Brown v Reed - [2024] NSWCATCD 52

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation: Brown v Reed [2024] NSWCATCD 52
Hearing dates: 8 February 2024 and 9 February 2024
Date of orders: 13 September 2024
Decision date: 13 September 2024
Jurisdiction: Consumer and Commercial Division
Before: R. Alkadamani, Senior Member
Decision:
(1) Order the respondent to rectify the main bathroom by removing the floor tiles, the first row of wall tiles, removing the existing waterproof membrane and applying a new waterproofing membrane on the floor of the main bathroom, including upturning the waterproof membrane at the floor and wall junction, and reinstallation of new tiles, and such work to comply with AS3470/2021.
(2) Order that the work in the main bathroom described in order 1 otherwise be carried out in accordance with the scope of works of the builder’s expert in the Joint Expert Report at exhibit 1, pages 144-145.
(3) Order that the respondent rectify the ensuite defects by removing the floor tiles, the first row of wall tiles, removing the existing waterproof membrane and applying a new waterproofing membrane on the floor of the ensuite, including upturning the waterproof membrane at the floor and wall junction, and re-installation of new tiles, and such work to comply with AS3470/2021.
(4) Order that the work in the ensuite described in order 3 otherwise be carried out in accordance with the scope of works of the builder’s expert in the Joint Expert Report at exhibit 1, pages 150-151.
(5) Order that the respondent rectify the retaining wall in the rear yard of the Property in accordance scope of works proposed by the builder’s expert in Exhibit 1 at pages 168-169.
(6) Order that the respondent rectify the driveway and concrete works in accordance with the scope of works of the homeowner’s expert in the Joint Expert Report at exhibit 1, page 172.
(7) Order that all the work in orders 1 – 6 be carried out with due skill and care.
(8) Reserve the question of costs.
(9) Direct that any party that wishes to make any submissions as to costs to file and serve written submissions of no more than 3 pages within 14 days, identifying the evidence on which they rely.
(10) Direct that any party that wishes to oppose any submissions made pursuant to the preceding order file and serve written submissions of no more than 3 pages within 28 days, identifying the evidence on which they rely.
(11) Direct that the submissions as to costs also address whether the Tribunal can dispense with a hearing in respect of costs.

Catchwords:
HOME BUILDING – limitation period – whether work not complete- completion – practical completion
HOME BUILDING – major defects

Legislation Cited:
Home Building Act 1989 (NSW)

Cases Cited:
Ashton v Stevenson; Stevenson v Ashton [2020] NSWCATAP 233
Blackhall v Fine Cut Building Pty Ltd [2011] NSWCATCD 43
Bourke v Wincrest Group Pty Ltd [2021] NSWCATCD 44
Clements v Murphy [2018] NSWCATAP 152
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Oikos Constructions Pty Ltd t/as Lars Fischer Construction v Ostin & Anor [2020] NSWCA 358
The Owners Strata Plan 64757 v Sydney Remedial Builders Pty Ltd [2023] NSWSC 1127
The Sydney Building Company Limited v Sinac [2019] NSWCATAP 43
Vella v Mir (No 2) [2019] NSWCATAP 240
Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101

Texts Cited:
None

Category: Principal judgment
Parties: Jenni Brown (Applicant)
Richard Thomas Reed (Respondent)
Representation: Counsel:
M Baroni (Applicant)
I Chatterjee (Respondent)
Solicitors:
Construction Legal (Applicant)
Northern Beaches Construction Lawyers (Respondent)

File Number(s): 2023/00379309
(Previously HB 23/38783)
Publication restriction: None

REASONS FOR DECISION

The applicant (the homeowner) is the registered proprietor of ** Sydney Road, Warriewood, NSW 2102 (the Property). The respondent in the proceedings, Mr Reed, is a builder (the builder) who was engaged by the homeowner to carry out residential building work at the Property.
The homeowner’s application commencing these proceedings was filed on 24 August 2023.
In her application, the homeowner sought a money order for alleged defects or incomplete work which thereby constituted defects.
The matter was heard on 8 and 9 February 2024.
Mr Baroni of counsel appeared for the homeowner. Mr Chatterjee of counsel appeared for the builder.
The following evidence was tendered during the hearing or pursuant to leave granted after the conclusion of the hearing:

A Joint Tender Bundle of five (5) folders, which was marked exhibit 1;

An enlarged screenshot of a section of the photograph at page 131 of exhibit 1, which was marked exhibit 2;

An enlarged photograph of the photograph at page 1,269 of exhibit 1, which was marked exhibit 3;

An enlarged photograph of the photograph at page 1,267 of exhibit 1, which was marked exhibit 4;

Photographs taken by Mr Morris in respect of the laundry, which was marked exhibit 5;

Photograph taken by Mr McGeady in respect of the retaining wall, which was marked exhibit 6;

Photographs of the lower ground floor area taken by the builder, which was marked exhibit 7;

An invoice dated 8 September 2020 and an invoice dated 10 November 2020 which recorded work referrable to tiling, which were together marked exhibit 8;

A copy of AS3740/2010, which I mark exhibit 9;

A copy of AS3740/2021, which I mark exhibit 10.

During the hearing the homeowner and the builder were cross examined.
The building experts retained by the parties gave their evidence concurrently. Some of that evidence was in response to questions in the nature of cross examination and some of the evidence was by way of commenting on oral evidence given by the other expert. The homeowner called Mr Morris and the builder called Mr Frizzell, both of whom had prepared expert reports.
The parties also called evidence from engineers in relation to the retaining walls and fencing constructed by the builder. Their evidence was given concurrently. The homeowner called Mr Jan. The builder called Mr McGeady.
At the conclusion of the hearing directions were made for the filing of submissions. The homeowner’s closing submissions were filed 14 March 2024 (Homeowner’s Closing Submissions). The builder’s closing submissions were filed 8 April 2024 (Builder’s Closing Submissions). A direction was made for the homeowner to file submissions in reply. The homeowner did not file any reply submissions.
At the conclusion of the hearing I also granted leave for the parties to tender AS3740/2010 and AS3740/2021. The builder annexed those documents to the Builder’s Closing Submissions and requested that they be admitted into evidence and I do so and mark those standards as exhibits 9 and 10.
In final written submissions the homeowner also sought to frame her case on the basis that the builder failed to bring the work to practical completion and thereby breached his contractual obligations to the homeowner. The builder disputed that the homeowner was entitled to frame her case in that way, contended that he was prejudiced by that articulation of her claim and opposed the dispute being determined on that basis.

Findings

The Tribunal makes the following findings.
In about mid-August 2020 the homeowner and the builder commenced discussions in relation to renovations and other work at the Property.
During August 2020 the builder provided the homeowner with a document entitled “Scope of Works for ** Sydney Road, Warriewood” (the Scope of Works) (Ex 1, pp. 34-35). That document is in the following terms:

• New Kitchen, laundry, bathroom and ensuite. (Kitchen and Laundry - Provisional Sums)
• Structural works to remove Internal wall and Install beam.
• Replace two windows to bedrooms and install a cavity slider door to the laundry and ensuite.
• Rear double doors to laundry to be removed
• New weatherboard wall to be installed with single solid core door with glass panel
• Patching gyprock as required
• 90mm cove cornice allowed for in downstairs room and office • Rectification of skirtings and architraves
• Remove front path and drainage and rectify.
• Excavate behind retaining wall and external brick lower ground floor walls below ground and waterproof.
• All waterproofing works done externally, only Internal waterproofing in bathroom, ensuite and laundry
• Remove rear slab under deck and excavate and waterproof western wall to downstairs room
• Rectify drainage and pour new slab draining away from house
• Install drainage cell, aggline and backfill with gravel
• Rear stormwater drainage as per plumbers quote (supplied)
• All plumbing as per quote provided • All electrical works as per Electricians Quotation
• Painting Internal only
Items not allowed for under this quote:
• Upstairs cornices and skirtings not allowed for at this stage as quantities unknown
• Thorough checking of plaster board repairs required due to electrical works cost not yet known
• No tiling to laundry floor allowed for
• No floor sanding allowed for - quote to be provided • Provisional sums still require fix priced quoting, Joiner measuring this week.
• Asbestos removal quote to be done this week
Repairs and rectification based on meetings and discussions between client and builder, not based on document provided. Fixtures and fittings throughout e.g tap wear, tiles, shower screens, basins, toilets etc. to be supplied by client Potential future works not Included - front driveway rectifications, rear landscaping, retaining wall, boundary fence.

The homeowner contends that words “not allowed for under this quote” in the Scope of Works in relation to a number of items shows that the parties also contemplated work future work outside the Scope of Works (see Ex 1, p. 25 at [7]-[8]).
On or about 23 August 2020 the builder provided the homeowner with a written quote in respect of the Scope of Works (Ex 1, p. 26 at [9] and pp. 36-37). The total price under this quote was $145,194 including GST.
On 25 August 2020 the builder provided the homeowner with another written quote in respect of the Scope of Works (Ex 1, pp. 102-105). The total price under this quote was $135,264 including GST.
In August 2020 the homeowner and the builder entered into a written contract for the residential building work at the Property (the Contract). The date that the parties signed the Contract is not recorded on the document. I infer it was after 25 August 2020. I do so because the contract price was $135,264, inclusive of GST (Ex 1, pp. 39 and 42) reflecting the price in the quote sent on 25 August 2020. In the ordinary course of events, where there is a separate quote and contract, the quote precedes the contract.
The respondent in these proceedings is Mr Reed, a natural person. Mr Reed signed the Contract. Subsequently, invoices for works under the Contract were issued on the letterhead and documentation of 100 Percent Building Pty Ltd (100 Percent Building), which is a company with which Mr Reed appears to have some association (eg Ex 1, p. 100). 100 Percent Building was not a party to the Contract and in these proceedings there was no contention that it should have been joined as a proper party. The respondent’s conduct during the course of the proceedings has at all times been on the basis that he was a party to the Contract and the proper respondent to the homeowner’s claims. All the amounts claimed under the invoices except for a small amount in the last invoice have been paid by the homeowner. Consequently, having regard to the dispute as propounded by the parties before the Tribunal and the matters recorded in this paragraph, I have proceeded on the basis that invoices issued by 100 Percent Building were issued on behalf of the builder. In these reasons the invoices or progress claims issued by 100 Percent Building will be referred to as invoices or progress claims issued by the builder.
The Contract is a Master Builders Association Residential Building (BC4) 2020 standard form contract.
Schedule 3 (Ex 1, p. 52) set out the details of the work to be performed by the builder as follows:

• New Kitchen, laundry, bathroom and ensuite. (Kitchen and Laundry - Provisional Sums) • Structural works to remove Internal wall and Install beam. • Replace two windows to bedrooms and install a cavity slider door to the laundry and ensuite. • Rear double doors to laundry to be removed • New weatherboard wall to be installed with single solid core door with glass panel • Patching gyprock as required • 90mm cove cornice allowed for in downstairs room and office • Rectification of skirtings and architraves.
Remove front path and drainage and rectify. • Excavate behind retaining wall and external brick lower ground floor walls below ground and waterproof. • All waterproofing works done externally, only internal waterproofing in bathroom, ensuite and laundry • Remove rear slab under deck and excavate and waterproof western wall to downstairs room • Rectify drainage and pour new slab draining away from house • Install drainage cell, aggline and backfill with gravel. • Rear stormwater drainage as per plumbers quote (supplied) • All plumbing as per quote provided - All electrical works as per Electricians Quotation • Painting internal only items not allowed for under this quote: • Upstairs cornices and skirtings not allowed for at this stage as quantities unknown. Thorough checking of plaster board repairs required due to electrical works cost not yet known • No tiling to laundry floor allowed for • No floor sanding allowed for - quote to be provided • Provisional sums still require fix priced quoting, Joiner measuring this week. • Asbestos removal quote to be done this week Repairs and rectification based on meetings and discussions between client and builder, not based on document provided. Fixtures and fittings throughout e.g tap wear, tiles, shower screens, basins, toilets etc. to be supplied by client. Potential future works not included - front driveway rectifications, rear landscaping, retaining wall, boundary fence

Item 9 of schedule 2 provided for the parties to list a special purpose or result that was required under the contract (Ex 1, p. 50). The parties did not list any special purpose or result under item 9 of schedule 2.
By way of background, some of the features or spaces in the Property, such as the rooms downstairs which were partially surrounded by earth, were previously built by another builder.
Work pursuant to the Contract commenced on 26 August 2020 (Ex 1, pp. 91).
The builder’s evidence is that on 22 September 2020 the homeowner moved back into the Property (Ex 1, p. 92). During cross examination the homeowner said that she moved back into the Property in November 2020.
The builder recorded a diary entry for 22 September 2020. The entry recorded “Jenni moving in” Property (Ex 1, p. 92, [13] & p. 111). The diary page on which that entry is recorded has numerous entries as to different work that might be recorded in a diary kept by a builder such as “waterproofing”, “concreting”, “painter” and “windows”. The veracity of the diary entry was not challenged in cross examination. For these reasons, I accept the accuracy of the diary entry for 22 September 2020 recording “Jenni moving in” and I find that the homeowner commenced moving back into the Property on 22 September 2020.
In addition to the work identified in schedule 3 of the Contract, I find that the builder carried out other residentially building work at the Property. That work included a concrete driveway, retaining wall in the rear yard of the Property, a boundary fence and landscaping (see Ex 1, p. 26, [12]).
On 16 June 2021 the last invoice was issued by the builder. The 16 June 2021 invoice was for $24,895.20. This invoice related to the driveway work and included excavation work and pouring of concrete. The concreting sub-contractor, Kelpie Concreting, also issued their invoice on 16 June 2021 (Ex 1, pp. 125-126).
A copy of the 16 June 2021 invoice as issued was not included in the materials tendered by the parties during the hearing. Rather, exhibit 1 contains a copy of an invoice dated 16 June 2021 in the amount of $24,895.20 but that document also records the receipt by the builder of the payment of $20,000, and records a balance owing of $4,895.20 (Ex 1, pp. 123-124). As discussed below, the $20,000.00 payment by the homeowner was made on 14 July 2021. Consequently, the document at Ex 1, pp. 123-124 is not a copy of the 16 June 2021 invoice as issued and that document must have been created after the payment of $20,000.00 on 14 July 2021.
The homeowner said that in December 2021 she received an invoice for the balance that was outstanding from the 16 June 2021 invoice (Ex 1, p. 27, [26]). The homeowner gave similar evidence in cross examination. I accept this evidence. I also infer the document at exhibit 1, pp. 123 – 124 is a copy of the document received by the homeowner in December 2021.
In June 2021, when the concrete work for the driveway was undertaken, the landscaping at the Property around the driveway was impacted.
After the concreting for the driveway was poured the landscaping around the driveway was not initially restored to its prior condition (Ex 1, p. 26, [17]). The homeowner was not satisfied with the landscaping and communicated her position to the builder on 5 July 2021 when the builder visited the Property (Ex 1, p. 26, [18]). The builder accepted that the landscaping was left in an unsatisfactory condition. Between 5 July 2021 and 14 July 2023, the builder undertook landscaping work around the driveway area (Ex 1, p. 27, [20] and [23]).
The homeowner says that because the builder “did not finish the internal tiling that was supposed to be completed by 30 January 2021 and the internal rectification work”. (Ex 1, p. 27, [21]) she told the builder that she would pay $20,000.00 in respect of the 16 June 2021 invoice and “would withhold the balance until the internal tiling and the internal rectification works were completed” (Ex 1, p. 27, [21]).
The builder disputes that the internal tiling was not completed (Ex 1, p. 93, [26]). The builder says that tiling “fell within stage 4 of the scope of works” (Ex 1, p. 93, [26]).
Having regard to s 18E(d) of the HB Act, whether the internal tiling work was not complete or whether the internal tiling work was undertaken, even if not performed in an appropriate manner, is relevant to determining the commencement of the statutory warranty period. I turn to consider when the internal tiling work was undertaken and whether it was not complete in the sense used in s 18E(d).
The Contract did not set out the schedule of works or a progress payments schedule. However, a document dated 1 September 2020 does identify various stages of work and the progress payments for those stages. The contractual status of that document is unclear. The parties did not address the Tribunal on whether the document dated 1 September 2020 has any contractual force. One difficulty with the document being contractually binding is that it is subsequent to the formation of the Contract. However, the builder’s evidence demonstrates that he considered that the 1 September 2020 document recorded the parties agreement as to when progress claims were to be made (Ex 1, p. 93, [26]). The homeowner did not dispute that the 1 September 2020 document recorded the progress claim stages. Further, the amounts and timing of the payments made by the homeowner was consistent with the stages described in the 1 September 2020 document (see Ex 1, p. 79). Consequently, the 1 September 2020 document assists in determining when the internal tiling work was performed.
The 1 September 2020 document records the work in connection with the fourth stage of progress claims to be “Tiling/Painting” (Ex 1, p. 107). The progress claim for ‘stage 4’ was issued on 16 September 2020 in the amount of $27,052.80 including GST (Ex 1, p. 110) and was paid by the homeowner on 30 September 2020 (Ex 1, p. 79). This evidence is consistent with the builder’s contention that the internal tiling work was subject to the subject of the fourth progress claim and that this reflected when the work was done.

The joint expert report dated 21 December 2023 (Ex 1, pp. 136 – 178) (the Joint Expert Report) is also relevant. Many items of alleged defects in the Joint Expert report, as identified in the left hand column describing the nature of the defect, relate to poor workmanship concerning tiling. However, the Joint Expert Report does not record that an issue with the internal tiling is that it was not completed or not done.
Having regard to the above matters, I find that the internal tiling work was not incomplete. I do so for the following reasons:

the builder denies that the internal tiling was not complete;

the 1 September 2020 document contemplated that tiling was a component of the fourth stage of work;

the progress claim for the fourth stage of work was issued 16 September 2020 and was paid by the homeowner;

the defects in the Joint Expert Report refer to defective tiling in many instances but do not refer to the internal tiling as not having been undertaken or being not complete.

On 14 July 2021 the homeowner paid the builder $20,000.00 in respect of the 16 June 2021 invoice (Ex 1, p. 27 at [23], p. 79 and p.94 at [29]).
During cross examination the homeowner agreed that the last item of work performed by the builder was the driveway work. Having regard to the above evidence concerning the driveway work and the unsatisfactory restoration of the landscaping, I find that the work to which the homeowner referred in her cross examination was intended to include the landscaping around the driveway. This landscaping work was done to restore the landscaping which had been affected by the driveway work and there is no dispute that at least some landscaping restoration work was undertaken in July 2021.
The landscaping work around the driveway occurred in July 2021. After the builder undertook that work, between 5 July 2021 to 14 July 2021, there was no further contact between the builder and the homeowner until December 2021.
There is some dispute as to what occurred between the builder and the homeowner in July 2021 and then in December 2021.
The homeowner says that in July 2021 the builder told her that he would return to the Property in November 2021 to attend to the “remaining Works” but that he did not do so (Ex 1, p. 27, [22]-[23]).
In December 2021 the homeowner tried contacting the builder by telephone but was initially unsuccessful and left a voice message. Subsequently, the homeowner was able to speak with the builder. The homeowner’s statement records the following (Ex 1, p. 27, [25]):

When I told Richard that I left him a voice message about the remaining defective work, he told me “She can shove it up her arse”. I was so shocked with his abusive language and felt very intimidated.

During cross examination the homeowner gave a different version of this evidence in that she says the words “She can shove it up her arse” were spoken by the builder to a sub-contractor.
I find that there was no contact between the homeowner and the builder between 14 July 2021 and the beginning of December 2021. There was a conversation between the builder and homeowner in December 2021 but I find that the builder did not say to the homeowner during the December 2021 conversation the words “She can shove it up her arse”.
I also find that during the December 2021 telephone call the homeowner traversed the issue of defective work (Ex 1, p. 27, [25]). I do so because in December 2021 there was a balance outstanding on the 16 June 2021 invoice, in December 2021 the builder re-sent the invoice to the homeowner with the balance outstanding itemised and the homeowner and the builder had a discussion in December 2021. I accept the homeowner’s evidence that she did not pay the balance outstanding in July 2021 because she was not satisfied with all the builder’s work. In light of the homeowner’s reasons for withholding payment of a portion of the 16 June 2021 invoice, when the parties had a telephone discussion in December 2021 it would be expected that the issue of the balance outstanding and the reasons for the non-payment would have been raised.
On 12 April 2022 the homeowner emailed the builder, relevantly, as follows (Ex 1, p. 81):

“Hi Richard,
I spoke with you just before Christmas, regarding my property, you told me you thought ‘she can shove it up her arse.......that I hadn’t paid the last invoice sent by you a few times. I explained I thought that was an automated mistake (as had happened before) and that I was shocked you would say that to me as we had agreed there was still work needed doing before I finalised payment.
When the driveway was completed as part of the works at my home last year, I had a conversation with you about the payment where I said I would transfer $20,000.00 and hold on to the rest until the problems and issues with the ensuite were resolved; you said you couldn’t do anything until November and I was understanding knowing you were now busy with other works.
I didn’t hear anything from you in November. I contact you in December and have had no further communication from you.
There are substantial issues in the ensuite as you know; Tiles coming up in the shower, tiling unfinished at edge of shower, edging of tiles not finished around window, around the floor where it meets the wall is not finished off leading to wood splitting and grout cracking, etc. The main bathroom also has issues where it has not been finished off around the door, the vanity now has problems with the seal to wall, there is an issue around the window I was not aware of, etc. I have had two tilers to inspect the bathrooms both of which don’t want to touch it as there are too many problems.
There is also an issue now with the rear retaining wall; it is dropping and bowing.
I also need a copy of the drainage plans including the underground pits, as I am having water issues - the south wall in the shed area (waterproofed?) is leaking, the pits overflow at the slightest rain and the drain at the lower rear door backs up with water as the pit to the west of it overflows and back runs up and into my lower floor; I have been constantly dealing with this flooding since February, before the big rains in early March, even having to sandbag the lower door so all the water doesn’t rush back into downstairs.
I have put together photos of the ensuite, main bathroom, retaining wall and water issues and will email separately.
Regards,
Jenni.”

The builder says that this email was the first notification of defective work that he received (Ex 1, p. 95, [44]). I accept that the 12 April 2022 was the first written notification of defective work received by the builder. However, I do not accept that this was the first notification to the builder of defective work because, for the reasons set out above, I have found that the issue of defective work was traversed in December 2021.
On about 22 April 2022 the builder attended the Property.
Some work was subsequently performed. The homeowner describes the work as “rectification work for the absorption pit” and “rectification work for the retaining wall” (Ex 1, p. 20, [45] and [46]). The absorption pits are a component of the drainage system. The builder’s evidence in this respect is inconsistent with the homeowner. He says that after the attendance at the Property on about 22 April 2022 he “returned to site and carried out rectification work to the drainage systems and the retaining walls” (Ex 1, p. 95, [45]). Specifically, on 25 May 2022 the builder carried out some further work in the form of some enhancement to the absorption pit by adding two trenches and a stormwater drains (Ex 1, p. 96, [46]-[47]) and in early June 2022 the builder also removed four posts from the retaining walls and replaced them with longer posts (Ex 1, p. 96, [49]-[50]).
The builder did not charge for the work on 25 May 2022 and in early June 2022 (Ex 1, p. 96, [48] and [51]).
I find that the work undertaken on 25 May 2022 and in early June 2022 was work by way of attending to defects. I do so for the following reasons. First, the builder did not charge for the work. Secondly, the 25 May 2022 and early June 2022 work was in respect of items of work that had already been performed by the builder. Finally, both parties described the work as “rectification work”. Although the parties’ description is of the nature of the work cannot determine its proper characterisation, it is relevant that there was no issue between the parties as to the nature of the work and that both parties saw the work as remedying previous work already undertaken.
The homeowner had ongoing concerns about the work undertaken by the builder. Consequently, in September 2022 the homeowner retained Hydromedial to provide a report on the work.
On 7 October 2022 Mr Karl van Hoogenwest from Hydromedial attended the Property and on 10 October 2022 provided the homeowner with a report. This report was sent to the builder by email on 21 October 2022 (see Ex 1, p. 84).
On 23 November 2022 the homeowner, the builder and Mr van Hoogenwest met at the Property and discussed the defects. The homeowner’s statement records that the parties came to an agreement as to the remediation work required (Ex 1, p. 21, [56]). The builder denies that he made such an agreement (Ex 1, p. 96, [55]).
On 28 November 2022 Mr van Hoogenwest sent an email to the builder, which was copied to the homeowner (Ex 1, p. 85). The email commenced as follows:

“Thank you for attending the site meeting on Wednesday, we appreciate you working with us in the client’s best interest. We have included the areas reported on and discussed on site at the meeting on 23/11/22, 7:30am, below:”

The email then contained a description of the alleged defects and the proposed method for remedying the alleged defects. The email also contained embedded links by which the builder could record his acceptance of his willingness to perform the proposed rectification. The builder did not signify his acceptance through the email links.
On 29 November 2022 the homeowner received an email from the waterproofing sub-contractor that had performed work related to the downstairs storeroom at the Property requesting permission to undertake some water testing the following day (Ex 1, p. 88).
On 30 November 2022 the builder and the waterproofing sub-contractor, Ben, by arrangement with the homeowner, attended the Property. The homeowner, the builder and Ben attended downstairs in the storeroom area.
During this visit Mr van Hoogenwest telephoned the homeowner. The homeowner left the storeroom to receive the call. Mr van Hoogenwest advised the homeowner that the builder had emailed him to the effect that he did not intend to undertake the rectification work as proposed in Mr van Hoogenwest’s 28 November 2022 email. Further, Mr van Hoogenwest advised the homeowner that the builder had advised he intended seeking legal advice.
After the call between the homeowner and Mr van Hoogenwest the homeowner returned to the downstairs storeroom. Upon her return the homeowner noticed that Ben was undertaking some form of work. The homeowner says that Ben was using a jackhammer. The builder says that he was using a grinder with the intent to insert a fast drying hydraulically expanding mortar known as “maxplug” (Ex 1, p. 97, [58]). I accept the evidence of the builder in this respect because it is more detailed and persuasive as to the nature of the work being carried out and the reasons for that work, namely, the insertion of the “maxplug” mortar.
At this point there was a heated exchange, the work stopped and the builder and Ben left the Property.
By letter dated 19 December 2022 the builder sent a letter to the homeowner setting out the work he was prepared to do. That letter was, relevantly, in the following terms (Ex 1, p. 132):

Monday, 19 December 2022
We refer to the “Notice of Dispute” dated 13 December 2022. We note that this Notice is purportedly issued pursuant to clause 26 of the contract. In this regard, it is not a proper notice. Clause 26 requires a notice and then to confer with 10 business days. Please advise suitable dates if you still wish to confer. In any event we below provide our position in relation to the works as discussed in the meeting on 23 November 2022.
Proposal from 100% Building Pty Ltd to Jenni Brown
52 Sydney Road
Warriewood NSW 2102
Works to be completed:
Ensuite:
• To be replaced as previously agreed
• Additional floor waste to be installed
• Correct falls to be installed
• Waterproofing to be redone
• Tiling to be redone
• Paint as required
Original fixtures and fittings to be used
• Tiles to be like for like price wise. Existing tile design cannot be used as not suitable.
As advised tiles with big glue line backing are not suitable for laying on floors.
Kitchen:
Kitchen sink to be replaced by Joinery company.
• Client has been asked to provide information on purchase of original sink to endeavour to purchase as close to match as possible.
• No more gaps to be removed from window sill and replaced with appropriate material.
• Joiner will arrange for cabinetry to be resprayed. Doors will be removed to be resprayed and will be re-installed. This will correct misalignment.
Respraying of Kitchen Cabinetry is an act of goodwill as we don’t believe that there is a defect. The misalignment of the cupboards, which as per NSW Standards and Tolerances has a defect period of 6 months from installation, Part 11.4.

The 19 December 2022 proposal records that 100 Percent Building would perform the proposed work. During the hearing the parties treated the 19 December 2022 proposal as being that of, or perhaps on behalf of, the respondent in the proceedings, namely, Mr Reed/the builder.
The 19 December 2022 proposal did not resolve the parties’ dispute.
On 24 August 2023 the homeowner commenced these proceedings.

Jurisdiction

Section 48A of the HB Act defines a building claim as follows:

building claim means a claim for—
(a) the payment of a specified sum of money, or
(b) the supply of specified services, or
(c) relief from payment of a specified sum of money, or
(d) the delivery, return or replacement of specified goods or goods of a specified description, or
(e) a combination of two or more of the remedies referred to in paragraphs (a)–(d),
that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services, but does not include a claim that the regulations declare not to be a building claim.
…
building goods or services means goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services—
(a) supplied by the person who contracts to do, or otherwise does, that work, or
(b) supplied in any circumstances prescribed by the regulations to the person who contracts to do that work.

The homeowner’s claim is for “the payment of a specified sum of money” in respect of alleged breaches of the statutory warranties prescribed by s 18B of the HB Act. That claim arises from the supply of building goods or services by the builder. Consequently, it is a building claim within the meaning of section 48A of the HB Act. It follows that the Tribunal has jurisdiction under s 48K to hear and determine the matter, subject to any questions of the warranty period arising under ss 18E and 48K(7).

Issues for determination

The issues for determination are as follows:

When does the statutory warranty period commence and is the homeowner within the time limitation period in respect of defects which are not “major defects”;

Which of the alleged defects comprise breaches of the warranties implied into the Contract by reason of s 18B of HB Act; and

Should the homeowner be permitted to raise an allegation that the builder breached the Contract by failing to bring the work to practical completion.

Commencement of the warranty period

I turn to consider the first issue, namely, the commencement of the statutory warranty period.
Section 18E of the HB Act prescribes the period of the statutory warranties prescribed by s 18B. Section 18E provides as follows:

18E   Proceedings for breach of warranty
(1) Proceedings for a breach of a statutory warranty must be commenced in accordance with the following provisions—
(a)  proceedings must be commenced before the end of the warranty period for the breach,
(b)  the warranty period is 6 years for a breach that results in a major defect in residential building work or 2 years in any other case,
(c)  the warranty period starts on completion of the work to which it relates (but this does not prevent proceedings from being commenced before completion of the work),
(d)  if the work is not completed, the warranty period starts on—
(i)  the date the contract is terminated, or
(ii)  if the contract is not terminated—the date on which work under the contract ceased, or
(iii)  if the contract is not terminated and work under the contract was not commenced—the date of the contract,

(e)  if the breach of warranty becomes apparent within the last 6 months of the warranty period, proceedings may be commenced within a further 6 months after the end of the warranty period,
(f)  a breach of warranty becomes apparent when any person entitled to the benefit of the warranty first becomes aware (or ought reasonably to have become aware) of the breach.
(1A) If a building bond has been lodged for building work under Part 11 of the Strata Schemes Management Act 2015, the period of 2 years specified for commencing proceedings for a breach of a statutory warranty for that work is extended until the end of 90 days after the end of the period within which a final inspection report on the building work under that Part is required.
(1B) Subsection (1A) does not limit any other law that permits the period for commencement of proceedings to be extended.
(2) The fact that a person entitled to the benefit of a statutory warranty specified in paragraph (a), (b), (c), (e) or (f) of section 18B has enforced the warranty in relation to a particular deficiency in the work does not prevent the person from enforcing the same warranty for a deficiency of a different kind in the work (the other deficiency) if—
(a)  the other deficiency was in existence when the work to which the warranty relates was completed, and
(b)  the person did not know, and could not reasonably be expected to have known, of the existence of the other deficiency when the warranty was previously enforced, and
(c)  the proceedings to enforce the warranty in relation to the other deficiency are brought within the period referred to in subsection (1).
(3) The regulations may prescribe defects in a building that are not (despite any other provision of this section) a major defect.
(4) In this section—
major defect means—
(a)  a defect in a major element of a building that is attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code (or any combination of these), and that causes, or is likely to cause—
(i)  the inability to inhabit or use the building (or part of the building) for its intended purpose, or
(ii)  the destruction of the building or any part of the building, or
(iii)  a threat of collapse of the building or any part of the building, or

(b)  a defect of a kind that is prescribed by the regulations as a major defect, or
(c)  the use of a building product (within the meaning of the Building Products Safety) Act 2017 in contravention of that Act.
Note—
The definition of major defect also applies for the purposes of section 103B (Period of cover).
major element of a building means—
(a)  an internal or external load-bearing component of a building that is essential to the stability of the building, or any part of it (including but not limited to foundations and footings, floors, walls, roofs, columns and beams), or

(b)  a fire safety system, or
(c)  waterproofing, or
(d)  any other element that is prescribed by the regulations as a major element of a building.

Section 48K(7) is also relevant. It provides as follows:

The Tribunal does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E).

Consequently, section 18E provides for a warranty period of 6 years for “major defect” and 2 years for any other defect.
Pursuant to s 18E(1)(c), the warranty period “starts on completion of the work to which it relates (but this does not prevent proceedings from being commenced before completion of the work)”. The word “it” in s 18E(1)(c) is a reference to the work to which the breach relates: see The Sydney Building Company Limited v Sinac [2019] NSWCATAP 43 at [42]-[43].
The meaning of “completion” is defined in section 3B of the HB Act. Section 3B provides:

3B Date of completion of residential building work
(1)   The completion of residential building work occurs on the date that the work is complete within the meaning of the contract under which the work was done.
(2)   If the contract does not provide for when work is complete (or there is no contract), the completion of residential building work occurs on practical completion of the work, which is when the work is completed except for any omissions or defects that do not prevent the work from being reasonably capable of being used for its intended purpose.
(3)    It is to be presumed (unless an earlier date for practical completion can be established) that practical completion of residential building work occurred on the earliest of whichever of the following dates can be established for the work—
(a)    the date on which the contractor handed over possession of the work to the owner,
(b)    the date on which the contractor last attended the site to carry out work (other than work to remedy any defect that does not affect practical completion),
(c)    the date of issue of an occupation certificate under the Environmental Planning and Assessment Act 1979 that authorises commencement of the use or occupation of the work,
(d)   (in the case of owner-builder work) the date that is 18 months after the issue of the owner-builder permit for the work.
(4)    If residential building work comprises the construction of 2 or more buildings each of which is reasonably capable of being used and occupied separately, practical completion of the individual buildings can occur at different times (so that practical completion of any one building does not require practical completion of all the buildings).
(5)    This section applies for the purposes of determining when completion of residential building work occurs for the purposes of any provision of this Act, the regulations or a contract of insurance under Part 6.

In The Owners Strata Plan 64757 v Sydney Remedial Builders Pty Ltd [2023] NSWSC 1127 (Sydney Remedial Builders) Rees J observed:

[19] …. Typically, building contracts contemplate two stages of completion: practical completion and final completion. Practical completion marks the point in time when possession of the works is handed back to the owner, liquidated damages cease to run and the defects liability period begins; the works are generally able to be used for the purpose contemplated by the agreement: Damien Cremean et al, Brooking on Building Contracts (LexisNexis Butterworths, 6th ed, 2020) at [8.23]. Generally, “final completion” is the stage of the work where everything which is required under the contract is finally completed, so that the contractor is discharged from all contractual obligations: Halsbury’s Laws of Australia (LexisNexis Butterworths, Online Service updated at 7 December 2021) at [65-925]. Commonly, building contracts provide for a final certificate to be issued at this point, being after the expiry of the defects liability period, rectification of all defects known or directed during this period, and compliance with the builder’s other obligations under the contract: Brooking on Building Contracts at [8.28].

The observations in the preceding paragraph relate to determining the date of completion as determined under the contract pursuant to s 3B(1), or practical completion as determined under sub-sections 3B(2) and 3B(3) if the contract does not provide for a meaning of completion: see Sydney Remedial Builders at [21] – [25]. However, those observations do not apply when the work is not complete within the meaning of s 18E(1)(d). As the Appeal Panel explained in Clements v Murphy [2018] NSWCATAP 152 at [25]:

… Prior to practical completion, a builder is clearly entitled to complete any incomplete works. In a sense, the concept of incomplete work is meaningless prior to practical completion. By definition, before building works have achieved practical completion, there will be work remaining to be performed.

In these proceedings, the homeowner contended that the work was not complete with the consequence that sub-s. 18E(1)(d) was engaged. In this respect the homeowner submits that the works that are not complete “include the tiling in the ensuite, waterproofing in the laundry, grouting, tiling on the outside bench, and the skirting boards” (Homeowner’s Closing Submissions, 14/3/23, [3.3]). The evidence cited in support of this submission is page 27 of exhibit 1. Page 27 of exhibit 1 is paragraphs [18]-[27] of the homeowner’s statement. The only paragraph that speaks to work that was not complete is [23] where the homeowner records that the builder “did not finish the internal tiling that was supposed to be completed by 30 January 2021 and the internal rectification works”.
In relation to the internal tiling, I have recorded above my finding that the internal tiling was not incomplete and that I prefer the evidence of the builder in this respect.
The homeowner also contended that missing grouting constituted work that was not complete (Homeowner’s Closing Submissions, [3.3]). The Joint Expert Report records the alleged problem in respect of the ensuite as “Missing grout” (Ex 1, p. 150, item 8). However, the “Missing grout” problem was not a reference to a complete absence of any grout in respect of the wall and floor tiling in the ensuite. This is made clear by the fuller explanation of this issue articulated in the expert report of Mr Morris filed on behalf of the homeowner. At 9.4.17 of Mr Morris’ report, dealing with the ensuite, Mr Morris records (Ex 1, p. 200):

We turned our attention to the grouting in the ensuite where we observed missing grout in various locations such as; on the jolly edges, joint between the mosaic, wall tile and exposed edges of tiles on the walls and floors and in the grout joints next to the vanity.

The problem of “missing grout” is not that grout has not been applied at all in the ensuite where required, but rather that grout was not applied in “various locations”. The absence of grout in various locations does not mean that the work was not complete within the meaning of s 18E(1)(d)(ii).
The Homeowner’s Closing Submissions did not identify the evidence that provided a foundation for the contention that “tiling on the outside bench” and “the skirting boards” constituted work that was not complete. In respect of these items, the Joint Expert Report also did not provide any basis for the contention that the work was not undertaken such as to mean that the work was “not complete” within s 18E(1)(d)(ii). I do not accept, on the balance of probabilities, that “tiling on the outside bench” and “the skirting boards” constituted work that was not complete.
The builder also contended that the work in the laundry was not complete. Some waterproofing work was performed in the laundry behind the splashback installed by the builder. The floor of the laundry was not tiled and, due to the builder’s position that the scope of works did not require waterproofing to the laundry floor, there was no waterproofing work to the laundry floor.
In Clements v Murphy [2018] NSWCATAP 152 the Appeal Panel said at [21]:

There may be some room for debate in individual cases as to whether a particular matter complained of is incomplete or defective work. For example, a failure to install handles on kitchen cupboards may be argued to be incomplete work, but may also be characterised as defective work. However, in general terms, a failure to install major building elements such as windows or a roof would clearly constitute incomplete work and could not properly be characterised as defective work.

The first issue with respect to the laundry requires the Tribunal to construe the scope of works under the Contract in respect of the laundry, as set out in Schedule 3 of the Contract (Ex 1, p. 52). The critical words of the Contract in this respect in Schedule 3 as follows:

All waterproofing works done externally, only Internal waterproofing in bathroom, ensuite and laundry … No tiling to laundry floor allowed for …

It follows that the agreement of the parties contemplated that the builder would undertake waterproofing in the laundry but excluded the provision of tiling to the laundry floor. The homeowner contends that the waterproofing work included waterproofing the laundry floor. The builder contended that the waterproofing related to the area behind the installed splashback and that this waterproofing was done.
During the hearing the homeowner’s expert accepted in cross examination that if a waterproof membrane was required for the floor of the laundry then that would require the membrane to be protected by screed and tiling. Mr Morris accepted that only laying sand and cement screed on top of the waterproofing membrane would not be complaint with relevant standards, presumably because the membrane would not be protected. I accept this evidence.
Mr Frizzell, the builder’s expert, also gave oral evidence to the effect that a waterproof membrane and the screed would need to be protected by tiles.
I also note that in Mr Morris’ proposed rectification methodology he initially included the need for tiling. Of course, the Contract excluded such work.
The builder submitted that the evidence of the homeowner’s expert that if a waterproof membrane was required for the floor of the laundry then that would require the membrane to be protected by screed and tiling supported the construction that the Schedule 3 required some waterproofing in the laundry, which was undertaken behind the splashback, but not the waterproofing of the laundry floor. For the reasons explained in the following paragraphs, I have concluded that this is correct.
An important rule in the construction of contracts is to give “as much meaning as possible to all parts of the contract in a consistent fashion” and normally to give greater weight to specifically negotiated clauses. In Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 Gyles, Edmonds and Greenwood JJ observed at [77]:

It is necessary to construe the contract as a whole and to construe individual clauses in that context. The objective is to give as much meaning as possible to all parts of the contract in a consistent fashion avoiding repugnancy and absurdity. Where there are clauses of a contract specially framed with the individual circumstances in mind, together with standard form clauses, it will normally be appropriate to give greater weight to the specially negotiated clauses.... In our opinion, this is such a case. Effect can be given to all parts of the contract and repugnancy avoided here if the standard form provision for termination without cause is read as applicable only after the completion of the 1998 calendar year. (Citations omitted)

In construing, objectively, what the parties intended and agreed under the Contract in respect of the laundry, the specific reference to the exclusion of tiles of the laundry floor indicates that the parties contemplated the work would not require tiling. The builder undertook tiling work to the bathroom and ensuite under the Contract so it seems unlikely the parties contemplated that another party would do tiling to the laundry floor and there was no suggestion during the hearing that tiling was to be undertaken by another party. I also consider that it be would absurd that the parties agreed that the work would be done in a manner that would result in that work breaching the requirement for due care and skill by agreeing to the non-application over the membrane of a tiled floor or another form of protection to protect the membrane. Consequently, I have concluded that the waterproofing in the laundry referred to waterproofing work in the area where the builder installed a splashback. This means that I have concluded that the laundry work under the Contract did not require application of waterproofing membrane to the laundry floor. This gives meaning to the word “waterproofing” in respect of the laundry, whilst not requiring an unprotected membrane to be installed on the laundry floor. The evidence that waterproofing was undertaken to the area behind the splashback is not contested and I find that this was done.
I have considered whether the better construction is that the reference to waterproofing in the laundry included the laundry floor. One factor which supports that construction is that there is no qualification to the surfaces to be waterproofed in the laundry. I have concluded that this is not the better construction of the clause because it would result in an unprotected, or insufficiently protected, waterproof membrane as the final result of that work.
Another factor which may favour this construction is that schedule 3 provided that the “Fixtures and fittings throughout e.g tap wear, tiles, shower screens, basins, toilets etc. to be supplied by” the homeowner. However, in relation to the words “Fixtures and fittings throughout e.g tap wear, tiles, shower screens, basins, toilets etc. to be supplied by” the homeowner, those words refer to the responsibility for the provision of materials to be used, whereas the words “No tiling to laundry floor allowed for” are apt to describe work by the builder, namely, “tiling to the laundry floor” that is not within the scope of works.
As recorded above, the homeowner’s submissions only referred to page 27 of exhibit 1 as the evidentiary basis in respect of the submission itemising the incomplete works, said to “include the tiling in the ensuite, waterproofing in the laundry, grouting, tiling on the outside bench, and the skirting boards”. The evidence on which the homeowner relied in [3.3] of the Closing Submissions did not provide an evidentiary foundation for the homeowner’s submission. In addition, I have dealt with the issue of whether the internal tile work was not complete and recorded that I do not accept this submission. I have also dealt with the allegation that the “missing grout” constituted work that was not complete and found that this description properly understood was a reference to a defect, as opposed to work that was not complete within the meaning of s 18E(1)(d). The absence of waterproofing on the laundry floor is not properly characterised as “not complete” because the builder was not required to waterproof the laundry floor and did waterproof an area behind the splashback which he installed. I am satisfied on the balance of probabilities that that the work under the Contract cannot be properly characterised as “not complete” within the meaning of s 18E(1)(d).
The homeowner also points to the builder’s 19 December 2022 letter (Ex 1, p. 132) which commences “Works to be completed”. However, the contents of that letter, including the description of the work under the heading “Works to be completed” identifies numerous items of work which were done but which needed to be rectified or remedied or which the builder had agreed to re-do or remedy. Such items of work which include (i) correct falls to the ensuite floor to be installed; (ii) the waterproofing in the ensuite which would be “re-done”; (iii) kitchen sink to be replaced; (iv) respraying of kitchen cabinetry; (v) grind down steel posts in grass areas, which referred to posts that the builder had installed; (vi) re-silicone bathroom; (vii) broken tile on bathtub to be replaced; and (viii) review removal of 2 tiles in corner to correct falls. Consequently, the words “Works to be completed” in the 19 December 2022 letter are not an admission by the builder that the work was not complete within the meaning of s 18E(1)(d). Rather, the work in the 19 December 2022 letter is generally in the nature of the builder remedying or rectifying work already undertaken by the builder.
Another reason or circumstance relied on by the homeowner to contend that the work was not complete is because in July 2021 the builder told the homeowner he “would come back to finish the remaining Works” (Ex 1, p. 27, [22]). That evidence is of very limited assistance in determining whether the work was not complete within the meaning of sub-s. 18E(1)(d). The evidence was not in direct speech in the homeowner’s statement and it is not clear what work was being described by the use of the term “remaining Works”. Consequently, the Tribunal cannot assess and determine whether the “remaining Works” to which the homeowner is referring is remedying defects (or alleged defects) or incomplete work.
I turn to consider s 3B in order to identify the commencement of the statutory warranty period.
In Sydney Remedial Builders Rees J explained the interaction between the contract and s 3B of the HB Act as follows:

[21] As to what, then, is required by section 3B(1), I consider that the building contract must provide when the work is complete, either by a date, a timeframe, or when the work meets a particular description or has been certified as such. It is probably further down the construction pathway than practical completion but not necessarily final completion. However, ultimately the matter is one of contractual choice. The question will simply be whether the building contract clearly identifies when the work can be said to be complete. A simple example of such a clause was in Howell v Talevski [2021] NSWSC 1133, where clause 8 of the General Conditions provided, “The work will be complete when the contractor has finished the work in accordance with the contract documents and any variations, it is free of apparent defects … and all rubbish and surplus material has been removed from the site.” Simpler and more complex contractual provisions no doubt abound. If the building contract provides when the work is complete, then completion occurs on the date provided by the contract: section 3B(1). That is, the question of whether work is complete is a matter of construction of the building contract itself, not of section 3B(1): Howell v Talevski at [36] (per Stevenson J).
[22] If the contract does not provide when the work is complete (or there is no contract) then completion occurs on “practical completion” as defined by section 3B(2), being “when the work is completed except for any omissions or defects that do not prevent the work from being reasonably capable of being used for its intended purpose.” It has been suggested that the statutory definition of “practical completion” may complicate matters where the work in question is repair work, as it was in this case: Bambagiotti, Building Disputes & the Home Building Act 1989 (NSW) (Thomson Reuters, 2012) at [HBA.3B.10]. The point at which “the work [is] reasonably capable of being used for its intended purpose” in this context may be more difficult to identify than, say, for the construction of a new dwelling.
…
[25] Whether under section 3B(2) or (3), it is the statute and not the building contract which identifies when “practical completion” has occurred for the purposes of the commencement of statutory warranties and home warranty insurance time periods. The difference in language between section 3B(1), on the one hand, and sections 3B(2) and (3), on the other, makes this plain. Of course, the contractual provisions may produce the same result as the statute, where the definition of “practical completion” in section 3B(2) is common in building contracts. Ordinarily, practical completion occurs at a contractually defined point where the works are generally able to be used for the purpose contemplated by the agreement: Brooking on Building Contracts at [8.23].

It follows that the first step under s 3B(1) is to determine whether the contract provides a meaning for “completion”.
In these proceedings the builder does not rely on the Contract as providing for completion and contends that completion falls to be determined under s 3B of the HB Act (see Builder’s Closing Submissions, [45]). The homeowner was provided with an opportunity to reply to the Builder’s Closing Submissions and did not file any submissions in reply. There may have been an argument that clause 24(f) of the Contract provides a meaning of completion. However, no party contended that was the case. Having regard to the manner in which both parties have conducted the proceedings, and the importance of parties being bound by their conduct of proceedings, I will proceed on the basis that the Contract did not provide a meaning for completion.
Section 3B(2) provides that completion “occurs on practical completion of the work, which is when the work is completed except for any omissions or defects that do not prevent the work from being reasonably capable of being used for its intended purpose”. Practical completion for the purposes of s 3B(2) is presumed to occur on the earliest occurrence of the matters listed in s 3B(3).
In these proceedings, I have concluded that, pursuant to s 3B(3)(b), practical completion occurred between 5 July 2021 and 14 July 2021, being a range of dates on which the builder “last attended the site to carry out work (other than work to remedy any defect that does not affect practical completion)”. I have reached this conclusion for the following reasons:

During cross examination, the homeowner agreed that the last item of work performed by the builder was the driveway work, which I have held included the restoration of the surrounding landscape. This was done by 14 July 2021.

The builder’s invoice for the driveway work was issued on 16 June 2021 and almost totally paid on 14 July 2021.

Despite a number of attendances by the builder in 2022, he did not charge for any of work done in 2022. The work done in 2022 addressed complaints in respect of the work previously performed by the builder under the Contract, rather than the performance of new items of work. The builder’s attendances were in the nature of rectification of defects and indeed both parties characterised the work as rectification work.

The homeowner has been residing in the Property since about September 2020.

The work that the builder undertook in 2022, and the defects the subject of these proceedings, do not comprise work that affected practical completion. The evidence did not establish that defects have prevented the homeowner and her family from residing in the Property, or that the bathroom, the ensuite, the driveway or the other work undertaken by the builder are not reasonably capable of being used for their intended purpose.

Finally, in this matter there is no reason to depart from the presumption prescribed by s 3B(3) to the effect that practical completion occurred on the date on which the builder last attended the Property to carry out work (other than work to remedy any defect that does not affect practical completion).
For the above reasons I find that the date on which the builder last attended the Property to carry out work, other than work to remedy any defect that does not affect practical completion, was between 5 July 2021 and 14 July 2021 and consequently that was the date of practical completion determined in accordance with s 3B(3)(b) is no later than 14 July 2021.
These proceedings were commenced on 23 August 2023, which is slightly more than two years after the commencement of the statutory warranty period. It follows that the homeowner cannot bring any claims for defects other than those constituting major defects. It also follows, pursuant to s 48K(7) of the HB Act, that in these proceedings the Tribunal does not have jurisdiction in respect of defects that are not major defects.
For completeness, I have not found that practical completion occurred when the homeowner moved back into the Property in September 2020. Clearly, after September 2020 major work was undertaken under the Contract, pursuant to agreed variations. That work included the driveway work was performed in about June 2021. The driveway work had not even commenced when the homeowner and her family moved back into the Property. There is no dispute between the parties that the driveway work was work undertaken under the Contract, albeit pursuant to variations of the Contract. In those circumstances, the work was ongoing after the homeowner had moved back into the Property and that the homeowner had taken possession of that work before June 2021.
Clause 22(f) of the Contract provides that the owners occupation or use of the Property amounts to practical completion. Clause 22(f) provides as follows:

22. Practical Completion
…
Occupation or use will amount to Practical Completion
(f) (i) Should the Owner or any tenant or their employees or agents take possession of the works or any part of the works without the written agreement of the Builder, the date of Practical Completion will be the date possession is taken, unless Practical Completion has already been reached.
(il) Without limiting the generality of this clause possession being taken will be established by any or all of such things as placement of furniture, use of any part of works, denial of access of the Builder to the works or work site or action by the Owner or their agent which prevents the Builder undertaking work.

The builder relied on each of sub-clauses 22(f)(i) and 22(f)(ii).
However, the parties’ contractual definition of practical completion, and the date yielded by that definition, is not necessarily the same as practical completion determined in accordance with s 3B of the HB Act. Unlike the date of completion for the purposes of s 3B(1), which is determined in accordance with the contract if the contract provides for a meaning of completion, practical completion falls to be determined in accordance with sub-sections 3B(2) – 3B(4) and not the parties’ contractual definition. Although the contract and s 3B(3) may yield the same result as to the date of practical completion, that is not necessarily the case. Consequently, I do not accept that sub-clauses 22(f)(i) or 22(f)(ii) of the Contract result in the date of practical completion being 22 September 2020.

Defects

Section 18B of the HB Act provides as follows:

18B Warranties as to residential building work
(1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work—
(a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract,
(b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new,
(c) a warranty that the work will be done in accordance with, and will comply with, this or any other law,
(d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time,
(e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling,
(f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder’s or person’s skill and judgment.

I turn to consider the defects, by reference to the Joint Experts Report.

Item 7 - Bathroom

The homeowner claims that “the bathroom floor and bathroom tiles present with multiple defects” (see Ex 1, p. 144, item 7). Two issues arise in relation to the alleged bathroom defects. First, whether there is a defect as described. Second, if there is a defect, whether it is a major defect.
The experts are agreed that the absence of water stop angles in the bathroom are a major defect as they comprised part of the waterproofing system. The missing water stop should be at the entry door area of the bathroom (Ex 1, p. 198, [9.3.22]).
The builder’s submissions did not contend that the Tribunal should not find that the absence of water stop angles was not a major defect for the purposes of s 18E.
AS3740/2010, section 3.9.1.2 provides as follows:

3.9.1.2 Perimeter flashing at door level openings
The following applies:
(a) For whole wet are floor waterproofing A water stop that has a vertical leg finishing flush with the top of the finished floor level shall be installed at floor level openings. The floor membrane shall be terminated to create a waterproof seal to the water stop and to the perimeter flashing.
NOTE: For typical bathroom detail for whole bathroom waterproofing, see Figures 3.3(a) and 3.3(b).
…

Consequently, so as to comply with AS3740/2010, the waterproof membrane is required to cover the installed stop angle in such a way so as to create a waterproof seal.
AS3740/2021, section 4.9.1(a) is to the same effect as AS3740/2010, section 3.9.1.2, albeit differently worded.
The significance of AS3740/2010, section 3.9.1.2 is that it informs the appropriate method for rectification by specifying the required interaction between the waterproofing (ie the membrane) and the water stop angle. Compliance with AS3740/2010, section 3.9.1.2 requires that the waterproof membrane that has already been installed by the builder in the Property to cover the water stop angle that is to be installed so as to create a waterproof seal.
The position of the builder’s expert is that the water stop angle will be “rectified with the replacement of the floor tiles” (Ex 1, p. 1,231, defect 7, item 2).
Another defect raised by the homeowner in relation to the bathroom is that the waterproof membrane is not turned down into the floor waste (see Ex 1, p. 197, [9.1.8]-[9.1.11]). The builder’s position is that a leak control flange has been installed and that the presence of the waterproof membrane product was visible (Ex 1, p. p. 1,232, defect 7, item 3). This issue turns on what the experts observed.
The homeowner’s expert produced photographs which he contends show that the waterproof membrane was not turned into the floor waste (see Ex 1, p. 387; see also p. 386). The builder’s expert says that “Waterproof membrane is visible within the leak control flange” (Ex 1, p. p. 1,232, defect 7, item 3).
The photograph at exhibit 1, pages 386-387 show a patchy surface of at least two materials, a white material and a grey material. The builder’s expert also does not say that the waterproof membrane provides a complete seal where it is turned into the leak control flange, and the photographs suggest it does not.
The homeowner’s expert agrees that a leak control flange was installed but his evidence is that the waterproof membrane still does not provide the coverage required as depicted in the diagram at exhibit 1, p. 196. That diagram depicted that the waterproof membrane should be turned into the flange, thereby ensuring water cannot escape flowing into the flange and cannot escape. I accept Mr Morris’ evidence in this respect.
Having regard to the above matters, I am satisfied that the waterproof membrane is not turned into the floor waste such as to provide complete coverage into the floor waste.
The experts agree that the falls in the bathroom floor, outside the shower recess, are less than 1:100. There is disagreement as to whether this is required in the bathroom floor and there is disagreement as to whether it constitutes a major defect.
The relevant standard applicable at the time of the work undertaken by the builder was AS3740/2010, Waterproofing of Domestic Wet Areas. That standard has now been replaced by AS3740/2021, Waterproofing of Domestic Wet Areas.
Appendix B of AS3740/2010 deals with falls in floor finishes. Paragraph B1 is explains the purpose of falls in floor finishes:

B1 GENERAL
The primary consideration for falls in floor finishes is to ensure water does not remain on the finished floor in a manner that can adversely affect the health or amenity of the occupants or deteriorate building elements.
Falls in floor finishes should ensure water exits the area at the floor waste or doorway if that is the design exit point (e.g., laundry door to exterior). Water should not pond on the floor, with the exception of residual water remaining due to surface tension.

Section 3.3 of AS3740/2010 is, relevantly, in the following terms:

3.3 FALLS IN FLOOR FINISHES
Where required, falls in floor finishes shall allow all surface water to drain without ponding except for residual water remaining due to surface tension.
For general bathroom floor area, the minimum fall to floor waste shall be 1:100.

Mr Morris contends that AS3740/2010 requires that the fall in the bathroom floor area be a minimum of 1:100.
Mr Frizzell contends that AS3470/2010 does not require a floor waste in a bathroom. Consequently, the words “Where required” in section 3.3 are not satisfied (see also [78] of Builder’s Closing Submissions). Mr Frizzell’s opinion is that if a floor waste is not required then section 3.3 does not apply. Since a floor waste is not a requirement of a bathroom floor, then section 3.3 is not engaged because the words “Where required” are not satisfied, even if there is in fact a floor waste in the bathroom floor area.
I do not accept Mr Frizzell’s opinion. One difficulty with Mr Frizzell’s contention is that the requirement for a minimum fall of 1:100 prescribed by section 3.3 would never arise even if there was a floor waste because that floor waste was not required. Consequently, on Mr Frizzell’s argument, whether there was a floor waste in the bathroom area or not, the bathroom floor fall prescribed by section 3.3 would not apply. Another curious result of Mr Frizzell’s contention would be that if there was a floor waste there would not a requirement for the water to drain to the floor waste because the floor waste was not itself a required feature of the bathroom floor. Those consequences indicate that section 3.3 should not be construed in that way.
The words “Where required” to refer to a requirement that arises because there is a floor waste. Consequently when there is a floor waste in a bathroom floor, then there is a requirement that water drains to the waste, other than water remaining due to surface tension. To facilitate that objective, the minimum fall in the floor is required to be 1:100.
It follows that I consider the fall in the bathroom floor does not comply with AS3470/2010, section 3.3. Having regard to the importance for amenity and safety of users of minimising surface water on bathroom floor surfaces and that water drain to a floor waste where one is present, accepting that some water will remain due to surface tension, I consider that this is a defect within the meaning of s 18B(1)(a).
The next issue in respect of the fall in the bathroom floor is whether it is a major defect. The homeowner contends that it is a major defect because the fall is an integral part of the waterproofing system (see [5.13] of the Homeowner’s Closing Submissions). The builder contended otherwise.
In Vella v Mir (No 2) [2019] NSWCATAP 240 (Vella v Mir) the Appeal Panel observed that “waterproofing” was not defined in the HB Act and adopted the definition and explanation as to the meaning of waterproofing explained in Ashton v Stevenson; Stevenson v Ashton [2020] NSWCATAP 233. The Appeal Panel relevantly said:

[17] Waterproofing is not defined in the HB Act. Mrs Vella’s submission refers to the definition of waterproofing in Schedule 4 of the Home Building Regulation 2013. This definition of waterproofing concerns the works that may be performed by a person who holds a particular contractor’s licence. It states:
Work involved in an protective treatment of dwelling designed to prevent the penetration of water or moisture into the dwelling or in the protective treatment of wet areas in a dwelling designed to prevent the unwanted escape of water from those areas by using solid membranes or membranes applied by brush, roller or any other method.

[18] In Stevenson v Ashton [2018] NSWCATCD 25 (Ashton), the Tribunal rejected an argument that the provision for stormwater overflow in external areas constituted part of the waterproofing of a building. In doing so the Tribunal stated that:
[157] “Waterproof” is defined in the Shorter Oxford English Dictionary as:
“impervious to water, completely resistant to the action of water; … make waterproof or impervious to water”.

[158] “Waterproofing” is defined as:
“(a) the action of the verb;
(b) the quality of being waterproof;
(c) material with which to waterproof something”

[159] The Macquarie Dictionary provides similar definitions.
[160] In my view the term “waterproofing” when used in the definition of “major element” in s 18E(4) means the mechanisms by which water coming into contact, by whatever means, with a building or building element is excluded from the building or building element….

[19] We are satisfied that this is the proper meaning of “waterproofing” for the purpose of s 18E. We reject the submission that the Schedule 4 definition of waterproofing should be applied. In relation to this, the purpose of the Schedule 4 definition is to limit the works that may be performed by a contractor in order to ensure that appropriately qualified and licenced contractors carry out residential building work. It should not be construed as limiting the elements that cause a building to be waterproof. To apply the Schedule 4 definition of waterproofing to s 18E could mean that water ingress into a building constructed, for example, without a required waterproofing membrane or with incorrectly installed roofing tiles could not be regarded a defect in a major element.

I adopt the meaning of waterproofing used in Vella v Mir.
The definition of “major defect” requires that both the existence of a defect in a major building element and that the defect causes or is likely to cause one of one of the matters specified in s 18E(d)(d)(i) – (iii) are established. In Ashton v Stevenson; Stevenson v Ashton [2020] NSWCATAP 233 (Ashton) the Appeal Panel observed in relation to the elements of s 18E(4):

[63] As can be seen, test in s 18E(4) has two parts. Relevantly, in order to be a major defect, it must be:
(1) “a defect in a major element of a building” attributable to one of the specified matters,
(2) “that causes or is likely to cause”:
(a) the inability to inhabit or use the building (or part of the building) for its intended purpose, or
(b) the destruction of the building or any part of the building, or
(c) a threat of collapse of the building or any part of the building

I have concluded that the homeowner has not established, on the balance of probabilities, that the fall in the bathroom floor causes or is likely to cause (a) the inability to inhabit or use the building (or part of the building) for its intended purpose, or (b) the destruction of the building or any part of the building, or (c) a threat of collapse of the building or any part of the building. Consequently, it is not necessary to determine whether the bathroom floor tiles forming a component of the waterproofing system. I set out below my reasons for concluding that, in these proceedings, the fall in the bathroom floor causes or is likely to cause (a) the inability to inhabit or use the building (or part of the building) for its intended purpose, or (b) the destruction of the building or any part of the building, or (c) a threat of collapse of the building or any part of the building.

The next issue is the cause of the water penetration and the scope of the builder’s obligations under the Contract.
The Joint Expert Report records the following (Ex 1, p. 168, defect 13):

[A Morris] has not been provided with sufficient evidence showing sufficient installation of waterproofing membranes and associated detailing.

[B Frizzell and A Morris] agree that water is penetrating the wall of the storeroom. Excavation is required to further investigate and to determine the cause.

Estimated costs to remain

The evidence in the preceding paragraph indicates that the experts agree that cause of the water penetration has not been determined and that to make that determination will require further investigation.
The position of both experts reflects the uncertainty as to the water penetration is occurring through the walls that the builder was required to waterproof or by reason of the internal slab footing being lower than the footing of the external walls. The experts agree that further investigation is required to identify the cause of the water penetration. I consider that evidence to be correct. Even if the experts had not so agreed, I would not have been satisfied that the homeowner established on the balance of probabilities that the work undertaken by the builder in waterproofing the walls was defective. An equally likely possibility is attributable to the circumstance that the internal slab footing is lower than the footing of the external walls permitting water in the soil to pass through the gap between the external wall footing and the internal floor slab.
Under Schedule 3 of the Contract the builder was required to waterproof certain walls. The position of both experts, at least implicitly, is that the cause of the water penetration may or may not be through the walls the subject of the waterproofing work.
The homeowner submitted that Mr Morris’ evidence was to the effect that the sheet membrane had not been terminated correctly and had it been correctly terminated then the water penetration would not be occurring (Homeowner’s Closing Submissions, [5.45]). The Tribunal was not taken to photographs or observations as to how the sheet membrane was incorrectly terminated. The conclusion that the water penetration is due to the incorrect termination of the sheet membrane is also difficult to reconcile with Mr Morris’ view, held also by Mr Frizzell, that further investigation is required to identify the cause of the water penetration.
I have construed schedule 3 of the Contract to require the builder to waterproof the walls specified therein rather than to achieve the purpose of waterproofing the downstairs rooms and storeroom. In this respect I note that the homeowner did not plead or contend that a particular purpose was made known to the builder and that she relied on the builder’s skill and judgment so as to engage the warranty implied by s. 18B(1)(f). As explained by Senior Member Ellis SC in Blackhall v Fine Cut Building Pty Ltd [2011] NSWCATCD 43 at [52], s 18B(1)(f) operates as an exception to the parole evidence rule. Section 18B(1)(f) implies into the Contract “a warranty that the work … will be reasonably fit for the specified purpose or result” if the homeowner made known to the builder the particular purpose of the work and the other matters required by that sub-section are also satisfied.
It follows that I do not accept that this defect has been established.

Item 14 Retaining Wall – rear yard

This defect relates to the construction of a retaining wall in the rear yard. The retaining wall is not connected to the home on the Property.
The parties are in dispute as to two issues in respect of the retaining wall. The first issue is whether the retaining wall comprises a building element. This issue engages whether the defect is a major defect. That is because first limb of the definition of “major defect” requires that the homeowner establish “a defect in a major element of a building that is attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code (or any combination of these)”. is relevant in determining whether the defect is a major defect.
The homeowner relies on the definition of “dwelling”. That definition provides that a dwelling includes a retaining wall if it is constructed for use in conjunction with a dwelling. Schedule 1, sub-clause 3 of the HB Act defines “dwelling” as follows:

3 Definition of “dwelling”
(1) In this Act, dwelling means a building or portion of a building that is designed, constructed or adapted for use as a residence (such as a detached or semi-detached house, transportable house, terrace or town house, duplex, villa-home, strata or company title home unit or residential flat).
(2) Each of the following structures or improvements is included in the definition of dwelling if it is constructed for use in conjunction with a dwelling—
(a) a swimming pool or spa,
(b) parts of a building containing more than one dwelling (whether or not the building is also used for non-residential purposes), being stairways, passageways, rooms, and the like, that are used in common by the occupants of those dwellings, together with any pipes, wires, cables or ducts that are not for the exclusive enjoyment of any one dwelling,
(c) parts of a building containing one dwelling only (where the building is also used for non-residential purposes), being stairways, passageways and the like which provide access to that dwelling,
(d) if non-residential parts of a building containing one or more dwellings give support or access to the residential part—the major elements of the non-residential parts giving such support or access,
(e) cupboards, vanity units and the like fixed to a dwelling,
(f) detached garages and carports,
(g) detached decks, porches, verandahs, pergolas and the like,
(h) cabanas and non-habitable shelters,
(i) detached workshops, sheds and other outbuildings (but not jetties, slipways, pontoons or boat ramps and any structures ancillary to these exceptions),
(j) concrete tennis courts and the like but only if the work involved is to be done under a contract to do other work that is residential building work,
(k) driveways, paths and other paving,
(l) retaining walls,
(m) agricultural drainage designed or constructed to divert water away from the footings of a dwelling or a retaining wall,
(n) fences and gates,
(o) ornamental ponds and water features, and other structural ornamentation, the construction or installation of which requires development consent but only if the work involved is to be done under a contract to do other work that is residential building work,
(p) any other structure or improvement prescribed by the regulations.
(3) Each of the following is excluded from the definition of dwelling—
(a) a boarding house, guest house, hostel or lodging house,
(b) all residential parts of a hotel or motel,
(c) any residential part of an educational institution,
(d) accommodation (other than self-contained units) specially designed for the aged, persons with a disability or children,
(e) any residential part of a health care building that accommodates staff,
(f) a house or unit designed, constructed or adapted for commercial use as tourist, holiday or overnight accommodation,
(g) any part of a non-residential building that is constructed or adapted for use as a caretaker’s residence,
(h) a moveable dwelling (with or without a flexible annexe) within the meaning of the Local Government Act 1993 that is, or is a vehicle of a kind capable of being, registered within the meaning of the Road Transport Act 2013 (such as a caravan or a motor home),
(i) a residential building for the purposes of which development consent can be granted only because of State Environmental Planning Policy No 15—Rural Landsharing Communities,
(j) concrete tennis courts and the like, except as expressly included under subclause (2),
(k) ornamental ponds and water features and other structural ornamentation, except as expressly included under subclause (2),
(l) a building or portion of a building that is prescribed by the regulations as excluded from the definition.
(4) A structure or improvement that is included in the definition of dwelling if it is constructed for use in conjunction with a dwelling is to be regarded as a dwelling whether or not there exists any dwelling of which it could be taken to form part.

The builder contends that since the retaining wall was not connected to the residential premises on the Property, it was not an element of the building. The builder submitted that the meaning of “building” is not defined in the HB Act and that the meaning of “dwelling” is not synonymous with the meaning of “building”.
A retaining wall unattached and separate to a dwelling would not ordinarily be considered a part of a building. However, the definition of “dwelling” in the HB Act is clearly intended to render the meaning of “dwelling” to extend a variety of structures that would not ordinarily be considered a dwelling such as fences, retaining walls and swimming pools. Moreover, sub-clause 3(1) of Schedule 1 of the HB Act defines dwelling to be, relevantly, a “building or portion of a building” constructed to be used as a residence. Consequently, I have concluded that the meaning of “building” as used in s 18E(d) includes those structures defined by clause 3 of Schedule 1 of the HB Act to comprise a “dwelling”.
The next issue is whether the retaining wall was constructed to be used in conjunction with the dwelling. I have concluded that it was. The retaining wall was constructed to be used as part of the enjoyment of the dwelling. I consider the words “use in conjunction with a dwelling” as sufficiently wide to include the use of items listed in sub-clause 3(2) of Schedule 1 in conjunction with the enjoyment of the dwelling. Many of the items listed in sub-clause 3(2), such as a fence, a swimming pool and an outdoor garage, are likely to be physically unconnected to the dwelling. Their use is likely to be as part of the use of the dwelling, including in the sense of enjoying the use of the dwelling.
The second issue is whether any defect has been established.
In relation to whether there is any defect, there is evidence of deflection. The experts do not agree on all the causes, but at least agree that some of the posts used by the builder in the construction of the retaining wall are insufficient in size. I accept that there is deflection and that this constitutes a defect.
The next issue is whether the defect, namely, the deflection, causes or is likely to cause (a) the inability to inhabit or use the building (or part of the building) for its intended purpose, or (b) the destruction of the building or any part of the building, or (c) a threat of collapse of the building or any part of the building, noting that the building is a reference to the retaining wall.
Deflection in the retaining wall due to inadequate posts may result, over time, in the collapse of the retaining wall or part of it. In fact, over time I would infer that is likely because there has already been deflection and even the builder’s expert considers the size of the posts used inadequate. Consequently, I have concluded the retaining wall deflection is a major defect.
The experts disagreed in relation to the appropriate method for rectification of the retaining wall. The homeowner called Mr Jan who is an engineer. The builder called Mr McGeady who is also an engineer.
The scope of works from the homeowner’s expert involved substantially rebuilding the retaining wall. The scope of works prepared by the homeowner’s expert included performing drainage works. The scope of works by the builder’s expert involved installing new posts. The scope of work of the builder’s expert was premised on drainage works having been undertaken when the retaining wall was constructed.
During the hearing there was a dispute as to whether the retaining wall had been built with any drainage mechanisms. The builder tendered enlarged photographs which he contended depicted Geotech material which had been installed during the construction of the retaining wall which connected to a drainage pipe (see Ex 2 and Ex 1, p. 131). I accept that those photographs depict Geotech material and a drainage pipe and I infer that drainage works were constructed when the retaining wall was built.
Both experts utilised the same software tools to determine the appropriate materials, particularly posts, for the construction of the retaining wall. One of the integers in the software tool is a measurement of soil cohesion. This integer is a measurement of the ability of the soil to solidify or clump around the posts used in the construction of the retaining wall.
The software tool has a default setting whereby the soil cohesion integer is set at 30. However, both experts altered the default setting and utilised a different integer. Mr Jan used an integer of zero. Mr Jan accepted in cross examination that sand was a form of soil which would have no cohesion. Mr Jan’s reasoning for utilising a value of zero was that this was a safe, conservative course.
Mr McGeady used an integer of 10. His opinion was that the soil had some cohesion and consequently Mr Jan’s selection of a value of zero was not appropriate.
Both experts agreed that a geotechnical engineer was required to identify the correct integer for the soil at the Property.
I am not persuaded on the balance of probabilities that zero was the appropriate value for soil cohesion. The soil on the Property was not sand. Further, there was no cogent rationale which persuaded me that a soil cohesion value of zero was appropriate for the type of soil on the Property.
Consequently, I have concluded that the scope of works proposed by the builder’s expert in Exhibit 1 at pages 168-169 is the appropriate method of rectification.

Item 17 – Driveway and water ingress into sub-floor areas

The driveway constructed as part of the work under the Contract runs from the road towards the house and then alongside the house. The driveway runs down quite steeply so that the point at which it reaches the beginning of the house is significantly below the level of the road. The concrete poured with the driveway works continues to run down alongside the house.
A number of issues were identified by the homeowner’s expert in relation to the construction of the driveway. However, the Homeowner’s Closing Submissions focused on two issues, namely:

That the internal subfloor level was lower than the external finished level;

The sub floor ventilation was below the height of the finished concrete area.

The homeowner contended that the consequence was that water, such as rain, was able to enter the sub floor area of the house. The homeowner submitted “this defect imposes a threat to the Property’s structural integrity as well as causing serious water ingress to the downstairs rooms” (Homeowner’s Closing Submissions, [5.61]).
I find that the driveway was not constructed with due care and skill. Rain running along the wall of the house past the sub floor ventilation would inevitably be able to enter into the sub floor area through the vents. The builder submitted that there was no observed evidence of water entering through the sub floor ventilation but the placement of the ventilation, depicted in photographs, is along and below the concrete and it is inevitable that during any material rain event some water will enter through the vents.
There was evidence from Mr Morris, which I accept, that there are high moisture readings on the perimeter walls of 80%-100% (Ex 1, p. 208, [9.8.2]). Further, water running along the driveway along exterior walls is also appears, on the balance of probabilities, to be one of the causes of water entry from the exterior of the building into the downstairs rooms. In this respect, Mr Morris opined that “This is a strong indication that the water is entering the building from the outside walls causing water entry from the exterior of the building” (Ex 1, p. 208, [9.8.2]). I accept this opinion.
The more difficult issue is whether the defect is a major defect. In particular, does the entry of water through the vents cause or is it likely to cause (a) the inability to inhabit or use the building (or part of the building) for its intended purpose, or (b) the destruction of the building or any part of the building, or (c) a threat of collapse of the building or any part of the building. The Tribunal does not have any cogent evidence that (b) or (c) are satisfied.
Although the matter is finely balanced, having regard to the evidence and opinions of Mr Morris in relation to the downstairs rooms, I have concluded that the entry of water into the sub-floor area or from water penetrating the outside walls adjacent to the downstairs rooms is more likely than not to be one of the causes of the downstairs rooms and downstairs storeroom not be able to be used for their intended purposes.
In terms of remediation, I prefer Mr Morris’ scope of works. His scope involves installation of a strip drain at the edge of the concrete, including adjacent to the exterior walls where the concrete and the house meet. Mr Frizzell’s remedy involved installing a barrier across the vents. I consider Mr Morris’ remedy is more likely to capture water and direct the water away from the walls or sub-floor area.

Items 9, 11, 15, 16, 18, 19, 20

Items 9, 11, 15, 16, 18, 19 and 20 are dependent on whether or not the homeowner’s application was commenced within the time permitted for breaches of the statutory warranties which are not major defects. In other words, the defects are agreed to not be major defects.
I have found that the homeowner’s application was filed more than 2 years after practical completion as ascertained pursuant to sub-sections 3B(2) and 3B(3). The result is that the homeowner’s claim has not been commenced within the time permitted by s 18E for defects that are not major defects and the Tribunal does not have jurisdiction to determine those claim by reason of s 48K(7).

Other items in the Joint Expert Report

I turn to consider some of the heads of damage claimed by the homeowner. For the reasons set out below I propose to make work orders. However, for completeness I will make findings as to the other heads of damage.
The homeowner’s damages claim included a claim for a project manager for $88,092.00. I am not persuaded that this claimed amount represents damage by reason of breaches of the statutory warranties. The homeowner’s Closing Submissions did not identify any authority for the proposition that this was a head of damage recoverable for breaches of s 18B warranties.
In relation to builder’s profit margin the builder contends 20% is the appropriate margin. The homeowner contends 30% is the appropriate margin. Remediation work ordinary requires a higher profit margin than the margin a builder would require for performing new work. I consider that 20% is too low and that a more realistic margin is around 25%. Consequently, I would have been inclined to order 25% had I not made a work order.
In relation to preliminaries, Mr Frizzell’s costings did not include preliminaries as a separate and constant percentage. Rather, Mr Frizzell’s costings involved including am allowance for costs attributable preliminaries in the costing of the scope of works if the scope required such costs. Mr Morris considered that 10% was an appropriate amount for preliminaries. The matter is finely balanced but I consider Mr Morris’ allowance more appropriate because it is consistent with the standard costing process for expert evidence in these types of disputes in the Tribunal and Mr Frizzell’s allowance for items that were preliminaries, as distinct from prime costs, was not discernible in the sense of clearly setting out when it was included or not included and, if included, how it was included.

Work Order or Money Order

The homeowner sought a money order rather than a work order. The Homeowner’s Closing Submissions did not address this issue. That may have been because the homeowner contended that the work was not complete: see Clements v Murphy [2018] NSWCATAP 152. However, I have concluded that the practical completion within the meaning of sub-sections 3B(2) and 3B(3) occurred which means that pursuant to s 48MA a work order is the preferred remedy.
I do not see sufficient basis to depart from the preferred outcome under s 48MA. In this respect, I take into account that no submissions were made to the effect that a work order was not the appropriate remedy and the expressed readiness or willingness of the builder to undertake a work order.

New Framing of Homeowner’s Case

I turn to consider the final issue, namely, whether the homeowner should be permitted to raise an allegation that the builder breached the Contract by failing to bring the work to practical completion. I do not accede to this proposed course.
First, there are real issues of utility in circumstances where I have concluded that the practical completion within the meaning of sub-sections 3B(2) and 3B(3) occurred.
Second, it is not apparent to me that the evidence is necessarily the same for the new proposed framing of the case as the evidence adduced during the hearing. The homeowner may wish to only rely on the evidence adduced at the hearing but the builder may wish to explain the delays. Issues of delays caused by weather, COVID restrictions in late 2020 and other possible reasons for delay were not adduced by the builder and did not appear relevant to the proceedings as heard by the Tribunal. However, they would appear to be relevant on the homeowner’s new framing of the case.

Costs

I will permit the parties a short period of time to consider these reasons and to make submissions as to costs. However, I note that each party has had a significant measure of success which the parties should consider in their submissions.

Orders

The Tribunal makes the following orders:

Order the respondent to rectify the main bathroom by removing the floor tiles, the first row of wall tiles, removing the existing waterproof membrane and applying a new waterproofing membrane on the floor of the main bathroom, including upturning the waterproof membrane at the floor and wall junction, and reinstallation of new tiles, and such work to comply with AS3470/2021.

Order that the work in the main bathroom described in order 1 otherwise be carried out in accordance with the scope of works of the builder’s expert in the Joint Expert Report at exhibit 1, pages 144-145.

Order that the respondent rectify the ensuite defects by removing the floor tiles, the first row of wall tiles, removing the existing waterproof membrane and applying a new waterproofing membrane on the floor of the ensuite, including upturning the waterproof membrane at the floor and wall junction, and re-installation of new tiles, and such work to comply with AS3470/2021.

Order that the work in the ensuite described in order 3 otherwise be carried out in accordance with the scope of works of the builder’s expert in the Joint Expert Report at exhibit 1, pages 150-151.

Order that the respondent rectify the retaining wall in the rear yard of the Property in accordance scope of works proposed by the builder’s expert in Exhibit 1 at pages 168-169.

Order that the respondent rectify the driveway and concrete works in accordance with the scope of works of the homeowner’s expert in the Joint Expert Report at exhibit 1, page 172.

Order that all the work in orders 1 – 6 be carried out with due skill and care.

Reserve the question of costs.

Direct that any party that wishes to make any submissions as to costs to file and serve written submissions of no more than 3 pages within 14 days, identifying the evidence on which they rely.

Direct that any party that wishes to oppose any submissions made pursuant to the preceding order file and serve written submissions of no more than 3 pages within 28 days, identifying the evidence on which they rely.

Direct that the submissions as to costs also address whether the Tribunal can dispense with a hearing in respect of costs.

**********

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: 03 April 2025

Medium Neutral Citation:	Brown v Reed [2024] NSWCATCD 52
Hearing dates:	8 February 2024 and 9 February 2024
Date of orders:	13 September 2024
Decision date:	13 September 2024
Jurisdiction:	Consumer and Commercial Division
Before:	R. Alkadamani, Senior Member
Decision:	(1) Order the respondent to rectify the main bathroom by removing the floor tiles, the first row of wall tiles, removing the existing waterproof membrane and applying a new waterproofing membrane on the floor of the main bathroom, including upturning the waterproof membrane at the floor and wall junction, and reinstallation of new tiles, and such work to comply with AS3470/2021. (2) Order that the work in the main bathroom described in order 1 otherwise be carried out in accordance with the scope of works of the builder’s expert in the Joint Expert Report at exhibit 1, pages 144-145. (3) Order that the respondent rectify the ensuite defects by removing the floor tiles, the first row of wall tiles, removing the existing waterproof membrane and applying a new waterproofing membrane on the floor of the ensuite, including upturning the waterproof membrane at the floor and wall junction, and re-installation of new tiles, and such work to comply with AS3470/2021. (4) Order that the work in the ensuite described in order 3 otherwise be carried out in accordance with the scope of works of the builder’s expert in the Joint Expert Report at exhibit 1, pages 150-151. (5) Order that the respondent rectify the retaining wall in the rear yard of the Property in accordance scope of works proposed by the builder’s expert in Exhibit 1 at pages 168-169. (6) Order that the respondent rectify the driveway and concrete works in accordance with the scope of works of the homeowner’s expert in the Joint Expert Report at exhibit 1, page 172. (7) Order that all the work in orders 1 – 6 be carried out with due skill and care. (8) Reserve the question of costs. (9) Direct that any party that wishes to make any submissions as to costs to file and serve written submissions of no more than 3 pages within 14 days, identifying the evidence on which they rely. (10) Direct that any party that wishes to oppose any submissions made pursuant to the preceding order file and serve written submissions of no more than 3 pages within 28 days, identifying the evidence on which they rely. (11) Direct that the submissions as to costs also address whether the Tribunal can dispense with a hearing in respect of costs.
Catchwords:	HOME BUILDING – limitation period – whether work not complete- completion – practical completion HOME BUILDING – major defects
Legislation Cited:	Home Building Act 1989 (NSW)
Cases Cited:	Ashton v Stevenson; Stevenson v Ashton [2020] NSWCATAP 233 Blackhall v Fine Cut Building Pty Ltd [2011] NSWCATCD 43 Bourke v Wincrest Group Pty Ltd [2021] NSWCATCD 44 Clements v Murphy [2018] NSWCATAP 152 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 Oikos Constructions Pty Ltd t/as Lars Fischer Construction v Ostin & Anor [2020] NSWCA 358 The Owners Strata Plan 64757 v Sydney Remedial Builders Pty Ltd [2023] NSWSC 1127 The Sydney Building Company Limited v Sinac [2019] NSWCATAP 43 Vella v Mir (No 2) [2019] NSWCATAP 240 Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101
Texts Cited:	None
Category:	Principal judgment
Parties:	Jenni Brown (Applicant) Richard Thomas Reed (Respondent)
Representation:	Counsel: M Baroni (Applicant) I Chatterjee (Respondent) Solicitors: Construction Legal (Applicant) Northern Beaches Construction Lawyers (Respondent)
File Number(s):	2023/00379309 (Previously HB 23/38783)
Publication restriction:	None