On 13 October 2012 the applicants entered into a contract with the second, third and fourth respondents to purchase a property which was to be built at [***] Girraween Road, Girraween. The property was purchased off the plan with additional upgrades and inclusions. The original price of the property without upgrades was $512,000.00 and with additional upgrades the price came to $521,000.00
The estimated date of completion was March 2013 but due to various delays the purchase was settled on 17 February 2014.
The applicants claim that they raised several issues during the construction of the property but they were advised that the matter would be addressed under cl. 14 of the special conditions to the contract for the sale of land. In July 2014 the applicants contacted the Office of Fair Trading and an inspector attended and provided reports to the builder and to the developers who had sold the property to the applicants. Some steps were taken to rectify certain issues but the rectification and completion works were not progressing satisfactorily.
[2]
APPLICATION
By an application filed on 29 December 2014 the applicants brought proceedings against the first respondent as the builder and the second, third and fourth respondents, or as the developers in respect of the property which they purchased off the plan at 73C Girraween Road, Girraween. They claimed a total sum of $71,282.74 being the cost of works referred to in the Scott Schedule in a sum of $65,282.74 together with an order to deliver and return or replace specified goods to the approximate value of $6,000.00. That sum appears to refer to upgraded items throughout the property which were allegedly paid for but not delivered.
A building inspection report was attached to the application together with photographs of a Scott Schedule and a Scott Schedule workings report.
The matter was listed for a directions hearing on 10 February 2015 when the first, second, third and fourth respondents were directed to file a copy of all documents including expert reports, witness statements and the Scott Schedule by 13 March 2015. A further order was made for the experts to consult with each other with a view to narrowing points of difference between them and setting out a schedule of agreed points and points of difference, by 27 March 2015.
The matter was listed again on 7 April 2015 when representatives of the applicant and the second, third and fourth respondents attended. It was claimed that rectification work was being undertaken and it was to be completed before 18 June 2015. The matter was stood over to a further directions hearing to enable this work to be undertaken and if appropriate, for the matter to be withdrawn.
When the matter was listed again on 30 June 2015 the second, third and fourth respondents were directed to deliver a copy of the approved plans for the building to the applicant by 7 July 2015. The applicants were directed to file and serve points of claim in respect of the remaining rectification works not completed by the respondent on or before 21 July 2015 and the respondents were directed to file points of defence in relation to the revised points of claim by 21 July 2015.
The respondents were directed to file and serve a revised Scott Schedule by 4 August 2015.
Orders were made for the applicants to file and serve all remaining evidence, including witness statements, by 21 July 2015 and the respondents to file and serve all remaining evidence including witness statements, by 28 July 2015. The Tribunal noted that the respondent, Ausko Building and Construction Pty Ltd had not appeared before the Tribunal on 7 April or 30 June and directed that if Ausko Building and Construction Pty Ltd did not comply with any of the directions of the Tribunal or appear, it would not have an opportunity to be heard in the defence of the claim and may have orders made against it in its absence.
On 27 July 2015 the second, third and fourth respondents sought an extension of time to submit documentation and file defences, noting that the main bundle from the applicants was not received until 24 July and claimed that an extension of a further 4 weeks were necessary so that a scope of rectification works allegedly agreed to could be completed. The application for extension of time was opposed by the applicants and it was pointed out that the building licence of Ausko Building and Construction Pty Ltd was suspended on 15 July, and that the licence was due to expire on 21 July 2015. On 4 August 2015 the second, third and fourth respondents were advised that the request for extension of time had not been granted and that they should comply with the procedural directions as soon as possible. The matter was thereafter listed for formal hearing before me on 17 August 2015. At the Hearing no application was made for any adjournment and no application was made to provide any evidence beyond that which had already been filed by the parties.
[3]
APPLICANT'S EVIDENCE
The applicants provided their documents in accordance with the Tribunal directions after seeking an extension of time for 2 days. The material included an initial expert report of Mr Richard Young, related to inspections undertaken on 28 April 2014 and 21 October 2014, together with photographs taken at that time and a Scott Schedule, along with workings to calculate the costings in the Scott Schedule. They provided a further expert report of Mr Young which was prepared following an inspection on 7 July 2015. That report incorporated further photos and a revised Scott Schedule which addressed works which had been done by the respondents in the intervening period.
The applicants also provided a schedule of the works which were incomplete as at 21 July 2015 and a report of Pietro Scalise, senior building inspector of the Department of Fair Trading, dated 18 August 2014. The schedule of some 66 complaints made at the time when the report was made to fair trading, was also included.
In addition, the applicants provided the contract for the purchase of the property which identified the second, third and fourth respondents as the vendors and the applicants as the purchasers. Emails were also produced, identifying issues which arose concerning problems with the property at the time of settlement.
Ms Shahin Sheikh gave evidence on behalf of the applicants and was available for cross-examination by the respondents. It was suggested that there were problems with the applicants refusing to provide access to the property but this was disputed by the applicants. In cross-examination on behalf of the respondents, it was suggested that there was an agreement to rectify only 20 items and that the developers were to be released from further liability on completion of those items. This assertion was disputed by Ms Sheikh on behalf of the applicants.
Mr Richard Young, building consultant, also gave evidence on behalf of the applicants and referred to his reports. In the Scott Schedule attached to his file report he identified matters which had been completed and those which had not been completed. He was questioned concerning the increase in rectification costs between his first Scott Schedule and his final Scott Schedule in July 2015. He responded by indicating that although some items had been completed, work which had been carried out in the main bathroom had increased the problems and gave rise to a necessity to carry out some additional work in that room. All of his costings were prepared by reference to the Master Builders Association recommended charge out rates and the schedule of rates as published by Cordell Building Costs, along with materials at cost. He allowed overhead and profit costs of 25%. His report also referred to a number of photographs that were taken at the time of each of his reports.
Mr Young was cross-examined by the representative from the developers, particularly in relation to the driveway, the floor in the bathroom and shower and the landscaping.
[4]
RESPONDENT'S DOCUMENTS
On 9 July Mr Viji Augustus submitted a letter to the Tribunal claiming to have personally handed over approved plans to the applicants. On Sunday 5 July 2015 he attached an A4 sized copy of the plan which contained no evidence of approval and he noted that the other drawings were copyright protected.
In a letter dated 11 August 2015 the second, third and fourth respondents provided a respondent's Scott Schedule in reply to the applicant's Scott Schedule. It was claimed that they did not have an opportunity to submit a respondent's expert report as the timeline given wasn't sufficient to obtain such a report. It is to be noted that the applicants provided an initial expert report when the application was filed and when the matter was before the Tribunal on 10 February 2015 the respondents were directed to provide a copy of all documents, including expert reports, witness statements and Scott Schedule by 13 March. The senior member then directed further that the parties' experts should consult with each other with a view to narrowing points of difference between them.
No application for an adjournment was made and no explanation was given for the failure to provide an expert report by 13 March 2015 or at any time thereafter.
An email from a gentleman known as Aidan Mulreaney dated 10 August 2015 and thereafter sent from David Rashan to Viji and Shanthi Augustus, suggested that he had been "trying for weeks now to get into 73C Girraween Road to finish the bathroom". He claimed to have been told that the next available time to access the bathroom was Sunday 23 August 2015. That document is not in the form of a statement, affidavit or statutory declaration as required and there is no material to suggest whether Mr Mulreaney was a tradesperson or a labourer.
The second, third and fourth respondents also attached a response to the applicants' Scott Schedule. The party responsible for preparing the response has not been identified and the comments referred to therein on behalf of the respondents are not supported by a report or an expert's opinion.
Although the comments in the respondents' reply to Scott Schedule are not supported by any expert opinion, the issues raised in those comments will be considered and weighed against the expert reports and Scott Schedules prepared on behalf of the applicants.
It is to be noted that the first respondent did not provide any evidence or any response to the claim at all.
[5]
DECISION
It has not been disputed in the present case that the second, third and fourth respondents were developers within the meaning of s. 3A of the Home Building Act 1989. I am satisfied that for the purposes of subsection (2) "residential building work" was being done in a building or residential development where 4 proposed dwellings would be owned by the partnership comprised of the second, third and fourth respondents.
S18C of the Act provides as follows;-
18C warranties as to work by others
(1) a person who is the immediate successor in title to an owner builder, a holder of a contractor licence, a former holder or a developer who has done residential building work on the land is entitled to the benefit of the statutory warranties as if the owner builder, holder, former holder or developer were required to hold a contract licence and had done the work under a contract with that successor in title to do the work.
(2) for the purposes of this section, residential building work done on behalf of a developer is taken to have been done by a new developer.
Section 18B of the Act details the warranties which apply to residential building works in the following terms;
18B warranties as to residential building work
(1)the following warranties by the holder of a contractor license or a person required to hold a contractor license before entering into a contract, are implied in every contract to do residential building work;
(a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract;
(b) a warranty that all material supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new.
(c) a warranty that the work will be done in accordance with, and will comply with, this or any other law.
(d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time.
(e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling, or the repairing, renovation, decoration or protective treatment of a building, the work will result to the extent of the work conducted, in a building that is reasonably fit for occupation as a dwelling.
(f) a warranty that the work and any materials used doing the work, will be reasonably fit for a specified purpose or result, if the person from whom the work is done expressly makes known to the holder of the contractor, licenser or person required to hold a contract license or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holders or persons skill and judgement.
The applicants are clearly successors in title within the meaning of s. 18C and it is appropriate to deal with each of the items set out in the Scott Schedule prepared by Mr Young to determine any liability of the second, third and fourth respondents. There is no expert opinion to contradict the views expressed by Mr Young in his two reports but it is necessary to review his findings in the light of the issues that have been raised, without the benefit of expert opinion, in the reply of the respondents. In The Owners - Strata Plan No. 68372 v Allianz Insurance Limited [2014]NSWSC 1807 Bell J was required to consider the effects of s. 18C of the Act in relation to warranties implied by s. 18B and His Honour concluded;
27…the effect of s. 18C is to make…the developer strictly liable for any breaches by the builder of the warranties implied by s. 18B of the Home Building Act. It does that by deeming the developer to have done the work which was done by the builder pursuant to the contract between it and its immediate successor in title.
Mr Richard Young, on behalf of the applicants provided an expert report and Scott Schedule following inspections on 28 April 2014 and 21 October 2014 and a further expert report and Scott Schedule following an inspection on 7 July 2015 after certain works for rectification or completion had allegedly been carried out by or on behalf of the respondents. The report following the inspection on 7 July 2015 represents the final report of defective or incomplete work which, in Mr Young's view remains unresolved.
The respondents prepared a document in the nature of a Scott Schedule which purported to reply to each of the items in the applicants' final Scott Schedule although the respondents' schedule was unsupported by any expert report or any quotes or costings.
In dealing with the claim by the applicants in this matter, it is appropriate to refer to each of the sub paragraphs in the final revised schedule prepared by Mr Young and to address only those item numbers where a specific claim has been made and addressed a particular claim in the context of other information and I propose to deal with the applicants' claim in that matter.
Item 1(a) The applicants claim $7,353.60 for rectification of driveway levels. The respondents claim that the work was completed by them at their own cost. Accepting the report of Mr Young, I allow the sum claimed by the applicants, namely $7,353.60. Items 1(b) to 1(d) inclusive have been included in this sum.
Item 1(e) Rectify water discharge from electrical conduit under the metre box when it is raining. A sum of $335.96 is claimed by the applicants for this. The respondents allege that the work was completed, however I accept the evidence of Mr Young and allow the sum of $335.96.
Item 1(f) Replacement of multiple colourbond fence panels at a cost of $545.16. The respondents contend that this was not an issue when ownership was transferred to the applicants and it is noted that it was not referred to in the Fair Trading report. There is however, evidence of at least two to three panels which are shown as damaged in the photographs. The Tribunal allows a sum of $175.00 in lieu of the $545.16 claimed, representing the cost of providing three panels and $100.00 in labour for installation.
Item 1(g) Cleaning of brickwork. The applicant claims $190.16 for cleaning of brickwork and the respondents claim that the brickwork was recleaned to bring closure to the matter. I am not satisfied by the photos that further cleaning would improve the position and the applicants' claim of $190.16 is disallowed.
Item 1(h) The applicants claim a sum of $657.84 to remove and re-lay brick window sills with even mortar joints and proper provision of weep holes. The respondents claim that the weep holes are not blinded but they are prepared to re-check. As the respondents are not licensed to carry out this work, I allow the sum claimed in line with the expert report of Mr Young. The respondents are to pay $657.84 under this part of the claim. This claim includes items 1(i), 1(j) and 1(k).
Item 1(l) Remove and replace step tread tiles in a workmanlike manner. The applicants claim a cost of $333.36 and the respondents claim that the tiles were installed at no extra cost. It is appropriate that the work should be completed in a proper and workmanlike manner whether or not it was paid for. I allow the sum of $333.36 claimed in the report of Mr Young. This amount includes item 1(m).
Item 1(n) Drainage ag-line at rear of block was not installed in a workmanlike manner. The applicants claim a sum of $457.44 to excavate the sub soil drainage line and connect to the drainage pit. Install metal aggregate to the sides and above the drainage lines. The respondents claim the ag-line was tested and was functioning correctly at the time of testing. I accept the report of Mr Young and allow the sum claimed, namely an amount of $457.44.
Items 1(o), 1(p), 1(q), 1(r), 1(s) and 1(t) have all been completed and no claim is made.
Item 1(u) Installation of adequate timber garden bed of supports with adequate support posts. The applicants claim the sum of $2,969.70. The respondents claim that the occupation certificate is sufficient certification that the landscaping had been appropriately carried out. They further note that they had agreed in good faith to provide a labourer for a day to carry out landscaping work. The cost they allowed was $250.00. The Tribunal accepts the opinion and costings provided by Mr Young and allows the sum of $2,969.70 which includes items 1(v) and 1(w).
Item 1(x) Removal and replacement of 230mm brick wall not constructed in a workmanlike manner. The applicant claims the sum of $1,386.88 to replace this wall in accordance with the estimate and costings prepared by Mr Young. The respondents simply note that the brick wall has been laid in compliance with appropriate standards. The Tribunal accepts the evidence and the costings of Mr Young and the sum of $1,386.88 is allowed.
41 Item 1(y) The applicants claim that the tank which has been installed is leaning due to subsidence at the base and a claim of $1,038.75 is made to rectify this problem. The applicant claims that the tank is within acceptable tolerances and that it is functional. This is not a proper answer to the claim made by the applicants' expert, and the sum of $1,038.75 is allowed.
Item 2(c) Install missing duct to exhaust fan. The applicants claim that a section of the fan duct is missing the fan whilst the respondent claims that the fan venting complies with relevant standards. The evidence of Mr Young and the expert report is preferred and the claim of $58.36 is allowed.
Item 2(e) Repair cuts to sarking. The applicants claim the costs of repairing the sarking with tape and the respondents merely indicate that it was repaired at the time of installation and ownership transfer. The respondents did however agree to a cost of $56.72 for this work.
Item 3(a) Seal hole in range hood. The applicants claim that the hole in the range hood duct has not been fully sealed and the applicant merely notes that the range hood and ducts are functional. The Tribunal allows the sum of $77.47 claimed on the applicants' expert report.
Item 3(b) The infill panel has not been installed between the dishwasher and the bench. The applicants claim that the dishwasher level has been adjusted, but screens are exposed inside the kitchen cupboard and a cost of $2,098.94 is claimed to remove screw fixings and install in a proper and workmanlike manner. The claim of $209.84 is allowed for this work, noting that $60.00 has been conceded by the respondent.
Item 3(d) Timber skirting missing inside wardrobes. The applicants claim $289.31 to install timber skirting where it is missing and to finish off the ends of the skirting with mitred return. The respondent claims that it can be rectified and the claim of $289.31 is allowed.
Item 3(f) The rectification of door binding a problem after missing screws installed. The respondent claims the doors are within acceptable tolerances and a claim of $67.47 has been made by the applicants' expert. It is noted that a similar problem exists in Item 3(n) where a further hour is claimed. It is appropriate to allow half an hour for each of these jobs and a sum of $33.74 is allowed for Item 3(f).
Item 3(g) Repair damage to door jam and restore paint finish. The respondents claim that there is no structural or functional issue. The Tribunal is satisfied claimed costs of $217.14 should be allowed to repair the damaged door jam and to restore the paint finish where the hinge was cut out.
Item 3(h) Bathroom shower leaks from under the hob onto the bathroom floor. The respondents contend that the shower cubicle was waterproofed and it was inspected by the private certifier. This item relates to the bathroom shower and in the initial Scott Schedule prepared by Mr Young, an allowance was made of $7,668.32. The scope of works remains the same in the revised Scott Schedule and there does not appear to be any basis upon which the claim should be increased to $13,245.56 for this item. I allow a sum of $7,668.82 for item 3(h).
Item 3(k) Rectification of the fall in the ensuite floor. The applicants claim a sum of $13,245.56 being the cost of necessary works including removal of all fittings including the shower screen, toilet pan, vanity and storage for reuse, the removal of all floor tiles and one row of walled tiles and waterproof the floor and retile with the falls in accordance with the building code. The respondents simply noted that the floor should be dry mopped and not washed with water and that the fall was acceptable. The claim of $13,245.56 is allowed which includes Items 3(l) and 3(m).
Item 3(n) Adjust door hinges. The respondent makes the same notation as in Item 3(f) and for reasons referred to in Item 3(f), it is appropriate to allow $33.74 in lieu of $67.47 because the doors referred to should properly be completed in a total of one hour.
Item 3(o) Repainting of a wall. The applicants claim that the wall above the wardrobe had different colour shades and needs repainting. Although the respondent has offered to carry out the painting work, the claim of $82.20 is not admitted. The Tribunal allows the assessed cost of $82.20.
Item 3(p) A claim of $1,509.90 is made by the applicants to fill holes and indentations and to sand, smooth and repaint the relevant wall. The respondents simply note that there was no such issue at the time of ownership transfer but suggested that the matter can be rectified. It is noted that none of the respondents are licensed to carry out the building work and accordingly the sum of $1,509.90 claim is allowed. The sum was not otherwise disputed as to its quantum, by the respondents.
Item 3(u) The applicants claim for the cost of an additional tap to be provided beside the toilet for washing purposes. It is noted the tap was to be connected to potable water and not tank water. The respondents suggest that the applicants are now demanding a tap to be replaced with a different model and they allow $150.00 for installation purposes only. The applicants' expert has costed the provision of plumbing pipes and tap wear for a total sum of $920.00 and this sum has been set out in working sheets. The claim of $920.00 is allowed.
Item 3(v) The applicants claim a sum of $166.68 for the installation of a decorative arch or corbel. The respondents have agreed to allow $150.00 for installation only, but in the circumstances it is appropriate to accept the estimate of the expert's witness which is only $16.68 hire.
Item 3(x) The applicants claim for the installation of a one way diaphragm to prevent discharge of water and suds through the laundry tub and floor waste sub. The respondents simply note that plumbing works had been installed in accordance with appropriate standards. The Tribunal allows the claimed sum of $128.33.
Item 3(y) Replacement of window sash or window. The applicants claim that bedroom one sliding window sash is unable to be adjusted to close and that accordingly the window will need to be replaced. A claim for replacement of the window in a total sum of $623.08 is made and the respondents simply indicate that at the time of ownership transfer, the windows were closing smoothly. The Tribunal allows the claim of $623.08.
Item 3(bb) The applicants claim a sum of $77.47 for replacement of defective sealant around the kitchen sink. The respondents claim that it is a housekeeping issue and that the sealant was functional at the time of ownership transfer. This is not a proper answer to the claim of defective workmanship and the sum of $77.47 is allowed.
Item 4(a) The applicants claim for rectification of a raw edge of plaster board above the garage door which requires adequate finish or trim. The respondents simply note that this is neither a structural nor a functional issue and again this response is not appropriate if defective or incomplete workmanship has been demonstrated. The Tribunal allows the sum of $234.94 for this item. The item includes matters separately referred to in Item 4(d).
A claim of $350.00 is made for rubbish removal after the works had been completed and when each of these items are totalled, a base sum of $40,691.93 is payable by the respondents to the applicants. It is appropriate to make an allowance of 25% for overhead charges and when these charges in a total sum of $562.98 are included, a total sum of $50,864.91 is arrived at. When GST of 10% is included, the total sum payable by the respondents to the applicant is $55,951.40 and it is appropriate to require payment of that amount by the respondents.
The applicants have been self-represented but it is noted that expert report costs relevant to the proof of this application have been incurred in a total sum of $7,480.00 inclusive of GST. The Tribunal and the respondents have all been provided with copies of each tax invoice and a summary of the total costs in accordance with directions which were made. Having perused the tax invoices and the summary, I am satisfied that it would not be appropriate for the monies payable to the applicants to be reduced by the cost of the experts reports which were necessary to allow the claim to be properly established. In the circumstances the respondents are ordered to pay the costs of the applicant in an assessed sum of $7,480.00.
There remains an issue as to whether the monies payable should be apportioned between all the respondents or whether some or all of the respondents should be required to pay the whole of the amount. The first respondent did not participate in the Hearing, other than to attend through its director when the matter was finally heard. No evidence has been provided by any of the respondents to assist the Tribunal in apportioning the claim and in the circumstances it is appropriate that the statutory warranties provided for by s. 18C of the Act against the second, third and fourth respondents. There is no evidence before the Tribunal to indicate whether attempted rectification work was undertaken by the first respondent, who was ultimately unlicensed, or whether it was undertaken by other persons engaged on behalf of the second, third and fourth respondents.
In the circumstances monies shall be payable by the second, third and fourth respondents jointly and severally.
Any issue between the second, third and fourth respondents and the first respondent can be addressed if the parties ever see fit to produce evidence to enable that issue to be properly considered.
J A Ringrose
General Member
Civil and Administrative Tribunal of New South Wales
22 September 2015
[6]
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: 09 October 2015
Parties
Applicant/Plaintiff:
Mohammed & Sheikh
Respondent/Defendant:
Ausko Building and Construction Pty Ltd & Augustus & Ravikumar & Roshan & Stanley