Wassim Hijazi by his tutor the NSW Trustee and Guardian v SRY Constructions Pty Ltd; SRY Constructions Pty Ltd v Wassim Hijazi

NCAT Consumer and Commercial|2018-04-04

Background

The Owner is the registered proprietor of a Lot in a strata scheme at Brighton Le Sands ("home").
On 15 April 1999, the Supreme Court of NSW appointed the NSW Trustee and Guardian ("NSWT&G") to financially manage the Owner's estate.
The Owner decided to renovate the kitchen, living room and bathroom in his home ("building works").

Facts adduced from evidence

The NSWT&G obtained a report from ARC Development on 17 November 2016 which identified the state of the building works as at that date and contained recommendations for the rectification of defects and completion of incomplete works at an estimated cost of $62,540 plus GST. The report in its conclusion also states "The occupant of the property is at risk of being electrocuted from exposed live wires and unprotected wired in walls". The Owner submits that such a statement is a declaration that the premises are uninhabitable and as a result the Owner moved from the premises on or about 4 November 2016.
The Owner's evidence is that: 1. From 4 November 2016 until 12 December 2016 the Owner moved into temporary accommodation; 2. From 12 December 2016 until 24 October 2017 the Owner rented premises at Randwick for a rent of $580.00 per week; 3. From 24 October 2017 the Owner rented premises at Ramsgate Beach for a rent of $425 per week and continues to live in those premises.
The Owner's premises remain in the condition they were in as recorded in the ARC Development Report.
On 23 June 2017 the Owner obtained an expert report as to the incomplete and defective building work from Cornerstone Building Consultancy (Owner's Expert Report") authored by David Roberts ("Expert Roberts").
On 15 August 2017 the Owner's solicitors sent the Builder a notice pursuant to Clause 25 of the Contract requiring the Builder to rectify defective works and make good incomplete building works identified in the Owner's Expert Report, within 10 business days.
On 8 September 2017 the Owner's solicitor gave the Builder written notice that the Owner had terminated the Contract.
On 6 October 2017 the Builder served on the Owner a copy of an expert witness report prepared by Independent Building Inspections ("Builder's Expert Report") authored by Paul Cavallo ("Expert Cavallo").
On 6 November 2017 Expert Roberts prepared a supplementary report to address issues raised by the Builder's claim ("Owner's Supplementary Report"). On 15 January 2018 Expert Cavallo prepared a further report responding to the Builder's Supplementary Report.
On 7 December 2017 Experts Roberts and Cavallo conducted a joint inspection of the property and prepared a Joint Report dated 13 December 2017.

Issues in the Owner's claim

The Owner contends that there are 5 issues for the Tribunal to consider: 1. What are the terms of the Contract and what is required under the Contract on its proper construction; 2. Whether the work performed by the Builder with respect to the ceiling , the counter top and the bathroom was defective and in breach of the Contract and the implied statutory warranties; 3. Whether the Builder's works are incomplete according to the terms of the Contract; 4. What relief ought to be granted in the event the Tribunal finds that the Builder's work with respect to the ceiling, the counter top and the bathroom are defective; 5. Costs.

Issue 1-Construction of the Contract

The Tribunal has considered the evidence and the parties' respective submissions.
The Owner's evidence is that the Contract comprises: 1. New South Wales Fair Trading version March 2015 form of building contract; 2. Fitting schedule prepared by Glasgow Hart FN-01 dated 10 July 2015; 3. Finish schedule prepared by Glasgow Hart FT-01 dated 10 July 2015; 4. Plans prepared by Glasgow Hart dated 10 July 2015; 5. Appliances quote prepared by Tradelink dated 29 July 2015; and, 6. Final Quote prepared by the Builder sent from Mr Hanigan of the NSWT&G on 11 December 2015 by email timed at 2:40pm (which includes provision of "colour changing LED strips as per plan").
The Owner contends that the Final Quote email (discovered at or shortly before the hearing by the Owner Manager) dated 11 December 2015 and timed at 2:40pm and with the Fitting Schedule and Finishes Schedule were the documents intended to be incorporated into the Contract and, if so, they were the documents to form the Contract: Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184. The Fitting Schedule includes "Superlight RGB Colour LED Superstrip ribbon Code SL7600-35, 8Watts per meter".
S 18B(1)(a) obliges the Builder to complete the work under the Contract with due care and skill.
The evidence, including the evidence of Expert Cavallo under cross examination is that the supply and installation of the Superlight RGB Colour LED Superstrip was work contracted for under the Contract.
The final quote prepared by the Builder and emailed to the Owner with the Contract provides for "colour changing LED strips as per plan".
The Owner submits that if the Tribunal is satisfied that the coloured LED lights were included in the Contract then the claim by the Builder for their cost of $8,136.00 must be rejected.
The Builder submits that the copy of the Contract tendered by the Builder incorporates the Glasgow Hart Fitting Schedule which expressly refers to a "LED LIGHT STRIP".
The Builder further submits in its submissions dated 7 May 2018 at [27] that the: 1. The recently discovered Builder's quotation including the coloured LED light strip should not be relied upon; 2. Both the Owner and Mr Hannigan deposed in their Affidavits the Builder's quotation not including the coloured LED light strip as included in the Contract; 3. The Builder's quotation with the coloured LED lights has not been signed. The Builder admits that the recently discovered email is genuine, but says that is different from saying it is the one agreed by the parties. The evidence of both the Owner and Mr Hannigan did not include the coloured LED lights as an inclusion in the Contract. 4. The change of lighting to the coloured LED lights was carried out at a cost to the Builder. 5. The issue of the recently discovered quote being the quote forming part of the Contract is not conclusive. The document was admitted into evidence as it being in existence, it is yet to be established if the document formed part of the Contract. 6. The recently discovered document was never incorporated into the Contract by signature: Estrange v F Graucob Ltd [1934] 2 KB 394; Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 at 483-4; 211 ALR 101 at 108-9; 7. The Owners evidence concerning whether the coloured LED lights were to be supplied is in his Affidavit where he relies on the contents of the Fitting Schedule in the Contract (exhibited to his Affidavit) and not on the recently discovered quotation.

Findings

On the evidence before it, the Tribunal finds that both parties relied upon the Contract in the Owner's Affidavit. That Contract does not provide for the supply of coloured LED Lights. The late finding of the email which references the supply of coloured LED Lights dated on the day the Contract was entered into, is, of itself not evidence that the parties agreed to the inclusion of the coloured LED Lights in the Contract. Whether it was incorporated into the Contract is a matter for the evidence. Until the email was located during the hearing, the Owner's and Mr Hannigan's evidence was that the Contract did not contain for the provision of coloured LED Lights. If the email had incorporated the coloured LED Lights into the Contract as now asserted by the Owner, then the sworn evidence given by him and Mr Hannigan in their respective Affidavits was wrong.
The supply of the coloured LED Lights was intended by the Owner and accepted by the Builder, not as inclusion under the Contract but as a variation to the Contract.
As such, the Builder is entitled to be paid the cost of the late specified coloured LED Lights and the Tribunal will order that the Owner pay to the Builder the amount of $8,136.00.

Issue 2-Defective and Incomplete Works

The Owner relies on the opinions expressed in the Owner's Expert Report, the Owner's Supplementary Report and the Joint Report. The Owner contends that his Expert Robert's evidence is preferred to the Builder's Expert Cavallo's evidence, because: 1. Expert Cavallo: 1. Was an unimpressive witness; 2. Had not included in his report any examination, tests or other investigations as he is required to do under the Tribunal's Procedural Direction regarding Expert Evidence; 3. Based his opinion on "photos, subsequent photos from the builder" which were not included in his report or given to Expert Roberts; 4. Based his opinion on text messages he had been shown by the Builder that he had failed to include in his report; 5. Failed to bring his independent judgement and assessment to bear on important issue in dispute such as failing to carry out independent tests of moisture levels of which he was critical in the Owner's Expert Report; 6. He uncritically accepted the Builder's version of events with regard: 1. to the coloured LED lights; 2. Causes of delay on the site; 1. The Tribunal cannot be satisfied of the matters on which his opinion is based; 2. His expert reports are of poor quality: R v Turner [1975] QB 834 at 840 Lawton J said: "Before a court can assess the value of an opinion it must know the facts upon which it is based. If the expert has been misinformed about the facts or has taken irrelevant facts into consideration or has omitted to consider relevant ones, the opinion is likely to be valueless" 1. In R v Jenkins; ex parte Morrison [1949] VLR 277 at 303, Fullagar J said that an expert witness must "explain the basis of theory or experience" upon which the conclusions stated are supposed to rest, for, as Sir Owen Dixon said in an extra-judicial address quoted by Fullagar J, "Courts cannot be expected to act upon opinions the basis of which is unexplained". This principle is especially important in a case such as this one, where the experts have expresses differing opinions on key issues and it will be necessary for the Tribunal to examine the factual bases underpinning those opinions to determine what evidence ought to be preferred: Paric v John Holland (Constructions) Pty Ltd [1985] HCA 58 at [9]. 1. In Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705 at [64], Heydon J said: "The basal principle is that what an expert gives is an opinion based on facts. Because of that, that expert must either prove by admissible means the facts on which the opinion is based, or state explicitly the assumptions as to facts of which the opinion is based…One of the reasons why the facts proved must correlate to some degree with those assumed is that the expert's conclusion must have some rational relationship with the facts proved." 1. The Tribunal Expert Witness Code of Conduct requires the expert's opinion to be presented in a form which makes it possible to differentiate between the facts which the expert observed or accepted and his expressions of expert opinion; 2. Expert Cavallo does not make clear what facts are assumed or observed that have produced the opinion propounded. His reports do not identify by which reference to which the Tribunal could test the quality of his opinions. 3. Expert Cavallo's expert evidence really amounts to putting into evidence the inferences and hypotheses on which the Builder seeks to rely: Dixon CJ in Clark v Ryan (1960) 103 CLR 486.
The Owner contends that in contrast Expert Roberts was an impressive witness. He is a builder of considerable experience. His reports clearly set out the facts and assumptions on which he relied, his reasoning process, the criteria on which he based his opinions and his expert opinions based on his specialised training study and experience. His report contains the materials and the tests on which he based his opinions, which were consistent with objective factual circumstances, acknowledging the limits of his expertise and not offering opinions beyond those limits. Expert Roberts cross examination did not undermine his reliability or credibility. His answers were clear, logical, thoughtful and forthright, where necessary he made appropriate concessions. His evidence is to be preferred.
The Builder submits that despite the Owners submissions in respect of his claim for damages, they have limited application where: 1. The preferred outcome is that a work/rectification order ("work order") be made (s48MA of the HBA); 2. There is no evidence before the Tribunal opposing a work order for any of the times in the Joint Report; 3. The Builder has offered and is willing to return to the site to carry out the work identified in the Joint Report excluding Items 2, 3 and 8; 4. The Owner's counsel on the first day of the hearing that a work order was an acceptable order to the Owner for the Items requiring rectification.
The Builder further submits that: 1. The challenge to Expert Cavallo expertise by the Owner must be rejected; 2. His resume included in his report speaks for itself as to his qualifications and experience; 3. His evidence was admitted into evidence unchallenged; 4. His instructions are set out in his report frankly and with candour; 5. Expert Roberts in his evidence displayed a partisan approach in relation to the Cornerstone Reports and in relation to his evidence as he had: 1. He volunteered that the matters set out in paragraph 2 of his report were the instructions he received by email dated 1 November 2017 from the Owner's representative and yet he had not attached that email to his report; 2. He failed to reveal in the Cornerstone Report dated 23 June 2017 that he had visited the site on 14 June 2017 for the purposes of preparing the report when he received a set of plans and had discussions with Mr Hannigan, the Owner and the Owner's solicitor without disclosing in the report that he had only discussed the matter with Mr Hannigan. 1. Expert Roberts opinions included an assumption as to the work detailed or implied in the Builder's quote and that he was instructed that the extent of the contracted work to be undertaken by the Builder was that detailed in the Builder's Quotation dated 5 November 21015 rather than the full extent of the work shown on the plans listed in his report. Further Expert Roberts went beyond giving his expert building opinion and proffered legal opinion sympathetic to the Owner's case by asserting that the LED strip light "was part of the contracted works to be undertaken by the Builder and no variation can therefore be substantiated".

Finding

In relation to the incomplete and defective works the parties experts have reached agreement as recorded in their joint report dated 13 December 2017. The appropriate order is that the preferred outcome under the section 48MA is the appropriate order. There is no evidence to the contrary before the Tribunal. The Builder has expressed a willingness to return to the site to complete the works and rectify the defects as agreed by the experts in the joint expert report.
The Tribunal is satisfied that the Builder is liable for the defective works as set out in the joint report where agreement has been reached between the experts.
The Tribunal orders that the Builder carry out the rectification works as agreed between the experts and complete the incomplete works in accordance with the scope of works and method of rectification set out in the joint report except for Items 2, 3, and 8.

Item 2 Kitchen Ceiling

Expert Roberts evidence is at [9.2.1] to [9.2.5] of the Owner's Expert Report. He says the ceiling is defective because: 1. The ceiling and the stepped bulkhead are noticeably out of level; 2. The east/west facing bulkhead upturn has a visible "bow" in it; 3. The ceiling and stepped perimeter bulkhead displayed numerous irregularities, toll marks and un-sanded sections; 4. The perimeter shadow line around the ceiling is not a consistent width.
The Tribunal should be satisfied that the ceiling needs rectification on Expert Roberts opinion.
Expert Cavallo in the Joint Report and his report of 6 October 2017 and in his evidence: 1. Agreed with Expert Roberts that there was no specific standard for the ceiling finish apart from it being a visual issue and said that the ceiling achieved a level 4 finish; 2. Said that the defect was localised to one section of less than 1 m long and less than 9 mm; 3. Said that the bulkhead was level or within tolerance as seen in the levels in the photos of the readings from the spirit level and that he had checked the level of the ceiling; 4. As a builder, expressed the view that the issue could be "rectified by resetting the one section setting a new angle to level and finished by coating with appropriate plasterboard top coat: sand and paint (if found). All other areas are level as seen in my report pages 5 and 6. Shadow line gaps are acceptable when view (refer to page 6 of my report)". 5. Was in no doubt about the method of rectification by chopping out the section of ceiling and localise the issue to one area.
The Builder contends that Expert Roberts method of rectification is extreme to achieve an acceptable finish.

Finding

The Tribunal relies on expert witnesses to inform it on technical matters. It is always of concern when two experts can have such divergent identification of issues and methods of rectification.
The Tribunal intends to order the preferred outcome. The method of rectification proposed by Expert Cavallo is the method that the Tribunal will order. The ability to rectify the defective work by such a localised method will, on the evidence of Expert Cavallo resolve the issue.

Item 3 Benchtop

Expert Roberts opinion is that the kitchen benchtop is defective because it is out of level to an unacceptable extent and out of alignment with the mirrored splashback. On his measurements the difference in level is 5mm over the width of 800mm. There is no evidence that he carried out any other measurement.
Expert Roberts opinion is based on a lengthy discussion about why the bench top could not be rectified by a stonemason cutting the bench and reinstalling it as the cut could not be made without damaging the stone bench top and the mirrored splashback.
Expert Cavallo's opinion is that: 1. There is no applicable standard for the benchtop and cupboard; 2. The levels shown on pages 7 and 8 of Expert Cavallo's Report (at pages 461 and 462 of the Court Book) include a photograph from Expert Roberts Report that shows a gap under the level longer than half its length and the tube vial showing the bubble in the spirit level is unable to be seen. Mr Cavallo's measurements show that the is a gap at the end beneath the end of the level of less than the thickness of a 10c coin, that is less than 2mm. 3. In his experience as a builder, the benchtop is acceptable and within acceptable tolerances

Finding

Similarly to the previous item, the Tribunal has regard to the extreme opposite positions taken by the experts as to their opinions for rectification of the defective works.
Expert Cavallo finds that the alleged defect is minimal. The Tribunal does not accept that the defect is minimal. The Tribunal prefers the evidence of Expert Roberts as to the defect and the method of rectification. The Tribunal finds that the defects are a breach of the statutory warranty under the HBA and that the Builder is liable for the rectification of the defect.
The Tribunal intends to order the preferred outcome. The method of rectification proposed by Expert Roberts is the method that the Tribunal prefers and will accordingly order that the Builder rectify the defect Item 3 in accordance with the method proposed by Expert Roberts.

Item 8 Bathroom

Expert Roberts is of the opinion that there are five key defects with the bathroom, they are: 1. The shower has been installed incorrectly without an angle in breach of AS3740-2004; 2. The falls on the floor are inadequate; 3. The tiles nearest the bathroom door fall out towards the corridor; 4. The tiles have been poorly installed; and, 5. There is excessive moisture in the bathroom floor tiles.
Expert Roberts proposed rectification methodology of the bathroom defects is to preserve the integrity of the waterproofing membrane and retain proper waterproofing after rectification.
Expert Cavallo opinion is based on material not included in his report and as such the Tribunal should give it no weight.
The Builder submits that Expert Cavallo responds to the assertions made by Expert Roberts as follows: 1. The shower recess was not required to have a hob, a step in the floor or a visible water stop angle. If there was a water stop angle installed it is not now visible under the shower frame; 2. The floors have adequate falls on the horizontal level readings taken by Expert Cavallo and that: 1. Ponding is not an issue; 2. The falls recorded bay an electronic spirit level read between 1-2% in the shower; 3. The falls recorded by an electronic spirit level read 1.4% on the bathroom floor adjacent to the shower, which is adequate; 4. The falls recorded by an electronic spirit level read 1.7% in the shower and a dry patch appeared shortly after testing. 1. If the defect identified by Expert Roberts is correct that the tiles nearest the bathroom door fall out towards the corridor then Expert Cavallo proposes that a strip of 4 tiles at the door at the door and within the shower rebate could be removed and replaced to rectify the fall. 2. The grouting was of an acceptable standard; 3. Moisture test undertaken by Expert Roberts were taken after running the shower for 5 minutes and does not account for enhancement of readings caused by condensation which can compromise accuracy.

Finding

The Tribunal is satisfied that the expert evidence of Expert Cavallo should be preferred. Expert Cavallo has taken measurements of levels and the Tribunal is satisfied on his evidence that the complaints of the Owner, through the evidence of Expert Roberts, have been answered by the Expert Cavallo's findings and recommendations.
The Tribunal finds that the method of rectification proposed by Expert Cavallo will provide a cost effective resolution of the defect. The Builder is to rectify the defect of the tiles nearest the door having a fall towards the corridor in accordance with Expert Cavallo's method of rectification.

Termination

The Owner submits: 1. Whether a breach of contract confers on the other a right at law to terminate is a question of law: Francis v Lyon (1907) 4 CLR 1023 at 1040; 2. When the conduct of a party to a contract confers on the other a right at law to terminate the contract, the innocent party has the rights to choose between affirming the contract by treating it as continuing; or, determining the contract by treating it as at an end. It does not matter "whether the right to terminate the contract is conferred by the contract or arises at common law for fundamental breach-in each instance the alternative right to insist on performance creates a right of election": Sargent v ASL Developments Ltd [1974] HCA 40; 131 CLR 634 at 655. 3. For an election to be effective, the election must be communicated by words or conduct to the other party: Sargent at 656. Once the election is made and communicated to the other side it becomes irrevocable: Peyman v Lanjani [1985] Ch 457 per Stephenson LJ at 488. The onus of proving both the existence and the exercise of a right to terminate for breach or repudiation rests on the party who claims that the right existed or has been exercised: J Kitchen & Sons Pty Ltd v Stewart's Cash and Carry Stores (1942) 66 CLR 116 at 126.
The Owner contends that he validly terminated the Contract on 8 September 2017 by the Owner's solicitor sending a letter to the Builder's solicitor giving notice of termination.
The Builder does not accept that the Owner terminated the Contract on 8 September 2017. It contends that: 1. Although the Owner purported to serve a notice dated 15 August 2017 pursuant to clause 25 of the Building Contract, the Builder responded disputing the alleged defects and affirmed that it was "ready, willing and able (subject to reasonable access) to rectify any agreed defects and to complete the agreed incomplete works". 2. On 28 August 2017 the Builder served a notice pursuant to clause 26 of the Building Contract that the Owner had denied the Builder and its employees and subcontractors access to the site, preventing work being undertaken, that the Owner had entered into occupation and without consent of the Builder and gave the Owner 10 days to remedy the default. 3. On 7 September 2017 the Builder, through it's lawyers, requested that it be given access to the site to carry out rectification works and to complete the incomplete works. 4. On 8 September 2017 the Owner's lawyers responded by requesting the Builder provide details of the work that it proposed to carry out and to pay the costs of any meeting with the Owner's expert, Expert Roberts; 5. On 8 September 2017 the Owner's lawyers purported to terminate the Building Contract by notice attached to an email that did not express any ground for termination. The email accompanying the notice set out an explanation of the grounds for termination. 6. On 21 September 2017 the Builder sent a notice advising that it had terminated the Building Contract on the basis that the Owner had not remedied his default under the Building Contract notice of which the Builder gave to the Owner on 28 August 2017.
The Builder contends that if the Owner based his notice of termination on the clause 25 of the Building Contract, the notice of termination by the Owner was an act of repudiation of the Building Contract. At the time of the Owner serving the notice of termination, the Owner was aware of the Builder's complaints about the Owner causing delay, the proceedings had been commenced, the Builder had requested to be able to return to the site to carry out the works, the Owner had refused access and the Owner had failed to comply with the notice of default served on him by the Builder.
The Tribunal is satisfied that when the Owner served his notice of termination he had been given a notice of default under the Building Contract and had failed to remedy those breaches. Most importantly the Owner had failed to provide access to the site for the Builder which prevented the Builder from carrying out its obligations under the Contract to complete the works.
The Tribunal finds that the notice of termination served by the Owner was invalid for the reasons set out previously.
The issue of the notice of termination by the Owner was an act of repudiation of the Building Contract.

Damages and or Rectification

The Owner contends that the appropriate order is an order for damages as the Builder has not demonstrated that he is either willing or able to complete the rectification works proposed by Expert Roberts.
The Owner submits that: 1. The proposed methodology of the Builder for rectification would be an inadequate remedy because the works proposed would fail to address the underlying defects pertinent to those works. 2. The Builders failure to do the works properly in the first place raises doubt of the Builder's competence to complete rectification works especially in light of the Builders continued denial of liability that the works are defective.
For the defective and incomplete work the Owner submits that he has suffered loss and damage in the sum of $52,722.50 being the amount determined by Expert Roberts in the Joint Experts Scott Schedule and that Expert Roberts opinion is preferred to Expert Cavallo's opinion, because 27 of the 30 items in dispute have been conceded as items to be rectified by Expert Cavallo although he proposes different methodology of rectification and a reduced cost being $14,190.00.
As to whether the appropriate order is the preferred outcome of rectification under section 48MA of the HBA the Tribunal must consider the principles: 1. The question of the appropriateness of a work order turns on the facts of each case: see Brooks v Gannon Constructions Pty Ltd [2017] NSWCATCD 12 at [64]; 2. The assessment about whether the preferred outcome should be ordered is an objective one: Brooks at [64]; 3. NCAT is obliged to consider the operation of s48MA of the HBA in determining a building claim involving an allegation of defective residential building work, work orders are not the mandatory outcome although preferred (see Galdona v Peacock [2017] NSWCATAP 64 at [50] and [65]); 4. It is relevant to consider the reasonableness of an Owners opposition to work orders where there has been a previous refusal to attend to rectify (see BNT Constructions v Allen [2017] NSWCATAP 186 at [33]-[35]); 5. A failure to acknowledge that works have been defective is a consideration against making a work order (see Cuaresma v Delta Constructions Australia Pty Ltd [2017] NSWCATCD 67 at[95]); 6. Other relevant factors include the extensiveness of the defects and whether the relationship between the parties has broken down (see Brooks at [65]); 7. NCAT can consider the resources that a respondent might be able to put to completing work orders (see Brooks at [70]).
The Builder's evidence is that it is ready and willing to carry out the defective and incomplete building works as has been agreed between the parties Experts and as determined by the Tribunal. It holds a current builder's licence issued under the HBA, continues in business as a builder and has resources to complete the building works and rectify the defects. The Owner has not supported opposition to a work order with substantive evidence that would establish that the Owner had a reasonable objection to the preferred outcome. Although the Builder has displayed a willingness to return to the site to carry out the work once the extent of the defects were identified and agreed between the parties.
The Tribunal is satisfied that the appropriate order is a work order that the Builder carry out the rectification work as agreed between the experts and as found in this decision.

Alternative Accommodation and damages

The Owner claims the cost of maintaining alternative accommodation and storage and removal expenses in the amount of $34,120.00 as the works carried out by the Builder have made the property uninhabitable. The evidence of the Owner, Expert Roberts and Expert Cavallo (under cross examination) is that further work needs to be done to make the property habitable, but the extent of the work needed to make the premises habitable is, according to Expert Cavallo, minimal despite the incomplete works and could have been carried out by the Builder at the same time as if he had been permitted back onto the site to complete his work by the Owner.
The Owners contends that the property has been uninhabitable for over two years and as such the Builder has breached the implied warranty in s18B(1)(e) that the works have not resulted in the dwelling that is reasonably fit for occupation as a dwelling and it was reasonably foreseeable that such a breach would give rise to loss and damage in the form of alternative accommodation costs.
The evidence is that the Building Contract did not have either a completion date or estimate of completion time inserted into it. The Owner remained living in the premises throughout the building works until he vacated the premises in or about December 2016. That date is some months after the Builder ceased to attend the site to carry out the building works. In his evidence the Owner says that until he moved out the premises were still liveable. In his evidence he then says that the premises became uninhabitable due to the incomplete and defective work.
The Builder contends that from the time the Owner moved from the premises, the Owner failed to mitigate his claim for the cost of his rent at other premises by making the premises habitable. The Builder further contends that the Tribunal should have regard to the date of the Owner's purported termination of the Building Contract, 8 September 2017.
The Owner voluntarily continued to occupy the premises while the building work was being undertaken and then for some months after the Builder was prevented from returning to the site.
The general principle applicable to damages is stated in Hadley v Baxendale (1854) 9 Ex 341. Damages for breach of contract should be such as may fairly and reasonably be considered as either arising naturally, as in general damages , or such as may reasonably be supposed to have been in the contemplation of both parties as the time the contract was made as the probable result of a breach from it, that is, special damages.
The Owner contends that it was within the parties contemplation that if the Builder caused the property to become uninhabitable that the Owner would have nowhere to live and would suffer loss or damage in the form of alternative accommodation costs. The Owner supports this contention by citing McHugh JA in Alexander v Cambridge Credit Corp Ltd (1987) 9 NSWLR 310 in that the test of what parties could reasonably have been expected to have contemplated was not by reference to the "precise details of the events giving rise to the loss" but rather it was "sufficient that they contemplate the kind or type of loss or damage suffered" and that "the parties must contemplate both the general nature of the loss or damage and the general nature of its occurrence". The Owner further cites Deane J in Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64.
If it were not for finding that the Owner repudiated the Building Agreement, the Owner would have still failed in his claim for damages in the amount of the cost of alternative accommodation. What was in the minds of the parties at the time of entering into the Building Contract was that the Owner would continue to live in the premises while the building work was carried out. It was after the building work ceased that the Owner chose to move from the premises and only in the preparation for the hearing of the claims did the Owner contemplate that he should make a claim for his accommodation costs. In any event, the evidence is that even if the premises were uninhabitable as alleged, only minor work was required to make them habitable. The Owner did not do so and as a consequence he has failed to mitigate the loss he now alleges he suffered. The Owner chose to live away from the premises. The cost of alternative accommodation was not contemplated by either party at the time of the Building Contract. The Owner lived in the premises and continued to do so. He accepted the premises in the condition they were in for some months before moving out to alternative accommodation. Had the claim not been unsuccessful for other reasons, the claim would not be successful under this head of claim.
Further, there is no provision in the Building Contract making the Builder liable to the Owner for delay in the completion of the building works as the Building Contract is silent on the issue. However, section 18B(d) requires building work to be completed within a reasonable time where no time is specified in a contract.
The Tribunal is not satisfied that the Owner is entitled to be compensated for the loss he alleges he suffered through the cost of provision of alternative accommodation. From December 2016 to date.
The Tribunal, having found that the Owner repudiated the Building Contract, the Owner cannot succeed in his claim for damages.

Builders claim

The Builder seeks an order that the Owner pays for variations pursuant to clause 13 of the Building Contract as follows: 1. Change of LED strip lights to coloured lights $8,136.00. 2. Relocation of Intercom-$2,244.00 3. Relocation of main water valve- $1,425.00. 4. Change of tiles-$1,397.00; 5. Removal of existing bedroom wardrobe-$805.00
The Tribunal will determine the Builders claim in the alternative on the quantum meruit for the amounts claimed as variations when considering each of the clams.
The Tribunal has considered the Builder's submissions in regard to the alternative claim on the quantum meruit. In particular the submission that restitution in the circumstances of this case, where the Builder contends that the Owner became unjustly enriched in consequence of each of the variations if he were allowed to retain the gain or benefit (see Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221). The Builder urges the Tribunal to have regard for the five point template developed by Mason J in What has Equity to do with Restitution? Does it matter? Chancery Bar Association, Inner Temple, 27 November 2006, page 1: "The unjust enrichment concept is an organising principle that assists sorting, teaching and developing the detailed case law in a principled manner. The five point template usefully presents the issues by posing the following questions: 1. Was the defendant enriched? 2. Was it at the plaintiffs expense? 3. Was it unjust, according to the categories developed in the caselaw? 4. Do any restitutionary or other defences apply? 5. What remedies are available and appropriate?"
The Builder contends that it has satisfied the five principles and on that basis is entitled to an order for restitution on the quantum meruit. The Owner disputes that the Builder has satisfied the principles to determine if the quantum meruit is available to the Builder
The Tribunal has already determined that the supply and installation of the coloured LED strip lights were not included in the Building Contract and made an order that the Owner is liable for the cost as claimed.
Although the Builder did not comply with clause 13 of the Building Contract it claims to be entitled to the cost plus builders margin to each of the intercom, water valve, tiles and removal of the wardrobe being the reasonable remuneration under the principles of quantum meruit. The Tribunal considers each claim: 1. Intercom- 1. The Builder relies on an invoice form H3 Electronics in support of the claim. 2. The Builder says that the work for the intercom was authorised by Mr Hannigan on behalf of the Owner over the telephone although Mr Hannigan's evidence is that he does not recall receiving any variation or tax invoice from the Builder for the relocation of the intercom. 3. The Owner says that he understood that the Builder damaged the existing intercom for his unit and other units and that the Builder would be responsible for the cost of repair. The cost of repair is not the cost of relocation. 4. The Owner submits that the invoice from H3 refers to "repairs". 5. The Tribunal is satisfied that on the balance of probabilities the Builder damaged the intercom during the course of the building works. The Tribunal is satisfied that the work carried out on the intercom resulted in its more convenient relocation, but that was brought about by the damage to it caused by the Builder. 6. On basis set out in the preceding sub paragraph, the works were to rectify damage caused by the Builder. The Tribunal accepts the Owner's evidence that the Builder agreed to repair the damaged intercom and the cost as shown on the invoice for H3 refers only to repairs. 7. The claim for the cost of the intercom as a variation or in the alternative on the quantum meruit fails. The amount claimed of $2,244.00 is disallowed. 1. Relocation of water valve: 1. The Builder says that it is entitled to charge the cost of the relocation of the mains water valve as there was a lack of design provided by the Owner and that Mr Hannigan authorised the works in a telephone call. The Owner says in his evidence that the amount should not be charged as the Builder had agreed to relocate the main water valve and the new garden tap for no extra cost as the Builder had to relocate the kitchen. Mr Hannigan denied in his evidence that he had knowledge of the main water valve being relocated and a new garden tap installed. 2. The Builder does not support his claim with evidence of the cost of the works carried out, although it does say that the works were carried out by a plumber. There is no invoice included in the Builder's evidence supporting its contention that the work was carried out by a plumber. 3. The Tribunal is not satisfied to the civil standard of proof that the work was agreed to be carried out as a variation. As to the Builder's claim on the quantum meruit, the Builder has not proven that the amount claimed was the cost of the works carried out. Accordingly the claim must fail. The amount claimed of $1,425.00 is disallowed. 1. Change of tiles; 1. Under this claimed variation the Builder includes the cost of returned wrongly ordered tiles, courier charges, lost time, difference in cost of tiles, 4 additional bathroom lights and change in style of basin. The Builder says that the Owner requested the variations. 2. The Owner contends that the claim is not a variation because the claim arose out of the Builder obtaining the wrong tiles in the first place. That contention is supported by contemporaneous email of 12 April 2016. 3. Apart from filling in the description and the amount claimed on the "Record of adjustments and variations" (being a copy of the form set out on page 28 of the Building Contract), the Builder adduces no other evidence to support the claim. 4. The Tribunal is not satisfied to the civil standard of proof that the work was agreed to be carried out as a variation. As to the Builder's claim on the quantum meruit, the Builder has not proven that the amount claimed was the cost of the works carried out. Accordingly the claim must fail. The amount claimed of The Tribunal is not satisfied to the civil standard of proof that the work was agreed to be carried out as a variation. As to the Builder's claim on the quantum meruit, the Builder has not proven that the amount claimed was the cost of the works carried out. Accordingly the claim must fail. The amount claimed of The Tribunal is not satisfied to the civil standard of proof that the work was agreed to be carried out as a variation. As to the Builder's claim on the quantum meruit, the Builder has not proven that the amount claimed was the cost of the works carried out. Accordingly the claim must fail. The amount claimed of $1,397.00 is disallowed. 1. Removal of existing bedroom wardrobe: 1. The Builder made a claim as a variation for the removal of the Owner's existing wardrobe on the grounds that no provision was made in the Building Contract for this work. 2. The Owner's evidence is that "no cost for the removal of the wardrobe was ever discussed" with him by the Builder. 3. Mr Hannigan's evidence is that the work was done and it was agreed to be done at no charge to the Owner. The Builder's director in cross examination said that he had not had a conversation about this issue with Mr Hannigan. 4. The Builder had not raised the issue for payment for the work until July 2017, a year after the work was done. 5. It is for the Builder to prove that the cost of the work was a variation or in the alternative a claim on the quantum meruit. 6. The Tribunal is satisfied that the Owners evidence should be preferred that Builder agreed with the Owner to remove the wardrobe while he was carrying out other demolition works in preparation for the work in the Building Contract and without charge to the Owner. The Builder's explanation that he did not raise the charge until July 2017 about one year after the work was done and about the time that the Builder commenced its proceedings. On that evidence the Tribunal considers that the claim was made at the time the Builder had in its mind the response to the Owners claim and before that time may have not considered a claim for the removal of the wardrobe. There is no other evidence to support the Builder's claim that could satisfy its onus of proof. 7. The claim of $805.00 is disallowed.

Unpaid final invoice

The Builder claims an amount of $5610.00 being the final payment under the contract.
The Builder concedes in its submissions that if a work order is made by the Tribunal then the final payment should be made upon completion of the ordered works.
The Owner denies liability for the final payment under the Building Contract as the building works are incomplete.
The Tribunal has found that the Builder is liable to carry out rectification works and incomplete works. Upon completion of those works the Owner is liable to the Builder for the final amount due under the Building Contract being $5610.00.

Delay Claim

The Builder claims for delay costs against the Owner in the amount of $13,358.00.
The Builder makes the claim on the basis that clause 19 of the Building Contract requires the Owner to allow the Builder and its employees and subcontractors access to the site.
The Builder contends that the evidence supports its claim: 1. The dates and times that the Builder requested access to the premises to carry out the works; 2. The Owner's number of changes of the appliances to be installed;
Although there was no time for completion specified in the Building Contract, the Builder contends that contractual obligations must be performed within a reasonable time: Canning v Temby (1905) 3 CLR 419; Reid v Moreland Timber Co Pty Ltd (1946) 73 CLR 1, and what is a reasonable time should be considered in light of the circumstances existing at the time when performance takes place or when the party demanding performance asserts it should take place: Peregrine Systems Limited v Steria Limited [2005] EWCA Civ 239 approved by Seymour J in Astea (UK)Ltd v Time Group LTD EWHC 725 (TCC). In all cases where the performance of their obligations requires co-operative acts, the duty of complying with the reasonable requests for performance made by the other: Electronic Industries Ltd v David Jones Ltd (1954) CLR 288.
The Owner, in response to the Builder's claim says that the Builder's claim is deficient as it relies on merely producing a list of dates prepared over a year after the proceedings had been commenced, allegedly setting out the dates when the Builder was denied access to the site by the Owner and attributing a value to the cost of workers time lost as a result. The Owner contends that the evidence that the Builder relies on is at best mere submissions based on the Builder's directors recollections. Those recollections are unsupported by corroborative contemporaneous documents (see McClelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 where His Honour commented on the fallibility of memory and the importance of available contemporaneous documentation to support the recollection).
In answer to the Builder's complaint about not being able to access the site, the Owner's evidence is contained in a considerable body of emails that record multiple attempts by the Owner to ascertain when the Builder would be coming to the site, to which the Builder did not reply.
The Tribunal is not able to find on the evidence adduced by the Builder that it has satisfied its onus to establish to the civil standard of proof that the alleged denial of access by the Owner has caused it to suffer the loss it claims. The Builder's evidence is deficient as there is no corroborative evidence that supports the mere assertion by the Builder that such alleged denial of access caused it the loss it claims. There is no independent evidence that the alleged loss suffered has the value of as claimed by the Builder. The Tribunal is also satisfied that the Builder's practice of not replying to attempts to contact him by email by the Owner to arrange access can also be construed as disentitling behaviour. The Builder's attempts to gain access can be regarded in light of the Owner's attempts to have the Builder inform him of when the Builder would attend at the site.
The Tribunal dismisses this head of the Builders claim.

Conclusion

For the reasons set out in this judgement the Tribunal makes the following orders: 1. In the Owner's, Wassim Hijazi by his tutor the NSW Trustee and Guardian, application HB17/06133, pursuant to section 48O of the Home Building Act 1989 (NSW) the Builder, SRY Constructions Pty Ltd, must rectify the defective and incomplete works in respect of Items listed in the Joint Expert report dated 13 December 2017 of Expert Roberts and Expert Cavallo, on or before 15 December 2018: 1. In respect of Items 1, 4-7, 9-30 inclusive in accordance with the agreed methodology and scope of works of the Experts; 2. In respect of Item 2 and 8 in accordance with the methodology and scope of works as recommended by Expert Cavallo; 3. In respect of Item 3 in accordance with the methodology and scope of works as recommended by Expert Roberts; 4. For the duration of the rectification and completion of the incomplete works the Owner's tutor must give the Builder unrestricted access to the work site including a security device in working order to allow entry to the site by the Builder upon the Builder giving not less than 72 hours' notice in writing by email to the Owner's tutor. 5. During the rectification and completion of the incomplete works the Builder is to have possession of the site and the site is not to be entered by the Owner or his tutor until the rectification and completion of the incomplete works are completed unless with the written agreement of the Builder. 1. In the Builder's, Sry Constructions Pty Ltd, application HB17/32146, the Owner must pay to the Builder: 1. $8,136.00 immediately; and 2. $5,610.00 within seven (7) days of the Builder giving notice that the building works for the rectification of defect and completion of incomplete works have been completed. 1. Subject to any application for costs, the proceedings HB17/01633 and HB 17/32146 are otherwise dismissed.

Costs

Any application for costs by either party is to be supported by evidence and submissions of no more than 5 pages in length and is to be filed with the Tribunal and served on the other party on or before 12 October 2018.
Any evidence and submissions in response to the application for costs from the other party opposing the application for costs, of no more than 5 pages in length, is to be filed with the Tribunal and served on the Owners on or before 9 November 2018.
If there are no applications made for costs by 12 October 2018 there will be no order as to costs in that respective application.

Opportunity to make submissions about proposed order to dispense with costs hearing

The parties are to advise the Tribunal in their respective submissions as to costs if they consent to the issue of costs being determined on the papers without a hearing.
Alternatively the parties are to make submissions as to why such an order should not be made pursuant to section 50 of the Civil and Administrative Tribunal Act 2013.

Civil and Administrative Tribunal of New South Wales

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: 19 December 2018

01 at 108-9; R v Turner [1975] QB 834; R v Jenkins; ex parte Morrison [1949] VLR 277; Paric v John Holland (Constructions) Pty Ltd [1985] HCA 58; Clark v Ryan (1960) 103 CLR 486. Francis v Lyon (1907) 4 CLR 1023; Sargent v ASL Developments Ltd [1974] HCA 40; 131 CLR 634; Peyman v Lanjani [1985] Ch 457; J Kitchen & Sons Pty Ltd v Stewart's Cash and Carry Stores (1942) 66 CLR 116; Brooks v Gannon Constructions Pty Ltd [2017] Galdona v Peacock [2017] NSWCATAP 64 NSWCATCD 12 BNT Constructions v Allen [2017] NSWCATAP 186 Cuaresma v Delta Constructions Australia Pty Ltd [2017] NSWCATCD 67 Hadley v Baxendale (1854) 9 Ex 341 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Alexander v Cambridge Credit Corp Ltd (1987) 9 NSWLR 310 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Canning v Temby (1905) 3 CLR 419 Reid v Moreland Timber Co Pty Ltd (1946) 73 CLR 1 Peregrine Systems Limited v Steria Limited [2005] EWCA Civ 239 Astea (UK)Ltd v Time Group LTD EWHC 725 (TCC) Electronic Industries Ltd v David Jones Ltd (1954) CLR 288. Watson v Foxman (1995) 49 NSWLR 315 Category: Principal judgment Parties: HB 17/06133 Applicant: Wassim Hijazi by his tutor the NSW Trustee and Guardian Respondent: SRY Constructions Pty Ltd

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