I have decided that the applicant is entitled to a money order against the respondent for $32,798.88.
No party sought leave for legal representation or costs orders; each appeared in person.
[2]
Background and issues
The applicant owns a house and land in Sutherland, a southern suburb in Sydney, NSW. By written contract dated 15 December 2020 signed by her and her partner she engaged the respondent builder to carry out renovations to the house at a contract price of $96,448.82 with a twelve-week works period, based on a cost summary and scope of works provided by the builder and dated 12 December 2020. She paid $87,948 $8,570.12 not paid from contract price.
Work began on 4 February 2021 with a completion period of 10 to 12 weeks plus 2 to 3 weeks for two variations. Practical completion was notified by the HBCF insurer on 26 August 2021 as having been reported to occur and the defects liability period under the contract to begin on 5 July 2021.
In and after the defects liability period in the contract the owner complained of numerous leaks. She retained a roofing contractor to provide an expert report, then predominantly for insurance purposes, and sent the report to the builder.
Damage to the frame to the sliding door had been notified to the builder the day following the installation (23 March 2021); the builder said that the door manufacturer would rectify any issues towards the end of the job. The owner said that she raised the issue every two to three weeks as minimal use was damaging the door and the rendering of this section of the house was delayed.
The door supplier inspected on 4 November 2021 and said that the installation was defective, with the bottom rail bent and the frame twisted so the outer frame ground away the door itself; pushing the door may have damaged the running gear in the bottom of the door. There was an uneven gap of 25mm on one side and 45mm on the other side. As a consequence the door needed to be replaced. The supplier would not provide a report as the builder, not the owner, was regarded as the contracted client, but advised on 16 December 2021 that the builder had not responded to calls. The owner had told the builder of the supplier's view by email on 9 November 2021.
The weather strip had been placed under the fixed shower screen panel over the main bath, not the moving panel, with the result that there was an excessive gap between the bath and the opening door which would not remain closed. All three shower screens leaked.
In the ensuite and laundry, shower screen brackets were incorrectly installed with a 10mm gap that had been filled with very thick silicone.
Joins to the cornice in the kitchen and dining were not flat so painting (an owner responsibility) was impractical since it would accentuate the fault. The builder had attempted to rectify with unacceptable results. Walls were out of plumb.
The owner said that she had emailed the main issues of complaint to the builder on 4 October 2021. She was advised by the builder that the roof sheets would be replaced. Material for that task was delivered on about 4 to 6 December 2021 and remained onsite without being installed, awaiting the flashing. They were still there as at 9 June 2022. The owner said that the roofing material that she had requested was not what the builder ordered (although in an email on 14 March 2021 she told the builder that it was an oversight on her behalf).
The builder last appeared onsite on 21 December 2021 to rectify a window-sill. He said to the owner's partner that he would re-measure the flashings required and order. The builder had not responded to a number of requests to return.
The owner said that incomplete items were: sealing of windows; installation of window and door screens; installation of back step; final plumbing inspection and provision of certificates of practical completion and for plumbing, waterproofing and glazing.
The owner said that, having heard no more from the builder, in February 2022 she complained to Fair Trading (FT) who issued a rectification order on 24 February 2022 with an end compliance date of 24 March 2022. She notified the HBCF insurer as Fair Trading advised. The FT report required investigation to identify then remediate the water leak to the exterior suffit lining, replace the roof materials with those suitable for the required pitch, rectify the excessive bow in the internal plasterboard and rectify the binding and grinding of the sliding door.
In these proceedings filed 21 May 2022 the owner claimed a money order comprised as follows (which total $34,600 and $38,060 including GST): rectify roof $13,450; plaster $4,500; replace sliding door $5,750 (damaged bottom rail and running gear, twisted when installed) which was holding up rendering, painting and floor sanding; rectify or replace three incorrectly-installed shower screens $4,500; reimbursement of $650 she had paid to rectify a water leak in the master bedroom ensuite; re-paint water-damaged rooms from water entry through the roofing defects and install back sandstone step $2,700; rectify downpipe near rear laundry $1,450; rectify a water leak in the laundry $400; removal of waste $1,200. Pricing was based on a remedial builder's quotation which contained a detailed scope of remedial works.
The owner resisted a work order. She said that the builder had been given numerous opportunities to rectify the defects: seven to eight attempts to rectify the shower screens; four attempts to rectify plaster works. The builder had not acknowledged the defective sliding door installation and the incomplete back step. The builder had not provided a certificate of practical completion nor certificates for waterproofing, glazing or plumbing despite numerous requests. She had lost all faith in the builder who had caused her unacceptable stress anxiety levels and produced a medical certificate in that respect. What should have been completed by early May 2021 remained defective and incomplete.
The builder said that the problems arose from trying to combine new work into an old house where there was existing plaster and some walls were not plumb. He had never refused to go back and remedy matters as required. He had not been given access to do so.
The builder said that the roofing delays were caused by the effects of COVID on top of the Christmas shutdown. He had not been present when the door supplier inspected but disagreed that the bottom frame was bent since he had checked it. He could not see twists in the track. He had tried to contact the manufacturer but had not had his calls answered after he could not answer the first call.
The owner had supplied the shower screens whereas he usually had them custom designed. The shower screens were correctly installed on the water stop angles. The laundry shower screen had brackets that made it difficult to install without a gap as it was "just about impossible" to cut into the tiles to recess the brackets; a smaller gap was achieved in the ensuite. The owner had approved the location of the shower screen on the bath edge.
He disagreed with the amount of the remedial builder's quotation, particularly on the shower screens. He gave some net trade costs for re-supplying and re-installing the sliding door and the roof replacement that were very much lower than the quotation. He said that the certificates would be supplied when final payment was made. He had not sighted an invoice for the cost of the owner's expert report.
The owner said in response that COVID lockdown had not prevented the builder working on an adjacent property, the main COVID effect had been in mid-2021 and she had never claimed delay damages under the contract. The shower screens were onsite prior to tiling being undertaken, so any issues with brackets should have been raised then. The screens were installed by the time that she found the requested instructions. She did not recall approving the location of the shower screen on the bath edge. The higher remedial price was due to custom screens being required to avoid new penetrations in the waterproof barrier by maintaining the original fixings. She said that she and her partner had marked the builder's plastering defects. Those markings were not to original walls, which the owners had finished ready for painting. It was the joins to the existing plaster panels that were the issue.
The owner said that the builder had used the door supplier on the adjacent property so had opportunities to follow up contact; she had confirmed with the supplier that it had attempted more than once to contact the builder. The outer door track that had been measured as level had been straightened but the same test had not been applied to the twisted running rail. The owner denied any mistreatment by her and her partner of the door as inferred by the builder. She said that she had observed "considerable force" being applied during the installation processes. The quotation for remedial roofing was not excessive given cost increases and the scope of work which involved flashing and ridge capping as well as sheeting.
Each of the owner, her partner and the builder gave evidence. The owner and the builder were cross-examined. Neither of the owner's experts was required for cross-examination. The builder had not sought to summons the owner to produce the expert's invoice.
There was no dispute that the subject of each contract was residential building work as defined in the Home Building Act 1989 (NSW) (HBA): HBA Sch 1 para 2(1)(b), (c), 2(3)(a), 3(1); Home Building Regulation 2014 (NSW) reg 12. The building contract required homeowners' warranty HBCF insurance since it exceeded $20,000 in the reasonable market cost of labour and materials involved: HBA ss 7(2)(f1), 92, 94; Home Building Regulation 2014 (NSW) reg 53. There was no issue that the proceedings were brought within time under HBA s 18E with s 48K(7). The claim was under the Tribunal's jurisdictional limit in s 48K(1).
The builder was and remained appropriately licensed. There was adequate HBCF cover.
The owner obtained a roofing expert report dated 9 September 2021 that confirmed the wrong roofing material had been installed for the required pitch of the roof. Other identified defects were with a superfluous bottom row of tiles that should be replaced with step flashing, a downpipe flowing onto the existing roof that needed to be spread in fall, overtightening of some screws that had split the roof sheets and pinched the sealing washers, permitting water entry, dings in the sheets and missing screws and rivets in barge flashing.
The owner also obtained an independent expert report at a cost of $3,300, dated 24 June 2022 from an inspection on 22 June 2022. The expert confirmed the roofing report's findings and added further defects including damage and lack of fixing of archetraves and uneven floor joins.
When the cost of the expert report was added to the compensation claim and the outstanding payment under the contract deducted, the net amount was $32,798.88.
[3]
Principles governing loss arising from defective and incomplete work
The ordinary, natural and probable consequence of a breach of statutory warranties under HBA s 18B as to compliance with approved plans (and laws, codes or standards), due care and skill and fitness for purpose is remediation to achieve compliance, care and fitness 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."
This is applicable unless disproportionate on the principles discussed below.
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, properly defined so as to be sufficiently specific, to establish the need for and required scope of remediation.
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 [87]-[88].
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. 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. 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.
[4]
Defective works
The owner's photos were consistent with the alleged defects, as were those in the owner's expert reports. I accept the owner's detailed quotation for scope and cost of remedial work in preference to the builder's alternative outline costing.
The builder's contention that the defective works were a product of new work being added to an existing house did not answer the owner's case. It was intrinsic to the scope of works that the new work was being added to an existing house. It was up to the builder to produce the contracted result in a manner that complied with the statutory warranties in HBA s 18B. The builder had not done so. If that was not possible without further work it was up to the builder to obtain instructions for appropriate variations or protect his position by following the process in HBA s 18F(1)(a).
The builder's alternative explanations put to the owner in cross-examination for some of the defects were not supported by objective evidence and were denied with a supporting explanation.
The owner has established her entitlement to relief for the alleged defective work in the manner and amount of remediation sought.
[5]
Work order or money order
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. 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 (including being licensed) 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: 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].
The owner's contentions in resisting a work order have been summarised earlier. In my view the evidence establishes an objective breakdown of relationship between the parties from the loss of confidence of the owner in the builder for the reasons she has given. A work order would in all likelihood in the present circumstances lead to a renewal application for a money order.
I shall accordingly make a money order for the amount sought by the owner.
[6]
Orders
I make the following order:
1. Order that Philip Travers pay Melanie Denmeade $32,798.88 on or before 27 February 2023.
[7]
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
[8]
Amendments
28 August 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: 28 August 2023