Culina v Timilty Constructions PL

Background, procedural, issues

1. The applicant with his wife bought one (xxx) of two dwellings in a duplex in Burraneer, a southern suburb in Sydney, NSW, from a developer who had contracted with the respondent builder to construct the duplex. The signed contract was in the HIA form and was dated 10 July 2018. The contract price was $1,311,848.34.
2. Although the named person who signed the contract against "contractor" was the sole director of the respondent builder, there was no issue raised that the contracting party was the respondent builder and I therefore have proceeded on the basis that the sole director signed on behalf of the respondent builder. If the point had been raised on the existing evidence, I would have considered that the sole director signed on behalf of the respondent builder, whom I shall call the builder.
3. Equally, no one has sought to join the applicant's wife as co-applicant so I have proceeded on the basis that the applicant sues on behalf of both him and his wife. If the point had been raised I would on the present material have joined the wife as co-applicant. Without disrespect I shall call the applicant the owner for the purposes of these reasons.
4. The builder said, without competing evidence, that practical completion was reached on 3 April 2019 when the keys were handed over. A final occupation certificate was dated 7 May 2019. The applicant's occupation was from November 2019.
5. The present proceedings were filed on 6 May 2021. The owner originally sought a money order for under $30,000 including GST for alleged defective waterproofing work, all but one involving water entry in various locations in his side of the duplex and the causes of that entry.
6. The builder held and continues to hold a contractor licence and its sole director was the nominated supervisor and also licensed. There was no dispute about HBCF insurance having been obtained as required under HBA ss 92 and 94 and Home Building Regulation 2014 (NSW) reg 53.
7. Except for one item there was no dispute, and I am satisfied, that the Tribunal had jurisdiction under the Home Building Act 1989 (NSW) (HBA) from the points of view of nature of the work and dwelling, amount claimed and timeliness of claim: HBA ss 3B, 18E, 48K, Sch 1 paras 2(1)(a), 2(3)(a), 3(1), (2)(b); Home Building Regulation 2014 (NSW) reg 12. In particular, the item that did not constitute a major defect as there defined (strip drains in wet areas - item 8.0) was within the grace period under HBA s 18E(1)(e), having emerged, on the applicant's uncontested evidence on this point, in the last six months of the warranty period (which under HBA s 3B ended on 3 April 2021 for defects other than major defects).
8. Each party had retained a well-qualified and experienced expert who produced a report compliant with expert witness requirements after site inspections: owner's expert 6 September 2021 with inspection 19 August 2021; builder's expert 28 October 2021 with inspection 9 October 2021. The experts conclaved by telephone on 19 January 2022 and produced a conclave report of the same date. Each report post-dated relevant attempted remediation by the builder.
9. As finalised in the respective expert reports and conclave reports, the owner's expert estimated remediation work at $63,383.07 and the builder's expert at $24,108 both including GST. The builder's expert made some further concessions on amounts during concurrent evidence.
10. In addition to the evidence of the conclaving experts, the owner and the sole director of the builder, the builder called and the owner cross-examined the stormwater engineer on the project. The engineer was called as an expert. The owner objected to two of his three reports because they did not say that he had read the Tribunal's code for expert witnesses and agreed to abide by it. This appeared in the third report, which was the middle one in time sequence and dealt with a different topic. I said that I would deal with any issue arising as a question of weight.
11. The owner also pointed out that the engineer had been appointed "supervising engineer" by the developer on 20 July 2018 and signed a structural construction report on 17 April 2019. The engineer's firm had also provided drainage and structural engineering plans. The engineer in cross-examination said that he had signed off on stormwater, not the roof.
12. Written submissions were provided. To the extent that those submissions go beyond the evidence I have not had regard to them.
13. The builder's written submissions also referred to proceedings concerning the adjoining component of the duplex and the expert evidence in those proceedings involving the same builder but another owner as parties. Neither of the decision nor the expert or other evidence in those other proceedings was before me. I am not in a position to have regard to either the findings or the evidence on which the findings were based in those other proceedings. Even if they were before me, I consider it would not be permissible to have regard to them absent a clear basis for their relevance.

Work order or money order - principles

1. Under HBA s 48MA, a work order is the preferred, not the mandatory, outcome for defective work: Galdona v Peacock [2017] NSWCATAP 64 at [65]. Personal animosity is not sufficient to displace the primacy of a work order for defective work, as the test is objective and the flexibility of s 48O permits an order that the builder fulfil a work order by engaging another party to carry out the work order on behalf of the builder.
2. However, relational breakdown is an element in objective assessment, as can be the builder's conduct in unrelated projects and as will be doubts about the builder's capacity or skills to undertake the required remediation, the builder's attitude to the standard of work done and willingness to return and the likelihood of further dispute not meaning that a work order would be a timely or cost-effective resolution: Owners SP 78465 v MD Constructions PL [2016] NSWSC 162 at [47]-[48]; Brooks v Gannon Constructions PL [2017] NSWCATCD 12 (appeal not affecting s 48MA decision); Galdona at [64]; BNT Constructions PL v Allen [2017] NSWCATAP 186 at [33]-[36]; Kumar v Sabharwal [2017] NSWCATAP 200 at [29]-[30]; Clements v Murphy [2018] NSWCATAP 152 at [30], citing with approval Kurmond Homes PL v Marsden [2018] NSWCATAP 23 at [31]-[32], [46]; Brennan Constructions PL v Davison [2018] NSWCATAP 210 at [15]-[21].
3. A work order is always available as one of the range of choices under HBA s 48O, even though there is no statutory preference for it in respect of incomplete work and it would be unusual to direct a builder to complete work under a work order where the builder's performance is the reason for acceptance of repudiation or termination of the building contract: Clements at [22]-[33]. It would be otherwise where the owner repudiated or provided the grounds for termination of the contract: White v Sunrise Pools Aust PL [2017] NSWCATAP 216 at [5], [70].
4. The ultimate litmus test for whether a work order should be made, and formulating its content, is whether it is appropriate, having regard to the fact that HBA s 48O(3) imports the requirement in s 79U(1) of the Fair Trading Act 1987 (NSW) that the orders will be fair and equitable to all the parties to the claim: Petropoulos v CPD Holdings PL t/as The Bathroom Exchange (No 2) [2018] NSWCATAP 233 at [28], [30], citing with approval Kurmond Homes PL v Marsden [2018] NSWCATAP 23 at [25].
5. A work order must focus on the particular defect to be rectified and must be certain, practical and enforceable: Catapult Constructions PL v Denison [2018] NSWCATAP 158 at [46]-[61] and authority there cited. The evidentiary onus is on the homeowner to set out the appropriate method of rectification: ibid, at [59].
6. The parties are also under an obligation under Civil and Administrative Tribunal Act 2013 (NSW) (CATA) s 36(3) to co-operate to achieve the guiding principle in CATA s 36(1) which extends to the necessary co-operation, including provision of access, to ensure that work orders can be implemented in an orderly manner: Maiolo v Chiarelli [2016] NSWCATAP 81 at [40]-[46], [55]. This reinforces the express obligation in HBA s 18BA(3)(b), (5).
7. There is a co-ordinate focus on the conduct of the owner in assessing the form of relief. In ordinary principles of contract law imported into construction contracts, an owner's claim for monetary compensation requires the owner to act reasonably in relation to the claimed monetary loss in order for the claimed loss to be recoverable: cp HBA s 18BA(1), (5). This includes giving the builder a reasonable opportunity to remediate or complete, or to minimise damages by remediating what it can and will do: cp HBA s 18BA(1), (3)(b), (5). The owner may be justified in a reasonable loss of confidence in the willingness and ability of the builder to do the remediation and completion. The evidential onus is on the builder to prove that the owner acted unreasonably: Owners SP 76674 v Di Blasio Constructions PL [2014] NSWSC 1067 at [42]-[48], adopted in Owners SP 78465 v MD Constructions PL [2016] NSWSC 162 at [26]-[30] and GPM Constructions PL v Baker [2018] NSWCATAP 119 at [38]. This is consistent with the orthodox principles at general law: TCN Channel 9 PL v Hayden Enterprises PL (1989) 16 NSWLR 130 at 158; principles summarised in Downer EDI Rail PL v John Holland PL [2018] NSWSC 326 at [585] and authority there cited.
8. If the owner has acted reasonably then, since the builder is a wrongdoer, it will not defeat the owner's claim that the builder can suggest other and more beneficial alternative methods of remediation: Unity Insurance Brokers PL v Rocco Pezzano PL (1998) 192 CLR 603 at 654; Karakominakis v Big Country Developments PL [2000] NSWCA 313 at [187].
9. HBA s 48MA does not seem to reverse or otherwise disturb this evidential onus. What s 48MA does, at most, on the authorities mentioned in preceding paragraphs, is to require the decision-maker to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome. In having regard to a principle that states a preferred outcome, the basis for the principle to operate still needs to be established. How that is established and when it is established is built on and derived from the rules just described about establishing measure of loss.
10. It is not entirely established whether the Tribunal is required, by the statutory nature of the obligation in HBA s 48MA, to consider the "statutory preference" for a work order even if the builder does not make a submission seeking a work order, let alone if the builder disavows seeking a work order. In principle one would think that the basis for the principle to operate would not be established.
11. In relation to alleged incomplete work at the time specified for contract completion, an owner will not be entitled to damages in respect of that lack of completion where the delay arises from the conduct of the owner, including requested variations (before or after the contract completion date). This is an application or instance of the "prevention principle" that a party cannot insist on performance by the other party of a contract obligation if the insisting party has caused the other party's non-performance: Probuild Constructions (Aust) PL v DDI Group PL (2017) 95 NSWLR 82; [2017] NSWCA 151 esp at [114]-[115].

Measure of damages, specificity and proportionality in remediation

1. The ordinary, natural and probable consequence of a breach of statutory warranty as to compliance with approved plans (and laws, codes or standards) is remediation to achieve compliance by doing of the remediation work or paying to have it done by others. As the High Court said in Bellgrove v Eldridge (1954) 90 CLR 613, [1954] HCA 36 at 617, cited with approval by the High Court in Tabcorp Holdings Ltd v Bowen Investments PL (2009) 236 CLR 272, [2009] HCA 8 at [15]: "In the present case, the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she has sustained by the failure of the appellant to perform his obligation to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building on her land which is substantially in accordance with the contract."
2. This is applicable unless disproportionate on the principles discussed below.
3. Under HBA s 48O(1)(c) the owner is required to specify action by the builder that is grounded in proof by the owner of, not only the defect, but also the manner of remediation: Catapult Constructions PL v Denison [2018] NSWCATAP 158 at [46]-[61] and the authority there cited. In my view as I set out in Marr v JCK Building Solutions PL [2018] NCATCCD, unreported, 4 December 2018, HB 16/43946 at [46]-[54], an element of the manner of remediation in certain circumstances may inherently require inspection to establish the need for and required scope of remediation.
4. In Bellgrove v Eldridge (1954) 90 CLR 613, [1954] HCA 36, the High Court said that the scope of remedial works must not be disproportionate to the defect. The High Court has also stated that there is a high bar for unreasonableness or disproportion once a breach is established: Tabcorp Holdings Ltd v Bowen Investments PL (2009) 236 CLR 272, [2009] HCA 8 at [13]-[20]; see also Walker Group Constructions PL v Tzaneros Investments PL [2017] NSWCA 27 at [186]; Barwick v Shetab [2017] NSWCATAP 127 at [88].
5. The analysis in the paragraphs in the Tabcorp decision, and the authority there reviewed, also makes it clear in these passages that reinstatement, provided it is not extravagantly disproportionate, is the appropriate measure of relief.
6. Reinstatement means what the builder was obliged to build, namely, contract works with a certain standard of amenity and presentation which includes not being at risk of emergent problems returning or growing.
7. It also means that the form and finish of remediation and rectification produces an outcome that matches other components of the contracted works in form and finish and makes the works of the originally-intended quality and integrity.

Consideration applicable to more than one alleged defect

1. There were eight areas of defective work claimed.
2. The building experts who conclaved (the conclaving experts) agreed on all the alleged defects being defects except for two, where the disagreement was respectively on whether there had been remediation previously and where the experts agreed that the defect was a defect and was minor but disagreed on whether it was out of time under HBA s 18B with s 48K(7), which was a matter for other evidence on which I have made findings earlier in these reasons.
3. As previously said, the builder called and the owner cross-examined the stormwater engineer on the project. The engineer was called as an expert. He engaged only with waterproofing on the rear planter boxes, the existing roof and gutter installation. His reports pre-dated the conclave experts except for the final which was two weeks after the owner's expert report.
4. The engineer's comments on waterproofing were said to be "based on review of the design" and did not indicate inspection as built. There was no consideration of the other experts comments concerning the clay base to the soils. Most importantly, the engineer said: "We note that this design relies on appropriate tanking and waterproofing of the planter box to ensure no water ingress to the internal areas, and we note that this waterproofing detail are by others."
5. The inadequacy of waterproofing, which the engineer acknowledged was central to the drainage and was a matter for other expertise, was at the heart of the conclaving experts' agreed position.
6. The engineer's opinion on existing gutter and roof installation was based on a "visual inspection" together with "analysis of photos and original architectural plans". He concluded that, "since there has been no history of water leaking or damage to this area of the roof over the last two years, in which there has been considerable storms in February of 2020 and March 2021", he wouldn't expect that to change moving forward, the flashing required less cleaning out and maintenance than guttering and, although not strictly in accordance with the plans, was a suitable replacement for the box gutter.
7. The engineer acknowledged in cross-examination that the architectural plans originally showed a box gutter and that his opinion would change if the assumptions he had been given were incorrect. Those assumptions were that the sheet metal/flashing in lieu of the box gutter had been installed "such that the water falls off this flashing to the outside of the building " and "there hasn't been any roof leaks or damage caused by the proposed installation of the flashing".
8. The assumptions were incorrect as demonstrated by the evidence of the owner and the conclaving experts concerning water ingress and damage in rain events and after water testing.
9. The engineer's photographs showed extensive staining to the flashing from water ponding on it towards the external wall against which it abutted. The question of fall was not comprehensively addressed by measurement in the engineer's report.
10. The owner also said that the engineer's report addressed the adjoining part of the duplex. I have however no concluded exploration in the evidence that they were, or were not, different so have based my conclusion on the preceding reasons.
11. The engineer's opinion on box gutter design did not fully address the defects identified by the conclaving experts.
12. To the extent that he contributed to the expert debate, the engineer does not detract from the agreed findings of the conclaving experts set out below.
13. There was no other evidence of sufficient weight to displace the conclaving experts' opinion on the matters the subject of these proceedings.
14. In particular, the two quotations provided by the builder were not based on investigative inspection of the works. Although said to be "based off" both conclaving experts' quotations, they did not provide sufficient detail to know how that was done, in contrast to the costing analysis in the conclaving experts' reports and in particular how it was done when the conclaving experts' methodology differed. There was no material that indicated expertise or experience, adherence to a code of conduct, independence or the other matters important for expert opinion.
15. I accordingly find, based on accepting the agreed opinion of the conclaving experts, that the agreed defects between the building experts constituted defective work which the builder was liable to remediate.
16. I find that the claim for the agreed defect which was debated as out of time was brought within time, for reasons given earlier.
17. I do not accept the builder's submission that the works complained of, particularly in item 4.0, came within the contract exclusion for "landscape". That term, in an application of its ordinary meaning and in the context of the construction contract where the planter boxes and protection of external walls against moisture from adjacent conditions were integral construction features and required by applicable codes and standards, is restricted to the scoping of the surface of the property after construction. Further, the approved plans expressly used the term "landscape" for areas that fitted the above characterisation and bore out that the planter box construction was integral to the build and distinct from landscaping.
18. Even if "landscape" included the gardens within the planter boxes, the removal and reinstatement of those contents was incidental to the remedial work on contract works, being the work to the planter box structures themselves. Even if it included the side path pebbling, that was not the defect causing water entry, as further discussed below.
19. The experts agreed the cost for the agreed scope and method of work on one defect being northern box gutter item 7.0.
20. The defects are dealt with immediately below on net trade cost. The experts also disagreed on preliminaries and margin which are further dealt with below.
21. To avoid repetition, I have preferred, unless indicated otherwise in respect of a particular costing, the owner's expert's costings. They were comprehensively explained as based on the relevant Rawlinson cost guide adjusted for remedial work by the owner's expert's long experience, discussions with remedial builders and in light of the location, site access and perceived risk with remedial work. There was accordingly a significant uplift in costings from Rawlinson's rates. The source of materials costings was also comprehensively given.
22. The builder's expert's report was thorough and comprehensive on defects and methodology, comparable with the owner's expert report on these aspects.
23. However, the builder's expert costings appeared mostly to follow Rawlinson rates without reasoned consideration of why uplift was not justified. This is an important matter when dealing with remedial rather than new work. In cross-examination the builder's expert accepted he had omitted some elements in the remediation works.
24. There was also a more detailed and realistic analysis, discussed in concurrent evidence, in the owner's expert's costings of the time involved with the necessary serial or staged work, including removal, protection, storage and reinstatement of items in order to do the remediation work, together with the need for scaffolding and other equipment. The owner's expert also pointed to the crowded nature of access and storage on site and the risks associated with off-site storage if required.
25. Even if the builder's expert's cheaper alternatives at points were available and available, on the authorities already discussed that of itself was not sufficient and the owner's expert's solutions were not displaced by being disproportionate.

Water ingress from planter box to ground floor (item 1.0)

1. The experts substantially agreed on method of rectification, being a perimeter subsoil drainage system and re-waterproofing.
2. The owners' expert costed this scope of works at $13,243.13. The builder's expert costed it at $7,046.74.
3. For reasons already given, I prefer the owner's expert's costings.

Water ingress from louvred window to ground floor (item 2.0)

1. The experts substantially agreed on method of rectification, being installation of correct window flashing, water stop under and waterproofing of adjacent planter box.
2. The owners' expert costed this scope of works at $3,464.48. The builder's expert costed it at $1,364.
3. For reasons already given, I prefer the owner's expert's costings.

Water ingress from sliding stack door to ground floor (item 3.0)

1. The experts agreed substantially on method of rectification, being installation of correct flashing, water stop and weatherproofing of the adjacent planter box.
2. The owners' expert costed this scope of works at $4,863.02. The builder's expert costed it at $2,252.62.
3. For reasons already given, I prefer the owner's expert's costings.

Water ingress from north wall of kitchen, dining and living areas (item 4.0)

1. The experts disagreed on this alleged defect. The builder's expert said that it appeared that the defect had been previously rectified and there was no evidence of water ingress during water spray testing at his time of inspection. In his report he also relied upon instruction from the builder that the original owner "took it upon himself to [raise?] the ground level post practical completion of the property". This was a reference to the builder's evidence.
2. The owners' expert simulated rain in his water test with a hose and found water ingress to the dining room after five minutes of testing. He also found that the pebbles on the external path were 50mm above the internal floor level and the clay base was 20mm below the internal floor level. Various standards and provisions of the NCC were contravened.
3. The owners' expert costed this scope of works at $3,101. The builder's expert costed it at $nil.
4. I prefer the conclusions of the owners' expert. The water testing was more specific and the contravening levels of the external path created the context for water entry. Even if the pebbles on the path constituted landscaping or were not laid by the builder, the defect was found to be inadequate drainage under the pebbles given the water retention by the clay base, together with failure to construct base flashing of the external wall. As the owner's evidence stated, the evidence showed the pebbles were not of the small size to impede water flow.
5. There was no competing costing to that of the owners' expert, which I accept.

Water egress from planter box north elevation (item 5.0)

1. The experts agreed substantially on method of rectification, being installation of correct height of waterproofing. The owners' expert noted that the builder's solution - silicone sealant to the tile joints of the soffit - had not addressed the source of water.
2. The owners' expert costed this scope of works at $5,208. The builder's expert costed it at $3,656.
3. For reasons already given, I prefer the owner's expert's costings.

Water ponding on roof sheeting (item 6.0)

1. The experts agreed that the flat roof sheet had not been compliantly installed. Surface water forced up against the external wall ponded and may compromise the wall's waterproofing integrity over time. The reverse fall dispersed water over the west wall of the kitchen resulting in staining. No box gutter had been installed with the correct line of fall according to the plans. The solution propounded - installation of diminishing battens with flashing - was costed at $1,345.08.
2. The builder's expert's solution was slightly more expensive at $1,390. He recommended reducing the height of the timber stud frame at the outer edge so as to allow an adequate fall, with supply and connection to downpipe of an adequate gutter.
3. I accept the builder's expert's proposed method and costing in the presence of potentially equally suitable choices and costing.

Northern box gutter (item 7.0)

1. The experts agreed that the northern box gutter had not been installed the full length shown on the hydraulic plans and also did not follow the plans in that it terminated at right angles and had only a single rainwater head (there should have been one at each end) and not at right angles to the gutter. The overflow provisions allowed water to run onto the external wall and sills of the living and dining rooms resulting in staining.
2. The experts agreed the cost of remediation at a figure between their two estimates of $2,615.66.

Wet area tiled strip drains (item 8.0)

1. The experts agreed that the tile in-fill linear drainage system were too tight, accordingly difficult to remove for cleaning and maintenance and required a 10mm trim. Having accepted that this item is within time to be claimed for reasons given earlier, I accept the owners' expert's uncontradicted costing at $362.

Preliminaries and margin

1. The builder's expert originally combined preliminaries and margin at 15%. In cross-examination on the range in Rawlinson, he accepted that 8-9% would be fair to take into account the necessary equipment. This was still at the lower end of the Rawlinson range of 8-14%. He also appeared to accept that a margin of 15% would be reasonable.
2. The owners' expert allowed 11% for preliminaries (mid-range on Rawlinson), 25% for margin, 15% contingency and 1.5% for warranty insurance if a new builder was engaged, as I have found will be required. He pointed to the need for contingency given the risks of further required work in the course of remedial work.
3. On all these items I prefer the estimates of the owners' expert. Each of preliminaries, margin and contingency is market-driven by the demand for builders, the demand for remedial specialists and the specialist nature of remedial work. Although in this case the remedial work is largely of the same character and will involve the same sets of trades, the establishment costs and nature and scheduling of the work compared with a new build, and in a competitive market, will make these items higher and the potential for discovering further issues will increase the cost to justify a contingency. The owners' expert properly analysed the above matters. The contract margin for the new build of the duplex at 16% indicated that the extra remedial margin was reasonable because of the above factors. It also clearly indicated that the combined percentage (preliminaries and margin) in the builder's expert's assessment was significantly too low at 15%, which justified the builder's expert's proper concessions that moved his opinion closer to that of the owner's expert.

Outcome if a money order

1. The total net trade cost, if a money order is made, is $34,247.29. With preliminaries at 11% this becomes $38,014.49; with margin at 25% this becomes $47,518.12; with GST the total is $52,269.93; with contingency at 15% this becomes $60,110.42; with warranty insurance of 1.5% ($901.66) this becomes $61,012.08.
2. In accord with my findings in the following section of these reasons, I shall make a money order in the owner's favour for $61,012.08.

Outcome on work or money order

1. The respondent builder's written submissions relevantly said the following: "In the first instance, whilst the preferred order would be that the applicant undertake the works (s 48MA), the relationship of the parties has deteriorated over the last six (6) months and this would not be the best outcome for both the parties notwithstanding that the applicant has sought in his submissiions an order that the builder undertak the works. … In this regard, as mentioned above, it would be the respondent's preferred method for a lump sum to be paid."
2. I have understood that submission to be that the statutory preference under HBA s 48MA is not invoked by the builder. This was consistent with the builder's earlier evidence in his undated second statement said to have been prepared about the end of October 2021.
3. To the extent (if any) I need to consider the preference despite the builder's not invoking it, I consider that the evidence indicated a sufficiently severe relational breakdown of trust and confidence between the parties that it would be highly likely that a work order would only provoke further dispute and proceedings for a money order. One trigger for that breakdown was the owner's perception, borne out in some aspects by the agreement of the conclaving experts, that attempted remedial work was slow and ineffective.
4. To the relational breakdown can be added the likely fact of interaction while remedial work is being undertaken between the co-owners and the builder, given the largely external but disruptive nature of the work and the co-owners' living in the house while the work is undertaken.

Costs

1. Section 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (CATA), together with rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules), provide that the ordinary costs rules apply, even in the absence of special circumstances required by s 60, where "the amount claimed or in dispute in the proceedings is more than $30,000".
2. The threshold amount was exceeded in the owner's claim as finalised in evidence so the ordinary costs rules apply to these proceedings.
3. The starting point for exercise of costs discretion on the usual principles is that costs follow the event. "The event" is usually the overall outcome of the proceedings - did the successful party have to go to the Tribunal (in this case) to get what it achieved, rather than being offered at least that relief. If there are distinct issues on which the party seeking relief did not succeed, that may be taken into account in the exercise of costs discretion. Appeal Panel decisions have made no order as to costs (to the intent that each party paid its or their own costs) where there has been a measure of success on both sides: Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45 at [25]-[29]; applied in Oppidan Homes PL v Yang [2017] NSWCATAP 67.
4. Costs will include the assessed or agreed amount for expenses on expert reports, unless those expenses have been claimed and allowed as damages. Here there was no evidence of the costs of expert reports so there is no present basis for including such expenses in damages or costs.
5. Costs are usually ordered on the ordinary basis as agreed or assessed, unless the parties tender material and/or make submissions that justify an award of costs on the indemnity basis as agreed or assessed, in whole or part.
6. For an award of costs on other than the ordinary basis, a party's conduct of the proceedings themselves, or the nature of the proceedings themselves (for instance, misconceived), or an outcome less favourable than an offer, are considered. The principles are explored in Latoudis v Casey (1990) 170 CLR 534, Oshlack v Richmond River Council (1998) 193 CLR 72 and in this Tribunal in Thompson v Chapman [2016] NSWCATAP 6 and Bonita v Shen [2016] NSWCATAP 159, citing earlier consistent authority. The principles have resonance with at least some of the "special circumstances" in CATA s 63 that are required to justify a costs order when rule 38A does not apply.
7. Here, neither party had applied for leave for legal representation.
8. Here, each party was entitled to test the other party's claims and did so with vigour. Each party co-operated with the Tribunal in eliciting the evidence and there was no relevant significant misconduct in the proceedings.
9. Since neither party sought leave for legal representation or was represented, and there is presently no evidence of any costs incurred that could be recovered, it seems to me the appropriate order on present material is that each party bears its own costs of the proceedings, which is the effect of no order as to costs of the proceedings. In that respect, I note that the owner simply stated a figure of $3,368.75 for his expert's engagement. Without the invoice I do not know what that figure covers.
10. The parties however asked to defer questions of costs (including whether or not anyone sought a hearing on costs as opposed to their determination on the papers) until after delivery of the substantive decision. I shall make orders to provide for any further submissions and evidence on costs.

Orders

1. I make the following orders: 1. Order that the respondent Timilty Constructions PL pay Dean Culina $61,012.08 on or before 21 July 2022. 2. Order as follows in respect of costs: 1. Any party wishing to seek an order for costs is to file and serve that application with any further documents and any submissions relating to that application (including any request with supporting reasons for a further hearing on costs) on or before 7 July 2022. 2. Any documents and submissions in response to material served under (a) is to be filed and served on or before 21 July 2022. 3. Documents and submissions filed and served are not to repeat existing evidence and submissions but may cross-refer to them.

---

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 August 2022