Millen v Skyview Homes Pty Ltd

ORDERS OF THE TRIBUNAL DATED 4 MARCH 2021.

1. The Tribunal made the following consent orders (summarising the substance of the orders):

Emergency Rectification of Roof (Order 5)

1. Builder to provide and install temporary flashings and/or roof cappings to prevent the ingress of water to the interior of the dwelling.
2. The emergency rectification work was to commence by no later than 15 March 2021 and be competed not more than 3 days after the commencement of the work. The builder was to give a minimum of 2 clear business days written notification of the commencement of the work and the owner was to give reasonable access so that the orders could be complied with.

Roof (Order 1)

1. By 29 April 2021, builder to: 1. Remove and re-install inadequately pitched roof. 2. Provide and install suitable fixings to entire roof. 3. Ensure all roof sheets are adequately supported. 4. Remove and replace broken roof sheets. 5. Rectify damaged or defective flashings and cappings. 6. Ensure box gutter had adequate falls to drainage points (including adequate provision for overflow). 7. Rectify any damages caused by water ingress that has occurred prior to completion of this rectification work, including damage to ceilings and walls. Such work is to include repairing damage to gyprock; restore and replace as necessary light fittings; re-paint to match existing ceilings and walls. So that the roof complies with the requirements of the Building Code of Australia and National Construction Code.
2. The work was to commence no later than 8 April 2021 and be completed by 29 April 2021. The work was to proceed uninterrupted from commencement, other than the extent necessary to perform rectification work on the bathroom.

Bathroom (Order 2)

1. By 29 April 2021 the builder to: 1. Remove floor tiles to area of bathroom outside shower enclosure. 2. Remove and store for re-fitting all affected fixtures. 3. Remove floor tiles and at minimum, a single wall tile, to each affected wall. 4. Remove screeded and water barrier membrane and prepare area for installation of a new water barrier membrane and allow to extend at least one tile width up affected walls. 5. On installation, test water membrane for period of 24 hours. 6. Re-prepare screed to fall at 1/100 to waste. 7. Re-tile to match existing bathroom floor tiles as far as that is possible. 8. On completion, re-install fittings; seals to tile surfaces; provide silicone joints as required and clean up area. 9. Demolished materials to be removed from site; site to be left reasonably clean; and ensure any damage caused as a result of rectification work is repaired.

Window and Bi-Fold Doors (Order 3)

1. By 29 April 2021, builder to: 1. Arrange for a service call with original sub-contractor who installed window and bi-fold doors. 2. Rectify the operation of the bi-fold door to ensure smooth operation; satisfactory locking; and adequate weather resistance.
2. On completion, leave door fully operational and weather tight. Further, remove debris from site, leave site reasonably clean and ensure any damage caused as a result of the rectification work is repaired.

Money Order (Order 4)

1. The builder was to pay the owner $15,000 by 1 April 2021. This was a separate and distinct order from the work orders dealing with the roof; bathroom; and bi-fold doors.

Notations

1. There were also notations of an agreement between the parties that did not constitute orders of the Tribunal. The builder was to use sub-contractors in respect of the roof and bathroom rectification works other than the sub-contractors originally used by the builder. The builder was to meet the reasonable costs of the owner in having Mr Nakhla inspect the works after completion. The builder was also to arrange and provide a dilapidation report prior to the commencement of works.

RENEWAL PROCEEDINGS IN MATTER HB 21/18862

1. On 30 April 2021, the applicant filed renewal proceedings under Sch 4 Clause 8 of the NCAT Act.
2. There is no dispute that the respondent complied with the money order to pay the applicant $15,000. It is the work orders that are in dispute.
3. There were a series of documents attached to the renewal proceedings application. Relevantly, the applicant asserted that the orders of the Tribunal had not been complied with by the respondent in various respects. The applicant asserted that there had been significant water ingress into the premises causing part of the gyprock ceiling to "collapse" on 22 March 2021.
4. The matter was listed for directions before Wilson SM on 14 May 2021. Wilson SM set the matter down for hearing and made procedural directions regarding the filing and serving of evidence. Wilson SM also noted that the respondent "claims the applicant prevented the work orders being undertaken" and that parties could rely upon evidence filed and served in the original proceedings, but they must place it in a folder of evidence in the renewal proceedings with an index and page numbers.
5. Each party filed and served documentary evidence.
6. The applicant's documents (which were subsequently admitted into evidence at the hearing) were filed and served on 21 May 2021 and 18 June 2021. Additionally, the applicant relied upon the NSW Fair Trading rectification order and subsequent report detailing non-compliance by Mr Goddard, the NSW Fair Trading Building Inspector.
7. The applicant's documentary evidence relevantly included: 1. A supplementary report from Mr Nakhla dated 13 May 2021. 2. That report identified that Mr Nakhla had inspected the residential premises on 3 May 2021 and 13 May 2021. The report contained photographs and comments. The majority of the report (and photographs) involved the roof of the premises. Mr Nakhla identified that there were still significant defects in the roof involving water ingress (including that the roof pitch had not been altered and remained under 3 degrees to affected areas; box gutters had not been rectified; and incorrect fixings and cappings had not been rectified). 3. Mr Nakhla stated that some ceilings and linings had been repaired, but not others and that repairs would have to be done to internal walls and ceilings "once the roof is completely rectified and the structure is made watertight. 4. Mr Nakhla stated that no rectification works had taken place to the main bathroom or awning window. 5. Mr Nakhla's report did not clearly state whether or not the opinion he expressed in his report of 23 September 2020 had changed in respect of the scope to rectify and the cost of rectification. 6. Email correspondence between the parties, including between the applicant and the builder's Solicitor. Much of the correspondence related to the issue of the respondent (or its sub-contractors) having access to the premises in March-April 2021 to have access to repair the roof. However, there was also a correspondence in respect of the parties engaging in negotiations to enter into a Deed of Release in respect of the works to the main bathroom. That Deed involved payment of $2,000 by the respondent to the applicant and the installation of glass shower door by the respondent, in lieu of the works identified the work order of the Tribunal. The applicant did not sign the Deed of Agreement and asserts that there was no concluded agreement. 7. Text messages between the parties (and sub-contractors) regarding access to the premises. 8. Photographs of the water ingress damage to the ceiling in March 2021 and repair works to the gyprock ceiling as a result of that damage. 9. Quotations regarding removal and replacement of the entire roof of the premises. The quotations (all being inclusive of GST) were $45,760 by Custom Carpentry and Roofing dated 27 April 2021; $40,672.62 by Hyspec Construction and Roofing dated 28 July 2020; $33,220 by TomKat Roofing dated 23 April 2021; and $43,560 by Andrew C Smith Carpentry dated 15 June 2021. The quote from Andrew C Smith stated that it would "not be desirable" to reside in the dwelling whilst the work was performed, and the estimated duration of the works was 2 weeks. 10. An email from TomKat Roofing to her stating that an earlier quotation they had given the respondent for a lower amount was based upon the difference in being engaged directly by an owner compared to being engaged by a builder. 11. A "witness statement" of the applicant dated 17 June 2021. That document is a combination of a response to the affidavit of Mr Williams, the director of the builder dated 4 June 2021 and a combination of evidence and submissions. 12. Brief statutory declarations from Mr Laming dated 15 June 2021 and Ms Armstrong dated 15 June 2021. Mr Laming is a neighbour of the applicant and Ms Armstrong a friend of the applicant. 13. Various tax invoices of Coleman Grieg Lawyers in the period between 9 November 2020 and 16 June 2021 for "professional fees" re "Building dispute with Skyview Homes". The total amount of the invoices is $4,466. 14. Tax invoices of Mr Nakhla in the period from 21 July 2020 to 4 March 2021 for preparing an expert report; attending a "conclave" with the other expert; and attending the hearing on 4 March 2021. The total amount of the invoices is $9,405. 15. Emails from Narellan Motor Inn and Camden Motor Inn for nightly and weekly rate for accommodation. The emails are dated 16 June 2021. 16. Photographs of the roof.
8. The builder's documentary evidence was filed and served on 10 June 2021. Such documents were admitted into evidence. The builder's documents contained an affidavit of Mr Jake Williams, the director of the respondent, dated 4 June 2021, and documents annexed to that affidavit. Such documents relevantly included: 1. Email correspondence regarding negotiations about settling the main bathroom defects issue, including a further copy of the proposed Deed of Release and a quote obtained by the applicant from Hinton Services dated 22 April 2021 to remove shower screen; install stainless steel hob on shower floor and install new shower screen in the amount of $2,530. 2. A copy of the contractual plans with two areas identified which the respondent regarding as being the areas of "inadequately pitched roof". 3. Tax invoice of Suttons Roofing dated 9 February 2018. Suttons Roofing was the sub-contractor of builder who installed the roof. The tax invoice included reference to supplying and installing "Min 2 degree pitch" roof sheeting. 4. Photographs taken on site on 21 April 2021 by the gyprock sub-contractor of the respondent. 5. Text messages, including texts between the applicant and Mr Williams; and between Mr Williams and various sub-contractors of the respondent. 6. Dilapidation report by Mr Gaddes of Tyrrells Property Inspections Pty Ltd dated 19 March 2021.
9. The hearing occurred on 30 June 2021. The applicant was self-represented. The respondent was represented by Mr Horobin of Counsel. The hearing was conducted by telephone.
10. Prior to the hearing commencing, the parties engaged in brief private settlement discussions. The matter did not resolve.
11. The applicant stated that she was claiming the following in the renewal proceedings: 1. The costs of rectification of the roof; the main bathroom; and the windows/bi-fold doors as set out in the original report and Scott Schedule of Mr Nakhla. 2. Costs of accommodation for having to move out of the residence whilst rectification works were performed. The applicant sought $5,060 in respect of two weeks motel accommodation for herself and her young daughter. 3. $20,000 in damages for distress and inconvenience. 4. Legal costs incurred in obtaining legal advice from Coleman & Grieg Solicitors and the costs incurred engaging Mr Nakhla.
12. Both parties made opening addresses setting out their respective positions. The respondent's Counsel made clear that the respondent would be arguing that the applicant failed to give a reasonable opportunity to the respondent to comply with the orders of 4 March 2021; and that even if the respondent had complied with the orders the applicant had failed to file and serve any updated report of Mr Nakhla setting out the condition of the premises and cost of rectification after the date of expiration of the orders on 29 April 2021.
13. The applicant stated that Mr Nakhla was available to give evidence at the hearing on 30 June 2021 until lunchtime; and she sought for him to give oral evidence about the current condition of the premises (including events after his second inspection on 13 May 2021) and the cost of rectification.
14. The respondent opposed Mr Nakhla giving further oral evidence in circumstances where no updated report had been served after the report of 13 May 2021.
15. The Tribunal refused the applicant leave for Mr Nakhla to give further oral evidence in chief, in circumstances where to do so would not give the respondent an opportunity to properly consider and respond to any additional issues raised, and would be a denial of procedural fairness to the respondent.
16. The Tribunal informed the applicant that she could make an application for an adjournment to obtain a further report of Mr Nakhla that not only dealt with any further issues subsequent to his report of 13 May 2021, but any revised scope of works to rectify and revised cost of rectification. The Tribunal explained that the respondent would be arguing that the applicant had insufficient evidence to prove the cost of performing works to put her in the position that she should have been had the orders been complied with if the Tribunal found the orders had not been complied with and the non-compliance was not due actions of the applicant.
17. The applicant requested time to consider whether or not to make an adjournment application. The applicant was given time and the hearing was adjourned for a short period of time so that she could consider her position.
18. When the hearing recommenced, the applicant stated that she was not applying for an adjournment.
19. The hearing continued. The only persons who gave evidence and were cross examined were the applicant and Mr Williams. The respondent did not require Mr Nakhla for cross examination (had it done so, the Tribunal would have considered adjourning the hearing part-heard if Mr Nakhla was not available). The respondent also did not seek to cross examine the persons who had made statutory declarations in support of the applicant.

CONSIDERATION

1. Under s 48O of the HB Act, the Tribunal has power to make remedial orders in home building proceedings. Such powers include the power to order a party to perform work.
2. Section 48O of the HB Act is the power to make remedial orders. The relevant cause of action pertaining to this matter is the statutory warranties contained in s 18B of the HB Act. The substance of such warranties and the applicable legal test is discussed in Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd v Deacon [2017] NSWCATAP 185 at [46].
3. In proceedings involving the purported breach of statutory warranties under s 18B of the HB Act, the onus is on the homeowner to prove the breach; scope of works to rectify, and cost of rectification (Catapult Constructions Pty Ltd v Denison [2018] NSWCATAP 158 at [59]. If damages are awarded for the cost of rectification, the Tribunal assesses damages applying the well-established test in Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 at 617-618 ('Bellgrove v Eldridge') that the rectification is necessary to achieve compliance with the contract and a reasonable course to adopt.
4. Further, the statutory warranties in s 18B of the HB Act are for a period of 2 years from completion of the work (as defined in s 3B of the HB Act) in respect of non-major defects; and 6 years from completion of the works for major defects (s 18E of the HB Act). In this matter, the date of completion of the work is the date of the issue of the occupation certificate (s 3B (3) (c) of the HB Act); being 25 September 2019.
5. Accordingly, irrespective of the outcome of these proceedings, the applicant remains within the relevant limitation period in respect of major defects.
6. Schedule 4 Clause 8 of the NCAT Act states as follows: 8 Renewal of proceedings in respect of certain Division decisions … (2) If an order has not been complied with within the period specified by the Tribunal, the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal, within 12 months after the end of the period, stating that the order has not been complied with. (3) The provisions of this Act apply to a notice lodged in accordance with subclause (2) as if the notice were a new application made in accordance with this Act. (4) When proceedings have been renewed in accordance with this clause, the Tribunal - (a) may make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined, or (b) may refuse to make such an order.
7. …
8. The applicable principles pertaining to renewal applications under Sch 4 Clause 8 of the NCAT Act has been discussed by the Appeal Panel of the Tribunal in decisions including Blessed Sydney Constructions Pty Ltd v Vasudevan [2018] NSWCATAP 98; Bondarek v NSW Land and Housing Corporation [2018] NSWCATAP 299; and Minifie v Maxwell [2020] NSWCATAP 30 ('Minifie').
9. In Minifie the relevant principles were set out as follows at [38]-[40]: In making orders that are "appropriate" in renewal proceedings, the Tribunal may have regard to the orders originally made; the circumstances of non-compliance with those orders; the fact of the renewal application; and all relevant circumstances whether they occurred before or after the time the matter was originally determined: Vasudevan at [34]-[35]. In Vasudevan, the Appeal Panel stated at [35]: …A renewal application is, however, designed to deal with a situation where there has been non-compliance with the original order that the Tribunal thought was appropriate when the matter was first determined. The circumstances will inevitably have changed since that time, if for no other reasons than because there has been non-compliance with the order that had been made. What was appropriate originally may well not be appropriate at the time of the hearing of the renewal application. To limit the orders that could be made on renewal to those that would have been appropriate when the matter was originally determined would be likely to prevent the Tribunal from doing justice between the parties, having regard to the non-compliance with the original order and to any other circumstances that had changed materially since the proceedings were originally determined. This would render the right to renew proceedings ineffective in a significant number of cases. The Tribunal has a wide discretion in renewal proceedings to determine what are appropriate orders, including the power to make orders that could not have been made in the original proceedings because there was no power to make a particular order at that stage, but such a power has been enlivened by subsequent events: Vasudevan at [41]-[43]; Bondarek v NSW Land and Housing Corporation [2018] NSWCATAP 299 at [43]-[45]; [54] ('Bondarek'). In Bondarek, the Appeal Panel held that determination of what are "appropriate" orders in a renewal application does not involve re-hearing the original proceedings. The Appeal Panel stated at [44]-[45]: This interpretative assistance reinforces the purpose, object and context of the renewal power. It is not simply an aid to enforce the Tribunal's existing orders as clause 4(a) makes clear in its reference to "make any other appropriate order". There is no restriction in the clause to the existing material before the Tribunal or its existing findings on that material. Rather, it is to consider what to do next given non-compliance, but not to rehear the substantive merits already determined, and to do that on the basis of material put forward by the parties relevant to the issue of what to do next. As was said in Akratos v Papadopoulos [2016] NSWCATAP 139 at 36: the purpose of the renewal proceedings was to consider, in light of the fact that the original order was not complied with, what other appropriate orders it could have made when the matter was originally determined and not to reconsider the substantive merits of the respondent's building claim.
10. It is also implicit in work orders of the Tribunal that the party in whose favour the orders were made will act reasonably to allow the respondent to comply with the orders. If an order was not complied with because the respondent was not given a reasonable opportunity to comply with the order, the Tribunal may exercise its discretion not to grant any remedy to the applicant in the renewal application.
11. However, being given a reasonable opportunity to comply with the orders does not mean an applicant has to act perfectly or be on friendly terms with the respondent. The applicable test is whether, assessed objectively, a reasonable opportunity has been given to comply with the orders.
12. If the Tribunal is satisfied that orders have not been complied with, it must then consider the appropriate orders to make. In doing so, it is not "rehearing" the original proceedings in the sense of disregarding the orders made an allowing the parties to re-argue their original cases. However, although the Tribunal is not re-determining the "substantive merits" of the original proceedings, that does not preclude the Tribunal from considering the expert evidence in the original proceedings, particularly where the dispute involves building defects.
13. The Tribunal, in this matter, has had the benefit of hearing the expert evidence of Mr Nakhla and Mr Pickering on 4 March 2021 before the parties entered into consent orders.
14. The Tribunal must also, to determine whether orders of the Tribunal have been complied with, the orders that were purportedly breached. When interpreting a consent order, the Tribunal adopts an objective interpretation (the same principles applicable to interpreting the terms of a contract) focussed upon the meaning of the words used and how a reasonable person would interpret such words, not the subjective interpretation of the parties as to what they thought the orders meant.
15. Accordingly, the Tribunal must consider: 1. Whether the orders have been complied with? 2. If not, why not? 3. If the orders have not been complied with, what are the appropriate orders that should be made having regard to non-compliance with the orders and circumstances that have changed since the orders were made.

The Roof

1. There is no dispute that the orders were not complied with. The evidence of Mr Williams was that the emergency roofing works were performed (and associated works to repair and replace some of the damaged gyprock ceiling areas, including the area of the ceiling that collapsed after the water ingress issue in March 2021.
2. Mr Williams asserts that he performed temporary repairs to the roof on 24 March 2021 after the applicant had a confrontation with the roofing contractor he had sent, Mr Agius. There were also gyprocking and painting works performed on between 13 April 2021 and 24 April 2021.
3. Mr Williams asserts the applicant was verbally abusive and confrontational with sub-contractors the builder sent to the site and with the builder. Mr Williams asserts that the builder had difficulties obtaining quotations and having roofing contractors attend the site because the applicant was verbally abusive to them and they did not want to deal with her.
4. Mr Williams also states that on 29 April 2021 he had offered to pay the applicant "for a new roof" because he wanted to end the dispute, due to the difficulties of dealing with the applicant. Mr Williams had previously sent a quotation from TomKat Roofing to the applicant, in an amount for approximately $28,000 and this was basis for the offer to the applicant. At the hearing, the position of the respondent had changed and the respondent was only prepared to contribute 25% to the cost of replacing the roof assessed on the basis of the quote the respondent had obtained from TomKat Roofing.
5. It was clear from the evidence of Mr Williams that he did not accept that the roof was seriously defective, and that the works he intended to engage to comply with the work order did not necessarily involve the entire replacement of the roof.
6. However, the orders of the Tribunal, when assessed objectively, meant that the roof needed to comply with applicable Australian Standards and the Building Code of Australia, including the pitch of the roof. Contrary to the subjective belief of Mr Williams, that order was not merely to do limited works to the roof.
7. The evidence of the applicant was, in essence, that the builder was entirely at fault regarding non-compliance with the orders pertaining to the roof. She denied being verbally abusive to the builder or sub-contractors sent by the builder. According to her, the builder had not given adequate notice regarding persons attending the site, and did not accept the scope of works she thought appropriate to rectify the defects. The applicant conceded during oral evidence at the hearing that she "regretted" consenting to enter into the work order soon after it was made as she did not have faith in the builder.
8. The applicant also asserted that she felt "unsafe" when the builder and sub-contractors of the builder attended the site.
9. Having heard the evidence of the applicant at the hearing and the tenor of the contemporaneous emails of the applicant, the Tribunal does not accept that the builder did anything to make the owner feel unsafe or threatened. The Tribunal accepts that the applicant adopted a belligerent attitude towards the builder at times when he attended the property and his sub-contractors attended the property. The applicant undoubtedly has a strong, confident, and forceful personality. The applicant could have acted in a more pleasant and co-operative manner towards the builder and his sub-contractors, but her attitude and actions do not rise to the magnitude of failing to provide reasonable access to the premises so that the respondent had a reasonable opportunity to comply with the Tribunal orders.
10. However, the Tribunal does not accept that the applicant did not give the respondent a reasonable opportunity to comply with the orders regarding the roof.
11. Those orders were that the builder perform works that ensured the roof fully complied with relevant Australian Standards and prevented water ingress. To achieve compliance with the orders, the Tribunal is satisfied the roof required replacement.
12. The Tribunal does not accept the evidence of Mr Williams that only part of the roof had an inadequate pitch; that box drainage was sufficient; and that defects with the roof were not substantial.
13. The evidence of Mr Nakhla, together with the history of water ingress into the roof (including substantial water ingress in March 2021 a matter of weeks after the Tribunal's orders of 4 March 2021) clearly establish that the roof is significantly defective.
14. The appropriate orders are that the roof be replaced, together with replacement of damaged gyprock ceilings; cornices and wall areas. Such work is appropriate both by non-compliance with the orders of the Tribunal dated 4 March 2021 and the principles in Bellgrove v Eldridge.
15. Regarding the cost of rectification, the applicant has a number of quotes from licensed roofers in addition to the original assessment of quantum of Mr Nakhla. There is no reason to believe that Mr Nakhla would have changed his opinion regarding the cost of removal and replacement of the roof had he addressed this issue in his report of 13 May 2021, because he clearly still believed the roof needed to be removed and replaced.
16. The Tribunal disregards the quote obtained by the builder from TomKat Roofing, which was based on the respondent engaging the roofer rather than the applicant. The remainder of the assessments range from $33,220 to $53,776.85,
17. However, the quotations the applicant has obtained from licensed roofers do not include the cost of replacing and repainting water damaged gyprock. In his original report, Mr Nakhla included this item in the amount of $53,776.85. Page 23 of Mr Nakhla's original report contains a breakdown of the costing of the work, and the replacement and repainting of gyprock is identified as a cost of $3,930.
18. The Tribunal is satisfied the appropriate amount of damages to be awarded for the cost of removing and replacing the roof of the premises, and associated works to gyprock, is the quote that is in the approximate mid-range ($43,560) plus an additional $3,930 for the replacement and repainting of gyprock.
19. Accordingly, the total cost of roof replacement and associated work is $47,490.

Main Bathroom

1. Again, there is no dispute this order was not complied with.
2. The contemporaneous emails and correspondence between the parties makes clear that the applicant decided she did not want the builder to do works to the bathroom regarding the tiles, and was prepared to negotiate an outcome whereby a shower screen was to be installed and a payment of money made.
3. In regards to the negotiations, the contemporaneous emails between the parties supports the version of events set out in the affidavit of Mr Williams at paras [20]-[22].
4. The applicant, in her email to the builder's Solicitors dated 29 March 2021, refused to sign the Deed of Release provided in circumstances where it did not include certain things, including payment of $2,000 to the applicant for "inconvenience"; and a statutory declaration from Mr Williams warranting the works (which was not a matter discussed previously, and is unnecessary in any event due to the statutory warranties in s 18B of the HB Act).
5. In such circumstances, the respondent did not comply with the work order because of the ongoing negotiations, and representation by the owner that she did not want tiling works performed.
6. In these circumstances, both parties have contributed to non-compliance with the order.
7. However, on the evidence of the builder's own expert in the original proceedings Mr Pickering, there is defective work in the bathroom that requires rectification; and the work order that was made to the Tribunal clearly involves work being done, which will be at cost.
8. The Tribunal is not satisfied that the negotiations entered into by the applicant and representations made are such that she has waived (or is estopped) from any rights arising from the non-compliance with the work order; or that the Tribunal should exercise its discretion not to award her any damages for the cost of rectifying defects in the main bathroom.
9. Rather, when assessing Bellgrove v Eldridge principles, the applicants intention whether or not to carry out works "sheds light on whether the rectification is necessary and reasonable, because as Giles JA stated in Westpoint Management Ltd v Chocolate Factory Apartments Ltd; Chocolate Factory Apartments Pty Ltd v Westpoint Management Ltd [2007] NSWCA 253 at [48]: An intention not to carry out the rectification work will not of itself make carrying out the work unreasonable, but it may be evidentiary of unreasonableness; if the reason for the intention is that the property is perfectly functional and aesthetically pleasing despite the non-complying work, for example, it may well be found that rectification is out of all proportion to achievement of the contractual objective or to the benefit to be thereby obtained."
10. The above principle was approved in Cordon Investments Pty Ltd v Lesdor Properties [2012] NSWCA 184 at [229].
11. Considering the above the Tribunal returns to the evidence in the original proceedings of Mr Nakhla and Mr Pickering. Considering the actions of the applicant in negotiating with the respondent and the substance of those negotiations, the Tribunal is satisfied that what is necessary and a reasonable course to adopt (both in respect of compliance with the s 18B HB Act statutory warranties and the orders made by the Tribunal on 4 March 2021) is the scope of work and cost of rectification contained in Mr Pickering's report rather than the assessment of Mr Nakhla.
12. The cost of rectification of the bathroom is assessed as $5,607.66.

Windows and Bi Fold Door

1. The order of the Tribunal has not been complied with. The evidence of Mr Williams was that he could not arrange a suitable contractor to attend within the timeframe of the orders, partly by reason of the issues involving the roof and main bathroom.
2. This is not an appropriate reason to excuse failure to comply with the order of the Tribunal.
3. The applicant seeks a complete replacement in accordance with the original report of Mr Nakhla (with the cost identified in his report as $4,100). However, that report did not clearly explain why any defects in the windows and bi-fold doors required a complete replacement. Mr Pickering asserted that adjustment was an appropriate scope of works to rectify.
4. The orders of the Tribunal did not require the bi-fold doors be replaced, but rather adjusted.
5. The builder submits that $800 is the reasonable cost of adjustment. That is broadly consistent with Mr Pickering's costing.
6. The Tribunal is satisfied that appropriate order for the cost of adjustment of the windows/bi-fold doors is $800.

Cost of Moving Out of the Premises Whilst Rectification Work Is Performed

1. The applicant claims over $5,000 for the cost of moving out of the residence whilst rectification work is performed.
2. The only evidence that clearly states that the applicant (and her daughter) will need to move out is the quote of Andrew C Smith Carpentry and Constructions. That quote says it would "not be desirable" for the dwelling to be resided in whilst the roof was replaced, and the estimated duration of the work is 2 weeks.
3. The reports of Mr Nakhla do not address this issue, nor the other roofing quotes obtained by the applicant.
4. Considering that replacement of a roof of a dwelling involves major works, the Tribunal accepts that it is likely the applicant and her young daughter will have to move out for a short period of time. However, the Tribunal does not accept on the very limited evidence of the quote of Andrew C Smith Carpentry that the applicant will need to move out for 2 weeks.
5. Doing the best it can to assess loss on the evidence before it the Tribunal awards $1,000 for the cost of accommodation whilst remedial works are being performed.

Damages for Inconvenience and Distress

1. In appropriate circumstances, an owner can obtain an award of non-economic loss damages for inconvenience, and distress caused by a builder breaching the statutory warranties implied into all contracts of residential building work under s 18B of the HB Act. By reason of the High Court decision in Moore v Scenic Tours Pty Ltd [2020] HCA 17; (2020) 286 CLR 326, the threshold provisions under s 16 of the Civil Liability Act 2002 (NSW) do not apply.
2. Applicable principles for the award of such damages are discussed in Murphy v Zubkyrcki & Anor [2020] NSWDC 538 at [157]-[163] (in that case, $5,000 was awarded for non-economic loss damages due to inconvenience and distress of the owner).
3. Such damages are awarded for breach of contract, not breach of Tribunal orders. Accordingly, the Tribunal cannot 'double count' distress, anxiety and inconvenience caused by failure to comply with Tribunal orders by reason of the fault of the respondent (rather than, as with the issue of main bathroom, both parties were involved in the failure to comply with the orders) in addition to distress, anxiety and inconvenience caused by failure to comply with the statutory warranties under s 18B of the HB Act. Such damages are compensatory, not punitive.
4. The applicant emphasised at the hearing that she was very upset and distressed by reason of the defects in what she described as her "dream home". There was no medical evidence of any treatment for anxiety arising from the defects in the home.
5. The Tribunal accepts that there was a degree of distress and inconvenience caused by the respondent breaching its statutory warranties under s 18B of the HB Act by reason of the water ingress into the roof; in particular the significant water ingress incident in March 2021. The Tribunal is satisfied that the degree of distress and inconvenience is sufficient to justify an award of non-economic loss damages.
6. However, the amount sought by the applicant of $20,000 is not supported by the evidence and is manifestly excessive in all the circumstances of the matter.
7. The Tribunal awards the applicant $2,000 for non-economic loss damages.

Section 48MA of the HB Act

1. Under s 48 MA of the HB Act, the preferred outcome is that a builder who has performed defective work be ordered to rectify the defects. However, the preferred outcome can be departed from in appropriate circumstances.
2. Whether the Tribunal departs from the "preferred outcome" that the builder who performed the defective work rectify it involves the exercise of discretion (Leung v Alexakis [2018] NSWCATAP 11 at [139]; Robinson v Hindmarsh Construction Australia Pty Ltd [2021] NSWCATAP 51 at [66]). When exercising its discretion, the Tribunal may consider any relevant matter and give appropriate weight to any relevant matter. Such matters include whether the Tribunal can be confident any work order will be complied with and whether the builder has previously had a reasonable opportunity to rectify.
3. In this matter, there have previously been rectification orders of NSW Fair Trading which were not fully complied with; and work orders of the Tribunal. The relationship between the parties has irretrievably broken down. A further work order would only likely invite further disputation as to whether such orders have been complied with. It is entirely appropriate that there be finality by way of an order for damages.

The Issue of Costs

1. The applicant is the successful party in the proceedings. The applicant seeks payment of disbursements including legal advice obtained and fees of Mr Nakhla. Some of the costs sought relate to the original proceedings and some relate to the renewal proceedings.
2. It is not appropriate to determine the issue of costs at this stage. By reason of s 38 (5) of the NCAT Act, both parties should be given the opportunity to be heard on the issue of costs taking into account the orders and reasons of the Tribunal.
3. The Tribunal's orders contain a timetable for both parties to make submissions and provide documents on the issue of costs. Such submissions should address matters including: 1. Whether the applicant is seeking a lump sum costs order; the amount sought; and the invoices supporting such an amount. 2. The provisions of s 60 of the NCAT Act and Reg 38 of the Civil and Administrative Tribunal Rules 2014 (NSW). 3. Whether either of the parties seek a further oral hearing on the issue of costs and if so, why this should occur rather than the Tribunal determining the issue of costs on the papers in accordance with s 50 (2) of the NCAT Act.

Conclusion

1. In summary, the damages payable by the respondent to the applicant in the renewal proceedings are: Heads of Damages Amount Replacement of roof and associated works $47,490 Main Bathroom $5,607.66 Windows/Bi-Fold Doors $800 Future accommodation expenses $1000 Non-economic loss damages $2,000 TOTAL $56,897.66

ORDERS 1. The respondent Skyview Homes Pty Ltd is to pay the applicant Jacqueline Gai Millen the amount of $56,897.66 by 28 days from the date of this decision. 2. By 14 days from the date of this decision, the applicant is to file with the Tribunal and serve on the respondent, by person or by post, all documents and submissions relied upon on the issue of costs. 3. By 28 days from the date of this decision, the respondent is to file with the Tribunal and serve on the applicant, by person or by post, all documents and submissions relied upon on the issue of costs. 4. By 35 days from the date of this decision, the applicant is to file with the Tribunal and serve on the respondent, by person or by post, all costs submissions in reply. 5. Both parties have liberty to apply to the Tribunal in writing to vary the timetable for costs submissions.

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

Registrar 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 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: 15 February 2022