Sharma v Premutico [2025] NSWCATCD 101;

Identity of contracting party; contract terms; basis for refund

1. The applicant said that the original agreement was concluded orally on 25 August 2023 and recorded in a text that he sent to the respondent on that day. The text was in evidence. No party to the contract other than the applicant and the respondent was mentioned in the text.
2. The applicant said that the respondent insisted on a revised contract which was a single page with a handwritten date under signatures of 26 September 2023. It was signed personally by each of the parties under their typed names - with no reference to a company - and the words "Agreement between" above those typed names. Against the applicant's typed name was "(Builder)"; against the respondent's typed name was "(Concreter)". In the document was a statement "Gus [the respondent] to provided active ABN".
3. The applicant said that the September document was revised from the original agreement by escalating the contract price to $90,109. A total contract price did not appear on either the original or the revised contract.
4. Rather, in both versions of the contract there was a formula which varied in some respects between the two versions and which set rates of charge for various items. Quantities for those items were not included.
5. The applicant put into evidence a sheet that he said he presented at the meeting of 31 January 2024 referred to below. This was said to contain the contracted cost of works at $76,863 calculated from setting out the area of each component of works and applying the price in the revised contract to that area (how that figure related to the alleged revised contract price of $90,109 was not explained). Against that were set out payments totalling $63,730 to that point.
6. The applicant said, in the final calculations in evidence, that total payments of $126,270 were progressively extracted from him, with $61,870 of those payments at the respondent's instruction being paid to the account of the company including $30,850 being paid after date of liquidation of 8 April 2024 (which was not known at the time to the applicant); some payments at the respondent's instruction were paid direct to suppliers.
7. The applicant in his final calculations adhered to the total paid but increased the costing (using the same calculation method as earlier described) to account for further items; the higher total costing was $87,585.50 and included an item (Bondek) for which the applicant was responsible under the revised contract of September 2023. The claimed overpayments were $38,684.50.
8. Pouring finished on 28 May 2024, allegedly with defects. The applicant said that he was paying interest and could not proceed with the rest of the works until rectification occurred and that alternative supply was tight.
9. On 30 January 2024 the respondent had allegedly told the applicant that the respondent had a new business, being the company, and a new partner called Vernon (the Mr Stanton referred to earlier), with a new "take or get lost" contract price of $122,000 lump sum.
10. The respondent put into evidence a handwritten document said to be signed by Mr Stanton, the respondent and the applicant. It recorded payments "to Gus [the respondent] thus far" as $63,780, being $50 above the applicant's figure mentioned earlier. It went on (quotations in these reasons are reproduced as the original text appeared, including errors of spelling and grammar):

"Total contract value for [the property] Everything including labour, site prepare, materials, Gus's profit, excavation, machine, Bondek etc is now inclusive of all, risks lumpsum contract of $122,000 including GST. To be paid till end of the project = 122,000.00 - 63780 To be paid till end of project including GST and everything else incl risks = $58,220 [then the signatures, names printed and the date of 30/01/2024]".

1. Invoices were issued in the company's name after 30 January 2024. The company had not been relevantly licensed since 16 June 2023. The running balance of monies paid, recorded on these invoices, included the monies paid to the respondent before the intrusion of the company.
2. The respondent appeared to deny his signature on both the September and January documents. Mr Stanton, who clearly knew the respondent well enough to know his signature, was present at the January meeting when the document was allegedly signed and who was present at the hearing, did not give corroborative evidence of that doubt. The documents were in some respects of benefit to the respondent and the January meeting clearly was to discuss contract revision. I do not accept that the signatures were not those of the respondent or that the respondent did not approve the varied contract.
3. The alleged imposed further-revised contract on 31 January 2024 constituted a variation to the then written contract of 26 September 2023. Under HBA s 6(1)(b) with ss 7E(1) and Sch 2 para 1(2) 10 such a variation must be in writing to be enforceable, absent a claim in quantum meruit: Paraiso v CBS Build PL [2020] NSWSC 190 at [32]- [43], [99]-[103]; Xu v Jinhong Design & Constructions PL [2011] NSWCA 277 at [105]- [106].
4. However, the builder can rely upon a variation by way of defence to a claim by an owner for a refund of monies paid in respect of them if as a matter of fact the variation was established as agreed or accepted by the owners and was properly valued: Wright v Foresight Constructions PL [2011] NSWCA 327 at [6]- [8], [43]-[48], [56]-[59].
5. The applicant said that his signature did not indicate agreement to the further variation of the 26 September 2023 agreement on 30 January 2024 and that at most it showed what the applicant had already paid and would further pay under sufferance to get the job finished so the overall project was not further held up:

"For plaintiff the only purpose of this document is as a proof to establish how much [the respondent] was paid prior to the meeting and how much extra he was illegally demanding for the completion of works. This document is an Evidence to shows what was being forced and being unreasonably demanded in the meeting. This document by no means supersedes the building works contract signed on 26 September 2023 that was in force at that time because: it does not acknowledged the contract in force, there was no intention of superseding that contract and no legal procedure was followed; [Mr Stanton] was the first party to sign this document whereas he did not hold any building work Contractor's Licence. He is not authorised to sign any building work contract."

1. The respondent contested the unwillingness of the applicant to sign the January document and said that the applicant wrote the document recording that agreement apart from signatures.
2. Monies can be recovered in some circumstances when they were not paid under a revised agreement reflecting a compromise of a legitimate claim: see, eg, the discussion of principle in David Securities PL v Commonwealth Bank of Australia (1992) 175 CLR 353, [1992] HCA 48 at 373-374.
3. Here, it seems to me that, contrary to the applicant's contention just quoted, there was a compromise agreed. The applicant has not sought to bring the situation within relief from contracts entered into under duress or other legally-recognised compulsion, as opposed to difficult commercial circumstances. In the higher, fixed total inclusive of GST in the January document was now included significant items that had been disputed as to their previous inclusion (such as excavation and some machinery) and items that previously were to have been paid (if required) separately by the applicant (such as Bondek).
4. However, I agree with the applicant's contention that, in the varied scope of works and contract price and form (lump sum), there was no express or even implied variation of the contracting parties. They remained the applicant and the respondent. There was no express alteration of the supplier to the company. Such a significant change would require more explicitness than the signature of a person (Mr Stanton) whose capacity in signing was not expressed and not clear in the evidence. It would also require an express acknowledgement of novation by existing parties. There was no express reference to the respondent and Mr Stanton signing on behalf of the company in addition to signing (for the respondent) personally. In contrast, there was continuing reference to what had been paid "to Gus [the respondent]" and to the inclusion in the fixed price of "Gus [the respondent]'s profit".
5. The September document and the further-revised January document were therefore both between the applicant and the respondent. The company had no contractual or other basis to make demands for payment. The contracting parties remained the applicant and the respondent. The applicant's payments were made to third party suppliers direct at the instruction of the respondent, or to the respondent or to the company. To the extent that they were paid to the company, they were also made at the instruction of the respondent.
6. Accordingly, the applicant is entitled to an order against the respondent for monies paid above the revised contract price. On the available evidence the amount of overpayment, taking into account the revised contract price and scope in the January agreement, is $4,270.

1. The applicant relied upon an independent building assessment and quotation of $19,800 including GST dated 20 September 2024. The respondent did not adduce an independent expert building report, challenged the expertise and independence of the writer of the assessment and quotation but did not require him for cross-examination, and did not cross-examine the applicant in detail on the alleged defects.
2. Defects the subject of examination in the assessment were: 9m section of high drop edge beams not plumb, allowing insufficient room (65mm instead of 150mm) for cavity and brickwork on the toe of the beam; non-compliance with structural engineer's specification of concrete cover for reinforcing steel in OSD and garage floor; misalignment of set-down between main slab on one unit with entry porch, again not compliant with drawings; non-compliant size of entry porch on each unit, reducing amenity.
3. The assessment said that attempted rectification (undertaken by the respondent after the company went into liquidation) of the first defect was itself defective in that it exposed steel reinforcing.
4. The assessment quoted $18,000 plus GST and a week minimum to fix the defects. The assessment was not inherently unreasonable as to cost or time given the described defects.
5. Under HBA s 48MA, a work order is the preferred, not the mandatory, outcome for defective work: Galdona v Peacock [2017] NSWCATAP 64 at [65]. The respondent, despite saying that the company was the contracting party, indicated a willingness to remediate any found defects. I have found that the respondent, as a party to the proceedings, was the contracting builder, so s 48MA can apply.
6. Personal animosity is not sufficient to displace the primacy of a work order for defective work, as the test is objective and the flexibility of s 48O permits an order that the builder fulfil a work order by engaging another party to carry out the work order on behalf of the builder. However, relational breakdown is an element in objective assessment, as can be the builder's conduct in unrelated projects and as will be doubts about the builder's capacity (including being currently licensed) or skills to undertake the required remediation, the builder's attitude to the standard of work done and willingness to return, any history of attempted but ineffective remediation and the likelihood of further dispute not meaning that a work order would be a timely or cost-effective resolution: Brooks v Gannon Constructions PL [2017] NSWCATCD 12 (appeal not affecting s 48MA decision); Galdona at [64]; BNT Constructions PL v Allen [2017] NSWCATAP 186 at [33]- [36]; Kumar v Sabharwal [2017] NSWCATAP 200 at [29]- [30]; Clements v Murphy [2018] NSWCATAP 152 at [30], citing with approval Kurmond Homes PL v Marsden [2018] NSWCATAP 23 at [31]- [32], [46]; Brennan Constructions PL v Davison [2018] NSWCATAP 210 at [15]- [21].
7. Here, the applicant sent numerous emails seeking the respondent's attendance onsite to remediate detailed defects in June and July 2024. The respondent's answers said, among other matters, that the wet weather was delaying site work, that the applicant had not paid all amounts owing and that the applicant's certifiers and engineers had conducted numerous pre-pour checks. The applicant disputed these allegations. They were not the subject of determinative evidence advanced by the respondent.
8. The parties made serious allegations against each other and there was clearly no trust between them. There was doubt over whether the respondent remained relevantly licensed. The respondent denied that it was the responsible contracting party. There is high likelihood of further disputes over the required scope of remediation works.
9. In those circumstances, a work order is not appropriate. The applicant is entitled to a money order against the respondent for the assessed amount of remediation cost being $19,800.

1. I shall make a money order in favour of the applicant against the respondent for the overpayment and the assessed remediation cost of defective works, totalling $24,070.

(1) Order that Gustavo Premutico pay Sanjay Sharma $24,070 immediately.

(2) Make no order as to the costs of the proceedings.

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.