Cully v Chaseling

The builder's position

1. The builder was ordered to file Points of Defence. He did not do that.
2. He did file a document which is in exhibit 1 described 'First response'. I will assume it is his response to the owner's Points of Claim. This document of 30 paragraphs is the builder's response and his account of what occurred. He states: 1. That the budget did increase significantly, by approximately 25% as work progressed and several issues were identified; 2. The project ceased in February 2017; 3. The original estimate of the owner's project was flawed; 4. As complex issues became known, they were disclosed to the owner; 5. The owner herself introduced complexity into the project; 6. In February 2017 a revised estimate was given to the owner; 7. Allegations of overcharging are denied; 8. In March 2016 he was eligible to apply for Home Owners Warranty Insurance cover of $500,000.00; 9. He offered to sign a contract with the owner; 10. The steel was not second hand; 11. The major work carried out for the owner was on a cost plus basis;

The contract

1. I find that the parties did not enter into written contracts for any of the work carried out by the builder for the owner.
2. For building work that has a contract price less than $5,000.00, such work is excluded from the definition of residential building work in the Act and therefore not subject to the Act. The Tribunal has no jurisdiction in connection with such work.
3. I find that the gutter repair work and the new linen cupboard built by the builder for the owner was not residential building work because its contract price was less than $5,000.00 and therefore cannot be the subject of a 'building claim' as referred to in s48A of the Act.
4. To the extent that the builder contravened the provisions of s 7 the Act which relates to the 'Form of Contracts', the Consumer and Commercial Division of the Tribunal, in which the owner's proceedings have been brought, has no jurisdiction to impose penalties on the builder for such contraventions.
5. Because the parties did not enter into a written contract it is necessary to ascertain what was the nature of their agreement for what I will call the 'major renovation work' which has been described by the builder as involving downstairs and upstairs renovation and an upstairs extension and deck.
6. I have had regard to the owner's statement of 18 September 2020. She states that she prepared a scope of works setting out her requirements for the works on 27 November 2016 with details following in December 2016 and January 2017. The 27 November scope of work was:

'Summary of work: 1. Renovate downstairs bathroom - near complete. 2. Renovate laundry and replace back doors - near complete. 3. Pressure test existing windows for leaks - especially windows that leaked during storm. 4. Repair or replace leaking windows. 5. Demolish upstairs toilet and bedroom 3 wardrobe (to make space for a larger main bathroom and new wardrobe). 6. Renovate main bathroom as per plan. 7. Build new wardrobe for bedroom 3 recessed into wall (approx 2450 high x 1500 wide x 615 deep). 8. Replace tile roof with colorbond roof. 9. Extend lounge and master bedroom, and build new deck. 10. Carry out repairs as per insurance scope of works as appropriate, including:

• re-position and repair kitchen window and bedroom 2 window;
• replace damaged yellow-tongue flooring.. 1. Replace bedroom 2 and bedroom 4 wardrobes (new carcass and robe doors). 2. Lay timber floor under proposed new kitchen and kitchenette. 3. Replace upstairs kitchen. 4. Replace downstairs kitchenette. 5. Re-paint house. 6. Lay timber floor. 7. Put water tank underground (excavate and level off backyard). 8. Fence perimeter (open wire mesh with timber posts).'

1. The owner's evidence is that on 6 January 2017 she paid a $15,000.00 deposit for the major renovation work. Council approval for this work was given on 9 January 2017.
2. She states that on 11 December 2016 the builder invoiced her for the commencement of the upstairs wardrobe and bathroom renovation. The builder states that council approval was not required for this work. She also states that the builder invoiced her another $6,227.00 for this work on 1 January 2017. I find that this work formed part of the major renovation work.
3. The owner's evidence based on her statement of 18 September 2020 indicates that she did not have any discussions with the builder regarding the commercial basis for the work being undertaken, although her evidence is that she suggested to the builder that they formalise their arrangements by entering into a written contract. I have had regard to the emails between the parties in August, September, November and December 2016 as tendered in the owner's evidence. These emails indicate ongoing discussions concerning the design of the major renovation work, and materials and equipment to be included.
4. The builder states that in November 2016 he was formally asked by the owner to complete the upstairs renovation and he assisted her in lodging the necessary plans with council. The builder states that he offered the owner to sign a HIA Cost Plus Contract, but she declined. The builder states the work was performed on a cost plus basis, was at the owner's request and to her benefit.
5. The parties evidence concerning the contract for the major renovation work is brief and unsatisfactory. Each of them states that she and he wanted to sign a contract. The builder was specific that he offered the owner a Cost-Plus form of contract. The owner states that she suggested that they sign a written contract. I find that there is little benefit in deciding who wanted to sign a contract and who did not. The fact is that the parties did not sign a contract and the builder as a licensed builder should have known that a written building contract was required. I also find that there is no evidence that the parties agreed to proceed on a cost plus basis. The only evidence there is that the parties, discussed what the '+' would be as a profit margin was the owner's evidence at [78] of her statement that the builder planned to increase the wages of his workers and introduce a builder's margin of 1%,
6. I find that the owner requested the builder to carry out the work that she had identified in her 27 November email. At that time both she and the builder had received the architects set of drawings. I find that it is common ground that the builder had stated to the owner that his estimate of the cost of the work was $200,000.00. That the owner had requested the builder to carry out the work is confirmed by her email of 13 February 2017 where she stated among other things: 'I realise there are still many unknowns, but I am wondering if at some stage you could estimate very roughly what ballpark I am in for the remaining work? Don't worry about the kitchens because I can use Holiday Coast Kitchen's quote as indicative (these costs are so variable and this is an area where I could economise).'
7. I find that the owner's request for the estimate for the remaining work is indicative of an existing contract or arrangement for the builder to carry out the work.
8. Apart from the owner's evidence at [78] of her statement that the builder planned to increase the wages of his workers and introduce a builder's margin of 1%, there is no supporting evidence that they discussed the payment terms that they would adopt or any other terms and conditions relating to the work. I find that in the absence of any agreed terms, the parties proceeded with the major renovation work on a 'do and charge' basis in accordance with the owner's scope of work, the architect's drawings, the Development Consent that had been issued and with the builder's estimate of $200,000.00 in the background. The owner states in [4] of her Points of Claim that she contracted with the builder on 22 November 2016. I reject her characterisation of the contract. Nonetheless the owner does not deny that she was in contract with the builder.
9. I find that the Act applied to the work that the builder was undertaking for the owner as it was residential building work as defined in the Act.
10. The Act is based on a central premise, among others such as the requirement for to hold a licence, that contracts for residential building work must be entered into, they will be in writing, signed and dated and will comply with its requirements which among other things, details what must be included in a contract. Contravention of the requirement for a written contract is addressed in s10 of the Act which states that a person who contracts to do residential building work under a contract to which the requirements of section 7 apply that is not in writing, or does not have sufficient description of the work to which it relates: '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.'
11. Pursuant to s18B of the Act the following warranties were implied into the parties' agreement for the builder to carry out the major renovation work: '(a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new, (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time, (e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling, (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment.'
12. As a consequence of s18B(1)(c), I find that the work carried out by the builder was required to comply with the Development Consent. A condition of the development consent was that the development was to be implemented in accordance with certain plans which unhelpfully were described as plans '1 -6'. I find that these plans were plans 1 - 6 prepared by Amanda Nunes on behalf of the owner.
13. Section 7E(1) of the Act states: 'A contract must include (and is taken to include) each of the terms set out in Part 1 of Schedule 2. A contract that contains a term that is inconsistent with a term set out in Part 1 of Schedule 2 is unenforceable to the extent of the inconsistency.' (Emphasis added)
14. Part 1 of Schedule 2 of the Act states: '(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 only applies to a contract to which section 7AA (Consumer information) of the Home Building Act 1989 applies.'
15. I find that s7AA of the Act applied to the contractual arrangements between the parties because I find that for the purposes of s7 of the Act, the contract price was at least $200,000.00, being the budget the builder provided. The result is that the terms set out in the preceding paragraph are included in the contract between the parties.

Licensing status

1. In accordance with s38(2) of the Civil and Administrative Tribunal Act 2013, I have searched the builder's licensing status. My search indicates that the builder's licence was subject to a condition that it was only for contracts not requiring insurance under the Home Building Compensation Fund in the period 30 September 2015 to 31 March 2016. Thereafter there was no restriction on the builder entering into contracts requiring insurance under the Home Building Compensation Fund, where that was required. The evidence is that the builder did obtain insurance under the Home Building Compensation Fund. There are two policies of insurance in exhibit 1 I find that at all relevant times the builder held the relevant insurance under s92 and 96 of the Act.

Experts

1. The owner engaged a number of experts to give evidence in support of her case. Mr Richard Eastman provided a building report. Mr Duffy provided a cost report. Mr Macleod and Mr Wood provided engineering reports. Mr Ballard gave evidence in connection with asbestos removal. Mr Cork provided an expert report on behalf of the builder.
2. I accept that Messrs Eastman, Macleod, Wood, Ballard and Cork are experts capable of giving expert opinion in the Tribunal. Since the owner does not rely on Mr Duffy's evidence in her submissions, I do not consider it to be necessary to consider whether his evidence is to be accepted as expert evidence. I find that his evidence goes to what a builder might charge for carrying out identified building work. I accept Mr Green's evidence as an experienced builder, providing his evidence of what he saw when he inspected the residence in 2016 and 2017.

Scott schedule

1. There are 2 scott schedules in exhibit A. One of 12 items and a separate scott schedule of 20 items. Mr Duffy said he prepared a scott schedule for the owner which he states quantified the costs of unwarranted works and cost to rectify defective/incomplete work. He did not attach a scott schedule to his report.
2. Mr Eastman prepared a report dated 17 December 2019. In that report he does not state that he prepared a scott schedule. Mr Eastman prepared a supplementary report on 16 September 2020 to take into account further information including by Ballpark Environmental Pty Ltd an expert retained by the owner and a report prepared by Mr Cork on behalf of the builder.
3. Mr Cork responded to a report and scott schedule prepared by +Ado Building Consultants (Mr Eastman) for the owner. In his opinion the appropriate rectification cost was $3,436 exclusive of GST, refer page 15 of exhibit 1.
4. I will determine the owner's claim in the order that she has raised it in her final submissions, being the order in which it is stated in the 12 item scott schedule.

Item 1 Asbestos remediation

1. The scott schedule claims $24,156.00 for these items. The builder's expert states that the proper cost is $1,500 and if items 2(i) and (ii) are found in the owner's favour then, his estimate will increase by $8,991.00.
2. There is no real dispute that the builder's work was not adequate in handling and disposing of asbestos when he carried out demolition to the owner's dwelling.
3. There are a number of asbestos reports. The owner relies on expert reports from Mr Ballard of Ballpark Environmental and documents from Coffs Harbour Demolitions regarding the asbestos clean that it carried out.
4. Ballpark Environmental in a report dated 17 August 2020 summarised their investigations by stating that asbestos containing material (ACM) debris and asbestos dust was identified on the eastern wall of the living room, asbestos dust was identified on the exposed timbers of the southern wall of the kitchen and asbestos dust was identified on the southern wall of the en suite in bedroom 1. Ballpark Environmental recommended that as a priority the owner engage a Class A licensed asbestos removalist to collect and remove the ACM debris and undertake a thorough environmental cleaning to remove loose asbestos fibres identified on the site. They stated that the ACM debris and asbestos dust would need to be removed under controlled conditions and disposed of as asbestos waste.
5. The builder's expert, Mr Cork in a report dated 20 October 2020 when he had been given all relevant Asbestos reports and documents stated that he agreed that asbestos removal was carried out by the builder and that the builder did not hold a current asbestos removal license and did not obtain a clearance certificate after removal. He also agreed that the upper level of the property required remediation works by a class A licensed asbestos removal company and a clearance certificate needed to be obtained due to the amount of time elapsed from removal.
6. I find that there is a degree of agreement between Mr Ballard of Ballpark Environmental and Mr Cork, although they do not agree on the proper costs that should have been incurred by the owner in connection with asbestos removal.
7. In his closing submissions the builder stated: 'An asbestos contractor (Walsh demolition) was employed for the project, however during the course some amounts of suspected asbestos was also removed and set-aside by myself when the contract was not available onsite. This is common practice and allowed under regulations for small amounts of asbestos sheeting, although I concede that I removed marginally more than technically allowed (10m2)'
8. Based on the reports of Mr Ballard of Ballpark Environmental and Mr Cork and the concession made by the builder, I am satisfied that the builder was in breach of s18B(1) (a) and (c) of the Act in that his handling of asbestos was not carried out with due care and skill or in accordance with the NSW Work Health and Safety Regulation 2011 and Workcover standards.
9. The owner submits that she should receive the amounts claimed for item 1 in the scott schedule, $17,600.00 and $6,556.00.
10. The first item is $17,600.00 which was paid by the owner to Coffs Harbour Demolitions for asbestos removal. The documents in exhibit A, volume 3 include a quote from Coffs Harbour Demolitions to the owner to carry out the work referred to in the Ballpark Environmental report dated 17 August 2020 for a GST inclusive amount of $17,600.00. The Coffs Harbour Demolitions quote was accepted by the owner on 18 August 2020. There is evidence that the owner has paid at least $8,800.00 and if she has not paid the balance, I am satisfied that she is legally obliged to do so.
11. The Coffs Harbour Demolitions quote stated that the owner was to engage Ballpark Environmental who was to provide the following services at the owner's expense: 1. preliminary investigation works, sampling and letter of advice/ site assessment report 2. ARCP and risk assessment reviews/ ITPs 3. Daily air monitoring; 4. SWAB sampling and Validation sampling; and 5. clearance certificate.
12. On 18 August 2020 Ballpark Environmental sent a proposal to the owner to provide hygienist services during the asbestos removal works. The amount quoted was $6,556.00. The owner accepted this proposal and paid Ballpark Environmental's tax invoice in that amount. This amount is claimed by the owner, as referred to above.
13. One issue raised by Mr Cork on behalf of the builder is that the clean by Coffs Harbour Demolitions went further than recommended by Ballpark Environmental by completely stripping the bathroom and adjoining cupboards during remediation to obtain a clearance certificate. Mr Cork's evidence was that Coffs Harbour Demolition completely stripped out the upper bathroom and adjoining wardrobe during remediation works.
14. The builder also took the position that the owner failed to mitigate the damages or cost associated with asbestos removal because she did not allow him to arrange the asbestos removal work at his own expense. There was correspondence between the parties about this. On 14 August 2020 the builder wrote to the owner stating: 'I consent for Jeff Cork of Expert building consultants to arrange at my expense the formal clearance and any associated work needed by a licensed asbestos removal contractor, as was intended and booked to occur in 2017. I also consent for him to mediate on my behalf any other costs that are fair and warranted. I note that these costs should have been incurred by you in the course of the renovation work you contracted us to complete, and that this clearance has been willfully prevented by you until now. In the interest of professionalism and mediation I am willing to pay for this process, however on the strict condition that it is orchestrated by Jeff Cork of Expert building consultants, a suitably qualified third party.'
15. The owner did not agree to the builder's request. Her reasons were provided on 14 August 2020, the main one being that the builder had according to her proposed a B class contractor, whereas she was seeking that the work be carried out by a Class A contractor.
16. On 14 August the builder responded to the owner. He stated that he had read the Ballard report, (Ballpark Environmental) which is strange since it was dated 17 August. The builder stated that he proposed to engage All Areas Demolition who had both class A and B licences. The owner replied the following day, 15 August, stating that she would confer with Mr Ballard. The builder replied on 17 August asking the owner to ensure that Mr Ballard keep Mr Cork and himself informed. On 17 August the owner informed the builder that she nominated Coffs Harbour Demolitions to undertake the asbestos removal works and an environmental clean of the upper level. The owner contracted with Coffs Harbour Demolitions the following day.
17. I find that the owner did not confer with Mr Ballard to discuss the builder's proposal and this indicates that she had no intention of allowing the builder to carry out the work recommended by Mr Ballard in the Ballpark Environmental report by his own contractor, All Areas Demolition.
18. So far as All Areas Demolition are concerned, that company prepared a quotation dated 21October 2020 which was based on an Asbestos Survey & Initial Advice from Ballpark Environmental dated 13 August 2020. Its quote was annexed to Mr Cork's 20 October 2020 report. The amount quoted was $15,661.80 including GST, or $1,938.20 less than the amount quoted by Coffs Harbour Demolitions.
19. In The Owners - Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067 Ball. J stated at [42] in connection with mitigation of loss: 'Generally speaking, a person who suffers loss as a consequence of a breach of contract is required to act reasonably in relation to that loss in order for the loss to be recoverable. An important aspect of this general principle is that the party who has suffered a loss is under a duty to mitigate its loss. Sometimes the use of the word "duty" in this context is criticised, since there is no requirement that the plaintiff act in a particular way and no requirement that the plaintiff minimise its loss: see, eg, J Carter, E Peden and GJ Tolhurst, Contract Law in Australia, (5th ed, 2007, LexisNexis) at [35-35]. Rather, the principle is that the plaintiff is not entitled to recover losses attributable to its own unreasonable conduct. As O'Connor J explained in Hasell v Bagot, Shakes & Lewis Ltd [1911] HCA 62; (1911) 13 CLR 374 at 388: 'One of the principles on which damages are assessed [is] that a party to an agreement suffering injury from the other party's breach of its terms is bound to exercise reasonable care in mitigating the injurious consequences of the breach, and is not entitled to recover from the party in default any damage which the exercise of reasonable care on his part would have prevented from arising.'
20. In The Owners - Strata Plan No 76674 v Di Blasio Constructions Pty Ltd Ball J further stated at [44]: 'In the case of building contracts, it is also generally accepted that the owner must give the builder a reasonable opportunity to rectify any defects. Often, of course, the building contract itself requires the owner (sic) (builder) to repair defects or sets out a procedure by which defects are to be made good: see, eg, Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302; (2010) 26 BCL 335. But, even if it does not, the owner is required to give the builder an opportunity to minimise the damages it must pay by rectifying the defects, except where its refusal to give the builder that opportunity is reasonable or where the builder has repudiated the contract by refusing to conduct any repairs: see J Bailey, Construction Law, (Vol II, 2011, Informa Law) at [14.109]; Cassidy v Engwirda Construction Co (No 2) [1968] Qd R 159 (reversed on other grounds in Cassidy v Engwirda Construction Co (No 2) [1968] QWN 47 (HC); (1968) 42 ALJR 168). That obligation may be an aspect of the duty to mitigate, since it may be less expensive for the builder rather than a third party to rectify the defects, particularly if the builder is still on site. But the obligation is not simply an aspect of the duty to mitigate. The cost to the builder of undertaking the repairs is likely to be less than the amount that a third party would charge the owner for the same work. In that case, the owner is not mitigating its loss, but rather the builder's damages.'
21. There are two issues to be determined. First, did Coffs Harbour Demolitions carry out a scope of work greater than proposed by Ballpark Environmental. Secondly, did the owner fail to mitigate her damages by unreasonably refusing to allow the builder to carry out the necessary asbestos removal work.
22. The answer to the first question is that having regard to the Ballpark Environmental letter of 16 September 2020 the first-floor bathroom was inspected following the removal of the ceiling and flooring. The first floor bathroom is a different space to the en-suite to bedroom 1 as shown on the Ballpark Environmental drawing dated 17 August 2020. The Ballpark Environmental 17 August 2020 report did not recommend clearance or investigation of this area. However, there is no suggestion that the work to this bathroom has increased the cost incurred by the owner which she now seeks to pass on to the builder. I find even if Coffs Harbour Demolitions did carry out a scope of work greater than proposed by Ballpark Environmental, which is most probably the case, the owner's damages have not been unnecessarily increased, that is she was not charged more for this work.
23. The second question is whether the owner failed to mitigate her damages by refusing to allow the builder to have this work carried out by his contractor. The authority cited above raises the following issues, First, did the owner act unreasonably in not giving the builder an opportunity to minimise the damage by rectifying the issues with asbestos and therefore increase the cost she now claims. I find that the owner did not give the builder's proposal of 14 August any real consideration. There is no evidence of Mr Ballard communicating with Mr Cork to explore or discuss what would be done. Nor is there any evidence that the owner gave any consideration to the builder's proposal to have All Areas Demolition do the necessary work as they had A and B class licences, thus satisfying her requirement for the work being done by an A class licence holder. I find that having regard to these findings that in accordance with the citation from The Owners - Strata Plan No 76674 v Di Blasio Constructions Pty Ltd at [67] that the owner failed to mitigate her damage by refusing to allow the builder to manage the asbestos clean up with his own licensed contractor. There is no evidence to persuade me that the owner's engagement of I further find that the owner's engagement of Ballpark Environmental as requested by Coffs harbour demolition was so essential to the asbestos clean up that it made her rejection of the builder's proposal a reasonable course to adopt. The scope of work stated by All Areas Demolition included Air monitoring and the supply of a clearance certificate which formed part of the Ballpark Environmental 18 August 2020 proposal as referred to in [59] above.
24. The owner's damages will be reduced to $15,661.80 in connection with this item on the basis that she failed to mitigate her loss.

Item 1(ii) Replacement of items that cannot be decontaminated

1. The scott schedule states 'Provided separately'. In submissions the owner relies on page 1215 of volume 3 of exhibit A to claim $23,700.00. That page states: $6,000.00 Woven oriental rug $5,000.00 Three piece lounge suite $2,800.00 Velvet upholstered arm chair and matching poufe $1,200.00 Velvet double bedhead $2,800.00 Care-o-pedic double bed ensemble (mattress and base) $2,000.00 Slumberland Olinda double bed mattress $200.00 Single bed ensemble base with built-in drawers $100.00 Two camp single mattresses $1,600.00 Re-upholstering of 4 piece cane lounge suite & lazy chair (frame salvaged) $1,000.00 Assorted clothing & shoes $1,000.00 Curtains & blinds $23,700 Total estimated cost by applicant 16/09/2020

1. The basis of this claim is that as a result of the builder's actions in removing asbestos in an unauthorised way, the above items cannot be cleaned and must be treated as asbestos waste. Refer Recommendation 7 of Mr Ballard's report. I accept Mr Ballard's evidence in this regard.
2. The owner has made her own assessment/estimate of the damage that she states that she has sustained. The owner has not stated whether the values stated above were the purchase cost of the items, their replacement value, or their estimated value at the time of the work carried out by the builder. There is no indication of the source of the figures. I find that the owner cannot in effect give her own subjective evidence of the loss associated with the items referred to being disposed of as asbestos waste.
3. In Lyon v Frenbray Pty Ltd [2022] NSWCATAP 207 an Appeal Panel stated at [102]: 'In Di Liristi v Matautia Developments Pty Ltd [2021] NSWCA 328; (2021) 396 ALR 545 one issue was the sufficiency of proof as to the cost of remediation of certain land. The only evidence tendered were two quotes for that remediation. Gleeson JA, with whom Macfarlan and Brereton JJA agreed, held that the two quotes were "some evidence, albeit slight, of the likely cost of remediation". His Honour said: "[76] It is well-established that where damage has been proved but the evidence does not enable precise quantification of it, the Court is required to "do its best". In Paino v Paino (2008) 40 Fam LR 96; [2008] NSWCA 276, Hodgson and McColl JJA said at [76]: 'There is a general principle in relation to damages that where a plaintiff has proved substantial loss but the evidence does not enable precise quantification of it, the court should "do its best": Fink v Fink (1946) 74 CLR 127 (at 143); New South Wales v Moss (2000) 54 NSWLR 536; [2000] NSWCA 133 (at [72]); Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 (at [135]-[141]).'"
4. The position stated above is well known in cases where the there is evidence of loss or damage, albeit slight. However in cases where the evidence is not satisfactory there is authority for different outcomes.
5. In Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31 Black J. explained the position as follows at [42]: 'On the other hand, the case law also recognises that damages must be proved with a degree of precision which reflects the proof that is reasonably available to the parties: State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 at [72]; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768 at [38]. In Schindler Lifts Australia Pty Ltd v Debelak [1989] FCA 311; (1989) 89 ALR 275 at 319, Pincus J noted that "if the evidence called on behalf of [the plaintiff] fails to provide any rational foundation for a proper estimate of damages, the Court should simply decline to make one". That approach was approved by Brooking J in JLW (Vic) Pty Ltd v Tsiloglou [1994] VicRp 16; [1994] 1 VR 237 at 243 and by the Court of Appeal in Troulis v Vamvoukakis [1998] NSWCA 237 where Gleeson CJ observed that, where damages were susceptible of evidentiary proof, but there was an absence of raw material to which good sense may be applied, "[j]ustice does not dictate that ... a figure should be plucked out of the air". That decision has been approved in subsequent cases, including McCrohan v Harith [2010] NSWCA 67 at [128], where McColl JA (with whom Campbell JA and Handley AJA agreed) held that an estimate of damages, in the nature of a "guess", should not be made where precise evidence of the damages suffered could have been adduced, but was not. I followed that decision in Re Hair Industrie Penrith Pty Ltd, Hair Industrie Merrylands Pty Ltd [2015] NSWSC 1578 at [20], on which I have drawn for the summary which appears above.'
6. I find that it was possible for the owner to have obtained more precise evidence than she has provided. She has not explained the table on page 1215 of volume 3 of exhibit A or the basis on which it was prepared. It is possible that she could have obtained an auctioneer's assessment of what the items might obtain at auction, or explain the difficulties she has or would face in obtaining an assessment of the current value of the items. On the basis of the extract from Sabouni v Revelop Building and Developments Pty Ltd, I find that the owner has failed to provide a rational foundation for a proper estimate of damages and that in the absence of raw material to which good sense may be applied, an estimate of damages, in the nature of a "guess", should not be made where precise evidence of the damages suffered could have been adduced, but was not.
7. I will allow the owner nominal damages of $10.00 in connection with this item as it seems clear that a loss has been sustained.

Item 2(i) - Reinstate main bathroom to current level of completion

1. The owner claims $12,080.00 for this item. The builder's expert states that there should be no amount allowed for this item. He relies on his evidence that that Coffs Harbour Demolition completely stripped out the upper bathroom and adjoining wardrobe during remediation works when the Ballpark Environmental report did not call for that.
2. The owner relies on Mr Eastman's report of 16 September 2020. In that report he states that he has been given a copy of, among other things, the Ballpark Environmental report dated 13 August 2020 which I assume is an earlier version of their 17 August report which is in evidence. In particular the owner relies on pages 961 - 964 of volume 3 of exhibit A. This section of Mr Eastman's report refers to the structural damage to the bottom plate/joist which is referred to at item 12 of the scott schedule.
3. The owner claims $12,080.00 for this item, although she has not referred to any expert's opinion as supporting it.
4. I find that the sections of Mr Eastman's report which are relied upon to support this item do not actually address it at all, and there is no evidence to which I have been referred or of which I am aware, that supports or substantiates the amount claimed. I reject this item of the owner's claim. I find it is most probably an invention of hers.

Item 2(ii) - Reinstate new wardrobe to current level of completion

1. The owner claims $1,935.00 for this item. The builder's expert states that there should be no amount allowed for this item. He relies on his evidence that that Coffs Harbour Demolition completely stripped out the upper bathroom and adjoining wardrobe during remediation works when the Ballpark Environmental report did not call for that.
2. The owner relies on a photograph of ACM Debris which was found in the bulkhead of the main bathroom. This evidence does not relate to the linen cupboard/adjoining wardrobe that was stripped out by Coffs Harbour Demolitions. There is also no evidence to support the amount claimed. I reject this item on the basis that the builder did not strip out the wardrobe and that it is probable that it was stripped out by Coffs Harbour Demolition. In addition, the photograph relied upon does not support the claim and there is no evidence to substantiate the amount of $1,935.00 claimed.

Item 3 - wall non-compliant with plans and specifications

1. The owner claims $1,860.00 for this item. The builder's expert states that the amount to be allowed is nil, but if the Tribunal finds in favour of the owner the amount to be awarded is $500.00.
2. The owner relies on the evidence of Mr Eastman in connection with this item. The requirement for this work is found in the owner's scope of work dated 27 November 2016. At item 6 she stated: 'Build new wardrobe for bedroom 3 recessed into wall (approx 2450 high x 1500 wide x 615 deep)'
3. The owner also provided a sketch which showed the wardrobe referred to in item 6 of the scope of work.
4. Mr Eastman at 6.8 of his first report states that the actual depth is 490mm and the height is 2280mm which is contrary to the owner's scope and that there is no provision for the specified wardrobe doors to be attached to the wardrobe.
5. Mr Cork for the builder states that the drawings that were part of the Development consent do not show this wardrobe. That may be correct. However I have found that the owner's scope of work was a document which formed part of the contract. Mr Cork also refers to a number of emails which show that the owner's design requirements changed and as a result the dimension of this wardrobe changed. The emails relied upon are dated 29 and 30 November, 12 December and 12 January 2017. Mr Cork does not explain precisely how any one of these emails affected the wardrobe. The respondent also hand annotates emails in exhibit 1 and alleges a meeting with the owner regarding the wardrobe in bedroom 3. He does not state when the meeting was or what was said.
6. The builder addresses this item at 6 of his statement which is at page 98 of exhibit 1. The builder states that the dimensions of this wardrobe were subject to the bathroom which adjoined bedroom 3. He states that the owner changed her vanity selection and size and the lay of the bathroom at least three times and that the layout and dimensions of the wardrobe and bathroom layout were changed continually. He states that the layout was finalised during a site meeting with the owner, himself and a tradesman Mr M Brett. He states at this point the dividing wall between the bathroom and bedroom 3 had been constructed and he went into the exact details with the owner of how she wanted the wardrobe to be laid out the types of doors and also due to the limited space for the wardrobe and the adjacent bathroom space they double checked that the space for the wardrobe was sufficient. Mr Brett's evidence which is at page 132 of exhibit 1, stated that he was also part of a long site meeting with the builder and the owner when the main bathroom was partially constructed discussing the exact size of the vanity alcove in the bathroom and the adjacent wardrobe in bedroom 3 three, the size of the wardrobe doors and the size of the vanity which he states had been changed by the owner of a couple of times.
7. At [39] I found that the contract was subject to a condition that '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'
8. I find that the effect of the condition referred to above was to require the agreement alleged by the builder to change the dimension of the wardrobe to be in writing and signed by the parties to the contract. The basis for this finding is that I find that the original requirement, namely to: 'Build new wardrobe for bedroom 3 recessed into wall (approx 2450 high x 1500 wide x 615 deep)'
9. was a term of the contract or alternatively a specification of the work required to be done and therefore subject to the above condition. Clause 7E of the Act stated that the contract was taken to include the above term.
10. I find that the builder was in breach of the contract because he did not build the wall and or the wardrobe in accordance with the owner's scope of works and that any change to that scope was required by the Act to be in writing and signed by the parties. I also find that there was no such signed writing changing the scope.
11. There is a dispute about the cost associated with this item. The owner claims $1,860.00 for this item. The builder's expert states that if the Tribunal finds in favour of the owner, the amount to be awarded is $500.00. Mr Duffy stated that he would charge $4,600.00 + GST to do the necessary rectification work.
12. Mr Eastman does not provide an assessment of the remedial cost of $1,860.00, nor does the owner provide an explanation of how this cost is made up. At page 11 of exhibit 1 Mr Cork provides a break-up of the sum of $500.00 he states is the rectification cost on an as - found basis. In the absence of the identification of the source of the owner's cost of $1,860.00, I accept Mr Cork's estimate.
13. I will find for the owner in the sum of $500.00 plus GST in connection with this item, $550.00.

Item 4 - Unauthorised strip out of upper level

1. The owner claims $39,164.00 for this item. The builder's expert states that the amount to be allowed is nil, but if the Tribunal finds in favour of the owner the amount to be awarded is $11,246.00.
2. To be successful in connection with this item, the owner must establish that there has been a breach of contract or a breach of one of the statutory warranties. The owner is not specific about this in her Points of Claim.
3. The only rational basis for a claim based on the builder's strip out of the residence is I find that the work was not done with due care and skill, or not done in accordance with the plans.
4. The essence of the owner's claim is that the builder stripped out the first floor of the residence to an excessive degree, without her knowledge or consent and in excess of what was required. There is no dispute possible that the builder did strip out the first floor of the residence. The numerous photographs in evidence demonstrate the extent of the strip out. The statement of Mr J Cully, which I accept, and his photographs describes and show the extent of the strip out.
5. The builder's position as conveyed to the owner in an email dated 7 May 2017 was: 'The assertion that damage has been done is dishonest and fraudulent, the demolition work carried out was, 1. Discussed with and authorised by you, 2. Necessary for both investigation by the Engineer in order to do his assessment and plans, and 3. to provide access for the specified bracing, steelwork etc we were contracted by you to install.'
6. In the builder's first response to the claim which is at p175 - 183 of exhibit 1, his position responding to this item is stated as that the demolition work was necessary and required for the design of the steelwork and bracing, as explained by the structural engineer to the owner. In addition at [23] the builder stated: 'Aside from the extension on the North side of the kitchen, flooring and gyprock on the south side of the home had sustained water damage and had been paid out for replacement to Ms Cully by her insurance company. Additionally, there was an ongoing insurance claim being assessed for structural damage to the windows on her South facing wall which required exploratory demolition work paid for by Ms Cully's insurance company, and a full rewiring of the home following a lightning strike and further claim in December. I was very careful to ask in detail from Ms Cully if she would like all of these works carried out together, involving the removal of the kitchen, flooring the affected gyprock and the demolition required by the engineer done at once, or if she would like it staged separately. Ms Cully stated that she was happy to carry out the works together, being eager for the work to be carried out in a timely and efficient manner.'
7. The owner and the builder's evidence is in conflict regarding the owner's state of knowledge regarding the demolition or strip out of the first floor of the residence in January 2017.
8. In Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Gleeson CJ, Gummow and Kirby JJ stated at 129[31]: '... in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately ... Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearance of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles of witness credibility; but it tends to reduce the occasions where those principles are seen as critical.'
9. To the extent possible I will have regard to contemporary materials, objectively established facts and the apparent logic of events in the determination of this aspect of the owner's claim.
10. It is common ground that the owner had made 2 insurance claims in connection with her residence. The first arose out of an event which occurred in August 2016. This event led to an insurance claim being made by the owner which was substantially resolved on or about 10 January 2017. On that date the owner sent a draft email intended for the insurer, to the builder for his comment. The email was: 'Thank you for progressing my claim. I would like to accept Comminsure's offer as outlined below subject to confirmation that the cash settlement amount of $39,388.33 includes the cost of my builder stripping the walls to fully expose the damage around the kitchen and bedroom windows where the frame has dropped (as previously identified by Commlnsure's assessor and A J Grant), but that it does not include the cost of repairing the damage, which will be quoted separately and submitted as a variation by my builder once the extent of the damage is clearer. As we discussed, this approach is consistent with A J Grant's advice to me that they would be submitting a variation to Commlnsure to cover the cost of these repairs once they had pulled out the kitchen and removed the wall sheeting. I agree to Commlnsure sending a building consultant to inspect the damage as required. If you need any further information please do not hesitate to contact me.' (emphasis added)
11. I find by reason of the above email that the owner was aware as at 10 January 2017 that the work to be done as part of the first insurance claim included stripping the walls to fully expose the damage around the kitchen and bedroom windows and removing the kitchen and removing the wall sheeting. This is confirmed when the owner sent an email to the builder on 12 January 2017 which discussed the insurer's position that some further investigative work was required in connection with 'dropping windows'. The owner's 12 January 2017 email made it clear that she was aware of proposals that the insurance work and cover would include pulling out the kitchen and removing the gyprock.
12. It is common ground that AJ Grant was the insurer's builder in connection with the first insurance claim. AJ Grant prepared a scope of work which is in exhibit A. This scope of work included a number of items of work that may be described as of a demolition or strip out nature.
13. This scope was expanded to remove and replace affected particle board flooring to the kitchen and dining room, requiring removal of the kitchen.
14. Before leaving this insurance claim, I find that it was the owner's intention that the necessary remedial work the subject of her claim would not be carried out by AJ Grant, but would be carried out by the builder. Remarkably the parties did not discuss this in plain terms, but I find that the facts support an inference that such was their intention. In fact the owner's scope of work allows such a finding to be made. It stated among other things: 'Carry out repairs as per insurance scope of works as appropriate, including: re-position and repair kitchen window and bedroom 2 window; replace damaged yellow-tongue flooring'
15. The owner's evidence at [64] confirms a meeting with the engineer Mr Jankovic on site when the engineer said that the extension would require plywood bracing in some walls because the site was exposed to high winds. On 13 January 2017 the owner wrote to the builder making proposals about the bracing.
16. Based on the contemporaneous evidence, I am not persuaded that the owner had no knowledge of and did not consent to the builder to some extent, stripping out the first floor of the residence. The emails that I have referred to indicate that the owner had actual knowledge that the builder would strip out the walls to fully expose the damage around the kitchen and bedroom windows. I also find that the owner through her knowledge of the AJ Grant documents knew that the amount of which she would or had received as the insurance payout, included a certain amount of strip out work. In addition in her statement, the owner stated that on 13 January 2017 the builder told her that he needed to remove a narrow section of the lounge room ceiling along the front wall to measure up for the new steel beam, required by the engineer's drawings.
17. The owner's experts have provided opinions on this. Mr Eastman's consideration of this issue was subject to the owner's instructions. It is important to have regard to them in the consideration of his evidence, as his opinion is limited by those instructions. At [9] of his report Mr Eastman states: 'The Owner has advised that the Builder was not authorised to remove any plasterboard, ceilings, skirtings, cornices or architraves if the total cost of building work was likely to exceed $200,000. However, the Owner has requested an assessment of the actual works undertaken by the Builder compared to the works that would be warranted as per the engineering plans by Nick Jankovic (warranted Works). In addition, and not taken into account by MacLeod Consultants, were insurance repairs as specified in AJ Grant Scope of Works No. 00226840. The Owner has advised that the Builder was not authorised to proceed with insurance repairs because the claim was still under negotiation with the Insurer (Commlnsure). Specifically, insurance repairs were not to proceed until the Insurer has approved the Builder's quote to remove wall sheeting and cornice around the kitchen window (to investigate potential storm damage the Builder alleged had occurred to the frame). However, the Owner has requested an assessment of the actual Work undertaken by the Builder compared to the warranted Works for insurance repairs as per the AJ Grant Scope of Works.'
18. As regards the instructions received by Mr Eastman, I find that the owner has not provided evidence that the Builder was not authorised to remove any plasterboard, ceilings, skirtings, cornices or architraves if the total cost of building work was likely to exceed $200,000. Her witness statement does not make such an assertion. Nor has she referred to any document which conveyed that instruction to the builder. I also find that the owner has not provided evidence that the Builder was not authorised to proceed with insurance repairs because the claim was still under negotiation with the Insurer. Nor have I been referred to any document which conveyed that instruction to the builder.
19. I also find that the above instructions are to some extent inconsistent and not particularly clear. The defined term 'warranted works' appears to relate to the demolition work that would be warranted by reference to the engineering plans. The owners final request is for an assessment of the builder's actual demolition/strip out work compared to the demolition work that would be warranted by reference to the engineering plans for the insurance work. I find this request to be not particularly clear as the engineering plans have no obvious connection with the insurance work.
20. What is apparent is that Mr Eastman has not been requested to take into account the demolition/strip out work that was required for the builder to proceed with the owner's 27 November scope of work.
21. The owner's evidence is that she returned from the residence to Canberra on 15 January. I find that there can be no suggestion that as at 15 January 2017 the major renovation work was on hold or the builder was specifically told not to proceed with that work, or to proceed only with specific items of work.
22. In his report Mr Eastman referred to the AJ Grant Scope of works which he stated required demolition or strip out. He then described the strip out/ demolition work carried out by the builder, providing details and quantities of what he describes 'unwarranted removal' which is the demolition/strip out work over and above the AJ Grant Scope. Contrary to his instructions he did not consider whether the engineering plans required demolition/strip out works. He also did not consider whether the owner's 27 November scope of work required demolition/strip out wok to be undertaken. Mr Eastman also dealt with this issue in his 16 September 2020 report at [20] and [21]. I find that those paragraphs are not expert opinion but are more in the nature of advocacy on behalf of the owner. I have had no regard to them.
23. Mr Green also provided a report. Mr Green had inspected the residence in 2016 in connection with the owner's insurance claim. He revisited the residence in April 2017. He stated, among other things: 'I could not understand the amount of strip out that had been done on the first floor of the dwelling which was far outside the scope of AJ Grant's insurance repairs or the plans for an extension (prepared by Amanda Nunes Design and Drafting and Nick Jankovic Design and Engineering)'
24. The owner also obtained an opinion from Mr Macleod an engineer. He stated, among other things: 'In order for the Builder to prepare for the structural part of the subsequent extension construction (future works), there would have been the necessity to demolish or remove and replace as follows: i) Remove and discard plasterboard to walls to receive plywood bracing as shown on the Engineer's plans (retain skirtings and architraves as they will need to match the remainder). Refer Sketch SKI in Appendix C for my opinion as to extent. ii) Remove a 750mm width of ceiling adjacent to existing doors to Verandah to allow for installation of new beam. Refer Sketch SKI in Appendix C. I noted on the Architectural Upper Floor Plan Demolition prepared by Amanda Nunes Drafting & Design drawing number 2016-014 page 2/6 that the whole area was hatched and notated " Existing to Remain." It is my opinion that the extent of lining removal far exceeded that required for both the structural and architectural requirements.'
25. Mr Cork's evidence on behalf of the builder was that after reviewing engineering plans by Mr Nick Jankovic, architectural plans by Amanda Nunes Drafting, a site inspection and discussion with the builder, he believed the extent of the strip out carried out by the builder was required to achieve the desired layout and standard of finish requested by the owner. Water staining to the rafters, attempted repairs under tiles and re-fixed timber battens, confirmed advices by the builder as to the state of existing ceilings.
26. Mr Eastman does not provide a break up or an explanation of the remedial cost of $39,164.00 as claimed by the owner. The owner states as follows in connection with her $39,164.00 claim: 'The Applicant is seeking reimbursement for $39,164 being the loss estimate relating to the reinstatement of the first floor of her home to a habitable including, reinstating: i. plasterworks (walls, ceilings and cornices); ii. missing hardwood ceiling battens; iii. timber architraves, skirtings, door jambs, balustrade, handrail, timber paneling; iv. the stud wall between the lounge and stairwell; v. yellow tongue flooring damaged by Respondent (holes cut in lounge and bedroom 1 floor, and former stud wall); vi. electrical wiring, power points and light fittings (as identified in quote from Respondent's electrician); and vii. paint stripped out areas.'
27. However she does not state how much is claimed for each item or how the cost is made up or calculated by reference to detailed, or indeed any costings.
28. Mr Cork provided his estimate of costing for this item on an 'as found' basis. His costing is at page 11 of exhibit 1 where he provides a detailed costing which totals $11,264.00. Mr Eastman in his report in reply does not comment on Mr Cork's costings.
29. To the extent that the builder suggests that the owner knew and approved of the full extent if the strip out that actually occurred, I cannot accept that submission. There is no evidence to support it. I have made findings based on the documents of the extent that the owner was aware that there would be a strip out. Those findings do not justify a finding that the owner was aware of or approved the full extent of the strip out that actually occurred. I accept the evidence of Messrs Green and Macleod that the strip out that occurred was outside the scope of AJ Grant's insurance repairs or the plans for an extension prepared by Amanda Nunes Design and Drafting and Nick Jankovic Design and Engineering and that the lining removal far exceeded that required for both the structural and architectural requirements. I also find that one of the contractual plans, 2/6 'Upper Floor Plan Demolition' prepared by Amanda Nunes and approved by the Council as part of the Development Consent showed a large area as 'No Changes to Hatched Area' with the entirety of the upper floor hatched. I find that the builder's strip out of the upper floor was in breach of s18B(1)(a) of the Act which provided a warranty: 'that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract,'
30. The strip out clearly exceeded what was shown on plan 2/6. Mr Cork's evidence does not take this into account and is a reason for not accepting such evidence. Any changes to plan 2/6 were required to be in writing as explained earlier in these reasons.
31. I find that the owner will be successful in connection with this item of her claim. I find that the itemised costing of $11,264.00 provided by Mr Cork is preferable to the non-itemised total cost claimed by the owner.
32. I will make an order in the owner's favour in the sum of $11,264.00 + GST.

Unauthorised substitution of second -hand steel

1. The owner is claiming $24,860.00 which she states that she has paid for supply and fabrication of steel. The owner submits that the builder charged $14,434.00 for steel and $10,426.00 for its fabrication.
2. The builder's invoice dated 24 January 2017 claims for the structural steel, although the precise amount claimed is not ascertainable. I would also state that the builder's invoice dated 24January 2017 does not make a claim for the fabrication of steel.
3. The owner claims that the steel that the builder has claimed for was second-hand steel and should not have been supplied or charged for. She also states that the steel has not been delivered to her.
4. So far as 'second hand' is concerned, the owner relies on s18B(1)(b) of the Act which provides a warranty from the builder to the owner: 'that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new' (Emphasis added)
5. The evidence the owner relies upon to support her contention that the steel charged for by the builder was second hand or not new is the builder's email to her of 20 March 2017 the relevant part of which states: 'I thought i would deal with the steel invoices separately, as i said before i have not settled on an accurate figure. Prior to starting your job, in June last year i contracted a job lifting a house out of a flood zone which required several steel beams to temporarily lift the house before building new posts under the house. I bought these beams and have had them in stock since then. It happened that some of these were suitable for parts of your build and so when buying the steel for your house i costed the price of the beams i already had along with the extra's required and included them. (The beam size i had , 250UB25's, was identical to some of the beams specified by Nick and a good substitute for the 150UC30 external columns, being slightly lighter therefore cheaper to buy and to galvanize, and also being Universal beams rather than channel's they provided better lateral bracing and would have been easier to box in with cladding. I discussed all of this with Nick who agreed and was happy to change the specs. I was also happy to be able to use the beams up)'
6. On 14 May 2017 the owner referred the builder's email to the engineer Mr Jankovic who responded by stating: 'I looked at the latest drawings, I have not made those changes… Sometimes builders asked me if they can substitute one thing with another and if it is acceptable I agree but nothing is allowed to be changed before I approve it (in writing) and either redraw the plan will write a letter to the council confirming that I have approved this change.'
7. An expert engineer engaged by the owner, Mr Wood stated: 'Once steel beams have been used to lift a heavy load (such as lifting a house out of a flood zone), they are no longer classified as 'new' and are 'second hand materials'. While it is likely that there would have been no impact on the structural integrity of the steel unless they were deformed from the previous use, 'second hand' material should not be used without the written approval of the engineer.'
8. In his final submissions the builder does not address this claim. The builder's expert states that in his opinion the steel should be classed as stock on hand rather than second hand. I prefer Mr Wood's opinion. He is an engineer whose opinion regarding the status or classification of steel should in my view be given greater weight than a non - engineering expert, in this case Mr Cork.
9. I have had regard to Mr Eastman's supplementary report. The charge made by the builder to the owner for the steel is stated to be $14,434.00 based on a builder's spreadsheet which showed a primary cost of $13,122.00 plus a margin of 10%, refer page 578 exhibit A. I accept that this amount was most probably charged to the owner in the builder's invoice dated 24 January 2017, as referred to.
10. I accept Mr Wood's evidence that the steel having been previously used to lift a house out of a flood zone cannot be characterised as 'new' steel and should not have been used. I also find that in invoicing the owner for the steel, the builder breached the warranty in s18B(1)(b) of the Home Building Act that materials are to be new.
11. To the extent that the builder suggests that new steel other than that already in his possession was billed to the owner, I find that he has not produced actual proof of that in the form of the invoices he states he paid when he acquired this additional steel. I also find that it was in the power of the builder to produce the precise evidence of this, but he has not done so.
12. Insofar as the owner claims $10,426.00 for the fabrication of steel. There is no evidence of the builder having invoiced the owner for that amount, or that it has been paid. To the contrary, the builder's estimation dated 7 March 2017 shows fabrication of steel as something to be done in the future as part of an estimation of costs.
13. I will find for the owner in the sum of $14,434.00 + GST in connection with this item.

Failure in waterproofing and non-compliant grading to floor - lower bathroom

1. The owner claims $19,702.00 for the cost of the defective work she alleges in connection with these items.
2. Her case is that her expert's opinion should be preferred over the opinion expressed by the builder's expert.
3. The owner's expert states that the shower is leaking. He states that moisture has penetrated the wall and floor substrate. He states that there was an elevated moisture reading found to the floor of the garage which backs on to the shower. He states that wet seal is likely to have failed around the channel drain in the shower.
4. Mr Cork for the builder states that he carried out a flood test on the shower for 45 minutes and that moisture readings were taken to the walls of the adjoining shower and garage at the base and that the moisture testing revealed no moisture before or after flood testing. In his later report Mr Cork confirms his opinion.
5. The owner's expert states in reply that Mr Cork used a moisture metre typically used for timber and the owner submits that his report should not be accepted.
6. The builder's engineer Mr Morgan whose evidence is in exhibit 1 states that if the ground floor en-suite shower waterproofing was defunct then he would expect to see rising damp within the mortar joints of the single skin brick wall which is the exterior wall of the shower. His report infers there is no rising damp to be seen and that water staining to the garage concrete slab is caused by residual water under the slab.
7. There is disagreement between the experts about the failure of the waterproofing of the shower area. I am not persuaded by Mr Eastman's evidence.
8. The owner's expert has not persuaded me in favour of his hypothesis that there is a failure of the waterproofing in the shower area. Mr Cork carried out a flood test for 45 minutes and states that his moisture readings showed no moisture after the flood testing. In addition the builder's engineer stated that if there was a failure of the waterproofing, he would expect to see rising damp, which is not present. I prefer their evidence given that the owner cannot point to obvious indications of a waterproofing failure.
9. The experts also agreed that the falls in the bathroom floor (downstairs) were less than 1:100 as specified in AS 3740 - 2010. AS 3740 - 2010 states that a fall ratio of 1:100 in a bathroom area is specified.
10. Mr Cork's evidence is that water is not pooling on the bathroom floor and there is a fall toward the waste. Mr Cork also states that AS 3740 - 2010 states that where a fall flatter than 1:100 is proposed, the primary consideration should be met which is to ensure that water does not remain on the finished floor in a manner that can adversely affect the health or amenity of occupants or deteriorate building elements.
11. The evidence of Mr Joseph Cully who resided in the downstairs section of the residence signed two statements in these proceedings which are in exhibit A. He did not mention in his evidence that water was ponding on the surface of the bathroom floor.
12. Mr Eastman's report in reply is not persuasive. He does not say that water ponds. He asserts that a 1:100 minimum fall in the standard is normative and mandatory. I do not accept his opinion. The standard does not impose a mandatory requirement and clearly states that where a fall flatter than 1:100 is proposed, the primary consideration should be met which is to ensure that water does not remain on the finished floor in a manner that can adversely affect the health or amenity of occupants or deteriorate building elements.
13. I find that there is no evidence of water remaining on the floor. In fact Mr Cork's evidence is that water is not pooling on the bathroom floor.
14. I reject the owner's claim that there is defective work that requires rectification because the fall on the bathroom floor is less than 1:100.

Re-pointing of brickwork under eave - work not performed

1. The owner claims $1,200.00 as a reimbursement for money she paid for work that she asserts was never carried out.
2. On 2 February 2017 the builder claimed $1,980.00 for 36 hours of work that included, among other things, re-point exterior brickwork.
3. There is a factual dispute between the experts regarding this item. The owner submits that she asked for re-pointing to be done at the top sections of brickwork above the south deck. However there is no evidence from her to that effect. In that regard I do not regard what the owner might have said to her experts and is referred to by them in their reports to be evidence that I would have regard to. However, Mr Green a builder who was associated with preparing a quotation for AJ Grant in connection with insurance, states in his report at [8] that in 2016 he pointed out to the owner eroded mortar in the top section of brickwork below the eave over the south deck and advised her to get this section of brickwork re-pointed.
4. Mr Eastman at 11.1 of his original report states that sections of the top 3 to 4 courses of the external brickwork on the south wall requires re-pointing. He states that the owner advised that work was to have been done. He refers to the builder's invoice referred to above.
5. The builder's expert Mr Cork states that re-pointing had been done but only to lower sections of brickwork. I take this to be a concession by the builder that re-pointing had not been carried out in the top section of brickwork below the eave over the south deck, the area referred to by Mr Green.
6. The builder addresses re-pointing at 11.1 of his statement which is referred to as his second response in exhibit 1. He confirms that re-pointing had been carried out, but had not reached the higher levels referred to by Mr Green.
7. I accept the builder's evidence that re-pointing had been carried out, although not to the higher levels of the premises.
8. The parties' evidence about re-pointing does not address the most essential element, namely what did the owner request the builder to do so far as re-pointing was concerned.
9. In the absence of evidence that the owner instructed the builder to re-point only the top section of brickwork below the eave over the south deck, I reject the owner's claim. There is evidence by the builder that re-pointing has taken place and there is no evidence to suggest that the amount charged is excessive having regard to the work carried out.

Seal and repaint damaged bulkhead and ceiling

1. This item is agreed to by the builder's expert in the amount claimed, namely $974.00 + GST.

New downpipe not connected to stormwater

1. This work was carried out by the builder for the owner in March 2016. He responded to a hi pages advert to quote for the relevant work. On 12 March 2016, he invoiced the owner $740.00 for the work he carried out which included, fit new downpipe. I find that the Act does not apply to this work as the value of the work is below the threshold for residential building work. Refer Schedule 1, s2(3)(a) of the Act.
2. Nonetheless the owner may have a cause of action against the builder under s60 of the ACL which states that: 'If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill.'
3. The owner's rights under the ACL arise pursuant to the Fair Trading Act 1987 as a consumer claim.
4. The owner's expert Mr Eastman states that the work has been done without due care and skill and the builder should remove the downpipe he provided and install a new downpipe. The builder's expert agrees that the work was defective and requires rectification. He valued the rectification cost at $370.00. With GST, the cost would be $407.00.
5. The owner claims $440.00 for this item. There is no explanation of how this amount is made up. I prefer the builder's expert's break-up of the rectification cost. I will find for the owner in the sum of $407.00.

Damaged linen closet ceiling

1. The owner claims $595.00 for this item which is agreed by the builder's expert.
2. I will find for the owner in the sum of $595.00 + GST.

Misleading and excessive charging for a new linen cupboard

1. The owner's complaint is that she has been overcharged for this work. She claims $2,000.00.
2. As stated at [11] the builder carried out some work for the owner in 2016 when he built a new linen cupboard for her for $4,166.00.
3. I find that the Act does not apply to this work as the value of the work is below the threshold for residential building work. Refer Schedule 1, s2(3)(a) of the Act.
4. If the builder overcharged the owner for the work, the owner will have a consumer claim pursuant to the Fair Trading Act 1987.
5. This item of claim arose by reason of the owner's expert's report in Reply dated 16 September 2020 when he stated that on a re-inspection of the cupboard and consideration of Mr Cork's report, he agreed that certain portions of the cupboard were pre-existing work. Mr Eastman states that the builder needed to explain why it took 2 months to complete the work at the cost he charged, $4,165.00.
6. In making a claim that there has been an overpayment, the owner is required to establish by persuasive evidence that she has overpaid. Asking the builder to justify his costs via an expert's report is not sufficient to discharge her onus to prove overpayment.
7. Mr Eastman states that the builder charged the owner for 10.8 metres of cornice but only installed 3.1 metres of cornice and charged the owner $1,556.00 for materials when the cost of materials came only to $1,267.00. Mr Eastman relies on Attachment 20 to his report which is said to be extracts from Mitre 10 statement.
8. Mr Eastman has not carried out a breakdown of the cost of all the work and materials that in his expert opinion would have been, and was, involved in the work of the new linen cupboard built by the builder in May, June and July 2016 such that would allow him to state in his opinion how much should have been charged for the work in comparison to how much was charged. Such an exercise would provide the Tribunal with a reliable estimate of an overpayment made by the owner. In that regard, Mr Eastman has not explained how he has come to say that the builder only installed 3.1 metres of cornice. In addition he states that the builder charged the owner for 10.8 metres of cornice. Annexure 20 to his report shows what the builder purchased from Mitre 10, not what the builder charged the owner for. So far as cornice is concerned, Annexure 20 indicates that the cost of cornice was $2.75 per lineal metre. If Mr Eastman is correct, the owner was overcharged $21.18 for cornice.
9. In response Mr Cork on behalf of the builder states that the invoiced amount for the work is fair and reasonable and that he has been given no information showing overcharging by the builder.
10. Mr Eastman's evidence does not persuade me that the builder overcharged the owner $2,000.00 for this work. In fact he does not even mention the sum of $2,000.00, nor is it explained. If Mr Eastman is correct, I estimate that the overcharge is $310.18.

Overcharging and Unsubstantiated charges

1. The owner claims that she has been overcharged $11,117.43, in four categories of overcharging.
2. The owner does not rely on an experts report to explain and substantiate the overcharging she alleges. As with the item above an expert's opinion to substantiate the alleged overcharging will usually but not in every case be required to substantiate a case of overcharging. In Mr Eastman's report in Reply of 16 September 2020 he states that the owner advised him that she had found several instances of overcharging and that he had referred the matter to the expert cost consultant. There is no such report in evidence.
3. I have had regard to the documents that the owner has referred to in her final submissions. They are order confirmations, extracts from the builder's spreadsheets, and icare documents.
4. The owner's submissions and the documents to which she refers do not present an obvious and compelling account of overcharging sufficient for me to make an order for $11,117.43 in her favour. This item of claim is rejected.

Structural damage to hardwood bottom plate and joist in the bathroom

1. The experts agree that $367.00 is the appropriate remedial cost.

Section 48MA of the Act

1. This section states: 'A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.'
2. While the preferred outcome as referred to in s48MA is not a mandatory outcome, I am required to consider whether the principle referred to should be the subject of an order in these proceedings requiring the builder to rectify the defective work.
3. Neither the owner nor the builder has made submissions regarding the builder carrying out any necessary rectification work, such as may be required as regards the strip out. This is an adequate reason for not making a work order. In addition, I find that the relationship between the parties has deteriorated to such an extent that a work order should not be made and if made would most probably be unworkable.

Conclusion

1. The owner has been successful in obtaining orders that the builder pay her the sum of $47,026.20. This amount is made up of the following items of her claim: 1. $15,661.80, [70]; 2. $10.00 [78]; 3. $550.00, [96]; 4. $11,264.00 + GST = $12,390.40, [128]; 5. $14,434.00 + GST = $15,877.40 [141]; 6. $974.00 + GST = $1,071.40 [165]; 7. $407, [170]; 8. $595.00 + GST = $654.50 [172]; and 9. $367.00 + GST = $403.70 [187].
2. In determining this figure, I have addressed each and every item that the owner has raised in her final written submissions. If there is an issue that is raised in her evidence, but which she has not addressed in her submissions, I have assumed that she no longer presses the issue.

Negligence

1. In her Points of Claim the owner alleges that the builder owed her a duty of care. I find that in circumstances where the builder was subject to the statutory warranties and the owner had the advantage of the beneficial features of the Act, that there is no room for the imposition of a duty of care by the builder. Refer, Owners Corporation SP 79417 v Trajcevski [2017] NSWCATAP 101 as authority in support.

Misleading and Deceptive conduct

1. Insofar as the owner has made submissions about misleading and deceptive conduct, she has not made a monetary claim concerning the loss and or damage she may have sustained as a result of the alleged misleading and deceptive conduct. There is also no submission made about what the owner would have done if the alleged representations were not made.

Costs

1. In the event that a party wishes to bring a costs application, for the costs of expert witnesses and any other costs, the costs application must be lodged in the Tribunal and served on/given to the costs respondent within 14 days of the date of the orders in these proceedings either attaching or referring to the documents relied upon in support of the application.
2. The costs respondent will have 14 days after the date it receives the application to lodge in the Tribunal and serve on/give to the costs applicant its submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.
3. The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.
4. Subject to the parties' submissions, the Tribunal will determine any costs application made on the basis of the papers lodged in the Tribunal.

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

Amendments 08 September 2023 - Formatting amendments. 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: 08 September 2023