Sharma v Manhattan Custom Homes Pty Ltd [2025] NSWCATCD 89 | Case summary

NCAT Consumer and Commercial|2025-06-02

The parties entered into a NSW Government home building contract for work over $20,000 on 2 April 2022. There was a deficiency in the contract in that clause 1 which was intended to refer to the specifications, plans and other documents which depicted or described the works was not completed.
In these reasons I will call the applicant the 'owner' and the respondent the 'contractor'.
These proceedings were instituted on 30 October 2023. The applicant sought orders that the respondent return to his property and commence construction work within 14 days and complete the works without delay, free from defects within two months. An order was also sought that the respondent pay expectation damages. Later in Points of Claim, the relief sought was stated to be:

(a) an order that the contractor rectify all defective work within 13 weeks of the date of order;

(b) an order that the contractor was to complete the remaining works under the contract without any delay, free of defects, within seven weeks immediately following rectification of defective work; and

(c) in the alternative, if the builder was unable to comply with the above orders the contractor pay:

(i) $303,349.99 being the amount required to rectify defective works; and

The hearing took place on 23 August 2024. The evidence in the hearing was a bundle of documents, which was marked exhibit A. Exhibit B was a Written Directions Notice dated 21/11/2023. Exhibit C was a Written Directions Notice dated 31/10/2023. In accordance with Tribunal directions, the parties filed closing written submissions. A transcript of the proceedings was also provided.
There was an agreement between the parties that the documents which comprised the contract were the:

(a) Contractor's tender issued to the owner at the time of entering into the contract;

(b) the architectural plans by Ntach Pty Ltd issued for the construction certificate, referred to at pages 499 - 515 of exhibit A; and

(c) the original structural plans created by Statiker dated 8 February 2024, refer to pages 519 - 520, exhibit A.

There is no dispute between the parties that their respective claims are building claims for the purposes of the Home Building Act 1989 ('HBA') and that the Tribunal has the jurisdiction to hear and determine the claims.
There was no dispute between the parties that the respondent had ceased carrying out work under the building contract.
The jurisdictional basis for the orders sought by the owner is to be found in Section 48O(1)(c) of the HBA, which states:

(1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate -

(a)

(b)

(c) an order that a party to the proceedings -

(i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or

(ii) do or perform, or refrain from doing or performing, any specified act, matter or thing.

Clause 24 of the contract dealt with suspension of work by the contractor. It stated so far as is relevant:

"If the owner without reasonable and substantial cause:

denies the contractor or the contractor's sub-contractors access to the site so as to prevent the work from proceeding, or otherwise prevents the contractor from carrying on the work;

the Contractor may, without prejudice to any other rights under the contract, suspend the work by giving written notice to the owner in accordance with Clause 28. (Giving of Notices) specifying the reason."

"If the contract requires or permits a party to give a notice, consent, or other communication in writing to the other party, it must be given by either:

handing it to the other party

leaving it with a person apparently over the age of 16, at the party's business residential address, or

by registered post to the last known address of the other party."

The contractor's position as stated in its closing written submissions is that there has been no wrongful refusal by it to complete the building work. The contractor submits that the contract was validly suspended by written notice given to the owner on 21 November 2023.

There are two issues to be determined in connection with the contractor's notice of suspension. The first issue is whether the contractor was entitled to give the notice. Put another way were the facts and circumstances that existed in November 2023 or before then sufficient to provide a sound basis for the notice of suspension. The second issue is whether the notice of suspension was served in accordance with clause 28 of the contract and if the answer to that question is 'no', what are the consequences. The owner states in his submissions that he received the notice of suspension. No point is taken as to the manner of service.
On 21 November 2023 Mr PJ Kooner who was a director of the contractor sent an email to the applicant which responded to an email from the owner. The subject of the email was:

"Suspension of work - Written Direction Notice (WDN)"

The email referred to above was written by the contractor after the owner had commenced proceedings in this Tribunal. The email in part responded to an email sent by the owner on a date that is not referred to.
The email raised a number of issues. It referred to roofing work and then provided reasons why the contractor was not on site. Those reasons were:

(1) The owner was booking inspections by his certifier which were not required by the contractor;

(2) The certifier had gone behind the contractor's back and without any communication had issued a Written Direction Notice.

The 21 November 2023 email raised numerous matters not all of which were reasons which would support a notice of suspension. Importantly, the contractor proceeded on a misconception that it had engaged the certifier. I find that it was the owner who had engaged the certifier. The contractor admits this in its director's affidavit when at [16] he states:

"On 10 August 2022, Yucel Haydar, who was Ashish's appointed PCA ('Certifier) emailed me."

The reference to 'Ashish' in the extract above is a reference to the owner.
The contractor's misconception is illustrated in the following extract from its 21 November 2023 email:

(1) In 1), "i clearly mentioned that we will be able to call our certifier Yucel by the end of the week"; "Without our consent, Yucel the certifier was gone to the site on the 31 oct." (Emphasis added.)

(2) In 3), "The only reason you booked our private certifier behind our backs is because I ended up replying back to one of your emails very rudely." (Emphasis added.)

(3) In 4) "Yucel our certifier has gone behind our back end without any communication has issued a WDN notice." (Emphasis added.)

Other more relevant matters stated in the contractor's email were:

(1) At 1), "We have no control of works as you guys are hindering our works past 12 months."; and

(2) At 4), "As you have taken full control of construction site works, you have been demanding the works to be done your way at each and every stage the construction has progressed, our tradies have been intimidated by you day in and day out, there is no room for them to work, but we still we didn't wanted to let go and wanted to finish this project until you went to lodge a claim through ncat, while we were still progressing with the construction."

"We hereby suspend your works as we can not work in an environment where a client like you is getting involved with our tradies day in and day out and jumping on the roof and hosing the roof to check the leak while the works are not done, which has also caused the yellow tongue that we have installed to damage, we understand that you want to get involved every time our tradesmen are conducting works, we understand that you want the job to be perfect but in order for you to hinder our works, we need time to finish your work."

The notice of suspension was not the first time that the contractor had complained about the owner interfering with the contractor's tradesmen who I infer were subcontracted. On 14 October 2023 the contractor sent an email to the owner stating:

"From the day we have entered your site, every tradesman has complained. And said you are sitting on top of their heads and they are finding it very difficult to work. You don't give them any room to work.

YOU CAN'T BE THERE ON THERE HEADS ALL THE TIME WHILE THEY ARE WORKING.

This has constantly happened since the time we started building the site, while demolishing and after demolition

Now that we have started working on your site again, the behaviour has not changed.

The new brick layer has complained that you are standing all day right beside them and he is not wanting to come back, the new roofer has complained the day before yesterday.

My new Carpenter, who did your roof mentioned " he has he has anxiety coming to your site as you are right there trying to interfere in his work"

We are also having big difficulties to work with you. None of trades wants to go to your site and work and to mention these are all the new trades that are experiencing high level of interference from you."

The contractor's director gave evidence at [20] of his affidavit that:

"From the commencement of this project, Ashish, who would often work from home, constantly interfered with the works. This conduct progressively got worse as the time went by, to the point where he would supervise Manhattan's work at all times, including giving directions to subcontractors on what they should/should not do. This interference got to the point where we would be advised by tradespeople who had visited the property that they no longer wished to return to do any work because of the owner's involvement and constant harassment."

In his affidavit the owner denied the contractor's assertions that he had:

(a) interfered with the building work;

(b) issued directions to subcontractors; or

(c) harassed subcontractors or the builder's workers.

I accept the contractor's evidence of the owner's conduct. I regard the owner's evidence as contained in his affidavit as self-serving despite the fact that he was not cross examined. In particular, I place greater weight on the contractor's contemporaneous documents such as its emails of 14 October and 21 November both of which set out in plain terms the matters which the contractor was complaining of thereby providing a persuasive basis for the contractor's affidavit evidence. This approach is supported by the High Court decision in In Fox v Percy [2003] HCA 22 at [30]- [31], where the plurality stated:

"It is true, as McHugh J has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in an appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") :

'... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.'

Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical." (Emphasis added.)

The issue is as stated at [12] whether the contractor was entitled to give a notice of suspension or whether the facts and circumstances that existed in November 2023 or before then were sufficient to provide a sound basis for the notice of suspension.
I have construed the contractor's notice of suspension to be based on the ground that the owner had, to use the words in in clause 24, prevented it from carrying on the work. It is true that the contractor did not use the words contained in clause 24 in its notice. However the contractor in its closing submissions states that its suspension notice was based on those words in clause 24.
The issue is whether the owner's conduct which I find is primarily established by the matters referred to in the contractor's emails of 14 October and 21 November prevented the contractor from carrying on the work.
The contractor's submissions at [19] suggest that acts which impede or delay its progress are ones that that prevent it from carrying on the work. At [23] it was submitted that the owner interfered with and hindered the builder's progress in completing the works.
In Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58; (2005) 221 ALR 448, the High Court in considering a copyright case considered among other things the meaning of the word 'prevent' in context of s 10 of the Copyright Act 1968 at [137] as follows:

"A device is "designed ... to prevent" copyright infringement when it is the operation of the device (which must incorporate one of the two processes specified in the definition) that makes it impossible to do an act of copyright infringement."

I find that the word 'prevent' in clause 24 has a similar meaning as was found in the High Court decision referred to above. It means that the actions of the owner must have stopped the contractor from carrying on the work. I find that to stop, or prevent, the contractor from carrying on the work imposes a higher requirement than the owner impeding or delaying progress or hindering or interfering with progress. I further find that in construing the word 'prevent' in clause 24 there is not a range of conduct which constitutes prevention (from a minimum to a maximum) by which the owner might prevent the builder form carrying on the work. If that were the case, there would be substantial uncertainty as to what type of owner's conduct would be required in order for a contractor properly to suspend the work because the owner prevented it from carrying on the work. As a result the contractor was required to establish that it was prevented or stopped from carrying on the work.
The construction that I have arrived at is a consequence of the fact that if an owner does prevent a contractor from carrying on the work, clause 24 provides an extreme right, namely the suspension of the work which in turn provides a right of termination under clause 26.
The contractor has other and different rights if the owner causes delay by impeding or delaying progress, or hindering or interfering with progress or issuing instructions to the contractor's subcontractor's or employees. If the owner engaged in such conduct the contractor would be entitled to claim an extension of time under clause 7 for the cause 'any act or omission of the owner'. Such type of conduct allows a different right, as it will allow an extension of time, as does a suspension, but does not provide the contractor with termination rights, as compared to a suspension of work.
I find that the conduct that the contractor referred to in its email of 14 October and its notice of suspension dated 21 November did not reach the level of demonstrating that the owner had stopped or prevented it from carrying on the work. Nor did the contractor in those emails expressly state that the owner had prevented it from carrying on the work.
Having found that the contractor does not have a contractual right to suspend the work, I find that the contractual position is that the contract remains on foot because neither party has terminated it and there is no indication that either party has abandoned the contract.

Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 and Little v J & K Homes Pty Ltd [2017] NSWCATAP 84

The parties have referred to these decisions in their closing written submissions in connection with the Tribunal's power to make work orders while a contract is still on foot.
In Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 in an often cited extract, Ipp JA addressed the position in which the plaintiff sought damages for defective work when the contract remained on foot. The passage cited is at [68]:

"While, on this assumption (the Contract still being on foot), the Council may have been entitled to claim damages for delay arising out of Beckhaus' failure to achieve practical completion by the date for practical completion, it could not sue Beckhaus for defective or incomplete work. As long as the Council maintained that the Contract was alive and had not been terminated, and held Beckhaus to its obligation to complete the work in accordance with the specification, on its contention the work remained lawfully in Beckhaus' possession. In other words, it was an inevitable incident of the Council's argument that the work had not been delivered to and accepted by the Council (Beckhaus - on the Council's argument - being in possession of and obliged to complete the work). While the work was in Beckhaus' possession, the Council suffered no loss by reason of defective or incomplete work; the work, not being in the Council's possession, did not at that stage form part of its patrimony."

Brewarrina Shire Council v Beckhaus Civil Pty Ltd was considered by an appeal panel in Little v J & K Homes Pty Ltd. There it was stated at [22]:

"The principle for which the decision of the Court of Appeal stands can have no application to a claim seeking orders that a building contractor perform work required to be undertaken by the terms of a building contract ("specific performance"), or, in relation to work governed by the HBA, to a claim pursuant to s 48O(1)(c) of the HBA for orders that the builder carry out work. A claim for "specific performance" of a building contract can only be brought while the contract remains on foot. Neither the statement of principle set out in [65] to [69] of Brewarrina Shire Council v Beckhaus Civil nor the logic underlying that principle precludes the Tribunal from determining a claim for work orders pursuant to s 48O(1)(c) of the HBA while the contract remains on foot."

"If a builder wrongfully refuses to complete building work governed by the HBA, the Tribunal has jurisdiction pursuant to s 48O(1)(c)(i) to direct the builder to complete that work.

The respondent submitted that the Tribunal could not have made any orders pursuant to s 48O(1)(c) as, at the time of the hearing, the respondent's building licence had lapsed and the Tribunal could not order an unlicensed builder to carry out building work. We accept that it would not be appropriate to make orders requiring an unlicensed builder to carry out building work. Such a builder could not, consistently with the HBA, carry out such work. At the very least, it would involve an inappropriate exercise of discretion to order an unlicensed builder to carry out home building work when the HBA had the effect of proscribing the unlicensed builder's actions in so doing.

However, s 48O(1)(c) is not limited to the making of orders requiring the building contractor to carry out the building work. Section 48O(1)(c) provides:

'(1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate:

...

(c) an order that a party to the proceedings:

(i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or

(ii) do or perform, or refrain from doing or performing, any specified act, matter or thing.'

In light of our decision that there was legal error by the Senior Member in applying the Brewarrina principle to the appellants' application, it is strictly unnecessary that we express a concluded view on the point arising under s48O(1)(c) of the HBA. However, it does seem to us that s 48O(1)(c)(i) would permit the making of an appropriately framed order, requiring the respondent builder to perform its obligation to complete the works required by and in accordance with the contract. That obligation could be fulfilled by the respondent retaining a licensed builder to carry out the work." (Emphasis added.)

As stated at [8] above the jurisdictional base for the owner's claim is s 48O(1)(c) of the HBA. The making of an order under s48 of the HBA is a discretionary matter by reason of the words

"the Tribunal is empowered to make one or more of the following orders as it considers appropriate."

The contractor's closing submissions raise a number of matters. First, it is said that the contractor has not wrongfully refused to complete the building work because the contract was validly suspended by the notice given to the owner on 21 November 2023. I have found that the contract was not validly suspended. Secondly, it is stated that there are good reasons not to make specific work orders regarding work which the owner states is defective, including that appropriate methods of rectification have not been provided by the owner.
Importantly in respect of defect items other than 2, 3, 4 and 6 the contractor accepts that remedial work should be ordered in accordance with the scopes of work prepared by Mr Nisbett at pages 131-133 of Exhibit A.
Given that there is an agreement from the contractor as to a work order in the terms referred to in the preceding paragraph, I will make such an order.
I find that in the language used in Little v J & K Homes Pty Ltd, the contractor has wrongfully refused to complete the building work referred to in the contract which is, I find 'residential building work' as defined in clause 2 of schedule 1 of the HBA. As a result, also in accordance with Little v J & K Homes Pty Ltd I have jurisdiction pursuant to s 48O(1)(c)(i) of the HBA to direct the builder to complete that work. I find that it is appropriate to make an order under s 48O(1)(c)(i) of the HBA that the contractor return to the site and carry out and complete the work in accordance with the contract, including the rectification of the defects that it has consented to. I will also add as part of the order that the contractor must proceed with due diligence as such conduct is required by clause 9(d) of the contract.
A similar order as the one I intend to make was made in Verma v Udhay Pty Ltd (Unreported, Consumer and Commercial Division, 7 February 2024) albeit without the analysis of Brewarrina Shire Council v Beckhaus Civil Pty Ltd and Little v J & K Homes Pty Ltd.
I have not dealt with other controversial matters between the parties for the reason that there is no agreement between their experts which would be of benefit to the parties in that there are no clear agreed scopes of rectification work. In addition under the orders that I have made the contractor will be obliged to carry out and complete the work under the contract as referred to in the agreed contract documents and in accordance with all of the terms and conditions of the contract. In that regard, the contractor will have the benefit of all of the expert reports. In declining to make defect rectification orders, except as conceded by the contractor, a substantial reason for that approach is that clauses 6 and 8 of the contract require the contractor to complete the work so that there are no omissions or defects that prevent the work from being reasonably capable of being used for its intended purpose. There is also a 13 week defect rectification period referred to in clause 23. These factors make it inappropriate in my view to be more prescriptive in making the orders in these proceedings.

In the event that a party is minded to make an application for costs, such application must be lodged in the Tribunal and served on/given to the costs respondent within 14 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 14 days after the date it receives the application to lodge in the Tribunal and serve on/give to the costs applicant its submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.
The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.
Subject to the parties' submissions, the Tribunal will determine any costs application made on the basis of the submissions and papers filed in the Tribunal.

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.

Civil Administrative Tribunal Act 2013

Sharma v Manhattan Custom Homes Pty Ltd [2025] NSWCATCD 89;

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Judgment (51 paragraphs)

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