances that no action is required where the experts agree that there is no defect, or in other cases, that a defect is disputed on the basis that the owners have not proven the defect, or there is a contractual issue.
As stated above, on 12 April 2021 the builder stated that there were no defects on site and provided a brief answer to each of the 32 defects referred to by the owners.
On 5 July 2021 the owners filed a 4 page submission which I have had regard to.
On 24 August the builder filed a submission with supporting documents which stated that it had complete certain remedial work in connection with items 1, 3, 9, 11, 23, 25, 27 and 30 of the scott schedule.
I have taken all of the evidence referred to above into account.
The parties were unable to reach agreement at the hearing on an appropriate form of orders to resolve the proceedings. It will therefore be necessary to deal with each of the items in the scott schedule.
In a defects case such as is brought by the owners, for them to be successful it is necessary for them to establish that the builder has breached one or other of the express warranties in clause 39 of the contract, or an obligation referred to in clause 40 of the contract or any other relevant provision of the contract.

[6]

Principles applicable to considering defect claims

In Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd v Deacon [2017] NSWCATAP 185 an Appeal Panel approved of what I stated in MacFayden and Anor v G Tadrosse [2014] NSWCATCD 194 at [46] in connection of what evidence in my view needs to be provided in order to establish a beach of the implied warranties in s18B(1) of the Act, or in these proceedings, the express warranties in clause 39: 'Evidence that work does not comply with the Building Code of Australia would establish a basis for a finding that sub section 18B(c) of the Act has been breached. Evidence of the details in which work does not comply with the contractual plans and specifications would form the basis for a finding that sub section 18B(a) of the Act has been breached. Evidence of work not being carried out in a proper and workmanlike manner would in my view involve identification of the work in question, a statement of how the expert would expect it to be carried out in in a proper and workmanlike manner and then identification of the factors which establish that the way in which the work has been carried out falls short of it being carried out in a proper and workmanlike manner. Evidence of this nature, if accepted, would form the basis for a finding that sub section 18B(a) of the Act has been breached'
In Hislop v Jakanda Pty Limited [2019] NSWCATCD (unreported) I referred to the above decisions and stated in connection with an allegation that work does not comply with plans or specifications: 'I would enlarge upon the extract above by stating 'Identification of, first the relevant contractual plans and specifications and secondly, evidence of the details in which the work, as built, does not comply with those contractual plans and specifications would form the basis for a finding that sub section 18B(1)(a) of the Act has been breached'.
I will apply the principles referred to above in determining the owners' defect claims.

[10]

Item 4 - Water leakage in the main kitchen

The owners allege that there is water leaking into the kitchen. The owners' have referred to their emails where they complain that water is leaking into the kitchen, the latest of which is 10 November 2020. They also refer to photographs of water leaking. They attribute the cause to be uneven roof box gutters which allow water to enter into wall cavities. On 12 April the builder stated that it attempted on several occasions to find the leak and that Mr Morrison went onto the site and sealed all expansion joints and was of the belief that the leaking had stopped.
At the hearing the owner stated that there was leakage. The builder stated that it still held the view that the leaking had stopped.
I find that the builder had in the past acknowledged that there was leakage into the kitchen, that it had attended the site to carry out rectification work and held the view that its rectification work was successful. I also find that the owners contended that the leaking was continuing.
The owners' expert states that the remedial work was erroneous, without any further detail. In the scott schedule the owners' expert states that further investigation is required. The builder's expert states that no defect has been proven and there was no visible damage to the kitchen wall.
The experts state that further investigation is required.
I find that the owners are obliged to prove on the balance of probabilities that the builder breached clause 39 of the contract and as a result there is water ingress into the kitchen. In the cases cited at [17] and [18] I explained what type of evidence would ordinarily be required to prove such a breach. I find that the owners have failed to establish that there has been a breach of contract. All that they have done is establish that further investigation is required. I also reject the owners' assertion that uneven roof box gutters allow water to enter into wall cavities thus causing the leaking. I find that the owners do not possess the necessary expertise to give opinion evidence in the Tribunal about the cause of leaking into the kitchen.
The owners are unsuccessful on this item.

[49]

Outcome of proceedings

The table below represents the findings as stated in the above reasons. Scott schedule item number Outcome 1 Bedroom floors The relevant work has been carried out 2 Bump in the trafficable flooring Owners unsuccessful 3 Main entry door The relevant work has been carried out 4 Water leakage in main kitchen Owners unsuccessful 5 Water leakage into bedroom 3 Owners unsuccessful 6 Water leakage lounge room Owners unsuccessful 7 Garage slab is uneven Owners unsuccessful 8 Alfresco Floor Builder to rectify 9 Roof box gutters uneven The relevant work has been carried out 10 Water feature Owners unsuccessful 11 CCTV Camera The relevant work has been carried out 12 Ducted Vacuum outlet Builder to inform the owner of the position of the Ducted Vacuum outlet 13 OSD tank lids Owners unsuccessful 14 Driveway Builder to pay 15 Sewerage smell Owners unsuccessful 16 Rainwater garden Owners unsuccessful 17 OC certificate Owners unsuccessful 18 Level back yard Owners unsuccessful 19 Stairs in the backyard concrete Builder to rectify 20 Retaining walls chipped Owners unsuccessful 21 Structural cracks Builder to rectify 22 Planter box Owners unsuccessful 23 Feature wall at front of house The relevant work has been carried out 24 Cracked and stained tiles Builder to rectify 25 Poor installation of door hardware The relevant work has been carried out 26 Uneven cupboard doors Owners unsuccessful 27 Paint patches inside The relevant work has been carried out 28 Messy and patch exterior paint Owners unsuccessful 29 Fireplace Owners unsuccessful 30 Right side of the house The relevant work has been carried out 31 BBQ Owners unsuccessful 32 Loose timber games room Owners unsuccessful 33 Ceiling holes in home theatre Owners unsuccessful 34 Broken toilet roll holder Owners unsuccessful 35 Front light stairs Builder to rectify 36 Chipped and cracked bowls Owners unsuccessful 37 Bermuda waste covering Builder to rectify 38 Chipped wall feature Owners unsuccessful 39 Miscellaneous defects on handover Not pressed 40 Spray hose Owners unsuccessful 41 Audio cables Builder to advise the owners

At a glance

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Judgment (52 paragraphs)

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