BLAZICEVIC and BENCHMARK DESIGNER HOMES PTY LTD

Case

[2014] WASAT 127

25 September 2014

No judgment structure available for this case.

BLAZICEVIC and BENCHMARK DESIGNER HOMES PTY LTD [2014] WASAT 127



STATE ADMINISTRATIVE TRIBUNALCitation No:[2014] WASAT 127
BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)
Case No:CC:738/201419 AUGUST 2014 - FINAL WRITTEN SUBMISSIONS FILED 29 AUGUST 2014
Coram:MR T CAREY (MEMBER)25/09/14
17Judgment Part:1 of 1
Result: Application successful in part
B
PDF Version
Parties:ERVIN BLAZICEVIC
HAYLEY BLAZICEVIC
BENCHMARK DESIGNER HOMES PTY LTD

Catchwords:

Building dispute
Time for performance of building works
Date of commencement
Effectiveness of time extensions referred to in written variations
Damages

Legislation:

Building Act 2011 (WA), s 9
Building Services (Complaint Resolution and Administration) Act 2011 (WA)
Home Building Contracts Act 1991 (WA), s 7, s 7(1)(a)(ii)

Case References:

Nil

Orders

On the application heard on 19 August 2014 before Member Tim Carey, it is on 25 September 2014 ordered that:,1. On or before 9 October 2015, the respondent must pay the applicants $6,405.

Summary

The applicants sought recovery of loss they claimed to have suffered as a result of the failure of the respondent to complete the construction of a residence within the time permitted under the building contract.,The parties disagreed about the correct date of commencement of the period for performance, and as to the effect upon this period of a number of 'variations'. According to the respondent, based on its views regarding the commencement date and extensions of time under the variations to which it was entitled, it was still within the time for performance.,The Tribunal agreed with the applicants that the commencement date arose upon the actual commencement of works within a prescribed number of days from the issue of the initial building permit for the works, and not upon the later issue of a second building permit necessitated by a changed detail to the plans.,The Tribunal analysed the issue concerning the variations by reference to both the relevant contractual clauses and s 7 of the Home Building Contracts Act 1991 (WA). It decided that once a term purporting to extend the time for performance was referred to in a valid variation document, of which notice had been given by the respondent in accordance with the contract, the extension was legally effective. This was found to have been the case with all the variations relied upon by the builder.,In the final calculation, the Tribunal found the respondent to have exceeded the permitted performance time by 44 working days. Based upon an estimate of rental income foregone by the applicants as a result of the delay, the Tribunal ordered the respondent to pay them $6,405.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : BLAZICEVIC and BENCHMARK DESIGNER HOMES PTY LTD [2014] WASAT 127 MEMBER : MR T CAREY (MEMBER) HEARD : 19 AUGUST 2014 - FINAL WRITTEN SUBMISSIONS FILED 29 AUGUST 2014 DELIVERED : 25 SEPTEMBER 2014 FILE NO/S : CC 738 of 2014 BETWEEN : ERVIN BLAZICEVIC
    HAYLEY BLAZICEVIC
    Applicants

    AND

    BENCHMARK DESIGNER HOMES PTY LTD
    Respondent

Catchwords:

Building dispute - Time for performance of building works - Date of commencement - Effectiveness of time extensions referred to in written variations - Damages

Legislation:

Building Act 2011 (WA), s 9


Building Services (Complaint Resolution and Administration) Act 2011 (WA)
Home Building Contracts Act 1991 (WA), s 7, s 7(1)(a)(ii)

Result:

Application successful in part


Summary of Tribunal's decision:

The applicants sought recovery of loss they claimed to have suffered as a result of the failure of the respondent to complete the construction of a residence within the time permitted under the building contract.


The parties disagreed about the correct date of commencement of the period for performance, and as to the effect upon this period of a number of 'variations'. According to the respondent, based on its views regarding the commencement date and extensions of time under the variations to which it was entitled, it was still within the time for performance.
The Tribunal agreed with the applicants that the commencement date arose upon the actual commencement of works within a prescribed number of days from the issue of the initial building permit for the works, and not upon the later issue of a second building permit necessitated by a changed detail to the plans.
The Tribunal analysed the issue concerning the variations by reference to both the relevant contractual clauses and s 7 of the Home Building Contracts Act 1991 (WA). It decided that once a term purporting to extend the time for performance was referred to in a valid variation document, of which notice had been given by the respondent in accordance with the contract, the extension was legally effective. This was found to have been the case with all the variations relied upon by the builder.
In the final calculation, the Tribunal found the respondent to have exceeded the permitted performance time by 44 working days. Based upon an estimate of rental income foregone by the applicants as a result of the delay, the Tribunal ordered the respondent to pay them $6,405.

Category: B


Representation:

Counsel:


    Applicants : In Person
    Respondent : In Person

Solicitors:

    Applicants : N/A
    Respondent : N/A



Case(s) referred to in decision(s):


REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

1 This matter concerns the computation of the correct starting and finishing dates for the time permitted by the contract between the parties for performance of building services.

2 On 29 March 2012, Ms Hayley Blazicevic and Mr Ervin Blazicevic (owners) entered into a standard HIA building contract (contract) with Benchmark Designer Homes Pty Ltd (builder) for the construction of a double storey brick and Colorbond residence.

3 Under the contract, the builder was permitted 320 working days from the date on which work commenced, or should have commenced, for completion of the works. The commencement date is agreed to have been not more than 45 days from the date on which the builder received approval from all relevant authorities.

4 The parties have different views about the commencement date. They also diverge on the effect of a number of signed 'variations', each of which purported to extend the performance period.

5 The owners claim that the builder is now well outside the time permitted to complete the works, and claims consequential loss and damage. The builder's position is that the time for completion of the works had not, as at the date of hearing, expired, and that the owners' application should not succeed.

6 The issues for my determination are:


    1) What is the correct commencement date?

    2) Having regard to any valid extensions of time, what is the correct completion date?

    3) Is the builder within or outside the allowed performance window?

    4) If not, to what damages are the owners entitled?





What is the correct commencement date?

7 Under clause 9(a) of the contract, the date of commencement of the building works is stipulated as being within a specified number of days (45) from the latest of five possible dates. It is common cause that the applicable latest date is the date 'on which the Builder has received approval from all relevant authorities'.

8 On the owners' case, the last relevant approval received by the builder was the building permit for the proposed residence issued on 3 September 2012 by the City of Bayswater.

9 As for the actual commencement date, the owners rely upon the date on which the first turn of soil occurred, which they submit to have been 20 September 2012 (a date not challenged by the builder). This date being within 45 days of the issue of the building permit, it is the date for which the owners contend as the commencement date of the building works.

10 The builder contends for a 7 December 2012 commencement of works, being the date upon which the City of Bayswater issued a building permit arising from a change to retaining walls at the rear of the property (second building permit).

11 The circumstances leading to the issue of the second building permit were explained by the builder's director, Mr Soliman. He explained that in November 2012, in the course of initial site works, emergency action was required at the border of the owners' block with an adjoining site. As a result, it became apparent that certain modifications of retaining walls at the rear of the proposed dwelling were required. Those modifications necessitated an amendment to the approved plans.

12 Mr Soliman asserted that all works (subsequent to the taking of the emergency action) halted, and no further works occurred until the granting of the second building permit. The cessation of works, it was said, was necessary in order to comply with s 9 of the Building Act 2011 (WA), which prohibits building works in the absence of a building permit for any building work.

13 The owners dispute the alleged cessation of building work on the site. However, for reasons which follow, it is unnecessary that I determine this disputed question of fact.

14 There will, under the contract, always be one, and only one, 'date on which work commenced'. On the facts of this case, the trigger date for determining the commencement date is the date 'on which the Builder has received approval from all relevant authorities'.

15 That occurred on the granting of the original building permit.

16 The builder's submission depends upon an interpretation of clause 9(a) of the contract under which the word 'latest' in the introductory words of the clause applies within item 9(v) dealing with approvals. But that is not what the clause says. The word 'latest' applies to the collective of conditions 9(i) to 9(v), not the individual conditions themselves. As soon as the point is reached that the latest of conditions 9(i) to 9(v) has occurred, the works must commence within 45 days. This occurred, on the facts of the case, on 3 September 2012.

17 Whether or not cessation of the works was necessary in order to comply with the Building Act does not change the commencement date so determined. It may, however, form the basis of a permissible extension of time for performance by the builder in accordance with clause 9(b) of the contract. I note that Variation 4454-014, based upon the addition of terrace retaining at the rear of the property, contained a term for extension of the performance time of 20 days. This was the builder's opportunity for an extension based upon the time required to apply for and obtain the second building permit.

18 I accept the owners' contention regarding the correct date of commencement of the building works. The works commenced on 20 September 2012.




Did any variations validly extend the time for performance, and what is the correct time for completion?

19 The builder relies upon a series of 13 written 'variations' (Variations) signed by the parties, which contained the endorsement 'extension of time for performance of works (Clause 18)', followed by a number of working days. In the case of 12 of the 13 Variations, 10 working days was nominated, the 13th Variation being the Variation relating to the terracing works which stipulated 20 working days.

20 The builder produced, in total, 14 signed Variations (Exhibit 1 - Hearing Booklet at pages 206 - 221). Consistent with Variation 4454-014, they are numbered according to the protocol 4454-xxx, the 'xxx' commencing with 001 and increasing progressively until 014. I shall refer to individual Variations as Variation xx, according to the two-digit number each is allocated under the above protocol.

21 It is convenient to reproduce the list of 13 Variations which appears in the builder's submissions, containing the date of signing, description of subject matter and endorsed time extension:


    Variation 01 - 2/8/2012 - Tile selection
10 Working Days
    Variation 02 - 2/8/2012 - Windows
10 Working Days
    Variation 03 - 2/8/2012 - Structural
10 Working Days
    Variation 04 - 2/8/2012 - Fixings
10 Working Days
    Variation 05 - 2/8/2012 - Cabinetry
10 Working Days
    Variation 06 - 2/8/2012 - Electrical
10 Working Days
    Variation 07 - 7/8/2012 - Electrical
10 Working Days
    Variation 08 - 2/8/2012 - Plumbing
10 Working Days
    Variation 09 - 2/8/2012 - Cabinetry
10 Working Days
    Variation 10 - 2/8/2012 - Plumbing
10 Working Days
    Variation 11 - 2/8/2012 - Six Star Rating
10 Working Days
    Variation 12 - 10/10/2012 - Brick build-up
10 Working Days
    Variation 14 - 10/10/2012 - Terracing
20 Working Days
Total
140 Working Days

    Of the above list, the owners accept the time extension nominated in respect of Variations 12 and 14, and reject the remainder.

22 I will consider the operation of the relevant terms of the contract, and any statutory provision which may be relevant, before determining the validity of the disputed claims for extension.

23 Clause 9 of the contract is headed 'Time for performance'.

24 Clauses 9(b) and 9(c) of the contract state:


    (b) Subject to this Contract the Builder shall complete the Works (bring the Works to Practical Completion – Clause 19(a)) by the time specified in Item 9(b) of the Schedule. The Builder is entitled to an extension to the time for completion of the Works due to delay from a cause beyond the Builder's sole control including:

      (i) any of the following events which affect directly or indirectly access to or the condition of the Site or the Works or any person engaged on or material employed in or to be employed in or in relation to the Works, namely: acts of God, fire, explosion, earthquake, civil commotion, theft or acts of vandalism, flooding, inclement weather, strikes, industrial action, lockouts or holidays granted in accordance with industrial awards, vehicle accidents, unavailability of labour, vehicles or equipment or permits required;

      (ii) any alterations to the Works;

      (iii) any instruction or delay in instruction by or any omission of the Owner;

      (iv) any deliberate and substantial prevention of or interference with the Works or the progress thereof caused by the Owner;

      (v) any delay in the supplies of materials or transport or labour;

      (vi) any dispute with or proceeding being taken or threatened by adjoining or neighbouring owners concerning the continuation or variation of delivery to or completion of the Works upon the Site;

      (vii) any cessation of work pursuant to Clause 7(e)(ii);

      (viii) any delay caused by the Owner providing materials, goods or work;

      (ix) any delay in the commencement of or continuance with the Works, caused by or resulting from an order or directive of a relevant authority or proceeding before the Builders' Registration Board or the Building Disputes Tribunal, the Registrar, a mediator, an arbitrator or a Court; or

      (x) any delay caused by proper investigation of any of the above by the Builder or the Owner.


    (c) The Builder shall give to the Owner a notice of any extension of time to which the Builder is entitled within TWENTY (20) working days of the Builder being aware of both the cause and the extent of the delay.

25 The time specified in item 9(b) of the Schedule (see opening words of clause 9(b) of the contract) is '320 working days from date on which work commenced or should have commenced under Cl 9(a)'.

26 Clause 12 of the contract is headed 'Variations'.

27 Clause 12(a) of the contract states:


    (a) If the Owner wishes to make any variation to the Works or the Contract Documents the Owner or the Owner's agent shall give the Builder a written request for such variation. The Builder may decline to agree to the variation requested but in the event that the Builder is prepared to agree to the variation:

      (i) the Builder shall prepare and give to the Owner or the Owner's agent a variation document setting out the terms of, and the cost to be incurred on account of, the variation;

      (ii) the Owner or the Owner's agent shall sign and return the variation document to the Builder;

      (iii) the Builder or the Builder's agent shall sign and insert in the variation document the date that he signs it and forward a signed copy to the Owner or the Owner's agent as soon as is reasonably practicable thereafter and before the work to which the variation relates is commenced; and

      (iv) the variation shall be carried out as if it were part of the Works under the Contract.

28 Finally, a special condition of the contract bears upon the current matter. Headed 'Post pre-start variations', it states:

    If the Owner wishes to make any variation to the Works or the terms and conditions of this Contract after completion of the pre-start process and final sign-off of all construction documents, he or his agent shall give the Builder a written request for such variation. The Builder may decline to agree to the variation requested but in the event that the Builder is prepared to agree to the variation:

    (i) the Builder shall prepare and give to the Owner or his agent a variation document setting out the scope of intended works and relevant terms thereof including the cost to be incurred and extra time to be added to the contract for performance of work. Unless otherwise stated an administration fee of $350 per variation item and a minimum of ten (10) working days will be added to time for performance[; and]

    (ii) the Owner or his agent shall sign and return the variation document to the Builder within [seven (7)] working days of the date of the variation or the … Builder will be at liberty of declining the variation.


29 The Home Building Contracts Act 1991 (WA) (HBC Act) applies to the contract.

30 Section 7 of the HBC Act provides relevantly:


    Variation of contract to be in writing and given to owner

    (1) A variation of a contract ­


      (a) must be in writing ­

        (i) setting out all of the terms of, and the cost of, the variation;

        (ii) showing the date of the variation;

        and


      (b) must be signed by the builder and the owner or their respective agents.

    (2) The owner or his agent must be given a copy of the signed variation ­

      (a) as soon as is reasonably practicable after it has been signed by both parties; and

      (b) before the work to which the variation relates is commenced.

31 The statutory provisions are, to a large degree, replicated in clause 12(a) of the contract. The points of commonality are:

    • A variation of the contract must be in writing signed by both parties.

    • A variation document must set out the terms of and the costs associated with the variation.

    • The date of the variation must be given. By clause 12(a) of the contract, the date is to be determined by the date the builder signs it.

    • A copy of the completed and signed variation document must be given to the owner or to the owner's agent before the work to which the variation relates is commenced.


32 Under clause 12(a) of the contract, an owner wishing to effect a variation is required to give the builder a written request for the variation sought.

33 A question arose at the hearing regarding the interrelationship of clauses 9 and 12 where an extension of time for performance is claimed by the builder in connection with a variation of the contract. Having carefully considered both clauses, I believe that both clauses are capable of being, and need to be, applied according to their terms.

34 A requirement of a builder that a particular variation to a building contract be tied to an extension of time for performance of a specified magnitude constitutes a 'term of' the variation for the purposes of clause 12(a) of the contract (and also s 7(1)(a)(ii) of the HBC Act), thereby invoking the provisions in clause 12(a) items (i) to (iv).

35 At the same time, where such a term is required by the builder, the extension falls within the following words of clause 9(b) of the contract:


    The Builder is entitled to an extension of time for completion of the Works due to delay from a cause beyond the Builder's sole control including … any alterations to the Works …

36 The builder must, in accordance with clause 9(c) of the contract, give the owner notice of the extension being claimed within 20 working days of the builder being aware of the cause and extent of the delay.

37 The special condition regarding variations is notable for being limited to variations 'after completion of the pre-start process and final sign-off of all construction documents', and requiring the variation document to refer to the extra time to be added to the contract for performance. It also provides for a $350 administration fee for each variation item.

38 Consistent with all these clauses, a builder will be entitled to the benefit of an extension of time in connection with a variation to the original building contract initiated by the owner upon the occurrence of the following events:


    a) the builder gives to the owner a written and signed variation document, containing reference to the extension, before the work the subject of the variation is commenced; and

    b) the builder gives to the owner a notice of the extension within the required 20 day period.


39 Clause 9(c) of the contract speaks of the 20 day period following the time of the builder's awareness 'of both the cause and the extent of the delay', which suggests that once a builder becomes aware of a particular alteration to the work, it is incumbent upon him to make a reasonable assessment about the effect on the performance time the alteration is likely to have. However, the duration of the extension is, as a matter of contract, purely a matter for the builder.

40 Further, as a matter of pragmatics, it will often be the case, and the present matter provides an illustration, that a builder's notice of extension of time under clause 9(c) of the contract will be manifested by the same document as the variation document with which clause 12(a) of the contract and s 7 of the HBC Act is concerned.

41 In the case of the 13 Variations, the builder first prepared the document, which he had asked the owners to sign. It seems to me that provided the remaining requirements for valid variations are met, and subject to satisfaction of the 20 day condition for notices of extension, any given Variation is capable of being regarded as being both a variation document and notice of extension.

42 The question is whether, in relation to each of the disputed Variations, it is to be so regarded.

43 Variations 01 to 11 have a somewhat convoluted history, which is set out in the statement of Ms Blazicevic (Exhibit 1 at page 39).

44 The precursors to Variations 02 to 07 were prepared by the builder and sent to the owners on 22 March 2012 (before the contract was signed), as part of the 'structural pre-start'. They included selections concerning windows, cabinetry and electrical. The owners returned the variation documents on 27 March 2012, dated 26 March 2012 and signed in each case, and, in some cases, indicated desired changes. The bundle of variation documents in this form appears in Exhibit 1 at pages 72 - 77.

45 On 2 August 2012, at a meeting 'to sign final prestart selections', the owners acceded to the builder's request that they 'reconfirm the prestart selections we had already made' on 27 March 2012. They also 'finalised the remaining prestart selections that had been in progress', namely, items such as tapware, basins and kitchen appliances, which had been the subject of the owners' consideration during April to August 2012. These became Variations 01 and 08 to 11.

46 A full set of fresh draft Variations, signed only by Ms Moller for the builder on 2 August 2012, appears in Exhibit 1 at pages 119 - 129 (not including draft Variations 12 and 13, which are not in dispute). A full set of the same documents, signed by the owners on 2 August 2012 when they became Variations 01 to 11, appears in Exhibit 1 at pages 206 - 216.

47 Although I was initially concerned about the fact that Variations 02 to 07 emanated from pre-contractual discussions, which one might have thought would have been merged into the contract itself, it seems clear that this did not occur, and that the 'Variations' signed only by the owners were in the nature of the owners' written request for variations from the contract, as contemplated by clause 12(a) of the contract. It was only when the variation documents were amended in accordance with the changes indicated by the owners, and signed by both parties, that they could become legally valid variations to the original contract.

48 In relation to each of Variations 01 to 11, I am satisfied that the written and signed Variation containing reference to the extension was given to the owners before the work the subject of each Variation was commenced. This is sufficient for a finding that a variation which was compliant with both clause 12 of the contract and s 7 of the HBC Act was entered into. By that time, the contract had been signed, and it was open for the parties to vary it. It was also open for the parties not to do so.

49 I turn to the additional requirement for an entitlement to an extension of the performance period under clause 9 of the contract that the builder give the owner notice of the extension within 20 working days of the builder being aware of both the cause and the extent of the delay.

50 As I have already explained, the builder's notice can be the variation document itself, after the builder signs it, when the builder gives it to the owner. In the case of each Variation, this occurred on 2 August 2012. The question is whether this was within the 20 day period.

51 In my view, given that the variation proposed by the owners was subject to acceptance or decline by the builder, it was only on the builder's acceptance that the alteration of the works reflecting the Variation became inevitable. Consequently, it was only then that the builder was in a position to give notice of any extension of time for performance arising from the alteration which was to occur.

52 The effect is that where, as here, the same document serves as the builder's notice under clause 9(c) of the contract and the variation document (after the owner has signed it), the builder will necessarily comply with the notice obligation.

53 In reaching this view, favourable to the builder, I have not overlooked the owners' main submissions before me. I will mention three of those now.

54 First, the owners relied heavily upon an argument that most of the Variations arose from pre-start discussions, and were essentially in the nature of material and product selections, for which no extension of the performance time was warranted.

55 Although the Variations do record some selections (for example, tiles, door fittings, hot water service), they refer also to tasks to be performed in relation to those selections. It is by no means clear that those tasks are identical to tasks included in the original contract. Further, selections can themselves give rise to interruption in the progress of works, for example, where a particular product has limited availability.

56 Second, the owners relied upon the special condition in the contract concerning 'post pre-start variations' reproduced above. They point out that this condition is limited to variations sought by the owner after completion of the pre-start process and final sign off of construction documents, in relation to which they must refer to the extra time to be added. In addition, an administration fee of $350 per variation item is payable, which charge was never levied in relation to the disputed Variations.

57 The problem with this argument is that, on the chronology of events outlined above, the Variations fit within the special condition. Although the subject of discussions between the parties prior to the signing of the contract, they did not form part of the original contract. They therefore had to be included, post-contract, by way of a variation. The owners conceded that the extra costs referred to in the Variations, which they accepted, were not included in the original contract sum. If the overall contract price can change as a result of the matters recorded in the Variations, there is no reason why other terms of the Variations ought not be similarly effective. The builder's failure to charge the administration fee does not make the condition any less applicable.

58 Finally, in her witness statement, Ms Blazicevic states (Exhibit 1 at page 43):


    Throughout the prestart procedure we were under the impression that although the prestart selections were made on Variation forms, we did not expect a time delay as they were only prestart selections.

59 Leaving aside the vagueness of its expression, this passage contains no allegation of positive misrepresentation or misleading or deceptive conduct. What it shows is a misapprehension on the part of the owners as to the effect of the notations regarding extension of time in the variation documents, assuming they actually noticed those notations prior to signing them.

60 As a matter of contract law, the time for the owners to contest the claims for extension of time was when they were presented with the variation documents signed on behalf of the builder. They did not do so, but instead, countersigned those documents.

61 In my view, the builder might reasonably be criticised for its failure to ensure that all variations arising through pre-contractual negotiations and which were capable of doing so formed part of the original contract. Some greater clarity of expression to the owners regarding the second prestart phase would also have been warranted. It appears that the builder has benefited from the owners' ignorance of the significance of the Variations for the issue of extension of the performance time, when they signed documents they considered to be much more limited in effect than they were. The builder would be well advised to better inform their clients of the full consequences of the signing of their variation documents containing the standard extension of time provision evident in this case.

62 Although not particularly significant, the misstatement in the Variations of the correct contract clause number (18, which should have been 9) concerning the impact on performance time of the Variation is another possible area of improvement by the builder. What the reference, incorrect though it is, indicates, is the builder's appreciation, against the position adopted by it at the hearing, of a requirement to give notice of an extension to be claimed arising from an alteration to the contract by reason of a variation agreed by the parties.

63 With the misgivings I have just mentioned, I consider that the builder is entitled to the extensions of time consistent with those expressed in each of Variations 01 to 11. They are to be added to the extensions the subject of agreement under Variations 12 and 14.

64 The result is that the builder has established the time for performance of the contract to be the original allowance of 320 working days plus an additional allowance of 140 working days for the Variations, a total of 460 working days.

65 In order to calculate the duration of the permitted performance period, I am content to rely upon that part of the calculation provided by the owners in Exhibit 1 at pages 35 - 37, indicating that, based upon a commencement date of 20 September 2012, 340 working days expired on 29 January 2014. This leaves 120 working days. Taking into account all relevant public holidays during 2014, the 120th additional working day falls on 23 July 2014.




Has the builder completed the required building works within the permitted performance window?

66 When the hearing occurred on 19 August 2014, the building works had not been completed. It was clear, however, that completion was imminent.

67 Subsequent to the hearing, evidence in the form of a progress claim certificate indicating practical completion had occurred on 13 September 2014 has been filed by the owners. On being invited to make submissions on the point, initially the builder sought to argue that practical completion was delayed by reason of an issue concerning electricity connection which was outside its control. However, at a directions hearing on 25 September 2014, Mr Soliman volunteered that 23 September 2014 was the true practical completion date for the purposes of any entitlement to damages to which the owners are entitled.

68 In these circumstances, I find that the builder exceeded its permitted time for performance of the building works by 44 working days.




To what compensation are the owners entitled?

69 The owners contend that they are entitled to recovery for lost rental income which they would have received since handover of their dwelling.

70 The owners led evidence that the constructed dwelling would have likely produced a weekly rental income of between $720 and $750 per week. The builder did not seriously contest this figure, and led no contrary evidence.

71 I will make an allowance based upon foregone rental income calculated at a weekly rate of $735, or $105 per day.

72 The excessive period for performance of 44 days equates to 61 calendar days when the owners were denied their property for rental use. After applying the daily rate to which I have referred, the resultant amount to which I find the owners are entitled is $6,405.




Order

73 The Tribunal shall issue the following order:


    1. On or before 9 October 2014, the respondent must pay the applicants $6,405.


    I certify that this and the preceding [73] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

    ___________________________________

    MR T CAREY, MEMBER

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