Negotiations for a building contract, claim for refund of deposit, requiring owner to sign "separate contract", whether really separate, agreement for charge over land entitling the builder to lodge a caveat, ss18 and 31 of the Domestic Building Contracts Act1995, ss8, 9, 161, 163 and 159(1) of the Fair Trading Act 1999, failure to disclose a document to owner before meeting to sign it, misleading conduct, unconscionable conduct, failure to give documents requested, action for damages, refund of sums paid, ability of builder to retain sums representing amounts incurred by it, interest, rent, costs, request for an order that the builder change its practice in future.

Elliott v Simonds Homes Pty Ltd (Domestic Building) [2010] VCAT 1827

The Respondent must pay the Applicant $1,535.38 forthwith.

1. Mr Elliott, the applicant, wished to build a house with the respondent, Simonds Homes, as builder. A contract was never signed and the amount sought by Mr Elliott is not very great -$4,425 plus interest. Nevertheless the grounds upon which Mr Elliott bases his claim are important. He represented himself at the hearing. Simonds Homes was represented by Ms Laura Ayres, the manager of construction services. Also present with Ms Ayres were Mr Mark Sanna, the Operations Manager for the North-West Region and Mr Mathew Gauci, a sales consultant.
2. Mr Elliott seeks the following orders:
   1. $1500 being deposit monies now being withheld by Simonds Homes.
   2. $57 being costs associated with lodgement of an application to VCAT.
   3. Any further administrative costs associated with the VCAT process.
   4. $6.25 per month being lost interest that would have been accrued by the deposit monies for the duration of Simonds' possession of it.
   5. $2868 being my dwelling rental cost for the duration of the time wasted pursuing a contract with Simonds, approximately 3 months.
   6. Simonds Homes be ordered to disclose the "separate agreement" form to prospective customers prior to their lodging a deposit, in order to fulfil Simonds obligations under the Fair Trading Act 1999 sections 9, 8 and 161. [sic]

1. The Tribunal has treated Simonds Homes as being the only respondent to the proceeding. In the application of 26 August 2010 the Applicant has completed the section "Name of Respondent(s)" thus:

Simonds Homes Pty Ltd -Mark Sanna (Operations Manager)

1. Mr Elliott gave an address for Simonds Homes, but only telephone numbers for the three people named, and they were not personally served nor named by the Tribunal as respondents. In his opening statement Mr Elliott referred to Mr Sanna, Mr Gauci and Ms Mueller as the first, second and third respondents, but the question of whether they have personal liability to Mr Elliott was neither the subject of evidence nor submissions at the hearing. I therefore treat Simonds Homes as the only respondent to this proceeding. The question of any personal liability of Mr Sanna, Mr Gauci and Ms Mueller has not been determined.

1. Mr Elliott gave evidence that on 14 April 2010 he first approached Simonds Homes and had dealings with Mr Gauci. He said he had a number of meetings with Mr Gauci, took a plan of his block of land which included "level lines", by which I understand he means contour lines. Mr Elliott also said he told Mr Gauci that as long as the price was kept "at around the $187,000 mark" he would like to enter a contact with Simonds Homes to build a house.
2. Mr Elliott said that on 21 April 2010 he was given a document headed "Sales Advice Quotation" totalling $183,876 which included a provisional amount of $15,000 for site costs, including an H class slab "Subject to site testing and site conditions." There was also a provisional allowance of $2,000 for "electrical upgrades".
3. The Sales Advice Quotation is four pages, each one hand-dated "1/5/10" and signed by Mr Gauci on behalf of Simonds Homes, and by Mr Elliott. Beneath the signatures on each page appeared the following words:

NOTE: We hereby authorise Simonds Homes to order a soil test and survey on our behalf.

All prices are estimates only. Simonds Homes is not bound by the estimated price or representations set out in this form.

I remark that to avoid misleading potential customers, if what Simonds Homes intends to provide is a preliminary estimate rather than a quotation which a potential customer can accept, they should re-name this document.

1. The parties agree Mr Elliott paid Simonds Homes $1,500 and there are two receipts totalling this sum. The first, for $500, is dated 21 April 2010 and the other, for $1,000, is dated 28 April 2010. Both are signed by Mr Elliott and Mr Gauci and beneath the signatures appear the following words, in significantly smaller type than any other words on the receipt:

Please Note: Deposit moneys will be applied by the builder towards the cost associated with preparation of your new home quotation and/or contract documents.

1. I note that hand-written on the receipt of 21 April is:

Subject to based price being approved @ $164,900 by management. If other wise deposit to be refunded [sic]

This was neither brought to my attention nor discussed during the hearing. I note that in both the Sales Advice Quotation and a similar eight-page document bound into the contract documents, item 1-1 describes the house type - the Stirling - which is priced at $164,900. It is hard to understand what comfort such a statement could give a customer, as this price is so substantially changed by other items. Nevertheless, it is clear that Simonds Homes acknowledged the possibility that there might be circumstances where the whole of the deposit might be refundable.

1. The other documents Simonds Homes gave Mr Elliott on 1 May 2010 were:

1. Sales advice, 2. Siting instructions - a drawing showing the position of the house on Mr Elliott's land,

1. Standard floor plans, sections and elevations for the Stirling - not the customised drawings that would be specific to Mr Elliott's house. Each drawing provided to me by Simonds Homes was signed and dated by Mr Elliott,

1. Standard inclusions, signed and dated by Mr Elliott, 2. Promotion document offering $13,000 of upgrades "free", and 3. A document described by Mr Gauci as "the building journey" which describes fifteen weeks of steps to be taken by Simonds Homes and the client to the point where "file is ready for site start". This was also signed and dated by Mr Elliott. I note the first two items in week one are: * Simonds locks in the base home price, any promotional offer (if applicable) and the site start month upon the receipt of your initial deposit * We arrange a soil test, site survey and property information on your behalf

NOTE: $600 of the deposit is non-refundable once soil and survey information has been ordered.

1. Mr Elliott said he asked Mr Gauci for a copy of the contract he would be asked to sign. He said that he was given the "Simonds version of a standard HIA section of the contract". Both Mr Elliott and Mr Gauci agree that he was not given the "separate agreement" or "caveat agreement" ("Caveat agreement") of which more is said later. Mr Gauci admitted under cross examination by Mr Elliott that he knew Simonds Homes would require the Caveat agreement to be signed at contract signing. Mr Elliott gave evidence, which I accept, that he would not have paid the deposit and entered any further negotiations with Simonds Homes if he had been given the Caveat agreement at that time.
2. Mr Elliott gave evidence, which was supported by the evidence of Mr Gauci_,_ that Simonds Homes does not release contracts to their clients before the meeting at which signing occurs, even though the final contract documents were ready for signing before the meeting. I asked Mr Gauci how a client could accurately tick the third bullet point in the checklist[1] on page ii of the contract: "Has the Owner had this Contract long enough to read and understand it?". He responded first that there is a cooling off period which enables an Owner to withdraw from a contract within five business days. When I persisted, saying that Simonds Homes' client should not be encouraged to sign unless he or she can accurately tick "yes" to the third to fifteenth items on the check-list, Mr Gauci said that if there is insufficient time at the meeting, another meeting can be arranged, and if necessary, the client can bring their lawyer.
3. I accept Mr Gauci's evidence that Mr Elliott attended a meeting with a Simonds Homes' representative in early June to choose colours and electrical fittings and that a few days before the meeting Mr Gauci telephoned Mr Elliott to inform him of the site costs, which had been increased. No evidence was given by either party of the extent of increase in the original contract price. Mr Gauci reported that Mr Elliott said the extra cost had "blown him out of the water" but that Mr Elliott still attended the colour and electrical meeting.
4. Mr Elliott said he attended a meeting to sign the contract on 16 June 2010 ("signing meeting"). The signing meeting was with Ms Mueller. She did not attend the hearing or otherwise give evidence. Ms Ayres said Ms Mueller was travelling overseas on the hearing date. Mr Elliott said he was given the Caveat agreement for the first time at the signing meeting. I accept his evidence that "I had not sighted [it] until the moment I was expected to sign it".
5. The Caveat agreement provides as follows:

acknowledge that we are now or may at any time hereafter be or become liable to pay to the Company on any account whatsoever money ("the sum") for services rendered and materials supplied to us, details of which have previously been supplied by the Company.

In consideration of the Company not demanding immediate payment today of the sum owing to it by us we jointly and severally agree as follows:

1. To pay the sum to the Company upon demand, which demand may be made at any time after seven days from the date hereof.
2. We immediately upon an event of default including failure to pay the sum or part thereof to the Company charge all our estate and interest in the property known as Lot xxxx being the whole or part of the land described in Certificate of Title Volume TBA Folio TBA ("the property") with payment of the sum or any part of the sum remaining unpaid or to be paid to the Company.
3. To the Company immediately upon an event of default including a failure to pay the sum or part thereof lodging at the Land Registry a caveat against the property with such caveat not to be withdrawn until the sum has been paid in full and all contracts entered into between us and the Company completed.

"An event of default" where referred to above means any failure to pay when due any sum owed to the Company by us or any failure to meet any terms, covenants or conditions contained in any contract or agreement between us and the Company.

1. I accept Mr Elliott's evidence that that he objected strongly to the Caveat agreement and insisted that he be permitted to take the entire contract package away for a few days to properly assess it. I accept his evidence that Ms Mueller told him he could not do so and that this is Simonds Homes' policy. Mr Sanna said he had a telephone conversation with Ms Mueller about Mr Elliott's request and told her it is company policy not to allow a potential customer to take home the contract and the Caveat agreement. Mr Sanna said he, in turn, discussed the matter with his supervisor, Mr Kane Kelley, who authorised a change of policy in this instance to allow Mr Elliott to take home the contract documents.
2. I accept Mr Sanna's evidence that the company policy that their clients sign the caveat agreement is a requirement of the directors of Simonds Homes and of the general manager.
3. I accept Mr Elliott's evidence that Ms Mueller released the documents to him before signing, on condition that Mr Elliott sign the following handwritten document:

I, Dean Simpson Elliott of ... hereby undertake to Simonds Homes that I will not in any manner reproduce the proposed building contract for the above Lot between us as supplied to me by the Builder on 16/6/10 and undertake to return it to Simonds Homes, South Morang office no later than Thursday June 23, 2010 COB.

Mr Elliott's copy of this document has a note on it in his handwriting: "Returned 23.6.10@ 2:12pm" and his initials. I accept Mr Elliott's evidence that he was true to his word and did not copy any part of the contract documents, but got the words of the Caveat agreement by searching the Internet.

1. Mr Sanna agreed that the document, which is on a Simonds Homes' variation form, is in Ms Mueller's hand-writing, but the witnesses for Simonds Homes were unable to say whether it was Ms Mueller's idea or whether she had been directed to seek such a document by one of her superiors. Mr Sanna said he was not aware of the undertaking.
2. Mr Elliott gave evidence, which I accept, that there were a number of aspects of the original contract documents that were unacceptable to him and which were the subject of e-mail exchanges between him and representatives of Simonds Homes. Mr Elliott sent Ms Mueller a detailed e-mail on 21 June 2010, with copies to Mr Gauci and Susan Eade, assistant to Mr Sanna. The following are some important passages from that e-mail. Mr Elliott received an answering e-mail on 23 June 2010. The answers were interspersed into his e-mail. Where there is an answer to a passage quoted, it is included here in bold:

I am deeply surprised that ordinarily your company does not release their documentation so proper legal advice can be sought if a customer would like to obtain it. To ask customers to complete seeking such advice within a 5 day cooling off period is wholly unacceptable to me, in view of the large amount of money involved. ... Please note that I will require any future modified contract for a few days as well, in order to properly assess it.

The open-ended, arbitrary and unfair "[Caveat] agreement" allowing Simonds to lodge a caveat over the land ... will not be signed by me under any circumstances ... I was not provided with a copy of this document when I requested a copy of Simonds' contract from the sales person. I was also not provided a copy of this document in the package sent from your office subsequent to my paying a $1500 deposit.

This requirement must remain and is non-negotiable.

Item 11 of schedule 1 notes that the finance approval amount is to be $0.00. This amount should reflect the contract price, or a worded amount sufficient to discharge my obligations under the contract, thereby rendering the entire contract subject to FINAL finance approval of an appropriate amount to pay for it. I am currently the holder of a finance pre-approval only.

Cost Item 2-14 This item is unacceptable, and excessive. The risk of double-handling should be borne by the organisers of the building site, ie the builder. The block is not unusual enough to warrant such a charge.

This item will need to remain as featured in the Contract and is not negotiable.

My established budget for this project is $187000.00, which is based on the relevant sales consultant's estimate ($183876.00) plus about $3000.00 for upgrades. Note this EXCLUDES a provision for the discovery of large formations of rock during the excavation process, which I regard as reasonable and standard in building contracts. The current total of the contract offered to me actually and potentially exceeds this total, primarily due to the "provisional" or unacceptable additions to the site cost [cost item 2-14] as detailed above. For me to accept the cost component of our proposed contract, the total cost will have to be reduced to $187000.00 or less. I have identified some upgrade items I can do without ... Note that meeting my cost concerns does not mitigate my other concerns as outlined above.

I hope that our proposed contract can proceed, but note that I will not consider entering into a contract with Simonds until the above concerns, and any others I may find in any subsequent proposed contract have been mitigated.

1. Mr Elliott responded to Ms Mueller on 24 June 2010 as follows:

With great regret, we are not able to reach agreement and the project appears to be dead in the water. The primary cause of this is Simonds' ongoing requirement to sign the [Caveat agreement] ...

The only remaining question is the return of my deposit. Were I shown a copy of the [Caveat agreement] I would be presumed upon to sign prior to making a deposit, I can assure you I would not have made such deposit, therefore regard that money as having been dishonestly obtained. This leads me to expect its return in full by cheque. If the management of Simonds resists this statutory requirement of theirs, I can and will take the time to prepare a very detailed account of your companies' contracting procedures to relevant third parties and construction industry oversight bodies. Please inform me of any procedures I am expected to undertake to facilitate this.

1. On 28 June Mr Sanna wrote to Mr Elliott, referred to recent conversations about "potential abolishment" of the Caveat agreement and asked how Mr Elliott would be financing the home "for example, $50,000 Cash & $245,000 finance."
2. Mr Elliott replied on the same day, refusing to provide the financing details sought, repeating that he did not wish to "expand that credit facility beyond $187000.00", referring Mr Sanna again to his other concerns and giving Simonds Homes until 7 July to either produce an acceptable contract or return the deposit in full.
3. A revised contract was sent to Mr Elliott on about 1 July 2010. Although Simonds Homes was no longer asking him to sign the Caveat agreement, there were three aspects of the contract he still considered unacceptable. He said the price was beyond his budget at $193,148, the contract offered was not subject to finance and it still contained item 2-14 which allowed a provisional sum for "double handling or hand carting of materials". Mr Elliott advised Simonds Homes that the revised contract was unacceptable on 7 July and once more sought the return in full of his deposit.

1. I accept Mr Elliott's budget was $187,000 and that he communicated this in conversations and by e-mail to representatives of Simonds Homes on a number of occasions; certainly before the revised contract was offered. Mr Gauci said he did not recall the conversation about $187,000.
2. Mr Sanna also gave evidence that he did not know Mr Elliott's budget was $187,000. This could only be so if Mr Sanna did not read Mr Elliott's e-mail of 21 June 2010, to which he replied by interspersing comments in the e-mail. I find Mr Sanna's evidence on this point unconvincing.

Refusal to provide the contract before the signing date

1. The parties agree that in accordance with its policy, Simonds Homes refused to provide significant parts of the contract documents - in particular the completed schedules to the contract and the Caveat agreement - before the meeting at which Simonds Homes expected the client to sign the contract. No satisfactory reason has been given for this policy.

Refusal to allow Mr Elliott to copy contract documents and the "guarantee" document

1. The parties agree that Ms Mueller, on behalf of Simonds Homes, only allowed Mr Elliott to take the contract documents away with him if he signed the agreement that he would return the documents within seven days and that he would not copy them. This would have made it difficult for Mr Elliott to obtain legal advice on the contract documents.

1. The parties agree that the Caveat agreement was provided to Mr Elliott first on 16 June at the meeting where he was expected to sign it and that Ms Mueller, acting in accordance with Simonds Homes' policy, resisted allowing him to take it away to consider it and obtain advice. They also agree that no mention of the Caveat agreement was made to Mr Elliott before this date.
2. Under cross-examination Mr Gauci admitted that he was aware of the policy requiring customers to sign a Caveat agreement but that he did not tell Mr Elliott about this document, even when Mr Elliott asked for the contract early in their dealings. When Mr Elliott asked Mr Gauci if he remembered Mr Elliott's request for "the contract", Mr Gauci quibbled on the point of what "the contract" meant. He agreed that when he provides a customer with a sample contract, he does not provide the Caveat agreement. In answer to the same question, Mr Sanna said that the usual practice is to show the Caveat agreement to the client for the first time on signing date.
3. Under cross-examination by Mr Elliott, neither Mr Gauci nor Mr Sanna were able to say how this policy complies with s161 of the Fair Trading Act 1991 ("FT Act"), which is discussed below.
4. I note the evidence of Mr Gauci and Mr Sanna that they rely on the authority of their superiors to tell potential clients that the Caveat agreement is an acceptable requirement.

1. As stated above, Simonds Homes provided the revised contract on 1 July 2010 and on 7 July Mr Elliott advised that it remained unacceptable.

1. Mr Elliott said the price of the revised contract - at $193,148 - was too far above his budget of $187,000 to enable him to accept it. I accept the accuracy of his evidence and find that the representatives of Simonds Homes knew this or should have known this with reasonable diligence before the revised contract was offered to Mr Elliott.
2. An aspect of the increase in cost which is particularly surprising is that site costs increased by $5,683 because of the result of the geotechnical investigation. It is surprising because on the Sales Advice Quotation of 21 April 2010 Simonds Homes allowed $15,000 for an H (or highly reactive) class slab, whereas the amount offered in the revised contract was $20,683 for a site classified by Intrax Consulting Engineers as M (moderately reactive). If anything, one might have expected the result of the geotechnical investigation to have caused the site costs, and hence the total price, to fall rather than rise.

1. In accordance with Mr Elliott's e-mail to Ms Mueller of 21 June 2010, and subsequent correspondence, Simonds Homes knew that Mr Elliott would only sign the contract if it were subject to finance. I am unsure what Mr Sanna was trying to convey by his reply of 22 June, sent to Mr Elliott on 23 June 2010 by Ms Mueller: "Refer HIA clause 8.1 for further explanations".
2. As Mr Elliott correctly assumed, under clause 8.1, a nil amount for this item would mean that the contract would not be subject to finance. I am not satisfied by Mr Sanna's explanation that this was an oversight in the revised contract. If it was an oversight, Simonds Homes failed to correct it at least twice.

1. The double-handling provision in 2-14 of the eight-page document to which Mr Elliott objected allowed "$2,500 Provisional" as follows:

To be used for double handling or hand carting of materials, providing access to building area where access is limited due to wet site conditions or restricted access or overhand laying of bricks to wall/s near boundaries.

It is the same provision to which Mr Elliott had objected in his e-mail of 21 June 2010.

1. I conclude that Simonds Homes' revised contract was one that it cannot have failed to know continued to be unacceptable to Mr Elliott. I therefore find that the revised contract was not a genuine offer by Simonds Homes to Mr Elliott.

1. I accept Mr Sanna's evidence that he provided the Intrax Consulting Engineers' soil report, wind rating, site survey and bush-fire rating to Mr Elliott. Mr Sanna's recollection of the cost of these items was inexact. I accept that the account from Intrax to Simonds Homes for these items was $325 for the soil report, wind rating and site survey, and $90 for bush-fire rating, a total of $415, to which GST of $41.50 must be added. I find that the total sum for items which are not specific to Simonds Homes' proposed design is therefore $456.50.
2. Mr Elliott admitted that he has the Intrax report but said "builders insist on using their own surveyors". He did not provide any further evidence of this assertion, but I have no reason to disbelieve him and none of the representatives of Simonds Homes challenged him on this point.
3. Mr Sanna also gave evidence about amounts incurred by Simonds Homes which are specific to its design. They are:
   • Energy rating report - $300
     • Property information report $630 (although this might include some of the amounts referred to in the previous paragraphs)
   • Footing design report - $315
   • In house drafting - $470
   • In house administrative costs - $500
   • In house colour and electrical appointment - $250
   • Estimating contractor - $260
4. I note Ms Ayres' statement that although Simonds Homes wishes to retain the whole deposit of $1,500, it is not seeking to recover any other expenditure.

Section 18 of the Domestic Building Contracts Act 1995

1. Section 18 of the Domestic Building Contracts Act 1995 ("DBC Act") is as follows:

Contract does not entitle builder to put caveat on the title of building site land

A domestic building contract does not give a builder an estate or interest in any land for the purpose of section 89 of the Transfer of Land Act 1958.

1. I find the Caveat agreement purports to give Simonds Homes a caveatable interest in the land of any building owner who signs it.
2. I raised the question of how the Caveat agreement complies with s18 of the DBC Act and was not given a satisfactory answer by any of the representatives of Simonds Homes who were present before me.
3. The consideration expressed in the Caveat agreement is: "In consideration of the Company not demanding immediate payment today of the sum owing to it by us...". However, I find that Simonds Homes gives no separate contractual consideration for it and indicated to Mr Elliott at the signing meeting of 16 June that it was unwilling to enter the building contract without it. I therefore find that the Caveat agreement, being so inextricably linked tot eh building contract, should properly be characterised as part of the building contract.
4. The Caveat agreement breaches s18 of the DBC Act and to tell Mr Elliott that it was acceptable was misleading. It is difficult to see how this statement also is not misleading. "Today" can only mean the date upon which an owner signs, and had Mr Elliott signed on 16 June, the only sum that might have been payable was the balance of the deposit.
5. Mr Elliott did not address me on s18 of the DBC Act, of which he might have been unaware. His concerns were that the Caveat agreement was not textually linked to the building contract, did not contain the five day cooling off period and seemed to be very extensive in effect. He remarked particularly that it could entitle Simonds Homes to lodge a caveat on its demand, regardless of its entitlements under the building contract. Clause 1 of the Caveat agreement is certainly capable of that interpretation, although it would be likely to be interpreted more narrowly, even if valid. Mr Elliott's refusal to sign the Caveat agreement was entirely reasonable.
6. In my view the Caveat agreement is a contrived means of attempting to escape a provision of the DBC Act with which Simonds Homes apparently does not wish to comply. Having it as a separate agreement does not cure its invalidity. Mr Elliott reasonably refused to enter a contract with such a provision.

(1) A builder must not enter into a major domestic building contract unless the contract-

(b) sets out in full all the terms of the contract; and

(j) states the contract price or, in the case of a cost plus contract, how the amount that the builder is to be paid is to be determined; and

1. This issue was not argued before me, although at the hearing I raised my concern that cost item 2-14 appears to breach s31. If Simonds Homes can claim its actual costs of "double handling" rather than receiving an agreed fixed price, the contract appears to be contrary to s31(1)(j) of the DBC Act - it does not state the price with certainty.
2. I say "if it is effective" because although that it is marked as "Provisional" in item 2-14, it did not appear in Schedule 2 where provisional items should be listed. The only possible reference is "SEE ATTACHED CONTRACT PS ITEMS", but there was no page or list of which I am aware headed "PS Items".
3. If it were a true provisional sum it would have to comply with sections 20 to 23 of the DBC Act. My concern is that it is not in the usual nature of provisional sums. It is not an item of work, or even an item of equipment. "Crane Hire $1875" is included in Schedule 2 and by reference to the hirer's invoices, it can be readily determined how much was spent by a builder.
4. Rather, item 2-14 concerns means, methods, techniques and sequences of work which are very much under the control of a builder. The item threatens to ride rough-shod over an owner's legitimate interest to only have the price change in circumstances where the builder could not reasonably pre-estimate the cost of undertaking the work. Further, the builder would be in a strong position to assert an extra cost and the owner in a weak position to challenge it. A provision such as 2-14 is far too open to potential abuse to accord with the spirit of the DBC Act and I also consider that it conflicts with the letter of the Act.
5. Again, I find that Mr Elliott reasonably refused to enter a contract with such a provision.

1. Mr Elliott referred me to sections 8, 9, 161 and 163 of the FT Act, all of which he submits Simonds Homes have breached. I also have regard to s159(1) which entitles a person who suffers loss because of a breach of the FT Act to recover damage.
2. Section 8 provides in part:

(1) A person must not in trade or commerce, in connection with the supply or possible supply of goods or services of a kind ordinarily used for personal, household or domestic purposes to a purchaser, engage in conduct that is, in all the circumstances, unconscionable.

(2) Without in any way limiting the matters to which a court or the Tribunal may have regard for the purpose of determining whether a person has contravened subsection (1), a court or the Tribunal may have regard to-

(b) whether, as a result of conduct engaged in by the supplier, the purchaser was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against the purchaser ...[Mr Elliott's emphases]

1. I am satisfied that Simonds Homes' attempt to have Mr Elliott execute a charge over his land when it was not entitled to do so under s18 of the DBC Act was unconscionable. Further or in the alternative, I am satisfied that its refusal to give Mr Elliott full contract including the Caveat agreement until the day upon which it wished him to sign is also unconscionable as an unfair tactic.
2. Section 9 provides in part:

(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

1. I accept Mr Elliott's submission that Simonds Homes' failure to tell him about their requirement that he execute the Caveat agreement before he paid the deposit was misleading conduct, as was their representatives' assurance to him that it was a reasonable and necessary document. As I have found that the revised contract was not a genuine offer to Mr Elliott, given the continuing terms that Simonds Homes knew were unacceptable to him, dropping the requirement for the Caveat agreement in the revised agreement did not cure their dealings with him of misleading conduct.
2. Section 161 provides in part:

If a purchaser or a prospective purchaser of goods or services asks the supplier for a document containing particulars of the goods or services, the supplier must give the purchaser or prospective purchaser a document ... which contains-

(c) any particulars or information in relation to the goods or services which have been asked for by the purchaser or prospective purchaser

1. I accept Mr Elliott's submission that he sought the contract conditions before he paid the deposit and they were not provided to him in full. I find that in addition to such behaviour being misleading, it also breaches s161 of the FT Act.
2. Section 163 concerns clarity of consumer documents. Although the circumstances surrounding presentation of the proposed contract documents breach the FT Act, Mr Elliott has not referred me to any aspect of the documents themselves that is illegible, too small to read or not clearly expressed.
3. Section 159(1) provides:

(1) A person who suffers loss, injury or damage because of a contravention of a provision of this Act may recover the amount of the loss or damage or damages in respect of the injury by proceeding against any person who contravened the provision or was involved in the contravention.

1. I have found that Simonds Homes has contravened the FT Act by breaching sections 8, 9 and 161. In accordance with s159(1) I find that Mr Elliott is entitled to recover any loss, injury or damage he has suffered.

1. Mr Elliott is entitled to recover the amount he paid of $1,500. Had he received value from the soil test and associated documents I would have considered whether a sum representing Simonds Homes' expenditure for those items should be recovered, but I do not have that evidence.
2. Simonds Homes documents are all affected by its conduct towards him and it cannot rely on them to give it any rights against Mr Elliott.
3. I find that in these circumstances it is fair that Simonds Homes repay Mr Elliott the whole deposit of $1,500, and so order.

1. The factors that militate against an order for interest in Mr Elliott's favour are the small amount in dispute, and the lack of proof of the amount of interest incurred by Mr Elliott. Nevertheless, Simonds Homes has had the use of Mr Elliott's $1,500 since April. In accordance with s108(2)(b)(ii) of the FT Act I award interest under the Penalty Interest Rates Act 1983 from the commencement of this proceeding on 26 August 2010 until today of $35.38.

1. Mr Elliott did not provide a basis upon which he should be paid rent, although I accept that Simonds Homes has wasted his time while he was negotiating with them. I make no order for rental.

1. Section 109 of the Victorian Civil and Administrative Tribunal Act 1998 provides in part:

(1) Subject to this Division, each party is to bear their own costs in the proceeding.

(2) At any time, the Tribunal may order that a party pay all or a specified part of the costs of another party in a proceeding.

(3) The Tribunal may make an order under subsection (2) only if satisfied that it is fair to do so, having regard to-

(a) whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as -

(i) failing to comply with an order or direction of the Tribunal without reasonable excuse;

(ii) failing to comply with this Act, the regulations, the rules or an enabling enactment;

(iii) asking for an adjournment as a result of (i) or (ii);

(iv) causing an adjournment;

(v) attempting to deceive another party or the Tribunal;

(vi) vexatiously conducting the proceeding;

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;

(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;

(e) any other matter the Tribunal considers relevant.

1. Mr Elliott did not refer to the VCAT Act and, although costs would possibly be merited under s109(3)(c), I do not consider they are justified in this proceeding where the amount in dispute is small, the costs incurred negligible and I have not allowed Mr Elliott all he sought. The only amount Mr Elliott has incurred in the nature of costs is the filing fee of $37.00. His own administrative expenses are not in the nature of costs. I make no order as to costs.

Requested order that Simonds Homes disclose the separate agreement in future

1. I cannot make the order sought, but note that it would seem prudent for the directors and senior managers of Simonds Homes to reconsider their obligations concerning the Caveat agreement and the right of prospective clients to receive documents in sufficient time to consider them and seek legal advice.

[1] The checklist is a requirement of 31(r) of the Domestic Building Contracts Act 1995.