Steven Miller & Anor v Grosvenor Australia Pty Ltd

NCAT Consumer and Commercial|2017-02-16

Reasons for Decision These proceedings concern the work performed by the respondent when it carried out bathroom renovation work for the applicants pursuant to a contract evidenced by a tax invoices dated 10 and 13 August 2015.
In these Reasons for Decision I will refer to the applicants as the owners and to the respondent as the builder.
In these proceedings the owners claim $46,127.00 because a glass sliding door with a known defect shattered three months after the owners refused the builder access to their premises for the purposes of replacing it.
There is no argument that I have the necessary jurisdiction to determine the owners' claim and the provisions of the Home Building Act 1989 (the 'Act') apply to the facts and circumstances which make up the substance of the dispute between the parties.
The hearing of the proceedings took place on 16 February 2017 and orders were made for the filing and serving of written submissions by the parties.
The evidence in the proceedings was: 1. Exhibit A, Statement of P. Metlege dated 21 July 2016; 2. Exhibit B, Statement of P. Metlege dated 30 November 2016; 3. Exhibit C, Statement of Mr S Miller dated 21 July 2016; 4. Exhibit D, Statement of Mr S Miller dated 15 November 2016; 5. Exhibit E, Expert report of Mr S.J. Owen dated 20 July 2016; 6. Exhibit F, Joint report of Simon Owen and Anthony Capaldi dated 2 December 2016; 7. Exhibit 1, Statutory Declaration of Mr Kikitas of 13 October 2016; 8. Exhibit 2, Statutory Declaration of Mr Kikitas of 15 February 2017 as to paragraphs 5, 8 and 9 only; and 9. Exhibit 3, Report of Mr Capaldi.
The proceedings were commenced in April 2016. The amount claimed was $46,127.00. The proceedings arise out of a bathroom renovation carried out by the owners. They contracted direct with the builder for the supply and installation of toughened glass frameless screens and a sliding door in the bathroom of their premises.

The contract

The simple contract that the owners entered into with the builder arose out of a quote dated 10 July 2015 provided by the builder to the owners' main bathroom contractor. At this stage it is relevant to state that the owners had a contract with a company called Gold & Eagle Constructions Pty Ltd (the 'main contractor'). The owner of that company Mr Metlege gave statements which are exhibits A and B.
Based on Mr Metlege's evidence I find that he introduced the builder to the owners as a glass installation specialist and that the owners contracted direct with the builder for the supply and installation of toughened glass frameless screens and a glass sliding door.
I accept the evidence of the applicant Mr Miller that the cost of the work to be provided by the builder was adjusted to $5,500.00. The builder submitted 2 tax invoices for the work dated 10 and 13 August 2015. The total amount claimed by the builder was $5,500.00 + GST. ($6,050.00). The total amount paid by the owners was $4,398.00 leaving a balance of $1,652.00 unpaid.
In August 2015 section 18B(1) of the Act provided: 'Warranties as to residential building work 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 warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, b 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 warranty that the work will be done in accordance with, and will comply with, this or any other law, d 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 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.'
I find that the work that the builder was carrying out under its contract with the owners was residential building work and that the warranties referred to in section 18B(1) of the Act were implied into that contract.

Relevant facts

It is common ground that the builder supplied and installed the frameless screens and sliding door on 12 and 13 August 2015. The owners complain of delay in the completion of that work. However that complaint has no bearing on their claim in these proceedings.
Mr Miller's evidence which I accept and which is not disputed is that the sliding door supplied and installed by the builder had a sliver of glass missing from the bottom of the door. I understand his evidence to be that a sliver of glass had at some point come away from the main body of the sliding door in the process of either manufacture, delivery or installation of the sliding door. In any event at 14.46 on 13 August 2015 he sent an email to the builder and to the main contractor putting them on notice of the fact that there was a slither of glass missing from the bottom of the door.
Between 13 August and 12 September 2015 there were a number of communications between the owner and the builder regarding the rectification of the sliding door and the payment of the contract price. I will deal with this period of time later in these Reasons under the heading 'Termination' and in particular in connection with the builder's submissions.
On 29 November 2015 the sliding glass door shattered causing physical damage to the bathroom of the owners' residence.
The owners claim that the cost of the rectification of that damage is $46,127.00.

Builder's concessions

In his opening the builder's counsel conceded that the sliding door supplied and installed by the builder had a crack or a sliver of glass missing at the bottom edge, that it was necessary for the sliding door to be replaced, that a liability for the shower door exists and that Mr Miller (one of the owners) has a cause of action for the replacement of the shower sliding door.
Having regard to the concessions made on behalf of the builder I find that by supplying and installing a glass sliding door with a slither of glass sheared or chipped out of its bottom edge the builder was in breach of the warranty in section 18(B)(1)(c) of the Act, that the glass sliding door would be good and suitable for the purpose for which it was used. Namely, I find, a shower sliding door.

Termination of Contract

In his opening, and in final written submissions counsel for the builder submitted that the facts indicated that on 25 August 2015 the owners terminated the future performance of the contract with the result that the builder was released from further performance. Counsel for the builder also submitted that the owners were obliged to mitigate their loss which they failed to do.
There were a number of relevant events on 25 August 2015. I accept that at 8.35 am the owners received a text message from their main contractor which informed them that the builder was going to the glass supplier to inspect an issue with the replacement glass sliding door.
At 8.46 am the owners emailed the main contractor. This email indicates that the owners had lost patience with the builder and its delay in replacing the imperfect shower sliding door. The email stated: 'If it is anyway not perfect, tell them not to bring it and get his money back from the supplyer.(sic) Then we will get someone else to finish the job.'
The builder relies upon the owners 25 August 2015 email which was sent to it and the main contractor at 12.30 pm. The owners email stated, among other things: 'I do not want any phone calls, invoices or visits from Sam or his workers to discuss, as this is now a closed issue. If Sam wants to discuss, please proceed to Arbitration. (As I will call the police if I have any problems). Enough is enough. Thanks Paul you have mediated well and we worked hard to get it completed. I will book the other glass guy to quote to get it completed.'
At 13.08 the builder sent an email to the owners stating: 'I understand your position, but we understood that we had until the 27th August to complete the work as per your email dated 13th Aug. We will be able to carry out the replacement work, but if you refuse access we will have no option but to recover any outstanding monies owing from Paul Metledge.'
At 3.53pm on 25 August 2015 the owners replied to the builder stating: 'We have sent Fair trading all the emails and wish for them to file so it is on record. Please look at www.fairtrading.nsw.gov.au where you can lodge a dispute against us and Paul. They can send a fair trading Inspector out to look at it. We do not accept your threat and happy to have this mediated anytime you wish. Any action from you other than through Fair Trading towards us or Paul, we will immediately take action.'
I find that the owners made their position completely clear on 25 August 2015 that the builder would not be permitted to return to their residence to replace the defective shower glass sliding door. If it did so they made it plain that they would call the Police. Otherwise the owners made it clear that the builder was free to lodge a dispute against them and that if the builder took action against them other than through Fair Trading they would immediately take action against it.
I further find that the effect of the owners position was a termination of the contract since it was I find an essential term of the contract that the owners would allow the builder reasonable access to the premises for the purposes of it being in a position to carry out rectification of defective work. I would also find that it was a term of the contract that the builder would rectify any defective work.
I also find that the subsequent correspondence between the parties was in the main, directed toward payment issues. Any further arrangements that may have been made by the parties for the builder to carry out remedial work are best understood in my view as separate agreements or subsequent attempts to make arrangements for the replacement of the defective glass sliding door. The fact is that none of the subsequent arrangements resulted in the builder actually replacing of the defective glass sliding door. In any event, I find as a fact and it is not in any way in issue between the parties, that the builder did not after 25 August 2015 attend at the premises to replace the defective glass shower sliding door.

Consequences of the owners' termination of the contract

The builder submits at paragraph 17 of its submissions that the owners have a claim for damages in respect of the defective glass and the measure of that loss is the difference between the cost of completing the outstanding work, less the amount of the contract price unpaid. The builder has cited Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 at [202] in support of that proposition. Paragraph 202 states: 'It should be noted that neither the passages from Hudson's 11th ed referred to, nor the judgment of McColl JA, make any reference to the builder having a right to claim reimbursement by way of a quantum meruit. Nor does the authority cited in the relevant passages of Hudson's 11th ed support the proposition: Mertens v Home Freeholds Company [1921] 2 KB 526. That case concerned a claim for damages for failure to complete building works in the manner required by the contract. Lord Sterndale MR uncontroversially stated that the measure of damages recoverable for failure by a builder to complete work was the cost to the plaintiff of completion of the work less any amount that would have been payable to the builder had he complied with his obligations under the contract (at 535, see also Younger LJ at 540).'
In reply the owners submit that they agree that so far as the builder failed to complete the work the measure of damage is the cost to complete less the amount payable to the builder in order for the builder to have complied with the contract. The owners further submit that there is a distinction between that measure of damage and the damage that flows from the installation of defective glass.
In my view the passage quoted above relating to what was stated by Lord Sterndale MR concerns the situation where a builder has not completed the work required by the contract and the owner is obliged to complete the work. The passage does not in my view relate to the measure of damages which must be applied in a situation where a builder performs defective work. In that regard the measure of damages should in my view be determined by the High Court decision in Bellgrove v Eldridge (1954) 90 CLR 613. I would add that generally, the builder would be entitled to claim the balance of money owing under the contract either by way of a set off or by separate action.
Discussion and findings regarding the appropriate measure of damages are in the context of these proceedings academic having regard to the final form of orders which have been made.
Ordinarily the builder would be entitled to rectify the defect. In The Owners - Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067 Ball J stated at [44]: 'In the case of building contracts, it is also generally accepted that the owner must give the builder a reasonable opportunity to rectify any defects. Often, of course, the building contract itself requires the owner (sic) (builder) to repair defects or sets out a procedure by which defects are to be made good: see, eg, Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302; (2010) 26 BCL 335. But, even if it does not, the owner is required to give the builder an opportunity to minimise the damages it must pay by rectifying the defects, except where its refusal to give the builder that opportunity is reasonable or where the builder has repudiated the contract by refusing to conduct any repairs: see J Bailey, Construction Law, (Vol II, 2011, Informa Law) at [14.109]; Cassidy v Engwirda Construction Co (No 2) [1968] Qd R 159 (reversed on other grounds in Cassidy v Engwirda Construction Co (No 2) [1968] QWN 47 (HC); (1968) 42 ALJR 168). That obligation may be an aspect of the duty to mitigate, since it may be less expensive for the builder rather than a third party to rectify the defects, particularly if the builder is still on site. But the obligation is not simply an aspect of the duty to mitigate. The cost to the builder of undertaking the repairs is likely to be less than the amount that a third party would charge the owner for the same work. In that case, the owner is not mitigating its loss, but rather the builder's damages.'
In this case the builder was not permitted to rectify the defective work because the owners terminated the building contract and refused the builder access to the premises for that purpose. However the builder takes no point regarding the owners refusal to permit the builder to carry out remedial work except to submit that it was discharged from further performance of the contract.

Consequential loss

I find and there can be no dispute about it, that in the period 26 August to 29 November 2015 a period of three months the owners did not have the defective sliding glass shower door replaced.
The experts instructed by the parties agree that the shattering of the glass sliding shower door that occurred on 29 November was caused by the defect observed by the owners and notified to the builder, namely the sliver of glass sheared out of the bottom edge.
As a result of this event damage was caused to the owners' bathroom as described by Mr Miller in exhibit C at [55].

Mitigation of loss

The builder's position in connection with this damage is that at 25 August 2015 the loss to which the owners were entitled was the cost of replacing the glass sliding shower door less the unpaid contract price.
The further cost and damage suffered by reason of the shattering of the glass sliding shower door is characterized by the builder as arising by reason of the owners' failure to mitigate their loss by the replacement of the glass sliding shower door. At the highest the builder states that the fact that the owners did not replace the glass shower sliding door in the period 26 August - 29 November 2015 establishes that the owners failed to mitigate their loss
In The Owners - Strata Plan No 76674 v Di Blasio Constructions Pty Ltd Ball. J stated at [42] in connection with mitigation of loss: 'Generally speaking, a person who suffers loss as a consequence of a breach of contract is required to act reasonably in relation to that loss in order for the loss to be recoverable. An important aspect of this general principle is that the party who has suffered a loss is under a duty to mitigate its loss. Sometimes the use of the word "duty" in this context is criticised, since there is no requirement that the plaintiff act in a particular way and no requirement that the plaintiff minimise its loss: see, eg, J Carter, E Peden and GJ Tolhurst, Contract Law in Australia, (5th ed, 2007, LexisNexis) at [35-35]. Rather, the principle is that the plaintiff is not entitled to recover losses attributable to its own unreasonable conduct. As O'Connor J explained in Hasell v Bagot, Shakes & Lewis Ltd [1911] HCA 62; (1911) 13 CLR 374 at 388: 'One of the principles on which damages are assessed [is] that a party to an agreement suffering injury from the other party's breach of its terms is bound to exercise reasonable care in mitigating the injurious consequences of the breach, and is not entitled to recover from the party in default any damage which the exercise of reasonable care on his part would have prevented from arising.'
In the case of Sotiros Shipping Inc. and Aeco Maritime S.A. v. Sameiet Solholt; (The 'Solholt') (1983) 1 Lloyds Rep, 605, Sir John Donaldson M.R. stated: 'A plaintiff is under no duty to mitigate his loss, despite the habitual use by the lawyers of the phrase "duty to mitigate". He is completely free to act as he judges to be in his best interests. On the other hand, a defendant is not liable for all loss suffered by the plaintiff in consequence of his so acting. A defendant is only liable for such part of the plaintiff's loss as is properly to be regarded as caused by the defendants' breach of duty. As Viscount Haldane, L.C., put it in British Westinghouse Electric and Manufacturing Co. Ltd. v. Underground Electric Railways Co. of London Ltd, [1912] A.C. 673 at p. 689: The fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach; but this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps.'
Based upon the above authorities it is necessary that I must decide whether the owners are entitled to recover the loss and damage which occurred when the glass shower sliding door shattered on 29 November 2015 having regard to the relevant principles being, as per The Owners - Strata Plan No 76674 v Di Blasio, whether the owners are entitled to recover from the builder any damage which the exercise of reasonable care on their part would have prevented from arising. Or, to similar effect, as per the Solholt whether the owners are debarred from claiming any part of the damage which is due to their neglect to take all reasonable steps to mitigate the loss consequent on the breach.
In TCN Channel 9 v Hayden Enterprises Pty Limited (1989) 16 NSWLR 130 Hope JA stated at p158 E that the onus was on the defendant in connection with mitigation. 'The plaintiff does not have to show that he has fulfilled his duty; the onus is on the defendant to show that he has not, and to show the extent to which he has not done so.'
As stated, the builder's case on mitigation is that the owners having terminated the contract on 25 August 2015 by preventing the owners from returning to their residence to carry out rectification work, failed in a period of three months to replace the defective glass sliding door.
The owners knew as at 25 August 2015 that the glass sliding door had a sliver of glass sheared out of the bottom edge. They knew that it was necessary to replace the glass door because they had requested that be done and the builder had agreed. In fact on 25 August they stated to the builder that they would book another contractor to 'get it completed'. They also knew that the builder had said it would replace the door by 27 August. There were also other discussions with the builder to effect the replacement, the last being on 9 September, only about 2 weeks after they had terminated the contract. The owners had also withheld $1,652.00 from the contract price so they had funds to pay for a replacement glass sliding door. The owners had every opportunity to replace the glass sliding door after they terminated the contract on 25 August 2015.
I find that the consequential damages which have occurred by reason of the shattering of the glass shower sliding door arose because of the owners' failure or neglect to take reasonable care to replace the glass door within a reasonable time and because of that, their failure debars them from recovering the costs they claim.

Replacement of the glass sliding door

However my finding does not prevent me from awarding the owners the costs associated with the replacement of the defective glass sliding door, including the cost of installation. I find based on Mr Miller's evidence that the other glass panels supplied and installed by the builder were not damaged by the shattering of the glass sliding door. The evidence relied upon by the owners so far as the rectification costs is concerned is a quote from Renovate 8 which provides a lump sum of $38,298.00 for a list of work which includes 'Supply and install new shower glazing'.
The owners have had prepared a scott schedule which at item 1.R shows the cost of the Supply and installation of new shower glazing to be $5,000.00. The scott schedule forms part of exhibit E which is the expert report of Mr S.J. Owen dated 20 July 2016. Mr Owen frankly stated to me that he did not prepare the Scott Schedule and that he did not know who did. Paragraph 4 of the owners' submissions in Reply states that the scott schedule was prepared by the owner's solicitors and populated with the comments and amounts provided by Mr Metlege as a breakdown of his original quote. Mr Metlege's original quote is not in evidence. Because the scott schedule was not prepared by an expert witness and also because the document said to be the basis for its preparation is not in evidence I will not give it any weight to it. In relation to glazing I find that I am unable to infer from the owners' scott schedule that the cost of the supply and installation of new shower glazing is $5,000.00.
The builder's submission is that it has a replacement panel of glass in its factory and the owners should only be allowed installation costs.

Work order

At this point it is necessary that I consider section 48MA of the Act which states: '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'
Since this case does involve an allegation of defective building work, namely the defective glass shower sliding door, I am required to take the section into account. The owners submit that the builder does not possess the necessary licence under Home Building Act. I find that the supply only by the builder of a replacement glass sliding door would not come within the definition of 'residential building work' as defined in the Act and a result such a supply is not required to be licensed under section 4 of the Act. By supplying the glass sliding door the builder would not, I find, be doing work involved in the renovation of a dwelling.
The builder stated at [36] of exhibit 1 that the glass panel that was ordered to replace the shattered glass panel door remained in its factory to date which I take to be 13 October 2016 the date of the statutory declaration.
Section 36(1) of the Civil and Administrative Tribunal Act 2013 states: 'The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.'
I have had regard to section 48MA of the Act and section 36(1) of the Civil and Administrative Tribunal Act and conclude that these provisions require me in this case in order to give effect to the 'preferred outcome' and 'the guiding principle' to order the builder at its own expense to deliver the replacement glass sliding door to the owners' premises. While the delivery of the replacement glass sliding door does not equate to rectification of defective work by the responsible party, it goes at least half way to satisfying that proposition. In addition I find that the builder providing the replacement door to the owners conforms to the just, quick and cheap resolution of an issue in the proceedings because: 1. The builder should be in a position to deliver the replacement door almost immediately; 2. It makes use of a replacement door which has been specifically supplied for the owners' purposes and in that regard is a cost efficient solution; 3. To make a money order which required the builder to pay the owners to obtain a second replacement sliding door leaving the builder with a door in its factory which is most probably of no use because it has been made to suit the owners' specification reason would be akin to economic waste and would not be cheap or just.

Installation cost

The owners will still be required to have the glass sliding door installed. I find that the builder is liable for the cost of that work and as I understand its case, it concedes that to be so. I have found that the owners' scott schedule is of no assistance in ascertaining that cost. I will not order the builder to install the replacement glass sliding door because it is not licensed under the Act and also because of the poor relations between the parties. I would have no confidence that even if licensed, that the fact of the builder installing the sliding door would not cause more problems than would be solved.
The builder in it submissions estimates the installation cost as $736.00. There is no evidence to support the submission.
There is a dispute between the parties' experts about how complex this exercise would be. Refer exhibit F, items 5.18, 6.18 and 6.22.
Mr Metlege in exhibit B gives evidence about this issue in paragraphs 10, - 13, namely that the installation work will require the removal of a part of the plasterboard ceiling above the area where the sliding door is to be installed. I accept his evidence in preference to the opinion of the builder's expert on the basis that as a builder experienced in the practicalities of actually carrying out the work in issue his evidence is more compelling by reason of being based on the actual experience of installing the glass sliding door in the first place. However he does not assist the Tribunal in providing an estimate of the hours of work involved
At paragraph 59 of their submissions in chief, the owners submit that if the Tribunal were to find it necessary to remove and replace the ceiling it ought to accept the evidence provided by the quote at attachment V to exhibit C. That quote is as referred to above, from Renovate 8 which provides a lump sum of $38,298.00 for a list of work which includes 'Remove plasterboard to both sides of the overhead runner. This will be required to allow the glazing to be installed'. Reference to this quote and the lump sum of $38,298.00 is of no assistance as the quote refers to numerous items of work a) - bb). There is no specific cost allocated to 'Remove plasterboard to both sides of the overhead runner. This will be required to allow the glazing to be installed'.
I find that there is no evidence before me that I am able to refer to in connection with the cost of the installation of the replacement of the glass sliding door.
In the Victorian decision of JLW (Vic) Pty. Ltd v. Tsiloglau and Anor [1994] 1VR 237, a decision of the Appeal Division of the Supreme Court of Victoria, Brooking J, who wrote the leading judgment said (at [9] of his reasons): 'A plaintiff cannot recover substantial as opposed to nominal damages unless he proves both the fact and the amount of damage: The Commonwealth v Amann Aviation Pty Ltd 11991] HCA 54; (1991) 174 CLR 54; (1991)174 CLR 64; 104 ALR 1, at CLR at 80, per Mason CJ and Dawson J, at CLR at 99, per Brennan J., at CLR at 118, per Deane J. and at CLR at 137-8, per Toohey J. If he proves the fact of the loss but does not call the necessary evidence as to its amount he cannot be awarded substantial damages (McGregor on Damages, 14th ed., at 190 and 222): he must put the tribunal in the position of being able to quantify in money the damage he has suffered: Watts v Rake [1960] HCA 58; (1960)108 CLR 158, at 159, per Dixon CJ. So juries in personal injuries cases are often directed that the plaintiff must prove to their satisfaction what he has suffered and will suffer and what is fair and reasonable compensation in respect of that. It is often said that the amount of the damage must be proved with certainty, but this only means as much "certainty" as is reasonable in the circumstances: Ratcliffe v Evans [1892] 2 QB 524, at 532-3. Where precise evidence is obtainable, the court naturally expects to have it; where it is not, the court must do the best it can: Biggin and Co Ltd v Permanite Ltd [1951] 1 KB 422, at 438; The Commonwealth v Arnann Aviation Pty Ltd, at CLR at 83, per Mason CJ and Dawson J. The nature of the damage may be such that the assessment of damages will really be a matter of guesswork, as in the well-known case of Chaplin v Hicks [1911] 2 KB 786, where the plaintiff had lost a chance of winning an engagement as an actress as a prize. So damages will be assessed for the wrongful detention of a racehorse even though it may be necessary to guess at the amount: Wilson v Matthews [1913] VicLawRp 54;119131 VLR 224; compare Howe v Teefy [1927] NSWStRp 41; (1927) 27 SR (NSW) 301. Claims for damages for loss of publicity are another example of cases of inherent difficulty in assessing the plaintiff's loss with any approach to certainty: see the decisions cited in Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66; (1938) 61 CLR 286, at 301. An interesting decision is Aerial Advertising Co v Batchelors Peas Ltd (Manchester) (1938) 2 All ER 788, where the loss suffered could not have been proved with precision. Atkinson J. awarded three hundred pounds as all he could allow on an absolutely safe basis, saying that it was undoubtedly too little, but that the plaintiff could have called better evidence if it had wanted a larger figure. But while in some cases guesswork may be permissible in assessing damages, in others it is not. Guesswork was not good enough in Williams v Stephenson (1903) 33 SCR 323 (breach of contract by preventing plaintiff from continuing to conduct hotel; trial judge wrong in assessing damages by guessing); Wood v Grand Valley R Co 16 DLR 361; affirmed 22 DLR 614; 51 SCR 283 (breach of contract to construct railway line; any estimate of loss practically guesswork); Toronto Transit Commission v Aqua Taxi Ltd 6 DLR (2d) 721 (violation of exclusive right of ferry; no intelligent conclusion possible as to amount of loss); Sunley (B) and Co Ltd v Cunard White Star Ltd [1940] 1 KB 740 and Woodman v Rasmussen [1953] St R Qd 202 (breach of contract to carry machinery; in Sunley trial judge wrong to assess damages while admitting that any attempt at analytical analysis of award must fail); Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66; (1938) 61 CLR 286 (breach of advertising contract; impossible to reach any estimate of damage suffered); Noske v McGinnis [1932] HCA 32; (1932) 47 CLR 563, at 599 (breach of contract for sale of hotel; Evatt J, dissenting as to sufficiency of evidence, holds that it will not found a fair estimate of damages); and Ashcroft v Curtin [1971] 1 WLR 1731 (diminution of profitability of business as result of plaintiffs injuries; quantification quite impossible). It all depends on the circumstances. Where a vessel was damaged by negligence and there was evidence that it was impossible to make a reasonably accurate estimate of the cost of repairs, the Full Court of Queensland upheld a direction that in estimating the cost of repair the jury must do its best on what seems to have been the exiguous material before it: Wheeler v Riverside Coal Transport Co Pty Ltd [1964] QdR 113. The plaintiff may have been fortunate in the briefly noted case of Bovet v Walker (1917) 62 Sol Jo 104, where no evidence to enable the diminution in value to be quantified seems to have been led; I should have thought that expert evidence would have been available and should have been called.'
His Honour said later in the judgment (at [11]): 'There is no rigid dividing line between cases in which guess work is permissible in assessing damages and cases in which it is not. The borderline between guess work and rational assessment is itself indistinct, as is the line between evidence that is "precise" (The Perminite Case Dictum) and evidence that is not.'
In this case there ought to be some evidentiary basis for the cost of installing the replacement glass sliding door including the work to the ceiling above in order to allow some estimation of cost to be made. However there is none. Without such evidence the Tribunal is unable to do the best that it can or even to engage in guesswork since there is no evidence to underpin either attempt.
Given the lack of evidence I am in a position to award nominal damages. I should also consider the fact that the owners have failed to pay the builder the sum of $1,652.00.
Section 48(3) of the Act deals with the order making power of the Tribunal. It states: 'Sections 79R and 79T-79V of the Fair Trading Act 1987 apply, with any necessary modifications, to and in respect of the determination of a building claim'
I find Section 79U of the Fair Trading Act 1987 to be relevant, in particular section 79U(1) which states: 'When making any orders under this Division, the Tribunal must be satisfied that the orders will be fair and equitable to all the parties to the claim.'
In circumstances where: 1. there is no evidence before me concerning the cost of installing the replacement glass sliding door including the work to the ceiling above; and 2. it is admitted by the owners that they did not pay the builder the sum of $1,652.00 being the balance of the agreed contract price of $6,050.00 (inclusive of GST); I find that if I made an order for nominal damages in the sum of $10.00 to compensate the owners for the cost of installation of the replacement glass sliding door including the work to the ceiling above in circumstances where they have retained the sum of $1,652.00 from the contract price, that would be an outcome that would be fair and equitable to all of the parties to these proceedings.

Costs

Section 60 of the Civil and Administrative Tribunal 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 the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) 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.'
In HB 16/27762 the amount claimed was $1,652.00. Section 60 of the Civil and Administrative Tribunal Act therefore applied to it. The claim was for the recovery of a small amount being the balance due under a contract between the parties. I can see no special circumstances which apply to the proceedings since the amount claimed was so small and the issue of non-payment was admitted. I will order that in HB 16/27762 there will be no order as to costs.
The owners have reserved their right to make submissions on costs regarding their application.
I will therefore make the following orders regarding the costs of these proceedings.
Any costs application must be lodged in the Tribunal and served on the costs respondent within 21 days of the date of these orders either attaching or referring to any documents relied upon in support of the application.
The costs respondent will have 21 days after the date it receives the application referred to in the preceding paragraph to lodge in the Tribunal and serve on the costs applicant its submissions in response to the cost applicant's costs application, such submissions either attaching or referring to any documents relied upon.
The cost applicant will have 14 days after the date it receives the cost respondent's submissions to lodge in the Tribunal and serve on the costs respondent its submissions, if any, in reply, such submissions either attaching or referring to any documents relied upon.
Subject to the right of the parties to make submissions under section 50(3) of the Civil and Administrative Tribunal Act 2013, (which should be made in conjunction with the submissions referred to above), 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 30 May 2017

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: 11 July 2017

At a glance

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Decision date

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Judgment (13 paragraphs)

Parties

Cases Cited (14)

Cited By (2)