Anderson v Gold Emporium Pty Ltd t/a Cordony Constructions

[2022] NSWCATCD 110

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Anderson v Gold Emporium Pty Ltd t/a Cordony Constructions [2022] NSWCATCD 110

Hearing dates:

22, 23 February, 23 April and 6 October 2021

Date of orders:

21 June 2022

Decision date:

21 June 2022

Jurisdiction:

Consumer and Commercial Division

Before:

D Robertson, Senior Member

Decision:

(1) Within four months of the date of publication of these reasons the respondent is to carry out on the applicants’ property the following rectification work in a proper and workmanlike manner:

(a) Remove the floor tiles and tile screed and the existing membrane in the shower and bath area only of the main bathroom, re-screed the prepared concrete substrate affording a minimum of 1:80 grade, waterproof the area with a compatible polyurethane waterproofing product in accordance with manufacturer’s requirements, and replace tiles.

(b) Install a 50 mm water stop angle at the bifold doors separating the interior of the house from the internal al fresco area of the rear deck, including regrading and resurfacing the rear deck to the extent necessary to enable the installation of the water stop angle, or, at the respondent’s option, installing a grated drain at the boundary of the internal and external areas of the deck.

(c) Carry out the scopes of works described in the “Preliminary Bill of Quantities and Cost Estimate for Rectification of Additional Defects” dated 11 September 2020 prepared by Mr Mathew Poole, in respect of items identified as ADD 4, ADD 8 to 11, ADD 12 to 14 and ADD 15 to 19.

(2) Subject to order (3) below, the respondent is to pay the applicants’ costs of the proceedings as agreed or assessed.

(3) Either party may file and serve written submissions within 14 days of the date of this decision seeking a different order in relation to the costs of the proceedings and in such event order (2) above will cease to have effect.

(4) If either party files submissions in accordance with order (3), the other party may file submissions in response within a further 14 days.

(5) Any submissions filed in accordance with orders (3) and (4) must address the question whether the question of costs may be determined on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).

Catchwords:

BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – Breach of statutory warranties – Section 48MA - Preferred outcome

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Civil and Administrative Tribunal Rules 2014 (NSW)

Environmental Planning and Assessment Act 1979 (NSW)

Home Building Act 1989 (NSW)

Swimming Pools Act 1992 (NSW)

Cases Cited:

Bell Solar Pty Limited t/as Sunboost v Anderson [2021] NSWCATAP 278

Bellgrove v Eldridge (1954) 90 CLR 613

Gallagher v Masters Installation Pty Ltd [2017] NSWCATAP 117

Hadley v Baxendale (1854) 9 Exch 341

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Mark Anderson and Kathy Anderson (Applicants)
Gold Emporium Pty Ltd t/a Cordony Constructions (Respondent)

Representation:

Counsel:
T Kent (Respondent)

Solicitors:
Creagh & Creagh (Respondent)

File Number(s):

HB 20/31442

REASONS FOR DECISION

Introduction

1. In these proceedings the applicants, Mr and Mrs Anderson, seek compensation in respect of what are alleged to be defective residential building works carried out by the respondent, Gold Emporium Pty Ltd trading as Cordony Constructions. As presented at the hearing, the applicants’ claim was for $381,213.16. The applicants’ claims arose in respect of five alleged defects or categories of defects, each said to involve a failure to carry out work with due care and skill and/or a failure to comply with the National Construction Code of Australia, in breach of the warranties implied into the contract between the parties by s 18B of the Home Building Act 1989 (NSW) (HBA):

1. Cost to remediate bathroom             $9,661.39

2. Cost of rectifying non-compliant back deck      $135,037.66

3. Cost of rectifying non-compliant lower area      $182,327.06

4. Cost to move pool filter and box            $2,969.61

5. “Cost to rectify defects listed in Attachment NN other than back deck”  $1,650

2. The balance of the applicants’ claim related to the cost of engaging experts, the “cost of retaining Angus Donald to project manage beyond the original defect period”, legal costs and the filing fee in the Tribunal.

3. The respondent resists the claim, submitting that the applicants have failed to establish that the works carried out by the respondent are defective or in breach of the implied warranties. The respondent submits in the alternative that, if any building works are defective, the Tribunal should make an order pursuant to s 48O of the HBA requiring the respondent to rectify the defective works. The respondent relies upon s 48MA of the HBA which provides:

48MA   Rectification of defective work is preferred outcome in proceedings

A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.

Background

4. The following statement of the background to the proceedings either reflects factual matters which are not in dispute or documentary material received in evidence. Save to the extent that matters are said to be in dispute, the statement of the background to the proceedings represents my findings of fact. Most of the correspondence from the applicants was signed by Mr Anderson only. Nevertheless Mr Anderson was acting on behalf of both applicants and, unless it is necessary to distinguish between actions or communications from one of the applicants, I will in these reasons for decision treat such communications as sent on behalf of both applicants.

5. The applicants own a property in Epping New South Wales. On 10 May 2017, the applicants and the respondent entered into a Simple Works Contract in the Australian Building Industry standard form for the carrying out by the respondent on the applicant’s property of alterations and additions to the existing dwelling on the property. The scope of works the respondent agreed to carry out was that set out in drawings numbered A01 to A18 and S000, S00 and S01 to S05 which formed part of the contract. The drawings were prepared by Mr Angus Donald, who conceded in the course of oral evidence at the hearing that, although he prepared the drawings and purported to act as architect in relation to the contract, he was not, at the time he did so, a qualified architect.

6. The work the subject of the contract included excavation and construction of a lower ground floor including storage, study, media and games rooms, the removal of an existing bathroom and ensuite and reconstruction of the bathroom and ensuite with new tiling, the construction of a concrete suspended deck at the rear of the property, and supplying and laying tiles to the lower patio area, among other work.

7. The work commenced on or about 15 May 2017. Practical completion was achieved on 11 October 2018.

8. In late 2018 or early 2019, the applicants raised with the respondent the proposition that marble tiles installed by the respondent in the main bathroom were discoloured. Discussions between the parties concerning this issue did not lead to a resolution and in April 2019 the applicants engaged Mr Nicholas Joannides of Partridge Remedial Pty Ltd to provide a report concerning four items:

1. Discolouration of floor tiles in the main bathroom

2. Water seepage and water flow to lower level bathroom and under the house

3. Water ingress through roof into rear ceiling at the rear of the first floor

4. Water ingress into head of doorway in lower-level at the rear of the first floor deck.

9. Mr Joannides’ report, dated 1 May 2019, concluded that there was “most likely water ingress at the bottom of the bathroom west and north walls that is likely the cause of the discolouration to the bath and shower enclosure floor tiles”. The report made recommendations for further investigation of the source of the water ingress. The report also made recommendations in relation to further investigation of the other issues in respect of which Mr Joannides had been retained to advise. The report was provided to the respondent. The applicants were dissatisfied with the respondent’s response.

10. At some point in April 2019 the parties involved Fair Trading NSW in their dispute. Although both parties filed detailed chronologies, the circumstances in which and mechanism and communication by which the involvement of Fair Trading NSW was instigated was not disclosed. It is noted at this point that neither party’s chronology was adequately cross-referenced to the evidence. Where I have not been able to identify the source document for any assertion included in either party’s chronology, I have not regarded that assertion as established by the evidence.

11. The respondent retained Mr Chris Zervos of CRD Building Consultants and Engineers to prepare a response to Mr Joannides’ report. Mr Zervos attended the premises on 15 May 2019. Mr Zervos did not prepare a formal report. In an email to the respondent dated 28 May 2019, Mr Zervos criticised Mr Joannides’ report and suggested further testing and investigation.

12. On 29 May 2019 Mr Andrew Kerin, an inspector from Fair Trading New South Wales, attended the site. On 31 May 2019 Mr Kerin issued a rectification order requiring the respondent to undertake a number of items of rectification of defective work including:

“4   Rectify the crack in the PVC adapter connecting the downpipe to the stormwater system outside the western wall of the ensuite bathroom.

5   Investigate and rectify the source of the water ingress through the eastern end of the first floor rear balcony. Make good affected surfaces, including the internal access door of the garage.”

13. The rectification order required the work to be completed by 14 June 2019.

14. On 13 June 2019 Fair Trading New South Wales issued a notice of completion of the rectification order. On the same day the applicants emailed Mr Kerin suggesting there was still water ingress. Mrs Anderson stated:

“It only took four half buckets of water. The water ingress is still occurring – from the eastern wall balcony tracking through the wall into the garage and perhaps affecting the door to swell”.

Mrs Anderson requested that the matter remain open.

15. Mr Kerin attended the site on 14 June 2019. On 20 June 2019, Mr Kerin forwarded an email to the parties in the following terms:

“I am emailing to clarify the process from here on in. I will not be issuing any further rectification orders. I will be sending a building inspection report which will identify the outstanding issue being the continual water ingress through the rear balcony. From here it is up to Mr Anderson to consider if he wishes to allow the Contractor to rectify again or seek alternate resolution. This is also the option for pursuing issues which I have not included in the rectification order.

Mr Cordony you mentioned that you would want to rectify your work. I said this was a tricky detail and if the matter was pursued at NCAT this may be considered by a member and possibly give you another attempt.

At present there is water ingress which needs to be fixed. The Contractor has had two attempts to rectify it and now Mr Anderson needs to consider his options. I will send the report shortly and that will conclude my involvement.”

16. About that time the applicants retained Mr Poole of Hydromedial Consulting to provide advice and investigate the cause of water ingress into the main bathroom and lower area.

17. At that time Mr Adam Cordony, the director of the respondent, sought access to the site, which was refused by the applicants.

18. Mr Poole’s initial report described as “The Photographic Defect Analysis Report” was completed on 16 October 2019. Mr Poole concluded in respect of the bathroom: that the cavity masonry walls did not incorporate a “compliant damp proof course”, that the cavities were breached by mortar and demolition debris, that the head flashing above the bathroom window had been incorrectly located, and that the waterproofing membrane was defective.

19. Mr Poole asserted that the cause of the defect in the waterproofing membrane was related to “insufficient surface preparation, non-compliant application and ground subsidence caused by a delay in the connection of a downpipe to a stormwater drainage point outside the affected corner of the bathroom.”

20. In relation to the tiled balcony and alfresco area Mr Poole expressed the opinion that the balcony “presents multiple major defects”, stating that the builder had “made no allowance for grade generally and for tiles and tile bed when setting out the finished height of the concrete slab. Or, the internal timber flooring battens were of insufficient height to allow for the bifold door frame to be set to a height which would allow for the tile bed to be installed with grade away from the bifold door”. Mr Poole stated that “the tiles on the balcony have been installed level and without provision for surface drainage toward the external edge and into the gutter”. Mr Poole also stated that the waterproofing was non-compliant and that “critical vertical upturns at the abutments with walls have been omitted.” Mr Poole further stated that the waterproofing detailing at junctions of dissimilar materials had not been incorporated which had resulted in “deficient adhesion of the membrane to the surface and consequential water penetration at these locations”. Finally Mr Poole expressed the opinion that “minimum surface drainage requirements have not been achieved”.

21. Mr Poole identified other defects relating to the roof and garage roof which are not relevant in these proceedings.

22. Mr Poole’s report attached over 130 pages of photographs, including photographs of a corner of the bathroom in which the tiling and screed had been removed to reveal the waterproofing membrane. In three photographs a screwdriver is shown lifting part of the membrane to disclose a hole. The captions to the photographs disclose that they were taken on 7 August 2019.

23. The evidence disclosed that Mr Poole had undertaken the removal of the tiles and screed to expose the membrane. The respondent had not been invited to attend or permitted to have its own expert observe the removal of the tiles and screed. The respondent maintained that the hole in the membrane was caused when Mr Poole removed the tiles and screed and that the existence of the hole in the membrane was not evidence of defective work. That was a substantial issue in the proceedings.

24. After receiving Mr Poole’s report the applicants wrote to the respondent offering the respondent the opportunity to meet with Mr Poole on site, provided the respondent paid Mr Poole’s professional fees for attending. The applicants did not at that stage provide a copy of the report to the respondent or inform the respondent of Mr Poole’s name.

25. On some date in December 2019 or January 2020 the applicants lodged a further complaint with Fair Trading New South Wales.

26. An email from Mr Cordony to Mr Mark Daniel, Manager – Dispute Resolution and Inspection Branch, Fair Trading New South Wales, sent on 14 January 2020, referred to telephone conversations on 23 December 2019 and 10 January 2020 in relation to the respondent’s dispute with the applicants. In that email Mr Cordony recorded that the applicants had claimed to have provided Fair Trading with a “new defects analysis report outlining a significant new number of alleged defects”. Mr Cordony noted that the respondent had not been provided with details of the report.

27. In response Mr Daniel stated “I am yet to review the new complaint from Mr Anderson but intend to do so this week.”

28. On 17 January 2020, Mr Pearson, of Creagh & Creagh, the respondent’s solicitors, wrote to the applicants conveying the respondent’s offer that it would agree to hold an on-site meeting with the applicants’ building expert on the basis that the respondent would meet the cost of the expert’s attendance, capped at two hours, provided that the respondent was provided with an electronic copy of the full defects report prior to the meeting. On 24 January 2020 the applicants responded to the respondent’s solicitors offering to provide the full Hydromedial report, provided the respondent paid $495 being the cost of two hours of Mr Poole’s time and $6,975.80 being half the cost of Mr Poole’s report.

29. On 7 February 2020 Mr Daniel advised Mr Cordony that the applicants had not given permission for Mr Poole’s report to be made available to the respondent but indicated that he would list the items raised as concerns.

30. Later on 7 February 2020, Mr Daniel emailed to Mr Cordony “a defect list based on the items raised in the Hydromedial report which Mr Anderson has not approved for release to you”. Mr Daniel referred to a meeting to take place on site, noting that Mr Poole from Hydromedial would be on-site in attendance “to provide clarification where required”.

31. The defect list identified 14 items as follows:

1   Floor waste not installed to standard.

2   DPC does not extend across cavity.

3   Head flashing over window incorrectly installed.

4   Cavity bridged by mortar and debris.

5   Waterproof membrane to bathroom incorrectly installed.

6   Mechanical fastenings to metal roofing goods not compliant

7   Defective roof tile pointing.

8   Roof tiles not adequately fastened.

9   Sarking not correctly installed.

10   Exposed tile batten not suitable for exterior use.

11   Non-compliant roof flashing to roof vent.

12   Defective waterproofing to rear balcony.

13   Defective tiling to alfresco area - delamination; absent expansion joints; inadequate fall.

14   Defective sill flashing to gable end fixed glazing.

32. On 11 February 2020 a meeting occurred on site, attended by Mr Daniel, Mr Anderson, Mr Cordony, Mr Chris Cordony (Mr Cordony’s father), Mr Poole, and Ms Ruth Polin, a solicitor from Creagh & Creagh.

33. On 18 February 2020 Mr Daniel issued a rectification order specifying works to be completed by 10 April 2020. The work required by the rectification order included:

“3   Ensure that the waterproof membrane to the shower/bath area of the bathroom is installed to ensure it is continuous and meets the performance requirements of the BCA.

Destructive investigation revealed membrane had been laid over exposed concrete moisture barrier at the wall/floor junction and had failed. This failure allowed moisture penetration from the exterior to the interior of the bathroom.”

“9   Identify and eliminate water penetration to the rear balcony.

There is evidence of water penetration from the rear balcony particularly associated with, but not limited to, perimeter flashing; waterproofing of wall junctions and fixing of balustrade posts.”

“11   Ground floor rear rooms have evidence of moisture penetration.

This area abuts an existing footing which is above floor level and groundwater lies against the footing.”

“12   Ensure that filter box beside the pool fence is constructed in accordance with the requirements of the standard and does not provide footholds or handholds that may be used to gain entry to the pool area.

The top of the filter box was observed to be within the non-climbable zone of the railing pool fence.”

34. On the same day the applicants wrote to Mr Pearson, purporting to set out two options for the resolution of the respondent’s obligations. The first option involved the respondent undertaking the rectification work subject to conditions including the provision of a scope of works prior to undertaking any work, supervision of all work by Mr Poole, and the respondent paying compensation in the amount of approximately $40,000. The second option involved the respondent paying the costs of rectification work, estimated to be around $194,000.

34. On 19 February 2020 Mr Pearson wrote to the applicants in the following terms:

“Both parties are in receipt of the rectification order issued 14 February 2020.

Our client confirms that it will comply with the terms of the rectification order and to this end has started organising the appropriate resources to complete the works.

We note the rectification order places the obligation upon yourselves, to provide access to the site within normal working hours. We assume that you will comply with your obligation.”

36. On 19 February 2020, the applicants responded that they intended to comply with their obligation to provide access but stated that that was “conditional upon” the conditions outlined in the applicants’ letter of 18 February 2020.

37. After further correspondence between the parties, on 21 February 2020 Mr Daniel emailed the parties stating:

“As the work is being carried out under an Order from Fair Trading please refer to the order and the issuing correspondence.

•    Gold Emporium Pty Ltd has been ordered to carry out rectification work and it is a condition of their licence that they comply with the order.

•    The owner of the property is required to provide access during normal working hours for the contractor to comply with the order.

As the contractor is responsible for the rectification work it the responsibility of the contractor to ensure the work is carried out by individuals they are confident are appropriately qualified and licensed to do that work.

It is to the benefit of both parties if the owner and the contractor can co-operate in scheduling the work and agreeing on the scope of the work and the proposed methodology.

However, it is not the owner's role to direct the work, who should do it or how it should be done. In order for the contractor to be able to carry out the work the owner needs to provide access to the site during normal working hours. As discussed with both parties the contractor should not be impeded from carrying out the rectification work. If, at the expiry of the Order period, the owner is not satisfied that the Order has been complied with Fair Trading will make an assessment of whether the Order has been complied with.

The property belongs to the owner and the owner has every right to refuse access to the site if they are not satisfied that the contractor will carry out the rectification work to their satisfaction.

I am happy to discuss any aspect of this process with either party and the options available to them.”

38. The applicants forwarded a number of emails to Mr Pearson following that email. In those emails the applicants referred to an incident in December 2019 in which Mrs Anderson claimed to have been followed and intimidated by Mr Cordony. That incident was the subject of evidence in the proceedings. To the extent necessary, I will address it further below. In the correspondence following Mr Daniel’s email, the applicants sought to impose upon the respondent a condition that the respondent provide a scope of works and proposed methodology for the rectification works. The applicants also sought an apology to Mrs Anderson.

39. On 22 February 2020, Mr Pearson emailed the applicants:

“There have been a number of emails from you in relation to what should be straight forward arrangements for undertaking rectification works that were discussed on site and the subject of the rectification order.

Adam Cordony and his assistant builder will attend at 7 am Monday to conduct the works. The works will follow the schedule our client has forwarded to you. They will not enter the house unless invited and will at all times be respectful of you and Mrs Anderson.”

40. On 23 February 2020 Mr Cordony forwarded to the applicants a “proposed methodology for stage 1 rectifications commencing Monday, 24 February 2020”. The work listed in the attachment to that email is not the subject of the present dispute.

41. On 28 February 2020 Mr Cordony forwarded to the applicants the “proposed schedule and methodology for stage 2 of the rectification works”. The email identified the requested dates for the works as 3 to 5 March and 9 and 10 March but noted “if you have any times that would be more suitable for yourself and Kathy, please let me know”. The work listed in the attachments to that email included item 9 from the rectification order, that is “identify and eliminate water penetration to the rear balcony”. The proposed rectification involved “supply and install new aluminium angle to wall and floor junctions and re-waterproof” and “remove tiles around balustrade posts and re-waterproof with bandage”.

42. The applicants responded that day suggesting that Thursdays and Fridays were not suitable to the applicants and stating:

“2.    The scope and methodology you have provided for item 9 is, In Mat Poole's words "totally inadequate" and will not achieve anything close to be deemed a satisfactory solution. I am ready, willing and able to allow you to bring your own expert on site to get advice on how to make a suitable approach to rectification.

3.    Although it is up to you to decide the scope, scheduling and methodology, I strongly suggest you prepare and present a full scope and methodology for undertaking the deck and bathroom work following input from an expert rather than the piecemeal and substandard approach appearing to lack skill, care and diligence in terms of the contact, BCA and standards that you propose.”

43. That afternoon Mr Daniel emailed the parties:

“I have been copied in on correspondence between the parties in scheduling and scoping work.

I understand there is disagreement over the scope of work to address item 9 and also aspects of item 3.

As discussed separately with both parties, please don’t allow this to derail completion of other items in the order. It is in the interests of both parties to complete as much of the rectification work as possible.

Item 9 appears to be the most contentious and problematic. While progressing your discussions of a methodology you can both agree to, please ensure the other items in the Order are completed in the most timely manner.”

44. At 2:55 pm that afternoon the applicants emailed Mr Cordony, stating:

“I have no issue with you addressing and progressing items 4, 5, 6, 7, 8, 10, 11, 12 and 13 on the Rectification Order.

Item 9 is major work requiring an integrated and skilful methodology to do it properly. When you only provide dribs and drabs of how you propose rectifying the balcony /deck, this is not suitable. For me to be comfortable and to obtain expert advice, I need the full proposed methodology from start to finish. The advice I have received on what you have proposed so far is that it would be premature and inefficient to build the hob at this stage. Given the lack of fall on the deck, significant and expert setting up of waterproofing is required, not just removal of a row of tiles.

Under the contract I am relying on your skill and expertise to rectify to the BCA and Standards. I will be having Mat Poole examine your work when responding to Fair Trading in relation to my satisfaction with the outcome of the Rectification Order.

Similarly with the main bathroom (items 1,2 and 3). Significant work is required to rectify the water penetration and damage done. I require a full and complete scope of works and methodology rather than piecemeal, ad hoc information so that Mat Poole can advise me.”

45. On 10 April 2020 Mr Cordony forwarded to Mr Daniel a report recording the completion of the defects listed in the rectification order of 18 February 2020 other than items 3 and 9. Mr Cordony reported that he had engaged Mr Chris Zervos, a building expert from CRD Building Consultants, to assess the outstanding defects and provide a scope of works.

46. On 14 April 2020 an on-site meeting took place at which Mr Zervos inspected the bathroom and rear deck.

47. At 6:46 pm on 14 April 2020 Mr Daniel emailed both parties, attaching an outline of the extent to which the rectification order of 14 February 2020 had been complied with, “as provided by” the respondent, and noting that items 3 and 9 remained outstanding. Mr Daniel stated that, unless advised otherwise by 16 April, he would accept that the other items in the order had been complied with. Mr Daniel requested that the parties provide a timeframe for finalising a methodology for compliance with items 3 and 9 by 17 April 2020 “so that I am able to make a decision whether an extension to the rectification order will provide a reasonable scope for compliance”.

48. Mr Zervos reported the outcome of his site inspection by email to Mr Cordony on 15 April 2020. Mr Zervos stated:

“Main Bathroom –

1.    I firstly note that within the dwellings main entry, entry foyer and entry into the main bathroom, I had not been able to observe any signs of water damage to external or internal finishes.

2.    It was advised by the Building owner that an invasive inspection and a report had been conducted by another Building Consultant company and that many breaches of the Australian Standards and Building Code of Australia's had been found in relation to the bathroom waterproof membrane.

3.    I confirm I have not received a copy of this report commissioned by the Building Owner and the Building Owner had advised that they are not willing to provide me with a copy of the report unless Adam Cordony pays 50% of the costs of the report.

4.    It was advised by the Building owner that there are many defects identified from the intrusive investigations with the bathroom and the bathroom does not comply with the Building Code of Australia and Australian Standards.

5.    It was advised by the Building owner that a flood test of the bathroom membrane was not conducted by the building consultants prior to the invasive inspection and demolishing of tiles in the north/west corner of the shower recess (adjacent to the bathtub).

6.    It was advised by the Building owner that their Building Consultant Company had conducted thermal imaging and moisture testing in the shower recess and that in result of this testing the north/west corner had indicated high moisture.

7.    It was further advised by the Building Owner that the high moisture was taken as an indication of water and moisture ingress from outside the bathroom.

8.    It was clear the shower recess in the north/west corner (adjacent the bathtub) had fully adhered mosaic tiles and tile bedding (also known as screeding) that was demolished and removed (an area approximately 300mm x 300mm) as a result of the alleged invasive investigations.

9.    It was visually evident that in the location of the invasive instigations and the demolition of floor and wall tiles within the North/west corner of the shower recess (adjacent to the bathtub), that the membrane was damaged, ripped and cut.

10.   It was also advised by the Building Owner that the report has detailed the cause(s) of the high moisture within the bathroom north/west corner and alleged to have damaged the waterproof membrane.

In summary whilst considering the second hand advice received by the Building Owner and not being privileged to the intrusive investigation findings, I am unfortunately having to advise that I cannot assist with developing a scope that will address the alleged cause of the waterproofing failure.

I further clarify that if you may wish to instruct me to conduct my own testing and invasive investigations, the first step I would need to take is to confirm the performance of the waterproof membrane installed. This is conducted in form of conducting a flood test (including dye test) of the shower recess and within the main bathroom. Unfortunately I must advise this flood test is no longer possible to be undertaken as the waterproof membrane has been disturbed and clearly breached.

Whith considerations of the above, my recommendation would be to obtain a copy of the Building Owners commissioned expert report to confirm that there was or was not a flood test conducted to confirm the performance of the waterproof membrane within the main bathroom. Secondly the report will assist to understand what diagnostic steps were exactly taken prior to, during and after the invasive investigations and as to get an understanding from the other expert involved as to what is exactly claimed or alleged to be in breach of the Australian Standards and the Building Code of Australia.

Unfortunately due to the above listed circumstances and without the information I cannot make any suggestion, recommendations and or generate a scope to rectify the bathroom shower recess in an order that will address the particular cause of damage.

Southern Balcony

1.    It was observed that there was water staining within the stairwell adjoining the balcony, Water staining is evident in the adjoining gaming room and garage entrance.

2.    It was observed that the bedroom below the balcony has staining along the lower parts of the wall and floor.

3.    The external walls of the southern balcony had various openings created, it was advised by the Building owner that these openings of the external walls had been created by their Building Consultant company whom conducted intrusive investigations and the partial removal of the wall claddings and vapour barrier. These wall openings have not been temporarily covered and remain open to the elements.

4.    The wall openings show a waterproofing termination angle installed that will appears to vary from 10- 20mm approx.

5.    The wall openings shows the exposed timber frame members to be weathered and damp. The vapour barrier installed behind the cladding has been cut and breached by the intrusive investigations.

6.    Two whole saw openings where made on the eastern adjoining roof flashing, however where temporarily masked up.

7.    Wrought iron balustrade posts are recessed in the slab and positioned under the tiled floor coverings

8.    Tile floor covering levels where measured by a digital level and the digital level indications varied between 0.3-1.1% in multiple locations. Considerations where made, that the balcony is open draining and a floor survey and surface water drainage assessment would be a better indication of how the catchment area is performing

I must firstly advise that the open areas of the external walls are causing further damage by being left open. I would recommend immediately that the Building Owner have their Consultant attend to site to dry out structural timber members, temporarily treat them or protect and cover these areas that have been left open to the elements (as did along the adjoining roof flashing). Considerations to my scope of works will have to now include (but separate) these areas as contributing damage.

In regards to the notes above and my inspection my opinion is clear that the waterproofing termination heights installed to the southern balcony are non-compliant to AS 4654.2—2012 Waterproofing membranes for external above-ground use Part 2: Design and installation. I further explain this by inserting the below snippet from AS4654.2-2012;

‘2.8.1.1 Height Where the membrane termination is to prevent water entry, the finished height of the membrane above the finished surface level shall be sufficient to prevent water, including wind driven, flowing over the top of the membrane.’

I would expect to see the wind class in this region to be categorised for this balcony between N1-N3, this however still needing to be confirmed exactly and will be detailed in my scope of works.

With the above said I believe I can develop a scope of works to address the waterproofing membrane termination heights by the 27th of April, as previously advised on the 30th March 2020. I do however have to state at this stage I am unaware of any other items being claimed or problems being raised with the balcony.

It was advised by the Building Owners expert report and intrusive investigations had identified multiple issues. I therefore suggest prior to this scope being finalized and implemented that I am provided a copy of the report, if the Building Owner would like me to review and or consider any other Defect claimed. If this also is the case and I am provided additional information, further time will be needed for me to make the requested additional review and considerations.”

49. Mr Zervos included in the email a table extracted from AS4654.2 which specified “vertical upward termination heights” for wind classes N1 –N3 as follows: N1, 40mm; N2, 50mm; N3, 70mm.

50. On 17 April 2020 Mr Pearson wrote to Mr Daniel reporting that Mr Zervos had advised that he was unable to provide a methodology in respect of the bathroom without access to the “intrusive investigation findings” held by the applicants or, alternatively, conducting his own testing and invasive investigations “which seems unnecessarily time-consuming, costly and potentially damaging”. Mr Pearson advised that Mr Zervos had confirmed that he would provide a scope of works to address the waterproofing membrane termination heights for the balcony by 27 April 2020.

51. Mr Daniel replied the same day, with copies to Mr Cordony and Mr Anderson, advising that the applicants had declined to make Mr Poole’s report available unless the respondent contributed to the cost. Mr Daniel further stated:

“With regards to the points raised:

1   The potential for water ingress to the bathroom has been addressed in items 1 & 2 of the Fair Trading Rectification Order. The scope of works required now is for the reinstatement of the waterproof membrane, making good of the tiled surfaces and reinstatement of bathroom fittings that have been disturbed.There is no need for further investigations other than to provide a scope of works to re-instate the bathroom to full amenity.

2.    Mr Zervos has confirmed he is able to provide a scope of works for this aspect of the works.” 

52. On 24 April 2020 Mr Pearson forwarded to Mr Daniel, with a copy to the applicants, a scope of works prepared by Mr Zervos, providing “details of the construction methods required to rectify the lack of termination height of the waterproof membrane observed to the rear balcony”.

53. The scope of works required the installation of a “waterproof membrane termination angle (also known as a water stop) to the perimeter of the balcony and adjoining any wall or roof frames”. The water stop was required to be sized in accordance with the N2 wind classification requirements stated in AS 4654.2 – 2012.

54. On 27 April 2020 Mr Daniel emailed the parties noting that he had received the scope of works for the rectification of the rear balcony. Mr Daniel stated “for the purposes of compliance with the order I consider the proposal, if carried out with due care and skill, will achieve compliance with the order.”

55. At some point during April 2020, Mr Daniel extended time for compliance with the rectification order.

56. The respondent undertook work on the rear deck including the installation of a fresh waterproof membrane during early May 2020. The applicants maintain that that work did not satisfactorily resolve the issues with the deck, asserting, in particular, that the falls on the deck were insufficient and the water stop was not high enough .

57. On 26 May 2020 Mr Pearson emailed to Mr Daniel and the applicants a scope of works for the rectification of the bathroom, which had been prepared by Mr Cordony. The proposed scope of works involved the removal of tiles damaged in the course of Mr Poole’s invasive investigation, the removal of the section of waterproofing membrane which Mr Cordony described as having been “cut by a knife when the investigation took place”, the repair of the substrate, if damaged, and cleaning of the substrate, priming the substrate, cleaning the membrane around the repair for a minimum distance of 50 mm, priming the existing membrane, applying two coats of “Dampfix PU” over the repair area, ensuring a minimum 50 mm overlap on the existing membrane, applying a sand and cement bed/screed over the membrane, and reinstatement and grouting of the tiling.

52. On 26 May 2020 at 9:02 am, the applicants wrote to Mr Pearson, copy to Mr Daniel, asserting that the proposed scope of works was “totally inadequate” and “demonstrates his lack of understanding”. At 11:31 am the applicants wrote to Mr Daniel seeking his “urgent intervention”. The applicants attached an email from Mr Poole commenting on the respondent’s proposed scope of work. Mr Poole expressed the opinion that the scope “falls short of a minimum rectification of the bathroom floor”, noting, in particular, that “a localised patch repair of the ruptured membrane is inadequate and fails to address the likely potential of additional compliance breaches” in the preparation of the concrete substrate.

53. On 12 June 2020 Mr Daniel emailed the applicants noting that he was satisfied that items 1, 2, 4 to 8 and 10 to 13 of the rectification order had been rectified. Mr Daniel noted that item 3 remained unresolved. In relation to item 9, Mr Daniel noted:

“The Order requires the elimination of water entry from the rear balcony and there is no evidence that this has not been achieved.

Drummy tiles were not assessed but appear to be less than 5% of the tiled area and the builder advises a portion of the floor identified as drummy is laid over joists and fibre cement sheet where the main deck is laid over concrete.

Incorrect falls could not be assessed and ponding would need to be demonstrated over a general rather than localised area to sustain a finding that the work is defective.

Compliance with the scope of Work is not part of the Order, including the provision of certificates. However, the builder has been requested to provide a brief summary demonstrating to what extent the Scope was followed and to provide the waterproofing certificate.”

60. In early June 2020 Mr Poole undertook further investigations at the site and produced a further report, headed “The Photographic Defect Analysis – Preliminary Report” dated 10 June 2020. This report was forwarded to Mr Daniel who issued a further rectification order on 24 July 2020.

61. Items 2 and 4 of that rectification order were:

“2   Ensure that the slab on ground construction incorporates adequate step downs to prevent the ingress of water”

and

“4    Ensure tiled external services have sufficient fall to prevent water ingress”.

62. The applicants allege that those items were not addressed by the respondent. The rectification order stated that “Items 2 and 4 will be considered to be complied with if it can be demonstrated that the as-built rectification work achieves compliance with the performance requirements of the NCC”.

63. Mr Daniel issued a Building Inspection Report regarding compliance with the rectification order on 28 August 2020. The report recorded that the rectification order had been complied with and that Fair Trading would take no further action in relation to the work “at this time”. Mr Daniel confirmed that items 2 and 4 from the work order “remain outstanding and are the contractor’s responsibility.” Mr Daniel stated that “the items in the report are not compliant with the National Construction Code but at the time of preparing this report there was no evidence that the work as carried out failed to meet the performance requirements of the Code.”

64. Mr Daniel also stated:

“It is also noted that in order to meet the requirements of the Code, all external finished surfaces adjacent to the rear of the house would need to be completed [sic, completely] demolished and the surface lowered, in some places more than 50 mm. This action would impact integration with other external finishes such as the grassed area and pool.”

65. Mr Daniel subsequently issued a certificate on 2 September 2020, recording that the rectification order had been complied with, but noting that:

“While the order has been complied with, part of the work as built does not comply with the National Construction Code (NCC). However, at the time of preparing the report, no evidence was available to demonstrate that the work as-built did not meet the performance requirements of the NCC.”

66. The applicants commenced the proceedings in the Tribunal on 22 July 2020.

The evidence

67. The applicants prepared for the purposes of the hearing a “Court Book” of five volumes, the fourth and fifth of which contained documents filed by the respondent, being the statement of Adam Cordony, dated 4 November 2020, but signed on 6 December 2020, and its annexures. The first three volumes of the applicants’ Court Book contained statements or statutory declarations from: Matthew Poole, Jim Conomos, Angus Donald, and each of the applicants.

68. The statutory declarations from each of the applicants related only to an assertion by Mr Cordony that certain work, which was alleged not to comply with relevant standards, had been completed at the direction of the applicants. The applicants had not otherwise filed any statements of evidence. However, the applicants’ Court Book included an outline of submissions, which Mr Anderson indicated set out the factual matters upon which the applicants relied. That outline of submissions was received in evidence as a statement by Mr Anderson.

69. The applicants’ Court Book also included the building inspection reports and rectification orders issued by Fair Trading. Pursuant to section 48N of the HBA, the Tribunal may have regard to, but is not bound by, those building inspection reports.

70. The applicants’ Court Book included three reports prepared by Mr Poole: “The Photographic Defect Analysis Report” dated 16 October 2019; “The Photographic Defect Analysis – Preliminary Report” dated 10 June 2020; and “The Preliminary Bill of Quantities & Costs Estimate for the rectification of additional defects” dated 11 September 2020. The first three volumes of the applicants’ Court Book were received in evidence without objection.

71. The respondent filed a tender bundle containing two volumes (with pages numbered 1R to 661R), the first of which contained Mr Cordony’s statement signed on 6 December 2020 and its annexures. That volume was received in evidence without objection. The second volume contained a report dated 10 February 2021 from Eric Byrne, a building consultant specialising in waterproofing consulting, and further documents to which the applicants objected.

72. The first such document was a letter dated 30 November 2020 from Michael Carter of Coastwide Waterproofing, which was the company which had carried out the waterproofing in the main bathroom. The respondent did not read two paragraphs of that letter (4 and 5). The remaining three paragraphs confirmed that the waterproofing works had been carried out “as per the Australian standards AS3740” and had been inspected “either by a private certifier or local council”. Mr Anderson did not object to those paragraphs. At the request of Mr Kent, counsel for the respondent, I deferred ruling on the following two pages (523R and 524R) which were tendered as “corroborative for certain aspects of my client’s evidence”. Mr Kent did not subsequently renew the tender of those pages and I will not treat them as part of the evidence in the proceedings.

73. The following pages, 525R to 533R, contained emails between Mr Pearson and CRD Building Consultants, which were tendered only to explain why Mr Zervos did not provide an expert report for the purposes of the proceedings and were admitted on that basis.

74. The balance of the respondent’s tender bundle consisted of photographs of the property, not accompanied by any explanation. Some of the photographs were referred to in the course of evidence, and those photographs are admitted into evidence. The photographs which were not referred to in the course of evidence are not part of the evidence in the proceedings.

75. As noted, Mr Byrne addressed only the waterproofing in the main bathroom. The respondent did not seek to rely upon any independent expert evidence in relation to the other issues raised by the applicants. The respondent sought to rely upon Mr Adam Cordony to give evidence concerning the building issues raised by Mr Poole’s evidence. Mr Cordony was not an independent expert and his evidence was clearly not disinterested. To the extent necessary I will address the contest between Mr Poole’s evidence and Mr Cordony’s evidence in due course.

76. Mr Poole and Mr Byrne prepared a joint report addressing the main issues arising in relation to the main bathroom. The joint report was received in evidence.

77. On the third day of the hearing the applicants sought to tender a witness statement by Mr Poole dated 25 March 2021. The applicants submitted that the statement was a convenient summary of Mr Poole’s expert reports. I have received it in evidence on that basis and will not treat any part of that statement as evidence of the matters stated, independently of Mr Poole’s reports and oral evidence.

78. At the commencement of the fourth day of the hearing both sides sought to lead further evidence. That evidence was rejected. The evidence sought to be tendered by the applicants was rejected in part because it sought to expand the basis upon which the applicants had limited their case. At the commencement of the hearing, the applicants had identified the statutory warranties upon which they relied as being those set out in section 18B(1)(a) and (c) of the HBA, that is that the works were not carried out with due care and skill and that they did not comply with the law, being the National Construction Code (with which, pursuant to the Environmental Planning and Assessment Act 1979 (NSW) and regulations in force at relevant times, the work was required to comply). The evidence sought to be tendered by the applicants appeared to raise the allegation that the work was not fit for purpose in breach of the warranty implied pursuant s 18B(1)(e) of the HBA.

79. Subsequently to the hearing, the applicants sought to file further evidence relating to the consequences of the exceptional rain events which occurred in early 2022. The respondent objected to that evidence being received and directions were made for the parties to file submissions concerning whether the further evidence should be received. The parties filed submissions and I issued a direction that the evidence would not be admitted and that reasons for the rejection of the evidence would be included in my reasons for decision.

80. The reasons why I have I rejected the evidence were, firstly, because, as the respondent submitted, the evidence was of similar character to that which I had rejected on the fourth day of the hearing and tended to seek to establish that the work carried out by the respondent was not fit for purpose rather than that the work was not carried out with due care and skill or failed to comply with the National Construction Code and, secondly, in any event, although the evidence sought to establish that there had been water penetration from the lower area or rear courtyard into the lower sections of the property, that is the area below the rear deck, the evidence did not attempt to explain or establish the mechanism by which the water was entering the property. Nor did the evidence contain any relevant factual matters that could not have been the subject of evidence filed prior to the hearing. Regardless of the intensity of the weather event, nothing about the consequences of that weather event could not have been the subject of testing prior to the hearing, if the applicant had been prepared to arrange it. The evidence included a letter from the applicants’ tenant, who had apparently rented the lower section of the property for three years, which suggested that she had experienced continued water penetration throughout that time. That evidence clearly could have been led at the hearing.

81. After I had issued my ruling that the further evidence would not be admitted, the applicants sought to file further evidence concerning the pool filter box. I have not taken that evidence into account.

82. The parties also tendered in the course of the hearing two video recordings, one of which showed Mr Poole tapping with the handle of a chisel on the tiles in the corner where he subsequently excavated to reveal the membrane, and the second of which was Mr Cordony’s recording of the incident in December 2019 referred to above (at [38]).

83. Each of the applicants gave oral evidence, as did Mr Conomos and Mr Donald. Mr Cordony gave evidence in the respondent’s case. Mr Byrne and Mr Poole gave evidence concurrently in relation to the main bathroom and the matters the subject of their joint report. Mr Poole also gave evidence concurrently with Mr Cordony in relation to the other aspects of his reports. After the conclusion of the joint evidence Mr Kent cross-examined Mr Poole, seeking to challenge both his independence and the credibility of his evidence.

The issues

84. The issues which arise in the proceedings are:

1. Whether the existence of the defects alleged by the applicants is established;

2. If so, what is the appropriate remedy, which requires determination of:

1. the appropriate scope of works for rectification;

2. whether it is appropriate to make a work order; and, if not,

3. the reasonable cost of rectification.

85. The applicants relied to establish the existence of the defects upon the reports of Mr Poole. In respect of the alleged bathroom defect, the Tribunal has the benefit of the joint report of Messrs Poole and Byrne. Nevertheless, even in that respect, an issue arises relating to whether the hole in the membrane was present before Mr Poole conducted his invasive investigation or whether it was in fact caused by the investigation.

86. In respect of that and other issues, the respondent maintained a challenge to the independence and objectivity of Mr Poole, submitting that his evidence was insufficiently reliable to persuade the Tribunal that the work carried out by the respondent was defective in the respects alleged by the applicants. Mr Poole’s evidence was said to be “unreliable, incomplete and misleading”.

87. It is convenient to address respondent’s challenge to the evidence of Mr Poole before turning to the various alleged defects.

Mr Poole’s evidence

88. The respondent’s challenge to Mr Poole’s evidence was based upon a number of matters.

89. The respondent firstly submitted that Mr Poole’s evidence concerning the preparation of his statement of 25 March 2021 suggested he had “abandoned his obligations”.

90. Mr Poole conceded that Mr Anderson had forwarded to him a draft of his statement. Mr Poole initially stated that he had “rewrote the thing entirely”. Subsequently Mr Poole acknowledged that parts of the statement were authored by Mr Anderson.

91. The respondent submitted that:

“It is difficult to contemplate a more serious or egregious departure from an expert's duty of impartiality and independence than an expert adopting as his own a report written, whether in whole or in part, by a party to proceedings. This is compounded by the fact that Mr Poole gave evidence which was at best misleading as to Mr Anderson's contribution to the document.”

92. The respondent also submitted that the statement expressed an opinion which Mr Poole acknowledged was incorrect, that is that certain pages of his 10 June 2020 report, and the report from Mr Daniel of Fair Trading New South Wales of 28 August 2020, included “evidence of deterioration and water ingress”.

93. The applicants’ response referred to evidence given by Mr Poole when it was suggested to him that it was not appropriate for a party briefing him as an expert to send him a statement:

“I didn’t see an issue with it because it didn’t contain any of the technical aspects that would be relied upon by me the expert.”

94. I understand that answer to be reflective of the proposition that the statement of 25 March 2021 was a summary of Mr Poole’s reports.

95. The applicants also referred to the email under cover of which Mr Anderson had forwarded the statement to Mr Poole which stated:

“To save you time, I have cut and pasted from your reports and info you have sent me and put it into the attached. Can you please review it and make sure it is your opinion and your statement – please edit it so that you are comfortable with it being a true statement of your opinion.”

96. In my view the statement by Mr Poole that there was evidence of deterioration and water ingress documented on particular pages of his 10 June 2020 report and in Mr Daniel’s 28 August 2020 report did demonstrate a lack of attention to detail on the part of Mr Poole, and a readiness to adopt what Mr Anderson had drafted for him. I note that the report does document evidence of deterioration and water ingress, Mr Poole’s error lay in identifying the relevant pages.

97. That and other aspects of Mr Poole’s evidence suggest that his opinions should not be accepted unquestionably, but in my view do not suggest that his opinions should be wholly disregarded. I do not find that Mr Poole was a dishonest witness and do not consider that at any time he sought to mislead or deceive the Tribunal.

98. The only example of direct inconsistency in Mr Poole’s evidence was the assertion that he completely rewrote the statement. I regard that as hyperbole rather than dishonesty. Mr Poole subsequently conceded that “at least parts of [the statement] were authored by Mr Anderson”. That is not a concession that the whole or even a substantial part of the statement remained unaltered.

99. The respondent also relied upon the fact that Mr Poole had signed a statutory declaration also authored by Mr Anderson. Mr Poole maintained that the statutory declaration was accurate. The statutory declaration apparently related to a complaint by Mr Anderson against Fair Trading and was not in evidence. I do not regard that as a matter of relevance in considering Mr Poole’s evidence.

100. The respondent was critical of Mr Poole’s reference in his statement to costings for the rectification of the rear deck when the relevant costings were prepared before the respondent had carried out rectification works.

101. The cross-examination of Mr Poole on this issue was complicated by the fact that Mr Poole did not have the relevant costings in front of him. The respondent relied upon the proposition that Mr Poole had agreed that “the costings were based on the demolition and rebuilding of structural elements” and that “rectification of the defects alleged relating to the back deck in February 2020, prior to the rectification performed by the respondent in May 2020, would not require demolition of structural elements.”

102. It is appropriate to set out the relevant evidence concerning these issues:

“Mr Kent:   Mr Poole, this preliminary cost estimate was based on the demolition of structural elements. Do you agree with that?

Mr Poole:   Yeah, I did see some demolition in there, that's correct.

Mr Kent:    But do you agree that it wasn't your view that the demolition of structural elements were necessary even before the rectification in May?

Mr Poole:    From my recollection, any structural demolition would be minimal. Is there a specific item you could prompt me to, so I could provide clarification?

Mr Kent:   I'm just asking - do you agree there was no structural demolition required, prior to the rectification in May?

Mr Poole:   I'd have to have a look at the document that you're looking at Mr Kent, because I can't provide you with a clear answer on that, without that document.

…

“Mr Kent:    Do you agree that you emailed Mr Anderson regarding the [unintelligible 01:01:18] a scope of works can be developed which won't require the demolition of any structural elements?

Mr Poole:   Yes.

Mr Kent:   Just some creative drainage options on the right membrane?

Mr Poole:   That's correct.

Mr Kent:   But what I'm putting to you is, is that $135,000 figure does include the demolition of construction elements doesn't it?

Senior Member: You mean the demolition of structural elements?

Mr Kent:   I beg your pardon, a demolition of structural elements.

Mr Poole:   That's again, I'd have to have a look at the actual elements you're talking about, because those creative drainage options, all run through the apartment below. So to the extent that there was structural works below, that would be clarified without that document. If you could point to the item, I'm sure I could find it and provide it to you.

Remedy

189. As I have noted above, I am required by s 48MA of the HBA to approach the identification of the appropriate remedy for the respondent’s breaches of statutory warranty, which I have found established, on the basis that rectification of the defective work by the respondent is the preferred outcome.

190. The applicants submitted that the relationship between the parties was such that the respondent should not be permitted to return to the applicants’ property to complete rectification works. The applicants relied in particular upon the confrontation between Mr Cordony and Mrs Anderson the subject of the video recording which was tendered in evidence. The applicants submitted that Mr Cordony had followed, confronted and intimidated Mrs Anderson.

191. The applicants also submitted that the respondent’s repeated failure to rectify the defects in the work was a further reason why it would not be appropriate to make an order requiring the respondent to rectify the defective work.

192. I am not persuaded that the respondent has repeatedly failed to rectify defective work. Although there were three rectification orders issued by Fair Trading NSW, each of those rectification orders related to different parts of the project. The respondent rectified the bulk of the items listed in the rectification orders. The items which the respondent failed to rectify were items in respect of which the respondent maintained either that the defect was caused by the applicants’ own expert or that there was no defect in the work. Although I have found that the respondent’s work was defective, I do not find that the respondent unreasonably maintained the position that the work was not defective.

193. In considering this aspect of the applicants’ submissions, I also take into account the applicants’ refusal to provide a copy of Mr Poole’s reports to the respondent. It was not in my view reasonable for the applicants to demand rectification of work claimed to be defective on the basis of an expert building consultant’s report without providing a copy of that report to the respondent.

194. I also note that Mr Anderson sought to impose conditions upon the respondent being permitted to return to carry out rectification work, which conditions were on any view unreasonable. In this regard, I refer in particular to the demand that the respondent agree to pay compensation in the amount of approximately $40,000 as a condition of being permitted to return to rectify the defects the subject of the 18 February 2020 rectification order.

195. In respect of the relationship between the parties, I have watched the video. There is clearly a confrontation between Mr Cordony and Mrs Anderson, but, as Mrs Anderson acknowledged, she was only present at the location of the confrontation because she had travelled there to observe a building site at which the respondent was carrying out work and not for any other reason. In those circumstances I consider that Mr Cordony’s conduct in approaching Mrs Anderson was understandable, albeit probably ill-advised. I do not consider that the actual conversation on that occasion, or any other communication between the parties, could be characterised as “intimidation”.

196. I do not consider that the conduct of either party could be said to have been faultless, however I am not persuaded that the evidence before me establishes that it would be inappropriate to direct the respondent to carry out the rectification of the defective work which I have identified.

Scope of works

197. It is necessary, before a work order pursuant to section 48O of the HBA can be made, that the work to be performed can be described sufficiently that the parties, and in particular the builder, can understand what is required.

198. The scope of works required in the bathroom is as outlined in the joint report: remove the floor tiles and tile screed and the existing membrane in the shower bath area only of the main bathroom, re-screed the prepared concrete substrate affording a minimum of 1:80 grade, waterproof the area with a compatible polyurethane waterproofing product in accordance with manufacturer’s requirements, and replace tiles.

199. In relation to the construction of the rear deck, the defect which I have found established is the failure to install a 50 mm water stop angle at the bifold doors separating the interior of the house from the internal alfresco area of the rear deck. The appropriate scope of works for rectification of that defect is the replacement of the existing 40 mm angle with a 50 mm angle with appropriate adjustments to the deck and waterproofing of the deck. It is not clear to me on the evidence whether that can be that can be accomplished without the regrading of the entire deck. If regrading of the deck is necessary, the work required of the respondent to rectify the rear deck will include regrading of the deck. Mr Poole suggested that regrading might be avoided by the installation of a grated drain at the boundary between the internal and external areas of the rear deck. In the event that the regrading of the rear deck would otherwise be necessary in order to permit the installation of the 50 mm angle, the respondent may instead install a grated drain at that boundary.

200. Mr Poole provided, by his “Preliminary Bill of Quantities and Cost Estimate for Rectification of Additional Defects” dated 11 September 2020, a scope of works for the rectification of each of the additional defects identified in his report of 10 June 2020.

201. The respondent did not provide any alternative scope of works for the rectification of defective work in the lower courtyard. Mr Poole’s report describes a scope of works for the rectification of items 4 (which is stated to also address item 7), 8 to 11, 12 to 14, and 15 to 19. Although items 10 and 17 are included within those addressed it is apparent that no separate rectification is addressed to those items. Item 18 related to the bridging of termite protection due to the raising of the external gravel path over the external timber cladding. It is not apparent that any part of Mr Poole’s scope of works in respect of items 15 to 19 separately addresses item 18. I consider that in respect of items 4, 8 to 11, 12 to 14, and 15 to 19, Mr Poole’s report of 11 September 2020 sufficiently describes the works necessary to rectify the defective works in the lower courtyard.

202. The respondent, presumably in reliance upon the principles set out in Bellgrove v Eldridge (1954) 90 CLR 613, submitted that the extent of rectification proposed by Mr Poole was not a reasonable course to adopt. However, the respondent did not put forward any evidence to suggest that there was a less extreme means of rectifying the defects. In the absence of independent expert evidence to contradict Mr Poole, I am not persuaded that the defects which I have found to exist are of such an insignificant nature that rectification would be an unreasonable course to adopt.

203. Accordingly I will make orders pursuant to section 48O of the HBA requiring the respondent to carry out the following rectification work in a proper and workmanlike manner:

1. Remove the floor tiles and tile screed and the existing membrane in the shower and bath area only of the main bathroom, re-screed the prepared concrete substrate affording a minimum of 1:80 grade, waterproof the area with a compatible polyurethane waterproofing product in accordance with manufacturer’s requirements, and replace tiles.

2. Install a 50 mm water stop angle at the bifold doors separating the interior of the house from the internal al fresco area of the rear deck, including regrading and resurfacing the rear deck to the extent necessary to enable the installation of the water stop angle, or installing a grated drain at the boundary of the internal and external areas of the deck.

3. Carry out the scopes of works described in the “Preliminary Bill of Quantities and Cost Estimate for Rectification of Additional Defects” dated 11 September 2020 prepared by Mr Mathew Poole in respect of items identified as ADD 4, ADD 8 to 11, ADD 12 to 14 and ADD 15 to 19.

204. The parties did not address the question how long would be an appropriate time to allow for the completion of the work. In the absence of any submissions or evidence on that topic, and doing the best I can, I consider that four months is adequate time for the respondent to complete that work.

Cost of rectification

205. Had I not been persuaded to make a work order I would have accepted Mr Poole’s assessment of the cost of rectification of the bathroom at $9661.31. Mr Poole’s calculation was set out in a Scott schedule prepared by Mr Poole for the purposes of the proceedings. Mr Byrne did not comment on that costing or provide an alternative.

206. I would have discounted substantially Mr Poole’s assessment of the cost of rectification of the rear deck. As the respondent pointed out, that costing includes items which are clearly attributable to the bathroom rectification. The costing also includes prices attributable to rectification of the roof and it is not clear exactly what work was assumed to have been involved in the rectification of the rear deck. The applicants suggested that the appropriate course was to deduct the amount assessed by Mr Poole as the cost of rectification of the bathroom from the amount calculated by Mr Poole as the cost of rectification of the rear deck. This is not a satisfactory approach, in particular when there are other apparently irrelevant items included in the costing. However, the costing is detailed and clearly includes substantial costs relevant to the rectification of the rear deck.

207. I have sought to analyse the costings to identify items clearly attributable to the rear balcony. Including demolition, the installation of the strip drain, the installation of the upturn, waterproofing, plastering and tiling, I calculate the costings clearly attributable to the rear deck at approximately $40,000. Some allowance must be made for preliminaries, Mr Poole’s allowance was $25,000. I consider that about two thirds of that (that is $16,000) would be the minimum which could be attributed to the rear deck. Mr Poole allowed 15% profit, 5% overheads and 5% for project management. I consider that a total 20% for those items would be appropriate. To that must be added GST of 10%. By my calculation the applicants have established, through Mr Poole’s evidence, that the cost of rectification of the rear deck will be at least $85,800.

208. Mr Poole’s evidence concerning the cost of rectification of the rear courtyard area was not sufficient to enable me to make any informed assessment of that cost. Mr Poole stated in his Preliminary Bill of Quantities and Cost Estimate Report that the total cost including GST would be $182,327.06. However, although Mr Poole identified the quantities on the basis of which he claimed to have made that calculation, he did not provide any detail of the calculation. I also note that his estimate included items 1, 2, 3, 5, and 21 to 26, which were not identified by Mr Poole as items falling within items 2 and 4 in the rectification order of 24 July 2020. Accordingly, if I were not prepared to make a work order in respect of the rectification of the lower courtyard I would not have been able to make any assessment of the cost of rectification and could not have made any award of compensation in respect of the breaches of statutory warranty which I have found: see Bell Solar Pty Limited t/as Sunboost v Anderson [2021] NSWCATAP 278, at [59] – [61]; Gallagher v Masters Installation Pty Ltd [2017] NSWCATAP 117, at [51].

Costs

209. The applicants have succeeded in obtaining orders in their favour. The amount claimed in the proceedings is clearly greater than $30,000. Accordingly, by virtue of rule 38 of The Civil and Administrative Tribunal Rules 2014 (NSW) I do not need to find special circumstances before making an order for costs. Presumptively, as the successful party, the applicants are entitled to an order for their costs. I will order that the respondent pay the applicant’s costs as agreed or assessed, but I will grant leave to the parties to apply for a different order within 14 days of publication of these reasons.

Orders

210. My orders are:

1. Within four months of the date of publication of these reasons the respondent is to carry out on the applicants’ property the following rectification work in a proper and workmanlike manner:

1. Remove the floor tiles and tile screed and the existing membrane in the shower and bath area only of the main bathroom, re-screed the prepared concrete substrate affording a minimum of 1:80 grade, waterproof the area with a compatible polyurethane waterproofing product in accordance with manufacturer’s requirements, and replace tiles.

2. Install a 50 mm water stop angle at the bifold doors separating the interior of the house from the internal al fresco area of the rear deck, including regrading and resurfacing the rear deck to the extent necessary to enable the installation of the water stop angle, or, at the respondent’s option, installing a grated drain at the boundary of the internal and external areas of the deck.

3. Carry out the scopes of works described in the “Preliminary Bill of Quantities and Cost Estimate for Rectification of Additional Defects” dated 11 September 2020 prepared by Mr Mathew Poole, in respect of items identified as ADD 4, ADD 8 to 11, ADD 12 to 14 and ADD 15 to 19.

2. Subject to order (3) below, the respondent is to pay the applicants’ costs of the proceedings as agreed or assessed.

3. Either party may file and serve written submissions within 14 days of the date of this decision seeking a different order in relation to the costs of the proceedings and in such event order (2) above will cease to have effect.

4. If either party files submissions in accordance with order (3), the other party may file submissions in response within a further 14 days.

5. Any submissions filed in accordance with orders (3) and (4) must address the question whether the question of costs may be determined on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 26 August 2022