Su v Winning Builders Pty Ltd

Procedural History of the Proceeding, the Parties' Exhibits for Hearing, and the Parties' Written Submissions following the Hearing.

1. The Owners commenced the Proceeding as an application for an order to pay money pursuant to the HB Act, s 48O(1)(a), consisting of in addition to the Owners' claim for delay damages, an amount of damages (well exceeding the contract price of $165,000) on account of the costs of bringing the works under the Building Contract to completion, including alleged defective work.
2. The Proceeding was case managed by the Tribunal in the usual manner prior to the commencement of the hearing on 18 and 19 January 2023. There were directions' hearings on 27 May 2022, and on 29 August 2023, where the parties were ordered to file and serve points of claim, points of defence, and lay and expert evidence in support of their respective cases.
3. In the case of the second directions' hearing, the Proceeding was adjourned to be specially fixed by the Divisional Registrar for a two (2) day hearing. Extensions of time to comply with prior directions of the Tribunal, were also made during the second directions' hearing on 29 August 2022, and then by orders made in chambers on 26 September 2022.
4. There was correspondence (referred to below) between the parties, and their solicitors, in December 2022, following the Owners' service of a notice purporting to terminate the Building Contract. This prompted an application by the Builder to vacate the specially fixed hearing on 18 and 19 January 2023. In dismissing the Builder's application to vacate the specially fixed hearing dates, the Tribunal said on 23 December 2023: Having regard to the points of claim of the applicants the issue of whether the applicants terminated the building contract pursuant to its terms or under the general law does not arise for determination.
5. The hearing on 18 and 19 January 2023 was adjourned part heard before me. Leave was granted to the Builder to amend its points of defence to include a defence based on the issue relating to whether the scope of works under the Building Contract included, as the Builder contended (relying upon lately served written evidence - see below), the Revised Engineering Plans or Rev 2 Plans, and for the Builder to pursue another defence based upon s18F of the HB Act (although, in fact, a s18F defence was subsequently not pursued by the Builder). Materially (for the purposes of adjourning the hearing on 19 January 2023), in respect of the Builder's case that the Revised Engineering Plans or Rev 2 Plans are part of the Building Contract, the Builder was given leave to rely upon (lately served) further evidence, i.e., written evidence which was not included in the Joint Tender Bundle, marked on 18 January 2023, the first day of the hearing, as Exhibit 1. The Builder's further evidence consisted of the second affidavit of Jimmy Yuen (Mr J Yuen) dated 11 January 2023, a supplementary report of Steven Maxwell Alexander (Mr Alexander) of Steven Alexander Pty Ltd (SAPL) dated 16 January 2023, and a supplementary report of Mr Lam dated 17 January 2023.
6. Because leave was granted in respect of additional written evidence in the Builder's case, as a matter of procedural fairness, and at the request of the parties' legal representatives, an adjournment was required to facilitate the carrying into effect of further directions for the Owners to file and serve their documents responding to the Builder's lately served evidence, and for any additional evidence in chief in the Owners' case as to quantum, and then for the Builder to file and serve any other documents strictly in reply to the Owners' documents: see orders 8 and 9 made on 19 January 2023.
7. With the adjournment granted, the parties' experts, George Dahrie (Mr Dahrie) of Noviion Engineering, in the Owners' case, and Mr Alexander of SAPL, in the Builder's case, were also directed to prepare an updated joint report, arising from their consideration of the issues raised in the lately served additional evidence of the Builder: see order 12 made on 19 January 2023.
8. In the lead-up to the hearing on 18 January 2023, the Owners had contended that they could bring a claim for damages by way of rectification costs based upon breaches of the statutory warranties in s 18B of the HB Act, because the Building Contract had ended (c.f., Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 (Brewarrina) at [67] - [68]) when they issued a termination notice to the Builder on 13 December 2022, relying on their rights at common law as opposed to the provisions of the Building Contract. Pertinently in this regard, the Tribunal had referred some months earlier (in fact, at the first directions' hearing on 27 May 2022) to Brewarrina and at that time, had noted that "the contract between the parties is still on foot".
9. Notwithstanding their earlier conduct of the Proceeding, on 17 January 2023, the Owners served Preliminary Submissions indicating that in respect of their claim for the Builder to bring works under the Building Contract to completion, including any defective work, they sought a work order and not a money order.
10. Both parties opened their cases before me at the hearing on 18 and 19 January 2023, and I admitted evidence in the form of the parties existing joint bundle at the time, which became Exhibit 1. The Owners by their counsel, submitted that the issue of termination of the Building Contract no longer arose for determination by the Tribunal as the Owners now sought a work order only, and that in those circumstances, the Owners were ready to proceed with the hearing.
11. While the Owners' position may have changed during the Proceeding as regards the appropriate relief that they sought under the HB Act, I recognise that the Builder has always disputed in the events which have occurred, that the Building Contract had come to an end, just as I recognise that the Builder has always disputed that a money order is an appropriate remedy in the circumstances of this case for bringing the works under the Building Contract to completion (including alleged defects). Clearly, the Builder has always contended in the Proceeding that the Building Contract remains on foot and that the Building Contract has not reached practical completion.
12. The Builder has also maintained that the Owners' purported termination of the Building Contract on 13 December 2022 was invalid, in that the Owners' Notice was not given in accordance with the termination clauses in the Building Contract, and further that the said Notice could not be relied upon under the general law to terminate the Building Contract because any right of termination accruing to the Owners had been lost upon affirmation of the Building Contract by the Owners' solicitors' letter of 12 August 2022, or alternatively, the right to terminate the Building Contract under the general law had been lost because such right had not been exercised by the Owners within a reasonable time, and the Owners' delay in exercising the right to terminate the Building Contract had caused prejudice to the Builder.
13. When the hearing resumed before me later in the year (i.e., on 6 and 7 November 2024), the Owners had elected not to file and serve any additional evidence in chief for their case as to quantum. The Owners' counsel confirmed that the Owners did not seek an order to pay money on account of the costs of bringing the works under the Building Contract to completion (including alleged defects); rather, the Owners sought a work order requiring the Builder to pay a third party building contractor to bring the works under the Building Contract to completion (including alleged defects).
14. Following the hearing, the Owners' Closing Submissions dated 8 December 2023 (Owners' Closing Submissions) at [5.1], [5.8] - [5.14] brought a further clarification as regards the relief sought by the Owners in the Proceeding - i.e., should the Tribunal find that the Builder is not required to rectify the defects to bring them into conformity with the Original Engineering Plans or Rev 1 Plans, but not otherwise, the Owners then claim $13,200 by way of restitution or alternatively, as a 'Contract Price Adjustment'.
15. This order to pay money in an amount of $13,200 was put in addition to the Owners' claim for delay damages in an amount of up to $43,645.80.
16. On the other hand, the Builder submitted that no work order should be made at all in the Proceeding, i.e., that the Builder should simply be allowed to return to the Property and complete the works under the Building Contract, as it has always contended should be the case from the time it said that it was denied access to the Property by the Owners in or about mid-March 2022. The Builder further relied upon its solicitor's letters to the Owners' solicitors dated 21 June 2022 (Exhibit 1A, pages 1,958 - 1,959) and 11 August 2022 (Exhibit 1A, pages 1,960 - 1,961).
17. Alternatively, the Builder submitted that if the Tribunal determines that a work order is the appropriate relief in the circumstances of the case, such order should require the Builder (and not a third party contractor) to undertake the works to bring the Building Contract to practical completion, and to fix any defects. Furthermore, the Builder said that because the works are incomplete (and not defective), any order for it to carry out works at the Property should be limited to those works where there is a dispute as to how they should be completed, and that no work order should be made in respect of works that the parties agree are incomplete, and where there is no dispute as to how the works should be completed.
18. The Builder also said that the Tribunal should dismiss the Owners' claim for a money order for 'Contract Price Adjustment' in respect of an alleged cost saving to the Builder relating to the steel columns. The Builder argued that the Owners' claim was very lately raised by the Builder and that it lacks a proper legal basis and evidentiary foundation.
19. As to the Owners' claim for a money order by way of delay damages, the Builder submitted that the claim should be dismissed due to a lack of evidence of loss, or alternatively, that the claim should be rejected insofar as it relates to the period after the Owners re-took possession of the Property (or, as the Builder submitted, the Owners denied access to the Builder).
20. Both parties were granted leave to have legal practitioners representing them at the hearing on 18 and 19 January 2023, and on 6 and 7 November 2023. All hearings were conducted in person with the parties' experts also present in person. The parties appeared by their respective counsel.
21. Pursuant to prior directions of the Tribunal, the parties produced a Joint Tender Bundle (also known as 'the Tribunal Book'), which (as I indicated previously) was admitted into evidence on 18 January 2023 as Exhibit 1 and comprising 558 pages. The Tribunal Book was then updated for the further hearing on 6 and 7 November 2023 when it became a book of three (3) volumes comprising 2,077 pages (Exhibit 1A), including the parties' written lay and expert evidence, the Complying Development Certificate and attachments (at pages 1,873 to 1,957), correspondence between the parties' solicitors' in the period June - December 2022 (at pages 1,958 to 1,971), and copies of the orders of the Tribunal in the Proceeding (at pages 2,031 to 2043).
22. As to the written expert evidence for the Proceeding, the Tribunal Book contained the following documents and reports:

• Building Defects Report dated 7 July 2022, with Scott Schedule, from the Owners' expert witness, Mr Dahrie of Noviion Engineering,
• Affidavit from the Builder's expert witness, Som Lam (Mr Lam) of HB2 Engineering & Development dated 19 August 2022,
• Response Schedule to Building Defects Report dated 19 August 2022 from the Builder's expert witness, Mr Alexander of SAPL trading as Building Diagnostics and Compliance Consultants,
• Joint Expert Scott Schedule of Mr Dahrie and Mr Alexander dated 28 November 2022 (First Joint Report),
• Supplementary Report of Mr Alexander dated 16 January 2023,
• Supplementary Report of Mr Lam dated 17 January 2023,
• Building Defects Report of Mr Dahrie dated 19 May 2023,
• Response Schedule to Building Defects Report of Mr Alexander dated 15 June 2023,
• Letter of Mr Sam in response to the Building Defects Report of Mr Dahrie, dated 16 August 2023,
• Affidavit of Mr Sam dated 23 August 2023,
• Joint Building Defects Report with comments of Mr Alexander dated 26 October 2023 (Updated Joint Report).

1. The Tribunal Book also contained the Owners' written lay evidence, as follows:

• Affidavit of Evelyn Su (Ms Su) dated 10 November 2022 with Exhibit ES - 1,
• Affidavit of Bao Ling Zhao (Ms Zhao, also known as Pauline Zhao) dated 21 November 2022 with Exhibit BLZ - 1,
• Supplementary Affidavit of Ms Zhao dated 13 July 2023 with Exhibit BLZ - 2,
• Supplementary Affidavit of Ms Su dated 13 July 2023,
• Affidavit of Jian Yu Su (Mr Su) dated 13 July 2023.

1. The Builder relied on the following written lay evidence as set out in the Tribunal Book:

• Affidavit of Jimmy Yuen (Mr J Yuen) dated 22 August 2022, with Attachment 1,
• Supplementary Affidavit of Mr J Yuen dated 11 January 2023 with Exhibit JY - 2,
• Further Supplementary Affidavit of Mr J Yuen dated 8 September 2023, with Exhibit JY - 3.

1. During the hearing, the following further documents were tendered and marked as Exhibits 2 to 6:

• An enlarged copy of page 137 of Exhibit 1A being part of the Original Engineering or Rev 1 Plans (Exhibit 2),
• An enlarged copy of page 1836 of Exhibit 1A being part of the Rev 2 Plans (Exhibit 3),
• Email correspondence during August/September 2023 between the parties' solicitors as regards arrangements of the experts for their joint report (Exhibit 4),
• Email correspondence in September 2023 between Mr Dahrie and Mr Alexander (Exhibit 5), and
• Copy of AS 3740 - 2010 Waterproofing of domestic wet areas (Exhibit 6).

1. The experts, Mr Dahrie, Mr Alexander, and Mr Lam each gave sworn oral evidence in joint session (on 7 November 2023) subject to cross examination by counsel. On 6 November 2023, the Owners, Mr Su, and Ms Zhao, together with Ms Su (who was not a party) gave affirmed oral evidence in the Owners' case, subject to cross examination by counsel, and Mr J Yuen gave affirmed oral evidence in the Builder's case, also subject to cross examination by counsel. Mr Su and Ms Zhao gave their oral evidence with the assistance of a Cantonese speaking interpreter.
2. Further, the parties provided a Transcript of the hearing on 18 and 19 January 2023 at pages 1972 to 2030 of Exhibit 1A, and of the hearing on 6 and 7 November 2023 as an attachment to the Owners' Closing Submissions (hereinafter, collectively referred to as the Transcript). Transcript references in these Reasons will be indicated by the letter 'T' with a page number and then a dot followed by the line numbers on the relevant page of the Transcript.
3. The parties' counsel provided written outline opening submissions at the commencement of the hearing on 18 January 2023: see at pages 2044 to 2059 of Exhibit 1A ('Opening Submissions of Builder' dated 18 January 2023), and at pages 2060 to 2076 of Exhibit 1A ('Applicants' Preliminary Submissions' dated 17 January 2023).
4. At the resumption of the adjourned hearing on 6 November 2023, both parties' counsel provided further opening submissions, as follows:

• Applicants' Further Preliminary Submissions dated 5 November 2023, and
• Builder's Revised Opening Submissions dated 3 November 2023.

1. Furthermore, pursuant to directions made on 7 November 2023 at the conclusion of the evidence, the parties' legal representatives have now provided their closing written submissions, as follows:

• Owners' Closing Submissions 8 December 2023 (Owners' Closing Submissions), with a form of proposed work order,
• Builder's Closing Submissions dated 12 February 2024 (Builder's Closing Submissions), with a form of proposed work order,
• Owners' Submissions in Reply dated 8 Match 2024 (Owners' Reply Submissions).

1. In making my decision in relation to the Owners' application for orders of the Tribunal, I have considered the entirety of the written material including the Exhibits, the Transcript, and the written submissions and supporting documents of the parties. In these Reasons for Decision, I may focus on the material which I consider is central to the considerations of the application for orders of the Tribunal; but to the extent that the Reasons may not refer to a specific piece of evidence or singularly deal with a submission, it should not be assumed that I have ignored that evidence or submission.
2. As in any civil proceedings, applicants for orders of the Tribunal bear the legal onus of presenting sufficient evidence to satisfy the Tribunal, on the balance of probabilities, that the orders sought in the application must be made.

The Primary Issues for the Tribunal's consideration and determination

1. Various factual and legal issues arise in the Proceeding around these questions: 1. In the context of the Owners' case to bring the works under the Building Contract to completion, is the Tribunal's discretion engaged to make a works order whether under subsection 48O(1)(c)(i), or subsection 48O(1)(c)(ii) of the HB Act (Jurisdiction and Discretion)? 2. If so, what should be the terms and conditions of the works order (Work Order Terms and Conditions), specifically: 1. Whether the works order should impose, as the Owners advocate, a condition that the Builder retains a suitably qualified third party building contractor to perform the works (Third Party Contractor Condition), 2. Whether the works order should contain, as the Owners advocate, a direction to the Builder to move the structural columns (Structural Columns Direction), 3. Considering the parties' experts' differences of opinion in their Updated Joint Report, to determine the scope of works for specific items in the works order (Scope of Works for Specific Items). 1. Should the Tribunal make an order to pay money under s 48O(1)(a) of the HB Act for a 'Contract Price Adjustment', as the Owners contend (Contract Price Adjustment)? 2. Should the Tribunal make an order to pay money under s 48O(1)(a) of the HB Act for delay damages, as the Owners contend (Delay Damages)?
2. For the Jurisdiction and Discretion issue, especially whether either of subsection 48O(1)(c)(i) or subsection 48O(1)(c)(ii) of the HB Act, is engaged in the circumstances, I must weigh all the evidence to make findings as to whether (or not) the Builder has wrongfully refused to complete the works required under the Building Contract. This involves consideration of the evidence in the Owners' case that the Builder abandoned the works on or about 14 February 2022 when it is said (by the Owners) that the Builder stopped attending the Property: see the Owners' points of claim dated 10 June 2022 at [11], [15], and [18]. Similarly, I must weigh the evidence in the Builder's case that work under the Building Contract ceased because of the Owners' 'wrong' not the Builder's, that the Builder has been denied access to the Property to complete the works since about mid-March 2022, and that the Builder has repeatedly, since mid-March 2022, indicated its willingness and readiness to return to work: see the Builder's amended points of defence dated 16 February 2023 at [11], [15], and [18].
3. The issues for consideration in respect of the question concerning the Structural Columns Direction, include whether the Builder has made out the three (3) reasons why it says no order should be made to move the structural columns. Relevantly, the Builder contends:

• Firstly, on a proper interpretation of the Building Contract, the Builder was free to select the location of the structural columns,
• Secondly, there was agreement by the Owners (i.e., the Oral Variation, as alleged by the Builder), or failing that acquiescence, in the location of the structural columns,
• Thirdly, it would not be reasonable to order the relocation of the said columns which the experts agree are structurally sound and capable of supporting the structure of the Owners' dwelling.

1. For the question concerning Delay Damages, the issues for consideration are whether the Builder has established on the available evidence, the Further Oral Variation regarding the delay claim procedure under the Building Contract, as well as other matters of proof such as quantum of loss, causation of loss, and remoteness of damage.

Jurisdiction and Discretion

1. While it is common ground that the Building Contract is still on foot, I find that such circumstance is not, in and of itself, an impediment to a work order being sought or made. The Tribunal has unique powers available to it under subsection 48O(1)(c) of the HB Act: "(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."
2. I am satisfied that those powers should be exercised in this case to compel the Builder to complete the works under the Building Contract. In this regard, I do not accept the Builder's case as regards lack of jurisdiction to make a work order: see the Builder's Closing Submissions at [14(a)] and [55]. There is no doubt that the Tribunal has power under subsection 48O(1)(c) of the HB Act to make a work order when the relevant contract is on foot and works remain incomplete (see Little v J & K Homes Pty Ltd [2017] NSWCATAP 84 at [22]), and even in circumstances where a builder is ready, willing, and able to complete the relevant work (see, for example, Project 4301 Pty Ltd v Buildcarp Constructions Pty Ltd [2022] NSWCATCD 30 at [88] - [91]).
3. Nor do I accept the Builder's case (see, for example, the Builder's Closing Submissions at [2], [3], [58], and [129] - [132]) that to grant the Owners the relief they now seek (c.f., the order to pay an amount of up to $490,000, as sought in the application lodged 27 April 2022), is to permit them to rely on their own 'wrong' (principally, the allegation that the Owners denied the Builder access to their Property), to obtain a work order. To the extent it can be said that the Owners refused access to the Builder on and from 28 March 2022, the Builder had rights under the Building Contract which it did not exercise, although I am not persuaded that the Builder can be criticised for not exercising those rights in circumstances where the Owners commenced the Proceeding less than a month after taking possession of the building site. In any event, access to the Owners' Property is a necessary term and condition of any work order made by the Tribunal.
4. On the Owners' case, the Builder was required to complete the Contract works by 1 April 2022, and as to the works the Builder had completed to that date, the Owners argued there were defects that were significant in their nature and extent, some of which were disputed by the Builder. Pertinently, SafeWork NSW had already issued compliance notices to the Builder on 26 June 2021. It is of no moment the Owners accepted (see T45.26-35 and T58.23 - T59.1) that the Builder thereafter ceased engaging in unsafe work methods on the Owners' Property. The fact that SafeWork NSW became involved in the first place is the material point. That the Builder took steps to ensure the building site was safe as it was directed to do by the compliance notices, does not detract from the Builder's strict obligations as regards carrying out works in a safe manner. It was those strict obligations which had been breached, and it was the Builder's breach, which prompted SafeWork NSW to issue the compliance notices. In all the circumstances, I am satisfied there was no 'wrong' on the Owners' part, and that they were compelled to pursue the Proceeding to get certainty as to what works the Builder is obliged to carry out to complete the Building Contract.
5. As to their conduct of the Proceeding since instituting it on 27 April 2022, I find that the decision by the Owners in or about January 2023 (when represented by Australian legal practitioners) to pursue a work order only in respect of incomplete works, was made, consistently with s 36(3) of the Civil and Administrative Tribunal Act 2013 NSW (NCAT Act), to facilitate the just, quick, and cheap resolution of the real issues in dispute between the Owners and the Builder.
6. In the exercise of the Tribunal's discretion under subsection 48O(1)(c) of the HB Act, and in balancing the interests of the Owners (on the one hand) and the Builder (on the other hand), I find that a work order is the appropriate form of relief, for the following reasons: 1. First, a work order is in keeping with the "preferred outcome" under s 48MA of the HB Act. 2. Second, if made, a work order will significantly reduce the chances of the parties having to come back to the Tribunal to reagitate outstanding and contested issues between them. That outcome is clearly undesirable. Further, it does not align with the Tribunal's guiding principle in 36(1) of the NCAT Act, which, as indicated, is to facilitate the just, quick, and cheap resolution of the real issues in the Proceeding. 3. Third, I am satisfied that there has been a systematic failure on the Builder's part to comply with the obligations imposed on it by the HB Act, and under the Building Contract, which is evidenced by: 1. The Builder's acceptance of payment of $25,000 on 3 July 2020, prior to home warranty insurance being obtained and in contravention of the HB Act in subsection 92(2), 2. During the Contract works, the Builder's failure to maintain a safe work site, resulting in SafeWork NSW issuing improvement and prohibition notices, 3. The Builder not following the procedure for extensions of time under the Building Contract, 4. The Builder's failure to bring the Contract works to practical completion within the time specified in the Building Contract, 5. The Builder's preparedness only to carry out works that it says are defective, and not the works which the Owners say are defective or those works which the Tribunal determines are defective. 1. Fourth, my findings (see below) as regards the unreliability of the evidence of the Builder's director, Mr Yuen. 2. Fifth, during the hearing, I observed personal animosities, and a lack of trust, between the parties. Of course, personal animosities, and a lack of trust, between a builder and an owner, in and of themselves, are not sufficient to displace the "preferred outcome" in s 48MA; nevertheless, the relevant discretion of the Tribunal in the HB Act (s 48O(1)(c) and s 48MA) to make a work order is to be exercised objectively, and a relational breakdown between an owner and a builder is an element of the Tribunal's objective assessment. The relational breakdown favours a work order being made with terms and conditions (see under the next heading - 'Issues arising for the Work Order Terms and Conditions') to ensure that the nature and extent of the works the Builder must complete is clearly defined such that the chance of further litigation is reduced. 3. Sixth, plainly, there is a dispute about what works need to be carried out, which is a further basis as to why the Tribunal ought to make a work order. 4. Seventh, considering my earlier finding of no 'wrong' on the Owners' part, I find that no real, or substantial, prejudice arises to either party if a work order is made by the Tribunal.

Issues arising for the Work Order Terms and Conditions

1. In their Closing Submissions, the Owners' legal representative and the Builder's legal representative, respectively, attached a form of Work Order with terms and conditions to Work Order (annexure A) and a scope of rectification works (annexure B).
2. The competing forms of the Owners, and the Builder, respectively, i.e., with their different terms and conditions of work order and their scope of works for the disputed items, raise these issues:

• Whether the Builder, or an appropriately licensed third party building contractor, should undertake the rectification works,
• Whether the works order should contain a direction to the Builder to move the structural columns,
• Considering differences of opinion between the experts, Mr Dahrie, and Mr Alexander, in their Updated Joint Report, to determine the scope of works for specific items in the works order,
• Whether there should be an order for inspections during the rectification works, and if so, whether Mr Dahrie, or Mr Alexander, is appointed by the order as the Inspector, who pays the costs of the Inspector, and how often (or at what 'hold points' during the rectification works) should the Inspector carry out his inspections,
• The time for completion of the rectification works, including when the period for completion of the rectification works is to commence,
• Whether the work order should provide for the (more detailed) terms and conditions on quality of construction, statutory approval, insurance of work and personal injury, Builder's indemnity in favour of the Owners, damage to property, maintaining access, minimal disturbance, and cleaning up, 'making good' defects in rectification works (without affecting the Owners' right of renewal of the Proceeding, and Work Health and Safety,
• In the event of renewal of the proceedings pursuant to Clause 8 of Schedule 4 of the NCAT Act, whether there is a notation that the Builder "irrevocably consents" to a money order, as per paragraph 5 of the Owners proposed form of work order.

1. I will consider these issues under the various headings below.

Third Party Contractor Condition

1. The Builder submitted that a work order requiring the Builder to pay a third-party builder to bring the works to completion is contrary to the statutory scheme of the HB Act and is an "extraordinary approach" (Builder's Closing Submissions at [60]). I disagree. The Appeal Panel has clearly stated that the principle set out in s 48MA is not limited to ensuring that a builder personally rectify defects in its work. For instance, in Precise Builders (NSW) Pty Ltd v Hones & Krel [2018] NSWCATAP 112, the Appeal Panel observed at [19]: The policy objective of the HB Act, to ensure that a homeowner has the benefit of statutory warranties in respect of building work conducted on his or her land, is therefore satisfied if the Builder contracts with a licensed third-party contractor to undertake the remedial work in satisfaction of its obligations under the orders. Furthermore, in Little v J & K Homes Pty Ltd [2027] NSWCATAP 84, the Appeal Panel stated that a respondent's obligation in an order made under subsection 48O(1)(c)(i) could be fulfilled by the respondent retaining a licensed builder to carry out the work the subject of an order under that subsection (at [26]-[27]), and alternatively, that an order made under subsection 48O(1)(c)(ii) is "clearly intended to authorise the making of orders having wider operation than requiring the performance of building works by the builder. That provision would authorise an order that the builder cause specified work to be completed" (at [28]).
2. The Builder further submitted that its conduct does not justify a third party contractor condition in a work order, and that the appropriate course (if the Tribunal is minded to make a work order), in the exercise of the Tribunal's discretion having regard to s 48MA and s 48O(1)(c) of the HB Act, is to have the Builder complete the work without paying a third party's profit margin. In this respect, I have considered the Builder's detailed submissions (see Builder's Closing Submissions at [60] - [77]), and I am satisfied that further 'in reply' submissions of the Builder (see Builder's Closing Submissions at [61]) are neither warranted, nor required. I agree with the findings of fact and law contended for in the Owners' Closing Submissions at [6.1c] - [6.1f], to which the Builder's Closing Submissions responded. The findings contended for by the Owners are entirely consistent with my findings in these Reasons under the heading 'Jurisdiction and Discretion' (see particularly, [78a] - [78g] above). Additionally, while there is some evidence that asbestos was found on site while the digging of foundations was in progress (Exhibit 1A page 1001, see also T30.40-43), there is also objective evidence that a broken piece of asbestos was used as a structural element to support the works carried out by the Builder: see Exhibit 1A, page 785 (Photo 5). I find that the Builder's use of such building techniques is a further reason which does not favour a work order allowing the Builder to do the work. In essence, the Tribunal in the face of such evidence, cannot have confidence in the Builder carrying out the terms of a work order in a safe manner.
3. Put simply, the Tribunal must be satisfied that the Builder can comply with the terms and conditions of a work order but without the continued supervision of the Tribunal. That would be a completely undesirable outcome and it would be inconsistent with the Tribunal's guiding principle in s 36(1) of the NCAT Act. I find that a work order with a third party contractor condition, and other conditions (as to which, see below under the heading 'Other terms and conditions of a work order'), satisfies the objective of the just, quick, and cheap resolution of the real issues in the Proceeding, and furthermore, that a work order with such conditions properly balances the interests between the parties.

Other terms and conditions of a work order

1. The parties accept that if a work order is made, there should be stipulations as to time. I will allow six (6) weeks for completion, with provision for reasonable extension(s) of time where there is delay beyond the respondent's reasonable control, and for the works to commence 28 days (not 14 days, as the Owners advocated) after the date of the Tribunal's orders.
2. Equally, the parties accept that the Owners should be ordered to permit access to the Builder and any employee and/or subcontractor of the Builder as and when required on two (2) business days' notice, and for the rectification works the subject of the order to be carried out between 7:00 am and 5:00 pm Monday to Friday.
3. I am satisfied that there is a need for an expert, Mr Dahrie (as the work order is for the Owners' benefit), to act as the 'Inspector' and to sign off on the rectification works the subject of the work order, and for the costs of the Inspector to be borne by the Builder. Without such provision in the work order, I find that in all reasonable likelihood, the parties will simply end up in further dispute(s). In such circumstances as the present case, it is not unusual for the Tribunal to provide for an Inspector to sign off on the requirements of a work order, so that there can be no doubt about the works done, the works not done, and the works not done properly.
4. I am further satisfied that the work order should have terms and conditions as to Quality of Construction, Licensing Requirement, Statutory Approval, Completion of the Rectification Works, Insurance of Work and Personal Injury, Builder's Indemnity in favour of Owners, Damage to Property, Maintaining Access, Minimal Disturbance, and Cleaning Up, Defects in Rectification Works, and Work, Health, and Safety. Those terms and conditions align with the Builder's obligations under the HB Act. Given the Builder's previous non-compliance, I am satisfied that their inclusion in the work order, is warranted. As regards the Builder's submission (Builder's Closing Submissions at [83]) that these provisions are in some way, "superfluous", that is not a reason for the Tribunal to decline to include them in a work order.

Whether the work order should contain a direction for structural steel columns (items 1 - 8 of annexure B to the work order)

The Builder's Submission

1. The Builder says there are three (3) reasons why no order should be made moving the columns.
2. Firstly, that on a proper interpretation of the Building Contract, the Builder was free to select the location of the columns. Accordingly, if I find that the Contract allowed the Builder to implement the Rev 2 Plans, the factual dispute between the parties (i.e., the second reason, as set out in the next paragraph) is not relevant.
3. Secondly, that there was agreement by the Owners, the so-called Oral Variation, or failing that acquiescence, in the location of the columns.
4. Thirdly, that it would not be reasonable to order the relocation of the columns, which can support the structure. The gravamen of the Builder's submission is that removing and replacing the columns will be costly and would extend the period to completion substantially, such that in the circumstances it would not be reasonable or necessary to order the columns to be moved: see Bellgrove v Eldridge (1954) 90 CLR 613 (Bellgrove v Eldridge).
5. I will deal firstly with the factual contest (the second matter) before turning to the proper interpretation of the Contract (the first matter), and then the third matter as regards the application of the principles in Bellgrove v Eldridge, and the various cases following that decision.

The evidence in relation to placement of the columns

1. Whilst it is common ground that discussions between the Owners and the Builder commenced in or about July 2020, the primary difference between the parties is what was discussed at a meeting on 3 August 2020.
2. There are differing accounts of what was discussed at the meeting of 3 August 2020, which was, of course, before the Contract was signed. Mr Yuen on behalf of the Builder (see his affidavit sworn 11 January 2023 at [16] - page 1545 of Exhibit 1A), states that Ms Zhao said words to this effect in the presence of Mr Su: "I realised the other day that based on the engineer's plans, there will be columns which will be visible inside the house", and that thereafter Ms Zhao asked (page 1546 of Exhibit 1A) for visible columns inside the house to become external columns, to minimise interference with the kitchen cabinetry and for aesthetic reasons. Mr Yuen says that he further suggested to Ms Zhao during their 3 August 2020 meeting that the Owners think over the issue for a couple of days. Mr Yuen then says (see his affidavit sworn 11 January 2023 at [19] - pages 1546 - 1547 of Exhibit 1A) that on 6 August 2020 (i.e., the date of the Contract), during a meeting at the Owners' Gladesville NSW restaurant, the Owners confirmed they "would like to go ahead and have the supporting steel be on the outside of the house".
3. Mr Yuen relies on file notes of his conversation: see pages 1562 - 1563 of Exhibit 1A, the authenticity of which are disputed (at least as to whether they are contemporaneous documents and therefore whether the documents carry any weight in the Tribunal's enquiry), as well as various WeChat conversations (i.e., in the form of text messages) in the period from 25 September 2020 to 29 November 2020, which are said to evidence the parties' agreement as to the placement of columns externally or failing that, the Owners' acquiescence in the changed location of the columns- see pages 1001, 1004, 1007 - 1008, 1013, 106 - 1018, and 1023 of Exhibit 1A.
4. Ms Zhao in her affidavit affirmed 13 July 2023 denied that the conversations on 3 and 6 August 2020 took place: Exhibit 1A page 941 at [27] and gave evidence that Mr Yuen had said to her in or about early August 2020 that the Builder would provide an "all-inclusive bundle" which included engaging a structural engineer "to prepare structural plans and designs": Exhibit 1A pages 941 - 942 at [31]. In his affidavit affirmed 13 July 2023, Mr Su denied having the conversations of 3 and 6 August 2020 with Mr Yuen, or any conversations about structural designs at all: Exhibit 1A pages 1489 - 1490 at [22] - [23]. Mr Su also recalled conversations with Mr Yuen in relation to an "all-inclusive bundle" and engaging a structural engineer: Exhibit 1A page 1488 at [13].
5. Mr Yuen, Ms Zhao, and Mr Su were cross-examined on their written evidence. Mr Yuen accepted that Ms Zhao was referring to the Original Engineering or Rev 1 Plans (Exhibit 2), where she had referred to the "engineer's plans": see T87.10-20, T89.35-40. While Ms Zhao said she could not recall being shown the Rev 1 Plans prior to the Contract being signed (T22.5-11), she denied asking Mr Yuen to move the internal structural columns that were "ugly" to become external structural columns (T22.16-39). Mr Su denied any conversation regarding changing the design so that "ugly" internal columns would be on the outside of the house (T72.26-30). Mr Su confirmed that the Builder had not shown him the Rev 1 Plans before the Contract was signed (T69.32-34), and that there had been no discussion between the parties about the location of the structural steel columns before the Contract was signed (T73.19-22). Mr Su accepted that he relied on Mr Yuen about arrangements in relation to the engineer: T73.14-17, T78.1-15.

Did the Oral Variation occur?

1. The Builder bears the onus to the requisite standard of proof (i.e., on the balance of probabilities) that the Oral Variation occurred. Whether the Oral Variation is established requires factual findings bearing upon the credibility (and ultimately, the reliability) of the evidence given by the lay witnesses.
2. The Tribunal's assessment of the character of the witnesses and of the way the witnesses gave their evidence is of primary importance. Where a witness gives evidence on a particular issue which is found to be extremely improbable, inherently incredible, or inconsistent with probabilities derived from objective circumstances, the Tribunal may find that of itself undermines a witness's credibility in relation to the balance of the evidence given by the witness: see Aytul Ak Tankiz v Ferat Ak & Ramazan Ak [2014] NSWSC 1044 at [75] - [76] & [138]. The Tribunal may also be able to draw conclusions as to a witness's attitude to proceedings not only from the objective effect the proceedings may have on that witness's financial situation but also from their behaviour in the witness box, including emotional reactions visible when giving evidence and indicating a strong sense of grievance: see, for example, Tomlin v Ford Credit Australia [2005] NSWSC 540 at [43] (Tomlin v Ford Credit Australia); see also what Lord Pearce wrote in his dissenting speech in Onassis v Vergottis [1968] 2 Lloyd's Rep 403 at 431: Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by overmuch discussion of it with others? Witnesses, especially those who are emotional, who think they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist.
3. Courts and Tribunals have considered the following grounds as relevant in coming to adverse conclusions about a witness's credibility: see Textralian Enterprises v Perpetual Trustees (Victoria) Limited [2000] NSWCA 176 per Heddon JA at [85]. Where a witness: 1. Appeared argumentative, 2. Appeared evasive, 3. Appeared prone to volunteer material, 4. Was not responsive to the question, 5. Under cross examination, he or she gave potentially important evidence which would have appeared in the witness's affidavits if it proceeded from genuine recollection, 6. Appeared to lack genuine recollection and be defensive about answering without first having access to whatever document might help, 7. Gave evidence which was in disconformity with the allegations appearing in the pleadings.
4. In such circumstances, the Tribunal may find it appropriate to accept the evidence of those witnesses only where the evidence is supported by contemporaneous records, is inherently probable - objectively ascertained, or is against interest: see, for example, Tomlin v Ford Credit Australia, at [43] - [44] and HM&O Investments v Ingram [2012] NSWSC 958 at [32] - [34] & [44].
5. Ultimately, the plausibility of the witnesses' testimony must be tested against context and that which was revealed objectively by contemporaneous documents. As Bell P put it in ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24 at [212], this is an exemplary approach to fact-finding and the assessment of witness credibility.
6. In my opinion, Ms Zhao and Mr Su presented as witnesses of truth. They answered the questions put to them, and they made concessions contrary to the Owners' interest, as necessary. For example, Ms Zhao conceded in cross examination (T24.38 - T25.2) that at the time she signed the Contract, she did not mind whether the structural steel columns were placed inside or outside the house. This was because Mr Yuen had not told her whether the columns would be built inside or outside the house, because she did not know that she had a choice in the matter, and because she was content at that time for Mr Yuen to build the structure of the house in a manner which complied with the applicable building standards (T23.15-35). Similarly, Ms Zhao admitted that when she prepared a list of incomplete works which formed part of her daughter, Evelyn Su's email of 17 January 2022 to NSW Fair Trading (Exhibit 1A page 770), she knew that the structural steel columns were located outside the house and did not consider it a problem at the time: T63.37 - T64.39.
7. My impression generally was that in giving their oral evidence, neither Ms Zhao nor Mr Su were trying to predict what the cross examiner was seeking to achieve and that they simply answered each question truthfully and honestly and to the best of their ability. Nor was it put to either of Ms Zhao, or Mr Su, at any time during their cross examinations, that they were being untruthful when they gave their evidence.
8. I accept Ms Zhao and Mr Su as reliable witnesses of fact. To the extent there are evidentiary contests between their evidence and the evidence of Mr Yuen, I prefer their evidence. Materially, to the extent the Builder's case is that Ms Zhao could understand, even interpret, the Rev 1 Plans, this is not supported by Ms Zhao's evidence. In this respect, I accept: 1. Ms Zhao had no building experience (Exhibit 1A, page 940 at [22]), 2. She did not have the required knowledge or experience to understand that the external beam placements deviated from the Rev 1 Plans (Exhibit 1A, page 947, at [62]), 3. She did not read or understand documents in English and trusted Mr Yuen to make things work (T18.41 - T19.2), 4. She had no idea what the Builder was proposing as regards the placement of external columns (T23.15-19).
9. In my opinion, it is inherently improbable that someone with no knowledge or ability to read the Rev 1 Plans would be able to discern what they depict (assuming they were ever provided to the Owners) and then to raise that concern with Mr Yuen, without any assistance from Mr Yuen.
10. I reject the evidence of Mr Yuen for various other reasons.
11. There is no evidence whatsoever that the Owners were provided with the Rev 1 Plans prior to 3 August 2020. There was written evidence (Exhibit 1A page 1545 at [15]) that on 1 August 2020, Mr Yuen had received from Mr Lam some engineering designs in respect of the proposed extension to the second storey of the Owners' home; however, in my opinion, whether (or not) Mr Yuen had "seen" the Rev 1 Plans prior to 6 August 2020, the date he "received" the plans, is of no moment. As indicated, Mr Yuen made these pertinent admissions in cross examination: 1. That he was sure the meeting with the Owners took place on 3 August 2020 (T86.30-32). 2. That Mr Yuen received the Rev 1 Plans (Exhibit 2) on 6 August 2020 (T85.20-23). 3. That the plans Ms Zhao were referring to when she used the phrase "engineering plans" on Mr Yuen's version of the material conversation in his written evidence, were the Rev 1 Plans (T87.10-20, T89.35-40). The admission in (iii) was made on two separate and distinct occasions during Mr Yuen's cross examination.
12. The Builder's counsel had the opportunity to explore these issues, with Mr Yuen in re-examination but elected not to do so. Accordingly, no attempt was made to clarify Mr Yuen's evidence that he received the Rev 1 Plans on 6 August 2020 and that he was sure the meeting with Ms Zhao occurred on 3 August 2020. In my determination, those admissions demonstrate that Mr Yuen's recollection of what he said was discussed on 3 August 2020 (i.e., a recollection that Ms Zhao spoke about what is depicted by the Rev 1 Plans), is unreliable, and further, that the discussions for which the Builder now contends, did not, in fact, occur. To the extent the Builder also now submits (see Builder's Closing Submissions at [106] - [108]) that the dates on the Rev 1 Plans are erroneous, the Builder could, and should, have put that proposition to Mr Lam, the author of the Plans, at the hearing, but it did not do so. I therefore place no weight on the Builder's submission.
13. Moreover, I found Mr Yuen's written, and oral evidence to be entirely self-serving and unsupported by the context, or by any objective evidence. I do accept Mr Yuen's handwritten notes are contemporaneous records and I place no weight upon those documents. In my view, it makes no sense for Mr Yuen to write up a document which he accepted was an important matter (T93.31-34), on the same day the Contract was signed, and then to do nothing with that document in circumstances where he was, apparently, worried, that the Owners might forget important matters that he had discussed with them and he wanted to ensure there was a record (T91.5-28). Further, Mr Yuen accepted (T93.18-21) that there was nothing stopping him from including the handwritten note as part of the Contract, i.e., the Contract, which had been signed on the very same day it is alleged the handwritten note was made. His failure to do so without any, or any adequate explanation speaks to his unreliability as a witness of fact for there being an Oral Variation.
14. My impression was that Mr Yuen was prepared to say anything to advance the Builder's case for there being an Oral Variation. Pertinently, he gave evidence that the Oral Variation resulted in the cost of the works being "a little bit higher" (T102.11-16). That evidence was quite contrary to the expert evidence (which, of course, included the Builder's expert). Mr Dahrie, Mr Alexander, and Mr Lam each agreed that there would be, in fact, a cost saving: see T132.33 - T133.12 (Mr Dahrie), T133.14-20 (Mr Alexander), and T125.40-44 (Mr Lam). Further, Mr Yuen could not explain why the (alleged) additional cost of the Oral Variation was not passed on to the Owners, particularly where Mr Yuen accepted that the Builder was operating a business for the purposes of making money (T101.25-31). The rational explanation is that the Oral Variation did not occur. When Mr Yuen's evidence is assessed by reference to contemporaneous documents it cannot be accepted.
15. I find that the Owners did not consent to the Oral Variation.
16. Nor do I accept the Builder's argument, which relied substantially on the evidence of the parties' WeChat messages during the period from 25 September 2020 to 29 November 2020, that the Owners by their own conduct, acquiesced in the Builder's placement of the steel columns. Referring to my earlier consideration of the written and oral evidence of Ms Zhao and Mr Su, I am not satisfied that the Owners had the requisite construction and engineering knowledge and experience to acquiesce to the change in location of the steel columns. In relation to the evidence of the WeChat messages, Ms Zhao gave evidence, which I accept, that although she saw, while works were being performed, strip foundations being excavated externally to the house and structural steel columns being placed there, she had no idea about these matters and did not know if the works being done, were right or wrong: T33.1- 32.
17. For the foregoing reasons, I find that the Oral Variation did not occur.

Interpretation of the Contract

1. The Builder submitted I should find that the Contract required the Builder to procure and implement a suitable structural design from HB2 Engineering which otherwise complied with the Contract and all applicable codes and standards; that the Builder did that by proceeding to implement the Rev 2 Plans; and that as such, the Builder did not breach the Contract.
2. I am unable to make the findings sought by the Builder. I agree that the Contract requires the Builder to obtain structural drawings from HB2 Engineering and to build to them: see clause 1 at page 855 of Exhibit 1A. I also agree that the Special Conditions of the Contract, in subclause 31(6) at page 875 of Exhibit 1A, put an obligation on the Builder to appoint a structural engineer to complete construction. I do not agree that the Contract permits the Builder to design and construct whatever the Builder wishes without the approval or consent of the Owners. I am satisfied that any amendment or change to the structural drawings or plans is a variation to the Contract, which needs to be documented (i.e., in writing) and signed by the Owners as per clause 13 of the Contract (at page 864 of Exhibit 1A).
3. Nor is the Builder's interpretation of the Contract consistent with the terms that are implied into the Contract through the operation of section 7E and Schedule 2 of the HB Act. Clause 1(2) within Part 1 of Schedule 2 under the heading 'Plans and Specifications', states, relevantly: Any agreement to vary this contract, or to vary the plans and specifications for work to be done under this contract, must be in writing signed by or on behalf of each party to this contract.
4. While the Builder may rely on an oral variation as a defence (i.e., as a shield) to any defects claim: Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327 at [43] - [48], [56] - [57], the Builder cannot enforce an oral variation (i.e., as a sword) for the reasons expressed by Fagan J in Paraiso v CBS Build Pty Ltd (2020) NSWSC 190 at [41].
5. Accordingly, I find that the Contract, properly construed does not permit the Builder to construct as per the Rev 2 Plans without the Owners' consent or approval. The Builder's interpretation does not align with the express terms of the Contract and the terms implied by s 7E and Schedule 2 of the HB Act.

Bellgrove v Eldridge

1. The primary measure of damages in the case of defective building work was stated by the High Court of Australia in Bellgrove v Eldridge (at 618-619) to be "the amount required to rectify the defects complained of and to give to [the plaintiff] the equivalent of a building on [the plaintiff's] land which is substantially in accordance with the contract". The Court held (also at 618-619) that the building owner is entitled to the "reasonable costs" of the rectification work "necessary to produce conformity" with the building contract. The rule was qualified in that rectification must be a "reasonable course to adopt".
2. As to what remedial work is both "necessary" and "reasonable" in any case is a question of fact. Reasonableness is to be assessed by reference to the contract the subject of any proceedings and not at large. As McDougall J observed in Bannister & Hunter v Transition Resort Holdings (No 3) (2013) NSWSC 1943 at [330], the cost of rectification will be unreasonable only if it is wholly disproportionate to achievement of the contractual objective.
3. In this Proceeding, the Owners through their counsel, indicated they do not run a case that the design of the columns in the Rev 2 Plans, is structurally inadequate: T145.18-21. Neither Mr Dahrie nor Mr Lam suggested that the Rev 2 Plans would bring an unsound outcome.
4. Subsequent to Bellgrove v Eldridge, the High Court has held that the test of "unreasonableness" is only to be satisfied "by fairly exceptional circumstances", such as where the proposed rectification is out of proportion to the benefit to be obtained: Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (Tabcorp Holding) [2009] HCA 8; (2009) 236 CLR 272 at [17]; see also Westpoint Management Ltd v Chocolate Factory Apartments Ltd; Chocolate Factory Apartments v Westpoint Finance [2007] NSWCA 253 at [42] - [48]; Owners SP 92450 v JKN Para 1 Pty Limited [2023] NSWCA 114 at [68] -[70].
5. There is no suggestion that the Owners are using a technical breach of the Contract to secure an uncovenanted profit (Tabcorp Holding at [17]). I accept that the Owners simply want works carried out in accordance with what the Builder was contractually bound to do. Nevertheless, given Mr Lam's unchallenged evidence that the structure remains stable and applying the principles in Bellgrove v Eldridge and in the cases following that decision, I am persuaded that there are fairly exceptional circumstances which warrant a departure from the primary measure of damages; that a work order which requires the removal and replacement of the steel structural columns, would be costly and disproportionate to achievement of the contractual objective; and that such a work order would likely extend the period to completion significantly. In the circumstances, I am satisfied that it would not be reasonable or necessary to order the columns to be moved.
6. For that reason, only, I determine that the work order should not contain a direction for the structural steel columns to be brought into conformity with the Original Engineering or Rev 1 Plans, i.e., that there should be no order for items 1 - 8 of annexure B to the work order.

Annexure B to the Work Order - Scope of Works for Other Items

Generally

1. Of the 55 items in the experts' Updated Joint Report of 26 October 2023 (see pages 692 - 755 of Exhibit 1A), the following items are not pressed by the Owners: Item 18 - Laundry height Item 20 - Laundry external door Item 21 - Rumpus Room Therefore, as was the case for items 1 - 8 (see above), I make no order for items 18, 20, and 21.
2. Moreover, I note that in some instances (e.g., Item 33 - Bulge in stairwell wall, and Item 54 - Level 1 Flooring) following receipt of the parties' Closing Submissions, the Owners have accepted the Builder's proposed amendments to the form of work order, as referred to below.
3. However, in the case of 'incomplete' works, specifically, items 9 - 15, 19, 26, 31, 32, 36, 42, 44 - 47, 51, and 52 in the experts' Updated Joint Report, the Builder made the primary submission that it should not be ordered to perform rectification work as proposed by Mr Dahrie (see under the 'Noviion Rectification' column in the Updated Joint Report), given that the Contract is still on foot and given the Builder's obligation under the Contract to bring the works to completion. The Builder argued that the Owners will have the opportunity to allege breach of statutory warranty at practical completion for those items (if necessary). The Builder's alternative position is that if an order is to be made, then Mr Alexander's opinion (as put in the SAPL report, or under the 'SAPL Comments following Conclave' column in the Updated Joint Report) should be preferred to the extent there was a dispute on various items between the parties' experts.
4. On the other hand, the Owners' position is that any contest as to whether items of works as referred to in the Updated Joint Report are to be characterised as 'defective' or 'incomplete' is really of no moment, because all items can, and should, be covered by the terms of a work order of the Tribunal.
5. I agree with the Owners' submission on so-called incomplete works. In this respect, there is no doubt that a work order can extend to incomplete works when a contract remains on foot: Little v J & K Homes Pty Ltd [2017] NSWCATAP 84 at [22] and Project 4310 Pty Ltd v Buildcarp Constructions Pty Ltd [2022] NSWCATCD 30. Considering the parties' prior (difficult) relations, and given the Builder's non-compliance with the obligations imposed upon it under the HB Act (as referred to, above), I am satisfied that consistently with the Tribunal's guiding principle in s 36(1) of the NCAT Act, the proper exercise of the discretion under s 48O(1)(c) of the HB Act, is for the work order made by the Tribunal to include so-called incomplete works, specifically, items 9 - 15, 19, 26, 31, 32, 36, 42, 44 - 47, 51, and 52. I find that an order made under s 48O(1)(c) of the HB Act, is in fact, the relief which is most likely to avoid the parties becoming embroiled in further dispute(s).

Item 16 - Western Elevation trip hazard

1. There is no contest that the Owners requested the Builder install air conditioning in the dwelling and that the work, as constructed, creates a trip hazard: see the photograph in Exhibit 1A at page 481.
2. The parties' factual contest is: 1. Mr Yuen says that he was instructed by Ms Zhao to attach the air conditioning unit to the wall after the Builder had already constructed a slab on the ground upon which the air conditioning unit would sit. 2. Ms Zhao says Mr Yuen did not discuss details (as to where the air conditioning unit would be located) with her and said to her: "Just leave it with me I would - considering all the things and I will do it for you". Indeed, when cross-examined about the concrete slab and whether she had asked the Builder to move the slab, Ms Zhao said: "I didn't ask him to do - I didn't make any kind of that request. He fixed the air conditioner over there; I didn't ask anything else": see T38.19-27.
3. I prefer Ms Zhao's evidence over Mr Yuen's evidence for the following reasons. Ms Zhao's answer during cross examination was not challenged. Nor was her evidence that she had no building experience, challenged. In the circumstances, it was reasonable for her to rely on the expertise of Mr Yuen. On the other hand, Mr Yuen's contentions as to what he says was instructed by the Owners is not corroborated by any contemporaneous documents, such as a text (or WeChat) message. Mr Yuen gave evidence that he prepared documents and gave them to the Owners because he worried that the Owners might forget important matters, as well as to ensure that there was a record of the important matters that were discussed between the parties: T 91.5-30. I find that the absence of any document substantiating the Owners' alleged instruction to the Builder, is persuasive evidence that any conversation about installing the air conditioner to in the location of the concrete block did not, in fact occur.
4. I find that Ms Zhao did not provide any instruction to the Builder as to the location of the air conditioning unit, and that the location of the unit was left to Mr Yuen to determine. The Builder constructed a concrete block that now poses a trip hazard. I find that it is a defect which requires rectification, in accordance with the scope of works set out under the Noviion Rectification column of the Updated Joint Report.

Item 17.1 - Laundry not waterproofed

1. The laundry is on the ground floor near the external back porch. There is a dispute as to whether this item forms part of the Contract.
2. I am satisfied that the Builder was required to carry out waterproofing works to the laundry. It is not in contention that the signed architectural plan (Exhibit 1A at page 883) forms part of the Contract, or that the Contract expressly provides that the plans and specifications "for work to be done" (see Clause 1 of the Contract - Exhibit 1A at page 855) are taken to form part of the Contract. Accordingly, it follows that if the plans show new construction works to certain areas of the dwelling, then these works are "works to be done" under the Contract.
3. I have considered the existing ground floor plan (Exhibit 1A at page 882) and the proposed ground floor plan (Exhibit 1A at page 883). I am satisfied that the signed architectural plans show that a new room is to be constructed on the porch which will contain a laundry tub (as evidenced by the photograph in Exhibit 1A at page 242) with a new drain position installed and that it will be used as a laundry. The Contract does not exclude the Builder from carrying out works to the laundry as a wet area requiring waterproofing. While the Builder excluded a washing machine and dryer (see under 'Excluded Items' in subclause 3h of Special Condition 31 of the Contract - Exhibit 1A at page 875), waterproofing works in the area shown on the plans to be used as a laundry, were not excluded. That omission in Special Condition 31 is consistent with an interpretation of the Contract that requires the Builder to construct the laundry as a wet area (i.e., with waterproofing).
4. Mr Yuen's evidence that no walls have been erected to enclose the laundry is of no moment. Post contractual conduct is not to be used as an aid to interpretation when a contract is entirely in writing: see for example, Brambles Holdings v Bathurst City Council [2001] NSWCA 61 at [26].
5. For those reasons, I find that the absence of waterproofing in the laundry is a defect which requires rectification, in accordance with the scope of works set out under the Noviion Rectification column of the Updated Joint Report.

Items 22, 27, and 30 - main bed ensuite, main bathroom; absence of water stops.

1. The evidence of Mr Alexander and Mr Dahrie in relation to these items turned on a difference about the interpretation of the relevant Australian Standard, AS3740:2010 Waterproofing of Domestic Wet Areas (Exhibit 6).
2. In essence, Mr Alexander relies on figure 3.6, whereas Mr Dahrie relies on the words in paragraph 3.13.4 of AS 3740-2010.
3. I prefer Mr Dahrie's interpretation. The express terms of paragraph 3.13.4 are clear. The title of the paragraph is: "Enclosed showers without hobs or set downs." Mr Alexander accepted that the photograph he was taken to in his cross examination, showed an 'enclosed shower without a hob or set down': see T 167.34-41. Sub-paragraph 3.13.4(a) states "where a shower screen is to be installed, a water stop shall be positioned so that its vertical leg will finish a minimum of 5 mm above the finished floor level (see Figure 3.6)". Mr Alexander accepted that a shower screen had been installed, and that a water stop angle had not been installed: T 167.40 - T168.5.
4. In my opinion, Mr Alexander's evidence confirmed that there had been non-compliance with the express terms of paragraph 3.13.4 of AS3740-2010.
5. Nevertheless, Mr Alexander contended that the standard is not well explained (T 169.7-10) and that this permits him to rely on Figure 3.6. He says paragraph 3.13.4, when read by reference to Figure 3.6 (to which the paragraph expressly refers) should be understood as applying only to showers where the waterproof lining terminates at the edge of the recess. He contended that the Owners have not established that this is the case, and that the Tribunal should find that the work performed complies with the Contract.
6. I disagree with Mr Alexander's position. Even if I agreed that the paragraph is not clear (which I do not), the note to Figure 3.6 says that the figure is for a 'typical hobless construction'. A 'typical construction' cannot be used for each, and every, type of construction; whereas, in my view, the express terms of AS3740-2010 can, and indeed must, be used for each, and every, type of construction. Moreover, any tension between the words in paragraph 3.13.4 and Figure 3.6 is dealt with in the explanatory note to the National Construction Code which states: … a figure must not be used as an indication of the full construction requirements in a given situation, as the only available option, or a substitute for referencing appropriate construction requirements (in other sources) for a given clause.
7. Further, that Mr Dahrie did not conduct any tests to determine that the absence of a waterproof angle was causing a failure of waterproofing or harmful water ingress, is not to the point. A failure to comply with objective standards such as Australian Standards, is sufficient to establish a breach of s 18B(1)(c) of the HB Act. Such a failure must extend to a failure to comply with the express terms of paragraph 3.13.4 of AS3740-2010. Objective standards are also material in establishing whether work has been performed without due care and skill in breach of s 18B(1)(a) of the HB Act.
8. Accordingly, I find that the Builder breached AS3740-2020 and that Items 22, 27, and 30 are defects which require rectification, in accordance with the scope of works set out under the Noviion Rectification column for each item of the Updated Joint Report.

Item 23 - Main bedroom ensuite: sealant not applied at the wall to floor junctions.

1. The Builder's decision was to leave out the sealant at the wall/floor junction to assist with drainage behind the wall: see the affidavit of Mr Yuen sworn 11 January 2023 at [71] - (Exhibit 1A, page 1559). Mr Alexander says (Exhibit 1A at pages 376 - 377) that this may have been "unusual" but was based upon "sound construction principles".
2. However, I prefer Mr Dahrie's evidence that the non-application of the sealant goes to the Builder's workmanship and that it is a defect within the meaning of s 18B(1)(a) of the HB Act. That Mr Dahrie did not conduct any flood testing in the area, matters not in my opinion. The photograph of the area which he took (Exhibit 1A at page 489) clearly shows a gap at the wall to floor junction through which water can escape the wet area. Even Mr Alexander says (Exhibit 1A at page 376) that "water can and does escape ingress through grout in the wall tiling and collects behind the tiling". Mr Alexander then says that the water collecting behind the tiling "gravitates to the tile floor base and then drains to the waste", but that statement is qualified by the word, "eventually", which does not address the issue of poor workmanship and Mr Dahrie's position that the Builder's construction should not have allowed any water collecting behind the tiling.
3. For those reasons, I find that the Builder's decision to leave out the sealant at the wall to floor junctions of the main bedroom ensuite is a defect which requires rectification, in accordance with the scope of works set out under the Noviion Rectification column for item 23 of the Updated Joint Report.

Items 24, 25, 28, 29, 48, 49, & 50 - Main bedroom ensuite, main bathroom: inadequate falls.

1. These items raise non-compliance with AS3740 which requires (paragraph 3.3) minimum falls to floor wastes of 1:100. This is to ensure that water does not pool on the floor and drains to the floor wastes provided.
2. Mr Dahrie's evidence was that the falls in the main bedroom ensuite and in the main bathroom, do not comply with the minimum fall requirements of the Standard. Mr Alexander countered this proposition by stating that Mr Dahrie had not demonstrated that water is, in fact, pooling in the bathrooms.
3. Items 24 and 48 relate to the master bedroom ensuite. Mr Dahrie carried out a water test which demonstrated water ponding (see item 48) in the master bedroom ensuite and took a photograph to depict the defect he observed - Exhibit 1A at page 518. Mr Dahrie gave evidence that he had conducted further investigations and water tested the main bathroom as well as the master bedroom ensuite. Mr Alexander gave evidence that he had water tested the main bathroom, but not the master bedroom ensuite.
4. I prefer Mr Dahrie's evidence. I find that his evidence carries more weight in the Tribunal's enquiry as to whether the items for the master bedroom ensuite and the main bathroom are defects and if so, what is the appropriate scope of works for rectification/remediation. While both experts appear to have inspected the main bathroom, only Mr Dahrie produced evidence (i.e., the photograph in Exhibit 1A at page 518) to establish, objectively, the outcome of the testing he had carried out (in that instance, water testing in the master bedroom ensuite). Pertinently, to counter Mr Dahrie's evidence, Mr Alexander could have conducted water testing in the master bedroom ensuite, but he elected not to do so.
5. I am satisfied that there has been non-compliance with paragraph 3 of AS3740-2010 in paragraph 3 in the main bedroom ensuite and in the main bathroom, and further, that there is objective evidence of water ponding in at least one of the bathrooms. I find that defects for items 24, 25, 28, 29, 48, 49, & 50 - Main bedroom ensuite, main bathroom: inadequate falls, have been established on the available evidence, and that the method of rectification propounded by Mr Dahrie, as set out under the Noviion Rectification column for those items of the Updated Joint Report, is reasonable and necessary.

Items 34 - 41 (inclusive) and 55 - Roof area

1. As regards a scope of works for these items, a pragmatic approach is taken whereby if a roof sheet is found to be crimped or there is sufficient damage to it, then it is replaced as that is "quicker and easier" according to Mr Alexander: T 158:31-32.

Item 43 - Western façade

1. I accept that the Owners are entitled to a works order in respect of this item.
2. The experts agreed that the packing used by the Builder contains asbestos. I find that remediation is required: see T174.1-27.

Item 53 - Rear Patio Area

1. There is a dispute as to whether the rear patio area forms part of the Contract.
2. It is not in contention that the signed architectural plan (Exhibit 1A at page 883) forms part of the Contract, or that the Contract expressly provides that the plans and specifications "for work to be done" (see Clause 1 of the Contract - Exhibit 1A at page 855) are taken to form part of the Contract. Accordingly, it follows that if the plans show new construction works to certain areas of the dwelling, then these works are "works to be done" under the Contract.
3. I have considered the existing ground floor plan (Exhibit 1A at page 882) and the proposed ground floor plan (Exhibit 1A at page 883). I am satisfied that the signed architectural plans show a "proposed BBQ kitchen area" being the patio area on the ground floor. The Contract does not exclude the Builder from carrying out works to the patio. While the Builder excluded other items (see under 'Excluded Items' in Special Condition 31 of the Contract - Exhibit 1A at page 875), works on the patio area of the ground floor are not excluded. That omission in Special Condition 31 is consistent with an interpretation of the Contract that requires the Builder to construct the rear patio area.
4. The Builder relied upon the evidence in text messages and images exchanged between Ms Zhao and Mr Yuen in the period from September 2020 to November 2020 (see Exhibit 1A at pages 999 - 1028) that the Builder did not excavate the rear patio area and pour a concrete foundation. However, post contractual conduct is not to be used as an aid to interpretation when a contract is entirely in writing: see for example, Brambles Holdings v Bathurst City Council [2001] NSWCA 61 at [26].
5. For those reasons, I find that this is an item of incomplete works under the Contract, and that a works order in accordance with the scope of works set out for this item under the Noviion Rectification column of the Updated Joint Report, is required.

Item 54 - Level 1 Flooring

1. The Owners take no issue with the Builder's proposed amendment to the work order regarding the level 1 flooring. The parties accept the flooring is a prime cost item.
2. Therefore, the works order for item 54 will be: All works under the Noviion Rectification column of the Updated Joint Report, noting that cl 11 of the Contract between the parties applies to the works.
3. This accommodates the possibility that the Owners will be liable to pay the Builder any excess cost over that allowed in the Contract ($80/m2).

Has the Builder established the Further Oral Variation?

1. A further factual contest arises with respect to a conversation between Mr Yuen and Ms Zhao in December 2020. Mr Yuen on behalf of the Builder, states that Ms Zhao told him that there is no need for formalities with respect to the Builder seeking extensions of time under the Contract: see the affidavit of Mr Yuen sworn 11 January 2023 at [37] (Exhibit 1A at 1550 - 1551). On the other hand, Ms Zhao denied that she told Mr Yuen that there was no need for formalities (T35.7-25). Under cross examination, Ms Zhao said Mr Yuen did not mention that the Contract's finishing time would be delayed or adjourned (T 34.19-20). This was not challenged by the cross examiner. It was not directly put to Ms Zhao at any time that she was not being truthful when she gave her evidence.
2. For the reasons already given, I find that Ms Zhao is a reliable witness of fact. When there are inconsistencies between her evidence and the evidence of Mr Yuen, I prefer Ms Zhao's evidence. In the context of the conversation in December 2020 relating to the Further Oral Variation, which is contended for in the Builder's case, Mr Yuen's account of the conversation is not supported by any objective evidence. It is not corroborated by any of the written communications passing between the parties around the time of the said conversation, or at any time. It is inherently improbable that parties who are in frequent written communication by various means including WeChat would not refer to or otherwise confirm such an important issue in the administration of the Contract. As indicated previously, Mr Yuen gave evidence that he prepared documents and gave them to the Owners because he was worried that they might forget important matters and to ensure that there was a record of important matters that were discussed (T 91.5-28). In the circumstances, the absence of any written record supports a finding that the conversation between Mr Yuen and Ms Zhao as alleged in the Builder's case to substantiate the Further Oral variation, did not occur. Nor does the Builder provide any explanation as to why it did not lodge any extension of time requests prior to 1 December 2020. If it was the case that the Owners had said to the Builder during the conversation in December 2020 that the Builder could ignore the Contract's formalities, or words to that effect, then one could reasonably expect that the Builder had been complying with the formalities prior to that conversation.
3. I find that the Further Oral variation did not occur.

The legal effect of the finding that the Further Oral Variation did not occur.

1. Clause 7 of the Contract (Exhibit 1A at page 859) nominates causes of delay which would entitle the Builder to claim an extension of time and requires the Builder to notify the Owners within 10 business days of the occurrence of the event.
2. There is no contest that the Builder did not comply with the time requirements of clause 7 of the Contract. As I have found that the Further Oral Variation did not occur, the Builder is precluded from raising extensions of time under the Contract. The 10 business day period is a mandatory requirement: Project 4301 v Buildcarp Constructions Pty Ltd [2022] NSWCATCD 30 at [73]. Further, to extent the evidence in Mr Yuen's affidavit may be characterised as requests now made for an extension of time, the requests were made after the Proceeding was brought to the Tribunal and after the pleadings had been served. On that basis they were made for the purposes of enhancing the Builder's position in litigation, not for the purpose of proper contract administration, and therefore cannot be relied upon: Project 4301 v Buildcarp Constructions Pty Ltd [2022] NSWCATCD 30 at [74].
3. I make the following findings: 1. The Builder commenced the works on 1 October 2020, 2. The construction period under the Contract commenced on 1 October 2020, 3. The Builder did not make any extension of time request under clause 7 of the Contract, 4. The Builder was required to complete the works under the Contract by no later than 1 April 2021, being 26 weeks after works commenced.

Does any loss arise from the Builder's Delay?

1. The Owners are entitled to consequential loss for the Builder's breach of contract if able to satisfy the well-known principles in Hadley v Baxendale [1854] EngR 296; (1854) 9 Ex 341; (1854) 156 ER 145 (Hadley v Baxendale), that such loss may fairly and reasonably be considered as arising naturally, that is in the ordinary course of things, from the breach (the first limb of Hadley v Baxendale), or it may reasonably be supposed to have been in the contemplation of the parties at the time they made the contract, as the probable result of a breach of it (the second limb of Hadley v Baxendale). Lord Reid considered Hadley v Baxendale in C.Czarnikow Ltd v Koufos [1969] 1 AC 350 at 385, and distilled it into a single principle, as follows: The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make a profit to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation.
2. The facts, matters, and circumstances bearing upon the Owners' claim for delay damages, are dealt with in the Owners' written and oral evidence for the hearing, including Ms Zhao's evidence during her cross examination by the Builder's counsel. Pertinently, the facts, matters, and circumstances, are: 1. The Owners had purchased the Property at Ermington in or about 2015 or 2016 and then lived in the residence on the Property before moving out in or about mid-2020 when the Builder commenced works under the Contract: T 64.41 - T 65.17. 2. At all material times, the Owners, in partnership, have operated a Chinese restaurant business from premises in Victoria Road, Gladesville, NSW, which they lease for a monthly rental of $4,585.03: see the letter dated 14 July 2022 of the Owners' accountants, Chats Accountants & Advisers (Accountant's Letter) - Exhibit 1A at page 896. 3. The leased premises contain accommodation, which is referred to by the Builder's counsel in his cross examination of Ms Zhao during the hearing, as an 'apartment'. The apartment is located above the restaurant area or, as Ms Zhao puts it in her affidavit sworn 13 July 2023 at [97] (Exhibit 1A, page 954), it is the 'second level residential portion at the Restaurant'. The Owners lived in the apartment, or second level residential portion at the Restaurant, while the Contract works were carried out by the Builder: T 65.19-39. Further, in his affidavit of sworn 13 July 2023 at [27] - Exhibit 1A at page 1490, Mr Su says: I currently reside in an above residential floor located at the Restaurant (Alternate Accommodation). I have lived there on and from the commencement of the building works and continue to reside at the Alternative Accommodation due to delay and incompletion of the building works. I have obtained my accountants' confirmation via a letter of advice that I pay $264.52 per week to reside there. 1. In her affidavit sworn 13 July 2023 at [96] (Exhibit 1A, page 954), Ms Zhao gave evidence that the lessors of the restaurant premises had "allowed [the Owners] to renovate the upstairs floor to create a temporary living arrangement", and that she expected to reside in that temporary living arrangement for only 6 months (Exhibit 1A, page 954 at [97]). 2. During the Contract works, Mr Yuen on behalf of the Builder met with the Owners from time to time, at the Owners' restaurant: see for example, Mr Yuen's affidavit sworn 11 January 2023 at [37] - Exhibit 1A at page 1550. 3. The Owners were required by their lease of the restaurant premises, to pay the same amount of monthly rental even if they were not residing in the apartment: T 65.41 - T 66.1. 4. The Accountant's Letter states, relevantly: As the Gladesville premises is not entirely for business use, we calculate the 'private' use proportion of the rent is 25%, which is non-claimable in the business tax deduction. This amounts to $264.52 per week. 1. On 28 September 2021, Ms Zhao and Mr Yuen exchanged text messages (Exhibit 1A, page 1137) as follows: 2. Ms Zhao: Jimmy how are you? Due to my husband and the restaurant's owner having contract issues that they cannot agree on, we need to move out before 19 January 2022. Can you please finish the construction by December? Thank you. Mr Yuen: Got it, we will try our hardest to finish, thank you. 1. As of 13 July 2023, the Owners were still living in the apartment above the restaurant premises: see Exhibit 1A, page 1490, at [27].
3. The Builder submits the Owners' claimed loss, being $264.52 per week from 1 April 2021, is too remote from the breach of contract, and that it does not fall within either limb of Hadley v Baxendale. Apparently focussing on the second limb of Hadley v Baxendale, the Owners' argument is that the loss for which they contend is not too remote, because it must have been obvious to Mr Yuen that if the Builder took longer than the contractually mandated 26 weeks to reach practical completion of the Contract, that the Owners would suffer loss either because they would have to secure alternative rental accommodation for themselves (a matter pleaded in the Owners' points of claim at [19d] - Exhibit 1A, page 14) or, assuming they were in a position where they could retain the apartment in the restaurant premises as a residence for the time being, they would be deprived of the opportunity of renting out that residence for the period beyond the 26 weeks.
4. The Builder's case as regards remoteness of loss is that the Tribunal cannot accept it was in the reasonable contemplation of the parties at the time the Contract was formed that the Owners might suffer loss flowing from delay in the form of a lost opportunity to sub-lease a portion of the restaurant premises.
5. Further, it is submitted that the Owners' claim for delay damages should also fail because the evidence led in support of the claim does not establish any loss at all, and because the claim as advanced by the Owners in their Closing Submissions is at odds with the claim articulated by them in their points of claim or which was run by them during the hearing.
6. As regards the argument that the Owners have not proved their loss, I accept the Accountants' Letter, which speaks for itself, as the best available evidence of the Owners' loss, being $264.52 per week from 1 April 2021. I have also considered the other evidence, as referred to at [175] above, which establishes that:

• the Owners leased the Gladesville NSW premises for the operation of their restaurant business,
• the Owners may claim a tax deduction for rental paid only in respect of their business (i.e., not private) use of the leased premises,
• the Gladesville NSW premises included a second level portion, or apartment, which the lessors had allowed to be renovated for residential purposes,
• the Owners were living in the apartment (i.e., they had the right of residence there) from about August 2020, and they continued to have such right of residence up until at least July 2023,
• the Owners' accountants had assessed the private use component of the leased premises as about 25%, in circumstances where the Owners were required to pay the full monthly rental regardless of whether they were living there,
• while the terms of the Owners' lease of the Gladesville NSW premises were not in evidence, it can be reasonably inferred in all the circumstances, including the lessors having allowed a part of the leased premises to be renovated and used as a residence, that the Owners' lease with the lessors was a standard commercial lease which had terms and conditions that permitted the Owners, on reasonable grounds, to sublet a part of the leased premises to an approved sub-tenant.

1. Where damages claimed are said to be too remote, each case turns on its own facts. The second limb of Hadley v Baxendale goes to whether the type of loss claimed by the wronged party, was in the contemplation of the parties when the relevant contract was made. Having considered the evidence, as set out above, I am satisfied that there is a proper factual basis to conclude that the type of loss which the Owners claim, was in the contemplation of the parties when they made the Contract. I find in the circumstances that it must have been obvious to Mr Yuen, and thus to the Builder, that if the Builder took longer than the contractually mandated 26 weeks to reach practical completion, the Owners would incur loss either because they would have to get alternative accommodation or, assuming the Owners were in a position to retain their existing place of residence, while practical completion was delayed, they would be deprived of the opportunity of renting out that residence for the period beyond the 26 weeks.
2. Nor do I accept the Builder's argument that the claim for delay damages as advanced by the Owners in their Closing Submissions, is inconsistent with the claim the Owners articulated in their points of claim or which was run by them during the hearing. While the points of claim in [19d] referred to the Owners' costs of 'alternative accommodation', the practice and procedure of the Tribunal (NCAT Act, s 36 & s 38) does not confine the parties to strict rules of pleading. Further, I am satisfied that the evidence adduced by the Owners in chief, as outlined above, clearly sets out the nature of the loss claimed by the Owners as delay damages.
3. For those reasons, I find the Owners have established on the available evidence, that they suffered loss arising from the Builder's delay, i.e., the Builder's breach of the Contract, being its failure to bring the works to practical completion within the contractually mandated 26 weeks.

What is the amount of the Owners' loss for delay damages?

1. For the reasons already given, I accept the evidence in the Accountants' Letter that the Owners' loss is $264.52 per week from 1 April 2021.
2. The Owners put their case for the calculation of the delay damages on alternative bases (see the Owners' Closing Submissions at [8.1]), which depend on whether damages continue to accrue after the date (30 March 2022) that the Builder no longer had possession of the building site. In each instance, the Owners' calculation adds a period of six (6) weeks, which is the period I have already found as a reasonable period for the Contract works to be completed (see under the heading 'Other terms and conditions of a work order').
3. While I accept that the Builder was precluded from entering the Property on and from 30 March 2022; nevertheless in the circumstances, I do not accept the Owners' submission (see the Owners' Closing Submissions at [5.2]) that time should continue to run for the purposes of delay damages beyond 30 March 2022 (and up until a date 6 weeks after judgment), because the Builder did not exercise rights available to it under the Contract. No authority was cited by the Owners' counsel, in support of that proposition. Further, in my determination, given that the Owners commenced the Proceeding on 27 April 2022 (i.e., less than a month after it is alleged that the Builder was excluded from the Property), it would have been wasteful and duplicative (and contrary to the Tribunal's guiding principle in s 36(1) of the NCAT Act), for the Builder to commence separate proceedings in the Tribunal attempting to enforce any contractual rights to have access to the Property.
4. For those reasons, I find that the Owners have established delay damages in the amount of $15,342.16.

Contract Price Adjustment

1. I do not accept the Owners' claim for payment of $13,200 by way of restitution or alternatively as a contract price adjustment. Therefore, I decline to make any order for a contract price adjustment.
2. The Contract is a fixed price contract. Clause 13 of the Contract (Exhibit 1A at page 864) provides, relevantly, under the heading 'Adjustment of contract price': The contract price may be adjusted as a consequence of: 1. variations to work or materials agreed in accordance with this Clause 13, 2. any variation to the cost of the building cover contract entered into by the contractor in respect of the work to be done under this contract. The cost of deletions from the contract will be deducted from the contract price. The price of any variation specified in the notice signed and dated by both parties will be added to the contract price.
3. I am not satisfied that either of subclause (a) or (b) apply in this case. There is accordingly no contractual basis for the cost of any 'deletion' to be deducted from the contract price.
4. Furthermore, I find that restitution principles under the general law have no role to play in circumstances where the parties' rights and obligations are governed by the Contract.

Conclusion and Orders (including directions as to costs)

1. For the above reasons, the Owners are entitled to a work order pursuant to s 48O(1)(c) of the HB Act. The work order is in the following terms and conditions: 1. The Respondent is to cause an appropriately licensed third party (and provide a copy of the licence prior to the commencement at the satisfaction of the Applicants) to undertake the rectification works set out in Annexure B and works required to comply with all applicable standards and codes as requested by the Inspector (together, the Rectification Works) in accordance with the terms and conditions set out in Annexure A at its expense. 2. The Respondent is to arrange at that party's cost and expense, for Mr George Dahrie, (the Inspector) to inspect the performance of the Rectification Works upon the occurrence of any hold points required by the Applicants' or Inspector and otherwise as reasonably required to allow the Inspector to be satisfied that the Rectification Works are being performed satisfactorily. 3. It is ordered that: 1. The Respondent is to provide the Inspector and the Applicants with three business days' notice of an inspection by email to the nominated email addresses to be provided by the Inspector listing the items of work to be inspected on that inspection, 2. All inspections are to occur on standard business days, between the hours of 8am and 4pm, and the Applicants and Respondent will use their reasonable endeavours to coordinate with the Inspector so as to facilitate the inspection at a time suitable to the Inspector and the Respondent, 3. While it is estimated that the Inspector is to carry out four inspections of the Rectification Works at the Respondent's cost, if the Respondent is unable to co-ordinate the Rectification Works such that more than four inspections are required, or if the Inspector determines that as part of the Rectification Works more than four inspections are required, the Respondent will be liable to pay for those additional inspections, 4. The Respondent agrees to co-operate with the Inspector and ensure the Rectification Works are completed and conform with the NCC and BCA and to work with the Inspector to achieve that outcome. 1. In the event that the Respondent does not comply with these Orders, the Applicants are entitled to renew the proceedings in accordance with clause 8 of Schedule 4 of the NCAT Act.
2. The Owners are also entitled to an order for the Builder to pay to them the amount of $15,342.16. For the reasons given, I decline to make any other orders to pay money.
3. The parties have asked to be heard separately on the issue of costs. It is an issue on which I would expect the parties and their legal representatives to liaise cooperatively to reach agreement, noting that Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) applies to the Proceeding. However, if the parties are unable to reach agreement on the issue of costs, or there are circumstances of which I am unaware, I make further directions to deal with that issue, as follows: 1. If any party (costs' applicant) seeks an order for costs, leave is granted to file and serve a short written submission (no more than 5 A4 size pages) on that issue only within 14 days of the date of these orders. 2. Leave is granted to the other party (costs' respondent) to file and serve a short written submission in reply (no more than 5 A4 size pages) within 28 days of the date of these orders. 3. The costs' applicant may file and serve any short written submission (no more than 3 A4 size pages) strictly in response to a costs' respondent's submissions within 35 days of the date of these orders. 4. In any such submissions, the parties are to address the matter of whether pursuant to the provisions of the Civil and Administrative Tribunal Act 2013 NSW, s 50(2), the Tribunal should dispense with a hearing on the issue of costs so that the issue is decided on the papers lodged with the Tribunal and with appearances of the parties not required.

ANNEXURE A - TERMS AND CONDITIONS TO WORK ORDER In this Annexure A, the following words and expressions have the following meaning:

• Proceedings means proceedings numbered 2022/00430188 (formerly HB 22/18103) in the Tribunal.
• Property means the residence referred to in the Reasons situated at Ermington, New South Wales.
• Tribunal means the NSW Civil & Administrative Tribunal.

Quality of Construction 1. The Rectification Works will comply with: 1. The National Construction Code of Australia, 2. All relevant codes, standards, and specifications that the Rectification Works is required to comply with under any law, 3. The statutory warranties contained in section 18B of the Home Building Act 1989 NSW.

Licencing Requirement 1. The Respondent will maintain a valid contractor's licence in accordance with the requirements of the Home Building Act 1989 NSW for the duration of the Rectification Works.

Statutory Approval 1. If the approval of the local council or other statutory authority is required to complete the Rectification Works, and that approval has not been sought by the date this Work Order, the Respondent must apply for such approval to complete the Rectification Works and the costs and fees associated with such approval to be the sole obligation of the Respondent.

Time for Completion 1. The Respondent must complete the Rectification Works within 6 weeks. The said period for completion of the Rectification Works is to commence 28 days after the date of these Orders. 2. The Respondent will be entitled to a reasonable extension of time in the event of delays to the Rectification Works where the cause of the delay is beyond the Respondent's reasonable control. The Respondent must take all reasonable steps to minimise any delay to the Rectification Works. Any claims for extensions of time must be notified in writing to the Applicants within 7 days and any dispute as to extensions to be determined by the Inspector.

Completion of the Rectification Works 1. When the Respondent considers that the Rectification Works have been satisfactorily completed, the Respondent will provide to the Applicants and the Inspector written notice that the Rectification Works have been satisfactorily completed in accordance with this Work Order and are ready for final inspection by the parties and the Inspector. 2. The Rectification Works will not be considered complete until the Inspector is satisfied that the Rectification Works are complete in accordance with Annexure B and has informed the Respondent and Applicants that he agrees that the Rectification Works are complete.

Insurance of Work and Personal Injury 1. Before the Respondent commences the Rectification Works at the Property, the Respondent must provide to the Applicants evidence of: 1. Contractor's all risk insurance incorporating public liability insurance to cover liabilities to third parties for death or personal injury or damage to property for an amount not less than $10,000,000.00. 2. Workers compensation insurance in accordance with the applicable legislation.

Respondent's Indemnity in Favour of Applicants 1. The Respondent will indemnify the Applicants against any loss or liability for death, personal injury, or property damage and against any loss, cost, charge, or expense incurred or likely to be incurred or sustained by the Applicants, arising out of, or as a consequence of, the carrying out of the Rectification Works. 2. If such liability, loss, cost, charge, or expense arises in whole or in part through the negligence of the Applicants, the extent of the Respondent's indemnity will be reduced by the extent that the Applicants contributed to the liability, loss, cost charge or expense.

Damage to Property 1. The Respondent is to make good any loss or damage to the Rectification Works or the Property of the Applicants, which is caused by the Respondent or the Respondent's employees, agents, or subcontractors.

Access for Respondent 1. The Applicants must provide access for the Respondent and any employee or subcontractor of the Respondent as and when required on two business days' notice. The Respondent acknowledges that all Rectification Works must be carried between 7am and 5pm Monday to Friday.

Maintaining Access, Minimal Disturbance and Cleaning Up 1. The Respondent must ensure that the Rectification Works do not unreasonably interfere with access to the Property for the Applicants and occupiers of the Property. 2. The Respondent must take all reasonable steps to minimise disruption to the Applicants and occupiers of the Property in the performance of the Rectification Works. 3. On completion of the Rectification Works the Respondent must remove from the Property all plant and equipment and dispose of all rubbish, excavated materials, demolished or dismantled structures and surplus material relating to the Rectification Works. The Respondent must then clean and make good all work areas.

Defects in Rectification Works 1. The Respondent must make good any omissions or defects in the Rectification Works or materials which become apparent within the period of 42 weeks from the date the Rectification Works are completed. The Applicants are to notify the Respondent in writing of any omissions or defects to be rectified and the Respondent is to promptly make good the work or materials at the Respondent's expense. This does not affect the Applicants' rights of renewal of these proceedings in the Tribunal.

Work Health and Safety 1. The Respondent accepts the appointment as the "Principal Contractor" for the purposes of the Work Health and Safety Act 2011 and the Work, Health, and Safety Regulation 2017 NSW in respect of the Rectification Works.

ANNEXURE B - RECTIFICATION WORKS With reference to the work order in [191] of the Reasons for Decision and the following reports:

1. Report prepared by Mr George Dahrie dated 19 May 2023 (Noviion Report),
2. Report prepared by Mr Steven Alexander dated 15 June 2023 (Alexander Report),
3. Updated Joint Report prepared by Mr George Dahrie and Mr Steven Alexander dated 26 October 2023 at pages 692 - 755 of Exhibit 1A (Updated Joint Report). the Rectification Works are set out as follows: Item Works Required Item 1 No works required. Footings Area 1 Item 2 No works required. Footings Area 2 Item 3 No works required. Footings Area 3 Item 4 No works required. Footings Area 4 Item 5 No works required. Footings Area 5 Item 6 No works required. Footings Area 6 Item 7 No works required. Footings Area 7 Item 8 No works required. Footings Area 8 Item 9 All works set out under Noviion Rectification column of the Updated Joint Report. Exposed steel beams Item 10 All works set out under Noviion Rectification column of the Updated Joint Report. Windows at ground level Item 11 All works set out under Noviion Rectification column of the Updated Joint Report. Downpipes at building perimeter Item 12 All works set out under Noviion Rectification column of the Updated Joint Report. Eastern eaves lining Item 13 All works set out under Noviion Rectification column of the Updated Joint Report. Western eaves lining Item 14 All works set out under Noviion Rectification column of the Updated Joint Report. Eastern elevation flashing (1) Item 15 All works set out under Noviion Rectification column of the Updated Joint Report. Western elevation flashing (2) Item 16 All works set out under Noviion Rectification column of the Updated Joint Report. Western elevation Item 17.1 All works set out under Noviion Rectification column of the Updated Joint Report. Laundry not waterproofed Item 18 No works required. Laundry height 1.77m Item 19 All works set out under Noviion Rectification column of the Updated Joint Report. Laundry external door Item 20 No works required. Staircase balustrade Item 21 No works required. Rumpus Room Item 22 All works set out under Noviion Rectification column of the Updated Joint Report. Main bedroom ensuite Item 23 All works set out under Noviion Rectification column of the Updated Joint Report. Main bedroom ensuite Item 24 All works set out under Noviion Rectification column of the Updated Joint Report. Main bed ensuite Item 25 All works set out under Noviion Rectification column of the Updated Joint Report. Main bed ensuite Item 26 All works set out under Noviion Rectification column of the Updated Joint Report. Doors throughout Item 27 All works set out under Noviion Rectification column of the Updated Joint Report. Main bathroom Item 28 All works set out under Noviion Rectification column of the Updated Joint Report. Main bed ensuite (should be main bathroom) Item 29 All works set out under Noviion Rectification column of the Updated Joint Report. Main bed ensuite Item 30 All works set out under Noviion Rectification column of the Updated Joint Report. Main bathroom Item 31 All works set out under Noviion Rectification column of the Updated Joint Report. Roof access Item 32 All works set out under Noviion Rectification column of the Updated Joint Report. Windows throughout Item 33 At completion, test to determine if defect exists as alleged in the 'Location and Description' column of the Updated Joint Report. If defect determined, perform all works set out under Noviion Rectification column of the Updated Joint Report. Stairwell wall Item 34 All works set out under SAPL Comments column of the Updated Joint Report, save for any roof sheets that are crimped or damaged must be replaced with new to match existing in accordance with manufacturer's specifications; see also at [157] of Reasons for Decision. Southern roof, rood sheets spray painted Item 35 All works set out under SAPL Comments column of the Updated Joint Report, save for any roof sheets that are crimped or damaged must be replaced with new to match existing in accordance with manufacturer's specifications; see also at [157] of Reasons for Decision. Southern roof, roof sheets damaged Item 36 All works set out under Noviion Rectification column of the Updated Joint Report; see also at [157] of Reasons for Decision. Southern roof flashing Item 37 All works set out under Noviion Rectification column of the Updated Joint Report; see also at [157] of Reasons for Decision. Southern pergola roof fall Item 38 All works set out under Noviion Rectification column of the Updated Joint Report; see also at [157] of Reasons for Decision. Southern pergola roof screws Item 39 All works set out under Noviion Rectification column of the Updated Joint Report; see also at [157] of Reasons for Decision. Southern roof inadequate falls Item 40 All works set out under Noviion Rectification column of the Updated Joint Report; see also at [157] of Reasons for Decision. Southern pergola roof spacing between purlins supporting roof sheets Item 41 All works set out under Noviion Rectification column of the Updated Joint Report; see also at [157] of Reasons for Decision. Southern pergola roof sheets cut and sprayed Item 42 All works set out under Noviion Rectification column of the Updated Joint Report. Eastern downpipe drains Item 43 All works set out under Noviion Rectification column of the Updated Joint Report. Western Façade Item 44 All works set out under Noviion Rectification column of the Updated Joint Report. Roof Junction Item 45 All works set out under Noviion Rectification column of the Updated Joint Report. Roof Junction Item 46 All works set out under Noviion Rectification column of the Updated Joint Report. Level 2 Ceiling Item 47 All works set out under Noviion Rectification column of the Updated Joint Report. Level 2 Ceiling Item 48 All works set out under Noviion Rectification column of the Updated Joint Report. Master bedroom ensuite Item 49 All works set out under Noviion Rectification column of the Updated Joint Report. Main bathroom Item 50 All works set out under Noviion Rectification column of the Updated Joint Report. Main bathroom Item 51 All works set out under Noviion Rectification column of the Updated Joint Report. Kitchen Item 52 All works set out under Noviion Rectification column of the Updated Joint Report. Ground floor ceiling Item 53 All works set out under Noviion Rectification column of the Updated Joint Report. Rear patio area Item 54 All works set out under Noviion Rectification column of the Updated Joint Report, noting that cl 11 of the Contract between the parties applies to the works; see also at [167] of Reasons for Decision. Level 1 Flooring Item 55 All works set out under Noviion Rectification column of the Updated Joint Report; see also at [157] of Reasons for Decision. Entire roof

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: 20 December 2024