HEARD : 9-10 DECEMBER 2024, 16-17 JANUARY AND 4 MARCH 2025

Preliminary issue as to the relevant contract or contracts - Building service complaints - HBWC complaints - two building contracts and one project management agreement

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 3, s 5(1), s 5(2), s 38(1), s 43(1)

Building Services (Complaint Resolution and Administration) Regulations 2011 (WA), reg 5A

Home Building Contracts Act 1991 (WA), s 3, s 14, s 20, Sch 1, cl 5

State Administrative Tribunal Act 2004 (WA), s 32(2)

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471

Lee and Holmes [2020] WASAT 108

Raftland Pty Ltd v Federal Commissioner of Taxation [2008] HCA 21; 238 CLR 516

1. Chantelle and Michael Leach wanted a new house. They signed a project management agreement with Danne Forte on 1 December 2020 (the project management agreement). They signed a building contract with HA-DECGROUP PTY. LTD. (HD) in December 2020 (the 2020 building contract) and then another building contract with HD in March 2021 (the 2021 building contract).
2. On 28 May 2023 Mr and Ms Leach lodged a complaint with the Building Commissioner against HD in relation to 33 alleged breaches of contract and 15 alleged defects in building work. That complaint was referred to the Tribunal. HD claimed the 2020 building contract was terminated by the 2021 building contract and that it did not do the relevant building work.
3. On 24 November 2023 Mr and Ms Leach lodged a complaint with the Building Commissioner against Mr Forte. The items of complaint which were accepted concerned 15 allegations of defective building work similar to the concerns raised against HD. That complaint was also referred to the Tribunal. Mr Forte denied the existence of a building contract between himself and Mr and Ms Leach.

1. The Tribunal ordered the following be determined as a preliminary issue in each proceeding:

(a) What were the contractual arrangements between the parties regarding home building work? Specifically:

(i) What is the status of the building contract signed by Mr and Ms Leach and HD in December 2020?

(ii) What is the status of the building contract signed by Mr and Ms Leach and HD in March 2021?

(iii) Were other building works contracts (whether oral, written or partly oral, partly written) entered into by Mr and Ms Leach, HD and/or Mr Forte?

1. It was also ordered that whilst each proceeding was to remain separate, they were to be heard and determined together, and the evidence in one would be evidence in the other.

Home Building Contracts Act 1991 (WA)

1. Section 3 of the Home Building Contracts Act 1991 (WA) (HBC Act) includes the following definitions:

home building work means the whole or part of the work of -

(a) constructing or re-constructing a dwelling including an existing dwelling and/or strata/community title dwelling; or

(b) placing a dwelling on land; or

(c) altering, improving or repairing a dwelling, including a strata/community title dwelling; or

(d) constructing or carrying out any associated work in connection with -

(i) any work referred to in paragraph (a) or (b); or

(ii) an existing dwelling, including a strata/community title dwelling;

associated work includes site works, swimming pools, spas, pergolas, carports, garages, sheds, fencing, retaining walls, paving, driveways, landscaping and other like works;

construct in relation to a dwelling means perform any work commencing with the preparation of the site and ending with the completion of the dwelling (including any associated work) and includes -

(a) painting where that is part of the work included in a contract; and

(b) the provision of lighting, heating, water supply, drainage, sewerage, gas and other like services;

perform in relation to home building work includes -

(a) causing the work to be performed; and

(b) organizing or arranging for the performance of the work;

1. Written submissions were filed on behalf of Mr and Ms Leach in both proceedings. Those submissions are summarised as follows:[1]

(i) the 2020 building contract had not been terminated and therefore governed the rights and obligations between Mr and Ms Leach and HD;

(ii) the 2021 building contract was not intended to and did not terminate or replace the 2020 building contract; and

(iii) the parties did not enter into any other building works contracts.

(b) Until the issuing of the complaint, the actions of the parties were consistent with the 2020 building contract and not the 2021 building contract. This included the correspondence from the then solicitors of HD in late 2022.

(c) The purported termination in February 2021 was inconsistent with the parties' actions and was disputed.

(d) The 2021 building contract was not signed with the intention of altering the parties' legal arrangements but solely for the purpose of reducing the amount payable for home indemnity insurance.

(e) The communications between Mr and Ms Leach and Mr Forte did not impact the contractual relationship between Mr and Ms Leach and HD. Mr Forte attracted Mr and Ms Leach, as inexperienced clients, with a promise to locate a builder to construct the house for $335,000. Mr Forte used the spreadsheets with the intention of convincing Mr and Ms Leach to agree to increase the price without having to go through the contractual process of variations.

(f) The arrangements between the parties were unusual, and Mr and Ms Leach did arrange for contractors to perform works. The question of what building work was performed by HD or other parties was a matter to be determined at the final hearing.

(g) The evidence before the Tribunal suggested HD appointed Mr Forte as its agent or sub-contractor to perform the role of builder on behalf of HD. Whatever their arrangement, it did not alter the fact of the building contract between HD and Mr and Ms Leach.

1. The written submissions of director Mr Hany Ayad on behalf of HD are summarised as follows:[2]

(a) The position of HD was that the 2020 building contract had been terminated, the 2021 building contract had been abandoned by Mr and Ms Leach and there were no other building contracts.

(b) It had become apparent he was the victim of a plot whereby:

(i) his company was used by Mr and Ms Leach for the purpose of obtaining bank finance and then State and Federal building grants; but

(ii) the intention of Mr and Ms Leach was to build their house on a basis more akin to that of an owner-builder, with the assistance of Mr Forte as project manager.

(c) The house as constructed was significantly larger and more complex than the single storey design of B1 Homes and the suggestion it could have been constructed for the same price 'defie[d] logic'.[3]

(d) The 2020 building contract was terminated by the 2021 building contract at the request of Mr Forte as the representative for Mr and Ms Leach. In the context of severe shortages of materials and trades, Mr Ayad accepted the representations of Mr Forte.

(e) Mr and Ms Leach set aside the 2021 building contract by engaging trades and purchasing materials directly or via Mr Forte.

(f) HD continued to invoice pursuant to the 2020 building contract because Mr Forte stated that to do otherwise could result in Mr and Ms Leach's loan being terminated.

1. Mr Forte's written submissions are summarised as follows:[4]

(a) Mr and Ms Leach chose his project management agreement after having terminated a standard building contract with B1 Homes.

(b) The project management agreement took precedence over any other contracts or activities during construction.

(c) The fundamental principle of their project management agreement was an 'at cost' arrangement with no fixed price.

(d) The parties' evidence demonstrated that the events in reality had nothing to do with a fixed price building contract.

(e) The project management agreement was a non-regulated agreement and the Building Commissioner (and presumably by extension the Tribunal) had no jurisdiction to 'look into' it.

1. I am satisfied the Tribunal has jurisdiction to hear and determine the application of Mr and Ms Leach (and therefore the preliminary issue) for the following reasons.

1. Section 38(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act) states that if the Building Commissioner refers a building service complaint to the Tribunal, it may make a building remedy order.
2. Section 5(1) of the BSCRA Act states a person may complain that a regulated building service has not been carried out in a proper or proficient manner or is faulty or unsatisfactory. This is defined by s 3 to be a 'building service complaint'.
3. A 'regulated building service' is defined to include a building service carried out by a registered building service provider, home building work carried out by a person for another person under a contract or arrangement for gain or reward and unauthorised work.[5]
4. The complaint of Mr and Ms Leach against HD which was lodged with the Building Commissioner and then referred to the Tribunal contained 15 complaints that building works had not been adequately completed or were defective.[6] As noted below,[7] HD is a registered builder. Furthermore, I am satisfied the activity the subject of the complaints satisfies the definition of 'home building work'.
5. The complaint of Mr and Ms Leach against Mr Forte which was lodged with the Building Commissioner and then referred to the Tribunal contained 15 complaints that building works had not been adequately completed or were defective. I am satisfied the works were home building work and, as noted below,[8] Mr Forte is a registered builder.
6. I am satisfied it is appropriate to characterise those complaints as building service complaints. Accordingly, I am satisfied the Tribunal has jurisdiction to make (or decline to make) a building remedy order pursuant to s 38(1) of the BSCRA Act.

1. Section 43(1) of the BSCRA Act states that if the Building Commissioner refers a HBWC complaint to the Tribunal, the Tribunal may make a HBWC remedy order.
2. Section 5(2) of the BSCRA Act states a person may make a complaint to the Building Commissioner regarding specific disputes concerning a home building work contract. This is defined by s 3 to be a 'HBWC complaint'. The specific disputes include the validity of price increases and claims for the payment of monies paid by the owner.[9]
3. The complaint of Mr and Ms Leach against HD which was lodged with the Building Commissioner and then referred to the Tribunal contained 33 complaints seeking the repayment of monies due to invalid price increases or on account of items not supplied by HD.[10]
4. I am satisfied it is appropriate to characterise those complaints as HBWC complaints. Accordingly, I am satisfied the Tribunal has jurisdiction to make (or decline to make) a HBWC remedy order in relation to HD pursuant to s 43(1) of the BSCRA Act.

1. Where there is a written contract, the rules of evidence may exclude evidence tendered for the purpose of altering the terms of that contract. It is not necessary to consider the complexities of those rules in this matter because s 32(2) of the State Administrative Tribunal Act 2004 (WA) provides that the Tribunal is not bound by the rules of evidence.
2. Therefore, it is a question of weighing the relevance and reliability of the evidence adduced by the parties. The evidence which I consider most relevant is summarised in the next section.
3. The paragraphs below contain little reference to the correspondence which developed in late 2022 when the parties' relationships broke down and lawyers were engaged. I consider that correspondence has minimal relevance because the acts taking place in late 2022 and onwards were significantly distant from the alleged formation of the contracts in December 2020 and March 2021 and thus insufficiently likely to be indicative of the terms of any contract made the relevant times.

1. Having reviewed all the evidence before the Tribunal, I make the following findings of fact. Where the facts were contentious, I have summarised the opposing views.
2. Mr and Ms Leach were at all relevant times the registered proprietors of the relevant land in Joondanna (the land or the site).[11]
3. At all relevant times Mr Ayad was the director of HD and represented HD in all its dealings with Mr and Ms Leach and Mr Forte.[12] HD was a registered builder.[13]
4. At all relevant times Mr Forte was a registered builder.[14]
5. By a contract dated 27 April 2020 Mr and Ms Leach contracted with B1 Homes for the construction of a single storey dwelling on the land.[15] B1 Homes obtained a building permit in October 2020.[16]
6. On 5 November 2020 Mr and Ms Leach gave B1 Homes notice of their intention to terminate the contract.[17] That email included the following:
   1. Variations. Clause 12 in general, and in particular sub­clauses (e) and (f) stipulate that the builder must give full justification, the basis and full calculations of any variation to the owners. This, has not happened on most variations related to this contract and in particular V09 is in breach of the contract conditions and undermines the trust and the duty of care principals ...
   2. Holding Information on purpose to the detriment of the owners. By you declining to give us the full value of the variation V09, we consider that you have increased the value of the contract by as much as $20,000, if not more, and under the provisions of clauses 22 d, e, and f, and 17 of the contract, we hereby give you notice of termination of the contract since this contract is now increased by over 5%.
   3. Possession of site. To date, and after 6 months from contract signature, you have not taken possession of the site as evidenced by an independent photographer's pictures taken as of 2/11/2020 that show B1 has failed to even install a sign to mark builder's possession (see attached). This has led to illegal dumping on the site as shown in the photos. We hereby withdraw our permission for you to possess the site or have any activities related to this site as according to clause 10.

1. Lack of Transparency. Lack of transparency with regards to costs in particular recent additional costs relating to V09 despite numerous requests to receive detailed breakdowns to remove 60% of retaining walls in response to the council's requirements. This also includes removal of the internal flooring without credit to the contract despite many emails requesting 25 789 a breakdown in the cost of the floor that should have been credited to us. This is clearly a breach of contract on your part.

1. Lack of proper evidence to support variations. Excessive pricing. Unreasonable mark-ups on many additions. For example we asked for a quote on upgrading the carpet. The additional cost for the upgrade was $4185. This was too much so we requested for the standard range to be removed. The credit for this was $1991. This meant the cost for the upgraded carpet was in B1's costing $6176. However, when we got a quote from Trevor's Carpets (your supplier) they quoted $2500 for the upgraded carpet. This means a mark-up of 147%[.]
2. Mr and Ms Leach reached an agreement with B1 Homes for the termination of the contract in November 2020.[18]

1. On 1 December 2020 Mr and Ms Leach signed a document entitled 'Agreement for Project Management Services'.[19] The other party to the project management agreement was expressed to be 'Danne Forte of Resiservices'. The project management agreement described Mr Forte/Resiservices as 'PM' and Mr and Ms Leach as the 'Owners'.
2. By the terms of the project management agreement:

(a) The PM was engaged to provide professional project management services in relation to the construction of a house at the land.[20]

(b) The PM was to 'vet, negotiate with, supervise and approve the payments to contractors in general as well as nominated by' Mr and Ms Leach.[21]

(c) Mr and Ms Leach were to be 'responsible for the engagement of and payment of all contractors or suppliers'.[22]

(d) The PM was to be paid $32,000 plus GST by Mr and Ms Leach.[23] Payments were to be made by instalments based upon the progress of construction. The PM was also to be reimbursed certain expenses.[24]

(e) The PM was to take out professional indemnity insurance. Mr and Ms Leach or their contractors were to take out third party and workers' compensation insurances.[25]

1. No party filed evidence as to whether Resiservices was a registered business name, and if so, the registered owner of that name.
2. In evidence were many emails sent between Mr Forte on the one hand and Mr Leach and/or Ms Leach on the other. In each message Mr Forte used the same email address, 'danne@resiservices.com.au'. His messages often ended with one of three email signatures, images of which are contained in Annexure A.[26]
3. Most of the construction invoices which noted Mr Forte as the contact person, issued the invoice to Resiservices, Building Renewals Pty Ltd (BR) or BR trading as Resiservices.[27]
4. In his written and oral evidence, Mr Forte did not differentiate between himself, Resiservices or BR. He said he was the project manager appointed by Mr and Ms Leach, he issued the invoices which were in the name of BR (which he described as 'his company'), he used his network of contacts to engage contractors and order materials and he managed the 'kitty' which was used to pay for contractors and materials.[28]

1. On 4 June 2020 the Federal Government announced an extension to their $25,000 HomeBuilder grant scheme. To be eligible, the construction contract must have been signed between 4 June and 31 December 2020.[29] The value of the land and cost of the house could not exceed $750,000.
2. Construction had to commence within 3 months of the contract date.[30] The commencement of construction was indicated by events such as significant earthworks or physical building works. Preparatory works were not included.
3. Construction had to be undertaken by a registered or licensed building service contractor.[31] Accordingly, owner-builders were not eligible for the grant.
4. On 29 November 2020, the deadline for the commencement of construction was later extended to 6 months from the contract date.[32] On 17 April 2021, the construction deadline was extended to 18 months from the contract date.[33]

1. On 7 June 2020 the West Australian government announced a 'Building Bonus' package, the terms of which included a grant of $20,000 to any person who signed a contract between 4 June 2020 and 31 December 2020 for the construction of a new house on vacant land.[34]
2. If the prospective homeowner had engaged a builder, construction had to commence within 6 months of the date of the contract and the bonus would be paid when the foundations were laid.[35] The commencement of construction was indicated by events such as significant earthworks or physical building works. Preparatory works were not included.
3. If the prospective homeowner was an owner-builder, they were required to have the appropriate approval and permit, and to have laid the foundations by 31 December 2020.[36]
4. On 20 October 2020 the West Australian government announced the deadline for the commencement of construction was extended to 1 year following the date of the contract.[37]
5. Subsequent announcements further extended the deadline for construction and the date by which the application had to be lodged or evidence provided.

1. The first homeowner grant is a one-off payment of $10,000 to persons buying or building their first home after 1 July 2000.[38] A concessional rate of duty may also apply to certain transactions.
2. Where there is a comprehensive building contract and the site is located in the Perth metropolitan area, the value of the contract including variations and the value of the land must not exceed $750,000.
3. In the case of an owner-builder and a site in the Perth metropolitan area, the unencumbered value of the home plus the unencumbered value of the land at completion must not exceed $750,000.

1. Mr and Ms Leach and HD executed a document entitled 'Building Contract' dated 24 December 2020.[39] Pursuant to the terms of that contract:

(a) HD promised to construct and complete a single storey house on the land.[40]

(b) The total price was fixed at $334,990.[41]

1. Mr Forte brought about the execution of the 2020 building contract. There were no communications directly between Mr and Ms Leach on one hand and Mr Ayad on the other. They did not meet each other until after the execution of the document.[42]
2. The evidence of Mr and Ms Leach was that they signed the 2020 building contract on 24 December 2020, gave it to Mr Forte on 25 December 2020 and Mr Forte emailed them the document executed by HD on 26 December 2020.[43] Mr Ayad stated he signed the contract on 24 December 2020.[44] It is not necessary for me to make a determination as to whether Mr Ayad signed the contract on 24, 25 or 26 December 2020.
3. There was lodged with the Tribunal a letter dated 22 February 2021 from Mr Forte to HD which stated the 2020 building contract 'is hereby terminated and superseded by the new structure only contract'.[45] Mr and Ms Leach questioned the authenticity of this document.[46] For reasons which are explained below, my conclusions do not depend upon a decision as to whether or not this document is authentic. Accordingly, I have not further considered the letter dated 22 February 2021, nor the allegations in relation to it.

1. Mr and Ms Leach and HD executed another document entitled 'Building Contract' and subtitled 'structure/shell construction only' dated 22 February 2021.[47] The terms of that contract included:

(a) HD's scope of works was to construct only the shell or structure of a house on the land, with exterior and interior finishing to be carried out by Mr and Ms Leach.[48]

(b) The progress payments comprised the deposit, pre-slab and site works, ground floor slab, ground floor plate and roof cover.[49]

(c) The total cost was fixed at $133,996.[50]

1. Mr Ayad prepared the 2021 building contract and provided it to Mr Forte.[51]
2. Mr Forte asked Mr and Ms Leach to sign the 2021 building contract by an email dated 15 March 2021.[52] Mr Forte wrote:

Hi Guys,

Attached is the structure only building contract. Please sign it and return to me so we can apply for the building permit. Thank you.

Danne Forte

1. Mr Ayad gave evidence that after the building bonuses had been granted, Mr and Ms Leach advised they could not afford the house and they needed to limit the scope.[53] Mr Forte asked him to reduce the scope of works to structure only, because Mr and Ms Leach wanted to directly engage trades and purchase materials and to do works themselves in order to save costs.[54]
2. Mr Ayad's evidence was that he reluctantly agreed and accordingly the 2021 building contract was signed.[55]
3. Mr Forte's evidence was:[56]

(a) There was never intended to be a fixed price contract for the construction of the house.

(b) Mr and Ms Leach instructed him to let them do anything they could themselves. This included their directly engaging trades and purchasing materials and constantly looking online for cheaper prices.

(c) Mr and Ms Leach did not respect any contract and so he tried to minimise the involvement of HD.

(d) For this reason, the structure only contract 'seemed plausible'. It legitimised what was happening and what was expected to happen on site.

(e) He discussed this with Mr and Ms Leach and they knew about the new contract before Mr Forte's email of 15 March 2021 which asked them to sign the 2021 building contract.

1. Mr and Ms Leach gave evidence that Mr Forte's email of 15 March 2021 caused them to believe the 2021 building contract was to be used in applying for a building permit.[57] They said there had been no discussions prior to the email and they did not think to question Mr Forte, even though they were aware B1 Homes had obtained a building permit without requiring a second contract. They signed the 2021 building contract before witnesses and returned it to Mr Forte without question.

1. On 25 March 2021 Mr and Ms Leach signed an application for a building permit on the land.[58] The estimated value of the work was stated to be $265,000. The builder and applicant were identified as HD. The document in evidence was not signed on behalf of HD.
2. The parties' evidence regarding the application for a building permit was as follows:

(a) Mr Leach said this document was presented to him by Mr Forte with the details already filled in and he signed it because Mr Forte asked and he did not check the document well enough.[59]

(b) Ms Leach said they had absolute trust in Mr Forte and they 'weren't checking that kind of stuff'.[60]

(c) Mr Ayad said Mr Forte prepared the application form and instructed him to sign it.[61] He understood the work had been valued at $265,000 because Mr Forte was expecting substantial additions, such as raked ceilings. In any event, it was up to Mr and Ms Leach to 'pay the gap' to the City of Stirling.

(d) Mr Forte said the amount on the building permit did not matter.[62] He said builders may start with a certain amount, but through variations or other reasons the final amount can be different. The owner or builder is obliged to inform the council and pay the difference in the applicable fee.

1. On 9 April 2021 the City of Stirling sent an email to Mr Leach stating that the site was non-compliant with the local law due to sand over the footpath, no builder signage and no verge permit.[63] Mr Leach and Mr Forte worked together to address the concerns and obtain a verge permit.[64]
2. By a letter dated 19 April 2021, the City of Stirling notified Mr and Ms Leach of its intention to issue a building order for the demolition of unauthorised building works at the site.[65] On 22 April 2021 Mr Leach emailed the draft building order to Mr Forte, asking if he should 'stay away regarding waterproofing'.[66] Mr Forte replied on 23 April 2021 with the text of an email he asked Mr Leach to send to the City of Stirling and stated that he and Ms Leach should attend a meeting with the City. Mr Leach sent the email as requested.[67]
3. On 7 July 2021 the City of Stirling issued a building approval certificate, which retrospectively approved the unauthorised works which had already been completed on the site.[68] Any documents upon which the City of Stirling relied to grant this certificate have not been identified by the parties and do not appear to be in evidence.
4. On 27 July 2021 the City of Stirling issued a building permit.[69] The building permit identified the builder as HD and the value of the work as $265,000.
5. Mr Forte forwarded the building permit to Mr and Ms Leach on 27 July 2021 stating:[70]

Called him this morning and begged on my knees!! Pheeeeeeeew! Thank God he didn't go there. I had ordered the bricks before and put them on hold as I didn't want him to see bricks on site which will immediately tell him the slabs are poured!!

1. In his evidence before the Tribunal, Mr Forte stated they were allowed to start site preparation and earthworks before the issuing of a building permit.[71] He said the only criteria was that concrete could not be poured. He said the very first work that was done was a retaining wall. They needed to go three metres deep for the undercroft and when excavating against the back neighbour the soil 'really went down' and he had to immediately arrange for concrete injection.

1. On 31 March 2021 QBE Insurance (Australia) Ltd issued a certificate of home indemnity insurance in relation to a single dwelling to be constructed on the land.[72] That certificate identified the building owners as Mr and Ms Leach, the builder as HD, the contract price as $133,996 and the contract date as 24 December 2020.
2. The parties' evidence regarding this certificate was as follows:

(a) Ms Leach confirmed she and Mr Leach received the certificate in the post.[73] She said they did not notice the contract amount until March 2024.

(b) Mr Leach said he did not at the time observe the contract price.[74]

(c) Mr Ayad said there must have been an oversight or perhaps a typing error by his administrative assistant, because the relevant contract was the 2021 building contract.[75] He said he was not in a fit state to check everything at that time.

(d) Mr Forte said Mr and Ms Leach had agreed to the contract figure of $133,000 on the application for a building permit and the home indemnity insurance due to the savings in fees.[76] He had explained to Ms Leach the home indemnity insurance would only cover the building structure (not the finishings) and the maximum payment was then only $100,000 regardless of the contract amount. He said in this way they saved $3,000 to $4,000.

1. The statements filed by Mr and Ms Leach and their oral evidence provided a narrative of the events surrounding the construction of their house.
2. Ms Leach described their activities as including:[77]

(a) contacting neighbours to obtain their consent to works;

(b) Mr Leach performing waterproofing to retaining walls and the brick walls of the cellar;

(c) going on the site to observe progress in the construction;

(d) providing instructions to Mr Forte in relation to the construction of a cat tunnel, shower recess and barbeque areas;

(e) raising an objection at the start of the brickwork when it appeared the cat tunnel and a kitchen window were not being built to specifications;

(f) agreeing with Mr Forte to attend to retaining walls and fencing themselves to save money, obtaining quotes and providing instructions for the works to be performed;

(g) organising skip bins and cleaning the site on four occasions;

(h) organising installation of gyprock or plaster in the office, an arch to a walk-in-robe and a false ceiling to the powder room, painting and glass shower screens;

(i) arranging for boxing in from inside a raked window and finishing a wall in the office;

(j) engaging a carpenter to hang the front door, rehang the pedestrian door to the garage and install all handles and locks to external doors;

(k) going on the site to instruct where tiles should be laid and organising a tiler to lay tiles in the cellar and powder room;

(l) Mr Leach sent the City of Stirling a crossover application and they engaged a concreter to pour the driveway and repair the footpath;

(m) Mr Leach met the electrician on site and then installed medium density fibreboard to ceilings in the garage and loft so that the electrical work could be finalised; and

(n) Mr Leach with the assistance of a friend installed some external flashing.

(a) Mr Forte suggested or they agreed to undertake some things directly in order to save costs.

(b) In May 2022 they agreed to finish aspects of the building because Mr Forte was unwilling to do further works for the reason he claimed they owed him too much money.[79]

1. The evidence of Mr Leach appeared consistent with that of Ms Leach.[80] He additionally stated:

(a) He never wanted to organise any part of the work, but it was a necessity in order to get the house finished and satisfy Mr Forte's demands.[81]

(b) On 27 March 2022, he and Ms Leach emailed Mr Forte a list of things they wished to be completed whilst waiting for delivery of windows and before the internal fit-out commenced. In relation to four of the 17 items, the email stated that Mr Leach would show or discuss them with Mr Forte on site the following day.[82]

(c) On 23 May 2022 a neighbour called to complain about rainwater coming from the site to flood their courtyard. Mr Leach left work and diverted the water as best he could using spare building materials. He observed flooding in the outside storeroom and bailed out water with a bucket. He also observed water leaking from the bottom of 'each set of stairs in the house'. He stated this was due to the external render stopping at the level of the sand outside, rather than at the slab. He later dug out the sand and applied waterproofing to the bricks and slab.

(d) On 2 September 2022 he had a meeting with Mr Forte during which Mr Forte said he would complete the final works, but only issue a notice of completion and provide a handover and keys when the monies owed to him as calculated on Mr Forte's spreadsheet had been paid.

1. Ms Leach appeared to contradict her account in cross-examination when she stated:[83]

We didn't bring in any contractors. We didn't order any materials. We didn't do any of the work. So, as far as we were concerned, it was a fixed-price contract.

1. There were a number of emails in evidence between Mr or Ms Leach on the one hand and Mr Forte on the other, in which they discussed the engagement of contractors, the progress of various items of work and the cost of the works. For example:

(a) The email of 27 March 2022 referred to at paragraph [73(b)].[84] In reply, Mr Forte emailed Mr and Ms Leach a spreadsheet for the parties to use to monitor the progress of the items.

(b) In an exchange of emails between approximately 15 May 2022 and 18 May 2022 Mr Leach and Mr Forte discussed complications regarding the manufacture and installation of windows, payment for the windows and choice of contractor to complete tiling after the windows were installed.[85] They also discussed whether it was a suitable time for Mr Leach to have office walls installed, the installation and cost of soakwells and who was responsible for organising (and the cost of) a post­construction clean of the house.

(c) On 18 May 2022 Mr Leach sent an email to Mr Forte stating that he calculated approximately 60 sqm of tiles had been laid, that the spreadsheet indicated the tiler had been paid $8,162.70 and asking for confirmation of what the tiler had been paid for because he considered the rate to be expensive.[86]

1. HD and Mr Forte agreed Mr and Ms Leach engaged in activities on the site, but claimed the scope of those activities was broader than alleged by Mr and Ms Leach.
2. In its submissions, HD alleged that Mr and Ms Leach put aside the contract, started work on the site without its permission, undertook works personally or by persons engaged by them and purchased materials directly, thus circumventing the contract.[87]
3. Mr Forte's evidence was that from the start Mr and Ms Leach told him they wanted to keep costs to a minimum by bringing in people they knew.[88] They attended site almost daily.[89] He was told Mr Leach had a relative who could supply air conditioning for a fraction of the real cost. Mr and Ms Leach bought materials when they found a cheaper price, including purchasing a second-hand laundry.[90]

1. Mr Forte stated Mr and Ms Leach 'were involved in everything, every single day' before the builder was on site to when they ended.[91] His role as project manager was to assist Mr and Ms Leach to construct the house at the site.[92] Part of that assistance was to use his network to access significant discounts in relation to the supply of materials or labour which were passed onto Mr and Ms Leach in full to minimise their costs of construction. He worked to their instructions and provided guidance because he had more experience.
2. Mr Forte stated that his system worked in conjunction with a 'kitty'.[93] All incoming funds whether from bank finance, owners' savings or government grants were paid into the kitty and all costs came out of it. The exception was when he had to advance funds to keep the project moving, or if owners paid for work directly.
3. Mr Forte stated that the kitty was held in a bank account in the name of his company.[94] He controlled the money in the kitty and the cashflow.[95] He paid for all of the materials and retained all the contractors, save for those paid for or retained by Mr and Ms Leach.[96] He said it was necessary for the bills to be in his name or the name of his company, because otherwise the suppliers would not provide the discounts.[97] He told HD when to send invoices.[98] His company would send an invoice to HD one or two days after HD had received the funds, or when Mr or Ms Leach advised him they had approved payment.[99] The majority of the funds went into the kitty, apart from a minimal amount kept by HD.
4. Mr Forte said it was usual for him to manage things, but not to the extent of this project.[100] The circumstances at the time, including the cascade effect of the government grants, meant that HD was not able to obtain material and labour without significant delays. Mr Forte was able to obtain supplies and trades more quickly using his network of contacts.[101]
5. Mr Forte said he monitored construction costs using spreadsheets.[102] There were three, entitled 'Cost Estimate and Monitoring Sheet', 'Reconciliation' and 'Project Cash-Flow Reconciliation'. These documents recorded estimated and actual costs, additional monies contributed by Mr and Ms Leach or himself and any repayment of those contributions. Mr Forte prepared these documents and sent them to Mr and Ms Leach by way of ongoing disclosure of the costs of construction. He said Mr and Ms Leach were involved in every decision that involved money.[103] The spreadsheets are considered further at paragraphs [104] to [107].
6. The evidence of Mr and Ms Leach was not in contradiction to the above evidence. They agreed spreadsheets were received from Mr Forte, and indeed both parties lodged examples of their email exchanges regarding the spreadsheets. Mr and Ms Leach said the spreadsheets were difficult to understand and they found many errors.[104]
7. Mr Ayad agreed that during the COVID-19 pandemic restrictions Mr Forte was more able than HD to engage contractors and obtain materials.[105]

1. The evidence of the activities performed by HD in relation to the building works are scant. None of the parties have taken me to documents which they allege demonstrate that employees or other agents of HD or contractors engaged by HD were present on site or undertook activities in relation to the construction.
2. Ms Leach said she only met Mr Ayad once.[106] She did not ask to meet the builder nor attempted to meet the builder.[107] Her witness statement detailed the interactions she and Mr Leach had with Mr Forte and third parties (such as trades persons). There was no reference to Mr Ayad until the parties' dispute resulted in legal letters in September 2022 and no reference to any person acting on behalf of HD attending the site or performing activities in relation to the construction.[108]
3. The witness statement of Mr Leach referred to Mr Ayad or HD only in reference to the sending or receiving of correspondence, such as invoices. There was no reference to engaging with anyone acting for HD in relation to building activities. During the final hearing, Mr Leach said HD was never involved in the construction.[109]
4. Mr Ayad's witness statements made no reference to any construction related activities undertaken by HD on the site.[110] In cross-examination, Mr Ayad said:[111]

(a) He thought he had attended once in relation to the pouring of concrete and once in relation to the roof. The concreter was supplied by Mr Forte. He asked to meet the concreter on site to see how the main slab was going to be joined to the existing bulk concrete which formed the undercroft.

(b) His supervisors had also attended site. He could not recall how often, but it was limited.

(c) His capacity to attend site was limited both due to his health and his location.

(d) It was not necessary for him or his supervisors to attend site frequently because the applicants had appointed Mr Forte as their construction manager. He fully respected the capability and capacity of Mr Forte.

1. Mr Forte's witness statements made no reference to any construction related activities undertaken by HD on the site.[112] Save (perhaps) that shortly after the signing of the 2021 building contract Mr Ayad 'had a severe medical condition which affected his capacity to work'.[113]
2. Of the great many invoices and quotes in evidence, only one appeared to be addressed to HD - a handwritten invoice dated 4 January 2022 which contained the description 'ceiling services'.[114] The address of where the works took place was not evident. The document was lodged by Mr Forte.
3. There was one photograph which depicted a HD sign on the site.[115] This document was also lodged by Mr Forte.
4. There was also the following discussion between myself and Mr Ayad:[116]

OLDFIELD MS: So if your company's responsibility ended with the roof cover, why wasn't a notice of completion filed?

AYAD MR: Because, as I - as I said in the previous question, they didn't finish the roof cover in the designated time, or roof carpentry, as well. They delay and interfere a lot.

OLDFIELD MS: But weren't those works - but weren't those your works? So how can you blame anyone else if your company was responsible for the works?

AYAD MR: Yes, because - it's not blame. It's still our responsibility, but we, like, gave Mr Forte the full flexibility to deal on the site as per his and his client's requirements. But the interference here was out of our control, out of anybody's control, so again, we - we found and our structure work finish at the end, which is, that's unusual things. It's not affecting the quality of - of works, but - but it's - it's not the right sequence, like, (indistinct) did the wrong sequence. So that's why the structure delay a lot. I can't remember when we finished the roof structure, but it was - it was finished at the end of the build, or almost at the - close to the end of the build.

...

OLDFIELD MS: Now, we had spoken about that invoice from Building Renewals. And Mr Ayad had said that the roof was not finalised towards the end of the build. So, Mr Ayad, if the roof wasn't completed until quite late in the process, why was the invoice for the progress payment for the roof cover issued---

AYAD MR: Again, because they nominated the subcontractor; they instructed me when to pay and what. Invoice, like, being issued because Mr Forte, which is Mr and Mrs Leach's representative, requested this money to deposit or start the roof (indistinct) that's as far as I remember so far.

...

OLDFIELD MS: All right. So you're saying that the invoice for the roof cover, which had a date of 29 December 2021, that you were instructed by Mr Forte to issue that.

AYAD MR: Absolutely. 100 per cent; 100 per cent. Because that's their point; their management point. And, again, he may have this as a front load or whatever, but I believe, from what I can see, they delayed the roof work a bit, or roof work being delayed a bit.

1. In addition to the above, there were allegations regarding keys to the house. In an undated letter which may have been sent to the solicitors for Mr and Ms Leach on 19 September 2022, Mr Ayad stated 'the keys have been returned to the project manager as was the case a week ago'.[117] On 13 October 2022 the then solicitors for HD warned against Mr and Ms Leach taking possession of the site.[118] On 14 October 2022, the solicitors for Mr and Ms Leach demanded HD deliver up keys to the site to their office.[119]
2. Earlier, over 29 and 30 May 2022, Mr Leach and Mr Forte exchanged emails regarding access to the site by contractors which included the following:[120]

...

Did you reach an arrangement where we can all have access to finish our respective jobs while keeping the house secure?

A lock box for the contractors would work or I can open doors in the morning (I usually go past around 6.30am, but could be earlier if needed).

If you would like a copy of the other keys I can arrange that as well[.]

...

There are two ways of going about this. The first is to immediately stop the presence of any tradesmen/contractors not appointed by the builder and hand over all keys to us and keep the site under lock until handed over. The second is to review and sign the attached indemnity to satisfy the insurers[.]

...

At the end of the day, we need the house to be secure, and we both need access to finish the job.

We'll go ahead and sign this and send it back to you, that should satisfy the insurers. I'll have it back to you this afternoon[.]

...

To secure the house properly we will keep it locked at all times except in the need of trades.

We will facilitate access for trades you have engaged whenever possible; however, as we both have to work, in some cases, access will need to be determined by you.

If you want to arrange a lockbox or something similar, just let us know and we'd be happy to help.

1. Mr Leach stated that when the doors and windows were installed, Mr Forte or Mr Ayad had all the keys.[121] The garage door was kept loose, and Mr Forte gave him a key which allowed access from the garage into the house. This was because it suited Mr Forte to ask them to open the house for trades.
2. Mr Leach said there was a stage where things were not going well, and Mr Forte advised them the builder had locked the house.[122] At that point the garage was locked and there was no way in. That prompted them to terminate the contract in October 2022.
3. When the attention of Mr Leach was directed to the email exchange above,[123] he stated that he must also have had a key to the rear sliding door, though he did not recall it.[124] He later stated the arrangement with Mr Forte was that he and Ms Leach would have access for their contractors, and this email exchange was actually an attempt by Mr Forte to deny their contractors access to the site.[125]
4. Mr Ayad said Mr and Ms Leach had their own keys for the house and did not use builders' keys.[126] Whenever he attended site, he had arranged it first with Mr Forte.[127] When his supervisor attended, he had to jump through the window.
5. Counsel for Mr and Ms Leach asked Mr Ayad to explain his letter having stated that the keys had been returned.[128] Mr Ayad stated that he had sought a copy of the keys and 'finally' had received a set. Later, in response to questions from Mr Forte, Mr Ayad said:[129]

I can't remember anything about the physical keys. I remember - I remember we fight for the keys. I did argue to have the keys, and suddenly I found a set in my letterbox ... But during the (indistinct) we used to jump over the fence, especially (indistinct) We used to wait until you, like, call us and say, 'Look, the garage is open', whatever. It was - it was, like, very messy.

1. Mr Forte's evidence in relation to this issue appeared largely general statements regarding standard building practices, save for the following:[130]

In fact, once the keys went - like I said before, we didn't have the new keys, you know, after the new door was installed by the owners, and I just - I never got the keys back in any case, and I have not seen the keys since.

1. I consider the email exchange extracted at paragraph [95] above established that on 29 and 30 May 2022:

(a) Mr and Ms Leach were in possession of keys to the house at the site; and

(b) those keys allowed Mr and Ms Leach to permit or deny access by contractors organised by Mr Forte.

1. The evidence was insufficient for me to make findings regarding which parties had (or did not have) possession of the keys at other times. I am satisfied however the usual arrangements, whereby the contracted builder is in sole control of access to the location at which the contracted works were to be performed, were not in place in relation to the site.

1. Mr Forte lodged 125 pages of spreadsheets. The earliest was said by Mr Forte to have been prepared on 15 December 2020.[131] I accept that date as correct because it is consistent with his email of the same date to Ms Leach which contains reference to an attachment called 'Cost Estimate and Monitoring Sheet'.[132]
2. The spreadsheet of 15 December 2020 is contained in Annexure B to these reasons. It listed 'preliminaries', including drawings, building licence, home indemnity insurance, 'builder's fee', the application for a certificate of design compliance, and estimated the costs of each. The spreadsheet also listed 22 stages of the 'house build'. including earthworks, concrete slabs, brickwork, plumbing, tiling, painting and landscaping, and estimated the cost of each stage. The spreadsheet included a contingency, notes '[f]loors by owners' and an amount for 'PM'. There was no dispute, and I accept 'PM' meant Mr Forte's fee pursuant to the project management agreement.
3. The spreadsheet estimated the total cost of construction as $375,750 including GST, not including Mr Forte's fee.
4. From time to time, Mr Forte updated the 'monitoring' spreadsheet with details of the cost of work done and whether it was on, over or under the estimate.[133] Mr Forte sought (or was provided) copies of invoices which Mr and Ms Leach had paid, and those amounts were added to the spreadsheets.[134] Mr Forte sent updated spreadsheets to Mr and Ms Leach and on some occasions Mr or Ms Leach requested corrections to the spreadsheets.[135]

1. I am satisfied Mr and Ms Leach were frequently on site and neither they nor their contractors were impeded by Mr Forte or HD from attending or working on site.
2. I am not satisfied the evidence established that at any time HD carried out the activities on the site which would normally be expected of a party identified as the builder in a contract to perform home building work.
3. I am satisfied the evidence established that Mr Forte and Mr and Ms Leach engaged in activities which eventuated in the construction of a house on the site. For the purposes of the preliminary issue, it is not necessary to specifically determine who did what.

1. By correspondence dated 20 January 2021, Westpac Banking Corporation (Westpac) granted Mr and Ms Leach unconditional approval to borrow $749,500 which was to be secured by a mortgage on the site and an unrelated property.[136]
2. Mr and Ms Leach lodged a schedule which calculated the following:[137]

(b) Progress payments and variable outgoings: $396,177;

(c) Total paid by them to Mr Forte and HD: $471,177;

(e) Payments received by them from Mr Forte: $22,747.73.

1. HD issued invoices in accordance with the progress payment schedule contained in the 2020 building contract:[138]

(a) deposit - $21,774 - invoice dated 11 February 2021;[139]

(b) pre-slab and site works - $45,000 - invoice dated 19 April 2021;[140]

(c) ground floor slab - $45,000 - invoice dated 20 July 2021;[141]

(d) ground floor plate - $55,000 - invoice dated 20 September 2021;[142]

(e) roof cover - $55,000 - invoice dated 29 December 2021;[143]

(f) lock up - $35,000 - invoice dated 23 March 2022;[144]

(g) finishing - $35,000 - invoice dated 4 April 2022;[145] and

(h) cabinets and fit out - $30,000 - invoice dated 20 May 2022.[146]

1. By email dated 11 February 2022 Mr Forte sent Mr and Ms Leach eight documents described as variations.[147] His email stated:

Hi Guys

Attached are the variations. I have sent them to Ha-Dec and am awaiting their confirmation. These come to $154,064.39. Please don't send them just yet. Thank you.

1. On 12 February 2022 Ms Leach sent an email to Mr Forte (copied to Mr Leach) entitled 'Variations v2'.[148] It stated:

Hi Danne

Please find attached as discussed. Also please note I checked all dates as some were on a Sunday so have changed those too.

I increased the inclusions (V1) and reduced the amount for the 45 days.

1. Attached to that email was an Excel spreadsheet entitled 'New Variations v.2' which included the following:[149]

Upgrade to bathroom fixtures, tiling floor to ceiling, kitchen fitout and electricial inclusions as requested by client

Revised DA application, BP, CDC and energy assessment

Extra over for price adjustment starting 45 days beyond contract signature and site conditions

Extra over PS for retaining walls and Waterproofing

Extra over for increase in Bricks and cartage and Bricklayers' rates at cost (can include crane costs in this??)

Extra over for increase in roof costs includes timber prices, roof carpenters and steel

1. Any responses by Mr Forte or HD were not in evidence. However, the following receipts of HD were lodged with the Tribunal:[150]

(a) Variation 1 in the amount of $18,872, paid in full. The date of the variation was said to be 8 February 2021, and the date of payment 9 February 2021.

(b) Variation 2 in the amount of $2,750, paid in full. The date of the variation was said to be 4 May 2021, and the date of payment 9 May 2021.

(c) Variation 3 in the amount of $3,251, paid in full. The date of the variation was said to be 14 May 2021, and the date of payment 16 May 2021.

(d) Variation 4 in the amount of $520, paid in full. The date of the variation was said to be 24 May 2021, and the date of payment 29 May 2021.

(e) Variation 5 in the amount of $5,780, paid in full. The date of the variation was said to be 23 May 2021, and the date of payment 25 May 2021.

(f) Variation 6 in the amount of $25,257, paid in full. The date of the variation was said to be 28 June 2021, and the date of payment 2 July 2021.

(g) Variation 7 in the amount of $22,580.39, paid in full. The date of the variation was said to be 25 May 2021, and the date of payment 28 May 2021.

1. Additionally, HD issued the following variations:[151]

(a) dated 16 November 2021, described as '[e]xtra over for increase in Bricks and cartage and Bricklayers' rates at cost including cranage and site handling', in the sum of $38,402.00; and

(b) dated 4 February 2022, described as '[e]xtra over for increase in timber prices, roof carpenters and structural steel', in the sum of $36,001.00.

1. If these variations[152] were sent by HD to Mr and Ms Leach or if they were sent to Westpac or another financial institution, that correspondence was not in evidence. However, it appeared Mr Forte sent Mr and Ms Leach receipts for payment of Variations 1 - 7 by email dated 13 March 2022.[153]
2. The bank statements and invoices filed by the parties depicted the following (noting a complete set of bank statements for the relevant period was not in evidence):[154]

'Danne Forte Extra fees for variations Joondanna Variations table"

'variations ... as per the reconciliation ... with Danne Forte'

1. In my view the evidence established the following:

(a) the invoices evidenced at paragraphs [113], [117] and [118] above were paid by or on the instructions of Mr and Ms Leach; and

(b) HD paid a significant portion of the funds so received to BR.

1. It was alleged the payments by HD to BR were made without the knowledge or consent of Mr and Ms Leach.[155]
2. I am satisfied Mr and Ms Leach were aware that Westpac paid progress payments to HD.[156] Further, Mr and Ms Leach gave evidence the variations were for the purpose of seeking additional bank finance.[157]
3. The correspondence between the parties clearly suggests Mr Forte and Mr and Ms Leach were organising contractors and the supply of materials, the costs of which were paid from the bank finance obtained by Mr and Ms Leach. When costs were incurred in advance (or in excess) of the progress payment invoices, Mr Forte and Mr and Ms Leach contributed additional funds. For example:

(a) By an email dated 20 April 2021 from Ms Leach to Mr Forte:[158]

The bank has their instructions to release the payment. Money will be received within 2-3 business days ...

Please organise, as discussed, for money to be paid back to us.

(b) In an email exchange on 5 January 2022, Ms Leach wrote:[159]

[W]e will send you 10k this week and 10k next week. Hopefully in 2 weeks' time we will be at a point to invoice the bank for the lock­up payment.

(c) Mr Forte's reply dated 5 January 2022 included:

...

Please note the $55,000 of the roof payment is not received yet and my loan still stands at just over $147,000 ...

What I suggest you do is after the lock up, you get a valuation and refinance for another say $100,000 and cover yourself[.]

1. I am satisfied, on the balance of probabilities, Mr and Ms Leach were aware of the transfer of funds from HD to BR.
2. HD issued two additional invoices. Firstly, an invoice dated 8 September 2022 described as '[u]nder account of variations for work done to date as per the reconciliation sheet dated the 7th September 2022 with Danne Forte. Final accounts will be done at handing over'.[160] The amount was $33,741.36. Mr Ayad and Mr Forte agreed this invoice was not paid.[161] Mr Forte said he knew nothing about it.
3. Secondly, an invoice dated October 2022 in the amount of $15,667.97 with the following description:[162]

Total Build $569,689.35

Less Contract Price $334,990

Difference $234,669.35

15% Builder Allowance $35,204.90

Less previously received $19,536.93

Due to be paid $15,667.97

1. Mr Ayad said he could not recall this invoice, but thought it may have been prepared in response to correspondence from lawyers on behalf of Mr and Mrs Leach seeking rectification in relation to the 2020 building contract, which he considered had been terminated.[163] He said it was like a counter-claim.[164]
2. Mr Forte said this invoice was not correct because HD should have charged 15% on the difference of $234,669.35 without deducting the amount previously received.[165]

What were the contractual arrangements between the parties?

1. In identifying the contractual arrangements between the parties in relation to the building works at the land, the starting point must be the written contracts. As stated by the High Court in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 at [33] - [35]:[166]
   1. The respondents each having executed a loan agreement, each is bound by it. Having executed the document, and not having been induced to do so by fraud, mistake, or misrepresentation, the respondents cannot now be heard to say that they are not bound by the agreement recorded in it ...
   2. There are reasons why the law adopts this position. First, it accords with the "general test of objectivity [that] is of pervasive influence in the law of contract". The legal rights and obligations of the parties turn upon what their words and conduct would be reasonably understood to convey, not upon actual beliefs or intentions.
   3. Secondly, in the nature of things, oral agreements will sometimes be disputable. Resolving such disputation is commonly difficult, time-consuming, expensive and problematic. Where parties enter into a written agreement, the Court will generally hold them to the obligations which they have assumed by that agreement. At least, it will do so unless relief is afforded by the operation of statute or some other legal or equitable principle applicable to the case ... The obligations of written agreements between parties cannot simply be ignored or brushed aside.
2. The 2020 and 2021 building contracts were entered into by the same parties, in relation to the same land. The parties have not alleged, and there is nothing in the evidence which suggests, the construction of two residences was ever contemplated. In my view, the 2020 and 2021 building contracts are inconsistent and it would have been impossible for both contracts to be performed according to their terms.
3. This suggests the 2020 building contract was rescinded and substituted by the 2021 building contract.[167] However, the parties suggested the true relationship was otherwise, and that it was necessary to look beyond the terms of the contractual documents to discern the 'real' agreement.

1. Mr and Ms Leach submitted the 2021 building contract did not operate to extinguish their rights under the 2020 building contract because:

(b) the actions of HD evinced an intention to be bound by the 2020 building contract because its actions were inconsistent with the 2021 building contract but consistent with the 2020 building contract.

1. Generally, it is the parties' objective intentions which are relevant to the construction of a contract. Parties will be held to the meaning to be reasonably inferred from their words and deeds rather than their uncommunicated subjective intention.[168]
2. I am not persuaded on the balance of probabilities that Mr and Ms Leach intended the 2020 building contract would govern the parties' rights and obligations. This is because:

(a) As discussed at paragraph [143] below, the actions of the parties were inconsistent with the terms of the 2020 building contract.

(b) The manner in which their contract with B1 Homes was terminated indicated to me that Mr and Ms Leach understood the process of a builder issuing a variation in order to vary the cost of construction under a fixed price contract. They did not attempt to follow that process with HD.

(c) Mr and Ms Leach knew B1 Homes had obtained a building permit from the same local government in relation to the same land, without requiring a 'structure only' contract.

1. Even if I were to entirely accept the evidence of Mr and Ms Leach regarding their intention, the basis upon which their subjective belief or intention is said to be relevant in this case has not been satisfactorily explained:

(a) It was the evidence of Mr and Ms Leach that Mr Forte's email dated 15 March 2021 by which he sent them the 2021 building contract caused them to believe that contract was to be used in applying for a building permit.[169]

(b) It has not been alleged, and there is no evidence, that Mr or Ms Leach communicated their intention to HD.

(c) It has not been alleged and there is no evidence that HD made any representations to Mr and Ms Leach in relation to the 2021 building contract.

(d) It was suggested that Mr Forte was effectively acting as agent for HD.[170] However even if that were accepted, there is no evidence Mr or Ms Leach communicated their intention to Mr Forte.

1. I also have reservations regarding the submission that the actions of HD must lead me to a conclusion it intended the 2020 building contract to remain in force. That conclusion is not the only rational explanation for the conduct of HD. Furthermore, it is difficult to see why HD would create the 2021 building contract if it intended to perform building works pursuant to the 2020 building contract.
2. Mr and Ms Leach submitted HD executed the 2021 building contract for the purpose of reducing the amount of the premium payable for home indemnity insurance. However, in an email exchange on 11 February 2021 it appeared that Ms Leach accepted the statement by Mr Forte that 'we have to make all the payments for the building permit, HII...'.[171] The expected (and then incurred) costs of the building permit and home indemnity insurance were also included in Mr Forte's spreadsheets. It appeared therefore Mr and Ms Leach and Mr Forte were not expecting HD to bear the cost of the premium and presumably that would have been communicated to HD because otherwise it would also have paid those costs. I am not satisfied this is a plausible reason for HD proposing the 2021 building contract.

1. Mr Forte submitted Mr and Ms Leach chose his project management agreement after having terminated a standard building contract with B1 Homes.[172] He said the fundamental principle of their project management agreement was an 'at cost' arrangement with no fixed price, and the parties' evidence demonstrated that the events in reality had nothing to do with a fixed price building contract.
2. Similarly, in submissions lodged before the commencement of the hearing, HD stated that it was a 'victim of a plot' and the intention of Mr and Ms Leach was to build their house with the assistance of Mr Forte pursuant to an 'at cost' system which it likened to them being owner­builders.[173]
3. Where there are allegations a written contract operates as a disguise, the Tribunal may consider evidence of the true nature of the parties' transaction. In Raftland Pty Ltd v Federal Commissioner of Taxation [2008] HCA 21; 238 CLR 516 Gleeson CJ, Gummow and Crennan JJ stated:[174]
   1. ... The apparent discrepancy between the entitlements appearing on the face of the documents and the way in which the funds were applied gave rise to a question whether the documents were to be taken at face value. In various situations, the court may take an agreement or other instrument, such as a settlement on trust, as not fully disclosing the legal rights and entitlements for which it provides on its face ...
   2. One such case is where other evidence of the intentions of the relevant actors shows that the document was brought into existence "as a mere piece of machinery" for serving some purpose other than that of constituting the whole of the arrangement ...
4. Similarly, the Tribunal in Lee and Holmes [2020] WASAT 108 found that the building contracts and building permits could not be relied upon to indicate who had performed the regulated building services in those proceedings.[175]
5. In my view, that is the correct approach to take in these proceedings. I am satisfied neither the 2020 building contract, nor the 2021 building contract are an accurate record of the true agreement between the parties. My reasons for reaching this conclusion are as follows:

(a) The terms of the project management agreement appear in conflict with the terms of either or both of the 2020 and 2021 building contracts. In other words, it is unclear how the project management agreement could have operated in conjunction with either of the 2020 or 2021 building contracts. In their evidence, Mr and Ms Leach were vague regarding the expected role of Mr Forte in the context of a fixed price building contract.

(b) The evidence of the parties' activities on site and engagement with the City of Stirling appears inconsistent with HD being in control of the site and the building works pursuant to either the 2020 or 2021 building contract.

(c) The preparation and use of the spreadsheets by Mr and Ms Leach and Mr Forte, to track the actual cost of labour and materials, is inconsistent with the concept of a fixed price building contract and inconsistent with the terms of the 2020 and 2021 building contracts. It is notable the first spreadsheet was prepared and shared on 15 December 2020 whereas the 2020 building contract was signed on or about 24 December 2020.

(d) It seems to me the payment by HD of funds received from Westpac to BR would only be consistent with the 2020 or 2021 building contracts if BR[176] had been engaged by HD to supervise and carry out the building works on behalf of HD. I am not satisfied the evidence established that arrangement. Indeed, the situation appeared more consistent with arrangements commonly known as 'licence lending' where a registered builder allows their name and builder's registration to be used by someone else.

1. If the contracts did not reflect the true agreement of the parties, they cannot be relied upon to accurately indicate the actions taken by the parties. Therefore, it may be a matter for the Tribunal in the final hearing to consider the physical performance of building works on the site in order to identify the person or persons who performed the regulated building service the subject of each item of complaint.

1. The closing submissions of HD stated the 2020 building contract was validly terminated in February 2021 and it entered into the 2021 building contract in reliance upon the representations of Mr Forte.[177] However, by their conduct Mr and Ms Leach and Mr Forte put the contract aside.
2. I understand this submission to effectively suggest the 2021 building contract was either abandoned or rescinded by Mr and Ms Leach. Such an analysis does not in my view adequately explain the actions of HD or Mr Forte. Furthermore, as stated above, I am not satisfied the evidence has established the 2021 building contract was a complete and accurate record of the parties' agreement.

1. In my view, the project management agreement is a more accurate indication of the true agreement between the parties.[178]
2. The evidence is insufficient for me to determine whether:

(a) Mr and Ms Leach were in effect owner-builders who had engaged Mr Forte or Resiservices to provide advice and assistance in managing the construction; or

(b) Mr Forte or Resiservices was in effect the builder operating on a cost-plus basis (albeit in breach of s 14 of the HBC Act).

1. It is not necessary for those questions to be answered for the purposes of determining the preliminary issue.

1. I am satisfied the evidence established Mr Forte and Mr and Ms Leach performed home building works at the site and HD allowed its name and building licence to be used for the purpose of obtaining the development approval, building permit and home indemnity insurance. I am further satisfied both the 2020 building contract and 2021 building contract were signed in the context of and as 'protective colouration' for that arrangement.
2. In relation to the specific questions forming the preliminary issue:

(a) What were the contractual arrangements between the parties regarding home building work? Specifically:

(1) What is the status of the building contract signed by Mr and Ms Leach and HD in December 2020?

On the face of the documents, the 2020 building contract was rescinded by the 2021 building contract. However, the 2020 building contract was a pretence which did not represent the true agreement between the parties.

(2) What is the status of the building contract signed by Mr and Ms Leach and HD in March 2021?

On the face of the documents, the 2021 building contract was the subsisting contract between Mr and Ms Leach and HD. However, the 2021 building contract was a pretence which did not represent the true agreement between the parties.

(3) Were other building work contracts (whether oral, written or partly oral, partly written) entered into by Mr and Ms Leach, HD and/or Mr Forte?

Yes, there was an agreement which was partly recorded in the project management agreement whereby:

(i) home building work would be performed by Mr and Ms Leach and by Mr Forte and/or Resiservices;

(ii) HD, in exchange for monies paid, would allow its name and building licence to be used for purposes which included obtaining home indemnity insurance and a building permit.

1. The parties are to attend a hearing of 2 hours duration to commence at a time and date to be determined by the Tribunal to make submissions in relation to the precise terms of the orders to be made consequent on the determination of the preliminary question and in relation to the listing of the final hearing.
2. By 11 August 2025, the parties must file with the Tribunal and give to the other parties a list of the dates in August, September and October 2025 on which they will not be available to attend the directions hearing.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

[1] Applicants' Outline of Submissions (AOS) dated 15 April 2025.

[2] Exhibit 1, pages 1653 - 1658; HD's Closing Submissions dated 15 April 2025 (HDCS).

[4] Mr Forte's Closing Submissions on the Preliminary Issue dated 15 April 2025 (FCS).

[5] BSCRA Act, s 3; Building Services (Complaint Resolution and Administration) Regulations 2011 (WA), reg 5A.

[9] BSCRA Act, s 5(2); Home Building Contracts Act 1991 (WA) s 20 and Sch 1, cl 5.

[12] For example, Exhibit 1, pages 2, 1480, 1508 and 1522.

[18] Exhibit 1, pages 492 and 532; Exhibit 2, pages 777 - 778.

[20] Project management agreement clauses 1(2) and 2.1 and the definition of 'Project' in clause 1.1.

[26] Exhibit 2, pages 769, 773 and 930. See Annexure A attached.

[27] For example, Exhibit 2, pages 1321, 1322, 1325, 1337, 1338 and 1361.

[28] Exhibit 2, pages 1730; ts 24, 47, 49, 50, 51, 52, 62, 90, 93 and 95, 17 January 2025.

[29] Australian Government, 'HomeBuilder', (Web Page, 27 April 2021)

[30] Government of Western Australia, 'HomeBuilder Program to assist with renovations and new builds', (Web Page, 4 June 2020) .

[32] Government of Western Australia, 'HomeBuilder grant extensions', (Web Page, 4 May 2023)

[33] Australian Government, 'Australian Government HomeBuilder grant', (Web Page, 5 June 2025)

[34] Government of Western Australia, 'Building Bonus to support economic recovery and create WA jobs', (Web Page, 7 June 2020)

[35] Government of Western Australia, 'Building Bonus grant', (Web Page, 1 July 2025)

[37] Government of Western Australia, 'Building Bonus extension to provide WA job certainty', (Web Page, 20 October 2020)

[38] Government of Western Australia, 'About the first homeowner grant', (Web Page, 19 June 2025) .

[42] Exhibit 1, pages 495 and 533; ts 14, 67 - 68, 9 December 2024; ts 158, 10 December 2024.

[56] Exhibit 1, page 1716; ts 52 and 98 - 99, 17 January 2025.

[57] Exhibit 1, pages 499 and 534; ts 50 and 81 - 82, 9 December 2024; ts 6, 10 December 2024.

[64] Exhibit 1, pages 501 and 535; Exhibit 2, pages 865 - 867.

[69] Exhibit 1, pages 426 - 428 and 592.

[78] Exhibit 1, pages 50, 209 - 510, 515 and 516; ts 56, 9 December 2024.

[88] Exhibit 2, page 1733; ts 24, 17 January 2025.

[93] Exhibit 2, page 1731; ts 50, 17 January 2025.

[101] ts 90, 17 January 2025; ts 213 - 214, 4 March 2025.

[102] Exhibit 2, pages 1730 - 1731; ts 47 - 49, 17 January 2025.

[109] ts 123 and 134, 10 December 2024.

[110] Exhibit 1, pages 1617 - 1618 and 1719.

[112] Exhibit 1, pages 1715 - 1716; Exhibit 2, pages 1730 - 1741.

[116] ts 277 - 278 and 279, 16 January 2025.

[134] For example, Exhibit 2, pages 359, 846, 929 and 933.

[135] For example, Exhibit 2, pages 462, 490, 501 and 1092 - 1095.

[152] The variations listed at [118] and the variations the subject of the receipts listed at [117].

[154] Exhibit 1, pages 1566, 1568, 1574, 1575, 1578, 1579 and 1580; Exhibit 2, pages 1628 - 1634.

[157] Exhibit 1, pages 513 and 539 - 540.

[167] SA Christensen and WD Duncan, The Construction and Performance of Commercial Contracts (3rd ed, 2023) The Federation Press at [15.3.2.4].

[168] JW Carter, Contract Law in Australia (8th ed, 2023) at [12-03].

[169] Exhibit 1 pages 499 and 534; ts 50 and 81 - 82, 9 December 2024; ts 6, 10 December 2024.

[176] Or arguably Mr Forte or Resiservices.

[178] More accurate than the 2020 building contract or 2021 building contract.