Howse v Caam Group Pty Ltd

Representation: Counsel:
Mr J Horowitz (Plaintiff)
Solicitors:
Alex Norrie & Associates (Plaintiff)

File Number(s): 2023/353243

Publication restriction: Nil

JUDGMENT

1. These proceedings were commenced in the Civil and Administrative Tribunal of New South Wales (‘NCAT’). They were transferred to the District Court in October 2023, and the plaintiffs, Mr Michael Howse (‘the first plaintiff’) and Ms Rosena Howse (‘the second plaintiff’), filed a statement of claim on 11 December 2023. The defendant, CAAM Group Pty Ltd (‘CAAM’) filed an Amended Defence on 13 November 2024.

2. The defendant failed to appear before the Court at hearings on 9 October 2025, 3 November 2025 and 10 November 2025. On 10 November 2025, an order was made for the defendant to file an affidavit by 5pm on 17 November 2025 showing cause why its amended defence should not be struck out for want of due despatch. No such affidavit was filed. Accordingly, on 20 November 2025, the amended defence was struck out pursuant to rule 12.7 of the Uniform Civil Procedure Rules 2005 (NSW).

3. On 1 December 2025, default judgment was entered in favour of the plaintiffs against the defendant.

4. The matter was listed for an assessment hearing, which took place on 5 March 2026.

5. This is the judgment in relation to the assessment of damages and the amount of restitution.

Facts

6. The plaintiffs are the registered proprietors of a residential property in Forrestville, New South Wales (‘the site’). On 16 May 2020, the plaintiffs entered into a contract with the defendant (‘the contract’), which holds Building Contractor Licence 290496C. Mr Ayssor Abdallah was at all relevant times the director and secretary of CAAM.

7. The building works the subject of the contract were described in Schedule 4 of the contract as “New two storey dwelling house and pool”.

8. The contract price was $947,800.

9. The plaintiffs obtained development consent for the building works from the Northern Beaches Council on 15 June 2018.

10. On 3 November 2020, a Certificate in Respect of Insurance for Residential Building Work bearing policy number HBCF20057837 was provided by the Home Building Compensation Fund of iCare in relation to the building works in response to an application by the defendant.

11. On 16 December 2020, Mr Samy Mikhail, a Registered Certifier of Building Certifiers, issued a Construction Certificate in relation to the building works.

12. The building works commenced on about 30 March 2021. The defendant had control of the whole of the site during the course of the building works. The plaintiffs lived elsewhere until February of 2022, when the plaintiffs, with, they say, the defendant’s agreement, moved into the new house.

13. Building works continued after the plaintiffs began living in the new house. On 24 February 2022, the defendant told the Home Building Compensation Fund of iCare, by email, that the building works were complete.

14. The defendant did not, at any stage, issue the plaintiffs with any written variation under the contract.

15. Between 21 March 2021 and 22 April 2022, the plaintiffs paid the whole of the contract price to the defendant, in stages. The defendant also required the plaintiffs to pay additional, substantial sums outside of the contract.

16. The plaintiffs became aware of defective and incomplete building works. The plaintiffs demanded that the defendant return to the site to rectify the defective works and complete the incomplete works. The defendant did not return to the site.

17. On 20 April 2022, the defendant’s contractor licence was cancelled.

18. On 27 May 2022, the first plaintiff contacted the New South Wales Department of Fair Trading (‘Fair Trading’) and made a written complaint via Fair Trading’s on-line complaints handling service in relation to the issues with the building work. The complaint gave a builders licence number. A letter was received from Fair Trading in reply, dated 31 May 2022. The reply said, among other things:

In NSW residential building work is to be completed by a licensed tradesperson. The information you provided in the complaint form indicates that the residential building work was carried out by an unlicensed trader.

As the building work was carried out by either

● an unlicensed trader, or

● a licensed trader who performed work outside the scope of their licensed category (considered to be unlicensed work), or

● a trader whose licence has expired, has been suspended, or has been cancelled we are unable to pursue your requested outcome under the legislation we oversee.

19. The defendant did not address the defective works and the incomplete works. The defendant vacated the site in June of 2022.

20. On 30 June 2023, the plaintiffs served a Notice of Breach on the defendant, pursuant to clause 27 of the contract. The Notice of Breach said, in part:

A. Breach of Contract

The Respondent Builder is in substantial breach of the Contract in that its contractor licence 290496C (Contractor Licence) was cancelled (by means of surrender, with such surrender approved by the Authority on 20 April 2022 pursuant to section 105N(5) of the Home Building Act 1989 (NSW) (the Act) in breach of clause 27.1(a).

B. Remedy of Breach

Pursuant to clause 27.4, if the abovementioned breach is not remedied by 21 July 2023, the Applicant Home Owners may terminate the Contract.

21. By letter dated 7 July 2023, the defendant purported to terminate the contract on the basis that the plaintiffs had commenced residing in the property despite, it was said, the defendant’s objection, and had refused the defendant access to the property from about February 2022, and had thereby repudiated the contract. The plaintiffs deny that the defendant objected to them moving in to the house and deny that they denied the defendant access to the site. The plaintiffs deny that they repudiated the contract and deny that the defendant’s purported termination was effective.

22. On 22 July 2023, the plaintiffs served the defendant with a Notice of Termination of the contract on the basis that the breach identified in the Notice of Breach had not been remedied. The plaintiffs terminated the contract under clause 27.4 of the contract. The plaintiffs pleaded that the termination took effect on 28 July 2023, being five working days from the first working day following service of the Notice of Termination.

23. As I have said, the plaintiffs have obtained a default judgment against the defendant.

Principles applicable to an assessment of damages

24. The plaintiffs claim damages with respect to the breaches of contract by the defendant.

25. The guiding principle in the award of damages in breach of contract is set out by the High Court in Tabcorp Holdings Ltd v Bowen Investment Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 at [13]:

13. The "ruling principle", confirmed in this Court on numerous occasions, with respect to damages at common law for breach of contract is that stated by Parke B in Robinson v Harman:

"The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed."

Principles applicable to a claim for restitution

26. The plaintiffs, in paragraph 64(c)-(f) of the statement of claim, seek restitution for monies paid which were not due and owing under the contract, namely:

(c) The cost, or a refund, of the additional payments in relation to the Progress Payment Schedule in the amount of $34,135.00.

(d) The cost, or a refund, of the additional payments made to the Defendant outside of the Contract in the amount of $73,858.50.

(e) The cost, or a refund, of the additional payments made to Third Parties outside of the Contract in the amount of $39,000.00

(f) The cost of obtaining items under Contract not supplied by the Defendant.

27. The plaintiffs relied on the explanation of restitution in Field v Dettman [2013] NSWCA 147 at [28] by Preston CJ of LEC:

28 … Mr and Mrs Field submitted that a payer, on establishing that monies were paid under a mistake of fact and/or law had a prima facie entitlement to recover the monies paid. It was accepted that, ordinarily, a person who receives such a payment (the payee) may raise any matter or circumstance which shows that retention of the payment would not be unjust, such as that the payment was made for good consideration, or, in reliance upon the payment, the payee, in good faith, has changed its position to its detriment (David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; 175 CLR 353 at 379-380, 385 and Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [2012] NSWCA 380; (2012) 295 ALR 147 at [70]-[76], [182]-[183]). Circumstances sufficient to displace the prima facie entitlement are sometimes termed "defences": Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd at [71].

28. The plaintiffs also cited Aslan v Stepanoski [2022] NSWCA 24, in which Macfarlan JA, with whom Gleeson JA and Payne JA agreed, said, at [90]:

Leaving aside whether the Owners, when making payments, believed they accorded with the then operative contractual provisions, the question remained, for the purpose of considering a restitutionary claim based on the payment of money under mistakes of fact or law, of whether the payments were in fact in disconformity with what the contract required.

Assessment of Damages for defective works and incomplete works.

29. In their statement of claim, the plaintiffs claim in relation to the defective and incomplete works set out in the expert report of Mr Neil Wallace, a building contractor, dated 5 September 2023 and the Scott Schedule prepared by Mr Wallace, dated 5 September 2023.

Defective Works

30. The plaintiffs claim the sum of $534,440.07 for defective work. The defective work is itemised and remediation methods are set out in detail and costed in the Amended Scott Schedule (‘the Scott Schedule’) annexed to the statement of claim. They are also described in Mr Wallace’s reports.

31. The defective work comprises the following:

32. A leak is causing water entry from balconies 2 and 3. Terrace 2 is non-compliant with AS 4654. The total cost of remediation is $67,690.30.

33. The hybrid flooring on both the ground and first floor has gaps between the ends of the floor boards and between the sides of the floor boards in some places. It is also “springy” in sections on both the ground floor and the first floor. The total cost of remediation is $10,902.83.

34. The rangehoods to both the kitchen and the butlers pantry have not been installed. No ducting has been installed for the rangehood in the butlers pantry to expel air to the atmosphere. Both rangehoods require covers and grilles to the ducting. The remediation work requires the removal and later reinstatement of the rangehoods and the overhead cupboards. The total cost of remediation is $2,036.23.

35. The built in robes and the walk in robe have not been built in accordance with the plans or the Interior Finishes Schedule. The robes have been installed with side panels of insufficient depth so that doors cannot be installed. The robes are not fit for purpose. The walk-in robe also lacks sufficient depth and are not in accordance with the plans. The total cost of remediation is $23,372.77.

36. The plasterboard and paint works throughout the house show defective work. There is cracking to sections of the gyprock plasterboard wall linings which are visible from 1.5 metres away. The plasterboard has been poorly finished around door openings and timber architraves do not conceal voids in the plasterboard. There are gaps around air conditioning ducting grilles to the first floor. There is also damage to some painted plasterboard and timber surfaces throughout, including separation of paint. There is overpaint in some areas, with paint encroaching onto adjoining materials. The total cost of remediation is $1,835.18.

37. The steps at the entry porch do not have a free board or step down at the entry door from the tiled entry porch. The steps leading to the entry porch are inconsistent and irregular in dimension and not compliant with the National Construction Code or the Building Code of Australia. The steps leading to the rear door of the laundry and butler pantry and the steps to the garage nest to Bathroom 2 are also defective. None of them have equal riser heights and they are not in conformity with the plans. There are no steps from Terrace 2 to Terrace 1. The entry porch tiling work has insufficient gradient. The total cost of remediation is $7,732.50.

38. Many of the door handles throughout the house have not been installed properly. Some are loose, some are crooked, some have a striker plate which does not align with the door locks, so that the door cannot be properly closed. The total cost of remediation is $1,587.74.

39. The swimming pool is not in accordance with the plans and is only partially constructed. The swimming pool the subject of the contract had infinity edges, and none have been provided. The swimming pool requires demolition and replacement. The total cost of remediation is $123,682.00.

40. The chimney and flue for the fireplace are defective in that they do not extend past the height of the roof and are not in accordance with the plans. The total cost of remediation is $4,051.83.

41. The glass balustrades to Terrace 2 are defective in that they are misaligned; each panel fails to line up with the adjacent panel. The glass panels at each end and sections at the north side have been installed at lease 25mm higher than those adjacent, so that the disparity is readily noticeable. Sections of the glass at the eastern side have been damaged by efflorescence caused by water penetration from Balcony 2. The total cost of remediation is $727.88.

42. The sliding stacker doors from the ground floor living and dining areas are difficult to operate. The total cost of remediation is $278.37.

43. When the dual ovens are used in the main kitchen, they trip the electrical circuit. The cost of remediation is $546.43.

44. The windows to the main bathroom and reading nook are defective because they have fixed glass and cannot be opened. This is contrary to the Basix window schedule and the plans. The cost of remediation is $1,414.53.

45. The vanity benchtop in the master bedroom ensuite does not extend wall to wall and is missing a third mirror, so that it is not in accordance with the plans. The cost of remediation is $2,314.59.

46. The ceilings to the first floor are flat, but the plans show raked ceilings for the master bedroom, the ensuite to the master bedroom and bedroom 2. The cost of remediation is $102,015.54.

47. At the south end of balcony 3, a transparent glass balustrade has been installed where the plans and Development Consent condition 15 require an opaque privacy screen. The cost of remediation is $2,428.

48. Some of the external wall cladding has been finished in a way which does not provide protection from the elements, including water entry, and provides entry points for airborne fire embers. The cladding does not comply with Bushfire Attack Level Australian Standard 3959 (BAL). The cost of remediation is $2,670.29.

49. The laundry door has a gap of 12mm between the base of it and the floor and there is no threshold under the door. This is contrary to BAL requirements and is not compliant with BAL FZ rating, which requires a gap no greater than 3mm to the outside. The cost of remediation is $979.45.

50. There is damage to the drawers of the wall-hung vanity cupboard of the master bedroom ensuite. The drawers have been cut to fit around the drainage pipe from the sink, but the cuts have not been sealed. The cost of remediation is $618.60.

51. The ant capping or termite barriers do not comply with AS 3660.12000. They have been installed in a non-continuous manner in places and the holding straps are a source of termite entry as they are shaped around ant caps. Some of the termite barriers do not extend over all sides of piers or walls. The materials in place are not fit for purpose and must be replaced. The cost of remediation is $5,361.20.

52. The gradient of the floor tiles to the shower recesses in bathrooms 1 and 2, the shower area in the main ensuite and the bath area of the main ensuite are not in compliance with AS 3740 nor AS 3958 with respect to falls. The cost of remediation is $7,928.70.

53. The total remediation cost for the defective works is $370,174.95. Preliminaries at 5% amount to $18,508.75, giving a total of $388,683.69. The builders margin at 25% amounts to $97,170.92. The overall total is $485,854.61, plus GST at 10% being $48,585.46, equalling $534,440.07 for defective work.

Incomplete work

33. The plaintiffs claim the sum of $101,556.52 for incomplete work.

34. The incomplete works are set out in the Scott Schedule prepared by Mr Wallace. They are also described in Mr Wallace’s reports.

35. The incomplete works comprise the following:

36. The built in cupboard to the first floor hallway adjacent to bathroom 1 has not been installed. The cost of completion is $2,773.39.

37. The glass sliding doors between the master bedroom and the master bedroom ensuite have not been installed. The cost of completion is $7,000.49.

38. The under house area at the north and west sides are open, which does not comply with BAL40 and BAL FZ requirements. The cost of completion of the under house area to comply with BAL40 and BAL FZ requirements is $8,428.42.

39. The internal staircase is incomplete. There are no handrails, the stair treads require sanding and finishing, and a section of the mid-landing requires additional support at the underside. The cost of completion is $5,113.76.

40. The sliding screen doors to both levels of the house have not had catches installed for the locks. The cost of completion is $268.06.

41. Splashbacks have not been installed to the main kitchen, the butler’s pantry and the laundry. The cost of completion is $2,861.02.

42. Work to the electrical and data wiring and connections is incomplete throughout the property. The cost of completion is $2,082.62.

43. The bathrooms and the master bedroom ensuite do not have glass installed in the shower screens and do not have shower screen doors. The Interior Finishing Schedules requires toughened, clear, glass shower screens and doors to the bathrooms. The cost of completion is $6,289.10.

44. No power point has been installed for the submersible pump to the rainwater tank at the rear of the dwelling. The rainwater tank cannot, therefore, perform its function of supplementing the water supply with non-potable water. The cost of completion is $525.81.

45. Prime cost items have not been installed to wet areas, namely toilet paper holders, towel rails or racks, robe hooks, soap trays and others required by the Interior Finishes Schedule (Revision C). The cost of completion is $4,206.48.

46. The drainage pipe from Balcony 3 is not connected into the stormwater drainage system, the drainage from Balcony 2 and Terrace 2 is not connected, no swimming pool fences have been built, there is no tiling to the sunken lounge area, the tiling to Terrace 1 is incomplete, tiling to the butlers pantry and the laundry is incomplete and the skirtings are incomplete. The cost of completion is $1,103.17.

47. The documents required for the issue of the final Occupancy Certificate have not been provided. The cost of rectification is $5,250.00.

48. The total sum of the incomplete work in the Scott Schedule is $45,902.32. Preliminaries at 5% amount to $2,295.12, giving a subtotal of $48,197.44. The builders margin at 25% will be $12,049.36, giving a further subtotal of $60,246.80. GST at 10% adds a further $6,024.68, to give a total of $66,271.48 for incomplete works.

49. The total of the rectification costs of $534,440.07 plus the total of the completion costs of $66,271.48 is $600,711.55. I am satisfied that an award of $600,711.55 is an appropriate award of damages, having regard to the evidence of Mr Wallace and the principle set out at [25] above.

Restitution

38. In April or May 2021, the defendant demanded a payment of $34,135.00 towards the floor slab, which was the subject of Progress Claim 3. However, the builder subsequently issued a claim for Progress Claim 3 in full, without accounting for the $34,135.00 partial payment that it had already received. The plaintiffs’ bank proceeded to pay Progress Claim 3 in full, in response to the builders demand. As a result, the builder is in possession of $34,135.00 paid by the plaintiffs for which no consideration was given and which was wrongly claimed twice.

39. The builder demanded and received from the plaintiffs payments totalling $72,558.50 for nine items in addition to the payments made under the contract, without any variation. However, only the following payments made to the builder by the plaintiffs outside of the contract are pressed:

40. “Pole & Services” claimed by the builder on 24 March 2021 at $2,200.00. This was for the disconnection of utilities and the installation of a private electrical pole, outside of the contract. However, the plaintiffs paid it twice, and no refund has been forthcoming from the builder. The plaintiffs received no consideration for the duplicate payment.

41. “Extra Structural” claimed by the builder on 14 September 2021 at $25,000.00. This was paid on the basis of a representation on behalf of the builder that not enough money was allocated for the timber structure and the price had gone up. The plaintiffs paid it by mistake without realising that the timber structure was included in the contract price. The plaintiffs received no consideration for this payment.

42. “Extra for Flooring” claimed by the builder on 30 November 2021 at $3,023.50. A representation was made on behalf of the builder that the gap between the floor of the house and the tracks of the glass sliding door on the terrace was too large so that the level of the flooring needed to be raised. The plaintiffs paid the amount demanded under the mistaken impression that they were obliged to pay it. However, they now realise that it was required because of defective work by the builder, for which they are not liable. The plaintiffs received no consideration for this payment; they were entitled to be provided with a floor at the correct height under the contract.

43. “Extra for Gutter Guards” claimed by the builder on 8 December 2021 at $2,000.00. The plaintiffs paid this claim under the mistaken belief that they were liable to pay extra for gutter guards. However, gutter guards were an inclusion under the contract. They received no consideration for this payment.

44. “Extra to Finish” claimed by the builder on 16 February 2022 at $20,000.00. The plaintiffs paid this under the mistake that they were liable to pay it, when, in fact, the builder was obliged to finish the building works under the contract. The plaintiffs received no consideration for this payment.

45. “Extra to Finish” claimed on 11 March 2022 at $15,000.00. Again, the plaintiffs paid this under the mistake that they were liable to pay it, when, in fact, the builder was obliged to finish the building works under the contract. The plaintiffs received no consideration for this payment.

46. The amounts set out in [39] are recoverable by way of restitution. They total $67,223.50.

47. The plaintiffs seek an additional $39,000 from the defendant by way of restitution. Ms Howse says, in her affidavit:

581 During the course of the concreting, Ace [the director of the defendant] demanded additional cash payments on behalf of Exact Building Group Pty Ltd (Exact Building) for their work, the details of which are in the table below:

| Item | Third Party | Claim and/or Description | Payment Date | Amount($) | | 1 | Exact Building Group Pty Ltd (Concreting Subcontractor) | “Concreting” | 22 April 2022 | 7,000 | | 2 | Exact Building | “Concreting” | 26 April 2022 | 12,700 | | 3 | Exact Building | “Concreting” | 2 May 2022 | 2,000 | | 4 | W.R. Aluminium (AUS) Pty Ltd (Glazier Subcontractor) | “Mesh Window Screens” | 4 May 2022 | 5,000 | | 5 | Exact Building | “Concreting” | 14 May 2022 | 2,000 | | 6 | Exact Building | “Concreting” | 19 June 2022 | 10,300 | | | | | TOTAL | $39,000 |

582 Subsequently to Ace’s demands, and prior to their payment, Exact Building pursued us directly for the payments they claimed.

583. I’m not sure about the specifics of the “extra work” that actually did or didn’t make up the additional $34,000 that we paid to Exact Building throughout April to June 2022.

584. Separately, the sum of $5,000 was paid to by us to WR Aluminium on 4 May 2022.

585. Therefore, the total of additional amounts paid to third parties was $39,000.

42. It has not been established on the balance of probabilities on the evidence that the amount of $39.000.00 is recoverable by way of restitution on account of the unjust enrichment of the builder. Ms Howse is not able to say what the “extra work” performed by Exact Building comprised.

Costs

43. A letter of 23 December 2024 from the solicitors for the plaintiffs to the solicitors for the defendant has been placed before the Court. The plaintiffs made an offer to settle this matter for an amount significantly below the amount that the plaintiffs will be awarded.

44. The offer was made expressly on the basis that it was an offer in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333, and it was such an offer.

45. The offer was not accepted. The plaintiffs are entitled to costs on an indemnity basis for legal work performed after 23 December 2024.

Orders

46. The following orders will issue:

47. The defendant is to pay the plaintiffs the sum of $667,935.05.

48. The defendant is to pay the plaintiffs’ costs on the ordinary basis up to 23 December 2024 and on the indemnity basis thereafter.

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Amendments

09 April 2026

Order (1) amended pursuant to rule 36.17 of the Uniform Civil Procedure Rules 2005 (NSW) ("the slip rule") to correct "plaintiff" to "plaintiffs".