These reasons for decision relate to two sets of proceedings.
The original proceedings were filed by Porthaze Pty Ltd trading as Galley Kitchens as applicant. The respondents were Simon and Katrina friend. The amount claimed was $5,819.10.
In these reasons for decision I will refer to Porthaze Pty Ltd as the contractor and Mr and Mrs Friend as the owners.
The contractor initiated proceedings HB15/32089 on 11 May 2015.
On 30 June 2015 the owners commenced a cross application against the contractor claiming the sum of $29,063.10. The amount claimed was broken up into a request for an order that the owners did not have to pay the contractor the sum of $5,819.10 and an order that the contractor pay the owners $23,244.00.
The owners made an application to amend their application as follows:
1. work order to complete the outstanding defects;
2. costs of expert witness reports $4,100.00;
3. Costs for delays and compensation for damage to walls, $3,000.00; and
4. time in dealing with the proceedings, $700.00.
The contractor resisted the application for it to carry out a work order.
The proceedings were heard in Newcastle on Thursday, 17 December 2015. The owners were self-represented. The contractor had legal representation.
The disputes the subject of the two sets of proceedings arise out of a contract entered into on 23 October 2014 for the supply and installation of a kitchen and butler sink. The total contract price was $29,063.00. I find that the contract that the parties entered into was dated 23 October 2014 and a copy is annexure A to exhibit A. This is not disputed by the owners as stated in paragraph 8 of exhibit 6
There is a real dispute about whether the contractor performed the work the subject of the contract in a proper and workmanlike manner. There is also disagreement about the degree of severity of the contractor's defective work. Its expert has conceded defective work which will be discussed in detail later in these reasons. The contractor submits that it has made numerous attempts to rectify defects and to address the owners' concerns.
There is no dispute between the parties that the Tribunal has the jurisdiction to hear the proceedings and to make an order determining the claims made by each of the parties. I find that I have the jurisdiction to hear and determine the disputes under section 48K (1) of the Home Building Act 1989 (the 'Act').
The evidence in the proceedings was as follows:
1. Exhibit A, statement Paul Ray 25 September 2015
2. Exhibit B, expert report M Dorrough 30 November 2015;
3. Exhibit C, letter Fair Trading 3 November 2015;
4. Exhibit D, Scott schedule opinion of probable cost;
5. Exhibit E, photos A-D;
6. Exhibit F, email chain commencing 9 December 2015;
7. Exhibit G, bundle of quotes in applicants documents;
In HB15/41204, the owners' application the evidence was as follows:
1. Exhibit 1 contract dated 15 October 2014
2. Exhibit 2 Fair Trading Report;
3. Exhibit 3 Guide to Kitchen and Bathroom Construction;
4. Exhibit 4 bundle of emails 23 July 2015;
5. Exhibit 5 bundle of images 1-54;
6. Exhibit 6 response to P Ray's witness statement;
7. Exhibit 7 Dennis Barrett expert report 9 September 2015;
8. Exhibit 8 - Scott schedule 14 September 2015;
9. Exhibit 9 further bundle of emails;
10. Exhibit 10 supplementary report Mr Barrett 1 December 2015.
The amount of $5,819.10 claimed by the contractor is the balance due under the contract. The owners due not dispute that the amount has not been paid. They seek an order that they do not have to pay the amount claimed.
The owners' defective work claim as set out in its Scott schedule is for $30,610.00 including margin and GST. It can be seen that the owners' claim for the cost of rectifying alleged defects is greater than the cost of installing the kitchen and butlers kitchen.
At this point it is appropriate to say that the owners expert's opinion at page 5 of his report is that:
'due to the extent of defects mainly caused by inadequate checking of measurements including checking walls for square and plumb that the kitchen should be removed, remanufactured and newly installed to comply with Australian Standards and industry standards.'
The amount claimed by the owners, $30,610.00 relates to the cost of removal, and remanufacturing and installing the new kitchen.
The contractor's expert states:
'It is also our opinion that some individual items/components require rectification and/or replacement specified above. These rectification items are relatively minor compared with the full kitchen replacement as suggested by Dennis Barnett. I do not consider a full replacement is warranted. Full replacement is disproportionate to the minor nature of defects and imperfections noted.'
The contractor's solicitors provided an outline of submissions on behalf of their client. Some concessions have been made in that document. They are:
1. There was a substitution of different stone after the contract was entered into;
2. There was an accident which destroyed the island benchtop during installation;
3. The stone benchtops except the island benchtop were installed on 12 December 2014;
4. The contractor caused its subcontractor to replace the benchtop surrounding the kitchen sink. The replacement benchtop's for the island bench and sinks surround were installed on 27 January 2015. Cupboards were installed on 29 January 2015;
5. The contractor accepts that the mantle panel, the mantle cover panel and hinges of the Rangehood chimney ought to be replaced;
6. The contractor accepts that compensation or to be allowed for the cost of a new cover panel.
[2]
The defective work claim
The owners claim that the works were performed in a way which breached section 18B of the Act.
At the time the contract was signed, 23 October 2014, Section 18B implied the following warranties into the contract:
'The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work:
(a) a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract,
(b) a warranty that all materials 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 dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling,
(f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, 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 holder's or person's skill and judgment.'
The owners engaged Mr D. Barnett a building expert to prepare a report for them on the kitchen installation. I accepted Mr Barnett's report dated 9 September into evidence as exhibit 7 and his Supplementary Report dated 1 December 2015 as exhibit 10. I accept Mr Barnett as an expert able to give opinion evidence in the Tribunal. I note that in exhibit 7, Mr Barnett refers to the 'Tender Document & Terms of Agreement' as being at Attachment 3 of his report. At attachment 3 is a document 15 October 2014 which is different to the contract which the owners concede that they entered into with the contractor. The drawings to attachment 3 may be the same as the drawings in the contract dated 23 October 2014. However the first page was not included in the contract dated 23 October 2014.
The contractor engaged Mr Dorrough to prepare a report for it on the kitchen installation and to respond to Mr Barnett's report. Mr Dorrough's report dated 30 November is exhibit B and his report entitled 'Scott schedule and Opinion of Probable Cost Workings is exhibit D. I accept Mr Dorrough as an expert able to give opinion evidence in the Tribunal.
Exhibit D contains a Scott schedule which sets out the owners' expert's defect items and costings and the contractor's expert's comments and costings. The result is that, as stated, the owners claim $30,610.00 including margin and GST for defective work. The contractor's expert has valued the defective work at $4,856.50 inclusive of GST.
Given the substantial difference between the experts I will consider each of the 40 separate defect items which make up the owners claim. I note that there is agreement between the experts on a number of the defects.
In providing his response to the defect items raised by the owners' expert, the contractor's expert has on a number of occasions stated:
'no material damage arising because the utility of the item has not been diminished'
While that may be the opinion of the expert, the Tribunal is ultimately responsible for the determination of the owners' claim. In my view the determination of the owners' claim pursuant to section 48K (1) of the Home Building Act must be made in accordance with appropriate legal principles.
The statement of the contractor's expert that 'no material damage' arises because the utility of the item has not been diminished does not in my view have any relevance to the question of whether or not there has been a breach of a statutory warranty. As a result if I find that the owners have established a breach of a statutory warranty, or if the contractor's expert concedes that a defect exists, I will assess the damages that arise out of the breach, despite the contractor's expert's opinion that no material damage arises because the utility of the item has not been diminished.
I will first consider whether the evidence establishes on the balance of probabilities that there has been a breach of one or more of the statutory warranties which are referred to above.
The relevant principles in relation to discharging the burden of proof in civil cases were recently summarised by the New South Wales Court of Appeal in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [55] as follows:
'(1) A finding that a fact exists (or existed) requires that the evidence induce, in the mind of the fact-finder, an actual persuasion that the fact does (or at the relevant time did) exist;
(2) where on the whole of the evidence such a feeling of actual persuasion is induced, so that the fact-finder finds that the probabilities of the fact's existence are greater than the possibilities of its non-existence, the burden of proof on the balance of probabilities may be satisfied;
(3) where circumstantial evidence is relied upon, it is not in general necessary that all reasonable hypotheses consistent with the non-existence of a fact, or inconsistent with its existence, be excluded before the fact can be found; and
(4) a rational choice between competing hypotheses, informed by a sense of actual persuasion in favour of the choice made, will support a finding, on the balance of probabilities, as to the existence of the fact in issue.'
[3]
Work order
There is an issue in these proceedings about whether or not a work order should be made in the owners favour.
The owners' application was lodged in the Tribunal on 30 June 2015. At that time section 48MA of the Act stated:
'Rectification of defective work is preferred outcome in proceedings
A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.'
The contractor's witness Mr Ray whose evidence is exhibit A, stated at paragraphs 45 and 46 of his statement:
'Between 23 October 2014 and April 2015, myself and Gallery Kitchens tradesmen and sub contract stone masons have attended Mr and Mrs Friends New Lambton home between 15 and 20 times to install and undertake rectification works. On every occasion myself and my staff were the subject of persistent hostile and rude comments by Mr and Mrs Friend and constantly interrupted with criticisms and directions. During or after each visit, we received further complaints in respect of our work, some restating existing complaints and some new complaints.
I have staff who have asked not to attend the New Lambton property again. I personally do not wish to attend to the New Lambton property again.'
The owners do not accept the contractor's evidence and state that only 10 visits occurred. They also state that the contractor's conduct was aggressive.
I accept Mr Ray's evidence as extracted above. Relevantly, in a letter to the Office of Fair Trading which is annexure H to exhibit A, the manager of the contractor states:
'After speaking with Steve our installer he expressed his distress to have to return to the side as they are rude, nasty and told him on his last visit if he is unable to make decisions then perhaps he should not attend this site. We felt it unfair to send him to a site that caused anxiety and distress.
'Rest assured we tried very hard to get this job over and done with and have them suitably happy but we feel this will never happen. The whole time we are there they inspect every movement made, they sit and make notes and they constantly berate us and our company.
I have no one including Paul who is willing to go back to that site and be treated like scum.'
This evidence pre-dates and supports Mr Ray's evidence. It is a document which was created before the proceedings were initiated. I have given weight to it as a contemporaneous document. I accept its content as being accurate.
In final submissions the contractor's solicitor stated that his client would rather pay rectification damages than return to the owners' property because of the difficulties that it had experienced in the past, as stated in Mr Ray's evidence.
Despite the fact that section 48MA of the Act provides that I am to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome, I must balance that principle with Mr Ray's evidence which is that:
1. He and the contractor's tradesmen and sub contract stone masons have attended the owners premises a number of times to install and undertake rectification works;
2. Both he and the contractor's staff have no wish to return to the site, because, I infer, of persistent hostile and rude comments and constant interruptions, criticisms and directions by the owners.
The principle that rectification of the defective work by the responsible party is the preferred outcome, not the mandatory outcome. Section 48O of the Act states:
'In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate'
In the circumstances of these proceedings as disclosed by the evidence, and in accordance with the discretion given to me by section 48O of the Act, I consider that it is appropriate to make an order that the respondent pay damages for breaches of the contract or section 18B of the Act, rather than carry out work pursuant to a work order.
Given that I have decided to make an order that the respondent pay damages for breach of contract or section 18B of the Act, I will assess the damages which the owners will suffer as a result of any breaches as may be found.
I will deal with each of the alleged defects in turn. In that regard I am proceeding on the basis of exhibit 8 which is a Scott schedule prepared by the owners' expert and exhibit D which is the Scott schedule which the contractor's expert has prepared, using exhibit 8 as a base, and completing the columns, Respondent's Comments and Estimate of Loss.
If these exhibits do not record each defect item set out in the owners' expert's report which is exhibit 7, I have proceeded on the basis that a defect item which may be in exhibit 7, but which has not been included in exhibit 8 and responded to in exhibit D is not pressed.
[4]
Item 1 Rangehood
The owners claim $17,367.00 in connection with this item. The contractor concedes $3,390.00. There are 21 separate defects that constitute the owners complaint in respect of this item. They are described below.
Item (i). The range hood and overhead cupboard unit is installed out of plumb. The contractor's expert agrees and acknowledges a breach of AS/NZS 4386.2:1996. I find for the owners.
Item (ii). The wall the range hood and overhead cupboard unit is installed against an out of plumb wall. The contractor's expert acknowledges the wall is out of plumb by 15mm. The contract between the parties provides that the owner agrees that any cover strips or new panels required due to a room being unreasonably out of square or plumb will be charged as an extra and that the contractor will advise the owners if cover strips or new panels are required and at what cost.
I have interpreted these contractual provisions to mean that the contractor would be responsible for the cost of cover strips or new panels due to a room being out of square or plumb, except where a room was unreasonably out of square or plumb in which case the owners would be liable for the cost of the cover strips or new panels. In accordance with this interpretation I will proceed on the basis that the onus lies on the contractor if it asserts that a room was unreasonably out of square or plumb.
In addition I have interpreted the contract to mean that where a room was out of square or plumb, the contractual intention was that cover strips or new panels would be provided to address the out of square or lack of plumb feature of the room in which the kitchen was to be installed.
The owners' expert refers to these provisions, but maintains that the contractor breached a statutory warranty. The reasons for that conclusion are not stated. On the evidence that there is in connection with this item which is an agreement between the experts that range hood and overhead cupboard unit is installed against an out of plumb wall and having regard to the provisions of the contract to which I have referred, I have formed the conclusion that the contractor should have covered the gap between the wall and the range hood and overhead cupboard with either a cover strip or a new panel, and in failing to do so breached the implied warranty at section 18B(a) of the Act.
Item (iii). The overhead covered front panel door that supports the mantle is bowed. The contractor's expert agrees and recommends the replacement of the panelled door. I find for the owners.
Item (iv). The overhead cupboard front panel door that supports the mantle is out of alignment with the shelving and is not flush. The contractor's expert agrees and recommends in conjunction with item (iii), the replacement of the panelled door to match the unit's width. I find for the owners.
Item (v). The overhead cupboard front panel door hinges are not adequate for the weight of the door on the door panel has dropped and is dangerous. The contractor's expert disagrees, but recommends that the door be replaced in conjunction with item (iv) and adequate lift mechanisms be installed. I find for the owners.
Item (vi). The corbelled supports for the mantle fixed to the range hood and overhead cupboard unit face panel are loose. The contractor's expert agrees that there is slight movement to the mantle and recommends adding additional fastners. I find for the owners.
Item (vii). The cupboard shelving units behind the range hood panelled face door are inaccessible. The contractor's expert acknowledges the shelving units are inaccessible and recommends addressing this item in conjunction with item (v). I find for the owners.
Item (viii).The cupboard shelving and drawer units to the range hood are not constructed in the same manner as the under bench and overhead cupboards and the remainder of the kitchen. The contractor's expert disagrees.
This defect is based upon the owners' expert's observation that a thin layer of laminex had been attached to the side of the cupboard unit and was inconsistent with other kitchen cupboard unit units installed. The laminex was stated to be bubbled due to poor adhesion qualities. The owners' expert further states that the exposed laminate edge was not in accordance with the contract agreement as exposed surfaces were required to be of craftwood having pencil rounded edges coated in polyurethane. The contract which I find is annexure A to exhibit A, does not provide for exposed surfaces to be of craftwood having pencil rounded edges coated in polyurethane, as stated by the owners' expert. The contract does provide for laminex white 200 edges.
Given the owners' expert's reference to an incorrect contractual provision, I find that the owners have not proved established a breach of contract or the breach of a statutory warranty on the balance of probabilities, as referred to in paragraphs (1) or (2) of the citation from Nguyen v Cosmopolitan Homes referred to above.
Item (ix). The range hood and overhead cupboard unit face panel does not extend down to cover the extraction fan apron. The contractor's expert acknowledges this. I find that this is a concession that the item is defective and that there has been a breach of a statutory warranty.
Item (x). The exposed side/end panels of the range hood cupboard unit are a single sheet of Laminex placed over stacked shelving, and have buckled. The contractor's expert acknowledges that side/end panels are a single sheet of Laminex as stated in the contract and the external corners are finished poorly. Given that the contractor's expert concedes that the external corners are finished poorly, I will find that this work is in breach of section 18B(a) of the Act.
Item (xi). The exposed side/end panels are not two pack coated craftwood and the edges are not pencil round finish in accordance with the contract. The contractor's expert acknowledges these complaints but states that the 'unit' has been manufactured as per the contract. The owners' expert does not specifically refer to the contractual requirements for two pack coated craftwood or a pencil round finish. I note that the contract requires doors to be 'Hawksberry White 200 Satin Polyurethane with Pencil Round Edges'. However this defect item does not relate to doors. Given the owners' expert's has not referred to the specific contractual provisions on which he relies, I find that the owners have not proved this defect on the balance of probabilities as referred to in paragraphs (1) or (2) of the citation from Nguyen v Cosmopolitan Homes referred to above.
Item (xii). The exposed side/end panels of the range hood and overhead cupboard unit are not scribed to the wall. The contractor's expert agrees and states that an infill panel or cover strip ought to be installed in conjunction with item (xvii). Having regard to the provisions of the contract to which I have referred, I have formed the conclusion that the contractor should have covered the gap between the wall and the exposed side/end panels of the range hood and overhead cupboard unit with either a cover strip or a new panel, and in failing to do so breached the implied warranty at section 18B(a) of the Act.
Item (xiii). The exposed side/end panels of the range hood and overhead cupboard unit and drawer fronts and the edging and not colour matched. The contractor's expert disagrees.
Item (xiv). The sculptured feet under the range hood and overhead cupboard drawer units and sculptured capping are not colour matched. The contractor's expert disagrees.
There is little evidence before the Tribunal in connection with items (xiii) and (xiv). The photographs taken by the owners expert are not conclusive enough to establish to my satisfaction, in light of the contractor's expert's disagreement, that the owners have proved this defect on the balance of probabilities as referred to in paragraphs (1) or (2) of the citation from Nguyen v Cosmopolitan Homes referred to above.
Item (xv). The sculptured capping to the overhead cupboards is not continuous around the range hood and is short leaving a large gap filled with sealant. The contractor's expert agrees and recommends remedial work in connection with the short piece. I find for the owners.
Item (xvi). The bulkhead over the range hood and overhead cupboard unit is not flush with the face of the range hood cupboard unit. The contractor's expert agrees, but states that the unit has been constructed in accordance with the contract. Mr Ray for the contractor at paragraph 13 of exhibit A states that the bulkhead has been installed exactly as stated in the contract. The owners' expert has not demonstrated specifically how the installation of the bulkhead over the range hood and overhead cupboard does not comply with the drawings. All he states is that the current installation is unconventional and unsightly. In the face of evidence from the contractor and its expert that the bulkhead has been installed exactly as stated in the contract, I find that the owners have not proved this defect on the balance of probabilities as referred to in paragraphs (1) or (2) of the citation from Nguyen v Cosmopolitan Homes referred to above
Item (xvii). The contractor installing the kitchen has cut the windowsill nosing board adjacent to the range hood and left a significant gap. The contractor's expert agrees and recommends remedial work. I find for the owners.
Item (xviii). The extraction fan within the range hood and cupboard unit is not ducted to the external wall or roof. The contractor's expert agrees, but states that this was not an obligation imposed on the contractor under the contract. The contract provided at the f) that:
'Unless shown, electrical and plumbing is not included in price and can be organised by Galley Kitchens or the customer themselves.'
On this basis I find that it was not a term of the contract that the contractor would carry out this work. This defect item is dismissed.
Item (xix). The extraction fan is not sealed or properly installed with unfilled gaps to the perimeter. The contractor's expert acknowledges but states that the gaps are bridged by other factors. I accept the contractor's expert's evidence that the gaps are bridged. This defect item is dismissed.
Item (xx). The extraction fan infill apron mould is damaged. The contractor's expert agrees and recommends replacement of the perimeter infill. I find for the owners.
Item (xxi). The range hood is not adequately held in position. The contractor's expert disagrees. There is no evidence to support this defect. As a result, I dismiss this item.
[5]
Defects included within the $17,367.00 claim
There are other defect items, the cost of which is included in the owners' claim of $17,367.00. Those defect items are dealt with below.
[6]
Item 2
Item 2. There are six items that make up item 2 for which $8,250.00 is claimed and which is included in the sum of $17,336.31 claimed in connection with item 1. The contractor makes no concessions as regards the amount of $8,250.00 as referred to.
Item 2(i). The owners' expert states that the stone benchtops are not level or correctly aligned at the joints. The contractor's expert acknowledges this, but states that the benches are broken up into 4 areas and the joint is consistent throughout. In connection with the 4 areas, the contractor's expert states:
1. the benchtop above the dish washer washing machine cupboard is 2mm out of level over the length of a 1200 mm long bench top;
2. the benchtop from the from the corner cupboard to the sink is out of level 3.144 mm over a benchtop length of 450 mm and from the cooktop to the corner it is approximately 1 mm out of level over the length of a 450 mm benchtop;
3. the benchtop above the six bank of drawers is level over a benchtop length of approximately 1800 mm; and
4. each short end of the benchtop above the island bench was 1.5 mm out of level over the length of an 800 mm benchtop and that a 1800 mm benchtop side was level.
I accept the contractor's expert's evidence in connection with this defect item. The reasoning process used by the owners' expert at page 17 of exhibit 1 is a generalised statement illustrated by 4 photographs which, I find, do not make out the general proposition that the stone benchtops are not level. In addition the owners' expert's evidence concerning the pooling of water is not substantiated by photographic evidence or measurements relating to the sink areas. The contractor's expert has taken detailed measurements which indicate that the benchtop's are either level, or out of level to a minor degree over areas ranging from 450mm to 1800 mm. There is no evidence before me to establish that minor variances in levels would constitute a breach of any of the warranties in section 18B of the Act.
I would also add that I have had regard to paragraphs 29 and 30 of Mr Ray's statement which states that the contractor became aware that the benchtops were not level on 29 January 2015, and then arranged for the sub-contractor responsible for the supply and installation of the benchtops to have its 'best installer' attend the premises on 12 February 2015 to rectify the out of level benchtops. I accept this evidence which supports the finding that the benchtops are either level or out of level to a minor degree.
Item 2(ii). The owners' expert states that the stone benchtops are not the same thickness affecting joins and alignment. The contract stated that benchtops would be 40mm. While there was a change in the type of stone benchtops there was, on the evidence, no change to the specified thickness. The difference in the thickness of benchtops is 3mm. The contractor's expert acknowledges this, but states that benches are broken up into 4 areas with each area being consistent, so far as thickness is concerned.
The evidence is clear that the 3 mm difference in benchtops was not in accordance with the contract. The owners do not raise an issue that the benchtops are 3mm less than specified and for that reason alone they seek damages They allege that the difference in thickness contributes to the benchtops being out of level and alignment particularly at the joins. I have dealt with the out of level issue above. The contractor's expert's evidence that benches are broken up into 4 areas with each area being consistent so far as thickness is concerned gives rise to doubt that the benchtops do not align at the joins.
I find on the evidence that is available as referred to above that the owners have not established on the balance of probabilities that the thickness of the benchtops has caused the benchtops to be out of level, or not to align at joins.
I dismiss this aspect of the owners' case.
Item 2(iii). The owners' expert states that the bench edge overhangs are inconsistent and vary from 16 mm to 23 mm overhangs. The highest that this issue can rise is that the owners' expert states that the inconsistent overhang of the benchtop visually affects the alignment with the under bench cupboard units. The contractor's expert acknowledges this, but states that benches are broken up into 4 areas with the benchtop overhangs being consistent on each individual run. I find that the owners have not produced evidence that the differences between benchtop overhangs was either not in accordance with either the drawings or specification, or that this aspect of the works was not carried out in a proper and workmanlike manner.
Item 2(iv). The owners' expert states that joins in the stone benchtop vary between 1mm and 3mm and joins have cracked. The owners expert relies upon a HIA guide which states that joins should be 0-2mm with a maximum variation of + 1mm. I interpret the HIA guide to be that taking into account permitted variation in width, joins should be in the range of 0-3mm.
On the owners' experts own evidence the joins are in the range of 1-3mm and therefore compliant with the HIA guide.
The contractor's expert states that benches are broken up into 4 areas with the benchtop joins appearing fine with no visible evidence of cracking.
The owners' expert has not produced photographic evidence of cracks in joins. Given the lack of photographic evidence and having regard to the contractor's expert's evidence that there is no visible evidence of cracking, I find that the owners have failed to prove this defect on the balance of probabilities as referred to in paragraphs (1) or (2) of the citation from Nguyen v Cosmopolitan Homes referred to above
Item 2(v). The owners' expert states that the benchtop width varies from 650 mm to 660 mm on either side of the kitchen sink. The owners' expert agrees, but states that benches are broken up into 4 areas with benchtop width being consistent with out of square walls. The owners have not produced evidence that the differences between benchtop width on either side of the kitchen sink was either not in accordance with either the drawings or specification, or that this aspect of the works was not carried out in a proper and workmanlike manner. This aspect of the owners' claim is dismissed.
Item 2(vi). The owners' expert states that the sink is cracked requiring the removal and replacement of the benchtop. The contractor's expert agrees that the sink is cracked. However there is a dispute between the parties about which of them is responsible for the cracked sink. There is little evidence regarding the cracking of the sink. The facts emerges from exhibit F that the supplier of the sink despite taking the position that the cracks in the sink were caused by the owners' plumber over tightening the waste fitting, supplied a replacement sink. As I understand the owners' case, their claim is in relation to the cost of installing the new sink.
The only evidence that has been drawn to my attention regarding the cause of the cracking of the sink is that from the sink supplier that the cracks in the sink were caused by the over tightening the waste fitting. The contract which is annexed to Mr Ray's statement provides at condition (f) that plumbing is not included. Based on the evidence in exhibit F and the terms of the contract referred to, I find that the contractor did not connect the sink to the plumbing and the cracks in the sink were not caused by the contractor and were most likely caused by the owners' plumber. As a result I find that the contractor is not liable for the installation of the replacement sink.
[7]
Item 3
Item 3. The defect is stated to be that the bulkheads as installed are setback an average of 105 mm from the face of the sculptured moulding and do not match the display kitchen. The amount of $637.00 is claimed in connection with this item. However that cost is included in the cost for item 1.
Mr Ray's statement which is exhibit A deals with this issue at paragraphs 14 - 19. The owners' response is exhibit 6.
The contractor's evidence is that the bulkhead had been installed exactly as detailed in the contract between the parties and in the same way as the example in its showroom. The contractor stated that the owners were unhappy with the look of the cupboards beside the chimney over the rangehood, but a compromise was reached between the parties. As a result some additional work was done by the contractor at no cost to the owners. The work carried out by the contractor was the installation of another strip of moulded capping on top of the existing capping which extended the capping up higher and left less bulkhead showing, which would address the issues raised by the owner.
In paragraph 17 of his statement Mr Ray states that the owners stated in response to his proposal 'OK that will be fine let's go with that.'
The owners' response to these paragraphs and their expert's report relies upon an assumption that the contract between the parties included a requirement that the work to be undertaken by the contractor would match the display kitchen in the contractor's showrooms. The contract between the parties which I find is annexure A in exhibit A does not include a term or condition that the work to be performed would match the display kitchen in the contractor's showrooms. The work to be performed was described in the contract and detailed with some precision in the three drawings that were attached. The contractor was obliged by condition c) which related to it, to complete the works as per the plans and specifications attached.
I accept Mr Ray's evidence and in particular his evidence at paragraph 13 that the bulkhead had been installed exactly as detailed in the agreement and in the same way as the example in the showroom, but the owners wanted it to look different.
If the owners allege that there has been some breach of the contract in connection with the bulkhead units, it is necessary for them to identify the respects in which the bulkheads as constructed were not in accordance with the drawings and specifications. They have not done this, nor has their expert.
For these reasons, I dismiss item 3 of the owners' defect claim.
[8]
Item 4
The owners' expert states that there were defects found to the island bench. The sum of $1,869.00 is claimed in connection with these defects.
Item 4(i). The owners' expert states that the island bench has not been positioned evenly on the featured kickboard and quirk margins vary excessively. The contractor's expert acknowledges that the quirk margins vary on each change of direction, but offers the comment that they are parallel on each section. The owners' expert's opinion is based on paragraph 10.03 of the Guide to Standards and Tolerances 2007. I accept his evidence, which is confirmed by the contractor's expert.
Item 4 (ii) The owners' expert states the corner joints in the kickboard are cracked and gaps are present. He does not state the dimension of the gaps. Paragraph 10.01 of the Guide to Standards and Tolerances 2007 states that gaps in excess of 1mm are defects. The contractor's expert acknowledges that the corner joints in the kick board are cracked and gaps are present, but states that cracks vary between 0.1mm and 0.25mm. I accept his evidence which leads to the conclusion that since the observed gaps are less than 1mm, there is no defect.
I find that the contractor has carried out the work of positioning the island bench on the featured kickboard in breach of section 18B(a) of the Act since it has not been positioned evenly and the quirk margins differ contrary to paragraph 10.03 of the Guide to Standards and Tolerances 2007.
So far as rectification costs are concerned the contractor's expert's Opinion of Probable Cost does not provide an assessment of rectification costs. The owners' expert addresses this defect item in exhibit 10.
I will allow the sum of $1,869.00 in connection with this defect item since it is the only quantum evidence there is.
[9]
Item 5
The owners' expert states that an uneven gap has occurred between the sink apron piece and the adjoining under-bench cupboard unit. The amount of $1,303.00 is claimed in connection with this defect item. He further states that the apron piece under and beside the sink bowl is too tight and too long forcing the side of the joining cupboard unit to bow. He states that the installation has resulted in a distorted cupboard unit due to a lack of care and skill during installation on the part of the contractor. The contractor's expert disagrees with the owners' expert. He states that the left side of the apron piece abuts the side panel of the dishwasher space matching the infill piece adjacent and above the dishwasher. He states that the right side has an even gap allowing for the normal operation of the corner cupboard door to eliminate the door binding on the apron piece.
The experts are unable to agree on this defect item. The distortion that the owners' expert photograph 49 shows is minimal. Given the conflicting evidence of the experts and the lack of clear evidence of the distortion to which the owners' expert refers, I find that the owners have not proved this defect to the standard required, as referred to in paragraphs (1) or (2) of the citation from Nguyen v Cosmopolitan Homes referred to above.
[10]
Item 6
This item relates to the supply and installation of screw cover caps. Both experts agree that some screw cover caps have not been installed. The amount claimed for this item is $57.00. This is a very minor issue.
I will make an order for $57.00 in the owners' favour in connection with this item.
[11]
Item 7
The owners' expert states in connection with this defect that the glass panels to the overhead cupboards have not been beaded in and exposed edges of the cut out are not adequately paint sealed. The sum of $283.00 has been claimed in connection with this item
The contractor's expert acknowledges this, but states that the glazing has been installed using a silicon type glazing adhesive and does not require beading in a small piece of glass.
I prefer the evidence of the owners' expert in connection with this item primarily because photo 52 of the owners' experts report, exhibit 7, demonstrates the matters raised by him.
I will allow the owners the sum of $283.00 claimed in connection with this item on the basis that it is the only evidence available as to the rectification of the defect item.
[12]
Item 8
This item relates to the overhead cupboards. The owners' expert states that the overhead cupboards and mouldings are not installed to the plan detailed drawings and the cupboards are not fitted neatly or tight into the corners with significant gaps of up to 25mm between the cupboard units mouldings and the wall lining. He further states that there is no evidence on the design drawings that indicates that the room area provided for the installation of the kitchen has been checked for square or that the walls are plumb and true. Further, he states that there are no notations on the plans that walls are to be straightened or plumbed by the owner before the installation of the kitchen. He also offers the opinion that the completed installation of the cupboard joinery is poor and unprofessional and has not been installed with that due care and skill. He further refers to AS 4386 clause 5.1 which states that irregularities between units and walls are to be filled by scribed infill panels of matching material.
The amount of $824.00 is claimed in connection with this defect.
In an undated letter to a senior building inspector of the Office of Fair Trading which is annexure H to exhibit A the contractor stated that the overhead cupboards were built to the exact size required by the contract. The contractor stated that the cupboards 'are off the wall in places due to them insisting they be installed in in an incorrect position. However as they insisted, we made the capping and bulkhead to suit how they want them installed.' This evidence is I find an admission that the work of installation was deficient, but due to the owners insisting that it be done in a certain way. There is no evidence that the contractor told the owners that their instructions would lead to an unsuitable outcome.
Section 18F of the Act states:
'In proceedings for a breach of a statutory warranty, it is a defence for the defendant to prove that the deficiencies of which the plaintiff complains arise from:
(a) instructions given by the person for whom the work was contracted to be done contrary to the advice of the defendant or person who did the work, being advice given in writing before the work was done'
In the absence of written advice from the contractor to the owners that their instructions would lead to an unsuitable outcome, it is no defence to the owners' defect claim for the contractor to state that the cause of the defect was their instruction.
The contractor's expert effectively concedes that some work is defective as he states that an amount of $400.00 should be allowed in connection with this defect item.
The contract between the parties provides that cover strips or new panels required due to a room being out of square or plumb will be provided. The contractor does not state that the room was unreasonably out of square.
For the reasons expressed above, I find that the contractor carried out the work the subject of this item either in breach of the contract or in breach of section 18B(a) of the Act. So far as rectification costs are concerned, the contractor' expert assesses the cost at $400.00. The owners' expert assesses the cost at $823.49 on a removal and replacement basis, while the contractor's expert proceeds on a repair basis.
For the reasons which are provided later in connection with the preferred rectification methodology, I will make an order in the owners' favour in the sum of $400.00 in connection with this item.
[13]
Item 9
Item 9. This item relates to the plasterboard wall linings having been damaged. The owners' expert states that rectification is required to remove the benchtop and dispose and repair the plasterboard wall lining, remeasure and install a new benchtop and paint wall linings. The owners' expert also states that on inspection the kitchen bench top was found to be oversize with visible damage to the plasterboard wall lining. The owners' expert states that he understands that to install the benchtop, the installer cut out the plasterboard wall linings so the benchtop would fit and the wall lining remains unrepaired. An amount of $461.00 is claimed in connection with this item and is included within the sum of $17,336.31 claimed in connection with item 1. The contractor's expert concedes $240.00 in connection with this item. He states the stone benchtop was in fact manufactured as per the contract but the wall adjacent was out of square over 650 mm by 8 mm. It seems that damage to the adjacent plasterboard is conceded, but the contractor's expert states that the repair is of a minor nature.
So far as rectification costs are concerned, the owners' expert assesses the cost at $461.00. The contractor' expert assesses the cost at $240.00. The experts' repair methodology is basically the same. However the owner's expert's methodology and allowances are more detailed and extensive. I will allow the larger sum of $461.00 on the basis that it will provide the owners with the opportunity to have all aspect of the work involved carried out in the best possible manner.
[14]
Item 10
The defect is stated to be that the sculptured capping above the overhead cupboards has split at one location and the entire sculptured capping and bases are not the same paint colouring as the exposed faces of the bench cupboards and overhead cupboards including sides and edges. An amount of $1,395.00 is claimed in connection with this item. As with other items referred to above, that amount is included within the sum of $17,336.31 claimed in connection with item 1. The contractor's expert does not agree that there is a defect stating that the splitting was not visible on his inspection and the sculptured capping is colour matched.
I have had regard to exhibit 9, photographs, 16 and 26 as well as the photograph P58 in exhibit 7. On the basis of this photographic evidence I find that the owners have made out this item so far as the paint colouring issue is concerned. As I understand the rectification methodology, the split in the sculptured capping will be rectified as part of the overall methodology. The owners are successful in connection with this item.
The only evidence of rectification costs in relation to this item is provided by the owners' expert in exhibit 10. I will allow the sum of $1,395.00 on the basis that it is the only evidence there is of the rectification costs.
[15]
Item 11
The owners expert states that the under bench cupboard doors to the corner cupboard unit are bowed and the door margins are excessive and exceed 5 mm. An amount of $447.00 is claimed in connection with this defect.
The contractor's expert disagrees that the doors are bowed and states that it was not visible during his inspection. However, he does concede the door margin was 5 mm at the base adjacent to the oven but states this requires a small adjustment to the hinge assemblies for the purposes of rectification. He costs this work as $60.00.
There is a dispute about whether the cupboard doors to the corner cupboard unit are bowed. The contractor's expert agrees that the door margins vary and states that all that is needed is an adjustment.
The photographic evidence P59 in exhibit 7 is of no assistance in ascertaining whether the doors are bowed.
Given the conflicting evidence of the experts and the lack of clear evidence of the bowing to which the owners' expert refers, I find that the owners have not proved this defect to the standard required, as referred to in paragraphs (1) or (2) of the citation from Nguyen v Cosmopolitan Homes referred to above.
However the contractor's concedes that the adjustment which he says is required will cost $60.00. I will make an order in the owners favour in that amount.
[16]
Item 12
The owners' expert states that the under bench cupboard containing the dishwasher and washing machine are loose and water damaged. The amount of $431.00 is claimed in connection with this defect.
The contractor's expert acknowledges that the side panels are loose that the adhesive sealant's that were used have failed. He estimates that the sum of $325.00 is appropriate for the rectification of this defect.
The experts have broken down their estimated rectification costs. I will allow the owners the larger sum on the basis that the difference between the expert is approximately $100.00 and the larger sum will ensure, so far as possible, that the owners can have the work carried out within the cost allowed.
[17]
Item 13
The owners' expert states that the shelf of the overhead cupboard above the fridge is sagging and the design of the shelf is not fit for purpose in accordance with AS 4386.1. He estimates that the sum of $608 is required for rectification of the defect.
The contractor's expert acknowledges of the shelf has a 2.5mm bow over a 950 mm span x 400 mm deep. The contractor's expert has provided a detailed analysis of AS 43896.1 clause 8.5.3 which deals with shelves and the bottoms and tops of wall units. He concludes that the 2.5mm bow is within the tolerance set out in clause 8.5.3 of AS43896.1.
I prefer the contractor's expert's detailed evidence based on the requirements of AS 43896.1 in preference to the owners' expert's generalised complaint that the shelf of the overhead cupboard above the fridge is sagging which does not analyse the deflection of the shelf as required by AS 43896.1.
This defect item is dismissed.
[18]
Item 14
This is a complaint made by the owners' expert that he considers the tender and the contract unfair and not in accordance with the Act because there is no provision in the agreement for a variation.
The contract was dated 23 October 2014.
There is no substance to this complaint raised by the owners' expert.
If anything this evidence discloses that the owners' expert acts as an advocate for the owners in relation to item 14, and perhaps more broadly.
Part 1 of Schedule 3 of the Home Building Regulation 2014 does not require a contract to have a variation provision. It states that if there is a variation provision:
'Any agreement to vary this contract, or to vary the plans and specifications for work to be done under this contract, must be in writing signed by or on behalf of each party to this contract'
[19]
Assessment of damages
The case of Bellgrove v Eldridge (1954) 90 CLR 613 establishes that where there are defects caused by a breach of a contractual obligation, the damages to be awarded are the costs of rectification, provided the rectification works to be carried out are both necessary under the contract, and reasonable. Otherwise, damages are to be assessed on the diminution in value of the property in question. In this case damages based on diminution in value do not seem to me to be relevant. Nor is there any evidence of diminution.
In Bellgrove v Eldridge the High Court stated:
'Subject to a qualification to which we shall refer presently the rule is, we think, correctly stated in Hudson on Building Contracts, 7th ed. (1946), p. 343. "The measure of the damages recoverable by the building owner for the breach of a building contract is, it is submitted, the difference between the contract price of the work or building contracted for and the cost of making the work or building conform to the contract, with the addition, in most cases, of the amount of profits or earnings lost by the breach". Ample support for this proposition is to be found in Thornton v. Place [1832] EngR 767; (1832) 1 M & Rob 218 (174 ER 74) ; Chapel v. Hickes [1833] EngR 95; (1833) 2 C & M 214 (149 ER 738) and H. Dakin & Co. Ltd. v. Lee (1916) 1 KB 566 . (See also Pearson-Burleigh Ltd. v. Pioneer Grain Co. (1933) 1 DLR 714 and cf. Forrest v. Scottish County Investment Co. Ltd. (1915) SC 115 and Hardwick v. Lincoln (1946) NZLR 309 ). But the work necessary to remedy defects in a building and so produce conformity with the plans and specifications may, and frequently will, require the removal or demolition of some part of the structure. And it is obvious that the necessary remedial work may call for the removal or demolition of a more or less substantial part of the building. Indeed - and such was held to be the position in the present case - there may well be cases where the only practicable method of producing conformity with plans and specifications is by demolishing the whole of the building and erecting another in its place. In none of these cases is anything more done than that work which is required to achieve conformity and the cost of the work, whether it be necessary to replace only a small part, or a substantial part, or, indeed, the whole of the building is, subject to the qualification which we have already mentioned and to which we shall refer, together with any appropriate consequential damages, the extent of the building owner's loss. (at p618)
The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt'.
As stated above the owners expert's opinion at page 5 of his report is that:
'due to the extent of defects mainly caused by inadequate checking of measurements including checking walls for square and plumb that the kitchen should be removed, remanufactured and newly installed to comply with Australian Standards and industry standards.'
The amount claimed by the owners, $30,610.00 relates to the cost of removal, and remanufacturing and installing the new kitchen.
The contractor's expert states:
'It is also our opinion that some individual items/components require rectification and/or replacement specified above. These rectification items are relatively minor compared with the full kitchen replacement as suggested by Dennis Barnett. I do not consider a full replacement is warranted. Full replacement is disproportionate to the minor nature of defects and imperfections noted.'
The owners will be entitled to damages to remove and replace the kitchen if that is 'the only practicable method of producing conformity with plans and specifications'.
As stated in Bellgrove v Eldridge the owners must establish that course is both necessary and reasonable.
I find that the issue in this case is to resolve the question of which of the competing options, the demolition and replacement of the kitchen, or the carrying out of the repairs advocated by the contractor's expert is necessary to 'produce conformity with the plans and specifications'.
If I find that the demolition and replacement of the kitchen is necessary to ensure 'conformity 'with the plans and specifications' the next issue is to ascertain whether that is a reasonable course to adopt. In considering that question, should it arise, I will have regard to the decision of the High Court in Tabcorp Holdings Pty Limited v Bowen Investments Pty Limited [2009] HCA 8 (12 February 2009) where the court discussed reasonableness as referred to in Bellgrove v Eldridge.
The evidence of the owners' expert has not induced in my mind an actual persuasion that the demolition and replacement of the kitchen is necessary to produce conformity with the plans and specifications. My reasons for coming to this conclusion are as follows.
First, not every item alleged to be defective by the owners in reliance on their expert's report has been found in their favour for the reasons that I have provided above. Because of this I have formed the conclusion that since the number of defects as found has diminished, so has the basis for the kitchen to be removed remanufactured and re-installed. There is I find no overwhelming reason for the removal of the kitchen as opposed to carrying out appropriate repairs.
Secondly, the owners' expert states:
'due to the extent of defects mainly caused by inadequate checking of measurements including checking walls for square and plumb that the kitchen should be removed remanufactured and newly installed to comply with Australian Standards and industry standards.'
I have found that the contract properly interpreted or construed provided for the provision of cover strips or new panels at the contractor's cost where the room was out of square, or not plumb. As a result I find that in accordance with the contract the contractor should provide for the cost of cover strips or new panels, where necessary. To put it another way, I find that since the contract anticipated the use of cover strips or new panels if the room was out of square or not plumb, rectification should proceed on that basis, in so far as the basis of a defect is out of square or out of plumb, not on the basis of removal and replacement.
[20]
Findings in owners' favour
For the reasons stated above, I find that the carrying out of appropriate repairs and rectification will produce conformity with the plans and specifications. As a result I will award the owners damages based on the rectification of defects.
However there is an obstacle to this path in that the contractor's expert's Opinion of Probable Cost in exhibit D only provides an estimate of rectification costs in connection with certain defect items. I have found that the contractor carried out defective work, not conceded by the contractor's expert and as a result not costed in the Opinion of Probable Cost.
The owners' expert's costing assessment is based on the removal and replacement of the kitchen which I have decided not to accept.
The issue to be resolved is how to assess the damage sustained by the owners where the evidence does not address the costs to rectify the particular item.
I propose to adopt the approach set out in Fink v Fink (1946) 74 CLR 127, at 143, per Dixon and McTiernan JJ CLR where Dixon J. stated:
'Where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy it provided for breach of contract, an award of damages.'
I will use, where possible, the totality of the costing evidence to assess the damages, despite the fact that some of that evidence adopts a removal and replacement methodology. I have decided to adopt this approach to overcome the position that in certain instances the contractor' expert does not provide an estimate of rectification cost.
I have found for the owners in connection with items 1(i), (ii ), (iii ), (iv), (v ) (vi) (vii), (ix), (x), (xii), (xv), (xvii),, and (xx).
The contractor's expert's Opinion of Probable Cost assesses that the sum of $3,390.00 is the rectification cost in connection with defect items (iii), (v) (vi) (xii) (xvii) and (xx).
In addition the contractor's expert states that the costs referred to above will also allow rectification of other items, such as item (iv) and (vii).
The following items found in the owners favour have not been costed, (i), (ii) (ix), (x), and (xv). The owners' expert's assessment of costs in connection with these items does not offer a breakdown of these costs but as stated is based on a remove and replace basis which I have rejected. Given that there is no evidence which addresses the rectification costs of these items and since the owners' expert's evidence does not assist me, I will allow the owners $780.00 plus GST of $78.00 in connection with these items which is made up of 2 hours labour per item at the higher rate of $60.00 per hour as used by the contractor's expert ($600.00) and 3 x cover strips or infill panels at the rate of $60.00 ($180.00) as stated by the contractor's expert.
The total amount awarded in connection with item 1 is $3,390.00 + $858.00 = $4,248.00 based on the reasoning above.
Defect item 2. For the reasons provided, the owners have failed to prove their claim for item 2.
Defect item 3. For the reasons provided, the owners have failed to prove their claim for item 3.
Defect item 4. The owners have been successful in connection with defect item (1) but not (ii). I have found the rectification costs are $1,869.00.
Defect item 5. For the reasons provided, the owners have failed to prove their claim for item 5.
Defect item 6. The contractor's expert has conceded this item. I have allowed the amount assessed by the owners' expert, $57.00.
Defect item 7. For the reasons provided, the owners have been successful in connection with this item. I will allow the amount assessed by the owners' expert, $283.00.
Defect item 8. For the reasons provided, the owners have been successful in connection with this item. I will allow the amount assessed by the owners' expert, $400.00.
Defect item 9. The contractor's expert has conceded this item. I will allow the amount assessed by the owners' expert, $461.00.
Defect item 10. For the reasons provided, the owners have been successful in connection with this item. I will allow the amount assessed by the owners' expert, $1,395.00.
Defect item 11. The contractor's expert has conceded that $60.00 is the appropriate amount of rectification costs. I have accepted his evidence and will make an order in favour of the owners in that amount.
Defect item 12. For the reasons provided, the owners have been successful in connection with this item. I will allow the amount assessed by the owners' expert, $431.00.
Defect item 13. For the reasons provided, the owners have failed to prove their claim for item 13.
Defect item 14. This item was dismissed.
On the basis of the findings above the damages awarded in the owners' favour are as follows.
Defect Number Amount found in owners favour
$4,248.00
Nil
Nil
$1,869.00
Nil
$57.00
$283.00
$400.00
$461.00
$1,395.00
$60.00
$431.00
Nil
Total $9,204.00
[21]
The owners have also claimed $3,000.00 for delays and compensation to damage to walls and $700.00 for their time taken up in the proceedings.
The contract did not provide a time for overall completion. The result is that there will be a term implied that the work was to be completed within a reasonable time. However the contract did provide:
'Stone benchtops are by others and a manufacturing time of 7-10 working days is required after installation of kitchen.'
For the reasons set out in exhibit A, there were difficulties with the stone benchtops and the fact is that they were not installed within 7 - 10 working days.
I find that the contractor breached this term of the contract in the manufacturing time of 7-10 working days for the benchtops was exceeded. However, there is no evidence about how damages of $3,000.00 have been incurred by the owners.
I will award the owners nominal damages of $100.00 for this breach of the contract.
The owners claim for $700.00 for their time taken up in the proceedings is dismissed on the basis that litigants are unable to recover for the time and effort expended in bringing proceedings before a Court or Tribunal.
For the reasons stated In HB 15/41204, I order the contractor to pay the owners the sum of $9,304.00 immediately.
In HB 15/32089, I order the owners to pay the contractor the admitted balance due under the contract of $5,819.10 immediately.
[22]
Costs
Section 60 of the Civil and Administrative Tribunal Act 2013 (the 'Act') provides that:
'Costs
(1) Each party to proceedings in the Tribunal is to pay the party's own costs.
(2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.
(3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following:
(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
(d) the nature and complexity of the proceedings,
(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
(f) whether a party has refused or failed to comply with the duty imposed by section 36 (3),
(g) any other matter that the Tribunal considers relevant.
(4) If costs are to be awarded by the Tribunal, the Tribunal may:
(a) determine by whom and to what extent costs are to be paid, and
(b) order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis.
(5) In this section: costs includes:
(a) the costs of, or incidental to, proceedings in the Tribunal, and
(b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.'
I only have the jurisdiction to award costs under section 60 if I am satisfied that there are special circumstances warranting an award of costs.
Rule 38 of the Civil and Administrative Tribunal Rules 2014 provides:
'This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal.
(2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if:
(a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10 (2) of Schedule 4 to the Act in relation to the proceedings, or
(b) the amount claimed or in dispute in the proceedings is more than $30,000.'
Rules 38 applies to proceedings HB 15/41204 because while the owners application was for $29,063.00 the amount claimed was amended to $30,610.00, the total amount as stated in exhibit D.
I will make the following orders in HB 15/41204 in relation to the owners' expert's costs of $4,100.00.
Any costs application pursuant to section 60 of the Civil and Administrative Tribunal Act 2013 or rule 38 of the Civil and Administrative Tribunal Rules 2014 must be lodged in the Tribunal and served on the costs respondent within 21 days of the date of the orders in these proceedings either attaching or referring to the documents relied upon in support of the application.
The costs respondent will have 21 days after the date of receipt of the costs application referred to above, to lodge in the Tribunal and serve on the costs applicant the submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.
The cost applicant will have 14 days after the date of receipt of the cost respondent's submissions to lodge in the Tribunal and serve on the costs respondent the submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon.
The Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal.
D Goldstein
Senior Member
Civil and Administrative Tribunal of New South Wales
1 April 2016
[23]
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: 03 June 2016