Dwyer Building Group Pty Ltd v Spicer; Spicer v Dwyer Building Group Pty Ltd [2025] NSWCATAP 133 | Case summary

[2]Dwyer Building Group Pty Ltd v Spicer; Spicer v Dwyer Building Group Pty Ltd [2025] NSWCATAP 133 | Case summary | Zoe

[63]

48K Jurisdiction of Tribunal in relation to building claims

(1) The Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 (or any other higher or lower figure prescribed by the regulations).

(2) The Tribunal has jurisdiction to hear and determine any building claim whether or not the matter to which the claim relates arose before or after the commencement of this Division, except as provided by this section.

(3) The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that have been supplied to or for the claimant if the date on which the claim was lodged is more than 3 years after the date on which the supply was made (or, if made in instalments, the date on which the supply was last made).

(4) The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that are required under a contract to be supplied to or for the claimant on or by a specified date or within a specified period but which have not been so supplied if the date on which the claim was lodged is more than 3 years after the date on or by which the supply was required under the contract to be made or, if required to be made in instalments, the last date on which the supply was required to be made.

(5) The fact that a building claim arises out of a contract that also involves the sale of land does not prevent the Tribunal from hearing that building claim.

(6) The Tribunal does not have jurisdiction in respect of a building claim arising out of a building cover contract required to be entered into under this Act if the date on which the claim was lodged is more than 10 years after the date on which the residential building work the subject of the claim was completed.

(7) The Tribunal does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E).

(8) The Tribunal does not have jurisdiction in respect of a building claim relating to -

[86]

(1) Whether the homeowner, on a renewal application, could claim for items that were not alleged to be defective in the original proceedings and which did not arise from work done by the builder under the work order? The Tribunal, relying on "extremely broad terms of the work order" D[273] allowed the homeowner to claim for defective work completed before she made her original claim, which was not alleged to be defective in the original proceedings.

(2) Whether the contract between the parties had been terminated and, if so, by whom, or whether it was still on foot. Both parties contended that the other had wrongfully repudiated the contract (the termination issues) (D[49] - [61]). This included an allegation that by seeking a money order in the renewal proceedings the owner had evinced an intention not to be bound by the contract. The Tribunal concluded that neither party had validly terminated or repudiated the contract and that it remained on foot while the work order was current (D[62] - [70]. The Tribunal made an order terminating the contract.

(3) Whether the work order made by consent on 4 May 2021 still remained on foot, or whether it had been terminated by the conduct of the parties or either of them? The Tribunal found that the work order remained on foot. (D[62] - [70]).

(4) The meaning of the work order, with particular reference to what is a "reasonable time" for the completion of the contracted works and what role the 6.5 months period for completion referred to in point 2 of the order (the note) was to play in deciding what was a reasonable time for the completion of the work ordered.

(5) Whether the extension of time provisions in the contract applied to the assessment of what was a reasonable time under the work order? The Tribunal held that they did not as the work order excluded them (D[69] - [72]).

(6) The Tribunal found that the builder's reasons for not complying with the work order did not constitute a reasonable explanation for the delay. In this regard the Tribunal rejected the builder's explanations relating to delays in complying with the work order being due to:

(a) claimed latent conditions causing delay (D[76] - [79]).

(b) changes to the scope of works (D[80]).

(c) claimed delays by the owner in approving quotes (D[81] - [93].

(d) the owner's failure to complete owner's works (D[94-[105].

(e) Covid-19 restrictions in NSW (D[106] - [107]).

(7) The homeowner's claim for the costs of rectifying defective works. The Tribunal reviewed the evidence with respect to each of the 19 claims and disallowed 5 of them with reasons. It allowed the rest but reduced the allowance for rectification costs in many of them. Of specific interest on the appeal is its consideration of the homeowner's claim for $59,790.00 for repairs to the verandah slab, which was 100 mm below the finish level of the dwelling, as per architectural plans (the verandah slab issue). The Tribunal ultimately allowed $5,000.00 for this: (D[157-167]). The total allowed by the Tribunal for defects was $38,400.00.

(8) The homeowner's claims for the costs of completing incomplete works. There were 21 claims considered by the Tribunal under this heading: D [209-265] . Five were rejected. The Tribunal allowed $214,531.09 for the costs of completion of the remaining sixteen. The builder had argued that these works were not incomplete because the homeowner had wrongfully repudiated the contract, thereby bringing the builder's obligations to an end before completion. As noted above, that argument failed.

(9) With respect to the builder's claim for payment of its unpaid invoices the Tribunal agreed that the builder should recover $46,074.00 for the work charged for in invoice 1323: TB 4079 ($54,484.00 claimed), but was not satisfied with respect to other four invoice: D [110-138].

[102]

In ground 2 the builder argues that the Tribunal exceeded its jurisdiction by considering the homeowner's claims for defects not previously claimed in the renewal proceedings. The Tribunal did so because it considered, "the terms of the Work Order are so broad that it is possible that any work that the builder was required to undertake under the contract is within the terms of the renewal application."( D[37])
The work order required the builder to "complete the works under the contract dated 29 November 2018 within a reasonable time." The builder says that because of the wide interpretation it gave to the work order, the Tribunal wrongly assumed a jurisdiction it does not have in renewal proceedings, by making an award of damages for the costs of rectifying defects when the time for complying with the work order had not passed.
The builder also says that renewal proceedings provide an enforcement mechanism, and are not a vehicle for making new claims: BS[31]. The claim for defects not previously claimed should therefore have been brought in separate proceedings.
The builder says that by awarding the homeowner damages for items 4 (the front entry steps), 7 (the verandah slab) and 13 (the verandah steps), the Tribunal exceeded its powers under cl 8 of Sch 4 of the NCAT Act by making a money order with respect to defects not previously claimed and not the subject of the work order. Properly understood, the builder says that the Tribunal's powers under cl 8 are confined to providing a remedy for orders that have not been complied with, which in this case was restricted to incomplete work as claimed by the homeowner in the original proceedings.
The builder submits that the terms of the work order do not support a conclusion that the order required the builder to remedy defects not previously claimed and that the Tribunal failed to provide adequate reasons for interpreting the work order as it did.
In response, the homeowner points to the wording of the work order. It required that the builder complete "the works under the contract" in a proper and workmanlike manner. It was not restricted to incomplete works or works claimed to be defective, but to the "works under the contract."
As an alternative, relying on the decision in Zerhouni v Vesta Homes Pty Ltd [2023] NSWCATAP 49 at [73], the homeowner submitted that it was open to the Tribunal to treat any new claim made in the renewal proceedings as a fresh application, and that this had been pointed out to the Tribunal in submissions.

[119]

80 In our view, there is nothing in the Appeal Panel's reasoning in Blessed Sydney Constructions to support a conclusion that in renewal proceedings the Tribunal can make an order concerning a claim that was not made in the original proceedings. Renewal proceedings are an enforcement mechanism which provides a remedy for non-compliance with Tribunal orders. They are restricted to claims relating to the consequences of the order in the original not being complied with. This will usually be the cost of undertaking the works specified in the work order. However, where other consequences have arisen as a result of that non-compliance (for example, water damage caused by defective waterproofing work), then the cost of rectifying that damage may be claimed in the renewal proceedings. However, renewal proceedings are not proceedings in which a new claim can be raised that was not raised in the original proceedings.

81 As Items 26 to 29 were not part of the original claim and are not items that have arisen as a consequence of the orders made in the original proceedings, they could not be considered as part of the renewal proceedings. We conclude that the Tribunal erred in finding that they could be considered as part of the renewal proceedings on the basis of authorities such as Bondarek and Blessed Sydney Constructions. Items 26 to 29 had to be considered as a new claim, to which the relevant time limitation periods under the HB Act applied.

82 The claim in respect of Items 26 to 29 should have been made in a separate application under the HB Act, rather than on the same application form as the application in the renewal proceedings. There are circumstances in which it would be appropriate for the Tribunal to exercise its discretion to allow both renewal proceedings and a claim for items that were not part of the original claim to be set out in the same application form; for example, if an application in respect of the new claims would be time barred if the Tribunal insisted on a separate application. Allowing the renewal proceedings and the claim in respect of new items to be set out in the same application form in such circumstances would be consistent with the guiding principle under s 36(1) of the NCAT Act; that is, the resolution of the real issues in dispute in a manner that is just, quick and cheap. It would also be consistent with the Tribunal's obligation under s 38(4) of the NCAT Act to act "with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.

[127]

The Tribunal below suggested that the wording of the work order was so broad that "it is possible that any work that the Builder was required to undertake under the Contract is within the terms of the renewal application." The Tribunal did not expressly adopt that construction. Rather, the Tribunal then proceeded to deal with the homeowner's case, as if that construction was correct, by considering and making orders with respect to defects not previously claimed by the home owners in the original proceedings. While not expressly stated in the Tribunal's reasons, it plainly adopted the construction of the order it had posited.
For the Tribunal to make orders under cl 8 of Sch 4 on renewal, those orders must:
- be appropriate (Blessed and Bondarek);
- relate to or arise from a failure to comply with the work order; (Blessed, Bondarek , Devel and Zahrouni); and
- relate to matters that have been claimed in the original proceedings (Blessed, Devel and Zahrouni).
The Tribunal's finding that the homeowner's claims on renewal all fell within the terms of the work order ("work required under the Contract"), did not satisfy the requirement that they be or relate to matters that were claimed in the original proceedings. While the Tribunal was aware of and quoted both Devel and Zahrouni, it did not implement their requirement that matters considered on renewal be part of the original claim.
The consent work order was necessarily confined by the claim in the original proceedings, which it was made in settlement of. The damages the Tribunal awarded on renewal for items 4, 7 and 13 were not claimed in the original proceedings. They are separate and distinct from the homeowner's original claims. Therefore, renewal of the proceedings under cl 8 of Sch 4 did not empower the Tribunal to award those damages, irrespective of the Tribunal's interpretation of the work order. To do so, was an error of law.
The Tribunal's interpretation of the consent order as extending to encompass defects not previously claimed in the original proceedings was erroneous. Consent orders, like contracts, need to construed having regard to their text context and purpose: As the majority explained in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 (Mount Bruce) at [47]

[129]

Consent work orders should be read in the context of the proceedings they relate to and in the light of their purpose. That is usually, as here, to resolve proceedings between the parties. While we agree that the interpretation adopted by the Tribunal was a possible interpretation, the construction of orders should have regard to the context in which they were made . That was one in which proceedings were on foot, as is made plain by the orders themselves. The clear focus of the homeowner's proceedings was on the completion of the works. Both parties were legally represented. The homeowner had obtained an expert report. The consent order should be construed objectively in that context and have due regard to the fact that the order was intended to resolve the original proceedings. Such a construction leads to the order being one intended to complete the disputed works in accordance with the contract. It did not extend to or require the builder to revisit already completed works. The fact that the text of the order required the builder to "complete" the works made that clear. If the purpose was for the builder to rectify and remedy already completed works, one would have expected that to be stated explicitly, and likely the to be subject of specific agreement.
This means that ground 2 must succeed.
The builder also submitted that the Tribunal's reasons for the finding that damages for defects not previously claimed were recoverable in the renewal proceedings, were inadequate. There was no explanation for why the Tribunal adopted what it posited, at D[37] as a "possible" construction of the work order. That it did so is clear, but there is no exposure in the decision of the reasoning process that led it to that conclusion, as is required with respect to a central issue to the dispute: see Meacham v Commissioner of Police [2020] NSWCATAP 107 at [35], New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 at [71] -[77], and s 62(3)(c) of the NCAT Act which requires the Tribunal to set out "the reasoning processes that lead the Tribunal to the conclusions it made." We do not think the use of the word "possible" by the Tribunal to be an "unhappy phrasing or a verbal slip" (Orr at [77v]. It indicates that the construction of the order being posited is but one possibility. The Tribunal did not explain in its decision how that possibility became the preferred construction of the order. This too, is an error of law.

[141]

First, at ground 3(a) the builder submits that, in finding that the work order had been breached, the Tribunal wrongly had regard to the 6.5 months mentioned in the notation in the work order, rather than to the requirement of the work order that work be completed within a reasonable time. To have found a breach of the work order, the Tribunal was required to assess whether there had been "compliance with the order" as required by cl 8 of Sch 4 of the NCAT, not with the notation. By giving such weight to the note, the Tribunal wrongly elevated a notation to an order: the builder relied on Re Felicity; FM v Secretary, Department of Family and Community Services (No 3) [2014] NSWCA 226.
Compliance with the order required that the work be completed within a reasonable time.
In response, the homeowner argued that, having regard to the decision as a whole and the various findings made by the Tribunal with respect to time for completion of the works, the "only reasonable inference must be that the Tribunal found that a reasonable time was 6.5 months". In particular the homeowner relied on the Tribunal's findings that:
- the builder ceased work and abandoned the property on 10 December 2021: see D[5] and [28].
- the builder's claims for extension of time had all been considered and rejected by the Tribunal, despite the Tribunal finding the extension of time regime under the contract did not apply to the work order.
The homeowner said that the Tribunal implicitly found that a reasonable time under the work order was the 6.5 months. She submitted that any looseness of language by the Tribunal in spelling out that conclusion should not be seen as constituting a failure to give as adequate reasons: relying on Orr at [77].
Secondly, in ground 3(b), the builder submitted that the Tribunal had erred by failing to apply the correct law when determining what was a "reasonable time." In doing so the builder relied on the decision of the Court of Appeal in Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd [2019] NSWCA 185. The builder submitted that in adopting 6.5 months as a reasonable time the Tribunal had failed to:
- pay due regard to the context and circumstances of the case;
- consider what was fair to both parties at the time the order was made; and
- have regard to the builder's explanations for delay, before concluding that the work order had not been complied with.
Thirdly, in ground 3(c), the builder argued that the Tribunal erred when it failed to take the extension of time regime in the contract into account when considering the meaning of "within a reasonable time" in the work order and wrongly found that that work order was not subject to that regime. Because the work order was one "in the manner of specific performance of a contract" (Blessed) the builder submitted that the Tribunal erred when it held, at D[70], that the extension of time regime in the contract did not apply to enable the time fixed by the work order to be extended. Properly construed, the builder submitted, the extension of time regime in the contract (cl 11), which enables the builder to extend time when matters outside its control delay the works, applied to the work order.
In response to these grounds the homeowner accepted that a reasonable time is to be assessed in the light of all the circumstances and that the parties' rights under the contract subsist, "albeit, under the control; of the Tribunal". The homeowner relied on Young J's observation in Pratt v Hawkins (1991) 32 NSWLR 319 (Pratt), at 324, that, where an order for specific performance of a contract is made, the contractual rights of the parties remain but there is, "superadded the requirement to defer to the court's direction and control in respect of any matter which the parties cannot themselves solve by agreement." The homeowner observed that the builder sought extensions of time under the contract, which she refused. In those circumstances, the parties were subject to the superadded requirements referred to in Pratt, and the builder should have sought an extension of time or suspension of the work order from the Tribunal. The homeowner added that in any case the Tribunal disallowed all the additional time claimed by the builder, with the result that it had no part to play in the reckoning of what was a reasonable time to complete the works.
Finally, the homeowner submitted that, if the Tribunal did err in reaching its decision about extensions of time not being relevant to the assessment of what is a reasonable time under the work order, then the error did not materially affect the outcome of the proceedings because the renewal was sought after a reasonable time had passed for the builder to comply with the work order.
In reply, the builder took issue with whether it could have applied to the Tribunal for an extension of time in which to complete the work order or to seek to have it suspended.

[147]

101 One important observation that needs to be made with regard to the primary judge's exposition of principle relates to his statement that the limit of what is a reasonable time is to be determined by what is fair to both parties at the time of the exercise of the right. The passage cited from Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; [1982] HCA 29 (Perri) does not indicate when the content of what is a reasonable time is to be assessed. It does not stand for the proposition that it is to be assessed at the time of the actual exercise of the right, although that is of course the point of time by reference to which the court will assess whether a reasonable time (within the meaning of the contract on its proper construction) has passed. This is a subtle but important distinction. In my opinion, the relevant time for considering what is in fact a reasonable time is the time at which, under the contract, the right which is to be exercised is first capable of being exercised (just as the time for assessing whether a notice to complete affords a reasonable time for completion is the time of the giving of the notice: see Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438 at 444). As I point out at [109] below, the time for ascertaining the legal meaning of "reasonable time" must be the time of contracting.

...

104 What is a reasonable time in any given case may be affected by the nature of the obligation to be performed (for example, whether it is dependent on some third party performance or circumstances outside the control of the party under the obligation) or the right to be exercised (for example, whether the right is dependent upon the provision of some information that may need to be assessed before the right can be exercised or simply upon the happening of an event or the passing of a particular time).

105 In Ellis v Thompson [1838] EngR 85; (1838) 3 M & W 445; 150 ER 1219, cited by Dixon J in Reid, Baron Alderson said (at 456-457; 1224-1225 of ER) that:

[150]

The parties chose to require that the builder complete the work within a reasonable time. The note that the builder had proposed a 6.5 month schedule for completion was included in the order by agreement between the parties. It was clearly intended to inform the assessment of what was reasonable time. It noted information as to an estimated time to completion, that was known to both parties, and formed an acknowledged part of the contextual circumstances in which the consent work order was made.
In those circumstances, it was clearly open to the Tribunal to view the notation as an indication, from the parties, of the time they thought it was likely to take to complete the works under the contract, at the time they agreed to the consent work order being made. There can be no doubt that the Tribunal reached the conclusion that 6.5 months was a reasonable time, although it did not state that conclusion clearly. There is nothing we were referred to that points to that outcome being unfair to either party when the order was made.
Given that the outcome the Tribunal reached in this respect is both understandable and undoubted, in our opinion the Tribunal's lack of clarity in expressing its conclusion reflects an infelicity of expression in what are long and complex reasons, rather than failure to give adequate reasons.
As a consequence, grounds 3(a) and (b) fail.
We are not of the same view with respect to ground 3(c). The parties use of the words "reasonable time" in the consent work order, points to them contemplating a need for some flexibility in the time scale, to allow for contingencies beyond the control of the builder affecting the completion of the works. There was already in place in the contract a mechanism for the builder to claim extensions of time. Unless the consent work order operated to stipulate a fixed time for completion, incapable of extension under the contract, those contractual provisions would continue to apply after the consent work order was made; Pratt. The use of the words "reasonable time" does not point to the exclusion of the extension of time provisions of the contract. Rather, they point to the extension of time provisions continuing to apply to the works, after the consent order was made, allowing the builder to claim reasonable extensions of time in accordance with the existing contract between them.
The Tribunal found that, at D[70], the extension of time provisions in the contract "cannot be imputed into the Work Order." As Pratt makes clear, the provisions of the contract continue to apply after a work order is made, subject to any variation made to the contract or necessarily implied by the work order. The issue, therefore, was not whether the extension of time provisions of the contract were imputed into the work order, but whether the work order operated to exclude them. The starting point was the reverse of that adopted by the Tribunal. In this the Tribunal erred as a matter of law.
We can see nothing in the consent work order that points to the parties agreeing to exclude the continued operation of the extension of time provision of the contract to the completion of the works. Their adoption of the words "reasonable time" points to the contrary conclusion.
Ground 3(c) therefore succeeds.

[179]

159 The Owner submits that:

(1) The stamped and certified plans (202, 204 - 228) show a 100 mm step down between the verandah and bedroom 4 and 5 (211);

(2) Detail 3 on sheet 9B of the stamped and certified plans (214) also show the 100 mm step down as does sheet 9C (215). Section 4.16(12) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA) states the construction certificate and any approved plans and specifications issued with respect to that construction certificate are taken to form part of the relevant development consent;

(3) Section 4.2(1)(b) of the EPA provides that a person must not carry the development out other than in accordance with the development consent, so the Builder has contravened this section;

(4) In constructing the concrete slab in contravention of s. 4.2 of the EPA Act, the Builder has contravened s. 18B(1)(c) of the HBA; and

(5) The Builder is therefore liable to compensate the Owner for the loss suffered by reason of this building defect in the sum of $59,790.00, the sum assessed by Mr Bournelis in the JER.

160 The Builder by contrast submits:

(1) This item was not claimed in the original proceeding (although it existed at that time) and is therefore beyond the permissible scope of renewal proceedings;

(2) A contravention of s. 18(1)(c) of the HBA was not specifically pleaded and should not be allowed now when the Builder had no warning prior to the close of evidence;

(3) The only available evidence from Broken Hill City Council (Council) is that the slab as constructed is compliant with the development consent;

(4) The Builder claims that the Owner expressly instructed and directed the allegedly non-compliant slab to be constructed.

161 The matter is also complicated by the existence of several reiterations (sic) of plans being:

(1) The 2018 Plans (3619 - 3639) showing a pier and joist foundation system which runs consistently flat across the dwelling and verandahs (3626). The Builder's quote Q1004 was based on these plans (2976);

(2) The 2018 Plans Rev 2 (3687) showing a slab system which runs consistently flat across the dwelling and verandas, and which was provided by the Owner's draughtsman, Paul Bessel (2978);

(3) The 2019 Plans (3721) showing a slab system which has a 100 mm drop down at the verandahs (2982), but the Builder alleges the Owner directed it not to build to these plans but rather to construct the slab as per the 2018 Plans Rev 2 (2981 - 2).

162 The Builder's expert, Mr Alexander, relies on uncertified 2018 Plans to support his conclusion that the slab is not defective (3396), which is itself unsatisfactory.

163 In all the circumstances, the Tribunal concludes that the concrete slab is in breach of the development approval and therefore in breach of s.18B(1)(c) of the HBA; see The Owners - Strata Plan No. 66375 v King [2018] NSWCA 170 at [402] Shanahan v Erwin Fornasier [2021] NSWCATAP 158 at [63] - [69].

164 The Tribunal dismisses the evidence of the Builder that the concrete slab was constructed in the manner in which it was based upon the Owner's express instructions. Although the oral evidence on this issue was uncertain, there is no written document or communication which supports such a claim or such instructions.

165 The Tribunal acknowledges that the concrete slab as constructed is 100 mm below the verandah flooring and in breach of the development approval. However, it is unclear what flows from that.

166 The Owner has resided, and continues to reside, in the Property. There was no evidence at the hearing to suggest that the occupancy of her or her family members had been impeded because of this defect. If this does became an issue between the Owner and the Council, then it is open to the Owner to apply to the Council for an amended Development Consent. This appears to be a more efficient and cost-effective way of dealing with this issue than tearing up and replacing the slab with one 100mm higher.

167 The Tribunal allows the Owner the sum of $5,000.00 for this contingency and to cover her costs of applying for an amended development consent.

[183]

"... 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.

The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt. No one would doubt that where pursuant to a building contract calling for the erection of a house with cement rendered external walls of second-hand bricks, the builder has constructed the walls of new bricks of first quality the owner would not be entitled to the cost of demolishing the walls and re-erecting them in second-hand bricks. In such circumstances the work of demolition and re-erection would be quite unreasonable or it would, to use a term current in the United States, constitute "economic waste". (See Restatement of the Law of Contracts, (1932) para 346). We prefer, however, to think that the building owner's right to undertake remedial works at the expense of a builder is not subject to any limit other than is to be found in the expressions "necessary" and "reasonable", for the expression "economic waste" appears to us to go too far and would deny to a building owner the right to demolish a structure which, though satisfactory as a structure of a particular type, is quite different in character from that called for by the contract. Many examples may, of course, be given of remedial work, which though necessary to produce conformity would not constitute a reasonable method of dealing with the situation and in such cases the true measure of the building owner's loss will be the diminution in value, if any, produced by the departure from the plans and specifications or by the defective workmanship or materials.

As to what remedial work is both "necessary" and "reasonable" in any particular case is a question of fact. But the question whether demolition and re-erection is a reasonable method of remedying defects does not arise when defective foundations seriously threaten the stability of a house and when the threat can be removed only by such a course. That work, in such circumstances, is obviously reasonable and in our opinion, may be undertaken at the expense of the builder. As we have already said the appellant does not seek to challenge the finding of the learned trial judge that the existing foundations are such as to threaten the stability of the building and the question which arises in this case is therefore whether demolition and rebuilding is the only practicable method of dealing with the situation that has arisen. This was followed in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8 where the Court explained, at [19] that:

The "qualification" referred to in the passage quoted above that the "work undertaken be necessary to produce conformity" meant, in that case, apt to conform with the plans and specifications which had not been conformed with. Applied to this case, the expression "necessary to produce conformity" means "apt to bring about conformity between the foyer as it would become after the damages had been spent in rebuilding it and the foyer as it was at the start of the lease"...

[191]

It is important to emphasise that in his evidence Mr Alexander for the builder did not allocate the costs of either labour or materials associated with any of the 15 individual items specified in invoice 1323. Instead, he produced a table in which he estimated the lump sum cost of the work with respect to the 15 items, and then assessed the cost of bringing those that were incomplete items to completion. This totalled $8,410. We infer that in allowing $46,074.00 on the invoice, the Tribunal deducted $8,410 from the $54,484 initially claimed. We also note that the Tribunal appears to have made no allowance for the items the builder conceded wrongly claimed.
The point made by the homeowner with respect to this analysis from Mr Alexander is that he valued the cost of completing the incomplete works, not the work actually done. That cost was then deducted from the builder's global claim in invoice 1323, without the charges being justified under the contract or on a quantum meruit basis. We agree.
In fairness to Mr Alexander, it should be noted that he argued that the invoice was payable in accordance with cl 20(d) of the contract because the end of a stage in the works had been completed, "except for minor omissions, incompleteness or defects." He did not say what stage that was. The invoice did not claim a staged payment. The differences in opinion between Mr Alexander and Mr Bournelis regarding these issues were agitated before the Tribunal. The Tribunal did not address this, instead, skirting over the issue and not determining whether invoice 1323 was recoverable on a quantum meruit basis or under the contract.
Ground 4 says that there "was no evidence" supporting a finding in favour of the builder for $46,074.00. While we are unable to understand from the decision how the Tribunal reached the figure of $46,074.00, there was clearly evidence before the Tribunal which, if accepted, would have enabled it to assess the higher amount claimed. In saying that, we acknowledge that the homeowner says that the builder's expert report from Mr Alexander should not have been accepted in this regard. The homeowner's ground 4 therefore fails.
Ground 5 related to the Tribunal's alleged failure to engage with submissions from the homeowner to the effect that:

[195]

We have already said that we are unable to understand how the Tribunal reached the figure of $46,074.00. The homeowner's submissions regarding the builder's concessions concerning the lump sum invoice are pertinent to the assessment, and were not engaged with by the Tribunal. The Tribunal's failure to engage is a constructive failure to exercise jurisdiction.
The Tribunal did not directly address the homeowner's submissions that the builder could not charge for the work under the contract, instead stating that, "if there is any issue about the circumstances of the Builder invoicing these amounts", the builder could in any case recover for the work on a quantum meruit basis. The Tribunal did not explain how it assessed the quantum meruit claim, given that the invoice was a lump sum claim from which it simply made a deduction for the assessed costs of completing incomplete work.
Ground 6 concerns whether there was evidence sufficient to enable the Tribunal to allow a quantum meruit claim. Whether on a quantum meruit basis or not, the Tribunal has not explained how the figure of $46,074.00 was reached although we have inferred the calculation undertaken. The result of that calculation is not based on the invoice alone but on an assessment of the value of the incomplete work; i.e. work not done. There was no evidence of the actual costs of the work actually done and the materials provided for each item claimed, whether in accordance with the contract or not. Nor did the Tribunal make any allowance for the builder's concessions with respect to four of those claims. We therefore agree with the homeowner with respect to this ground.
Ground 7 is that the Tribunal failed to given adequate reasons for its finding that the builder was entitled to recover $46,074.00 with respect to invoice 1323. For the reason already given, we agree. There is no explanation as to how this figure was reached, and the reasons do not address the homeowner's submissions concerning why the invoice could not be relied on. This too is an error of law.
Ground 5, 6 and 7 of the homeowner's appeal are made out.

[196]

Both parties have been partially successful in their appeal.
A number of consequences flow form our deliberations.
First, because the homeowner was not entitled to claim for defects not previously claimed in the renewal proceedings, she is not entitled to recover the $38,400.00 awarded for them by the Tribunal. This will require an adjustment to any monetary order in her favour.
Secondly, the homeowner's entitlement to damages for incomplete works is dependent a decision as to whether a reasonable time for completing the works under the work order had expired, when the homeowner commenced the renewal proceedings on 21 January 2022. This in turn, requires a consideration of whether the builder is entitled to any and what extensions of time under the contract, when determining a reasonable time for the purposes of the work order.
It will be remembered that the renewal proceedings were commenced by the homeowner on 21 January 2022 some 8 months and 17 days after the work order was made on 4 May 2021. If the work was not completed within a reasonable time as required by the work order, then, as the Tribunal found, the builder is liable for the reasonable costs of completing the works. If a reasonable time had not passed when the owner commenced the renewal proceedings, then the Tribunal had no power to make an order on the renewal application.
In that case, all of the orders made by the Tribunal will have to be quashed as the Tribunal will have acted without power.
Third, is the issue of whether the builder is entitled to set-off any and what amount relating to invoice 1323 against the amount awarded to the homeowner? That question will only arise if the second issue is resolved in the homeowner's favour, as, if she was not entitled to bring the renewal proceedings, no order can be made in her favour. If there is no order in her favour, there is nothing for the builder's set-off to reduce.
Section 36 of the NCAT provides that the guiding principle of the NCAT Act and Rules "in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings." In determining how to resolve this appeal we are conscious of the complexity of these proceedings and the very large body of material required to be considered. The proceedings to date have consumed significant resources and time of the parties, and of the Tribunal: beyond what they merit on an objective assessment of the amounts involved.
In determining how to dispose of the appeal we have paid due regard to the guiding principle in s 36, by deciding that we will redetermine the issues necessary to finally resolve the proceedings following the appeals. This is an option that the parties were aware was open to us and under consideration at the time of the appeal hearing. We will conduct that reconsideration on the basis of the evidence and material that was before the Tribunal below, and the submissions made to us. We think this preferable to remitting the proceedings for further hearing and consistent with the instruction in s 36(4) that:

[230]

Extension of time # 1 (TB 3761) was issued on 17 June 2021. It related to a design variation to the rear door and entry requested by the homeowner. It sought a 10 business day extension of time under cl 11(a)(i) and (v) of the contract. It relied on the owner's failure to return the signed variation within the time specified by the builder, which was 1 day. It did not explain how the works were delayed by 10 business days. In her evidence the homeowner agreed that she had initially sought to change the rear door and entry (before the work order was made) but had withdrawn that request on 27 May 2021 in writing. She said that subsequent discussions and communications relating to the rear door and entry escalated into a dispute as to whether there was a variation, or whether, as the homeowner maintained, the door was a PC item stipulated in the builder's quote 1004 (TB94-103) and as to the amount of that allowance. The homeowner says this was aggravated by the builder including a component for additional labour for the PC items, reducing the allowance for materials. The contract provides that Quote 1004 lists all PC and provisional cost items (see Sch 2 (TB 121)).
Extension of time # 2 (TB 2784-2786), also labelled extension of time #: 1 but dated 5 July 2021, claims an extension of time, relating to the rear door, of 20 business days. It relates to the homeowner's failure to sign a series of alleged variations, which she maintains were not variations but adjustments to PC items. The extension of time notice contains no explanation of how the failure to agree to the variation\prime cost adjustment was delaying the works. In submission to the Tribunal below, the homeowner pointed to photographs which showed the back door boarded up and argued that the work was not impeded.
It is apparent on the face of variations # 1 and 2 that the builder and the owner have not been able to agree on anything concerning the rear entry, be they variations or prime cost adjustments. While proposals have been put by each party, there has been no agreement reached. There is no agreed variation in writing.
In closing submissions to the Tribunal, the builder claimed an extension of time of 23 days under extension of time # 1 and 19 days for extension of time # 2. On their face, these are different from and exceed those claimed by the builder which totalled 30 business days.

[266]

The work for bedroom 3 related to the builder's quote 289 (TB 1931) dated 19 September 2021 which the homeowner did not accept. The owner did not accept the builder's assertion that the need for the work was caused by a latent condition. She said in her statement of 24 August 2022 (TB 1481), that to ameliorate the builder's concerns she had the timbers replaced following a site meeting held on 27 September 2021. It is to be noted that this was happening at the same time as the homeowner and the builder were in dispute as to whether or not the builder was responsible for wall damage in the master bedroom and bedroom 3 as a result exposing them to the elements. The builder and the owner ended up in a stand-off over whether the additional work was due to latent conditions. Cumulatively, builder claims an extension of time of 45 days for this problem. The work has not been carried out.
We are satisfied that extensions of time claimed cannot succeed because there was no variation in writing, which delayed the work as required by cl 11(a)(i) of the contract. As was her right, the homeowner refused to agree to the proposed variation. The builder's claim for extension of time under cl 11(a)(i) of the contract therefore fails. We reject the builder's submission that the builder is entitled to a variation under cl 14 if it is undertaking work additional to the contract work. If it is remedying damage it has caused, that is not the case.
With respect to the builder's claims for an extension of time under cl 11(a)(v) we are not persuaded that the homeowner failed to provide the builder with instructions in writing. Once again, it would seem the basis for the extension of time claim is the builder not getting the instructions it wanted.
We are unable to unable to see how the builder claims the bedroom 3 delays as entitling it to an extension of time under cl11(a)(xii) due to causes beyond the builder's control.
These claims for extensions of time are not made out.
The second claim group of 5 day claims in each of these notices relates to delays in obtaining materials causing delays, So too does the ninth claim in extension of time # 9.They are dealt with below.
The third 5 day claim in each of the extensions of time was said to be due to:

[283]

Quote 296 was dated 6 October 2021 for electrical work in the lump sum of $15,396.70 including GST. The extension of time notice was issued 15 days later. The homeowner responded on 12 October 2021 stating her view that the electrical works were inclusions under the contract and should be completed in accordance with the contract. She wrote, "Please carry on the electrical works as per the contract."
Quote 299 dated 12 October relates to the laundry and is a lump sum quote for $29,203.00 including GST. It expired on 26 October 2021. The homeowner replied on 27 October 2021 requesting clarification of proposed charges and inclusions. These are set out in her statement at TB 1614.
The builder considered the electrical work he had quoted to be a variation. It was not agreed to. The homeowner instructed the builder to complete the works in accordance with the contract. He would not do so without the quote being agreed to. The proposed variations for the laundry was questioned, with no response from the builder. There was certainly no agreed variation.
In submissions to the Tribunal below, the builder argued, at AB 275, that the builder was not required to proceed with variations without a written variation, signed by both parties, and is entitled to fair and reasonable extension of time, if no written direction is forthcoming.
The reality is that the owner refused to agree to the proposed electrical variation and the builder was directed to proceed with the electrical work as specified in the contract. No agreement was reached as to the laundry variation. There were therefore no variations to which cl 11(a)(i) would apply to allow an extension of time. Any delays did not result from variations within the meaning of the contract.
Similarly, there was no act, default, delay or omission on the part of the homeowner which would entitle the builder to an extension of time under cl 11(a)(v) of the contract. With respect to the electrical work the homeowner had provided a written direction, without undue delay, on 12 October 2021 to carry out the electrical works in accordance with the contract. The builder clearly did not like those instructions.
We are unable to see how the builder claims either of these circumstances as entitling it to an extension of time under cl11(a)(xii) due to causes beyond the builder's control.
The balance of these extension of time claims are concerned with PC and provisional items, following client selections in October 2021. The contract required that such adjustments be made in writing. These are:

Dwyer Building Group Pty Ltd v Spicer; Spicer v Dwyer Building Group Pty Ltd

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (305 paragraphs)

Legislation Cited (5)

Cases Cited (13)