Concourt Pty Ltd v Victoria Mary Kerr; Victoria Mary Kerr v Concourt Pty Ltd

NCAT Consumer and Commercial|2014-04-16

The Claims

In these reasons I refer to Concourt Pty Ltd as "the builder" and Victoria Mary Kerr as "the owner". Mr Kerr was appointed as superintendent under the building contract and I refer to him as "the superintendent".
There are two matters under consideration: 1. HB 13/09795 Concourt Pty Ltd v Victoria Mary Kerr ("the builder's claim" filed on 11 February 2013) in which the builder claimed: 1. the sum of $34,483.00 alleged outstanding payment; and 2. $10,000.00 estimated interest on the above amount over 4 years. 1. HB 13/31696 Victoria Mary Kerr v Concourt Pty Ltd ("the owner's claim" filed on 12 June 2013) in which the owner claimed: 1. the sum of $155,312.00 in relation to defective and incomplete works; 2. an order that she does not have to pay the amount of $34,483.00; and 3. the sum of $10,306.00 in relation to legal and expert fees.
The parties' experts attended an expert conclave on 05 November 2013 assisted by Member Topolinsky which was effective in resolving a number of the issues. The agreements and the outstanding disputed issues are listed in the amended joint Scott Schedule signed by each party's expert.
Following the joint expert conclave, there were 6 issues outstanding for determination: 1. defective internal stairs: amounts (subject to method of rectification) agreed at the conclave, liability dependent on the contract; 2. failure to install yellow-tongue particleboard flooring substrate: liability to be determined, rectification and cost agreed at the conclave; 3. failure to top-hang sliding doors: liability to be determined, rectification and cost agreed at the conclave; 4. rebate for agreed removal of skylight from the works originally included in the contract: 5. retention moneys held by the owner; and 6. amount of liquidated damages.
The largest item, as claimed, is the sum of $51,600.00 for liquidated damages as at the date of the filing of the owner's cross application. The flooring costs are in excess of $28,000.00, the stairs at up to $22,000.00, the doors at $6,000.00 and the skylight rebate agreed at $4,200.00. This totals the sum of $112,018.00.

The Joint Scott Schedule

As noted above, the parties have provided two copies of the amended joint Scott Schedule following the expert conclave, as counterparts, each signed by the respective party's expert. There is also on the Tribunal file the original Scott Schedule hand-notated by Member Topolinsky and used as the basis for the amended joint Scott Schedule provided and signed by the parties' experts. It appears that the parties came to slightly different understanding of the agreements made at the conclave.
As I read the original notes of Member Topolinsky, the following items are agreed in all respects: liability, rectification method and cost: all items in the main bedroom, the ensuite tiles, all items in the second bathroom, front door, retaining wall and rear soffit. That is the owner's understanding as well. The builder, in its counterpart of the joint Scott Schedule, suggests that in relation to all items in the main bedroom, the ensuite tiles, all items in the second bathroom and the stairs, liability is still to be determined. It is agreed that there are two possible methods of rectification to the stairs, with cost for each agreed.
There appears to be a small error in the addition of the figures in the Scott Schedule. The difference is minor and is set out in the annexed summary of the joint Scott Schedule.

Background

The parties entered into a contract for building works in relation to a property in Tamarama, Sydney. The works consisted essentially of demolition of part of the property, renovation works and a second floor addition. The contract sum was $1,150,00.00 and the contract was entered into on 07 April 2008. (As the claims were commenced in February and June 2013 respectively there is no issue as to any time limitation.)
The Home Building Act 1989 ("the Act") makes detailed provision for parties undertaking residential building works to enter into a formal contract, take out appropriate insurance and to set out the contractual bases for the parties interaction. In this case the parties have taken particular care to set out the contractual relationships between them. As can be seen from the evidence and submissions of the parties, as well as the joint Scott Schedule, a number of the outstanding issues relate to or are connected to the correct interpretation of the contract between them. I note with approval the care with which the parties included proper investigations and provision of details in relation to insurance and licencing of the builder and the various inclusions in the contract.
The contract itself consisted of an "Instrument of Agreement" ("the instrument") together with the Standards Australia "Minor works contract conditions (Superintendent administered)" contract, AS 4905-2002 and certain other documents, set out in the instrument as follows: "3. The Contract comprises: 1. this Instrument of Agreement (excluding schedules); 2. the attached Schedule of the Home Building Act 1989 (NSW) Provisions; 3. Australian Standard General Conditions of Contract AS 4905-2002 including all Annexures and Schedules ("the General Conditions") (as amended by the attached Schedule of Amendments); [Note: this standard form requires a superintendent to administer the contract. If there will not be one appointed by the Principal, then AS 4906 should be used and consequential changes made to the rest of the document] 4. the drawings, specifications and other documents set out in the attached Schedule of Documents and included in a bundle which is marked and initialled by each party for identification purposes. 4 To the extent of any inconsistency between the documents listed in clause 3, the documents shall be given precedence in the order they appear in clause 3."
The Annexure to AS 4905-2002 contains the following additional information: 1. the date for practical completion is 22 January 2009; 2. "retention moneys" = 5% of the contract sum - $57,500.00; 3. "liquidated damages" (subclause 20.5) = $1,000.00 per week [no limit is stated and the contract then provides at cl13(b): "If nothing stated, there is no limit"]; 4. "delay damages" (subclause 20.6) = $300.00 per day.
Clause 20.5 of the contract states: "20.5 Liquidated damages If WUC ["works under the contract"] does not reach practical completion by the date for practical completion, the Superintendent shall certify, as due and payable to the Principal, liquidated damages in Item 13(a) for every day after the date for practical completion to and including the earliest of the date of practical completion or termination of the Contract or the Principal taking WUC out of the hands of the Contractor. If an EOT ["extension of time"] is directed after the Contractor has paid liquidated damages, the Principal shall forthwith repay to the Contractor such of those liquidated damages as represent the days the subject of the EOT. The Principal hereby waives that part of liquidated damages exceeding the Item 13(b) amount." As noted in the previous paragraph, no such limit was provided in Item 13(b) and therefore there is no such waiver by the owner.
Clause 20.6 of the contract states: "20.6 Delay damages For every day the subject of an EOT for a compensable cause ["any act, default or omission of the Principal or its consultants, agents or other contractors (not being employed by the Contractor);"] and for which the Contractor gives the Superintendent a claim for delay damages, damages certified by the Superintendent in accordance with Item 14 shall be due and payable to the Contractor."
As previously noted, the Superintendent was Mr Robert Kerr.
There is a further important document to be noted. This is described by the owner as the "Variation Letter", dated 19 June 2012. Because of its importance, I set out the text of this brief document in full, including the schedule of alleged defective or incomplete works: "Further to our meetings on Tuesday 29 May and Friday 15 June, I set out below the steps to finalise the defects at the above address and the terms of such. 1 You agree that the outstanding monies owing to you under the building . contract are currently $27,483 which includes a late completion penalty of $10,000 and rebates of 2,900. 2 Attached to this letter is a list of defect items that you agree to undertake with dates for completion. You agree to this list and the completion dates. 3 If any item is not finished by 24 July, then late penalties will apply at $300 per day from 24 July until all items are completed. 4 Access hours to 15 Alexander Street will only be Monday to Thursday inclusive from 830am to 4pm. Week-end work only by agreeance. 5 This agreement does not extinguish any legal rights of the parties. 6 Upon you agreeing to this letter and its contents, the owner will release $4,000 to enable the ordering of materials for the completion of the works. Evidence that materials have been ordered must be supplied to me as soon as they are ordered Agreed by [Signed by both parties]" 15 Alexander St, Tamarama Defects List - Final (Works to be rectified) Date 4 June 2012 Item Detail Corian vanity bench-top defect, the Kitchen Catalyst has inspected and completed a report and passed on to Corian, awaiting outcome. Vanity doors scrape, need adjusting. One Vanity door swings in wrong direction, needs to be changed. Ensuite Cracked tiles on floor need replacing. Tiles require cleaning and resealing ‑ Mirror has been unevenly installed. Replace Sliding Door on inside needs painting. Main Bedroom Sill above door continues to leak water when it rains. Flashing needs to be replaced. Damage skirting board from water leak needs repair and painting. Exhaust fan not working. Teak flooring required to shower area i.e. level with tiles Second bathroom upstairs Bath tap flow not working properly, Bath mixer not satisfactory, whole system needs redoing remove toilet labels check toilet leak and repair skirting board floor tiles not cleaned and sealed, needs to be re-done. Front door - To be replaced with solid door Stairs Side stringers continue to rust, cut back side stringer closest to wall and repaint C&M recommends the entire staircase needs replacing. Bedroom 3 upstairs - Repair and repaint security hole - Need door lock plate Kitchen Louvre trim needs redoing - Gas regulator fitted $400 rebate Loose floorboards in kitchen Floorboards Cut floorboards in middle of the room, floorboards require replacing sanding and painting - Patching to floor around edges needs to be redone Downstairs bathroom Recessed downlights need alignment. Then repaint ceiling Tiles were not properly cleaned and sealed. Needs to be re-done Front storage unit Joinery subspecification. Completed but rebate $500 Vanity doors All to be checked for rubbing against side panels Roof Panels lift during winds, inspection required. Locate and affix. Capping required outside terrace of main bedroom Front Door Needs replacing as needs solid door as specified. Finished by painting and on top. Garage Columns need repainting as only one coat has been used Water penetration evident against ceiling Downpipes Southern side - not draining properly, the junction between the two tanks does not work, need to replace and the replace the exiting pipe, check flow thereafter. Northern side - Not finished in properly needs rectification. One downpipe not recessed - rebate $1,000 Wood battens on back wall Nail gunned in, should be credit. Quantify credit - $1000 Large sliding doors Large split crack in first doors, needs felt inserts, check they all open External back courtyard Cracked tiles need replacing, in dispute. Thermostats All three to be changed with 24 hour timers Builder to confirm all doors are solid, otherwise replace All windows require locks General All doors and windows to ensure painted on inside Skirting boards to be sanded and repainted where necessary All door fittings to be securely fitted

The Evidence

Directions were made by me on 3 December 2103 for the parties to provide a common bundle of evidence to be relied upon at the hearing. Despite some last-minute issues, this common bundle was provided. It consists of 3 bundles of documents with a bundle of drawings as well.
The parties provided meticulously filed and indexed, and, it should be noted, complete, documents which were of great assistance in determining these complex claims. These included: Document Prepared for Date Original Application Builder 11 February 2013 Expert Witness Report of Gordon Woolf Owner 18 May 2013 Defence and Cross Application Owner 05 June 2013 Expert Witness Report of J & L Fransen Builder 02 July 2013 Superintendent's Report Owner 27 August 2013 Expert Witness Reply of Gordon Woolf Owner 31 August 2013 Affidavit of Anthony Neil Joseph Owen Owner 11 October 2013 Affidavit of Victoria Mary Kerr Owner 14 October 2013 Affidavit of Robert Byers Kerr Owner 15 October 2013 Scott Schedule after Conclave Joint 15 November 2013 Affidavit of Peter Baden Court Builder 17 December 2013

In addition to the above, a large bundle of drawings was also provided.

The matter was heard over 2 days. Mr Court (the builder) and Mr Fransen gave oral evidence for the builder, and Mr Kerr, Mr Owen and Mr Woolf gave oral evidence for the owner. In addition, both parties provided written submissions, handed to the Tribunal at the hearing by the owner, and submitted some 2 weeks following the hearing, by direction, by the builder.

Staircase

In relation to the staircase, I find that the staircase was not installed in accordance with the contract drawings which clearly specified stainless steel. The expert evidence supports a finding that the stairs and the stringers are defective, and the parties have agreed on the cost of $22,000.00 to replace the stairs.
The builder's evidence was that in the initial discussions and quotations it was decided that the stairs did not specify stainless steel following the desire of the owner to reduce the costs. The builder includes at Annexure "I" of his affidavit a schedule of proposed savings, including a reference to the stainless steel. He states that these proposed savings were included in the final contract price agreed at $1,150,000.00 and that the contract as finally agreed and signed did not include stainless steel.
In my opinion the builder is seeking to suggest by this evidence that the submission of the owner to the contrary is wrong. It is interesting that the builder rather skips over this issue in paragraph 14 of his affidavit of 17 December 2013. At that point the builder acknowledges that he was given "enlarged specifications" in "about early April" but apparently the only comment or response he made was to ask the superintendent if the new specifications increase the cost of the works, receiving an answer in the negative. The builder makes no suggestion that he examined the documents for himself to answer this presumably crucial question. The builder then goes on to state that he signed the contract on 7 April 2008, which therefore included the specification for stainless steel. As I understood the builder's oral evidence, it was clear that stainless steel was specified and was not varied. It is obvious that the builder is bound ty the signed contract, not be prior discussions and negotiations.
The evidence of the owner as to the almost immediate rusting issues with the steel staircase, including independent inspections and reports provided to the builder, and unsuccessful attempts to repair the issues, is extremely strong. I am satisfied not only the stringers but the staircase as a whole requires replacement, on the basis of that expert evidence.
I am satisfied the owner has proved this item.

The Flooring

I find the builder failed to install yellow-tongue particle board as flooring substrate in accordance with the contract. I am not satisfied this item was subject to a variation. The evidence to that effect is similarly extremely persuasive. In accordance with the agreement at the conclave, the agreed cost is $28,218.00.
Besides the contractual evidence, there is a clear dispute between the parties in relation to an alleged variation in this sub-flooring. The builder states in his affidavit evidence at paragraph 26 that the existing timber flooring was kept as a platform until completion of the structure and the water-proofing. When it was removed, it was realised that a concrete slab would need to be laid. Quotes for that concrete slab or slabs were agreed. Then, the builder states: "At the same time we discussed the yellow tongue subfloor. Mr Kerr decided not to install and just run the joists over the new concrete areas as well as the remaining floor, and lay the strip flooring on the existing floor joists. For this a deduction was made to my third quote of 18 September 2008 and the construction method used was approved by Mr Kerr and myself. The issue of the installation of the strip floor was not raised by Tony Owen Partners or Mr Kerr until 18 May 2013." These quotations are not in evidence. Any such variation, like all other variations, would have had to have been in writing and signed by the owner or the superintendent. I am satisfied that in that regard the superintendent was extremely particular. I reject this evidence of the builder.
In relation to the builder's claim that the issue was not raised until May 2013, I note the superintendent's evidence that although he made certain complaints to the builder about the floor (affidavit of 15 October 2013, paragraphs [28]-[31]), it was not until the builder pulled up some floorboards and the superintendent noticed for the first time that no substrate had been laid. That evidence is not successfully challenged. It explains most of the delay mentioned by the builder. The evidence of the superintendent that he notified the builder of his concerns in July 2012 is not otherwise supported by evidence. However, I am satisfied that the owner has proved this claim.

"If Found" Items in the Joint Scott Schedule

Before going on to consider other specific items, it is necessary to address the abovementioned differences between the parties' versions of the agreements reached at the expert conclave. These are set out in the attached summary of the conclave joint Scott Schedule. I refer in particular to items 6.1(a), (b) and (c); 6.2 and 6.3(a), (b) and (c). Member Topolinsky's notes are very clear and not ambiguous. The owner agrees with the Member's notes (of course, as would be expected). I find that these items were all agreed at the conclave, in relation to liability ("responsibility"), method of rectification and cost of rectification and I allow those amounts. There is a necessary variation to the allowance for the ensuite tiles as it is now known what they actually cost to be rectified, being an amount less than that agreed at the conclave. For that item I allow $1,155.00.
As there is no ambiguity in relation to the remaining items in the joint Scott Schedule, I allow the agreed amounts for items 6.5, 6.9 and 6.15.

Rear Sliding Doors

I find that the sliding doors have to be removed and reinstalled at the agreed price of $6,000.00.
This issue concerned the fact that the builder installed these doors running in tracks at the bottom of the doors, rather than being hung from the top. The owner alleges that as a result these heavy doors are difficult to move.
The builder's evidence is that the change in the method of installing these doors was included in the "costs savings" schedule dated 10 February 2008, being annexure "I" to his affidavit and discussed in paragraph 25 above.
In that document, the only reference to "doors" is the line "Primed windows/door", with no cost reference but the figure of "25000" in the "Savings" column. The builder states at paragraph 28 of his affidavit "… I proposed savings of around $25,000 to the project by deleting top hung rollers and, instead, installing the rollers on the floor which Mr Kerr accepted. Tony Owen Partner whose representative inspected the top hung doors, and took photograph of them made no comment in relation to this issue following the inspection." The owner denies any such discussion or agreement, noting again that there is no variation in writing and that the contract documents, as signed, included top hung doors. The builder's evidence is at odds with the view I have formed that the owner and the superintendent in particular would not have agreed to any variation not in writing and signed. In any case, in regard to this particular issue, I find there was no agreement as claimed by the builder and that he failed to install the doors as per the contract. The doors must be reinstalled at the cost agreed at the conclave.

Skylight

This is the final item considered in the joint Scott Schedule (apart from those items not pressed which are not mentioned further). This is another item in which liability is not agreed but rectification and cost is.
The builder's initial evidence is that on 8 March 2008 he attended a meeting with the superintendent and Mr Owen where further variations to the specifications were "discussed and agreed". The builder states that he received an email from the superintendent dated 09 March 2008 "confirming setting out the list of agreed variations. … A credit for this deletion was included in our final contract price … ." Annexure "J" to the builder's affidavit is the email of 09 March 2008, which relevantly reads: "Tony & Peter Thanks for the meeting yesterday. Notes from the meeting follow; … 7. Skylight to be deleted and continue roof at 4 degrees. … I think that was all. Rob."
In answer to that evidence, the owner submits that the skylight was in fact included in the contract but that on 15 July 2009, well after the contract was signed, the skylight was deleted. The skylight is shown in the contractual plans and specifications. The owner also submits that no rebate has been provided and that the builder conceded as much in cross-examination.
My note of the builder's answers in cross-examination do not support that submission. It appeared to me the builder continued to maintain the skylight had been deleted from the agreed works (if not from the contract) and that a rebate was included in the final contract price. The builder continued to maintain that the agreement of March 2008 referred to in paragraph 39 above still applied at the date of signing of the contract on 07 April 2008.
Somewhat surprisingly, the builder's later written submissions do not challenge the submission of the owner that the builder conceded in cross-examination that no rebate was given for the deletion of the skylight.
In my opinion, the discussions and the email of early March 2008 do not amount to an agreement that the skylight would be deleted and that a rebate or saving of an appropriate amount would be included in the final contract. The superintendent's email of 09 March 2008 amounts to no more than a note of what had been discussed. There was, I note, no mention of a rebate in that email. However, even if that was the case, if in fact a rebate had been included in the final contract price, I would not allow the owner's claim. There is no evidence to support the builder's claim in that regard.
The owner claims that the skylight was deleted by agreement in July 2009. There is no evidence of any rebate having been granted by the builder at or after that time. Therefore, there is no evidence at any time to support the builder's claim a rebate had been granted. On the other hand, by the same reasoning adopted in paragraphs [24] to [26] above, I find the skylight was still included in the specifications and drawings part of the signed contract. In view of the paucity of evidence to the contrary, I find the skylight was deleted from the contract after the contract was signed and that the owner is entitled to a rebate which has not been credited to her. The agreed cost in the joint Scott Schedule is $4,200.00.
The total allowed is as shown in the attached joint scott schedule, including GST, in the sum of $77,061.60.

Liquidated Damages

The final item in the owner's case is both the most difficult to resolve and the most expensive.
I note first that there is no doubt that both the delay damages and liquidated damages were included in the contract and that no objection was taken at that time or afterwards of those contractual provisions.
The owner is claiming liquidated damages calculated at $300.00 per day to a maximum 4 days per week (that is, $1,200.00 per week) according to the Variation Letter, payable from the agreed date of completion of the works per that agreement (being 24 July 2012) until the owner's cross application was filed on 12 June 2013. The sum claimed as at that date was $51,600.00.
The owner submits: 1. that the Variation Letter varied the terms of the contract, providing that certain works were to be completed by 24 July 2012; 2. that the builder contends those works were completed by 30 August 2012; 3. that it is not disputed that some of the works were not completed; 4. therefore practical completion has not been reached; 5. the builder claimed "delay days" for the first time on 16 October 2012 but did not do so by way of a detailed written claim within 28 days of the day the builder should reasonably have become aware of the cause of a delay as provided for in the contract. In those circumstances, submits the owner, she is entitled to the "contractual" liquidated damages provided for in the Variation Letter.
The builder does not take exception as such with the concept of the damages claim but does make a number of cogent submissions in its final written submissions.
The starting point of the builder's submissions as contained in Mr Court's affidavit of 17 December 2013 is that practical completion was reached on 18 February 2009 and that on that date the Occupation Certificate was issued. (Any liquidated damages claim would normally relate to a delay incurred up to that date.)
The builder next submits that the reasoning of the owner as set out in paragraph 48 above "is an analysis divorced from the facts". The builder submits that the Variation Letter was not a variation to the contract as: 1. it came three or more years later; 2. it did not use the word "variation"; 3. the builder was not in possession of the site and faced different working hours (I infer different to those in the original contract); 4. no prior rights (whatever they were) were extinguished and the statutory warranties continued to be applicable, not requiring any further agreement; and 5. practical completion had occurred under the contract "long ago".
The builder also submits that the effect of the owner's claim as claimed is that liquidated damages run from 24 July 2012 until such time as the owner chose to either to accept the works were completed without defect or until she commenced her own claim. Against this the builder submits that the owner is under a duty to mitigate her loss, either by having the work done by others or by bringing her claim promptly.
Finally, the builder submits that there is a "technical bar" to the liquidated damages claim in that there is no extension of time provision in the Variation Letter, which has been found to be fatal to a liquidated damages claim: Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111, 112.
The builder submits that the case is about the builder's claim for outstanding payment less any proven damages, the latter being nil.

Decision on Liquidated Damages

In my opinion, the Variation Letter is not a variation of the contract. In order to be persuaded that it was a variation, I would require clear and definite terms to that effect.
It follows, in my opinion, that in order to rely on the liquidated damages clause in the contract, the owner should have brought such a claim when the builder claimed practical completion had been reached, even if that meant there would need to be a decision as to whether the builder's assertion was correct.
I find that practical completion was reached by the date the Occupation Certificate was provided. The fact that there were minor incomplete items and perhaps major items of defective works, does not mean practical completion was not reached. I find the premises were able to be used for their purpose despite the remaining defective items. The ongoing negotiations between the parties up to June 2012 were in relation to either attempts to have defective works rectified, or minor works completed.
The Variation Letter is a separate agreement. It does not contain a valid liquidated damages clause because there is no provision for determining whether the builder was entitled to claim extensions of time. Whether the liquidated damages assessed are a proper pre-estimate of the owner's loss or whether they are in fact a penalty does not arise, in my view, because this agreement does not properly provide a mechanism to determine who may be responsible for delays. This in my opinion is the principle to be derived from Peak v McKinney and it is a question of interpretation of the agreement - in this instance, the Variation Letter rather than the Contract.
The issue just mentioned is an important one, in my view, because I am not sure the builder is correct in asserting that the owner has a duty to mitigate her damages, surprising as that may sound. Gleeson JA stated in Galafassi v Kelly [2014] NSWCA 190: [154] As a matter of principle the so-called duty at common law to mitigate loss does not apply to a claim for liquidated damages: H McGregor, McGregor on Damages (18th ed, 2009, Sweet & Maxwell). Bathurst CJ and Ward JA agreed with His Honour's reasons.
If that is the case, such a clause becomes at least potentially extremely onerous on the builder. In my view the agreement would require a meticulous procedure for ascertaining the rights of the builder in relation to delay before a claim for liquidated damages could be asserted. This agreement fails to do so.
That is the principle to be derived from Peak v McKinney, in my opinion and I agree with the builder's submission in that regard.
I have not been taken to, and I have been unable to find myself, any Australian case in which Peak v McKinney has been applied. The one exception to that statement is Clough Engineering Ltd v Oil & Natural Gas Corporation Ltd [2007] FCA 881 in which GILMOUR FCJ was considering an application by Clough to serve its application out of the jurisdiction. His Honour stated: 52 Clough makes a number of submissions in this regard which I have set out below. 53 A liquidated damages clause, included solely for the benefit of the principal (Company), is to be construed contra proferentum in the event of ambiguity: Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 114 at 121; Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82; (1986) 161 CLR 500 at 510. 54 Where the parties have agreed liquidated damages for delay as a genuine pre-estimate of damage, rather than a penalty, the presumed intention of the parties is that absent express provisions to the contrary, the clause has no operation where the principal is a cause of the delay: Peak v McKinney at 121, 125-6, 127-8. 55 A contrary intention may be shown where the parties have, in the terms of the contract itself, provided for a contractual mechanism for the determination of extensions of time where the principal is in default: Turner Corporation Ltd v Co-Ordinated Industries Pty Ltd (1995) 12 BCL 33. 56 There is no provision in the contract by which the parties have expressly agreed to confer the power on a person (such as the Company's Representative) to determine extensions of time (cf certification of Practical Completion and Discharge Certificate). 57 Unless the parties have clearly expressed, in the wording of their contract, that a party or its agent is to be the sole and exclusive judge of what additional time should be allowed, such a construction should not be inferred, as it would put one party completely at the mercy of the other: Roberts v Bury Improvement Commissioners (1870) LR 5 CP 310 at 326-327, cited in Turner v Co-ordinated at 218. … 60 Accordingly, in this case, where the Company has, by its breach, caused substantial delay to the off-shore works, the liquidated damages clause has no application. 61 In my opinion, these submissions, upon the proper construction of the contract, are arguable.
Although that is a finding only that the submissions are arguable, Gilmour FCJ did not suggest that Peak v McKinney does not apply.
In any case, I am satisfied that the agreement does not properly provide for liquidated damages, and the owner's claim in that regard is dismissed.

Total Allowed For The Owner's Claim

The total figures I have calculated vary slightly from the figures from the joint expert conclave. Using the individual conclave items, I deduct the sum of $2,3776.00 agreed there for the tiles, for which the owner actual paid $1,155.00. The remaining amounts total $68,185.00, GST on which is $6,818.50, a total of $75,003.50. Adding to that the amount of $1,155.00 for the tiles, the total is $76,158.50.

The Builder's Claim

It is now necessary to consider the builder's original claim in HB 13/09795 Concourt Pty Ltd v Victoria Mary Kerr: 1. the sum of $34,483.00 alleged outstanding payment; and 2. $10,000.00 estimated interest on the above amount over 4 years.
In oral submissions at the end of the hearing, the builder submitted that his claim for outstanding payment was $24,483.00 plus interest. The owner submitted the amount was $23,483.00.
The most compelling evidence proving the amount outstanding in my opinion is the Variation Letter. Although I have found that document not to be in fact a variation of the contract, nevertheless it was signed by the builder which satisfies me that as at 19 June 2012 the builder did agree that the outstanding amount was $27,483.00. It is undisputed that the owner paid an amount of $4,000.00 to the builder pursuant to clause 6 of the Variation Letter, leaving the amount of $23,483.00 as contended by the owner. I find that is the outstanding amount owed to the builder.
In relation to interest, the owner concedes in the Defence to the builder's claim that in the event it is found that the retention moneys were unreasonably withheld, interest would be payable. The initial position of the owner is that no interest is payable on any outstanding payment because the works remain defective and incomplete. As I have found above the works reached practical completion on 18 February 2009. However, the owner asserts in the defence that interest would only accrue from 30 August 2012 as that is the date the builder asserts the works were completed. That evidence is said to be contained in the builder's letter dated 16 October 2012.
I do not agree with the owner's submission. In the letter of 16 October 2012, the builder refers to "maintenance works" being completed, not to the date of practical completion. I find that the claim for interest properly accrues from 18 February 2009.
The contractual rate of interest is 18% per annum. For the period of 5.72 years since 18 February 2009, the amount of interest payable on $23,483.00 is $21,168.83.
I find the builder has proved his claim in the amount of $44,651.83. G Meadows Senior Member Civil and Administrative Tribunal of New South Wales 13 November 2014 Item No. Claim Member's Comments Parties' Comments Cost 6.1 Main Bedroom 6.1(a) Water penetration through sliding door Agreed responsibility, agreed rectification, agreed cost $1,644.00 Builder: "if found" $1,644.00 $1,644.00 Owner: as per conclave Member 6.1(b) Skirting butt joint opening Agreed responsibility, agreed rectification, agreed cost $505.00 Builder: "if found" $505.00 $505.00 Owner: as per conclave Member 6.1(c) Water ingress southern side Agreed responsibility, agreed rectification, agreed cost $776.00 Builder: "if found" $776.00 $776.00 Owner: as per conclave Member 6.2 Ensuite cracked tiles Agreed responsibility, agreed rectification, agreed cost $2,376.00 Builder: "if found" $2,376.00 $2,376.00 Owner: as per conclave Member 6.3 Second Bathroom 6.3(a) Bath spout Agreed responsibility, agreed rectification, agreed cost $700.00 Builder: "if found" $700.00 $700.00 Owner: as per conclave Member 6.3(b) Damaged bath Agreed responsibility, agreed rectification, agreed cost $198.00 Builder: "if found" $198.00 $198.00 Owner: as per conclave Member 6.3(c) Teak flooring Agreed responsibility, agreed rectification, agreed cost $200.00 Builder: "if found" $200.00 $200.00 Owner: as per conclave Member 6.4 Stairs Builder: Responsibility to be determined in contract. If found, cost of replacement with stainless $22,000.00. If found existing may be repaired, agreed cost $12,000.00 Responsibility to be determined in contract. If found, cost of replacement with stainless $22,000.00. If found existing may be repaired, agreed cost $12,000.00 This item was agreed on the Members advice that in this location within 1kl of the ocean it was a requirement under Standard Australia that the steel be protected either by epoxy coating or galvanising. My research has shown that the Standard Australia referred to is a guide not a requirement of the Building Code of Australia. $22,000.00 $12,000.00 Owner: as per conclave Member. 6.5 Front door Agreed responsibility, agreed rectification, agreed cost $1,000.00 Builder and owner: as per conclave Member $1,000.00 $1,000.00 6.6 Ground floor flooring Responsibility not agreed. If found, agreed rectification, if found agreed cost $28,218.00 Builder: as per conclave Member; $28,218.00 $28,218.00 Owner: responsibility to be determined in contract, agreed rectification, agreed cost 6.7 Water penetration Part of item 6.1 Builder: as per conclave Member $0.00 $0.00 Owner: agreed responsibility, agreed rectification, cost part of 6.1 6.8 Roof panel Not pressed Both: as per conclave Member $0.00 $0.00 6.9 Rear retaining wall Agreed responsibility, agreed rectification re-tile garden wall, agreed cost $1,944.00 Builder: as per conclave Member $1,944.00 $1,944.00 Owner: Agreed responsibility, agreed rectification, agreed cost 6.10 Louvre handles Not pressed Builder: this item was not pressed NIL; $0.00 $0.00 Owner Not pressed 6.11 Rear sliding doors Responsibility not agreed. If found agreed rectification, if found agreed cost $6,000.00 Builder: as per conclave Member; $6,000.00 $6,000.00 Owner: responsibility to be determined in contract. If found agreed rectification, if found agreed cost 6.12 No skylight Responsibility not agreed. If found agreed rectification, if found agreed cost $4,200.00 Builder: as per conclave Member; $4,200.00 $4,200.00 Owner: responsibility to be determined in contract. Agreed cost 6.13 Front gate Not pressed Builder: this item was not pressed NIL; $0.00 $0.00 Owner Not pressed 6.14 Front deck timber Not pressed Builder: this item was not pressed NIL; $0.00 $0.00 Owner Not pressed 6.15 Rear soffit Agreed responsibility, agreed rectification, agreed cost $800.00 Builder: as per conclave Member; $800.00 $800.00 Owner: as per conclave Member. Total $70,561.00 $60,561.00 GST $7,056.10 $6,056.10 Grand Total $77,617.10 $66,617.10

As found by Conclave Member and Parties Estimate of Costs $70,956.00 plus GST; Builder: on if found basis $60,418.00 ($60,418 on if found basis) Owner: Total $70,056.00 GST 10% $7,005.60 Total Total $77,061.60 $77,061.60 $60,418.00

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: 26 March 2015

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