Ding v Sanli Design & Construction Pty Ltd

Hearing

1. At the hearing, a Joint Tender Bundle, comprising pages numbered 1-466, became Exhibit A. Documents related to the stormwater issue were added, during the hearing, as pages 466-481. Those documents were (1) a joint report from Mr Nguyen (for the owners) and Mr Ghobrial (for the builder), (2) a costing prepared by Mr Nguyen, and (3) a costing prepared by Mr Ghobrial. The owners' opening submissions and chronology were marked for identification as MFI 1 and MFI 2 respectively.
2. On the first day of the hearing, the builder's Mr Wei was cross-examined as was the owners' expert, Mr Xue, and one of the owners, Ms Ding. The second hearing day began with cross-examination of two experts, Mr Nguyen for the owners and Mr Ghobrial for the builder, dealing with the stormwater issues. That was followed by oral closing submissions from the owners' solicitor, Mr Birch, and Ms Wei, who is the daughter of the builder's principal, which dealt with the issues raised by the renewal application and the issues raised by this application, except for the stormwater issue.
3. The joint report only became available shortly prior to the commencement of the hearing. As a result of that joint report, the owners' solicitor sought to rely on a costing prepared by Mr Nguyen which increased the amount claimed for rectification of the stormwater issue from $48,484 to $75,051 (both figures exclusive of GST).
4. That created a difficult situation. To not permit the owners to rely on that costing would leave the proceedings to be determined by reference to a costing which has been superseded by the joint report. On the other hand, to permit the owners to rely on that costing would not only provide the builder with sufficient time to be ready to challenge that costing but also leave no time for the builder to provide a costing in response.
5. After ascertaining how long it would take the builder, who did not have legal representation, to be ready to deal with Mr Nguyen's revised costing and for Mr Ghobrial to prepare a costing in response, additional hearing time was added just under a week later. On that third hearing day an opportunity was provided for both Mr Nguyen and Mr Ghobrial to be questioned in relation to their costings after which oral submissions were made on the stormwater issue.
6. It is be noted that (1) the owners had legal representation while the builder did not, and (2) the first language of the builder's principal (Mr Wei) was not English which is why his daughter (Ms Wei) was permitted to represent the builder.

Jurisdiction

1. It is clear these proceeding relate to residential building work, that the definition of "building goods or services" in s 48A of the Home Building Act 1989 (HBA) is satisfied. As these proceedings include a claim for an amount of money, they involve a "building claim" within the meaning given to those words by s 48A of the HBA.
2. Likewise, it is clear these proceedings have been commenced within time as the builder was carrying out the work the subject of this application as late as November 2020 and this application was lodged in April 2021. The amount claimed exceeds the lower limit of $5,000 set by clause 2(3)(a) of the HBA and clause 12 of the Home Building Regulation 2014 and is below the upper limit of $500,000 set out in s 48K of the HBA. Accordingly, the Tribunal has jurisdiction under the HBA.

Relevant law

1. Courts and Tribunals take the view that the same issue cannot be raised more than once otherwise litigation would never be finalised. In everyday language, that principle could be summarised by saying 'you cannot have two bites of a cherry'. There are four ways in which this principle can be said to operate.
2. First, The Latin phrase res judicata is a term used to indicate that a claim has already been decided by another court (or Tribunal) and between the same parties. It arises from a prior decision made by a court or Tribunal. Secondly, estoppel is a rule which prohibits a person from contradicting what was determined in earlier proceedings. It arises from the conduct of the parties.
3. Thirdly, the term issue estoppel goes beyond the outcome as it is used to indicate that a party is prevented from revisiting an issue that has been decided in earlier proceedings. The fourth concept is usually referred to as Anshun estoppel, because the authoritative decision on that point is that of the High Court in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 (Anshun), which provides a barrier to raising in subsequent proceedings a matter that could and should have been raised in earlier proceedings.
4. Anshun has been applied by the Tribunal such as in the case of Tonkin v Riverwalk Realty Pty Ltd [2020] NSWCATAP 260 at 26 where it was said: In the present proceedings the appellant was suing the respondent on the same basis, and thus the Tribunal was correct in applying res judicata. If the appellant was suing on any additional basis then she would not be allowed to do so because the law requires her to bring all her claims against a party at the one time - Port of Melbourne Aurhority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589.
5. Thus, by way of summary, a decision in prior proceedings in a court or tribunal not only operates to finalise the issues between the parties raised in those prior proceedings but also acts as a barrier to revisiting those issues in subsequent proceedings, other than by way of an appeal. Further, by reason of the decision in Anshun, this principle extends to cover not only duplicated matters but also matters that were known at the time of the earlier proceedings.
6. Of course, when considering allegations of defective building work, the statutory warranties set out in section 18B(1) of the HBA are relevant. 1. 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, 2. 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, 3. a warranty that the work will be done in accordance with, and will comply with, this and any other law, 4. 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, 5. a warranty that, if the work consists of the construction of a dwelling, the marking or alternations 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, 6. 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 know to the holder of the contractor licence or person required to hold a contractor's licence, or another person with express or apparent authority to enter into or vary any 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 that work to achieve, so as to show that the owner relies on the holder's or person's skill or judgment.
7. It is also necessary to note that section 48MA of the HBA provides: A court or tribunal determining a build 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.
8. Prior decisions which have considered those words assist in its consideration in this case. Galdona v Peacock [2017] NSWCATAP 64 is an Appeal Panel decision which noted that s 48MA provided for a preferred outcome, not a mandatory outcome. That case suggested that a work order would not be appropriate where (1) the relationship between the parties has broken down, (2) the builder has not acknowledged a poor standard of work, and/or (3) there are reservations as to the ability of the builder to rectify the work with due care and skill. However, those categories cannot be regarded as confining the operation of s 48MA since the test to be applied is not that decision, but the words of the statute set out above.
9. Kurmond Homes Pty Ltd v Marsden [2018] NSWCATAP 23 at [32] suggests section 48MA operates as a preference rather than a right and only operates to prevent unreasonable refusal by the owners to prevent the builder from carrying out rectification work.
10. It is clear the Tribunal is required to weigh up the factors in each case and make an evidence-based decision: Brooks v Gannon Constructions Pty Limited [2017] NSWCATCD 12 at [64].

Status of the claims in these proceedings

1. The sequence of relevant events is not in dispute: 1. The owners obtained a report from Jim's Building Inspections (JBI). 2. That report was submitted to the Department of Fair Trading, 3. The Department of Fair Trading used that report to obtain the builder's response and then issue a rectification order (RO) to the builder. 4. At the hearing of the earlier proceedings (HB 20/14622) the owners relied on that JBI report while the builder relied on the RO. 5. The Tribunal, having considered both that JBI report and the RO, the Tribunal preferred the RO and made orders based on it.
2. In the application, it was said that "The defective works are identified at 3.03, 3.06, 3.07, 3.11, 3.13, 3.14, 3.15, 2.16 3.17, 3.20. 3.23 and 3.24 in the expert report or (sic) Gordon Xue dated 5 February 2021." A copy of that report was lodged with the application. A close consideration of that 5 February 2021 report reveals that those numbered references are to topics raised in the JBI report, a copy of which was included in that 5 February 2021 report.
3. Mr Wei annexed to his affidavit a copy of the pages provided to him (A150-189) which were plainly based on the JBI report.
4. The following table sets out the reference number identified in the application by reference to Mr Xue's report dated 5 February 2021, the description of that item in that report, and the corresponding item number in the pages provided to Mr Wei by the officer from the Department of Fair Trading who prepared the RO. Xue Description DFT 3.03 Garage, Plasterboard finish - defective 2 3.06 Garage, Wall cladding - Substandard Installation 6 3.07 Garage, Cracks to render - Category 1 7 3.11 Yard - Back, Brick repairs and matching - defective 11 3.13 All Areas, Plasterboard finish - defective 13 3.14 Lounge Room, Mouldings (internal) - misaligned 14 3.15 Lounge Room, Doors and windows - Incomplete installation (AS2047) 15 3.16 Lounge Room, Window frame joints - not aligning and flushing 16 3.17 All Areas, Floors - springy 17 3.20 Stairs - Internal, Window operation - defective 20 3.23 Entry, Door installation not weathertight - door sweep or bottom weather strip missing 23 3.24 Lounge Room, Fly screen, not fitting the size of window 29

1. Thus, it is understandable that the builder would say that each of the items alleged in the application now under consideration were (1) raised with the Department of Fair Trading but were not included in the RO, and (2) rejected by the Tribunal on 22 September 2020 when it preferred the RO over the JBI report since that report was unsigned, did not list any relevant qualifications, and did not contain anything to suggest its author was aware of the responsibility of an expert provided evidence to the Tribunal.
2. At the first directions hearing, held on 4 May 2021 the owners were directed to file and serve Points of Claim by 18 May 2021, which was done. Ten defects were alleged in that document. On 7 July 2021 the owners were given leave to file and serve Amended Points of Claim, which was also done, albeit late.
3. The Amended Points of Claim added stormwater drainage as an additional defect at [21]. At [22] it was indicated that the owners relied on the report of Mr Xue dated 23 July 2021 in addition to his report dated 5 February 2021 that was referred to in the Points of Claim. There were also changes to the amount claimed at [27], revising it up to a total of $197,411 in respect of building work which had a contract price of $283,800.
4. Listed below are the eleven defects set out in the Amended Points of Claim: 1. Cracks to render wall; 2. Basement level not built as one level; 3. Water ingress through front entry door; 4. Squeaking flooring; 5. Poor installation of insulation; 6. Roof cavity electrical wiring; 7. Living room floor not levelled; 8. Poor finishing details; 9. Cracked driveway crossing; 10. Garage floor; and 11. Stormwater drainage 1. Installation of 2 x 500l underground rainwater tanks installed on the lower side of the boundary pit preventing gravity fed discharge. 2. Access and maintenance access to the underground rainwater tanks have not been installed. 3. Stormwater pipe to the underground tank is not sealed. 4. The absorption pit has not been installed at the correct orientation. 5. The underground rainwater maintenance put have been covered over when they must be exposed. 6. The stormwater pipework has not been installed to allow correct fall from the backyard rainwater tank to the absorption pit. 7. The front yard underground rainwater tank has been installed to the lower side of the discharge pit prior to the street kerb, resulting in the stormwater backflowing into the rainwater tank. 8. Each of the defects listed in 1-7 are the result of the Builder not constructing and/or installing the stormwater drainage in accordance with the Hydraulic drawings (3 pages) prepared by Ing Consulting Engineering.
5. Mr Xue provided three reports in support of this application: a report dated 05 February 2021 which was lodged with the application (the first report), a report dated 23 February 2021 which was included in the joint tender bundle at A205 (the second report), and a report dated 23 July 2021 which was confined to the stormwater issues and was in the tender bundle at A385 (the third report).
6. It should be noted that each of those three reports of Mr Xue was provided on behalf of Jim's Building Inspections but that it was Mr Li Wan, not Mr Xue, who prepared what has been referred to as the JBI report, being the report that was submitted by the owners to the Department of Fair Trading and upon which the owners relied at the hearing of the earlier application which resulted in the orders made on 22 September 2020. A copy of the JBI report is in the joint tender bundle at A322.
7. The first report was not included in the joint tender bundle. The second report appears to be the report upon which the Points of Claim were based. The third report dealt with the stormwater issues and was plainly the report which provided the basis for the addition of that topic in the Amended Points of Claim.
8. Both the first and second reports, dated 05 and 23 February 2021 respectively, were based on the same inspection that was said to have occurred on 27 November 2020, after the builder ceased to work on the property. A page-by-page comparison of the first and second reports reveals that the second report added two pages (A271-272) relating to an external downpipe which was observed to be circular but, by reference to the Schedule of Finishes, should have been rectangular. An additional amount of $1,189 was added for this item.
9. It is first necessary to consider the second report (which updated the first report in only one respect) to ascertain whether it contains any additional matters that were not covered in the JBI report. That is because, as indicated above, the owners are bound by the outcome of those matters in the earlier proceedings. Secondly, it is necessary to consider whether any such additional matters are caught by Anshun estoppel in that they could and should have been raised in the earlier proceedings.
10. Before proceeding to that analysis, the Tribunal records that the question of whether the matters now raised by the owners against the builder in this application was directly raised during the cross-examination of Ms Ding (Mr Ding did not provide any evidence). She was asked when she first knew about the defects now alleged in this application. Her response was that she knew from when Mr Wei did not take any further action in relation to those matters. That would mean by November 2020 when the builder ceased to work on the site and by 27 November 2020 when Mr Xue conducted the inspection upon which the first and second reports were based.
11. When it was specifically put to Ms Ding, by both Ms Wei and by the Tribunal, that she knew of all the defective work alleged in this application, except for the stormwater issues, before the decision in the earlier application she clearly agreed with that proposition.

Cracks to render wall

1. This item, which appears in section 6.2 of the second report was the defect with the reference 3.07 in the JBI report. Accordingly, this matter cannot now be raised again.

Basement level not built as one level

1. This item, which appears in section 6.3 of the second report, is the same as the defect with the reference 5.03 in the JBI report. Support for that view derives from the fact that there is a photo of the same 70 mm floor level variance in both reports. Accordingly, this matter cannot now be raised again.

Water ingress through front entry door

1. In section 6.4 of the second report there were raised matters said to cause water ingress through the front door. This topic was raised in the JBI report at 4.04. There are three answers reasons why this topic does not warrant consideration in this application. First, to the extent that the fall in the gutter is raised, that it addressed by the stormwater issue. Secondly, to the extent that section 6.4 raises matters which overlap the JBI report they cannot now be raised again. Thirdly, to the extent that additional causes are now suggested, those matters could and should have been raised in the earlier application.

Squeaking flooring

1. At section 6.5 Mr Xue said: "I noticed the floor to be squeaking to the master bedroom floor". In the JBI report, the defect numbered 3.17 suggested that the floors were "springy" in all areas, not just the master bedroom. As it is clear the floors in all rooms were included in the JBI report, the master bedroom was included.
2. In short, there is now said to be a defect in the floor of the main bedroom but that revisits a claim in the JBI report in relation to floors which included the floor of the main bedroom. Even if it could be said that the specific claim now made was not raised in the JBI, to permit a similar claim (squeaking compared to springy) would be to permit a series of claims to be made in relation to the same subject matter, contrary to what was said in Anshun.

Poor installation of insulation

1. It is not necessary to consider this item since, during closing submissions for the owners, it was indicated that this item is not pressed.

Roof cavity electrical wiring

1. The topic raised in section 6.7 of the second report was not raised in the JBI report. While it could be said that the roof cavity should have been inspected by the author of the JBI report, the Tribunal does not exclude this item from consideration in these proceedings.

Living room floor not levelled

1. This item, which appears at section 6.8 in the second report was titled "Living room floor not levelled". The same defect is found in the JBI report at section 3.18 in the JBI report where the location is stated to be "All areas" and the description is "Levelness of Timber and/or Concrete Floors - Defective". The photos in both reports show a timber floor in what appears to be the same area. It is clear what is now sought to be raised was previously included in the JBI report and was thus an issue considered by the Tribunal in the earlier proceedings.

Poor finishing details

1. This item, which appears at section 6.9 in the second report was the defect with the reference 3.13 in the JBI report. Accordingly, this matter cannot now be raised again.

Cracked driveway crossing

1. Section 6.10 in the second report, headed "Cracked driveway crossing", was not raised in the JBI report and thus warrants consideration in these proceedings.

Garage floor

1. Under this heading, in section 6.11 in the second report, it was alleged that the garage floor floods during wet weather which was suggested to be due to the slab falling towards the rear of the garage. In the JBI report, the defects with the references 3.02, 3.05, 3.06 and 3.07 each relate to the garage as does what is headed "Defect 5.01" where it is alleged that the garage floor is defective and "will cause water ingress in garage". The overlap is clear and even if there could be said to be different aspects of the floor raised by these two reports, Anshun estoppel clearly applies as the owners should not be permitted to raise the same alleged effect, namely water ingress to the garage floor, in separate proceedings.

External downpipe

1. This is the item that was added to the first report in the second report at section 6.12. The allegation was that a round downpipe had been used whereas the contract documents required a square form of downpipe. However, the JBI report, at the defect numbered 5.02, referred to materials were used that were not in accordance with the contract and contained two photos, one of which was included in section 6.12 in the second report. That being the case, this is governed by the Tribunal's decision in the earlier proceedings.
2. Even if that was not the case, it is convenient to here note that the suggestion that an amount of $1,189 should be awarded for the replacement of that round downpipe with a square downpipe would not be accepted as the Tribunal is not satisfied that such work is necessary or reasonable, as suggested by the decision in Bellgrove.

Stormwater drainage

1. Raised in the third report, and by the Amended Points of Claim, this topic was not raised in the JBI report and thus warrants consideration in these proceedings.

Conclusion

1. By way of summary, the only matters which are properly before the Tribunal in these proceedings are (1) the roof cavity electrical wiring, (2) the cracked driveway crossing, and (3) the stormwater drainage. That reduced scope of issues for these proceedings is the result of the deficiencies in the JBI report identified by the Tribunal in the earlier proceedings, which led to the RO being preferred to that report.

Consideration - Roof cavity electrical wiring

1. The only matter which needs to be addressed is the suggestion that electrical wiring in the roof space has not been fixed and clipped off as required by AS3000-2007. Mr Wei suggested that some but not all that work was done. The Tribunal is satisfied that this item constitutes a failure to due residential building work with due care and skill, contrary to s 18B(1)(a) of the HBA.
2. Mr Xue suggested an amount of $5,469 as the cost of rectification which included a 15% margin. However, in the Scott Schedule at A394, additional allowances and GST were added. To adopt what appears in that Scott Schedule would result in the owners being awarded well over $6,000 for this item. For the reasons indicated below, the Tribunal considers this item should be addressed by way of a work order rather than a money order.

Consideration - Cracked driveway crossing

1. This defect was said to be that there was a cracked layback in the driveway extension and that there was no control joint between the layback and the driveway. The suggested cost of rectification was $14,866, including a 15% margin. Again, the approach set out in the Scott Schedule was adopted, the owners would be awarded well over $16,000 for this item.
2. The Tribunal is not satisfied that it is either necessary or reasonable for the entire driveway extension to be removed and replaced. A reasonable method of rectification is to remove and reinstall the layback with a control joint being placed between the layback and driveway portion of the extension with that control joint following the line of the control joint between the original layback and driveway.

Consideration - Stormwater drainage

1. In relation to this item, the report of Mr Nguyen listed the required rectification works (A458) as follows: 1. Install additional five 100 diameter downpipes to the main dwelling and a further one to the garage. The rain head connection is to be removed and replaced with a direct connection. 2. The downpipe near the front porch is to be connected to the front underground rainwater tanks system. 3. Install first flush diverter to all downpipes and a first flush line to service the front underground RWT. 4. The water collected from the front 10KL underground RWT is to be connected for reuse in the toilets and laundry. 5. The front rainwater tank system is to be constructed to designed levels as per approved plans or reconfigured where necessary to ensure overflow from the tanks will be directed to Sydney Street via the boundary pit. Reconfiguration will require redesign which may require adjustment of the existing rainwater tanks level. A chartered professional engineer will need to be engaged in regard to the production of a design solution and certification. Further, all access to the tanks is to be left unburied for maintenance access. 6. The inlets to the absorption system shall be reconstructed to the full trench with as specified on the approved plan. The stormwater pits may need to be relocated to facilitate this process. 7. The grated absorption pit sizes are to be 600 square as specified, 8. A tap connected to the rear water tank extraction system is to be provided for irrigation. 9. Upon completion of the remedial works, a plumber's certification on the rainwater reuse system as per condition 44 of DA consent is to be provided. 10. The rainwater tanks and absorption system are to be uncovered to confirm the size constructed is as per the approved plan. 11. Warning signs are to be affix[ed] to reuse extraction system informing users that "water id non potable and is not for consumption" 12. Engineers inspections and certification of the abovementioned remedial works is required.
2. The joint report of the hydraulics engineers, namely Mr Nguyen for the owners (whose firm was abbreviated to DES) and Mr Ghobrial for the builder (whose firm was abbreviated to Akko), set out their agreement on each of those twelve aspects without any comment except in relation to the fifth aspect: DES & Akko agree that the rainwater tanks system comprising of inlet, outlet, first flush & extraction system at the front of the site can remain where it is, however will need to be redesigned and constructed to achieve DA & CC application approval objectives as detailed in Item 3 of DES report. The attached concept plans (Refer to Appendix) detailed the work required, however the assumptions adopted for this concept remedial design will need to be confirmed on site as being accurate via exploratory excavation to reveal the constructed work.
3. In his third report, Mr Xue provided an estimated cost of repair of $48,484 which included a 15% margin but not GST (A391). However, that costing was superseded by the joint report which resulted in a revising costing (A472) which increased that amount to $75,051 plus GST which is $82,556.10. Mr Ghobrial's costing (A474) suggested a total of $10,530.44 inclusive of GST. Mr Xue and Mr Ghobrial were both questioned in relation to their costings.
4. The challenges to Mr Xue's suggested cost included his allowance of $1,000 for covering and protecting surfaces during rectification work (being the same amount he suggested in the related, renewal proceedings), the time he allowed for aspects of the work, and his allowance of $5,000 for materials which, like the $1,000 referred to above, was not provided with any factual foundation or reasoning but was said to be based on his experience. He also allowed 16 hours (two men for one day) for making good any affected surfaces, despite allowing $1,000 for the protection of surfaces, and a further 16 hours for site cleaning.
5. The challenges to Mr Ghobrial's estimate included suggestions that the hourly rates he used were low, the times he allowed were too low, and whether he considered certain aspects of the work were necessary.
6. In closing submissions, Mr Birch removed some items from Mr Xue's costing which reduced the owners claim for stormwater rectification to $45,346 plus a builder's margin of 15% and GST which gives an amount of $57,372.69. He contended that Mr Ghobrial's estimate was too low while Ms Wei suggested that even the reduced amount sought by the owners was too high. Ms Wei also suggested the stormwater plan was flawed but that submission was not put to Mr Nguyen and sought to contest what was agreed in the joint report.
7. It is sufficient to indicate that the Tribunal is comfortably satisfied both that the amount suggested by Mr Xue, even when reduced from $82,556.10 to $57,372.69, and that the amount of $10,530.44 suggested by Mr Ghobrial is too low. However, it is not necessary to determine the reasonable cost of rectification as the Tribunal is satisfied that a work order should be made, for the reasons indicated below.
8. The Tribunal notes that the work order will include a requirement for the provision of a certificate to the owners which, combined with the order made in the related proceedings for the provision of certificates in relation to plumbing and electrical work, will enable the owners to obtain an occupation certificate.

Work order or money order?

1. The owners sought a money order while the builder sought a work order. As is commonly the case, the relevant considerations do not all point in the same direction. In favour of the owners is the fact that, in the related proceedings, there were items which were established as non-compliance with a work order that was made in what has been referred to as the earlier application. There were also reasons advanced in favour of a work order by Ms Ding in her affidavit although the suggestion that the builder did not comply with an order of the Tribunal made on 22 September 2020 in the earlier application carries less weight since the owners also failed a comply with such an order. Further, a balanced consideration of any failure to comply with the RO needs to take into consideration that it was conditional upon payments being made by the owners.
2. The builder accepted that each of the three items under consideration constituted defects and expressed a willingness to carry out rectification work. While it is clear the friendship which the owners and Mr Wei previously enjoyed has plainly broken down, the Tribunal is not satisfied that the breakdown is such as to displace the statutory preference for a work order. To allow a work order in relation to this application is consistent with the making of a work order in the earlier application.
3. Relevant considerations are not confined to the position of the parties. First, the Tribunal considers the amounts suggested to be the cost of rectification by Mr Xue for each of the three areas under consideration were unreasonably high. Secondly, the absence of any amount in the evidence of the builder for two of the three items and the unreasonably low amount suggested by Mr Ghobrial for the third, makes it difficult for the Tribunal to achieve an outcome which does not either over/under compensate the owners or over/under burden the builder. Thirdly, the major component of the work, relating to stormwater drainage, requires certification which provides a form of compliance mechanism. Fourthly, the comment made by the hydraulic engineers in the joint report indicated a need for an inspection and assessment before the rectification work proceeds and it is difficult to assess the reasonable cost of rectification when there remain alternative courses which cannot be known at the time of the hearing.
4. For those reasons, the Tribunal has decided to make a work order rather than a money order. It is necessary to consider by what date that work should be completed. As it is now close to the Christmas break, it is likely that little will be able to be achieved before mid-January 2022. In relation to the stormwater issues, there is a need for inspection and design before that work can proceed to a conclusion. There was oral evidence from Mr Xue that the rectification work for the stormwater issues would take three to four weeks. Accordingly, the Tribunal considers 28 February 2020 to be a reasonable date by which completion should be achieved.
5. Noting that there is a need for inspection, finalisation of a design and certification, the Tribunal considers those costs should be borne by the builder since they arise from work found to be defective.

Costs

1. As the total amount claimed in the Scott Schedule (A394) was $197,411, it is clear rule 38(2)(b) of the Civil and Administrative Tribunal Rules 2014 applies with the result that costs follow the event unless there is disentitling conduct: Latoudis v Casey [1990] HCA 59; Oshlak v Richmond River Council [1998] HCA 11.
2. In this application, the owners made eleven claims but only three were successful. Normally, if a party only succeeds on some claims and not others then costs may still be awarded, subject to the question of whether there were dominant or severable issues, considered below. However, in this case, the builder's position is stronger because it is clear those eleven claims included eight which should not have been brought.
3. On the question of whether to consider the issues or claims rather than just the outcome on the question of costs, the Tribunal notes the principles set out in Bostik Australia v Liddiard (No 2) [2009] NSWCA 304 at [38], omitting case citations: The principles governing the making of an order as to costs so as to reflect the time taken in dealing with a particular issue in which the successful party in the proceedings or on the appeal did not succeed were reviewed by this Court in Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373. Those principles may be summarised as follows:

• Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed
• In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument
• If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue
• Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed
• A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter
• Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation

1. Consistent with those principles, the decision of the Appeal Panel in Smith v Giro Construction Pty Ltd [2015] NSWCATAP 214 at [27-28] suggested two propositions. First, that where there are multiple issues there is generally no attempt to differentiate between those on which a party succeeded and those on which it failed. Secondly, that a successful party should only be deprived of a costs order where the unsuccessful issues were dominant or severable, having regard to the significance of those unsuccessful issues to the outcome, the time they occupied at the hearing and (to the extent it can be determined) in preparation for that hearing.
2. In this application, the claims which failed were both dominant, being eight out of eleven claims, and separable. As those eight claims should not have been brought, the Tribunal does not consider it reasonable to award the owners any costs in respect of those claims. While this is a matter where precision is not possible, since the stormwater issues occupied more hearing time than any of the remaining ten claims, the Tribunal assesses that the owners should be entitled to recover 50% of their costs of this application.
3. However, to allow the owners to recover 50% of their costs of this application would leave open a dispute as to which costs related to this application and which costs related to the renewal application. Since each of those applications took about the same amount of hearing time, the practical way to make a costs order to which the Tribunal considers the owners to be entitled in relation to this application is to award them 25% of their costs in both applications.

Orders

1. For the reasons set out above, the Tribunal makes the following orders: 1. The respondent is to carry out the work set out in Appendix A, in a proper and workmanlike manner, and compete that work by 28 February 2022. 2. The builder is to bear the cost of the inspection, design, and certification required by paragraphs 3 and 4 in Appendix A. 3. The application is otherwise dismissed. 4. The respondent is to pay 25% of the costs of the owners of both this application and the related application (HB 21/16050), such costs if not agreed to be assessed in accordance with the Legal Profession Uniform Law Application Act 2014.

Appendix A

1. All electrical wiring in the roof cavity is to be fixed, clipped, or otherwise rectified to comply with clause 3.9.3 of AS3000-2007.
2. Remove and replace the layback in accordance with the Council specification, installing a control joint between the layback and driveway to match the control joint in the existing driveway.
3. Excavate to reveal the constructed work in relation to the rainwater tanks system to enable inspection by Mr Nguyen and Mr Ghobrial.
4. After they have provided an approved design, carry out the following rectification work:Install additional five 100 diameter downpipes to the main dwelling and a further one to the garage. The rain head connection is to be removed and replaced with a direct connection. 1. The downpipe near the front porch is to be connected to the front underground rainwater tanks system. 2. Install first flush diverter to all downpipes and a first flush line to service the front underground RWT. 3. The water collected from the front 10KL underground RWT is to be connected for reuse in the toilets and laundry. 4. The front rainwater tank system is to be constructed to that approved design, ensuring overflow from the tanks will be directed to Sydney Street via the boundary pit. All access to the tanks is to be left unburied for maintenance access. 5. The inlets to the absorption system shall be reconstructed to the full trench with as specified on the approved plan. The stormwater pits may need to be relocated to facilitate this process. 6. The grated absorption pit sizes are to be 600 square as specified, 7. A tap connected to the rear water tank extraction system is to be provided for irrigation. 8. Upon completion of the remedial works, a plumber's certification on the rainwater reuse system as per condition 44 of DA consent is to be provided. 9. The rainwater tanks and absorption system are to be uncovered to confirm the size constructed is as per the approved plan. 10. Warning signs are to be affixed to reuse extraction system informing users that "water is non potable and is not for consumption". 11. Engineer's inspections and certification of the abovementioned remedial works is required and a copy of the required certificates are to be provided to the owners to enable them to obtain an occupation certificate.

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 15 February 2022 - Numbering of paragraphs updated 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: 15 February 2022