Warren v K Kavangh t/as Local Fencing

Jurisdiction and Legislation

1. Section 48A of the Home Building Act defines: "building claim" means a claim for: (a) The payment of a specified sum of money, or (b) The supply of specified services, or (c) Relief from payment of a specified sum of money, or (d) The delivery, return or replacement of specified goods or goods of a specified description, or (e) A combination of 2 or more of the remedies referred to in paragraphs (a)-(d) that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods and services, but not include a claim that the regulations not to be a building claim". "building goods and services" means goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services: (a) Supplied by the person who contracts to do, otherwise does, that work, or (b) Supplied in any circumstances prescribed by the regulations to the person who contracts to do that work. Section 3 of the Home Building Act defines: "residential building work" means any work involved in, involved in co-ordinating or supervising any work in: (a) The construction of a dwelling, or (b) The making of alterations or additions to a dwelling, or (c) The repairing, renovation, decoration or protective treatment of a dwelling". Section 48K(1) of the Act provides: Jurisdiction of Tribunal in relation to building claims (1) The Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 (or any other higher or lower figure prescribed by the regulations). STATUTORY WARRANTIES Section 18B of the Act provides: Warranties as to residential building work The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work: (a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new, (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time, (e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling, (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment. The Tribunal finds that the both the home owner and the builder have a building claim for the purposes of the Act and is satisfied that it has jurisdiction to hear and determine the applications before it. The statutory warranties in s 18B of the Act are implied into the contract between the home owner and the Builder.

Summary Position of the Parties

1. The Home Owner claims that the work performed by the Builder is defective in a number of respects. She relies principally on the report of Mr Jason Roumanos, Building Consultant, from Let Us Do it Building and Pest Inspections dated 21 May 2015 ("the LUDI report").
2. At the hearing, the Builder acknowledged that the work was defective in certain respects, and was no longer seeking payment of the full amount due under the building contract. He indicated during the hearing, he would accept "about half" of what was due under the contract, in recognition of the fact that the Home Owner would use the balance to pay for any rectification work.
3. The Home Owner does not agree, believing she obtained no value for the work performed by the Builder. She seeks to be relieved entirely from payment of the amount due, and for additional costs associated with the removal of existing fencing.

Applicant's Evidence

1. On 3 February 2015, the Home Owner emailed the Builder with a list of defects. These included: On Left side (a) Palings needing overlapping to industry standards (b) Palings need to be same width (c) Gate latch to be securely in place (d) Gap between paling and retaining wall to be closed in (e) Ag line to be properly installed (f) Fence line to be strengthened Rear (g) Palings to be straightened and overlapped (h) Ag pipe to be correctly installed (i) Gap between paling and retaining wall to be closed in (j) Tidy up retaining wall on neighbour's side (k) Retaining wall panels to corner to be in one piece (l) Street corner sleepers to meet with rear corner sleepers (m) Corner fence upright post to be installed and squared off (n) Rear retaining wall dug in, installed and levelled (o) Fence line to be strengthened Street side fence (p) Paling to be straightened and overlapped (q) Missing sleepers to 5 sections to be dug in and installed (r) Insert missing screws from upright supports (s) Fence to be aligned with retaining wall (t) Gaps between sleepers to be correctly fitted (u) Ag pipe correctly installed (v) Level and match all top capping (w) Replace front capping section with one long piece (x) Replace broken/bent top rail near gate (y) Double gate to be hung centred and made level with fence (z) Strengthen gate support (aa) Install missing sleepers in front retaining wall (bb) Concrete in all upright supports (cc) Strengthen the fence line (dd) Make storm water box to allow access by water board.
2. In this email, the Home Owner notes that she will not pay for any of this additional work, nor for the $280.00 extra added to the quote due to the job being done wrongly by the Builder's workmen. She also makes the following comment: "It is in our interest to settle the problem and pay you out in full once all issues are completed to a professional industry standard. Please advise us of your intentions to resolve the above matters by Friday 6th February 2015, or we will proceed with further action."
3. The Builder never agreed to this list of repairs. He simply indicated the Home Owner would need to pay 50% up front before further work would be done. The Home Owner indicated that the bank would not allow this and the original contract required payment "upon completion". The Builder then emailed the Home Owner indicating that he did not agree with the following items on her emailed list of 3 February: 1. Strengthening the fence line: "(supports are sufficiently strong enough 2. "You agreed on site … that some supports not into ground were cosmetic only (to look uniform from the street) and behind these supports were double supports with the extended post and double support behind it"
4. As there was no further agreement, the Home Owner referred the dispute to the Office of Fair Trading. This did not result in an agreement.
5. No further work was done, but the Builder (or those instructed by him) returned without invitation and began "smashing the fences down". This resulted in a complaint to the local police.
6. On 14 April 2015, the Home Owner wrote to the Builder informing that "we feel we cannot continue any further" due to their threatening and intimidating actions and accessing the property uninvited and removing fencing. She writes: "You are .. given 14 days from this dated email to remove (with agreed arrangements…) all fencing and structures erected by your company without causing any further damage or loss to our land or property …"
7. The Builder replied on 21 April: "We have been very patient waiting for you … after saying you were referring to Dept of Fair Trading so we could agree on repairs and pay monies owing … this has not happened … I refer to our meeting with yourself and your father where you were asked on 4 occasions to agree to pay monies owing after repairs were done. We both agreed on what repairs were to be done. You consistently refused … Your only answer was "what if something happens later to the fence" Our solicitors have been advised to lodge a summons. When judgement is obtained a request will be made to the sheriff for repossession of furniture and items to pay the monies owing which you originally agreed to pay …"
8. The Office of Fair Trading recommended the application to this Tribunal, and the Home Owner lodged the application.
9. The LUDI report contains conditions which include the following: the report "is not an all-encompassing report dealing with building from every aspect. it is a reasonable attempt to identify any obvious or significant defects apparent at the time of the inspection. Whether or not a defect is considered significant depends to a large extent upon the age and type of building inspected. … It is not a structural report. Should you require any advice of a structural nature you should contact a structural engineer. … This is a visual inspection only limited to those area and sections of the property fully accessible and visible to the inspector on the ate of inspection … This report does not and cannot comment upon defects that may have been concealed …"
10. Specific to this inspection, Mr Roumanos notes that the report was based on a visual inspection only with no core drilling, digging testing or structural sampling. Only the fences and retaining walls were inspected. No digging was undertaken to determine the depth of the embedment of posts. The comments contain opinions based on material available at the time. The report contains the following relevant observations and opinions: 1. The retaining walls at the property are cantilevered walls. These are usually constructed with round or sawn timbers with a third of their length buried into the ground and cantilevered out to support timber walling. The poles are set at close centres to support the timber that spans between them. 2. The post centres of the Home Owner's wall are inconsistent 3. Every second post has not been concreted into the ground and is a dummy post 4. The embedment depth of the walls is insufficient with the manufacturer's instructions for a wall of this height, and distance between post centres 5. The posts are smaller than the recommended minimum post size of 200mm x 100 mm 6. There are insufficient screws in some posts. 7. There is poor workmanship in the external corner of the retaining wall on the north eastern corner of the property. The spanning of wall elements is non continuous. 8. The hinges used are non typical for timber framed gates. 9. The top of the fence undulates excessively over the length of the fence. 10. The gate post is loose and uses dynabolts which are not suited for external use. 11. The paling spacing is irregular and unsightly and indicative of poor workmanship. 12. The external corner of the wall and fence is poorly finished, unsightly and structurally inefficient. 13. The retaining box sits over the stormwater inlet grate, restricts its swing and blocks its operation. 14. The gap between fence and wall is inconsistent and indicative of poor workmanship. 15. The aggregate drain is poorly installed. There is no drainage aggregate below or around it. It does not fall in any direction, and there is some backfall in more than one location.
11. The LUDI report concludes: "The condition of fencing and retaining walls at … is generally poor. The workmanship is poor. The installation does not look like it was carried out by experienced tradespersons. Little care has been shown in finishing the works in a uniform and consistent manner. The structural adequacy should be confirmed by a certified structural engineer, however it has been shown that it does not meet a general timber framing guide published by a timber mill in NSW. These guides are used industry wide by builders and carpenters when building timber retaining walls under 900 mm high."
12. At the hearing, the Home Owner added that the ag pipe cannot now be installed due to construction of the next door house since this work was done.
13. The Home Owner also produces the Campbelltown (Sustainable City) Development Control Plan 2009 Volume 2 Engineering design for Development June 2009. This includes information regarding the construction of retaining walls in the municipality including: 1. that the work contracted to be performed by the Builder requires a development application. She notes this is required for retaining walls within 1 metre of the boundary and exceeding 800 mm in height. . 2. The walls also require structural certification and engineering certification to retain over 600 mm of fill, and 3. Have adequate drainage lines connecting to the existing stormwater drainage system.The Home Owner suggests that there was no development application, and no certification or drainage lines installed as required.
14. The Home Owner also questions whether the Builder was adequately licenced to complete the work.

Cost of Rectification

1. The Home Owner notes that they have found it difficult to obtain a quote for redoing the work. They believe they have obtained no value for the work done by the Builder, and the only way to resolve the matter is for the work to be removed and to start again. The work is also not complete. The Home Owner seeks to be released from any liability under the Building contract with the Builder, and for the costs of removing the work that has been done.
2. The Home Owner produces 2 quotations: 1. Quote encompassed in an email from Mr Jason Roumanos - the author of the LUDI report. He provides 2 options: Option 1 - to remove all existing material from the site ($3,900 plus GST) and build new retaining walls and fencing ($10,750 plus GST) Option 2 - to fix the existing retaining walls and fences and bring "up to code" including supply and installation of 2 gates ($11,900 plus GST) (He notes that these quotes do not include the cost of council approval or permits, structural engineer designs, hydraulic engineer design.) 1. Custom Creation Landscapes Remove all of existing boundary fencing (but leave concrete footing) ($5948.61 inc GST)

Builder's Evidence

1. The Builder made the following specific responses to the alleged defects: 1. The average height of the posts was not more than 800mm. There was only one section greater than 800mm. it was therefore unnecessary to make a development application. 2. The posts that were not concreted in are not structural. They are merely to cover strips 3. The distance between the fence posts of 1.6 metres is not defective as there is a post support in the middle of the 1.6 metre distance. This is much stronger than the recommended 1.2 metre gap.
2. There are defects in the work. The cause of these defects is that the person employed to do the work - Warwick - decided to leave the job in the hands of inexperienced labourers. Warwick previously had 5 years of satisfactory work with the company.
3. Contrary to the position to the Home Owner, they did agree to a list of faults and they offered to fix them. However, the work did not go ahead because the Home Owner did not give a commitment to pay.
4. After the complaint was received from the Home Owner, the Builder arranged for an inspection by a structural engineer Mr Nabil Ghosn and another fencer Excellent Fencing. The engineer spent about 1 hour inspecting the work, and told the Builder that it was structurally sound. He did not take photos or prepare an independent report.
5. The Builder produces a document signed by Mr Ghosn of Sydney Wide Engineers. He provides his qualifications as BE, MIEAust/CP Eng. The document is a copy of a portion of the Home Owner's email in which she lists the defects (see paragraph 18 above). There are ticks next to each of the items except for the following, next to which in which the following comments in italics are made: 1. "Palings overlapping to standards" 2. Fence line to be strengthened ("Not required/OK as is") 3. Ag pipe installed correctly ("Not in the contract") 4. Rear retaining wall dug in, levelled and installed ("can't be done") 5. Front retaining wall missing sleepers 1st section and 5th section need to be dug in and installed ("N/A") 6. All upright support to be dug concreted into place ("straighten wall") Then in handwriting Mr Ghosn writes: "Please note: The rear fence must be stepped or sloped as is due to the natural fall of the ground level. I Nabil Ghosn have inspected the constructed timber fence and retaining walls on 23 July 2015 and I agree with the notes of this report/email."
6. A copy of the same portion of the Home Owner's email was provided to Excellent Fencing. There are ticks next to each of the items except for the following, with the following comments in italics are made: 1. Fence line to be strengthened ("Not applicable") 2. Ag pipe installed correctly ("OK do left side, not required rear") 3. Rear retaining wall dug in, levelled and installed ("Not feasible, to look accepted practice") 4. Front retaining wall missing sleepers 1st section and 5th section need to be dug in and installed ("Client agreed not applicable") 5. All upright support to be dug concreted into place ("make straight") 6. Fence line to be strengthened ("N/A") 7. Storm water box ("make lid out of 150 x 150 timber - widen to allow grate lifted")
7. In separate document dated 23 July 2015, Mr Brock of Excellent Fencing writes: "I have inspected the fencing at the above property and have noted in attached list (referring to the above) repairs and adjustments to be carried out and noted items not necessary to be done in accordance with accepted standards of fencing."
8. The Builder suggests that Mr Ghosn's views should be preferred to those expressed in the LUDI report as the author of the latter report is not an engineer.
9. On this basis, the Builder submits that the work is not so defective that the existing structures need be removed and rebuilt. It can be quite adequately repaired. He agreed in oral evidence that this is "not a job we have any pride in", but suggests that the evidence indicates that the walls and fences are structurally sound. He refers to Option 2 from Mr Roumanos (paragraph 33) which contemplates repairs to the existing structures.
10. The Builder also challenges the quotes provided by the Home Owner (see paragraph 33). He believes the cost of removal of the existing structures should be no more than $800.00 for labour of $80.00 per hour the hire of a bobcat and tip fees. The Builder confirmed he had no expert evidence to establish these costs. He relies on his experience to make this assessment.
11. The Builder also submitted that that the Tribunal should take into account in any orders it makes the benefit the Home Owner has obtained from the excavation work it has done.

Did the Builder perform any works which are defective in such a way as to breach the statutory warranties set out in s 18B of the Home Building Act?

1. It is common ground that the work as performed by the Builder was defective, but there are some differences as to the extent of those defects. The Builder has not provided any independent assessment of the extent to which the fencing and retaining walls comply with industry standards. Instead, he seeks expert analysis of the Home Owner's list of defects. There is no attempt to analyse the defects as set out in the LUDI report, some of which are not contained and go beyond what appears in the Home Owner's list (including the post size and location, and the construction of the gates)
2. This leaves a number of alleged defects in the LUDI report as effectively unchallenged. The Builder notes that the author of the LUDI report Mr Roumanos is not an engineer and therefore cannot comment on the structural soundness of the walls and fences. This is not in dispute. The LUDI report makes clear that the report is based on visual observations only and does not comment on structural issues. Mr Roumanos does use a timber framing guide to determine whether the fencing and retaining walls have been constructed in accordance with industry standards. The Builder does not challenge the use of this guide as a basis for determining whether the retaining wall has been built to industry standards.
3. Mr Roumanos alleges that the work falls short of those standards principally in respect of the following 1. The distance between the posts 2. The manner in which the posts are secured to the ground 3. The size of the posts 4. The embedment depth of the posts (while acknowledging that he did not dig down to check this) 5. The lack of screws in the posts 6. The inconsistency in the paling spacing 7. The poorly installed aggregate drain 8. The varying height of the fence 9. The irregular spanning of wall elements 10. Various aspects of the construction of the gates 11. The poor workmanship of the retaining box over the stormwater drain, and 12. Inconsistent gaps between fence and wall.
4. The Builder makes little comment about many of these matters. It is difficult to determine from the comments of his experts - Mr Ghosn and Mr Brock - whether they take issue with the comments of Mr Roumanos. It is not clear whether Mr Ghosn and Mr Brock had access to the LUDI report at the time of their inspections on 23 July 2015. However, each of them had sufficient time prior to the final hearing to have the opportunity to comment on this report. There is no direct comment by either of them.
5. I accept the LUDI report produced by the Home Owner as the best evidence of the defects evident in the work performed by the Builder. While the author Mr Roumanos does not claim to have any particular expertise in the construction of fencing or retaining walls, I accept his qualifications as a building consultant with the capacity to make general comments based on the industry standards of which he is aware. His evidence does not specifically comply with NCAT Procedural Direction 3 Expert Witnesses, in so far as there is no acknowledgement that he has read the Experts Code of Conduct, but it does properly set out the limitations of his report and the basis upon which he makes his findings. I find his evidence as to defects should be accepted.
6. On the basis of the above evidence, I am satisfied that the work falls short of the statutory warranties in Section 18B of the Home Building Act 1989 that the work will be done with due care and skill, and that all materials will be good and suitable for the purpose for which they are used.

Determination of the Builder's Claim

1. The Builder seeks the amount due under the contract being $10,456.00. For contracts entered into prior to 1 March 2015, contracts for work exceeding $5,000.00: 1. must be in writing and be dated and signed by or on behalf of each of the parties to it. 2. must contain the names of the parties, including the name of the holder of the contractor licence shown on the contractor licence, and the number of the contractor licence, and a sufficient description of the work to which the contract relates, and any plans and specifications for the work, and the contract price if known, and any statutory warranties applicable to the work, and in the case of a contract to do residential building work-a conspicuous statement setting out the cooling-off period that applies to the contract because of section 7BA, and in the case of a contract to do residential building work-a statement that the contract may be terminated in the circumstances provided by the general law and that this does not prevent the parties agreeing to additional circumstances in which the contract may be terminated, and any other matter prescribed by the regulations for inclusion in the contract. (Section 7 HBA) 1. Section 10 of the HBA provides that a person who contracts to do residential building work under a contract entered into to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates is not entitled to damages or the enforce the contract. While there is no written contract as required by the HB Act in this case, this does not preclude a claim by the builder otherwise than on the basis of contract. 2. The general law of quantum meruit /quantum valebat/restitution/unjust enrichment has been applied by the Court of Appeal on many occasions with respect to building cases involving no written contract, in the context of the HB Act: see, for example, Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277 and Darin v Olzomer [2012] NSWCA 60.
2. As the contract work did not exceed $20,000 there was no requirement for a contract of insurance between the parties (Section 92 of the HBA, Regulation 53 Home Building Regulation), and Section 94 does not apply to limit the Builder's remedies.
3. The written quotation forming the basis of the contract clearly did not comply with Section 7 of the HBA. This means that the Builder can only recover under quantum meruit. To succeed on this basis, he must establish that it would be just and equitable to recover money for work performed. I note in this matter that neither party was legally represented. The Applicant did not raise this issue, but in my view this does not relieve me from consideration of any legal issues that might affect liability.
4. The approach of the Courts to claims for relief on a quantum meruit basis was summarised by Senior Member Goldstein in the Tribunal matter of Jason and Michelle Zammit trading as Zammit's Quality Constructions v Saul Markunsky and Shereen Markunsky [2015] NSWCATCD 21 as follows: "Section 94(1A) of the Act was considered by Barrett J in Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273. At paragraphs 43 - 61 of his judgement his honour considered the 'just and equitable criterion under section 94(1A)' of the Act and the factors bearing upon the just and equitable assessment. In considering the just and equitable criterion Barrett J. referred to a number of authorities which establish that the words just and equitable are of wide significance. His honour referred to a passage of the judgement of Sheller JA in Stephenson v State Bank of New South Wales (1996) 39 NSWLR 101 where his honour quoted from a decision of the High Court in Talga v MBC International Limited [1976] HCA 22; (1976) 133 CLR 622.
5. The passage quoted was: 'Stephen, Mason and Jacobs JJ dealing with the issue raised for the Court by the Banking Act 1974 of whether it was just and equitable that a transaction should be treated as valid, said: 'The court will have before it an existing transaction replete with all its surrounding facts and circumstances and in their light will determine what is just and equitable. In doing so it will certainly be exercising a wide discretion that this is a commonplace of the curial process; the court will be bound to act judicially, exercising its discretion by reference only to such considerations affecting the transaction as, on an examination of the legislation, may be seen to be material to the decision which it is called on to make. Irrelevant matters, matters such as the plaintiffs instanced in the course of argument, which have no rational connection with the policy of the regulations but would be expressive only of the personal predilections of the Court, cannot be allowed by it to play any part in its decision.' Barrett J. observed that this approach was endorsed by Campbell J in Sullman v Sullman [2002] NSWSC 169. At paragraph 49 of his judgement Barrett J. stated in connection with section 94(1A) of the Act: 'The inquiry directed by the statute is therefore, in effect, whether the surrounding circumstances are such as to justify the creation of a right and an obligation as to the payment of the sum separately determined to represent fair remuneration. The Act, as I see it, does not attempt to control quantification. That is left to the general principle imported by the expression " quantum meruit ". The Act is concerned with factors influencing a decision whether, in the particular circumstances in which the court finds the parties, it is fair that one receive the quantum meruit sum and the other pay it.' The owners have referred me to the decision of Hall J in Pender v Robwenphi Pty Limited & Anor [2008] NSWSC 1144. In that case Hall J stated, commencing at paragraph 41, in connection with the decision of Barrett J in Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd: 'In relation to the analysis undertaken by Barrett J in Eddy Lau Constructions (supra), the following propositions may be derived from the judgment:- (1) The words "just and equitable" are of the widest significance and involve evaluations of questions of fact. (2) In exercising the wide discretion under the provision, a Court or Tribunal is to have regard to considerations affecting the particular transaction as are material to the decision to be made. Irrelevant matters are those that have no rational connection with the policy of the statutory requirement. (3) The statutory discretion under s.94(1A) must be exercised judicially in light of the whole of the circumstances surrounding the relevant subject matter. (4) Inquiry is directed to ascertaining whether the surrounding circumstances are such as to justify the creation of a right and an obligation as to the payment of the sum separately determined to represent fair remuneration. (5) The Act is concerned with factors influencing a decision whether, in the particular circumstances in which the Court finds the parties, it is fair that one receive the quantum meruit sum and the other pay it. It is apparent from the analysis by Barrett J in Eddy Lau Constructions (supra) that the conduct of the party in breach is an important matter for consideration. In that respect, ignorance or oversight of the statutory requirement under the Act stands in marked contrast to a contravention that is wilful or deliberate.
6. I have considered the above principles in its application to this matter. I am not satisfied that it is just and equitable to permit recovery by the Builder on a quantum meruit basis. I take into account the following factors: 1. The absence of a contract in the statutory form has clouded a proper consideration of the true scope of works. 2. The absence of a written contract which complies with the statutory requirements has resulted in the absence of clearly stated dispute resolution clauses or information about the manner in which the contract can be terminated, and what remedies are available on termination. 3. The Builder has provided no evidence as to the true value of the work he has performed. The best evidence (LUDI report and associated rectification quotations) indicates that the work is significantly sub-standard, and that there is little value in it. In paragraph 75 of Eddy Lau Constructions, Barret J writes: "The quantum meruit sum is the reasonable cost of the work done and expenditure incurred, with the assessment of reasonableness being undertaken by reference to the results produced and evidence of what it would in the ordinary course of things be necessary to outlay in order to produce those results. 1. The builder has not supplied any independent evidence of the reasonable costs in the present case.
7. For the abovementioned reasons, I am not satisfied that it is just and equitable to allow recovery by the Builder on a quantum meruit basis. I therefore dismiss the Builder's claim.

What remedy is the Home Owner entitled to?

1. The Builder initially offered to undertake all necessary remedial work. However, in the circumstances set out above, a stalemate was reached in the parties' negotiations such that neither was seeking the Builder to return to the site to complete the work. The Builder offered the Home Owner relief from part of the amount due under the contract to pay for remedial works.
2. Section 48MA of the Home Building Act provides that rectification of defective work is preferred outcome in proceedings: A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.
3. The circumstances outlined in paragraphs 1 to 7 of these Reasons indicate the fraught relations which existed between the parties by about March 2015. As noted above, by the time of the final hearing, neither party was requesting the Builder to undertake the rectification work. In these circumstances, I am satisfied that I should not order rectification of the work by the Builder.
4. The innocent party is generally entitled to the reasonable cost of correcting the defective work (Craftsmen Restoration & Renovations Pty Ltd v Boland [2011] NSWCA 147). The damages allowed must be necessary to produce conformity with the contract and also a reasonable course to adopt. (Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613).
5. I am not satisfied that this is the remedy which should be ordered in this matter for the following reasons: 1. The scope of works is set out in the Quotation of 16 September 2014 (replacing a previous quotation from 9 August 2014). As best as can be determined from the handwritten document, the scope of works includes a lapped and capped treated pine fence to the left, right and rear of the property, a timber retaining wall under each fence, an ag pipe on the left side and possibly another on the right side, a box in drain with sleepers, a single gate on the left and a double gate on the right. On the best evidence available to me (the LUDI report), I am satisfied that there are major defects associated with each of these items. 2. This is only quote provided to fix the existing walls and fences and gates is in the amount of $11,900. This indicates that the cost of rectification exceeds than the originally contracted price. [I note that the Builder suggests that the work could be fixed/completed for a cost of approximately $5,000, but he had no independent evidence to support this. In the absence of any expert evidence to the contrary, I prefer the evidence of Mr Roumanos as to the costs of rectification] 3. The extent of the defective work has resulted in the Home Owner receiving so little value for the work performed that the more appropriate remedy is the one she seeks - to put her in a position to have the work redone by another (suitably licensed) contractor. It is not in my view appropriate or fair and equitable to order rectification of work that falls so far short of the expected standards.
6. The Home Owner has obtained 2 quotes for removal of all existing structures - one with GST included and one without. I will order the Builder to pay the Home Owner the amount of $5,000.00 being the approximate average of these 2 quotes.
7. To this I will add the amount of $500.00 being the cost of the LUDI report. I am of the view that this cost incurred by the Home Owner was reasonably incurred to prove the Applicant's case on breach of statutory warranty and to establish the reasonable costs of rectification.
8. I will not allow the other amounts claimed by the Home Owner being the NCAT application fee and other out of pocket expenses, as there were no special circumstances pleaded by the Applicant which would remove this matter from the general rule under Section 60 of the Civil and Administrative Tribunal Act 2013 that each party are to pay their own costs.
9. The orders on the Home Owner's application are therefore: 1. The amount of $10,456.00 is not due by the Home Owner to the Builder pursuant to Tax Invoice dated 16 September 2014. 2. The Builder is to pay the Home Owner the sum of $5,500.00 on or before 15 December 2015. B Shipp Senior Member Civil and Administrative Tribunal of New South Wales 20 November 2015 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: 12 January 2016