Actol Pty Ltd v Rise Products; Rise Products v Benth Holdings Pty Ltd t/as Gledswood Projects

[2022] NSWCATCD 150

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Actol Pty Ltd v Rise Products; Rise Products v Benth Holdings Pty Ltd t/as Gledswood Projects [2022] NSWCATCD 150

Hearing dates:

12-13 October;
4, 29 November 2021;
Final written submissions received 16 May 2022; Supplementary submissions received 14 and 22 November 2022

Date of orders:

02 December 2022

Decision date:

02 December 2022

Jurisdiction:

Consumer and Commercial Division

Before:

D Robertson, Senior Member

Decision:

In proceedings HB 20/35833:

(1) The first-named respondent, Rise Products Pty Ltd, is to pay the applicant, Actol Pty Ltd, the sum of $50,650.60 within 28 days of the date of publication of this decision.

(2) The proceedings are otherwise dismissed.

In proceedings HB 21/30136:

(3) The proceedings are dismissed.

In both proceedings:

(4) Within 14 days of the date of publication of this decision, any party may file submissions, not exceeding five pages, and evidence in support, seeking an order in respect of the costs of the proceedings.

(5) If any party files submissions in accordance with order 4, the other parties may file submissions in response, not exceeding five pages, and any evidence relied upon, within a further 14 days.

(6) Submissions strictly in reply to submissions filed in accordance with order 5, not exceeding three pages, may be filed within a further 14 days.

(7) Any submissions filed in accordance with orders 4 and 5 must address the question whether the issue of costs can be determined on the basis of written submissions and without a further hearing.

(8) If no submissions are filed in accordance with order 4, there will be no order in relation to the costs of the proceedings.

Catchwords:

BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW), s 18B – Statutory warranties – Respondent undertaking supervision of residential building work but not pursuant to contract – Not subject to implied warranties

CONTRACTS – Formation of contract – Contract not wholly in writing – Consideration of surrounding circumstances – Whether contract required supply only or supply and installation

CONSUMER LAW – Australian Consumer Law (NSW), s 3 – “consumer” – Whether goods acquired as a consumer – Whether pre-fabricated formwork panels for residential building are “goods … of a kind ordinarily acquired for personal, domestic or household use or consumption” – Whether products acquired for the purpose of being incorporated into houses being constructed for sale at a profit are “acquired … for the purpose of using them up or transforming them … in the course of a process of production or manufacture”

CONSUMER LAW – Misleading and deceptive conduct – Representations as to future matters – Reasonable grounds

RESTITUTION – Ineffective transactions – Restitution of money paid – Where purchase price was paid in full but only half of the goods the subject of the contract were delivered – Purchaser asserted goods were defective and balance of goods not delivered – Contract rescinded by purchaser or abandoned by parties – Purchaser entitled to restitution of the price paid for the goods not delivered

CONSUMER LAW – Fair Trading Act 1987 (NSW), s 79S – Jurisdiction of the Civil and Administrative Tribunal with respect to consumer claims – Whether the increase by regulation of the Tribunal’s jurisdiction in respect of consumer claims applies in proceedings commenced before the increase became effective – Increased jurisdiction was applicable to proceedings already on foot at the time of the amendment

STATUTORY INTERPRETATION – Principle of legality – Retrospectivity – Interpretation Act 1987 (NSW), s 30 – Increase of jurisdiction of Tribunal with respect to consumer claims in existing proceedings does not affect any right, privilege, obligation or liability acquired, accrued or incurred under the pre-existing legislation

WORDS AND PHRASES – “consumer”, “goods of a kind ordinarily acquired for the purpose of personal, domestic or household use or consumptions”, “using [goods] up or transforming them … in the course of a process of production or manufacture”

Legislation Cited:

Australian Consumer Law (NSW)

Acts Interpretation Act 1958 (Vic)

Building and Construction Industry Security of Payment Act 1999 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Civil and Administrative Tribunal Rules 2014 (NSW)

Competition and Consumer Act 2010 (Cth)

Corporations Act 2001 (Cth)

Design and Building Practitioners Act 2020 (NSW)

Fair Trading Act 1987 (NSW)

Fair Trading Amendment (Monetary Limit on Orders) Regulation 2022 (NSW)

Fair Trading Regulation 2019 (NSW)

Home Building Act 1989 (NSW)

Interpretation Act 1987 (NSW)

Trade Practices Act 1974 (Cth)

Cases Cited:

20*20 Pty Ltd v D&G Developments Pty Ltd [2009] WASC 343

Bunnings Group Limited v Laminex Group Limited [2006] FCA 682; 153 FCR 479

Carr v Finance Corporation of Australia Ltd (No 2) [1982] HCA 43; (1982) 150 CLR 139

County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193

Gallagher v Masters Installation Pty Ltd [2017] NSWCATAP 117

Gaskell and Bourke v Northshore Homes Pty Ltd and Nazha [2021] NSWCATCD 33

John McDonald Building Services Pty Ltd v Gusa [2022] NSWCATAP 60

Laws v GWS Machinery Pty Ltd [2007] NSWSC 316

Maxwell v Murphy (1957) 96 CLR 261

Pollock v Hicks [2015] NSWCA 122

R v Papanicolaou (No 4) [2021] NSWSC 1698

Robertson v City of Nunawading [1973] VR 819

Theo Holdings Pty Ltd v Hockey; Australian Competition And Consumer Commission v Theo Holdings Pty Ltd [2000] FCA 665; (2000) 99 FCR 232

Wilson v Winnicott [2021] NSWCATAP 211

Woodward v Warwick Green Building Pty Ltd [2021] NSWCATAP 210

Texts Cited:

D Pearce, Statutory Interpretation in Australia, Ninth Edition 2019

Category:

Principal judgment

Parties:

HB 20/35833
Actol Pty Ltd (Applicant)
Rise Products Pty Ltd (First Respondent)
Daniel Pszczonka (Second Respondent)
Benth Holdings Pty Ltd t/as Gledswood Projects (Fourth Respondent)

HB 21/30136
Rise Products Pty Ltd (Applicant)
Benth Holdings Pty Ltd t/as Gledswood Projects (Second Respondent)

Representation:

Counsel:
C Carter (Actol Pty Ltd)
J O’Sullivan (Rise Products and Daniel Pszczonka)

Solicitors:
Doyles Construction Lawyers (Actol Pty Ltd)
& Legal (Rise Products and Daniel Pszczonka)

File Number(s):

HB 20/35833
HB 21/30136

Publication restriction:

Nil

REASONS FOR DECISION

Introduction – Outline of the proceedings

1. The primary claim in these proceedings is brought by Actol Pty Ltd (Actol), which is, or was at relevant times, the owner of property at Kellyville in New South Wales, against Rise Products Pty Ltd (Rise Products), which is the manufacturer of a pre-fabricated formwork system.

2. Actol alleges that Rise Products contracted to supply and install its pre-fabricated formwork system on four lots on which Actol was constructing houses.

3. 3Form Structures Pty Ltd (3Form) was a licensed building company which undertook, at least initially, the erection of the formwork for two houses.

4. Benth Holdings Pty Ltd trading as Gledswood Projects (Gledswood) undertook some work in relation to the erection of the formwork for two houses.

5. Actol alleges that the formwork constructed for the four houses was defective and seeks compensation for the cost of rectifying the defective formwork, damages for delay in the completion of the project (assessed by reference to the interest paid on a loan taken out by Actol to finance the project), and the repayment of half the sum paid by Actol to Rise Products representing the cost of formwork panels and accessories not delivered. The amount sought by Actol is $476,321.56, consisting of rectification costs of $278,133.56, interest payments of $198,208, and “return of overpayment” of $50,650.

6. Actol alleges that Rise Products contracted with Actol to supply and install the formwork and that Rise Products breached the statutory warranties incorporated into that contract by s 18B of the Home Building Act 1989 (NSW).

7. The particulars of breach identified by Actol were:

I    Rise Walls were out of square;

II    Rise Walls panels require additional support to be held;

III    Protruding screws;

IV    fibre cement panel joints screw heads protruding from panels;

V    Poor join work;

VI    Chipped corners of the Rise Walls;

VII    Hollows and gaps in panel filling;

VIII Large cracks and blow outs on the Rise Walls;

IX    obvious signs on honeycombing;

X    sections of fibre cement panel formwork broken;

XI    dry slump;

XII    uneven fill of concrete.

XIII    does not correspond with the sample / demonstration model in quality, state or condition and free from any defects

8. Rise Products disputes that it contracted to install the formwork. Rise Products alleges that Actol contracted separately with 3Form for the installation of the formwork.

9. Rise Products also asserts that Gledswood also contracted directly with Actol to undertake work involved in the installation of the formwork.

10. Actol alleges, in the alternative, that the formwork product supplied by Rise Products was supplied in breach of the consumer guarantees provided by ss 54, 55, 56, 57, 58, 60, 61 and 62 of the Australian Consumer Law (NSW).

11. Actol further alleges in the alternative, that Rise Products engaged in misleading and deceptive conduct in breach of s 18 of the Australian Consumer Law, including representations as to future matters, which conduct allegedly induced Actol to acquire the Rise Products formwork and thereby sustain loss. Actol alleges that Mr Pszczonka, a director of Rise Products, was knowingly concerned in the representations made by Rise Products.

12. In light of Rise Products’ assertion that Actol had contracted with 3Form and Gledswood rather than Rise Products for the installation of the formwork, Actol joined 3Form and Gledswood to the proceedings and sought compensation from 3Form and Gledswood for breach of statutory warranty. Actol also alleged that Rise Products had acted as either the coordinator or supervisor of the installation of the formwork, pursuant to a “supervision contract” which also incorporated the statutory warranties, and that Rise Products had breached the statutory warranties in the performance of the supervision contract.

13. Rise Products brought a separate application against 3Form and Gledswood for contribution and indemnity by reason of alleged breaches of duties of care arising pursuant to the Design and Building Practitioners Act 2020 (NSW) and the common law.

The procedural history

14. The initial application to the Tribunal (HB 20/35833) was commenced by Actol on 21 August 2020 against Rise Products and Daniel Pszczonka. By order of the Tribunal made on 21 May 2021 Actol was granted leave to join 3Form and Gledswood.

15. On 8 July 2021 Rise Products filed its cross application against 3Form and Gledswood.

16. Actol Pty Ltd and Rise Products filed points of claim and points of defence, together with evidence, and the proceedings were listed for hearing before me for two days on 12 and 13 October 2021.

17. In preparation for the hearing, the parties provided a three volume Tribunal Book containing 1,413 pages. In addition, Actol provided a paginated bundle of 377 pages (Summons Bundle) containing documents produced on summons by 3Form, Gledswood and Rise Products in July and August 2021.

18. In the course of the hearing, I indicated to the parties that any document in those bundles referred to in submissions or in cross-examination would become part of the evidence in the proceedings unless explicit objection was taken. Subsequently Mr Healy, director of Gledswood, asked that the Tribunal treat as evidence filed on behalf of Gledswood the entirety of the material produced by Gledswood in response to the summons, that is pages 323 to 355 of the Summons Bundle.

19. Save to the extent that other documents in the Summons Bundle were referred to in cross-examination or in submissions I do not regard those documents as forming part of the evidence and I have had not had regard to them.

20. At the commencement of the hearing on Tuesday 12 October 2021, which took place by video link, Mr Soliman, solicitor, appeared on behalf of 3Form and sought that the hearing be adjourned on the basis that his firm had only been engaged the previous Saturday.

21. That application was opposed by Mr Carter of counsel who appeared for Actol and Mr O’Sullivan of counsel who appeared for Rise Products. The application for adjournment was refused and the hearing proceeded.

22. The evidence included in the Tribunal Book included affidavits filed by Mr Peter Wakefield, a director of Actol, and Mr Douglas (Bob) Woods, a site supervisor employed by Actol, on behalf of Actol, and Mr Daniel Pszczonka, the second respondent to Actol’s claim and a director of Rise Products, and Mr Tim Pope, the Chief Executive Officer of Rise Products, on behalf of Rise Products. The Tribunal bundle also included expert reports from Dr Cunniffe, a building consultant, and Mr Whyte, a quantity surveyor, both filed by Actol.

23. 3Form had not filed any evidence before the hearing.

24. Mr Ben Healy, the director of Gledswood, had included in the documents produced on summons a document headed “To Whom It May Concern” which set out “my recollection of events between Actol Pty Ltd, Rise Products, 3Form and Gledswood Studio”. That document (pages 350 and 351 of the Summons Bundle) was received as Mr Healy’s statement.

25. After the lunch adjournment on the first day of the hearing, Mr Mando of counsel announced an appearance for 3Form. Mr Mando sought to renew the application for adjournment. That application was rejected. The hearing continued with Mr Mando representing 3Form.

26. On the second day of the hearing, when it became clear that the hearing would not be completed that day, Mr Mando indicated that, if the hearing was to be adjourned, his client intended to seek leave to rely upon evidence from Mr Daniel Gharib, a director of 3Form. The hearing was then adjourned until 4 November 2021.

27. At the commencement of the adjourned hearing on 4 November 2021, Mr Mando sought leave to rely upon a statement from Mr Gharib. That statement had only been provided to the other parties one or two days before the hearing. By reason of particular difficulties experienced by other counsel in dealing with Mr Gharib’s evidence in those circumstances, I declined to grant leave to 3Form to rely upon that statement.

28. Nevertheless, as the hearing was not concluded on that day, and it was convenient to adjourn the hearing for another three weeks, Mr Gharib’s statement was permitted to be read and Mr Gharib gave evidence on the fourth day of the hearing on 29 November 2021.

29. In the course of the hearing, each of Mr Wakefield, Mr Wood, Mr Pszczonka, Mr Pope, Mr Healy, Mr Gharib and Mr Whyte gave oral evidence. On the basis that Mr O’Sullivan was at liberty to make submissions concerning Dr Cunniffe’s evidence without cross-examination and no point would be taken in relation to any submission on the basis that a proposition was not put to Dr Cunniffe, Dr Cunniffe’s evidence was received without Dr Cunniffe being subject to cross-examination.

30. Directions were made for the filing of written submissions. On 7 February 2022, before the expiry of the time allowed for the filing of submissions by Rise Products, the Tribunal received notification that 3Form had gone into voluntary liquidation on 3 February 2022 and Peter Hillig had been appointed liquidator pursuant to section 497 of the Corporations Act 2001 (Cth). Upon the appointment of Mr Hillig, pursuant to section 500 of the Corporations Act, the applications could not be proceeded with against 3Form without the leave of a Court.

31. The Tribunal sought an indication from the parties as to their attitude to the future conduct of the proceedings. Ultimately, both Actol and Rise Products withdrew their applications insofar as they sought relief against 3Form, and 3Form ceased to be a party to the proceedings.

32. The remaining parties provided written submissions to the Tribunal and Actol filed submissions in reply. The parties also provided a transcript of the hearing. Actol filed a chronology, which the Tribunal had requested. The chronology was incomplete, partial and argumentative, and in some instances provided incorrect references to the evidence. It was therefore of limited assistance. It is clearly not an agreed chronology. Nevertheless, as no alternative chronology was supplied by any other party, I have relied upon Actol’s chronology where it provided apparently reliable assistance.

33. On 7 November 2022, I directed the parties to provide further submissions regarding two issues which it appeared might arise, being:

1. The effect of the Fair Trading Amendment (Monetary Limit on Orders) Regulation 2022 (NSW), which came into force on 18 July 2022; and

2. The decision of the Appeal Panel in John McDonald Building Services Pty Ltd v Gusa [2022] NSWCATAP 60.

34. Both Actol and Rise Products filed submissions in accordance with my direction and submissions in response to the submissions filed by the other. The latest of those submissions was filed in the Tribunal on 22 November 2022.

Factual background

35. Actol owned a property at Kellyville which it was seeking to develop into multiple lots. Actol obtained development consent for subdivision of the property and the construction of a house on each lot within the sub-division. Relevant to these proceedings was a block of six lots (the Site) upon which, from 2017, Actol was seeking to construct houses.

36. Actol obtained an owner-builder permit. Actol initially utilised a pre-fabricated formwork system supplied by an enterprise called Pro 9 in the construction of houses on two of the lots. Delays were experienced in the construction of those houses and Actol, represented by its director Mr Wakefield, became dissatisfied with the Pro 9 system.

37. Rise Products is the manufacturer of a pre-fabricated formwork system, sold under the name RiseWall, which is made up of prefabricated fibre cement wall panels which are erected in position in lieu of traditional formwork before reinforcing steel is placed within the formwork so erected and concrete poured to create the walls of the building. Unlike traditional formwork, the Rise Products formwork remains in position after the concrete has set. One claimed advantage of pre-fabricated formwork such as the RiseWall is time savings in the construction process.

38. In 2019 Mr Wakefield attended a building expo at which Rise Products was an exhibitor, and became aware of the pre-fabricated formwork systems manufactured by Rise Products.

39. On 14 June 2019 Actol provided a copy of the plans, drawings and specifications for the dwellings on the Site to Rise Products.

40. On 26 June 2019 a meeting occurred on the Site between Mr Wakefield and Mr Pszczonka. Mr Wakefield’s evidence was that Mr Pope was also present.

41. Mr Wakefield’s evidence was that Mr Pszczonka had said:

a. 'our product is of high quality finish';

b. 'our product is true and straight'

c. 'our product is perfect flat finish and you won't have any problems like you did with Pro 9';

d. the product goes up very fast and flexible design and compatible with all plans';

e. 'the product supersedes traditional masonry wall system by reducing costs, time and space';

and that a conversation had also taken place in the following terms:

Mr Wakefield: “You need to supply and install. Whoever you get as the installer has to be competent and have experience with using your product. I don't want anything to do with the installation.”

Mr Pszczonka: “Yes, no worries.”

Mr Pope: “Yes. We only use competent installers.”

42. Mr Pszczonka ‘s evidence was that the conversation had been:

Mr Wakefield: “We want to use RiseWall. How do we install it?”

Mr Pszczonka: “We can put you in touch with an installer. We can introduce you to 3Form. They do lots of apartments using products like this.”

43. On 1 July 2019 Ms Lina Hatem, Sales and Technical Manager for Rise Products, forwarded to Mr Wakefield a quote which included the supply of formwork, concrete, labour and steel and provided a total price for “S & I” of $73,247 excluding GST.

43. On 6 August 2019 Mr Wakefield responded, noting that he would talk to Ms Hatem.

44. On 7 August 2019 Mr Wakefield provided a further plan on which, Mr Wakefield stated, the “exterior walls [had been] marked up”.

45. On 16 August 2019 Sandie Archer, Finance Officer for Rise Projects Pty Ltd (a related company of Rise Products), emailed Mr Pszczonka and Ms Hatem, providing “updated Actol quotes”. I note that the quotations attached to that email are not identified in the evidence.

46. On 20 August 2019, a meeting took place on the Site which, according to Mr Wakefield’s evidence, was attended by Mr Wakefield, Mr Pope of Rise Products, and Mr Gharib and another from 3Form (who can be identified from other evidence as Andrew Francis). Both Mr Pope and Mr Pszczonka gave evidence that Mr Pszczonka was also present. Mr Wakefield’s site diary records “meeting with RiseWall and installers Tim Daniel Daniel Andrew”.

47. Mr Wakefield’s evidence of the meeting was that a conversation took place in the following terms:

Mr Pope: “This is Daniel and Andrew from 3Form. They are the guys who are going to do the installation on this job. They are familiar with the Rise Products and we have worked with them in the past.”

Mr Wakefield: “Ok that's good. How long do you reckon it would take to install.”

Mr Francis: “This is a piece of cake and we can do it in a week. We do this all the time.”

Mr Wakefield: “Ok that's good, we will see.”

Mr Pope: “Lots 3 to 6 will be done in two week, one week to complete the ground and one week to complete the upper floor.”

Mr Wakefield: “Ok that's good. So you will organise things and then do I pay you as things fall due?

Mr Pope: “Yes we will organise. But you pay for materials as they fall due and this will be deducted from the final price.”

Mr Wakefield “Ok. What about scaffolding? do we need to provide for the pour?”

Mr Gharib: “No we can do it off a mobile scaffold.”

Mr Wakefield: “That's a bit of pressure off.”

49. Mr Pszczonka’s version of the conversation was:

Mr Pope: “This is Daniel Gharib and Andrew Francis from 3Form. They can do the installation for you.

Mr Wakefield: “Daniel, how long will it take 3Form to do the installation?”

Mr Francis: “A couple of weeks.”

Mr Wakefield: “OK, that's good. How and when do I pay?”

Mr Pope: “You pay us for the product in full as you order it along the way. 3Form might invoice you in stages.”

Mr Francis: “We can quote you for supply and install.”

50. Mr Pope’s evidence was that he had only joined Rise Products on 19 August 2019 and was present purely as an observer. His version of the conversation was:

Mr Pope: “Here are the installers. This is Daniel and Andrew from 3 Form. They have provided you a quote to do the installation on the job.”

Mr Wakefield: “OK, good. How long do you reckon it would take to install?”

Mr Francis: “A couple of weeks.”

Mr Wakefield “OK, that's good. How do I pay for all of this?”

Mr Gharib “You pay Rise for the product in full as you order it. I expect 3 Form will invoice you at the completion of each stage of the works. If 3 Form invoices you for panel supply, then you pay us directly for the panels and deduct that from what you owe 3 Form at the end. 3 Form will also arrange for steel supply concrete, concrete supply, and concrete pumping but Actol pays this directly and deducts it from their contract sum.”

51. Mr Gharib’s evidence in cross examination was that he attended the meeting with Mr Pope, Ms Hatem, Mr Woods and Mr Wakefield. Mr Gharib stated that he was only at the meeting for a short time and that “I just needed to discuss where we were going, what projects we had completed”. Mr Gharib agreed that at that meeting he handed to Mr Wakefield a quotation dated 19 August 2019 (the 3Form Quote). Mr Gharib also gave evidence that Mr Wakefield said at the meeting that he was happy with the quote.

52. Mr Wakefield did not give specific evidence that the 3Form Quote had been handed over at the meeting, however Actol’s written submissions acknowledged that it had been.

53. Both Mr Pszczonka’s and Mr Pope’s evidence was that Rise Products did not receive a copy of the 3Form Quote.

54. The 3Form Quote was on 3Form letterhead and addressed to Actol Developments, attention Peter Wakefield. The 3Form Quote referred to the Site and stated:

“We are pleased to quote to the above-mentioned project, our prices in the order of … $194,000 plus GST this includes the following works to the following drawings to lots 3, 4, 5 & 6

Drawings: 9/78, 10/78”.

55. The drawings referred to were the floor plans for both floors for lots 5 and 6.

56. The 3Form Quote identified that included in the price were:

“Supply & place 257m2 by 4 lots super finish risewall 160

Supply & place 26 corner panels 160 by 4 lots

Supply & place 13 end cap by 4 lots

Supply & place 33 floor track by 4 lots

Supply, pump, and finish concrete to walls

Supply & place reinforcements to walls

All our work will be completed in accordance with drawings

All our work will be completed in accordance with specifications

All our work will be done in a safe manner as to work Cover NSW

All our employees will be inducted to our SWMS and site inductions”

57. It did not appear to be in contest that the information required to produce the 3Form Quote had been supplied to 3Form by Rise Products.

58. On 20 August 2019 Ms Hatem forwarded to Mr Wakefield an email headed “Rise Products Quote for Lot 3-6 Kellyville”. Mr Wakefield responded asking Ms Hatem to send the email again as no attachment had come through. Ms Hatem sent a further email, which the time-stamp suggests was sent immediately upon receipt of Mr Wakefield’s email.

59. The documents attached, or supposedly attached, to that email were four separate quotations dated 16 August 2019, one for each of lots 3 to 6, for the supply of panels, corner panels, end caps and floor tracks for the RiseWall “160 Series” formwork system. The price on each of the quotations was $25,325.30, inclusive of GST.

60. Each of the quotations in the Tender Bundle has attached to it five pages of terms and conditions. Actol submits that Rise Products did not supply its terms and conditions to Actol until after a contract was formed between them. Actol also submits that the terms and conditions relate to the opening of a credit account not a standard supply contract. I will address this issue, to the extent necessary, in due course.

61. On 21 August 2019 Ms Hatem emailed Mr Wakefield:

“Hi Peter

As per phone conversation Daniel doublechecking quantities/m2

Cost breakdown for lots 3 – 4 – 5 – 6 Inc GST

Rise Products

$101,301.20

3Form Structures

Install of Rise Wall

Supply & place of concrete and reinforcements

$113,088.80”

62. On 23 August 2019 Ms Hatem emailed Mr Wakefield with the subject line “Rise Products & 3Form supply & install quote”:

“As per phone conversation 3Form have confirmed that they have not included GST for the Rise Products component in their quote so therefore you haven’t been double charged GST.

Breakdown Exc GST-Lots 3-4 5-6

Rise Products

$23,023 per lot x 4 = $92,092

+ (GST $9,209.20)

3Form Structures

$102,808

+ (GST $10,280.80)

Hope that is clear – let me know there’s anything else we need to look at.”

63. On 26 August 2019 Mr Wakefield emailed Ms Hatem:

“Hi Lina,

We would like to give you the go ahead to supply your 160mm insulated Rise wall Super Finish.

3Form to fix the Rise wall product and supply concrete and steel.

Rise wall supply ==$92,092.00 +gst =$9,209.= $101,301.20

3 Form supply and fix = $102,808 + gst =$10,208.80 = $113,088..80

Total = $214,390.00

Do you have a standard contract or 3Form to sign or we will organise, so we have an idea on who's doing what and timing.

Regards Peter.”

64. Actol maintains that, by that email, Actol accepted an offer made by Rise Products by the emails of 21 August and 23 August 2019.

65. Ms Hatem replied that afternoon:

“Hi Peter

Thank you for choosing Rise Products to be your supplier and 3Form to be your Installer.

Andrew from 3Form will contact you today/tomorrow to discuss the schedule amongst yourselves

That will then be the contract I guess between you and 3Form.

3Form will liase with us for the Fibre Cement orders/deliveries.

Let me know if you need other information

Thank you

Talk soon

Lina”

66. Ms Hatem attached to that email the four quotations referred to at [59]-[60] above. Actol maintains that this was the first time those documents had been provided to Actol. I will address that issue in due course.

67. On 3 September 2019, Ms Hatem emailed Mr Wakefield. The subject line of the email was “Actol invoices – Lot 3, Lot 4, Lot 5 & Lot 6”. Mr Wakefield responded the same day: “Hi Lina, My wife said that she would pay in three lots”. The attachments to Ms Hatem’s email do not appear to be reproduced in the evidence. Nevertheless, I infer from Mr Wakefield’s response that four invoices for the supply of RiseWall formwork were attached to the email. This inference is supported by a statement from Rise Products addressed to Actol and dated 13 September 2019 which records payment of $16,883.40 in respect of INV-3020 (reference Lot 5) for $25,325.30 and a balance due of $8,441.90 in respect of INV-3020 and $25,325.30 in respect of INV-3021 (reference Lot 6).

68. Between 4 September and 13 September 2019 Actol paid Rise Products $101,301.20, that is the amount identified in the 21 August and 23 August emails as the price for the supply of the RiseWall product by Rise Products.

69. The first delivery of RiseWall product to site occurred on 6 September 2019.

70. The erection of the RiseWall panels commenced shortly thereafter.

71. Mr Wakefield gave evidence that he observed Mr Pszczonka and Mr Pope attend the Site and provide guidance to workers from 3Form on 12 September 2019 and that he subsequently observed 3Form workers undertaking the installation of RiseWall panels on Site. It is not disputed, as I understand the evidence, that Mr Pope and/or Mr Pszczonka provided advice to 3Form in relation to the installation of the RiseWall product.

72. Text messages produced by Mr Gharib and Mr Healy disclosed that Mr Healy was introduced by Mr Pope to Mr Gharib and Rabih, another employee of 3Form, on 13 or 14 September 2019, as someone who was familiar with the RiseWall product and available to assist with the erection of the RiseWall panels. Rabih’s surname was not, as far as I can tell, disclosed in the evidence and I will refer to him in these reasons for decision as Rabih, no disrespect is intended. On 13 September 2019 at 5:48 pm, Mr Pope sent a text message to Rabih:

“Ben Healy (second installer) and I can meet you on site tomorrow at 7:30 am.

We will try to help your team get on top of things and you can talk to Ben about helping doing one of the houses.

Will that suit you?

I need to confirm with Ben.”

73. Mr Wakefield’s evidence was that he was introduced to Mr Healy by Mr Pope on 14 September 2019. This evidence is supported by Actol’s site diaries.

74. Mr Wakefield stated that Mr Pope had introduced Mr Healy as “one of our recommended contractors”, that Mr Pope said that he had asked Mr Healy to “observe and help 3Form for a couple of hours today”, and that Mr Healy had said:

“Tim has asked me to come along to assist Rise Products and 3Form with the installation and give them some tips and possibly some pointers on the best way to install their panels.”

75. Mr Pope gave evidence that Mr Healy was introduced to Mr Wakefield as “going to be a sub-contractor to 3Form”.

76. Mr Healy’s evidence was that he had been brought in “to assist 3Form to meet their agreed deadlines, with the agreement that Actol Pty Ltd pays me directly.” Mr Healy gave evidence in cross examination by Mr Carter that he did not have any discussions with any representative of Actol concerning his involvement in the project, the only connection being that Mr Healy rendered an invoice and Actol paid it.

77. It is apparent that Gledswood undertook the erection of RiseWall formwork on the ground floor level of two of the four houses, independently of 3Form.

78. Text messages between Mr Pope and Mr Healy over the period 16 to 26 September 2019 suggest that Gledswood, that is Mr Healy and employees, were engaged in the erection of RiseWall panel on the Site during that period. Those text messages also indicate that Mr Healy was dissatisfied with the RiseWall panels. In one text message Mr Healy informed Mr Pope that “the corner penetrations don’t work out with the penetrations of the walking system; we are struggling with the hook bars.” Mr Pope responded “those corner we[re] a rush job… The ‘real ones’ have identical profile to wall.”

79. In another text message sent on 26 September 2019 Mr Pope attached a photograph of RiseWall panels and informed Mr Healy that “new panel with larger joined – coming your way soon!” Mr Healy gave evidence that that email had been sent to him in direct response to concerns he had raised about the RiseWall product.

80. Mr Healy also gave evidence that the product supplied by Rise Products was “completely ad hoc”.

81. Mr Healy described the following issues with the RiseWall product:

“* Prototype product was supplied - Fibre Cement has a shelf life and the first batch of sheet delivery were extremely fragile.

* Internal/external profiles did not match the FC profile - the supplied profile was supplier in a 1.5m length for a 3m sheet and the holes for reo did not align.

* The screws were not fit for purpose - the supplied screws were not countersunk screws and we only had 10mm of 'bite' to join the sheets together, the weight of the product could not be held together with the supplied fastenings. Rise Products knew this was a problem. Hence, Tim Pope's message (attached)

* Glues and Screws - we constantly ran out of this product which made installing the product difficult. No agreement could be reached with Gledswood returning due to Rise Products constant mismanagement of their own product and ancillaries.

* The cappings provided for around window and door openings were not fit for purpose - the supplied product seemed to be a James Hardie linea board, and could not be fastened into the FC product. To eradicate this, Rise Products supplied metal angles after the install and were expecting the installers to return and install at no additional charge.”

82. Mr Gharib also gave evidence, in cross examination by Mr Carter, that the products supplied by Rise Products were “the issue” in terms of having the formwork ready for concrete pour. Mr Gharib stated that he was uncomfortable putting concrete in the RiseWall formwork because 3Form couldn’t “get it … to be stable without concrete in it”. Mr Gharib stated that, when he raised these issues with Rise Products:

“They started coming up with different ways to hold it together. One way was the corners … And - where the two panels meet, put sheets of ply trying to hold the two together. There was all different avenues of trying to make it work but at the same time we had a connection ..... if you couldn't hold the connection to it enough it ….. trying to make it work but I wasn't really comfortable. That's why I didn't want to proceed.”

83. On 2 October 2019 Mr Healy sent to Mr Wakefield an invoice on Gledswood letterhead dated 27 September 2019 and addressed to Actol Pty Ltd. The invoice was in the amount of $11,000 inclusive of GST for “Progress Claim on installation of the Rise product walling system as agreed.”

84. On 3 October 2019 Mr Wakefield sent an email to Mr Healy confirming payment of the invoice.

85. Also on 3 October 2019, Mr Francis (of 3Form) forwarded an email to Mr Wakefield, copied to Ms Hatem, attaching an invoice from InfraBuild Construction Solutions for reinforcing steel. Ms Janice Wakefield, Mr Wakefield’s wife who was responsible for the payment of Actol’s accounts, responded suggesting that the attached invoice was not the correct invoice but confirming that the correct amount had been paid to the reinforcing supplier.

86. On 15 October 2019 Mr Sheldon Hutchin of Rise Projects, who identified himself as “Site Manager”, sent an email to Mr Liam Porritt and Mr Pope. Mr Hutchin stated that he had attended the Site at Mr Porritt’s request and had observed “the following items that cause some concern and need for questions”. Mr Hutchin continued:

“1. Plumbing points will need to have large holes cut in the product to allow for pressure fitting to be fitted, how do these get patched and keep the same aesthetics.

2. Electrical point will need to be installed using mounting blocks, yes?

3. Internal corner plastic angles warp in the heat of the day, how do these get finished?

4. External corner plastic cover moulds on internal walls, how do these get finished? Setting with plaster will not adhere to the plastic

5. Current screws being used to pin sheets together strip thread before pulling into FC Sheeting, this may cause sheets to split under load of pour. This was seen today at Charles street on walls that were maximum 1400mm high. 3000mm walls will have at least 3 times the load on them when pouring. Can an alter all screw be sourced?

6. FC Sheet inserts around window reveals need to have holes at sequential spacing to ensure it adheres/binds with concrete when poring. I believe they will just pop of if left as they are now when stripping formwork.

7. Current sheets have tongues that vary in width from 10mm to about 20mm, this causes issues pinning sheets together. Is this normal practice or quality of materials supplied.

8. 3000mm high panels seem to flex in the middle, possible deflection under pouring loads. I believe knee bracing would be required to prevent this.

9. Timber battens and props are not sufficient for this product. Installers would need a $ figure to supply Top Hats and adjustable tilt braces so walls can be monitored and adjusted if required during pours.”

87. Mr Hutchin attached photographs to the email on which he had inserted comments:

“Screw with fine thread suitable for use in metal not plastic as it will strip under pressure easily.”

“Joining tongues range from 10 mm to 20 mm, very inconsistent.”

“Screw heads do not bite enough into FC [fibre cement] sheeting and are proud of wall surface.”

“Joining tongues behind FC sheeting are to narrow, this causes screws to fracture sheeting and then relies on screws to hold in plastic rib only.”

88. The photographs on which the last two comments were inserted showed screws driven into panels, presumably RiseWall, which had cracked in the region of the screws.

89. Actol relied upon this document as evidence that the RiseWall product was not fit for purpose or not of acceptable quality. Rise Products disputed that the document could be relied upon in that manner. I will address this issue in due course.

90. On 18 October 2019 Mr Pope emailed Mr Gharib and Mr Healy (copied to Mr Pszczonka and Ms Hatem). The email was headed “Kellyville/Actol – Pre-pour Review”:

“Firstly I was good to see ‘light at the end of the tunnel’ for finishing the ground floor walls before filling.

Further to today's pre-pour review I hereby share the following as my insights as to what you need to keep an eye on/address before pouring concrete

1) Rise Wall is a finished wall-so ultimately the walls must be straight, plumb & square. Bob (and Peter) have reiterated this numerous times so please make sure you have doubled checked this. I believe this needs to be done with a string or laser line. The external face will rendered so you have some tolerance but the internals are intended to be set & painted.

2) Screw fixings that are not going to be removed need to be flush for setting-especially in the setting rebate at the joints

3) Screw fixings are supposed to be 250mm centre in every joint, bottom track etc-I noticed areas missing screws and this spacing being longer. This will risk the panel failing during the pour.

4) Steel reinforcement needs to be completed as per the drawings provided by Actol. Some things that I noticed are;

a. Starters bars need to be at even centres.

b. The detail over the larger opening (some windows and garage door) needs to be completed

c. Corner hook bars and vertical bars need to be double checked You need to make sure Actol get the engineer to inspect once you are completed

5) Check bracing and alignment whalers are tight and strong-otherwise the wall may move during pour

6) Ends & corners still need to be completed is some areas

7) The top of panels need to align at the same heights-otherwise you will not be able to finish the top of the concrete pour level for the next panels to be installed;

a. I noticed with Lot 3 (first house) there is change in level where the rebate stepped down - I suggest you resolve how to address this with Actol

8) Window and door openings- I assume you have double checked these. Otherwise they are going to be hard (and expensive) to correct

9) External Corners-you need to make sure these are aligned, square and vertical. Otherwise they won't be able to adjust these later;

a. I have advised several time that one corner on Lot 3 (the first house) at the lower level near stair is not properly installed - I suggest you try and resolve how to rectify this with Actol.

10) Gaps-there are a lot of gaps, holes, especially around openings that will need to be filled to make sure core filling does not 'escape’

You suggest you also make sure Actol (the builder);

1) Fill the gap at the bottom of the panels where the rebate was wrong-otherwise the panels may blow-out here due to no fixings

2) Finish their services and make sure they are 'sealed' and firmly fixed

With regards the concrete pour, Actol confirmed 3Form are responsible for placing the concrete including access. There are four houses and three different levels for each so I suggest this gets planned asap.”

91. On 29 October 2019 Mr Gharib emailed to Mr Healy a copy of the 3Form Quote. Mr Healy responded the same day in an email copied to Mr Pope and Ms Hatem,:

“Thanks Daniel. Is there a monetary breakdown for labour vs material? As agreed upon last Tuesday, I am after a breakdown for the two dwellings we are completing. Currently, I only have the capacity to complete the 2x jobs we have commenced in Kellyville.”

92. Shortly thereafter, Mr Pope emailed Mr Healy, copied to Ms Hatem:

“Lina – please confirm for Ben what Rise Products supply quote was that needs to be deducted from this. Ben FYI it was around $94k

Ben on this basis the budget for two dwellings is 50k for

1) install of panels

2) supply and install of reo

3) supply, pump and place concrete

Peter can advise reo supply to date and that cost can be halved and deducted from the 50k.

I am sending this FYI to try and assist but as you are trying too you need to get these agreed with 3Form”.

93. Site diaries maintained by Mr Wakefield suggest that 3Form ceased to attend the Site after 6 November 2019.

94. On 6 November 2019 Mr Pope sent an email to Mr Healy:

“As discussed - I have prepared the attached a spreadsheet as an initial ‘attempt’ to breakdown the quote for Units 3-6 (four houses).

None of this has been discussed with 3Form at all.

I am simply trying to share with you how I understand the 3Form quote came together

This being with the view to seeing if you/Gledwood Studios is willing & able to take over the project from here and finish it.

I just want to try and get this project done & dusted for Peter/Bob/Actol so we can all move onto the next one.

In doing this I have;

1) Used the Rise Wall panel supply take off for the basis of quantities

2) Calculated the volume of concrete based on the 160mm insulated panel (internal width of 110mm) and deducted the windows and doors;

a. I have applied an estimated $220/m3 for concrete supply (only) - this needs to be verified

3) Estimated the cost for reinforcement for the project at $8k-Actol is going to give us the cost to date tomorrow so we can assess this and adjust if required

4) I have assumed we are going to need to two concrete pours for each level (four pump visits to complete the project) as follows;

a. First pour up to window sills and 1m all wall via a line pump-done from concrete slab and scaffolding. This will require 3 agitators which we can space out by an hour each (at least);

i. I have assumed $1k for pump hire for the day-this needs to be verified

b. Second our using a boom pump to place the remaining 2m This will require 7 agitators which again we can come back to back but will allow at least 1 hour between pouring on-top of each other;

i. I have allowed $2k per day for boom pump- this needs to be verified

5) I have allowed $2.5k for the additional prop hire and purchase of the angles for the windows

6) I think the above has 'some fat in it' (TBC) and comes to a total of $44k;

a. Let's do some homework on quotes from pump hire and concrete suppliers to verify this

When this is deducted off the $102k budget remaining after panel supply-leaves $59k for installation of panels or around $58/m2

Based on this m2 rate .

3Form is due approx. $15k for two houses GFL only-I suggest for this they need to come back and strip their materials and take them away once the walls are poured. .

Gledswood is also due this for the 2 GFL-less what you have been paid to date ($10k)-would mean you get another $6k (roughly). .

This would leave $28k for the 4 x LV1;

o Based on needing 4 men for 3 weeks at $350/day/man to complete these floors this would total $21k leaving around $6k margin (or 24% profit on labour).

Noting that in doing the LV1 you will have;

the new panels with the extended glue tracks

corners with aligned punch holes

props for every panel

metal angles for every opening

So based on the above (albeit a 'first cut') I would have thought this looks doable.

If you can have a look at this and then let's discuss your thoughts around 'tidying' this up to reach a decision.”

95. Mr Healy responded that evening:

“Thank you sending this through.

Please find amendment attached.

If we are in agreeance with your attached $/m2 rate, then I have attached the actual breakdown of costs thus far. Also, I want it recorded that any works that Jarrod B Carpentry performs, and invoices, does not affect my allowance of funds for the job.

Using your spreadsheet, I believe the figure will be closer to the $23k, without taking into consideration the additional delivery costs, etc

Less the $3k for the ply sheeting.

Also, who pays for the crane to lift the product to the first floor?

Who takes responsibility for any blowouts/bulging?

Giving us extended glue tracks is great, but the amount of cutting for the upper floors of this project is going to be excessive in time consumption on this job.

Who is to supply the additional plyboard to secure the connection between sheets? There'll be $3k worth of product just for that.

There's a reason why 3form are attempting to shun their commitment to Peter.

$350/day for 5x days = $1,750

Less 9.5% for superannuation is $166.25

Less Income Tax is $443.00

Equates to $1,140.75 a week, or $228.15c a day (with no contingency of leave loading)

Unfortunately, I don't have a labour force that will be viable on the proposed day rate.

And I certainly don't work for that amount of money.

Respectfully, I'm going to pursue the remaining part payment of $7,754.28 + GST with this job and walk away.”

96. On 7 November 2019 Mr Pope and Mr Wakefield exchanged emails concerning amounts which had been paid to 3Form (or more accurately to the steel supplier for reinforcing).

97. Mr Pope sent a further email to Mr Healy on 12 November 2019:

“Please see attached a further developed breakdown of Kellyville.

I have included actual rates for supply reo (to date), concrete quoted by Hymix and concrete pump as quoted.

Unfortunately the reo costs to date have been higher than the first estimate so Dan (and I) have agreed to cover the cost of the props and angles.

You will see I have deleted the $3k for form ply as this should be able to be re-use materials from GFL on the first.

I have left the labour to complete as per your response.

I have had a discussion with 3Form and they are prepare to hand the contract over (from here) if they can get paid $15k + GST.

Dan we will back on site on Thursday with Jarrod to make sure we get the window angle openings completed.

Dan also has spoken with the scaffolder RP use, and they are quoting the project ASAP - so let's assume at this stage (but to be confirmed) that there will be scaffold to pour concrete off.

With regards placing concrete we propose to use the concreter that does Rise Projects work, and Dan (and I) will be on site during the pours. As per the spread sheet we propose two days pouring for GFL - Day 1 (1/3rd all walls all houses), Day 2 (2/3rds all walls all houses). If there is any 'blow-out' we just need to have you and one other on site to cut-out and replace form-ply. Based on this, this risk would seem managed.

Rise Products has the new panels & corners in stock - and with all the props and angles from GFL should enable a really 'clean' installation on Level 1 - the final training run!

So based on all the above it looks like the project can be completed within the remaining contract sum.

If you can take over the contract (with 3Form getting $15k) Dan & I can then work with you to get the project finished - hopefully on a good note.

This would see us all ready to take on GWH (in a about a months-time)

Could you have a read of this, and look at the spreadsheet and let me know your thoughts.”

98. Mr Healy responded on 13 November 2019:

“Everything considered, including the spreadsheet and 3form's ability to simply walk away from the Project.

Gledswood will not be returning to Kellyville.

If 3form will still get paid the $15k, even after Jarrod finished their work, then I will opt for the same exit strategy.

Please instruct Jarrod to complete the angles on our units also (less the ones we have completed), and like 3form, I will not be footing the bill for Jarrod.

I will return to site to remove my props and braces when suitable.

I will advise Peter from Actol of my decision.

If 3form get $15k, I'll be electing for $16k, as my reo is completed and Jarrod will be there for a week finishing their Door openings.

These window angles should have been delivered originally with the product, not after we have completed the window openings.

And better still, only half the product showed and we run out of screws! Who pays me for a return trip??

The installer is footing the bill for all these amendments with no means for remuneration.

And I am not convinced that the First Floors will be any different.”

99. Mr Pope replied to Mr Healy:

“Noted an understood.

Could you agree to not advise Peter/Actol until Dan and I have spoken with him?

We also need to resolve 3Form so we we aim to go and see them Friday

if not – just let me know and we will work around this”.

100. On 14 November 2019 Mr Wakefield emailed Mr Pope:

“Further to our phone conversation yesterday, can you confirm that 3 Form and Ben from Gledswood Projects will not be returning to the site and that Rise Products will be finishing 3 Forms Lots 3 and 6 lower ground floors. Then who will be doing the upper floors and what time frame is this to take. If 3 Form are no longer want to do the job who will the contract be with. This is not what was sold to me at the meeting, there were all the promises of we'll do this in a week and it'll be true and straight. At the moment there are corners out of square and walls out of plumb. Steel to go in various places. I know that you are here on Monday to start to rectify this work ready for a pour.”

101. On 15 November 2019 Mr Pope emailed Mr Wakefield:

“I would like to hereby clarify Rise Products offer to help complete the installation of Rise Wall to Units 3-6.

3Form (the Contractor for installation) and Gledswood Projects (3 Form subcontractor) have progressed the GFL panel installation to point almost ready for core filling. There remains some further works around installing additional bracing to the window and door openings, installation of steel reinforcement over the larger openings, gap filling, final screws fixings and squaring off and aligning panels.

We acknowledge 3Form and Gledswood have had difficulty in undertaking the installation for various reasons associated with working with new product.

Rise Products is frustrated (as we understand you are) as to the progress to date (and time taken) and would like to see Rise Wall installation completed competently from here.

Rise Products has spoken with 3Form (and Gledswood) whom have (both) expressed their desire to look at another way to complete the project without their further involvement (if possible).

With this in mind, Dan Pszczonka and I (Rise Products) have agreed to offer to take over the completion of the Rise Wall installation (from here) if this is amenable to yourself (Actol).

This offer is based on the following:

1) Rise Projects will take over the contract based on the quote provided by 3Form (refer attached).

2) Actol does not pay 3Form any monies. We understand Actol has paid Gledwood $10k (please advise if this is not the case) and similarly we would request no further monies are paid to them. Rise Projects will make arrangement to pay these companies for the installation work completed to date upon completion of the GFL core-filling.

3) Rise Products will manage the installation of Rise Wall going forward.

4) Upon completion of the GFL core filling, Rise Products will receive payment of;

a. Installation of GFL panels -$35k less $10k (tbc) = $25k

b. Concrete supply and place - $20k

5) On completion of core filling the first level panels Rise Walls, Rise Products will receive payment of the remaining contract sum less the cost of steel reinforcement supplied for the project

6) Actol will provide scaffolding access to place concrete from in between each unit as well the external side of Unit 6

The proposed timing is as follows;

1) Agreement reach between Rise Projects and Actol (ideally today)

2) Upon written agreement (as above) Rise Project will recommence on site to complete the work to pour GFL walls. The aim being by the end of next week (weather permitting).

3) Actol completes scaffolding in readiness for concrete pour by the end of the week.

4) Rise Products recommences first floor panel installation when Actol completes the first level flooring and perimeter scaffolding (all units) for edge protection.

I trust the above is clear and received favourably and in the vein intended, being an offer assist Actol getting the installation of Rise Wall completed. We look forward to your response”.

102. A copy of the 3Form Quote was attached to that email.

103. Mr Wakefield responded on 16 November 2019:

“Yes we have paid Gledswood Projects $10,000.00 + GST = $11,000.00.

I don't know where you are getting your figures from, my calculations are 3 Forms total price was $102,808.00 the SQ mts are nearly the same for bottom and top floors.

Divide it by 2 = $ 51,404.00 less steel of $10,491.92

$ 10,491.92

= $ 40,912.08 Less $10,000.00 to Gledswood

$ 10,000.00

= $ 30,912.00 plus GST This includes the $20,000.00 for concrete and pump.

If you disagree with the split then we will remeasure.

ACTOL PTY LTD dose not agree with your figures. If you feel you need to put angles on the corners then you need to put them on. 3 Form and Gledswood need to rectify their work immediately.

We brought your rise Wall Super Finish on the proviso that it was installed by competent installers and a concrete pump handler. We also based our decision on your (Tim) and Dans words to the effect 'This will go up in no time and be straight and square, you'll have no problems with this. 3 Form also confirmed this at the meeting and said that it would be done in a week. We didn't think it would be done in a week but did think 3 weeks was reasonable. It has been 9 weeks and still not finished ground floors.

You put the blame on the installers, but Ben from Gledswood Projects, you Tim asked him to come and see 3 Form install the walls for the first time and to give them any tips on how to do it easier.

After seeing it installed and talking to the installers, you and Dan I think the product needed modifying because it the installers were having a hard time at it. Admittedly 3 Form were new and Ben was good at installing it.

Now you have to pull out all the blocking to window openings and put metal angles because of a big chance it could blow out at those points.

In the meeting the question was asked to 3 form 'do you need scaffolding to fix or pour' no we use mobile scaffolds and move them around. We asked what about the braces, they are no worries was the answer.

Based on the way the ground floor walls were done and the time it has taken and you guys new about the time it was to take to install, we will not be doing the upper floors and will seek a full refund of upper floors that was paid in good faith.”

104. Actol maintains, in the alternative, that if Rise Products had not contracted to install the RiseWall formwork on 26 August 2019, then from 15 November 2019 Rise Products “actively became ‘… Involved in, or involved in coordinating or supervising, any work involved in the construction of a dwelling’”. I do not understand that Rise Products disputes that Mr Pope and Mr Pszczonka became more actively involved in the completion of the installation of the formwork and concrete after mid-November 2019, but Rise Products does dispute that that occurred pursuant to any contractual arrangement.

105. On 19 November 2019 Mr Pope emailed Mr Wakefield:

“As discussed this morning Rise Product will endeavour to assist 3Form to complete of the GFL (Units 3-6) in accordance with their quote/agreement.

We will proceed to mobile resources back to site to complete the final works in readiness for concrete pour.

Ideally you could please arrange for scaffolding to the perimeters to facilitate access for the concrete placement.”

106. On 20 November 2019 Mr Pope emailed Mr Gharib:

“As discussed with Rabi last week, Rise Products has been unable to reach agreement with Actol/Peter to step-in and take over the contract to complete the work on this project.

Peter is insisting that 3Form complete the ground floor and that he does not want to proceed with L1.

He has verbally advised that he will pay for GFL based on the pro-rata m2 when this is complete.

He has advised he will not pay Gledswood/Ben any more money.

Based on the above, in the same vein as to what Rise Products was trying to achieve that being us assisting 3Form finish the project and get paid under the contract we are willing to;

1. Supply adjustable propping to assist with aligning the wall -250 props are already on site and partially installed. These cost $3/prop/week and we will aim to get these off-hired within a month - approx $2.5k.

2. Supply metal angles to all opening to reduce the risk of bulging during concrete placement - 50% of these are installed and remainder are delivered to site. These costs around $3.5k

3. Provide labour to complete the work in readiness for concrete placement. We have already had three men for 3 days and envisage this will require 2-3 more days - around $3.5k

4. Provide additional supervision to assist with the concrete pour/s

We intend to get guys on site (as per Item 3 above) tomorrow and aim to finish everything this week.

Based on the above, 3Form will need arrange concrete pumping next week. We recommend that you be prepared to do this over two days to reduce the risk of any blow.

We also recommend that 3Form arrange concrete supply that Actol pays for- so that you get this at the best possible rate so the least amount is deducted from the contract sum.

One house has been scaffolded and we have requested Actol prepares the others but there is some likely-hood this won't happen in time. On this basis we need to be prepared to place the concrete via our own means of access as per the original quote.

FYI Peter is also demanding Rise Products refund the panels specially made (with insulation etc) for L1 - this is an argument RP will try to resolve directly with Actol.

We all acknowledge this project has been less than ideal, however the only thing to do is finish the GFL scope to be able to get paid.

Can you please confirm that you are Ok to proceed accordingly.”

107. The Site diaries maintained by Actol disclose that on 26 November 2019 Mr Wakefield was injured falling “through roof” and was taken to hospital. It is also apparent that WorkCover closed the Site until 29 November 2019 (seemingly after scaffolding had been installed) and that Mr Wakefield was discharged from hospital on 2 December 2019.

107. It is not in dispute that the initial concrete pour occurred on 18 December 2019. The Site diary records that Mr Woods was on-site with two labourers for Actol. The annotation in the Site diary regarding the concrete pour is:

“Danny [Pszczonka] controlled the pour. Pump concrete to half of walls. Rise Products 4 = Tim, Jarrod. HD projects pump people 2.”

109. Concrete Sales Pty Ltd trading as concretesales.com.au issued an invoice to Actol on 18 December 2019 for delivery of 35 m³ of concrete on that date. HD Projects Pty Ltd rendered an invoice addressed to Actol for concrete pump hire on 18 December 2019. The invoice was dated 31 December 2019 and emailed to Actol on 6 January 2020.

110. Jarrod B Carpentry Pty Ltd issued an invoice to Rise Products Pty Ltd on 14 January 2020. The invoice included charges for “Pour bottom half of rise wall with Tim”, “Fix reo to engineer spec with Tim”, “Pour top half of rise wall with Tim and J’Maine” and “strip braces, angles and formwork”.

111. It was not disputed that Jarrod B was Jarrod Bordecino (or Baldocino) and that he had attended the concrete pour on 18 December 2019 at Mr Pope’s request.

112. On 8 January 2020 Mr Wakefield emailed Mr Pope:

“Rise Products Pty Ltd. 6th January 2020

Attention Tim

Tim, I draw your attention to the placement of reinforcement and concrete at [the Site].

After our discussions, on several occasions, about the incomplete steel reinforcement and inadequate bracing to the garage door lintels, you have placed concrete in these areas before rectifying any of the errors.

After inspecting all lintels we have found,

reinforcement bars are not lapped as required,

sitting on what we believe to be the board forming the soffit of the lintels leaving insufficient concrete cover,

areas of hollowness in the poured portions of the walls

and excess concrete on the reinforcement bars preventing or obstructing the future pouring of the concrete into the unfilled portions of the walls.

Bob Woods has pointed out to you on several occasions the poor and incomplete state of the reinforcement and each time you have stated you would fix it prior to placing the concrete.

On Wednesday 18th December you informed Bob Woods that the pour would not proceed past the height of the bottom of the lintels however you then placed the concrete to the top of lot 3.

Actol Pty Ltd has offered throughout the exercise to assist in the placement of the steel and you have stated that yourself and Jarrod would complete it prior to pouring, the latest was on the day of the pour when Bob Woods suggested you come to Site on the following day with Jarrod and together with Actol Pty Ltd, would complete the rectification but you refused the offer.

We understood the pump- operator was experienced in placing the concrete in this type of wall, it appears he was not instructed correctly or he was not willing follow the instructions and as a result we have concrete in all lintels preventing the completion of necessary steel reinforcement.

Bob Woods was forced to stop the operator from pouring concrete into various lintels but his reaction was to state he was unable to stop and start his pump to move to another area every five minutes.

I was under the impression that you were only going to pour concrete approximately halfway up the walls on all four lots only.

After our meeting with you Tim on 7-1-2020, we did further inspections of lot 3.

We removed the soffit linings from the back-sliding door and window.

We found no cover on the vertical reo bars of the sliding door and there appears to be no vertical reo bars to the dining room window.

The engineer is on holidays until the 13-01-2020. I understand that you have other work pending, but on our site there is still sufficient work to do without an engineer's inspection. If you want to wait for the engineer to inspect then the further delay is your responsibility. We will organise an inspection ASAP with the engineer.

We would also like to know in writing as to how you are going to rectify the blow outs,concrete hollows in the walls, bowed walls including humps and hollows to the skirting and cornice lines.

Actol Pty Ltd now require those responsible, be it 3Form, Rise Products or their subcontractors, to remove all necessary concrete, reinforcement steel, and formwork then replace the same to achieve the promised quality result for this project.”

113. Mr Pope responded on 10 January 2020:

“Rise Products has a supply only contract and is assisting in completing this project.

We planned to pour the walls on Friday 20th January but unfortunately had to cancel due to not being able to access the necessary labour resources (due to bush fires). The reinforcement adjustments were going to be done in the morning prior to pouring concrete.

Rise Products re-planned to complete the second pour this week and I attended site (on Tuesday) to arrange this. Further to identification of the remaining reinforcement issues Jarrod and I will attend site on Monday to address these.

If an engineer inspection is to be made we would require this done on Monday afternoon and would like to attend this.

We have only been able to book the 45m boom pump on Tuesday afternoon (TBC). HD projects advises this equipment will likely not be available for the rest of the week as they have a large project for Macquarie University.

Rise Products also has to re-allocate resources after next week which will make it difficult to advise when we could then assist to complete the second pour.

The completed works will be assessed (for defects) once completed.

I trust we can work together as above in the interest of getting the GFL wall filled so the following works can commence”.

114. Mr Wakefield replied on 12 January 2020:

“You have a short memory, at the start I made it very clear that I did not know much about your product and therefor was not interested in just buying your product and installing it myself. The deal was that for me to buy your product you also had to organise an experienced installer to do the job. Your first choice of contractor was Clyde from H D Projects who gave you a price of $60.00/sq mtr, this was to dear so you went to 3Form who were cheaper. It turns out that they have not installed this material before and that this was their first go at it. You had Ben from Gledswood Projects to come out to oversee them doing the installation and to provide feedback to them on the best way to do the installation. They were obviously struggling so you engaged Ben to do lot 4. This was to show 3 Form on how to install it. You've had a falling out with both contractors because of price and this is where we are at now. Dan, Lina, and you were so confident that your walls would be straight, square, plumb and true. In everyone's words you were saying "you won't have a problem with these walls and we'll do the bottom four lot walls in a week. How many weeks later is it now?? Tim I think you need to look at what you've said before because the more stories you tell the hole just gets bigger.”

115. The second concrete pour took place on 14 January 2020. Concretesales.com.au issued an invoice to Actol on 14 January 2020 for the delivery of 19 m³ of concrete on that date. HD projects issued an invoice to Actol on 17 January 2020 for concrete pump hire on 14 January 2020. DJK Carpentry and Construction Pty Ltd issued an invoice to Rise Products on 15 January 2020 for “day labour hire” for apprentices and tradesmen (three days in each case). Actol’s Site diary for 14 January 2020 records both Mr Wakefield and Mr Woods being present together with two labourers. The diary records “Pump the rest of walls, Rise Products 3 – Tim Jarrod +1, HD projects 4.”

116. In late January 2020, 3Form, assisted by Rise Products, sought to recover payment for work carried out on the Site.

117. On 22 January 2020 Mr Pope emailed Mr Gharib setting out a calculation of the amount which he apparently suggested should be the subject of a payment claim to be issued by 3Form to Actol. The calculation proceeded by determining the remaining contract sum, calculated by deducting from the amount of the 3Form Quote the amounts paid by Actol to Rise Products and others, for RiseWall panels, reinforcement, concrete supply and the concrete pump, dividing that by two (to give a price for the installation of the ground floor RiseWall), deducting the $10,000 paid to Gledswood and deducting a further 10% of the amount so calculated for defect rectification.

118. Mr Pope stated:

“Please see below and attached for how I see the payment claim. Happy to discuss. I highly recommend you submit this done strictly in accordance with the Security of Payment Act.”

119. On 3 February 2020 Mr Gharib forwarded to Mr Wakefield, copied to Mr Pope and Ms Hatem, an email attaching a tax invoice on the 3Form letterhead addressed to Actol for “Works completed to date – LOTS 3, 4, 5 & 6 Installation ground floor Rise wall”. The invoice stated “This claim is made under the security of payment act NSW”.

120. That evening, apparently not having realised that the invoice had been forwarded to him, Mr Pope emailed Mr Gharib:

“Please send me a copy of the invoice if you can so we can double check it for compliance with Security of Payment as well as be prepared if/when Peter Wakefield calls.

That said, if he does call us – we will redirect him to you.”

121. On 6 February 2020 Mr Wakefield emailed Mr Pope:

“I emailed you on the 16 – 11 – 2019 stating that we are not going ahead with your product and would seek a full refund of top floor walls that was paid for.

We are asking you to refund the monies and a breakdown of how you arrived at the particular $ amount you think it needs to be paid back.”

122. Also on 6 February 2020 at 9:35 am Mr Wakefield emailed Mr Gharib:

“I don't know where you got your $26,528.56 from because it is less all other associated cost to finish the walls also we have additional costs to add relating to cleaning the site, checking poor standard of works. Can you give me a break down of how you arrived at this price?? Further more you pulled your men off the site and were not coming back and it was left up to Rise Wall to negotiate a new agreement to take over the contract at more costs. Rise Wall now claim that they were now working for you to finish the job. I think that you had better get out here and see the standard of work that you 3Form and Rise Wall have done because it is very unprofessional. Until all the defects, of which are to numerous to list are fixed we are not paying any monies.”

123. At 10:25 am Mr Wakefield forwarded a text message to Rabih, of 3Form, attaching a number of photographs with the comment: “Hi Rabih, this is mostly what Rise Products did on your behalf. Peter”.

124. 124 The text message is evidenced by screenshots from a telephone apparently belonging to Rabih. The screenshots included in the evidence include, above the photographs, the message:

“Bob Rise Products was helping 3Form. You will need to liaise with 3Form from here. That said I am speaking to them daily so will pass this on also.”

125. The evidence does not explain the source of this message.

126. At 1:58 pm Mr Gharib responded to Mr Wakefield’s email, copied to Mr Pope:

“I dont understand what you really are trying to say we have a contract and you breach it the second you decided to pay be [sic Ben] with out my aprovel you payed rose without my aproval you got other contractors to carry on my work so please lets not go down this road i have acurd alot of damages due to the fact that you went around paying people that i had to sighn off on so this invoice stands and will not be negotiated

I dont care what has to be done but the fact that you decide to pay ben and not 3form tells me that there was so.e sort of agreement between use so im not going to turn this into prove whats mine or else i submit the hole invoice since 3form havnt reseaved a dollar yet and you are not to pay people with out my concent”.

127. Mr Wakefield replied:

“You need to talk to Tim as he organised Ben to check on your workers and to provide any tips on installation. That was on a Saturday the next thing he turns up on Monday and says that he is doing lot 4. What went on between you three for him to start lot 4 is beyond me. He finished lot 4 and did lot 5 with your approval. I haven't engaged any trades to install your walls.”

128. Mr Pope emailed Mr Gharib at 8:44 am on 7 February 2020:

“I am happy to meet this morning if you wish - just let me know when and where suits. That said I also recommend you follow the security of payment process (exactly) so you can action this claim under this process to try and get paid. I will look into what we understand the next step to be and let you know but there is plenty on the internet you can read also.”

129. Mr Gharib replied at 8:55 am:

“Stop talking to me about payment acts i not going there court for your fuck up you were going to sort it buddy”.

130. Mr Pope responded at 9:04 am:

“The only reason I am talking about the Security of Payment Act is because it is the legal mechanism in NSW to deal with construction related payment disputes. If you follow this - you have the best chance of getting paid. I acknowledge this is not something you normally have to do, so we are trying to help you with this, but it has to come from 3Form as you have the contract with Actol. The process is not hard to follow-albeit it does need to be followed strictly to enable it to be enforced. I can come and see you and/or give you a call to discuss.”

131. At 2:13 pm that day Mr Gharib emailed Mr Pope, Ms Hatem and Mr Pszczonka:

“I find it really disrespectful the way you are treating 3form I have attached pictures that peter sent your guys made the walls worse

And you have told him that you are only a supplier and have nothing to do with installation

If so why did you bring ben into the picture he made it go wrong it was a test we were your guinea pigs Peter doesn’t want to pay and you have the nerve to tell me take him to court

That's is a very wrong move mate I wanted to do one house to test the product and then the next one go smooth but you decide to bring in your friend and make deals with him then he gets payed and we don’t I find that rude and irresponsible then I ask for a quote and you want to charge accessories and the same rate you give everyone else know we are just a number in your books

Mate this is not on you also changed you word 3 times at mascot every time its only in your best interest beside that you have also offer Andrew a job when we first me

So I'm sorry but I will not be copping the loss at peters job it was all your fault thing went wrong Please explain to me why I should use rise after all this afs give me a excellent product and same rates no games plaved im not there trial

You have given me the same rate you give everyone even though I was the first to try your product mate it is a joke I would like to have a meeting and you are yet to organize it

I have tried getting you

Decode

Getani

Mascot 2

Clovely

I told shane your product was good when they called me

I tell everyone about rise and this is what I get

This is socking I want to sort it out asap it's a joke even the invoices get are not right mate so please get back to me and I cc your partner daniel and lena because id like them to be at the meeting”.

132. On 8 February 2020 Mr Pope and Mr Gharib exchanged emails concerning the holding of a meeting “to discuss and try and resolve (or at least agree a way forward) to the issues you [Mr Gharib] have raised”.

133. On 13 February 2020 Mr Wakefield emailed Mr Pope:

“It’s been a week and no response on a refund, so does this mean that I have to pursue other channels to get my monies.”

134. Mr Pope responded:

“I apologise for the delay. We will provide a response as soon as possible.”

135. Also on 13 February 2020 Mr Wakefield emailed Mr Gharib:

“It’s been a week and you have not bothered to say whether you want to come and inspect the defective work done by Rise Products supposedly on your behalf. If I don’t here from your ASAP then it would be apparent that you are not interested in rectifying any of the defects. You will leave me no options to pursue legal channels.”

136. Mr Gharib responded:

“Hey champ I will come out this week but you have breached contract by paying other contractor so the recefication will have to be done by rise”.

137. Twenty minutes later, Mr Gharib replied again:

“I will come me and the boys from rise and meet on site I will get back to you tomorrow on and day and time”.

138. On 17 February 2020 Mr Pope emailed Mr Gharib attaching a “Security of Payment template” and suggesting that Mr Gharib cut-and-paste the document onto 3Form company letterhead and submit it to Mr Wakefield.

139. On 21 February 2020 Rabih texted Mr Wakefield:

“Hey Peter, I’ve spoken to rise walls will be organising a meeting for next week, I’m just in a meeting couldn’t answer your call mate”.

140. Mr Wakefield forwarded a further photograph to Rabih at 1.15 that afternoon, commenting:

“this is the shoddy workmanship that we are finding that Rise Products have done. There’s a lot more to see. Get on to them and organise a time early next week. I want to put in my windows.”

141. Rabih and Mr Wakefield exchanged further text messages over the following days relating to the arranging of a meeting with Rise Products.

142. On 27 February 2020 Mr Gharib forwarded to Mr Wakefield a document on 3Form letterhead, headed “Payment Claim”, seeking payment of $29,191.41 for “work carried out to 30 January 2020”. The document stated “This is a payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW).” It is apparent that Mr Gharib had forwarded that document to Mr Pope on 18 February 2020 presumably for his comments/approval.

143. Mr Wakefield responded the same day:

“We have no problem paying for work completed. But in this circumstance whether you 3Form or Rise Products have done such defective works that we will not pay any monies until the defective work is rectified to a industry standard. We also have back charges because you walked off the site and Rise Products had to complete the works. This will be all discussed at tomorrows meeting. For the record I reckon your invoice figures are wrong.”

144. It is apparent from the text messages exchanged between Mr Wakefield and Rabih referred to above that the meeting referred to in Mr Wakefield’s email was cancelled because Mr Pszczonka could not attend.

145. On 28 February 2020, Mr Gharib emailed Mr Wakefield:

“We have to meet to resolve this matter

First of all I came to start the job

Then I started on one with a faulty product you had supplied

Then ben came into the picture without my written consent so contract was breached

Then he gets paid witch breaches contracted again

Then rise wall comes to try fix the issue and pulls off my bracing without my consent again breach

Then they get payed for a faulty product and ruin my walls again it's a breach

43

Then I submit invoice and I get told I cant get payed because rise fucked the job ben has been payed rise got payed for a faulty product and you breached contract 4 times

So please explain who is at fault

Lets no play games I have had it with you ben and rise I'm sick of you guys running in circles”

146. In early March Mr Pope consulted solicitors seeking advice concerning 3Form’s position under the Building and Construction Industry Security of Payment Act 1999 (NSW) and the appropriate way forward after 3Form had issued the further invoice following the template provided by Mr Pope. Mr Pope forwarded that advice to Mr Gharib on 6 March 2020

147. On 16 March 2020 Mr Wakefield emailed Mr Pope, copied to Mr Healy and Mr Gharib:

“Hi Ben, Tim, and Daniel,

After our meeting today to try and resolve the problems onsite I have organized a building consultant to go over the work in question and provide a report on the said works. I find it very disappointing when two meetings have been made and the first meeting gets cancelled because Rise Products owner Daniel has to go interstate and can't make it. The second one, another excuse he can't make it because he has a meeting. So no wonder nothing got resolved today.”

310. In any event, I am not satisfied that Actol has established that 3Form was in fact not a competent installer. To the extent that there is evidence before the Tribunal concerning 3Form’s performance as an installer of the RiseWall product, it suggests that 3Form was having the same difficulties as Mr Healy but was not able to overcome those difficulties as efficiently or effectively.

311. Mr Gharib’s evidence was that 3Form had had experience with other wall construction systems, but had not installed RiseWall product at any site before August 2019.

312. Mr Gharib gave evidence that, at the start of the project, Mr Pope and Ms Hatem were on-site “trying to teach us how to use the product and show us how it worked”. He also stated that Ms Hatem was there “most of the time we were there” and that “we told her we knew how to do it and then told her what needs to be fixed”.

313. Mr Gharib further stated that “from our knowledge we know where to put the bracing” but that the bracing was not the problem with the RiseWall product.

314. I have set out above Mr Gharib’s evidence concerning the problems 3Form experienced with installing the RiseWall product (see [82] above).

315. It is fair to say that Mr Carter’s cross-examination of Mr Gharib did not in any way seek to establish that either Mr Gharib or 3Form were not competent to install the RiseWall product.

316. I do not find that such representations as were made by Rise Products concerning the installation of the RiseWall product were misleading or deceptive in breach of s 18 of the ACL.

Performance Representations

321. Mr Pszczonka acknowledged in cross-examination that it was his usual practice in 2019 to “promote the positive parts of the RiseWall product to potential customers” which included telling potential customers that the RiseWall product:

“is a high quality finish”

“is true and straight once erected”

“is a perfect flat finish”

“[goes] up very fast”

“[is] a flexible design” and

“[is] compatible with all drawings, specifications and plans”.

322. Mr Pszczonka did not dispute Mr Wakefield’s version of the conversation in which Mr Wakefield alleged that the Performance Representations were made.

323. I accept that representations to the effect of the Performance Representations, as particularised by Actol in the Further Amended Points of Claim, were made by Mr Pszczonka to Mr Wakefield in June 2019.

324. However, as noted above, the representations concerned the RiseWall product generally, not the specific goods delivered to the Site.

325. Although I have found that the product delivered to the Site was not of acceptable quality and not fit for the purpose of being an easily installed formwork system, Actol did not tender evidence and did not seek to establish that the RiseWall Super Finish 160 Series product was, generally, not:

of high quality finish

true and straight

perfect flat finish

capable of erection very quickly

flexible in design or

compatible with all plans.

326. Mr Pszczonka’s evidence concerning the conversation with Mr Wakefield in June 2019 was:

“I recall a conversation along the lines set out. Pro 9 is a competitor’s product that in my view, leaves walls with a rough surface. Rise Products’ Rise Wall products use fibre cement sheets that leave a much smoother surface than Pro 9.”

327. That suggests that the statement “you won’t have any problems like you did with Pro 9” was made in the context of discussions concerning the surface finish of the product.

328. In that context, even if the representation is characterised as a representation as to a future matter, there was evidence that Rise Products had reasonable grounds for the representation, that is “Rise Wall products use fibre cement sheets that leave a much smoother surface than the Pro 9”.

329. Mr Pszczonka was not challenged on his evidence in that regard.

330. Accordingly, I am not persuaded on the balance of probabilities that Actol has established that the Performance Representations were misleading and deceptive in breach of s 18 of the ACL.

331. It follows that Actol’s case pursuant to s 18 of the ACL must fail, both against Rise Products and against Mr Pszczonka.

Reliance and Damages

332. I note that, even if I had found that Rise Products and/or Mr Pszczonka had breached s 18 of the ACL, I would not have found that Actol had established any loss flowing from those breaches.

333. Actol pleaded that, but for the representations, it would not have entered into the contract with Rise Products. Had Actol not entered into the contract with Rise Products for the acquisition of the RiseWall formwork, it would have needed to utilise another method of constructing the ground floor walls of the four houses.

334. Actol’s evidence did not disclose what alternative method Actol would have adopted. As the anticipated advantages of the RiseWall system included the speed with which it could be erected and the cost of acquiring and erecting it, it may be assumed that any alternative method of installation of the ground floor walls would have been more expensive than the sum agreed with Rise Products and 3Form.

335. The measure of Actol’s loss would be the difference between what it has cost Actol to acquire and fill the RiseWall formwork, including the rectification of defects, and what it would have cost Actol to construct the ground floor walls if it had adopted a different method of construction.

336. Actol would also be entitled to claim compensation for the additional time which the completion of the walls took beyond what would have been the case if an alternative method of construction had been adopted.

337. Actol did not tender any evidence to establish either the alternative method of construction it would have used, the cost of that alternative method of construction, or the time which walls constructed by that alternative method would have taken to completion.

338. It cannot be said that such evidence would not have been available should Actol have sought to obtain it. Accordingly, on the principles outlined in Gallagher v Masters Installation Pty Ltd [2017] NSWCA 117 at [51], no compensation can be awarded.

339. Because the claim for misleading and deceptive conduct has failed, it is not necessary to consider Rise Products’ submission that the claim is apportionable and that 3Form and Gledswood are concurrent wrongdoers.

Actol’s claim to reimbursement of the cost of goods not delivered

340. Actol’s claim to reimbursement of the cost of the goods not delivered by Rise Products, as pleaded and outlined in its written submissions, is founded upon the alleged repudiation of the contract by Rise Products.

341. Actol relied upon the failure of 3Form (and Rise Products) to complete the construction of the ground floor walls within three weeks of delivery of the formwork panels for the first floor. Actol submitted:

“A period of nine week passing, with no final installation or concrete pour date in sight, signalled an intention by Rise not to comply with the agreement that Actol says that it entered into with them. The delay was simply unreasonable. It was a breach of an essential term of the contract.

…

Actol therefore says it was entitled to accept Rise’s repudiatory conduct and signal its intention to not proceed with the first floor panels.”

342. As Rise Products had no obligation to install the formwork or finish the walls, I do not accept that Rise Products had repudiated the contract between Rise Products and Actol.

343. However, I am satisfied that the issues with the product, which I have referred to above, were such that Actol was entitled to reject the undelivered portion of the goods the subject of the contract.

344. Rise Products’ own evidence was that the panels for the upper floors had been specifically manufactured for the project. Mr Pope stated in his affidavit:

“The product had to be custom-made for the job at the Site and is still sitting in a warehouse in St Marys.”

345. It is implicit in that evidence that the panels for the first floor to which Mr Pope referred incorporated the same issues with inconsistent tongue widths as the product which had been delivered for the construction of the ground floor. Had Rise Products sought to deliver the balance of the order, Actol would have been entitled to reject it as not of acceptable quality and not fit for purpose.

346. In circumstances where Rise Products has not sought to deliver the goods, I consider that Rise Products has implicitly accepted that the goods have been rejected. Rise Products has not sought to tender performance of the balance of the contract in the form of the delivery of defect free product. Although Rise Products did, by its solicitors’ letter of 22 May 2020, demand that Actol arrange for the collection of the remaining product, that was the product in storage since September 2019, which Actol was not required to accept. Rise Products has not at any stage indicated that it has available product which does not suffer from the issues which I have identified. In these circumstances, the only available conclusion must be that Actol rescinded the contract, or the parties have abandoned it, to the extent that it requires the delivery of the balance of the order.

347. In those circumstances, Actol is entitled to restitution of the amount paid for the goods which were not delivered. The amount in question is half of the sum paid by Actol for the RiseWall product, that is $50,650.60.

348. The question arises whether the Tribunal has jurisdiction to order the repayment of that sum. The claim made by Actol arises in restitution, as reimbursement of monies paid for goods not delivered. Although the goods were intended for incorporation into a residential building, I do not consider that Actol’s claim to repayment of monies paid for the goods is a “building claim” within the meaning of s 48A of the Home Building Act. “Building claim” is defined in s48A, for the purposes of Part 3A of the Home Building Act, as follows:

“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 two 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 or services, but does not include a claim that the regulations declare not to be a building claim.”

349. “Building goods or services” is defined as follows:

“building goods or 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, or otherwise does, that work, or

(b) supplied in any circumstances prescribed by the regulations to the person who contracts to do that work.”

350. Although the undelivered RiseWall panels were contracted to be supplied for the carrying out of residential building work, the construction of reinforced concrete walls, they were not contracted to be supplied by the person who contracted to do, or otherwise did, that work. There is no provision in the regulations which affects either definition.

351. Accordingly, the Tribunal does not have jurisdiction pursuant to s 48K of the Home Building Act to order restitution of the amount paid for the undelivered RiseWall product.

352. Nevertheless, the Tribunal does have jurisdiction pursuant to s 79J of the Fair Trading Act 1987 (NSW) to determine a consumer claim.

353. A “consumer claim” is defined, relevantly, in s 79E as:

“a claim by a consumer, for one or more of the following remedies, that arises from a supply of goods or services by a supplier to the consumer (whether or not under a contract) or that arises under a contract that is collateral to a contract for the supply of goods or services—

(a) the payment of a specified sum of money”.

354. Pursuant to s 79D “consumer” includes a small proprietary company within the meaning of the Corporations Act 2001 (Cth).

355. Section 79H provides:

“For the purposes of this Part:

(a) a person or body claiming to be a consumer is to be presumed to be a consumer until the contrary is proved, and

(b) in any legal proceedings (including proceedings before the Tribunal), the onus of proving that a person or body claiming to be a consumer is not a consumer is on the party who seeks to establish that fact.”

356. Although Actol alleged in its Further Amended Points of Claim that it was a “consumer” within the meaning of the Competition and Consumer Act 2010 (Cth), it does not explicitly allege that it is a consumer for the purposes of the Fair Trading Act. Nevertheless, it is clear, both from the nature of the claims made in the Further Amended Points of Claim and from Actol’s written submissions, that it does claim to be a consumer for the purposes of the Fair Trading Act. Rise Products did not tender evidence to establish that Actol is not a small proprietary company within the meaning of the Corporations Act, (where that term is defined in s 45A(2)). I therefore proceed on the basis that Actol is a small proprietary company and therefore a consumer for the purposes of the Fair Trading Act.

357. Pursuant to s 79D of the Fair Trading Act, “supplier means a person who, in the course of carrying on (or purporting to carry on) a business, supplies goods or services.” Clearly Rise Products supplies RiseWall product in the course of carrying on a business.

358. Accordingly, the claim by Actol against Rise Products for reimbursement of the amount paid for the undelivered goods is a consumer claim and the Tribunal has jurisdiction to determine it pursuant to s 79J of the Fair Trading Act.

359. The question then arises whether the limit of the Tribunal’s jurisdiction in respect of the claim is $40,000, as limited by s 79S of the Fair Trading Act at the time the proceedings were commenced, or $100,000, as provided by regulation 13A of the Fair Trading Regulation 2019 (NSW), which came into effect on 18 July 2022.

360. Section 79S of the Fair Trading Act relevantly provides:

“79S Monetary limit on Tribunal’s jurisdiction to make orders

(1) The Tribunal has no jurisdiction to make, in respect of a particular consumer claim, an order or orders in favour of the claimant (or, where there are two or more claimants, in favour of those claimants) if the relevant total under or because of the order or orders would exceed the prescribed amount.

(2) For the purposes of subsection (1), the relevant total is the total of—

(a) the amount or amounts (if any) of money to be paid, and

(b) the value or values (if any) of the work to be performed, or the services to be supplied, and

(c) the amount or amounts (if any) of money to be declared not to be due or owing, and

(d) the value or values of goods (if any) to be delivered or replaced.

…

(7) In this section—

…

prescribed amount means $40,000 or such other amount as is prescribed for the purposes of this section.”

361. Regulation 13A of the Fair Trading Regulation 2019 (NSW), which was inserted into the Regulation by the Fair Trading Amendment (Monetary Limit on Orders) Regulation 2022 (NSW) and came into effect on 18 July 2022, provides:

“13A Monetary limit on Tribunal’s jurisdiction to make certain orders

For the Act, s 79S(7), definition of prescribed amount, the amount of $100,000 is prescribed.”

362. The amendment regulation did not contain any transitional provisions indicating whether the increased jurisdictional limit of $100,000 would be applicable to proceedings which had already commenced.

363. Rise Products submitted that, by virtue of the presumption against the retrospective operation of legislation, regulation 13A should not be construed as affecting existing proceedings.

364. Actol submitted, in reliance upon the decision in Gaskell and Bourke v Northshore Homes Pty Ltd and Nazha [2021] NSWCATCD 33, that, by reason of the provisions of s 74(3) of the Fair Trading Act, neither s 79S nor regulation 13A limited the damages that could be awarded in these proceedings. Actol’s submissions otherwise appeared to submit that, if the jurisdiction of the Tribunal was limited by the provisions of the Fair Trading Act, the applicable limit upon the Tribunal’s jurisdiction should be $100,000.

365. Section 74(3) of the Fair Trading Act relevantly provides:

“74 Actions for damages and compensation orders

…

(3) The Tribunal may decide the matter of whether a person has suffered loss or damage because of the conduct of another person that constitutes a local contravention or a contravention of Chapter 2 or 3 of the ACL if that matter arises in connection with another matter the subject of proceedings in the Tribunal. In deciding the matter of loss or damage, the Tribunal may award such sum, and make such ancillary orders, as it thinks fit.”

366. In Gaskell the Tribunal determined that the limitation in s 79S did not apply to a claim against the second respondent, a director of the first respondent building company, for misleading and deceptive conduct in breach of s 18 of the ACL. The Tribunal found that it had jurisdiction in respect of the claim for breach of s 18 pursuant to s 73(4) of the Fair Trading Act, because the claim arose “in connection with another matter the subject of proceedings in the Tribunal, namely the owner’s case against the first respondent in relation to a building claim as defined by the Home Building Act”. Actol’s submissions regarding the decision in Gaskell did not appear to comprehend the basis upon which the Tribunal found it was not restricted in the amount it could award by s 79S of the Fair Trading Act.

367. Section 74(3) only vests jurisdiction in the Tribunal with respect to claims for damages in respect of contraventions of chapters 2 and 3 of the ACL. Chapter 2 of the ACL comprises sections 18 to 24. Chapter 3 of the ACL comprises sections 29 to 150.

368. A claim for restitution of monies paid for goods not delivered is not a claim for damages in respect of a contravention of chapters 2 or 3 of the ACL.

369. Accordingly, s 74(3) of the Fair Trading Act is clearly not applicable and it is unnecessary to consider the decision of the Appeal Panel in John McDonald Building Services Pty Ltd v Gusa [2022] NSWCATAP 60 which, at first blush, appears to be inconsistent with the decision in Gaskell.

370. Thus, the issue requiring to be determined is whether regulation 13A is applicable in these proceedings.

371. Section 30 of the Interpretation Act 1987 (NSW) provides:

“30 Effect of amendment or repeal of Acts and statutory rules

(1) The amendment or repeal of an Act or statutory rule does not—

(a) revive anything not in force or existing at the time at which the amendment or repeal takes effect, or

(b) affect the previous operation of the Act or statutory rule or anything duly suffered, done or commenced under the Act or statutory rule, or

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act or statutory rule, or

(d) affect any penalty incurred in respect of any offence arising under the Act or statutory rule, or

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability or penalty,

and any such penalty may be imposed and enforced, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, as if the Act or statutory rule had not been amended or repealed.

(2) Without limiting the effect of subsection (1), the amendment or repeal of an Act or statutory rule does not affect—

(a) the proof of any past act or thing, or

(b) any right, privilege, obligation or liability saved by the operation of the Act or statutory rule, or

(c) any amendment or validation made by the Act or statutory rule, or

(d) the operation of any savings or transitional provision contained in the Act or statutory rule.

(3) This section applies to the amendment or repeal of an Act or statutory rule in addition to, and without limiting the effect of, any provision of the Act or statutory rule by which the amendment or repeal is effected.

(4) In this section, a reference to the amendment or repeal of an Act or statutory rule includes—

(a) a reference to the expiration of the Act or statutory rule,

(b) a reference to an amendment or repeal of the Act or statutory rule effected by implication,

(c) a reference to the abrogation, limitation or extension of the effect of the Act or statutory rule, and

(d) a reference to—

(i) the exclusion from the application of the Act or statutory rule, or

(ii) the inclusion within the application of the Act or statutory rule,

of any person, subject-matter or circumstance.”

372. In considering whether an amendment to legislation has retrospective effect, the principle applicable at common law, that is in the absence of a provision such as s 30, was expressed by Dixon CJ in Maxwell v Murphy (1957) 96 CLR 261 at 267:

"The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But, given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, or for that matter to vindicate an immunity or privilege, notwithstanding that before the change in the law was made the accrual or establishment of the rights, liabilities, immunity or privilege was complete and rested on events or transactions that were otherwise past and closed. The basis of the distinction was stated by Mellish LJ in Republic of Costa Rica v Erlanger [(1876) 3 Ch D 62, at 69]. 'No suitor has any vested interest in the course of procedure, nor any right to complain, if during the litigation the procedure is changed, provided, of course, that no injustice is done'."

373. As Pearce records in Statutory Interpretation in Australia, Ninth Edition 2019, at 10.37:

“it does not appear that the courts regard the statutory test as leading to any result different from that which would flow from an application of the common law presumption.”

374. Pearce cites, in support of that proposition, the High Court decision in Carr v Finance Corporation of Australia Ltd (No 2) [1982] HCA 43; (1982) 150 CLR 139, at 152.

375. In Robertson v City of Nunawading [1973] VR 819, at 827, the Full Court of the Supreme Court of Victoria held, referring to s 7(2) of the Acts Interpretation Act 1958 (Vic) which was in similar terms to s 30(1) of the Interpretation Act:

“There may be some areas in which the limits of the common law principle and those of this statutory provision are not the same. The case where an amending statute imposes an entirely new obligation may be one covered by the common law principle and not by the statutory provision. But, for present purposes, the quality of the ‘right’ required for the purpose of the statutory provision can be tested in the same way as a right for the purpose of applying the common law principle”.

376. See also R v Papanicolaou (No 4) [2021] NSWSC 1698 at [38], where Wright J held:

“38 … The principles to be applied in construing [the relevant provisions which had been amended] include the general rule of the common law that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events: Maxwell v Murphy (1957) 96 CLR 261 at 267 (Dixon CJ); [1957] HCA 7; Rodway v The Queen (1990) 169 CLR 515 at 519 (Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ); [1990] HCA 19. Section 30 of the Interpretation Act, …, is a statutory provision to essentially the same effect.”

377. In my view it is clear that the enactment of regulation 13A does not affect any right, privilege, obligation or liability acquired or accrued under the Fair Trading Act or Regulation.

378. The past events giving rise to the liability on the part of Rise Products were not affected by the limit on the jurisdiction of the Tribunal imposed by s 79S or by the enactment of a regulation increasing that limit. Those past events have, as I have determined, given rise to a right of Actol to reimbursement and a liability to reimburse Actol on the part of Rise Products. Adapting the words of Dixon CJ, “the law appointing or regulating the manner in which [those rights and liabilities] are to be enforced … by judicial remedy” is affected by the enactment of regulation 13A, but the rights and liabilities themselves are not.

379. In this context, the statement of Mellish LJ quoted by Dixon CJ in Maxwell v Murphy is apt. Rise Products had no vested interest in the limit imposed upon the capacity of the Tribunal to make orders in respect of a consumer claim, nor any right to complain if, during the litigation, that capacity is changed.

380. Rise Products submitted that it “might have conducted the case and any negotiation of settlement differently had it been aware of [the] change in exposure” arising from the enactment of regulation 13A.

381. Rise Products did not particularise any way in which it claimed it “might” have acted differently. I do not consider that knowledge that the limit of jurisdiction was $100,000 rather than $40,000 would have affected any decision made by Rise Products in relation to the substantive conduct of the proceedings. Any decisions made by Rise Products in relation to settlement offers seem to me to be relevant only to the consideration of questions of costs, where they may be brought into consideration, and the impact of the increase in jurisdiction taken into account.

382. In any event, the question whether potential injustice would result from the application of the increased limit on jurisdiction to existing cases, must be answered in general, and not by reference to the specific circumstances of the instant case.

383. Once it is recognised that there is no vested right to have proceedings determined in the Tribunal subject to a particular limit on jurisdiction, it follows that there can be no injustice to a party which may find that the jurisdictional limit has increased during the pendency of the proceedings in the Tribunal.

384. Accordingly, I find that the limit of the Tribunal’s jurisdiction in respect of the consumer claim brought by Actol against Rise Products is $100,000 and I will order Rise Products to pay Actol the full amount paid in respect of the RiseWall products not delivered, that is $50,650.60.

Costs

385. The parties sought to be heard with on the question of costs.

386. The amount claimed in the proceedings exceeds $30,000. Accordingly, rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) is applicable and special circumstances are not necessary before I may make an order in relation to the costs of the proceedings.

387. Although Actol has succeeded in obtaining a judgment in its favour, it has succeeded in only one element of its claim and in a small proportion of the total amount claimed.

388. Presumptively, Gledswood would be entitled to an order for costs, as it has succeeded in full, but it was not legally represented at the hearing and may choose not to seek an order for costs.

389. I will make directions permitting any party to make an application for costs, accompanied by submissions which should not exceed five pages, within 14 days. Such application should include a detailed statement of the orders sought, including in relation to the allocation between Actol and Rise Products of any costs that may be awarded to Gledswood.

390. All parties will have 14 days to respond to submissions filed by other parties. Submissions in response should not exceed five pages. I will allow parties to file submissions strictly in reply within a further 14 days.

391. Submissions filed by any party should address the question whether the issue of costs can be determined on the basis of the written submissions and without a further hearing.

392. If no application is filed in accordance with my orders there will be no order as to costs.

ORDERS

393. My orders are:

In proceedings HB 20/35833

1. The first-named respondent, Rise Products Pty Ltd, is to pay the applicant, Actol Pty Ltd, the sum of $50,650.60 within 28 days of the date of publication of this decision.

2. The proceedings are otherwise dismissed.

In proceedings HB 21/30136

3. The proceedings are dismissed.

In both proceedings

4. Within 14 days of the date of publication of this decision, any party may file submissions, not exceeding five pages, and evidence in support, seeking an order in respect of the costs of the proceedings.

5. If any party files submissions in accordance with order 4, the other parties may file submissions in response, not exceeding five pages, and any evidence relied upon, within a further 14 days.

6. Submissions strictly in reply to submissions filed in accordance with order 5, not exceeding three pages, may be filed within a further 14 days.

7. Any submissions filed in accordance with orders 4 and 5 must address the question whether the issue of costs can be determined on the basis of written submissions and without a further hearing.

8. If no submissions are filed in accordance with order 4, there will be no order in relation to the costs of the proceedings.

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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

Amendments

22 September 2023 - Formatting amendments.

Decision last updated: 22 September 2023