HEADNOTE
[This headnote is not to be read as part of the judgment]
Mr Winner (the respondent, who is a licensed builder and quantity surveyor), and his aunt and uncle, Ms Muir and Mr Krolczyk (the second and first appellants respectively), the registered proprietors of a property in Windsor, NSW (Windsor property), commenced discussions in 2011 about planned renovation works to the Windsor property. Discussions fell away for some years, but in July 2015 the parties discussed the matter again and work commenced on the Windsor property. Mr Winner performed some work personally and otherwise assisted with the progression of the renovation project, for example, by assisting with the development application process and enlisting other tradespeople to do work on site. By September 2016, the appellants became aware that some of the works were defective.
The parties disputed the nature of the arrangements pursuant to which the works were undertaken. The appellants contended that Mr Winner agreed to be the builder for the project pursuant to a partly written and partly oral contract that fell within the ambit of s 18B of the Home Building Act 1989 (NSW). Alternatively, they claimed that Mr Winner was a supervisor of the project. Mr Winner contended that he worked on this project merely as a favour to his aunt and that the appellants held owner builders' permits themselves. At first instance the primary judge (Olsson SC DCJ) found in favour of Mr Winner, holding that the parties did not form a contract to the effect that Mr Winner was the builder or, alternatively, supervisor of the renovations at the Windsor property. Her Honour did, however, find that a more limited agreement existed between the parties, namely that they would work together to get the project completed. In a separate costs judgment, her Honour found that the appellants acted unreasonably in declining an offer of compromise contained in a Calderbank letter dated 7 March 2018, and ordered the appellants to pay Mr Winner's costs on the ordinary basis up to 7 March 2018 and thereafter on an indemnity basis. The appellants appealed from these two decisions.
The Court held (Griffiths AJA, White and Kirk JJA agreeing), upholding the appeal in part:
As to delay:
The delay of almost 12 months between the hearing of the matter and delivery of judgment at first instance was not indicative of a dereliction of judicial duty, but rather reflected the way in which the case was presented below and the difficulties of resolving the numerous disputed issues and facts: [84].
As to ground 1 (the correct appellate approach to reviewing the primary judge's findings of fact) and ground 4 (primary judge's approach to credit):
The primary judge found neither Ms Muir nor Mr Winner to be a "particularly impressive" witness. Where those witnesses gave conflicting evidence, the primary judge sensibly resolved the conflict by determining which of their accounts was supported by contemporaneous objective evidence: [86]-[88]. Ground 1 was rejected. Furthermore, the primary judge was not obliged to grade the respective levels of those witnesses' lack of credibility or reliability: [144]-[145]. Ground 4 was rejected.
As to ground 2 (the primary judge's analysis of objective evidence):
The appellants' complaint, made by reference to twelve separate instances, that the primary judge either overlooked or misconstrued objective evidence which purportedly supported their overall claim, was rejected: [91]-[137].
As to ground 3 (adequacy of primary judge's reasons on liability):
The appellants' complaints were rejected, in part for the reasons given in respect of ground 2. Furthermore, the primary judge was not required to provide explanatory reasoning as to the nature of the parties' relationship in the event that the Court found that there was no contract between them: [141]-[143].
As to ground 5 (onus regarding intention to create legal relations):
The primary judge did not erroneously place the onus on the appellants to prove that there was an intention to create legal relations: [148]-[150].
As to grounds 7 and 8 (particular defective works):
The appellants' claims that Mr Winner was responsible for alleged defective works relating to floor framing and the first floor west wall were rejected: [161], [174]. The appellants' claim that Mr Winner was responsible for defective wall framing and related work (items 1, 4 and 5) was upheld: [175]-[183].
As to ground 6 (mitigation):
This ground only had significance for items 1, 4 and 5, in respect of which the appellants established liability: [184]. The primary judge ought to have found that Mr Winner had not discharged his onus of establishing that the appellants acted unreasonably in not mitigating their loss: [195]. Ground 6 was upheld.
As to ground 9 (benefit of an exclusion in the Home Building Act 1989):
While the primary judge found that Mr Winner would be entitled to the benefit of an exclusion in the Home Building Act 1989 if he supervised the works, that finding must be read in context of the reasons as a whole. Her Honour made express findings that Mr Winner was not engaged as a supervisor: [199]. Ground 9 was rejected.
As to ground 10 (failure to consider appellants' reliance upon the Design and Building Practitioners Act 2020):
The primary judge made express findings that Mr Winner did not supervise the project. No appealable error in those findings was demonstrated and, accordingly, the legislation could have no application to him based on a claim that he was supervising the work: [206].
As to ground 11 (indemnity costs):
The reasonableness of the offer of compromise served on the appellants had to be assessed at the time of the making of the offer: [217]. The primary judge failed to take into account that, by 15 February 2018, Mr Winner had accepted responsibility for the wall framing (which had potential ramifications for the appellants' claims under items 1 and 5) and that the appellants were entitled to take into account that Mr Winner carried the onus of establishing a failure to mitigate: [221]. Ground 11 was upheld.