Treadgold-Svir v Dynamik Constructions Pty Ltd

NCAT Appeal Panel|2023-07-03

Dynamik Constructions Pty Ltd (Respondent) Representation: Counsel: M Hamdan (Respondent)

Solicitors: Appellant (Self-represented) Holman Webb Lawyers (Respondent) File Number(s): 2023/00141497 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 3 April 2023 Before: H Woods, Senior Member File Number(s): HB 20/42435

Introduction

This appeal relates to building claim HB 20/42435 brought by the appellant/homeowner against the respondent/builder in connection with renovation and repair work carried out to the appellant's premises at Pemulwuy. The application was filed 8 October 2020.
The appellant sought orders for payment of the following amounts: 1. $369,000.00 for the cost to remedy defective and incomplete work and consequential damage; 2. $15,445.44 for losses in respect of personal property and other items; 3. $114,000.00 for lost rental income and interest on monies paid to the respondent and for the purchase of materials.
The proceedings were heard by the Tribunal on 11 December 2021, 15 June 2022 and 15 August 2022. On 3 April 2023, the Tribunal made an award in favour of the appellant in the sum of $48,597.46 (the decision). The Tribunal provided written reasons for its decision (reasons).
By reference to the items claimed, the amount of the decision was made up as follows: 1. Items 1 and 2-front and rear balconies: 2. $8,695.25 for rectification of the front balcony. 3. $5,281.30 for rectification of the rear balcony. 4. The Tribunal preferred the evidence of the respondent's expert Mr Taylor to that of the appellant's expert Mr Frizzell. 5. Item 3-water penetration to the garage from the east lower roof: 6. $4,719.00 being the cost to remedy water penetration. The Tribunal preferred the evidence of Mr Taylor to that of Mr Frizzell. 7. Item 4-water penetration to the alfresco roof: 8. $7,942.34 being the cost to remedy water penetration defects and damage of $22,942.34 less the Provisional Cost sum of $15,000 included in that amount (being repairs to the CBUS system) that was not allowed by the Tribunal. 9. The Tribunal preferred the evidence of Mr Taylor to that of Mr Frizzell. 10. Item 5-inadequate fall of floor tiles to the main bathroom: 11. $3,409.35 being the cost to remedy the inadequate fall of the main bathroom tiling. The Tribunal preferred the evidence of Mr Taylor to that of Mr Frizzell. 12. Item 6-inadequate fall of floor tiles to the ensuite: 13. $5,302.90 being the cost to remedy the inadequate fall of the ensuite tiling. The Tribunal preferred the evidence of Mr Taylor to that of Mr Frizzell. 14. Item 7-inadequate falls and drainage to north-east balcony: 15. $4,341.00 to remedy inadequate falls and drainage to the north-east balcony, being the amount agreed between the experts, Mr Taylor and Mr Frizzell. 16. Item 8-consequential damage from previous damage not rectified: 17. This claim was rejected as the Tribunal was not satisfied the damage occurred after the respondent commenced working on the site nor was the Tribunal satisfied that the respondent was engaged and paid to rectify any pre-existing damage. 18. Item 9-builders rubble left on site: 19. $1,176.00 being the amount agreed between the experts to carry out this work. 20. Item 10-rainwater tank removed and not replaced: 21. $3,410.00 being the amount agreed between the experts for damage to piping and replacement of the water tank. In this regard, the Tribunal rejected the respondent's evidence concerning pre-existing damage or that there was a request to redirect any water flow into the stormwater rather than the existing tank. 22. Item 11-down pipes not connected satisfactorily: 23. $285.00 being the amount agreed between the experts to carry out this work. 24. Item 12-poor finishing to plaster setting: 25. $929.50 being the amount agreed between the experts to rectify this defect. 26. Item 13-poorly finished and/or missing render to the external of the building: 27. $2,760.00 being the amount agreed between the experts to carry out this work. 28. Item 14-ensuite door not closing, out of alignment: 29. $296.75 being the amount agreed between the experts to rectify this defect. 30. Item 15-missing CBUS switch covers: 31. $49.55 being the amount agreed between the experts to rectify this defect. 32. Loss of rental income: 33. This claim was rejected as it was not reasonably foreseeable that delay in completing the work would cause economic loss in the form of loss of rent. Further, even if it was, the Tribunal was not satisfied the rooms in question were not capable of being tenanted out nor that the amount claimed was a reasonable amount for which they could have been let. 34. Interest: 35. The Tribunal rejected this claim as the applicant had failed to identify any factual or legal basis for the claim or interest, nor was there any evidence to support a claim or to show how the claim was calculated.
The appellant appeals the decision.

Notice of Appeal, grounds of appeal and hearing of the appeal

The Notice of Appeal was filed 2 May 2023. The appellant says she received the decision on 6 April 2023.
The respondent, in its Reply to Appeal, did not accept the appeal was lodged in time but made no objection to the Tribunal extending the time for the lodging of the appeal.
A review of the Tribunal's records indicates the decision was sent by email to the appellant on 3 April 2023 at the email address recorded on the original application. It would have been received on that date. Consequently, it would appear the appeal was lodged out of time.
However, as there is no objection by the respondent and the appeal was only lodged one day out of time, we will make an order extending the time to appeal the decision to 2 May 2023.
The appellant's grounds of appeal in her Notice of Appeal are provided by way of a narrative against paragraphs of the reasons. Having noted that there was no contract in writing and having made submissions concerning the Tribunal's findings as to the state of the premises at the time the respondent was engaged to carry out work (including in respect of roofing) the appellant raised the following issues: 1. Preference of the evidence of Ms Taylor to that of Mr Frizzell Having referred to the reasons at [54]-[62], the appellant said that her expert, Mr Frizzell, was from an organisation called Tyrells. This organisation was "known to be one of the best in the expert witness field for building matters which is why the [appellant] engage them". Mr Frizzell has more experience than Mr Taylor and it was unfair and unjust not to accept his evidence. 1. Items 1 and 2 - Front and rear balconies The appellant says the Tribunal wrongly rejected her claim that installation of balustrades was not part of the contract work. In this regard the appellant said a "balcony without balustrading would be classed as incomplete, unsafe and defective". There are two balconies involved for which she claimed an amount of $28,578 ($16,218 for one balcony and $12,360 for the other). 1. Item 4 - Water penetration into the alfresco roof The appellant says the Tribunal was in error in rejecting the claim that damage to the CBUS system was caused by defective roofing work performed by the respondent. The appellant says damage to the CBUS system was due to "water ingress as a result of the defective alfresco roof to which the respondent is and has been found liable". An amount of $86,970 is claimed for the CBUS system work and for other damage. 1. Item 5 - inadequate fall of floor tiles to the main bathroom The appellant says the evidence of Mr Frizzell should have been preferred to that of Mr Taylor. Mr Frizzell was more experienced. Mr Taylor had "disagreed this was a fault and incorrectly deemed these bathrooms not to be an issue". Mr Taylor was "clearly not an expert at all and does not know his field anywhere near as well as that of the [appellant's] expert Mr Frizzell". The appellant says she should be awarded $6,458 for this work. 1. Item 6 - Inadequate fall of floor tiles in the ensuite The appellant repeats the matters raised in respect of item 5 and says an amount of $7,949 should have been awarded for this item. 1. Item 8 - Consequential damage from previous damage not rectified In light of the Tribunal's finding in its reasons at [69], that there was water penetration into the garage and guest room from a roof which was replaced by the respondent, the appellant says consequential damages in the sum of $21,262 should be awarded in her favour. The appellant says that the Tribunal's finding at [110] of the reasons, that it was not satisfied consequential damage occurred after the respondent commenced working on-site and/or that the respondent was engaged and paid to rectify such damage, was inconceivable. In this regard reliance was placed on Mr Frizzell's report and various photos contained therein. 1. Item 10 - Damage to personal property The appellant challenges the Tribunal's conclusion that she had not proved the respondent had caused the losses. For example, she says that the "defective and leaking balcony above the garage … caused the motor of the garage door to be damaged due to water ingress and ceased working in 2020". An amount of $15,435.44 is claimed. 1. Item 11 - Loss of rental income The appellant states she "never said she advised the respondent at the time he was engaged in July 2018 that she wanted to rent rooms out. There was no need to do this at that time as her mother was still living with her at the premises when the respondent was hired". However, the appellant says the respondent was notified in January 2020 of her intention to rent out four spare rooms. The works were delayed and she is entitled to claim rent of $1,000 per week for the period from February 2020 until April 2023, a total of 169 weeks being $169,000 in lost rental income caused by the respondent. 1. Item 12 - Interest The appellant claims an amount of $24,410 per year in interest, a total of $97,640. She says interest is calculated at 10% per annum. She says the law states she can claim interest specified under a contract or as agreed between her and the builder. She also refers to "interest at the rate prescribed by practiced (sic) direction", the prescribed rate being "10% pa from the day the amount claimed became due to the day of the decision by default".
The appellant also raises some general matters concerning the reasons of the Tribunal, typographical errors and inconsistencies between the decision and the stated reasons. In doing so, she seeks to rely on the evidence of Mr Frizzell concerning the quantum of her loss (excluding interest and loss of rental) which she says Mr Frizzell estimated at $383,521.26 in the joint report and another quotation provided by Dardas Construction Pty Ltd (Dardas) in a quotation dated 8 December 2021 in the amount of $369,731.55.
The appeal was heard on 3 July 2023.
At the hearing of the appeal, the appellant relied on the written submissions attached to her Notice of Appeal and the documents identified therein. She also made oral submissions, referring to various documents in the bundle she had provided. As necessary, we will refer to these submissions below.
The respondent was represented by Counsel who provided oral submissions. The respondent also filed a bundle of documents, which included written submissions. Again, we will refer to those submissions as necessary below.

Consideration

There is a right of appeal on a question of law. Otherwise leave to appeal is required: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
In such an appeal, the appellant must demonstrate relevant error. While the Appeal Panel can deal with an appeal by way of a new hearing (see s 80(3) of the NCAT Act) we were not asked to do so, nor do we think it is appropriate in this case.
As the appeal is from a decision of the Consumer and Commercial Division, Sch 4 cl 12(1) limits the circumstances in which leave can be granted. The appellant must demonstrate she may have suffered a substantial miscarriage of justice because the decision was not fair and equitable, against the weight of evidence or there is significant new evidence that was not reasonably available at the time the proceedings under appeal were being dealt with. The decision of Collins v Urban [2014] NCWCATAP 17 sets out the principles applicable in respect of the grant of leave.
It is convenient to deal with this appeal by reference to each of the items for which an additional amount is claimed. In doing so, we do not permit the new evidence provided by the appellant for the purpose of this appeal. This is because the evidence identified was reasonably available at the time of the original hearing: Al-Daouk v Mr Pine t/a Furnco Bankstown [2015] NSWCATAP 111 (Al-Daouk) at [19] and following.
This new evidence includes a video on a USB drive which had been recorded prior to the original hearing but was not provided at that time. We will deal with particular items of new evidence as necessary.
Prior to dealing with each claim for additional compensation, there are some general matters to be considered.

Need for leave concerning the scope of work

First, there was a dispute concerning terms of the contract and the scope of work to be performed.
This dispute arose because the contract was not in writing as required by s 7 of the Home Building Act, 1989 (NSW) (HB Act). Nor was there a document recording the precise scope of work. Despite the absence of writing, the contract was enforceable at the suit of the appellant/homeowner but not the builder: s 10 HB Act.
The Tribunal was confronted with an evidentiary matter which it was required to resolve, namely what were the terms of the oral contract and scope of work. As necessary, the Tribunal made findings about particular items of work and whether that particular work formed part of scope of works of the respondent. In doing so, the Tribunal rejected the respondent's claim that its only responsibility was to arrange particular work to be carried out by others rather than the contractor being responsible for carrying out the work.
In doing so, due to the absence of a written contract and the conflicting evidence of the parties, the Tribunal made reference to post contractual conduct of the parties in support of its conclusions as to what works had been agreed to be undertaken by the respondent. This included having regard to what the parties referred to as the "Rectification Order Agreement" dated 30 April 2020 by which the respondent/builder agreed to carry out various works identified as "Incomplete Work" and "Defective Work". This agreement is found in folder 1, Tab F subtab 12 of the appellants bundle (AB) (Rectification Order Agreement). The agreement was entered into after Fair Trading had issued a rectification order (Rectification Order).
It was not suggested in the appeal that the approach taken by the Tribunal was impermissible. Indeed, the authorities summarised by McDougall J in Mushroom Composters v IS & DE Robertson Family Trust [2014] NSWSC 164 at [127] and following confirm such an approach was permissible. There, His Honour said: 127 In some case, it is necessary to look at the conduct of the parties, at a time when or after when one of them says a contract was formed, to see if indeed a contract was formed at all. That will be so, for example, where it can be seen that one party made an offer, intended to lead to the formation of a contract to the other, and where the other is said to have accepted that offer not expressly but by its conduct, subsequent to the making of the offer. Its conduct may show that "it agreed to all the conditions contained in the offer" (to quote Ipp AJA in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [173]). The same point was made by Heydon JA in the same case at [81] to [85]. 128 An examination of conduct for that purpose is particularly relevant where offer and acceptance analysis is inconclusive. As Heydon JA said in Brambles at [71], offer and acceptance analysis "is neither sufficient to explain all cases nor necessary to explain all cases" of contract formation, and "does not work well in various circumstances". 129 Although, as will be seen, the present case does require analysis of the circumstantial evidence to see whether (and if so on what terms) a contract was formed, I am for the present looking at a narrower application, or use, of post-contractual conduct.
However, post contract conduct is not otherwise admissible "on the question of what the contract means as distinct to the question of whether it was formed": Brambles Holdings Limited v Bathurst City Council 53 NSWLR 153; [2001] NSWCA 61 at [26] per Heydon JA.
The Tribunal was required to make factual findings about whether there was an agreement and what was the scope of work (as opposed to construing the legal meaning and legal consequences of found facts). Accordingly, these factual findings require leave to appeal if they are to be challenged.
As necessary, we will deal with the issue of scope of work and whether leave should be granted when dealing with each of the items, the subject of this appeal.

Preference given to evidence of Mr Taylor over Mr Frizzell

Secondly, a challenge is made to the Tribunal preferring the evidence of Mr Taylor to that of Mr Frizzell.
This matter was dealt with by the Tribunal in its reasons at [54]-[62]. There, the Tribunal noted that Mr Frizzell referred to costs provided in Rawlinson's Construction Guide (Rawlinson's) however did not use that guide. Rather, Mr Frizzell simply adopted the amount quoted by Dardas. Mr Frizzell relied on the Dardas quotation dated 15 December 2020. In doing so, the Tribunal found Mr Frizzell did not provide any methodology or reasoning as to why that quotation was accepted by him.
On the other hand, Mr Taylor's report sets out his reasoning and contains a detailed itemised breakdown, having regard to Rawlinson's, of the work required to perform the rectification works which Mr Frizzell said was necessary.
As to the joint report, the Tribunal accepted Mr Frizzell's costings identified an hourly rate and the unit rate based on his experience, as well as having regard to Rawlinson's. However, the Tribunal said, Mr Frizzell did not provide a report in which he had taken issue with the methodology used by Mr Taylor, nor did he set out his reasoning in support of the approach taken by him in the joint report.
In circumstances where: 1. Mr Frizzell's report did not contain independent estimates, whereas Mr Taylor "had gone into some detail in his report setting out the reasons for the method used by him, Mr Taylor's costings … based on an accepted industry guide"; and 2. Mr Frizzell had not provided a report in reply taking issue with those costings, the Tribunal generally preferred the evidence of Mr Taylor.
The challenge to this finding requires leave to appeal.
In our view, leave should be refused. Our reasons are as follows.
Mr Frizzell's report is found at AB 3 Tab 2. The basis of Mr Frizzell's cost estimate is found at p 7 of that report. Under the heading "Methodology" in section 9.3 and following, various opinions are offered as to rates and percentages in respect of preliminaries and builder's margin.
Only in items 5 and 6 of Mr Frizzell's report does he use these rates as the basis for costing the work in question. These costings are, respectively, recorded at pp 20 and 22. Otherwise, as the Scott schedule (at p 30 and following) identifies, the estimation of loss for each of the other items of work is based on the lump sum price of $322,550 contained in the Dardas quotation dated 15 December 2020. This quotation is found in section F4 of Mr Frizzell's report.
This quotation is for a lump sum price. While Annexure 1 to the Dardas quotation (commencing at p 110) provides some information about the scope of work for each item of defect, no costings are provided against each item nor is there any costings or other evidence to support the lump sum amount.
In Forster v Hunter New England Area Health Service [2010] NSWCA 106, Macfarlan JA, referring to Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705, set out the requirements for expert evidence in order for it to be probative of a matter in issue. At [30]-[31] his Honour said: 30 As Heydon JA (as his Honour then was) indicated in Makita, for an expert report to be useful it is necessary for it "to comply with a prime duty of experts in giving opinion evidence: to furnish the trier of fact with criteria enabling evaluation of the validity of the expert's conclusions" (at [59]). Heydon JA referred to the observations of Lord President Cooper in Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh [1953] SC 34 at 39-40 which included the following: "The scientific opinion evidence, if intelligible, convincing and tested, becomes a factor (and often an important factor) for consideration along with the whole of other evidence in the case, but the decision is for the Judge or jury. In particular the bare ipse dixit of a scientist, however eminent, upon the issue in controversy, will normally carry little weight, for it cannot be tested by cross-examination nor independently appraised, and the parties have invoked the decision of a judicial tribunal and not an oracular pronouncement by an expert" (cited in Makita at [59]). 31 To like effect are the statements, also quoted by Heydon JA, in Makita of Sir Owen Dixon in an extra-judicial address that "[c]ourts cannot be expected to act upon opinions the basis of which is unexplained" (Makita at [60]) and of the authors of Phipson on Evidence, 15th edition (2000) London Sweet & Maxwell, that "[i]n general, an expert may give evidence in chief as to the grounds on which he has reached his opinion, and it may be said that, without the grounds, the opinion is valueless" (Makita at [63]).
Save for items 5 and 6, the report provided by Mr Frizzell, whether read in conjunction with the Dardas quotation or not, does not provide evidence to enable the evaluation of the validity of the expert's conclusions against each item in respect of the necessity for work or reasonableness of cost.
We should note at this point that a second Dardas quotation dated 8 December 2021 was also in evidence (AB 5 Tab 6). This quotation was for an amount of $369,731.55. While this quotation contained a lump sum for each item of defect, again no breakdown was provided by Dardas nor did Mr Frizzell offer an opinion about this quotation and the costs therein.
This is to be compared with the evidence of Mr Taylor whose report is found in the Respondent's Bundle (RB) volume 2 Tab 9. The schedule of his calculations containing assessed rates etc is Annexure E (page 611 and following).
It is clear from the reasons that the Tribunal considered each expert's report and formed the view that the assessment of costs to rectify the defects provided by Mr Taylor was to be preferred. This was because Mr Taylor had not only explained his methodology but had also assessed quantities and applied rates to determine a reasonable price for the works in question.
In light of the above, we are not satisfied that the appellant may have suffered a substantial miscarriage of justice in relation to the Tribunal's determination to prefer Mr Taylor's evidence and therefore refuse leave to appeal on this issue.

Items 1 and 2- Front and rear balconies

The Tribunal found that the scope of work for the contract included repairs to the waterproofing and drainage to the balconies. However, the Tribunal rejected the appellant's claim that replacing the balustrades formed part of the scope of work.
The respondent's witness, Mr Hanna, provided evidence that replacement of the balustrades was excluded from the scope, the applicant saying to him she would select the new balustrades and arrange for them to be separately installed: see para 33 c of Mr Hanna's affidavit affirmed 16 November 2021 RB 2 p 413. The applicant said the respondent's obligation was to stop water ingress and provide balconies in a state that could be used. She denied there was a conversation concerning her replacing the balustrades.
The Tribunal accepted the evidence of Mr Hanna being "fortified in [its view that the balustrades were not part of the scope] because neither the Rectification Order nor the Rectification Order Agreement stated that the balcony renovation work was to include the installation of balustrading": reasons at [65].
It seems to us that the Tribunal evaluated the evidence before it and preferred the evidence of Mr Hanna as to the scope of work. It was entitled to do so. Further, it was for the applicant to prove her case.
The decision made by the Tribunal was available on the evidence. Consequently, we refuse leave and dismiss this ground of appeal.

Item 4-Water penetration into the alfresco roof

This challenge by the appellant relates to the Tribunal declining to award damages in connection with repairs to the CBUS system. This system is a centralised control system with peripheral connections for operating lights, air conditioning and other electrical systems throughout the premises.
As noted in the reasons at [78], the appellant contended that the scope of work for the contract included the complete replacement of the security system throughout the premises and re-programming of the CBUS system: Points of claim para 4 AB 2 Tab1. In this regard, the appellant said at para 5 of her affidavit sworn 21 April 2021 (AB 2 Tab 2) that the scope of work included: Complete entire electrical upgrade to the house CBUS system, lighting, air conditioning system, security system and security cameras as all previously water damaged/ no longer functioning correctly.
Having regard to these statements, the Tribunal found at [79] that "it is likely that the CBUS system was damaged at the time the respondent was engaged". Further, the Tribunal noted that rectification of the CBUS system is specialist work, both experts agreeing on this point, and in the absence of any evidence from the appellant as to a conversation concerning the detail of the work required, the Tribunal concluded that it was "unlikely, given the specialist nature of that work, that the agreed scope of work included the rectification of the CBUS system": reasons at [80].
Consequently, the Tribunal did not award damages for this item of claim.
The challenge by the appellant to this item requires leave.
In oral submissions, the appellant referred to various evidence supporting her contention the CBUS system had been damaged because of defective roofing work done by the respondent which allowed water ingress including: 1. photographic evidence (eg AB 3 p 112) said to show water damage; 2. the oral evidence of her expert, Mr Frizzell, at the hearing on 15 June 2022 (transcript RB 1 Tab 4 p 246 at 1603); and 3. para 81 of her affidavit sworn 21 April 2021 (AB 2 Tab 2).
At 1603, Mr Frizzell gave the following evidence: Um, where are the - we've both agreed that there is no cavity flashing above the roof. Water has penetrated into the cavity and the main controller for the CBUS system for the entire house is in that wall and that has been affected by it, so the CBUS system no longer works. That's why I've allowed what I have. I'm not an expert on CBUS, I don't know what the damage is or um, or how extensive it is. Ms Treadgold-Svir has had two guys come in and give prices on the rectification of it and that's what (the line?) item there. Purely and simply because, I just - it's the main controller it's not just a series? Of wires or anything, but the whole main control box is in that wall, directly underneath where the water was penetrating. Um, the ceiling underneath there is continuing to get worse. Ms Treadgold-Svir sent me some photos yesterday, significantly more mould underneath that ceiling where water is still penetrating into there.
The appellant also relies on an email from a person called "Mars" to the appellant dated 16 April 2023. It includes a quotation for work to the CBUS system and other electrical work dated 14 September 2018 (AB 4- Appeal folder - Tab 3 Tab F). The quotation does not indicate to whom it was addressed. The email says: Hey, I can't fine (sic) the 2nd invoice for the bathrooms and other stuff but I have the 1st here. In total you paid him $28,500 for us because work was added on and yes we reprogrammed the cbus system at the end but later you send us videos of it not working and water in it but was all good when we left. Regards, Mars
Mars, apparently the representative from First Spark, was not called as a witness and did not provide a statement. Nor was the email evidence otherwise provided to the Tribunal at first instance. This is new evidence which, having regard to its contents, was clearly "reasonably available at the time the proceedings under appeal were being dealt with" as that expression is used in sch 4 cl 12(1): see Al-Daouk above. Consequently, it cannot be relied upon for the purpose of this appeal.
The appellant also relied on: 1. an email to the Tribunal dated 26 October 2020 annexed to her 21 April affidavit (AB1 Tab N subtab 2); 2. Two quotations from CML Electrical Group and Renovex- Building & Construction (AB 1 Tab PQ subtabs 7 and 8); and 3. The Dardas quotation dated 8 December 2021.
In reply, the respondent said the CBUS system was not working prior to the respondent being contracted to do work and that the CBUS repair and programming were not part of its work. Counsel for the respondent submitted that the Tribunal's findings show it considered the evidence provided and the findings made were available on that evidence. There was nothing unfair or inequitable about the conclusions reached and leave should be refused.
In part, the respondent relied on an email from Mr Hanna to the appellant dated 1 April 2020 (AB 1 Tab F Tab 7 page 2) which stated work to the CBUS system was not part of the scope of work. We were not referred to any email responding to this email at that time.
In respect of this item the appellant is claiming $86,970 being the amount said by her expert, Mr Frizzell, to be payable in respect of the CBUS system and for the other items allowed by the Tribunal. This sum included an amount of $75,000 as a "PC sum" for the CBUS system.
Leaving aside the amount claimed for the CBUS system, the difference between the amount claimed on appeal to that awarded by the Tribunal arises from the Tribunal's preference of Mr Taylor's evidence. Mr Taylor valued the rectification costs at $7,942.34.
For the reasons set out above, this part of the challenge is rejected, no error being established by reason of the Tribunal preferring the evidence of Mr Taylor.
As to the claim in respect of the CBUS system, in order to succeed on this ground, it is necessary for the appellant to show the Tribunal was in error in its conclusions and that the respondent was contracted to carry out work to the CBUS system or the respondent caused damage to the CBUS system in carrying out other works to her premises. Having done so, it is also necessary for the appellant to prove with appropriate evidence the works reasonably required to rectify any damage or defects caused by the respondent and the reasonable cost of that work.
The directions made by the Tribunal required the parties to provide evidence including expert evidence concerning technical matters such as the nature and extent of any defects or damage, the works required to rectify such defects or damage and the reasonable cost of doing so.
The Tribunal found that the CBUS system was not part of the contracted works, accepting the evidence of Mr Hanna that the respondent was not expert in these systems and could not undertake the required work. The Tribunal made this finding in circumstances where the appellant had given sworn evidence that the "CBUS system, lighting, air-conditioning system, security system and security cameras [were] … all previously water damaged/no longer functioning correctly": see para 5 of the appellant's 21 April affidavit set out above.
Quite clearly the CBUS system was already damaged prior to the respondent being engaged to carry out any building work.
Further, while there was reference to the electrician "Mars" carrying out various work, as at 11 February 2020 none of this work was to the CBUS system: see AB 1 Tab F subtab 1 p 11 which states "no reprogramming CBUS until very last".
It might be thought that, in some way, this statement made by the appellant in her email to Fair Trading (from whom she was seeking assistance in resolving her dispute with the respondent) may have provided some evidence that work to the CBUS system was included in the respondent's contract with her. However, as explained by the Tribunal in its reasons, this does not seem probable. This is because works to the CBUS system was neither included in the list of incomplete work in the Rectification Order (which was dated 7 February 2020) nor the Rectification Order Agreement dated 30 April 2020.
Consequently, no error is established in the Tribunal's conclusion that the CBUS system was not part of the scope of works to be carried out by the respondent under its contract with the appellant.
As to the respondent being liable for damage to the CBUS system by reason of defective building work done under its contract with the appellant which permitted water ingress and damage to the CBUS system, the evidence is insufficient to prove the nature and extent of any liability which the respondent might have.
While it can be accepted that there is some evidence of water ingress to the system after the respondent had carried out various building works (see eg the email to the Tribunal dated 26 October 2020), the evidence referred to is insufficient to prove relevant loss or damage. In this regard: 1. there is no sufficient evidence to establish the state of the CBUS system and the extent of water damage prior to the respondent commencing work; 2. there is no evidence sufficient to establish the nature and extent of the damage caused by the respondent as a consequence any water ingress arising from defective building work carried out by the respondent; 3. as noted above, despite directions of the Tribunal, there was no relevant expert evidence concerning the nature and extent of the damage or the reasonable cost to repair or make good the CBUS system. In this regard, the appellant's expert Mr Frizzell expressly stated he did not know what the damage was or how extensive it was. Also, he said he was not an expert in CBUS systems: see transcript at 1603 set out above. The evidence of the respondent's expert Mr Taylor did not assist on these matters. 4. as to the quotations to carry out works to the CBUS system which had been provided: 1. Neither the CML Electrical Group and Renovex- Building & Construction quotations provide any evidence as to the existence of defects or the location of defects or the nature and extent of any damage. They simply catalogued the work which is to be performed. 2. The Dardas quotation dated 8 December 2021 says that the "CBUS System water damaged and failing and not fit for purpose". However, the quotation provides no sufficient evidence concerning the nature and extent of the defects, when the damage occurred, the location within the premises of the required work nor any explanation as to whether the expression "not fit for purpose" is a reference to some inadequacy in the existing system other than that caused by water damage.
Such quotations can provide some evidence of cost and may record observations concerning defects said to exist: see eg Khan v Kang [2014] NSWCATAP 48. However, that does not mean the evidence is sufficient to prove all elements of the cause of action being relied upon, namely that the builder has caused consequential damage by reason of carrying out defective building work or has otherwise breached its contract with the appellant.
In light of the findings concerning: 1. the CBUS system being damaged prior to the respondent commencing any building work, 2. the rejection by the Tribunal that the respondent was contractually obliged to effect repairs to the pre-existing damaged system; and our decision to refuse leave on this issue; and 3. the evidentiary deficiencies which we have identified above, 4. we are not satisfied leave to appeal should be granted or that relevant error has been established.
It follows this challenge to the decision fails.

Item 5-Inadequate fall of floor tiles to the main bathroom

The challenge on this aspect of the appeal is that the evidence of appellant's expert, Mr Frizzell, should have been accepted in preference to that of Mr Taylor. Leave is required.
As stated above, in our view the Tribunal's decision to prefer the evidence of Mr Taylor has not been shown to be in error and leave should be refused.

Item 6-Inadequate fall of floor tiles in the ensuite

The challenge on this aspect of the appeal is that the evidence of cost of the appellant's expert, Mr Frizzell, should have been accepted in preference to that of Mr Taylor. Leave is required.
As stated above, in our view the Tribunal's decision to prefer the evidence of Mr Taylor has not been shown to be in error and leave should be refused.

Item 8- Consequential damage from previous damage not rectified

The consequential damage claim relates to water damage to floorboards, blinds, joinery and other items. As noted by the Tribunal in its reasons at [104]-[105], repair costs were estimated by Mr Frizzell at $21,252 and by Mr Taylor at $16,813.03. The claim was rejected by the Tribunal.
At [107] the Tribunal identified the issues to be resolved as follows: 107. Putting the rectification costs to one side, the issues were: (1) whether the damage observed by the experts was pre-existing; and if so, (2) whether the expert had been engaged to and paid to rectify the damage but failed to perform the work with due care and skill.
At [108]-[110] the Tribunal said: 108. The areas where the damage was observed were the bar area (floorboards and blinds), the main bathroom (water stain to the shower ceiling where the shower rose penetrates and IXL Tastic light unit) and garage (damage to joinery and skirting to the northwest corner) 109. The Rectification Order: (1) referred to the garage, but not the joinery in the northwest corner or the rectification of damage to the joinery in the northwest corner; (2) referred to the main bathroom, but not water stain to the shower ceiling where the shower rose penetrates nor the IXL Tastic light unit; and (3) did not refer to the bar area, nor more particularly the floor nor the blinds in the bar area. Further, the applicants evidence as to the work the respondent was to perform, although referring to items in the garage and the main bathroom, did not refer to damaged joinery in the northwest corner of the garage nor a water stain where the shower hose penetrates nor the IXL light unit. 110. For that reason and because of the lack of weight I generally place on the applicant's evidence as to the state of the Property at the time the respondent commenced performing work at the Property, I am not satisfied that the identified consequential damages occurred after the respondent commenced working at the site, and if it was pre-existing, that the respondent was engaged and paid to rectify the damage.
Because of the findings concerning the defective balcony work and the defective work to the garage roof, the appellant says "it is inconceivable the Tribunal has found the respondent not liable to pay for the consequential damage caused by the respondent's defective work. Further, it is clear this damage is not older than the last 4 years".
In reply, the respondent says that the Tribunal concluded that the items identified as consequential damage were likely pre-existing and that the respondent was not engaged nor paid to rectify the damage. A challenge to this conclusion requires leave and it has not been shown the Tribunal was in error.
In her points of claim, and in her affidavit sworn 21 April 2021 (AB2 Tabs 1 and 2), the appellant says that the scope of work was to "rectify all water damage internally and externally". However, there is no precise identification as to the works involved.
The instructions provided to the appellant's expert, Mr Frizzell, then said by the appellant to be pre-existing defects, were recorded by Mr Frizzell in his report in the following terms (AB 3 Tab 2 p 26 Item 8): I am instructed that consequential water damage from previous water damage has not been rectified to multiple areas including: i. Bar area - water damage to the floorboards at the rear of the property, below the master bedroom balcony Photo 47; ii. Bar area - the blinds in this area on the South, West and the South wall of the dining area are all water damaged Photo 48- 51; iii. Dining room - the blinds on the South wall of the dining area water damaged; iv. Main bedroom - water Styling to the shower ceiling where the shower rose penetrates. I am instructed by the [appellant] that: • the shower was turned on and water sprayed everywhere inside the ceiling, staining the ceiling and causing the Tastic lights to fail; • The light no longer operates properly and that the light globes have been changed numerous times; and • On the day of the inspection, the centre light was not operating Photo 52 v. Garage - damage too joinery and skirting in the northwest corner Photo 53-55.
Mr Hanna, the representative of the respondent, set out what he said was the scope of work in para 12 of his affidavit affirmed 16 November 2021: RB 2 Tab 8. There, Mr Hanna said: The [appellant] and I agreed that Dynamik would complete the following work: a. Replacement and rectification to the roofing at the rear of the house in the area of the works by Mr Gallardo and other areas of the dwelling to stop water ingress. b. renovation to all three balconies to prevent water ingress. The balcony work excluded the balustrades as this was work that the [appellant] Was to arrange herself. c. Install I- beams in backroom under the new main bedroom and install yellow tongue flooring in the main bedroom. d. Repairs to the outside pergola to stop leaks, including complete replacement with knew timber. e. Backyard carpentry for the pergola roof and install 2 timber posts for the back veranda, including new structure. f. Garage- replace water damaged timbers from the previous builders' works and gyprock. g. carpentry- walls for walk-in robe, walls for the new on suite bathroom end all the internal walls to the main bedroom. h. Ensuite bathroom, new sycon flooring. i. villa board to two bathrooms (ensuite and guest bathroom). j. Install 4 windows to the main bedroom. k. Install sliding door to the main bedroom. l. Install sycon floor to the front veranda of the [appellant's] mother's bedroom. m. Install composite decking to bedroom 2's balcony. n. Install sycon floor to balcony 2 and the main balcony (off the main bedroom). o. All internal fit out - doors for the main bedroom, ensuite, guest bathroom and architraves, skirting to the main bedroom
At [48] the Tribunal found: Given Mr Hanna's evidence that he agreed for the respondent to complete the works identified at paragraph 12 of his affidavit, and that the respondent was paid in the order of $140,000.00 and there was no direct evidence of any other contractors having been paid by the applicant, I find that the work that was performed from about July was performed by or at the direction of the respondent pursuant to the oral contract between the applicant and the respondent and that the respondent was therefore responsible for that work and liable for any losses caused any breaches of the warranties implied by 18B HBA.
Having regard to the lack of precision in the appellant's evidence concerning the scope of work, her instruction to Mr Frizzell and to the Tribunal's reasons concerning the reliability of the evidence as to the state of the premises prior to entering into the contract with the respondent, we are not satisfied the damage was caused by defective building work done by the respondent.
The question then is whether the respondent was contracted to rectify that pre-existing damage.
Having regard to the Tribunal's findings concerning the scope of work and its acceptance of Mr Hanna's evidence about the scope of agreed work, aside from the garage, we are not satisfied there was any error in the Tribunal's rejection of this claim as it was not within the scope of work of the respondent's contract. Accordingly, leave to appeal is refused on the defects other than in respect of the garage.
As to the garage, the appellant asserted in oral submissions that damage in the garage was caused by defective work done by the respondent in relation to the balcony. This is inconsistent with the instructions Mr Frizzell records as having been provided to him that the damage arose from earlier building works.
Despite this inconsistency, item f of the respondent's scope, which was accepted by the Tribunal, required the respondent to rectify damage in the garage being "replace water damaged timbers from the previous builders' works and gyprock". This work, by its terms, related to gyprocking and associated timber work. However, it did not include cabinetry work.
It follows that, whether or not pre-existing damage, the respondent was required to rectify these defects under its contract with the appellant. Based on the expert evidence it did not do so.
The cost to rectify this work was assessed by Mr Taylor on p 53 of his report (RB2 Tab 10 p 679) being three items totalling $99.43 ($70.00, $7.68 and $21.75), to which should be added preliminaries of 15%, builders margin of 20%, homebuilding compensation fund contribution at a rate of 1%, contingency of 20% and GST of 10%. This totals $182.93.
In light of the Tribunal's preference for Mr Taylor's evidence and our conclusion on this issue above, we see no reason to reject these costings in favour of those of Mr Frizzell.
We grant leave to appeal on this aspect as there is "an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand": Collins at [84(2)(c)]. The appeal on this item is allowed.
The award should be increased by an amount of $182.93.

Item 10- Damage to personal property

The personal property for which $15,435.44 was listed in paras 185 -197 of the applicant's closing submission to the Tribunal at first instance dated 5 December 2022 (original submissions): AB 4 Tab 8, marked "Appeal Panel".
It is to be noted that these submissions, although presented in the form of an affidavit, are not themselves evidence in the original proceedings, the hearing having concluded on 15 August 2022 and this document filed pursuant to directions requiring the parties to subsequently provide written submissions in support of their respective positions.
At [142]-[145] the Tribunal said of this claim: 142 The onus is on the applicant to establish not only the breach of the contract or the implied warranties by the respondent, but that the breach has caused loss to the applicant. 143 In my view, the evidence pointed to by the applicant does not do this. 144 I am not satisfied that the respondent has breached the warranties nor the oral contract between the applicant and the respondent or even if there was some conduct by the respondent that could be said to have been in breach of the contract or the implied warranties, that it has caused the loss and damage, as alleged, to the applicant. 145 The applicants' claim for other damages to personal property is therefore rejected.
The evidence to which the appellant referred in her original submissions included photographs and text messages.
The appellant requires leave to appeal in respect of this challenge. We will deal in turn with each item of personal property for which a claim is made. 1. Re-Key House - $3,500 There is some evidence from the appellant that keys were given to but not returned by the builder: Appellant's affidavit sworn 21 April 2021 (21 April affidavit) paras 14 and 78. However, we were not referred to evidence concerning the cost to replace those keys or that the amount of $3,500 was reasonable. Leave to appeal in respect of this item is refused. 1. Removal of paint on vehicle - $1,000 There is some evidence of "painted white paint speckles all over [the appellant's) car and other items surrounding [her] property": 21 April affidavit para 79. However, again we were not referred to any evidence to support the costs of repairs or that those costs were reasonable. Leave to appeal in respect of this item is refused. 1. Bunnings receipts - $311.46 Paragraphs 2, 70 and 109 of the 21 April affidavit provide some evidence to support those claims. Para 68 of the 21 April affidavit also makes reference to purchases at Bunnings. While the relevant invoices appear to have been sent in a text message from the appellant to the respondent, Mr Hanna denied having made a request for the appellant to purchase the items or being liable for payment: See AB 1 Tab T sub-tab 71 p 5-6. Mr Hanna was not cross examined on this matter and there is no reason to conclude the contract was relevantly varied. In the absence of evidence about the circumstances in which the items were purchased and what they were used for we are not satisfied the Tribunal was in error in rejecting this claim. Leave to appeal in respect of this item is refused. 1. Pool Equipment - $2,900 The appellant relied on para 98 of her original submissions, those submissions being cross referenced from para 188 of the original submissions. Paragraph 98 of the original submissions relate to balustrades and the scope of work, not damage to the pool equipment. However, at pp 23-24, there are submissions made about pool equipment. Paragraph 120 of the 21 April affidavit makes a claim for pool equipment however we have not been referred to any evidence that would prove the circumstances of damage, the extent of damage or the reasonable cost of repairs. The quotation at AB 1 Tab PQ subtab 5 does not provide sufficient proof. No error is shown in the decision of the Tribunal and leave to appeal in respect of this item is refused. 1. Garage Door Motor - $279.98 Again, the appellant relies on her original submissions and documents referred to therein. Again, it is to be remembered that these submissions were provided after the hearing had concluded and statements made within them are not evidence for the purpose of the proceedings. The evidence is contained in affidavits and documents handed up to the Tribunal at the hearing. The issue of the garage door motor is dealt with at para 54 of the 21 April affidavit. That paragraph refers to emails from the B & D Group which confirmed that the motor of the roller door was replaced "due to water in the motor that came from the leak above the track". While this evidence would support a conclusion that the motor was damaged by water, the evidence does not establish that the damage arose from water leaking in consequence of defective building work done by the respondent. Further, the evidence does not establish the reasonable cost to repair the identified defect. No errors have been shown in the decision of the Tribunal and leave to appeal in respect of this item is refused. 1. Water feature - $1,200 The water feature is depicted in the photograph in AB 1 Tab D p 9 where the narration says "wire trod on and broken. Pebbles fallen through. Surrounding pebbles paint". There is no evidence to which we have been referred which demonstrates any damage was caused by the respondent or its workers. Nor is there any evidence to which we have been referred to prove the cost to repair or replace the item in question or that those costs were reasonable. No error is shown in the decision of the Tribunal and leave to appeal in respect of this item is refused. 1. Gate - $300 As with the previous item, there is no proof of the reasonable cost to repair or replace the gate. In addition, the photographs at page 9 of AB1 Tab D, upon which the appellant relies, do not show the nature and extent of any damage to the gate. No error is shown in the decision of the Tribunal and leave to appeal in respect of this item is refused. 1. Statues - $500 During oral submissions, we were referred to a photograph in a text message depicting a broken statue: see AB 1 Tab subtab 18. However, there is no direct evidence as to how this occurred nor is there any evidence as to the reasonable cost to repair or replace this item. No error is shown in the decision of the Tribunal and leave to appeal in respect of this item is refused. 1. Pots - $1,400 The appellant relies on photographs depicting damage to pots: AB 1 Tab D pages 9 and 10. Leave to appeal in respect of this item is refused for the same reasons as the previous item. 1. Furniture - $3,000 The evidence identified by the appellant in her original submissions (AB 1 Tab D page 9) is inadequate to prove the nature and extent of the furniture damage nor the cost to repair or replace such furniture. Again, evidence of how damage occurred, who was responsible and what is the reasonable cost of repair or replacement has not been provided. No error is shown in the decision of the Tribunal and leave to appeal this item is refused. 1. Wheelbarrow - $249 In her original submissions, the appellant says her wheelbarrow "went missing while the respondent was on site". In her 21 April affidavit she says at paragraph 26 the wheelbarrow had been "stolen from site" and "no action was taken [by the respondent] to have it returned and [the applicant] never got it back. The evidence to which we have been referred does not establish that the respondent was responsible for the loss of the wheelbarrow, nor does it establish the reasonable cost to replace the wheelbarrow. No error is shown in the decision of the Tribunal and leave to appeal this item is refused. 1. Ladder - $545 As with the claim for the wheelbarrow, the appellant says her ladder went missing. Again, the evidence to which we have been referred does not establish that the respondent was responsible for the loss of the ladder, nor does it establish the reasonable cost to replace the ladder. No error is shown in the decision of the Tribunal and leave to appeal this item is refused. 1. New canopy damaged - $250 In her original submissions the appellant says that the respondent insisted she purchase a canopy for over the sliding door of the downstairs bedroom. She contends it was damaged while the respondent was working and needs to be replaced. Again, the evidence to which we have been referred does not establish that the respondent was responsible for the damaged canopy, nor does it establish the reasonable cost to repair. No error is shown in the decision of the Tribunal and leave to appeal this item is refused.

Item 11 - Loss of rental income

The property was not being rented at the time the parties entered into the building contract. There is no evidence that it was a term of the contract or in the contemplation of the parties at the time the contract was entered into that completion of the work was required in order to permit the premises to be rented at the conclusion of the work. The submission of the appellant that her mother was occupying part of the house at the time the contract was formed counts against a finding that loss of rent was in the contemplation of the parties at the time the contract was formed.
Damages are recoverable if not too remote. As stated by the Court of Appeal in Cripps and Another v G & M Dawson Pty Ltd and Another; G & M Dawson Pty Ltd and Another v Cripps and Another. [2006] NSWCA 81, per Santow JA at [7] (Mason P and Brownie AJA agreeing), the test of remoteness is as follows: The question at issue essentially turns on whether the damage was properly recoverable under one or other of the two limbs in Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 as being either: (a) a loss that may fairly and reasonably be considered as arising naturally, according to the usual course of things, from breach of the contract, or (b) a loss as may reasonably be supposed to have been in the contemplation of both parties at the time they made the lease contract as a probable result of the breach of it.
The claim for loss of rent neither arises naturally, according to the usual course of things, from the breach of a building contract nor is the loss reasonably within the contemplation of both parties at the time the building contract was entered into as a loss that would probably be suffered if the building contract was breached.
It follows that this challenge fails.

Item 12 - Interest

As stated by the appellant, interest may be payable under a contract if the contract so provides. In this case, there is no express term of the contract that interest is payable by one party to the other where a breach of contract occurs.
Such a term would not otherwise be implied into an oral contract as it would not satisfy the criteria for implication: see Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; [1982] HCA 24 per Mason J at 347 referring to the requirements for implication of a term in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 283; (1977) 52 ALJR 20, at p 26; [1977] HCA 40.
Unlike proceedings to which the Civil Procedure Act 2005 (NSW) (CP Act) applies, there is no power permitting the Tribunal to award pre-judgment interest in the Tribunal: cf s 100 of the CP Act. Interest is only payable on an unpaid judgment debt: see r 39 of the Civil and Administrative Tribunal Rules 2014 (NSW).
While interest in the nature of damages for loss of use of money might be payable in accordance with the principle in Hungerfords v Walker (1989) 171 CLR 125; [1989] HCA 8, such a claim requires evidence to prove the loss. There is no relevant evidence to sustain such a claim in this case.
Consequently, the Tribunal was correct to reject the claim for interest and this challenge fails.

Orders

The appellant has only been successful in relation to the appeal concerning repairs to the garage - part of Item 8 - Consequential damage from previous damage not rectified. Orders should be made in respect of this item. Otherwise, the appeal should be dismissed.
Direction should be made to permit the parties to make any application in respect of costs of the appeal. It would appear r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) applies to this appeal because of r 38A. This matter should be addressed in submissions if there is any dispute. In addition, the parties should provide submissions concerning whether the hearing of any costs application can be dispensed with pursuant to s 50(2) of the NCAT Act.
The Appeal Panel makes the following orders: 1. The time to lodge the Notice of Appeal is extended to 2 May 2023. 2. Leave to appeal is granted and the appeal is allowed concerning repairs to the garage (part of Item 8 - Consequential damage from previous damage not rectified) and the amount of the award made by the Tribunal on 3 April 2023 is increased by an amount of $182.83. 3. Order 1 made 3 April 2023 is varied to $48,780.29. 4. Save as provided above, leave to appeal is refused and the appeal is dismissed. 5. The following directions are made in relation to costs: 1. Within 14 days from the date of these reasons, any applicant for costs (costs applicant) is to file and serve any evidence and submissions in support of the application (costs application). 2. Within 28 days from the date of these reasons, any respondent to the costs application is to file and serve any evidence and submissions in response. 3. Within 35 days from the date of these reasons, the costs applicant is to file and serve any submissions in support in reply. 4. The submissions of the parties are to include submissions as to whether an order should be made dispensing with the hearing as to costs pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). 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: 04 August 2023

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (16 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (16)

Cited By (1)