Kurmond Homes Pty Ltd v Zaknic

Builder's Grounds of Appeal

1. The builder does not challenge the order to pay the homeowner the sum of $1058.00 for the internal door.
2. The builder seeks leave to appeal the other three orders on the grounds that it was not open to the Tribunal to make the orders on the evidence before it and the claims were not made out by the homeowner and therefore were against the weight of evidence.
3. The builder seeks leave to appeal on the grounds that the decision was not fair and equitable and that the Tribunal did not allow the cross examination of the lay witnesses. They suggest that the Tribunal could not have come to a decision on the contested issues of fact relating to whether there was waste on the site at the end of the contract and who was responsible for the waste and when practical completion occurred.
4. They also seek to rely on evidence in relation to invoices and photos which they say were not reasonably available at the time.

Homeowners Grounds of Appeal

1. The homeowner seeks an extension of time to appeal on the basis that the time to appeal fell in the Christmas shut down period.
2. The homeowner seeks leave to appeal on the grounds that the decision was made against the weight of evidence because the Tribunal erred by not including GST, the builder's margin and allowing for home warranty insurance on the amounts awarded. They also say that the Tribunal did not give proper consideration to the fact that builder had failed to obtain proper plumbing certification and that an electrical defects notice had been issued in relation to the builder's work.

Application for extension of time

1. Pursuant to rule 25(4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW), (NCAT Rules), the parties had 28 days to appeal from the day on which they was notified of the decision or given reasons for the decision, whichever is the later: The Tribunal made the orders on 28 November 2015. The Panel finds that the parties were notified of the decision shortly thereafter. The builder lodged its appeal within time on 23 December 2014. The homeowner lodged his appeal on 14 January 2015 and considering that it would have taken a short time for the decision to be sent to the parties, the Panel is satisfied that the appeal was made about two weeks out of time.
2. The time for lodging an appeal may be extended even though the time has expired: NCAT Act, s 41. The principles to be applied when considering an application for an extension of time are set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [22] The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include: (1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant - Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38]; (2) The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision - Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success - Jackamarra at [7]; (3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: (a) The length of the delay; (b) The reason for the delay; (c) The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and (d) The extent of any prejudice suffered by the respondent (to the appeal), - Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and (4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59].
3. The Panel is satisfied that it should extend time for the appeal. The delay of two weeks is short and is explained by the Christmas shutdown period when the Tribunal Registries are closed for a short period. Further, given the builder already had an appeal on foot, it cannot be considered that any significant prejudice is suffered by the builder.

Was the decision made against the weight of evidence?

1. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel considered the meaning of the phrase "against the weight of evidence" in cl12(b) of Schedule 4 to the Act, and stated at [77]: The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach (citations omitted).

The Asphalt

1. The builder states that this work was excluded by the tender agreement and that the Tribunal had no grounds to make the decision.
2. The Tribunal made finding page 16, item 7.5 of the reasons: The evidence in regard to this item is somewhat unclear. It is alleged the builder, in constructing the kerb and gutter layback, excavated a portion of the roadway immediately adjacent to the new curb and layback, and left it unfinished in the sense that the area was not refilled and smoothed and Asphalt relaid. The builder suggests that on the basis of the documentary evidence provided, this was not a cost to the builder or the owner, because of the ambiguity of the evidence which may suggest the Council would accept responsibility for this minor piece of work. I do not agree with that submission. In my opinion the evidence suggests that the owner was to contact the Council who would decide if the work was to be done. The council officers would make the decision, not to do the work themselves. I allow this item based on the tax invoice provided.
3. In the Scott Schedule, the homeowner indicated that the builder was to install the driveway laybacks in accordance with the variation to contract documents. In that regard, while it may not have been part of the tender agreement, it was open to the Tribunal to find that it was part of variation works and we do not find that the decision was against the weight of evidence.

The Builders Waste

1. The builder alleges that its lay evidence stated that the site was left cleaned of debris at practical completion and that its witnesses were not required for cross examination. Further as the Tribunal accepted their evidence, it was not open to it to make the finding it did. At pages 16 to 17 at item 7.6 the Tribunal made the following finding I agree with the owner's expert that if concrete waste was left on site this would be a breach by the builder. However, the evidence suggests both that the builder did remove at least some of that waste on the basis of the affidavit provided by the builder, there was no waste left on site. The makers of the affidavits were not required for cross-examination and I accept the evidence but I note this is not the end of the matter. The owner has provided evidence including a reference in the certificate of practical completion that further concreting was to be done. This related to the kerbing and guttering work and the owner alleges waste was left on the site after that work. The builder does not refer to this evidence, I allow the claim
2. The Tribunal has not rejected the evidence of the builder, but instead has referred to waste after the kerbing and guttering was done. The Panel finds that this was open to the Member to find and the decision is not against the weight of evidence.

Loss of Rent

1. The builder asserts that the Tribunal incorrectly awarded loss of rent on a number of grounds.
2. Firstly liquidated damages were specifically deleted from the contract and as such the only interpretation of the contract available was that the parties intended that there be no liquidated damages. We do not agree with this assertion. The Tribunal acknowledged that the provision was deleted. The Tribunal found that It is not difficult to infer that Item 13 of schedule 1 was struck through for that reason: the owner intended not to prevent a possible claim for the loss of rent or rather limit such a claim by inserting an amount in item 13, in the possible circumstances of a delay in completion of the works. I find that both parties agreed to the amendment of the contract.
3. We find that it was open to the Tribunal that the clause was deleted with the intention of allowing actual damages to be claimed and we do not find this to be against the weight of evidence.
4. The builder also claims that in accordance with the rule in Hadley v Baxendale (1854) 89 Ex 341 at 354 damages should be reasonably considered by the parties as a damage naturally arising or within reasonable contemplation at the time the contract was made and as a probable result of its breach. The builder suggests that did not apply in this case.
5. The Tribunal made the following relevant findings As noted above, I accept the owner had these dwellings constructed for the purposes of renting them out… I further note it was not disputed by the builder that this was a valid claim under the contract although the method of calculation and the probative values of the evidence was disputed.
6. Considering those findings the Panel is satisfied that it was within the parties contemplation that these were damages which arose from the breach and does not find this was a decision made against the weight of evidence
7. Further grounds relate to the actual evidence of the loss. The builder claims that the documents in relation to the leases were inadmissible because the building expert led them and that the leases themselves do not establish that the tenants were ready, willing and able to proceed with them and the homeowner has failed to discharge the onus.
8. Section 38 of the Act NSW 2013 relevantly states that: (1) The Tribunal may determine its own procedure in relation to any matter for which this Act or the procedural rules do not otherwise make provision. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.
9. We are satisfied that it was open to the Tribunal to accept the evidence in relation to the leases even if it was led by the expert, the Tribunal examined those leases in their own right. Further it was reasonable for the Tribunal to infer that the leases were evidence of the fact that there were tenants ready to lease the premises. We do not find that this was against the weight of evidence.
10. We turn to consideration of whether it was open to the Tribunal to conclude that there had been a breach of contract by the builder.
11. The builder referred to the stolen hot water tank. It states that the Tribunal found the fact that there was no hot water tank was the only reason as to why practical completion within the terms of the contract did not occur. The builder states that pursuant to the contract it was not responsible for replacing the hot water tank and that the finding was contrary to the contract provision in particular special condition 12.1. The builder further alleges that had the builder known that the Tribunal would use the absence of a hot water tank as a factor in determining the date of practical completion it would have lead further evidence, including an invoice as to the delivery of the hot water system on 30 September 2013.
12. Clause 26 of the Home Building Contract between the parties relates to practical completion which is defined at clause 3 of the contract as follows Practical completion means when the building works are completed except for minor omissions and defects that do not prevent the building works from being reasonably capable of being used for the usual purpose
13. However special condition 12.1 of the contract states the following: As a measure to reduce theft and/or damage to the completed dwelling, the owner agrees that the following items will be as installed within five (5) working days after payment of the Final Progress Claim and upon taking possession: Stove; Cooktop; Wall oven; Microwave Oven; Range hood; Dishwashing Machine; Hot Water Service; Alarm; Air Conditioning; Remote Control to the garage and Carpet
14. The Tribunal in its reasons made the following finding in relation to the when practical completion occurred In my view the dwellings are not capable of being used for the usual purpose without a hot water service. The evidence in that regard is not clear as to the actual date the hot water service was ready to use. The owners expert suggested it was installed on 1 November 2013 and was found to be "missing" (read "stolen") two days later. Both experts now accept the builder was not responsible for that loss I therefore find practical completion was not reached until 1 November 2013.
15. The Tribunal found practical completion based on the date of the installation of the hot water service. In light of the special condition, that was an error of law, as the contract made provision for the hot water system to be installed after practical completion. Accepting the time calculations made by the Tribunal it appears to the Panel that practical completion occurred on or about 24 September 2014. On this basis the builder committed no breach of contract in the time it took to reach practical completion and the award of damages for such breach must be set aside. The mistake is an error of law and does not require a rehearing.

The Homeowners Appeal

1. The homeowner seeks leave to appeal on the grounds that the decision was made against the weight of evidence because the Tribunal erred by not including GST, the builder's margin and allow for home warranty insurance on the amounts awarded. While part of attachment 1 of the Scott Schedule does include margins for GST, builder's margin and home warranty insurance, it is not contained in attachment 2 which the parties agreed were the items in dispute. We think that GST which we calculate at $218.00 should be added to the amounts allowed by the Tribunal but see no reason for adding a builder's margin which presently has already been included.
2. Accordingly the appeal should be allowed in part and otherwise dismissed,.

Orders 1. Leave granted for the Appellant to be legally represented. 2. The application by the owner for an extension of time in which to appeal is granted. 3. The appeals are allowed in part. 4. In lieu of the order made below order that the builder pay to the owner the sum of $2616.91 within 28 days 5. The appeals are otherwise dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

Amendments 22 October 2015 - "Respondent" replaced with "Appellant" in order (1) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 October 2015