Smith v Slater

The proceedings

1. These proceedings were commenced by Mr Smith on 29 January 2021. On 4 February 2021 the Tribunal directed that he provide the documents on which he intended to rely to the Tribunal and the other party within 14 days. Mr Smith filed and served a bundle of documents on 18 February 2021.
2. The matter came before the Tribunal on 11 March 2021. The Tribunal: 1. extended the time for Mr Smith to provide any further documents, until 25 March 2021, (direction 4) and 2. made a direction for the respondent to provide any documents by 15 April 2021, (direction 5) and 3. made a direction for the applicant to provide any evidence in reply by 29 April 2021 (direction 6).
3. On 31 March 2021 the time for compliance with the directions was extended, direction 4 until 26 April 2021, direction 5 until 7 May 2021 and direction 6 until 21 May 2021.
4. Mr Smith provided documents in compliance with the directions. No documents were provided by Mr Slater.
5. Mr Smith requested summonses, which were issued to Gary Kumar and Global Consulting Engineers. Certain documents were produced, but others were not.
6. The hearing proceeded by phone on 9 June 2021. During the hearing, Mr Slater indicated that he had documents which he had not provided. He sought an adjournment of the hearing. I refused the adjournment request, as Mr Slater did not provide any explanation for his failure to comply with the Tribunal's directions. Furthermore, he did not request an adjournment until the hearing had almost been completed. He then indicated that he had kept the documents back because he intends to take proceedings "for damages" in "a civil court."
7. The conduct of both parties during the hearing made the hearing very difficult. Both parties were argumentative and continually interrupted and disparaged each other, despite my directions that they desist.
8. At the end of the hearing, I made it clear that no further communications would be received after the hearing. Despite this, Mr Smith sent an email communication to the Tribunal, and has today delivered a letter with attachments to the Tribunal. I have had no regard to either in making this decision.

Issues

1. The following issues arise for determination: 1. Was Mr Smith entitled to terminate the agreement? 2. Was the work incomplete and/or defective? Was the work carried out in accordance with the contract? 3. What is the cost to complete and/or rectify the incomplete and/or defective work? 4. What is the effect of Mr Slater not having an appropriate licence to carry out the work? Is Mr Smith entitled to a refund of the monies paid to Mr Slater? 5. Is Mr Smith entitled to be reimbursed for his costs of these proceedings?

Was Mr Smith entitled to terminate the agreement?

1. A perusal of the text messages between the parties shows the background to Mr Smith's termination of the agreement between the parties. The dispute centred around Mr Slater's payment demand (to be paid $5000 on the day before the concrete was to be poured and the balance of $1472.00 on completion), the conditions of his use of Warren Spicer's license, and the timing of the work being undertaken.
2. At the hearing Mr Slater claimed that his terms for payment were contained in the quotation. He did not provide a copy of that quotation to the Tribunal. The copy supplied by Mr Smith does not contain any terms of payment, but I note that I have only been provided with page 1 of 2 pages. The document with which I have been supplied makes reference to a deposit of $2000 but contains no other terms of payment.
3. On 12 January 2021 Mr Smith sent a series of text messages to Mr Slater, demanding that he and the license holder Warren attend to discuss the issues, and making demands about the work to be carried out. These included demands to reduce the amount being charged for the concrete. Mr Slater continued to state that he would not pour until the payment for concrete had been made. Mr Smith stated that he would no longer deal with Mr Slater and required that the sum paid to Mr Slater be refunded, and a new agreement be entered into with the license holder.
4. Mr Smith finally terminated the agreement by text message on 20 January 2021. That message cited issues with the work which had been carried out, as well as the lack of a license.
5. I am satisfied that Mr Smith was entitled to terminate the agreement on the basis that Mr Slater did not hold a license entitling him to carry out the work.

Was the work incomplete and/or defective? Was the work carried out in accordance with the contract?

1. By text message at 5:13:25 PM on 20 January 2021 Mr Smith claimed that the following work was defective: "(1) You never properly excavated the footing or the slab, The slab was to be 14 metres, plus the front drain section + the rear section, you did not make the excavation the correct length. (2) the footing has not been excavated the correct length or the correct depth at both the road end or the water end (3) 20 if (sic) the starter bars are in the wrong positions (they will not fit in the Besser Block holes) (4) you should have bought 35 starter bars not 34".
2. A text message at 6:00:27 PM included the four alleged breaches above but added: "(5) you put the stormwater pipe in the Wrong position (6) you never provided enough F82 Reo mesh."
3. Mr Smith provides an undated report from Cameron Building Services Pty Ltd. Mr Cameron does not adopt the Tribunal's code of conduct for expert witnesses. He confirms the defects referred to by Mr Smith in his text messages. He says that they marked the start and finish of each Besser Block, marked the start and finish of the slab, advised what rectification work was required and inspected the site after the work was carried out.
4. I accept the evidence from Cameron Building Services Pty Ltd. Whilst Mr Cameron has not adopted the Code of Conduct for expert witnesses, I am satisfied that the issues raised required rectification.
5. Mr Slater relied upon the certifier and engineer who he said had inspected and passed the location of the piers and the excavation and layout of the reinforcement. However the certifier failed to produce on summons records which would have confirmed his attendance at the site. Mr Smith gave evidence that the certifier could not have inspected the site when he said he had. In any event, the certifier indicated that further work was required, and the report is not inconsistent with the evidence of Mr Cameron.

What is the cost to complete and/or rectify the incomplete and/or defective work?

1. Cameron Smith Building services charged Mr Smith $3200.00. In addition, Mr Smith supplies two tax invoices from Hughes Concreting in the sum of $2950.00 and $4180.00, for the laying and completion of the concreting. He also paid for the concrete $3648.00 and concrete pump $950.00.
2. Mr Smith claims the sum of $1200.00 for the removal of rubbish and corrugated iron but there is no evidence he incurred that sum and I do not allow it.
3. Mr Smith's loss is the amount which he has paid which exceeds the amount he would have paid Mr Slater under the contract: 1. Amount paid to Slater $7000 2. Amount paid to Cameron Building $3200 3. Amount paid to Hughes Concreting $7130.00 4. Concrete $3648.00 5. Concrete pump $950 6. Subtotal $21, 928.00 7. Less quoted price $13072 8. Loss $8856.00
4. In addition, Mr Smith claims that the contract required Mr Slater to drill the pier holes 500mm from the house wall. He says that the closest part of the pier hole was only 200mm from the wall and as a consequence, water entered the lower level of his home for the first time in 29 years. He claims the following: 1. Cost of inspection and report $480.00 2. Cost of required repairs $9,870
5. Mr Smith provides a report in the form of a quotation from Cameron Building Services Pty Ltd in support of this part of the claim.
6. I accept the evidence which has been presented. The plan clearly shows that the pier holes were to be located with the edge of the pier hole 500 mm from the wall. Mr Slater said that he did not have those plans, but I reject that assertion. He also said that the plan required the centre of the pier to be 500 mm from the wall but that is not consistent with the detail on the plan.
7. I also accept that the work will require rectification. The only evidence of what is required and the cost of that work is the evidence supplied by Mr Smith. I accept that evidence and allow the amount claimed.

What is the effect of Mr Slater not having an appropriate licence to carry out the work? Is Mr Smith entitled to a refund of the monies paid to Mr Slater?

1. There is no dispute that Mr Slater did not hold a license at the time he entered into the agreement with Mr Smith, or at the time he carried out the work the subject of this dispute. He said during the hearing that Mr Smith bullied him into providing a letter in respect of that issue. The text messages between Mr Smith and Mr Slater do not support this claim. It is clear that Mr Smith asked Mr Slater for evidence of his licence, and Mr Slater replied: "I am not licensed but my partner is and we work under his licence and he will be onsite and supervising all work.'
2. Mr Smith continued to ask for evidence, including evidence that the holder of the licence agreed to Mr Slater "working under his licence". Eventually Mr Slater produced an unsigned letter to that effect. Mr Smith alleges that the letter is a forgery, but I do not need to make a finding about that issue, because there is no provision in the Home Building Act 1989 ("the Act") for a licence holder to permit someone else to work under their licence, unless that person himself holds a licence. The Act provides: 4 UNLICENSED CONTRACTING (1) A person must not contract to do-- (a) any residential building work, or (b) any specialist work, except as or on behalf of an individual, partnership or corporation that is the holder of a contractor licence authorising its holder to contract to do that work. : Maximum penalty--1,000 penalty units in the case of a corporation and 200 penalty units in any other case. (2) The holder of a contractor licence who has contracted to do any residential building work must not contract with another person for the other person to do the work (or any part of the work) for the holder unless the other person is the holder of a contractor licence to do work of that kind. : Maximum penalty--1,000 penalty units in the case of a corporation and 200 penalty units in any other case.
3. Indeed, it is unlawful to hold oneself out as being prepared to carry out residential work unless holding a licence: 5 SEEKING WORK BY OR FOR UNLICENSED PERSON (1) An individual, a member of a partnership, an officer of a corporation or a corporation must not represent that the individual, partnership or corporation is prepared to do-- (a) any residential building work, or (b) any specialist work, if the individual, partnership or corporation is not the holder of a contractor licence authorising its holder to contract to do that work. (2) A person must not represent that an individual, partnership or corporation is prepared to do-- (a) any residential building work, or (b) any specialist work, if the person knows that the individual, partnership or corporation is not the holder of a contractor licence authorising its holder to contract to do that work. (3) An individual who is convicted of a second or subsequent offence under this section is liable to a penalty not exceeding 500 penalty units or imprisonment for a term not exceeding 12 months, or both. : Maximum penalty--1,000 penalty units in the case of a corporation and 200 penalty units in any other case.
4. Section 10 of the Act then provides: 10 ENFORCEABILITY OF CONTRACTS AND OTHER RIGHTS (1) A person who contracts to do any residential building work, or any specialist work, and who so contracts-- (a) in contravention of section 4 (Unlicensed contracting), or (b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6(2)), or (c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person. (4) This section does not affect the liability of the person for an offence against a provision of or made under this or any other Act.
5. The effect of these provisions has been discussed in a number of cases and it has been determined that a failure to comply with these statutory requirements does not render the contract void. There is no entitlement to "claw back" monies which have been paid to a Builder who has breached the provisions of the HBA. In Alexander & Anor v Gregoriou & Ors [2010] NSWDC 15 (22 February 2010) the Court summarised some of these decisions: 89 The Court was not referred to any authorities in which a court has considered the entitlement for a party to recoup or "claw-back" monies already paid to a builder under a contract which offended the statutory provisions as to contracting, licensing and insurance. In Brodyn Pty Ltd t/as Time Cost and Quality v Davenport [2004] NSWCA 394; (2004) 61 NSWLR 421, Hodgson JA (with whom Mason P and Giles JA agreed) said as to the effect of ss 10 and 94 (at [82]; at 449): "In my opinion, the civil consequences for an unlicensed contractor for its breach of s.4 are those set out in s.10 and not any wider deprivation of remedies. In my opinion this is confirmed by the different provisions of s.94, which explicitly precludes, in the event of breach of the insurance provisions, the obtaining of a quantum meruit unless a court considers it just and equitable. In my opinion, the remedy given by the Act is not of the nature of damages or any other remedy in respect of breach of contract nor is it enforcement of the contract: it is a statutory remedy, albeit one that in part makes reference to the terms of a contract, and thus it is not affected by s.10 of the Home Building Act." 90 To a similar effect, Bryson JA (Santow JA agreeing) in Kalokerinos v HIA Insurance Services Pty Ltd [2004] NSWCA 312 at [34]- [35]: said: "34 A provision in legislation that a contract is not enforceable is not a provision that rights do not arise under it, and does not prevent establishment of and decision by reference to those rights, if they are relevant in some other context than enforcement of the contract by a person whose right to enforce the contract is forbidden. There is no provision to the effect that the contract is void; and the contract continues to exist and to have whatever effects its provision produce on the rights of other parties than the licensee referred to in s 10." 35...The actions which the builder took (acceptance of repudiation and termination of the building contract) cannot fall within the concept of enforcement in any way; s 10 does not interfere with the working out of rights under the contract at any point except at a point of enforcement...." 91 It is to be emphasised that contracts made as infringing ss 4(1), 7(1) and 92(1) are not void or illegal, only that they are unenforceable at the suit of the offending contractor; but, it is to be added, enforceable by the innocent party: see Trimtor Building Consultants Pty Ltd v Hilton [1983] 1 NSWLR 259 at 261 and Lee Gleeson Pty Ltd v Sterling Estates Pty Ltd (1991) 23 NSWLR 571 at 585-586. 92 Finally on this aspect, the following reasoning by Deane J in Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 at 262-263, as to s 45 of the Builders Licensing Act 1971 which had similar terms to s 7 of the Home Building Act as to the unenforceability of contracts not in writing, is authoritative: "There is no apparent reason in justice why a builder who is precluded from enforcing an agreement should also be deprived of the ordinary common law right to bring proceedings on a common indebitatus count to recover fair and reasonable remuneration for work which he has actually done and which has been accepted by the building owner... Nor, upon a consideration of the words of s 45 in their context in the Act, am I able to identify any legislative intent to deprive the builder of that ordinary common law right. The section does not make an agreement to which it applies illegal or void. Nor do its words disclose any legislative intent to penalise the builder beyond making the agreement itself unenforceable by him against the other party. ... Plainly enough, the survival of the ordinary common law right of the builder to recover, in an action founded on restitution or unjust enrichment, reasonable remuneration for work done and accepted under a contract which is unenforceable by him does not frustrate the purpose of the section to provide protection for a building owner. ..." 93 In Pavey & Matthews it was held by Mason, Wilson, Deane and Dawson JJ, Brennan J dissenting, that s 45 did not prevent the bringing of an action by a builder on a quantum meruit for the value of work done and materials supplied under an oral building contract. 94 It follows, and I so find, that the legislative scheme itself of the Home Building Act does not entitle the Alexanders to recoup from either the Gregoriou company or ASB the monies already voluntarily paid by them under the oral contracts in the respective amounts of $59,400 and $295,830.12. However, the Gregoriou company and ASB are not entitled to enforce the contracts against the Alexanders to obtain the outstanding monies said to be due otherwise than under a quantum meruit.
6. In addition Mr Smith says that he should have the amount of $7000 which he paid to Mr Slater refunded because the excavation was not carried out properly and he had to have it redone. However, as discussed above, the damages suffered take into account the amount which was agreed to be paid to Mr Slater.
7. I am not satisfied that there is any basis on which Mr Smith is entitled to a refund of the monies already paid for the work undertaken by Mr Slater. The claim for a refund of $7000 is dismissed.

Is Mr Smith entitled to be reimbursed for his costs of these proceedings?

1. The following claims are costs of the proceedings: NCAT fee $27.11, cost of software to print out text messages $42.90, cost of printing (printer cartridges and paper $600.00), and cost of express post $39.40. In addition Mr Smith foreshadowed a claim for the costs of the summons issued.
2. In the Tribunal, where the amount claimed or in dispute a claim is less than $30,000, each party is to pay his or her own costs unless there are special circumstances. The total amount claimed in these proceedings is $29,434.74 (including the costs claimed).
3. Section 60 (3) of the Civil and Administrative Tribunal Act 2013 provides: (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. I am not satisfied that there are special circumstances warranting an order for costs. Whilst it is true that Mr Slater did not provide any documents in accordance with the Tribunal's directions that did not increase the complexity of the proceedings or disadvantage Mr Smith. Mr Smith did not incur costs for an independent expert to support his claim, nor was he legally represented. None of the other matters apply.
5. Thus I decline to make an order in respect of the costs claimed.

Orders 1. Matthew Slater is to pay Graham Smith the sum of $19,206.00, on or before 17 August 2021.

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: 16 August 2021