| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : BYHAM and AFRA CONSTRUCTION PTY LTD [2014] WASAT 38 MEMBER : MS K LANG (SENIOR SESSIONAL MEMBER) MR P MITTONETTE (SESSIONAL MEMBER)
HEARD : 23 OCTOBER 2013 AND 4 MARCH TO 7 MARCH 2014 DELIVERED : 14 MARCH 2014 PUBLISHED : 25 MARCH 2014 FILE NO/S : CC 345 of 2013 BETWEEN : DALLAS ANTHONY BYHAM Applicant
AND
AFRA CONSTRUCTION PTY LTD
Respondent
Catchwords: Home building work contract Defects in construction Remediation Credit for balance of contract price in assessment of cost of remedial work Delay Damages for delay in completion being loss of rental income Applicant's costs of proceedings Legislation: Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5, s 5(1), s 5(2), s 11(1)(d), s 36(1)(b), s 41, s 43, s 49, s 49(2)
Home Building Contracts Act 1991 (WA), s 3, s 17
National Rental Affordability Scheme Act 2008 (Cth)
National Rental Affordability Scheme Regulations (Cth)
State Administrative Tribunal Act 2004 (WA), s 87 Result: Applicant's application successful in part
Respondent's application dismissed
Summary of Tribunal's decision: The applicant contracted with the respondent to construct a home unit on a strata lot. The respondent failed to construct the home unit within the contractual time allowed. Many aspects of the regulated building service were faulty or unsatisfactory.
The respondent did not attend the entire hearing but its contention that the defects were minor defects and omissions was disproved by the weight of credible evidence to the contrary.
The remedial work required would, when undertaken, put the applicant in the position of the unit being constructed to handover and fully complete. The Tribunal set off the unpaid balance of the contract against the reasonable and necessary remedial costs. The respondent's claim for breach of contract for nonpayment of invoices (including practical completion) was dismissed. The respondent admitted at the hearing that construction of the unit had not reached practical completion.
The Tribunal awarded the applicant compensation for loss of rental income caused by the respondent's breach of contract in failing to construct the home unit to the practical completion stage within the contractual time allowed. The Tribunal allowed the applicant's costs of the proceedings, in part.
Category: B
Representation: Counsel:
Applicant : Ms Y Byham (Acting as Agent)
Respondent : Mr M Afrasiabi (on 23 October 2013 only)
Solicitors:
Applicant : N/A
Respondent : N/A
Case(s) referred to in decision(s):
Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145
Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188
Thumolano and Afra Construction Pty Ltd [2013] WASAT 17
Waldron and Afra Construction Pty Ltd [2013] WASAT 207
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 On 21 January 2013 Mr Dallas Byham (applicant) lodged a complaint form with the Building Commissioner of Western Australia (Commission) concerning the construction of a strata home unit on Lot 6, No 15 Ferguson Street, Falcon (unit) by Afra Construction Pty Ltd (respondent). The applicant's application is Matter No CC 345 of 2013 which consists of three separate complaints. 2 The first complaint is described as faulty workmanship under s 5(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act). The applicant alleges that the regulated building service provided by the respondent was not carried out in a proper and proficient manner, or is faulty or unsatisfactory. The applicant relies upon the report of Mr Bradley Porteous, registered building service provider (builder) trading as BSP Construction Consultants (BSP), to support his claim. This complaint consists of 114 workmanship items. 3 The second complaint concerns a breach of contract under s 5(2) of the BSCRA Act and s 17 of the Home Building Contracts Act 1991 (WA) (HBC Act). The applicant alleges that the respondent failed to construct the unit within the time provided in the contract, causing him to suffer a loss of rental income for the period of the delay. 4 The third complaint is made pursuant to s 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) and s 49 of the BSCRA Act for costs of the proceedings. 5 On 9 January 2013 the respondent lodged a complaint with the Commission pursuant to s 5(2) of the BSCRA Act claiming a breach of the contract by the applicant. The respondent claims to be entitled to lockup and practical completion stage payments ($22,400 and $5,040 respectively), as invoiced, plus interest (Exhibit 1, Hearing Booklet (HB) R1, page 1). This is Matter No CC 346 of 2013. 6 The Building Commission of Western Australiareferred both complaints to the Tribunal for resolution pursuant to s 11(1)(d) of the BSCRA Act. 7 The Tribunal made an order to consolidate the applicant's application in Matter No CC 345 of 2013 with the respondent's application in Matter No CC 346 of 2013, with CC 345 of 2013 being the lead matter. 8 The matter was listed for hearing on 23 October 2013. 9 The applicant filed numerous documents which comprise the bulk of the five hearing booklets. 10 The respondent failed to file responsive documents or complete the Scott Schedule, in breach of several directions by the Tribunal at the interlocutory proceedings.
The hearing 11 The respondent's director, Mr Mal Afrasiabi, attended the first day of the hearing and indicated that he opposed all aspects of the applicant's complaint, although he conceded that the unit had not reached practical completion. Mr Afrasiabi testified that the respondent had rectified a number of the claimed defects since the BSP inspection. He did not deny that the respondent had repeatedly failed to permit the applicant to inspect the premises, in breach of the Tribunal's directions. 12 The parties agreed to orders effecting a partial settlement and the hearing was adjourned. The settlement failed and the hearing was relisted for four days from 4 March 2014. 13 Mr Afrasiabi failed to attend the resumed hearing. 14 The Tribunal is satisfied that Mr Afrasiabi was consulted by the Tribunal's case management officer at the time of the relisting and agreed to the hearing date. The respondent was served with a hearing notice. 15 Shortly after 10 am on 4 March 2014 the case management officer telephoned Mr Afrasiabi who acknowledged that he was aware of the hearing and understood that the Tribunal would proceed with the hearing in the absence of the respondent if he or Mr Fazollah Afrasiabi, the other director, failed to attend. 16 Mr Fazollah Afrasiabi attended the Tribunal by telephone on another matter that same morning and was informed by the presiding senior member of the pending hearing of this matter. 17 After waiting an hour, the Tribunal commenced hearing this matter in the absence of the respondent, satisfied that the respondent had full knowledge of the hearing and had determined not to attend. Neither party made an application for an adjournment of the proceedings. The Tribunal was satisfied that prejudice to the applicant would result from any further delay of the final hearing. 18 The applicant testified at the final hearing and called the following witnesses: • Mr Ron Lyster, the former operational manager of Yaran Property Group; • Mr Addy Khosravi, certified civil engineer, formerly contracted to Yaran Property Group; • Mr Michael Brown, the former project manager of Yaran Property Group; and • Mr Andrew Ginbey, senior building surveyor, City of Mandurah. 19 Commission Inspector Mr Peter O'Dea also attended the hearing as a witness.
Issue 1: workmanship complaint 20 The applicant claimed $41,090 for the remedial works in respect of the workmanship complaint (Scott Schedule, Exhibit 1, HB A2, page 191). 21 The applicant primarily relied upon the BSP Report dated 26 April 2013, which assessed each of the 114 workmanship items and the cost of the necessary remedial works (Exhibit 1, HB A2, page 34). Mr Porteous was not a witness. 22 Inspector O'Dea, a registered builder and inspector qualified by extensive experience in the building industry, prepared four inspection reports following two inspections of the unit. The Tribunal accepts Inspector O'Dea is an expert witness on matters relevant to the workmanship complaint. 23 Inspector O'Dea had not reviewed the BSP Report costings and gave no evidence on the appropriate remedial costs. 24 The applicant did not seek to pursue items referred to as the 'additional items' in Inspector O'Dea's Inspection Report (1) of 20 February 2014 (Exhibit 1, new (white) HB, page 43), over which the Tribunal lacked jurisdiction, the Commission not having referred those items to the Tribunal. 25 The applicant also withdrew all complaint items concerning common areas, which he conceded were better prosecuted by the Council of Owners of the strata plan against the developer which had retained responsibility for construction of the development's internal roads, paths and landscaping.
Internal workmanship items 26 The internal complaint items are contained in the Inspection Report dated 24 February 2014 and the BSP Report (Exhibit 1, new (white) HB from page 54, and HB A2 from page 34, respectively). 27 Inspector O'Dea testified extensively and impressed the Tribunal as being a reasonable and thorough expert witness. Inspector O'Dea was unable to inspect the internal items due to the respondent's failure to provide access, although he examined the photographs included in the BSP Report and expressed opinions where possible. Inspector O'Dea testified that, in his opinion, the BSP Report is a fair and balanced report and, as far as he could, he agreed with the conclusions stated therein. 28 The Tribunal accepts the evidence of the BSP Report as to whether the work is proper and proficient, faulty or unsatisfactory, and the necessary remedial costs as identified in the following table, save for the following findings: • Items 1a, 5b, 5c and 5h concerning defects to frames are dismissed for duplication with Item 5j (aluminium window and door frames are not supplied as per building specification). Item 5j is the most expensive of the workmanship items to rectify. 29 Although the respondent submitted no evidence, and the applicant's evidence is sufficient to prove the complaint on the balance of probabilities, the Tribunal gave this item particular consideration. 30 The terms of the contract in this matter are identical to those considered by the Tribunal in Waldron and Afra Construction Pty Ltd [2013] WASAT 207 (Waldron),which concluded, after extensive consideration of a similar complaint, at [31]: The Tribunal finds that in breach of the contract, the building licence and the [Building Code of Australia], the respondent supplied noncertified frames and glazing in the aluminium sliding doors and windows to the home unit and thereby failed to carry out the building service in a proper and proficient manner, and that the same is faulty and unsatisfactory as provided in s 5(1) of the BSCRA Act. … the Tribunal concludes that the respondent failed to carry out the building service in a proper and proficient manner and that the same is faulty and unsatisfactory for the purpose of s 5(1) of the BSCRA Act. 31 The Tribunal follows Waldron and is satisfied that this item is proved. 32 Item 5l (tapware fitted is not as per the specification) is dismissed as the Addenda to Specification Section 0802 Schedule 2.3 provides that items may be substituted for a similar product (Exhibit 1, HB R1, page 83). 33 INTERNAL ITEMS
Complaint Description | Remedial Work Required | Cost | | 1. Bedroom 1 | a Fill and professionally paint the holes to the window frames. | $250
| | b Repaint over the marks to the ceiling, next to the robe. Patch and paint the dent to the central part of the ceiling. | $150 | | c Neatly re-patch and paint [the] cornices around the robe door frame. | $150 | | d Professionally paint out the scratches to the robe door frame. | $100 | | e Replace the rough cut robe shelf and front rail. | $250 | | f Replace the front window sills as they are water damaged. The window frames may be leaking and require repair. | $300 | | g Neatly patch and repaint around the power outlets. The cover plates need to be removed to patch. | $100 | | h The high window sill is fitted higher than the base of the frame. This sill should have been fitted lower to fit under the sill of the window frame. | $200 | | i Remove the dirt marks from the wall. | $50 | | j The entry door handle needs re-fitting to cover the hole cut out. | $50 | | k Paint repair the scratches to the entry door frame. | $100 | | l Fit the missing entry door frame rubber stopper. | $50 | | m Fill the crack to the back edge of the entry door. | $50 | | 2. Bathroom | a Replace the over cut wall tiles around the shower outlet and soap holder. | $200 | | b The shower cubicle wall corner is not silicon sealed. | $200 | | c The toilet roll holder bracket is fitted upside down. | $50 | | d Paint repair the scratches to the door frame leading to the bedroom. | $100 | | e The trough cabinet is not flush fit to the floor. | $300 | | f The wall inside the trough cabinet is not white set plastered. | $150 | | g Replace the hole cut out surround to the trough as it is poorly fitted. | $100 | | h Close the gap next to the trough cabinet. | $100 | | i Clean the dirt marks off the walls. | $50 | | j The shower screen frame leaks and needs resealing. | $100 | | k Clean the marks off the ceiling cornices. | $50 | | l Repair the rough finished vanity cabinet edge to wall join. | $150 | | m Replace the rough cut wall tile around the power point. Recommend that this point be moved up and refit a full tile. | $200 | | n Remove the wall paint from the tiles above the vanity. | $50 | | o The vanity bench top bottom edge has not been bevel finished and needs repair. | $600 | | p Re-seal the vanity basin to the bench top. | $50 | | q Re-patch the wall surrounding the washing machine recess power outlet so the cover plate can be fitted flush. | $100 | | r Grout finish the wall tiles next to the shower screen. | $50 | | s The washing machine taps are shown on plan to be wall mounted and not fitted inside the trough cabinets. The taps fitted inside the trough cabinet are not suitable for a washing machine and are not easily accessible. | $850 | | t The wall tiles to the laundry trough are not installed as per the building plans. The height and area of tiling is not completed as per the plans supplied. | $350 | | u A double towel rail requires installation. | $200 | | 3. Mixed Use Room | a Repair the rough finish around the window sill. | $100 | | b Clean the marks off the light fitting cover. | $50 | | c Straight fit one of the power outlets and gap fill around its perimeter. | $100 | | d The window sill timber is fitted higher than the sill of the window frame, which looks unsightly and not to an industry standard. The sill timber has been rough cut and requires replacement. | $400 | | e Fit carpet to this room instead of the floor tiles as per the building addenda. | $550 | | 4. Kitchen | a The top edge of the oven is scratched and requires replacement. | $250 | | b The oven needs to be screw fixed into place. | $50 | | c The bottom edges of the stone bench top have not been bevel finished, are very rough and require repair. | $900 | | d The microwave recess cabinet edge is stained and requires cleaning or replacement. | $250 | | e The bench top is being supported by cardboard above the drawers, which needs removal. | $150 | | f The microwave recess cabinet backboard is cut through and chipped and requires replacement. | $300 | | g The top edges of the wall tiles have been rough cut and require replacement. | $150 | | h Clean the dirt marks off the walls. | $50 | | i The air conditioning unit was reported that it should be located in the living room and not in the kitchen. | $700 | | j Replace the badly chipped island bench cabinet end. | $800 | | k The cabinet doors are chipped, the top drawer face is scratched, the inside backing of one of the overhead cabinets needs repair, the infill pieces next to the rangehood are rough cut and require refitting, the handles are chipped and fill the holes to the cabinet backboards. | $990 | | l Clean the overspray paint off the bench top edges. | $50 | | m One side of the rangehood cabinet is not fitted flush with the neighbouring door. | $300 | | n The gaps to the overhead cabinet closer panel need closing. | $300 | | o Clean and repair the marks to the cabinet kickboard. | $100 | | p Clean the metal lead solder off the fan light. | $50 | | q The sink is not fully clipped into place. The sink is not flush fit with the bench top. | $200 | | r Patch and repair the rough finish to the bottom edges of the ceiling cornices | $300 | | 5. General Internal Items | a Clean the paint off the entry door lock catches. Fill the gaps around the latches and repaint. | $100 | b Fill and professionally repaint the holes to the living room front window frame. | $200
| c The living room front window flywire is loose fitted and needs repair. | $100
| | d Repaint the wall reveals around the living room front window. | $100 | | e Clean the dirt marks on the walls around the front entry door. | $50 | | f Gap fill and repaint around the entry door striker plates. Straight fit the deadlock door striker plate. | $100 | | g There is no high gas vent installed to the living room. | $150 | h The window winders are not colour matched to the frames. | $800
| | i Gap fill and repaint around all internal door latches. | $200 | | j The aluminium window and door frames are not supplied, as per the building specification. | $9,500 | | k The floor tiles are not supplied as per the specification. Carpet should have been installed to the Multi Purpose room. | $5,950 | l The tapware fitted is not as per the specification. | $800
|
External complaint items 34 The external complaint items are contained in Inspection Report (2) dated 20 February 2014 and the BSP Report (Exhibit 1, new (white) HB, page 71, and HB A2 from page 63, respectively). 35 Inspector O'Dea inspected each external item in the BSP Report and testified that he generally agreed with Mr Porteous' findings and conclusions but was not satisfied that a number of items were faulty or unsatisfactory. The applicant agreed with Inspector O'Dea and those items were dismissed by consent, as indicated below. 36 The Tribunal accepts the evidence of the BSP Report as to whether the work is proper and proficient, faulty or unsatisfactory, and the necessary remedial costs as identified in the following table, save for the following findings: • External Items 1r, 1qq and 1rr are dismissed by consent of the applicant. • External Items 1k, 1s and 1ll are dismissed for duplication with External Item 1a (replacement of all pavers). • External Item 1pp (rear bitumen finish) is dismissed for lack of evidence of any current defect or costings. • External Item 1x is dismissed for duplication with Internal Item 5j.
EXTERNAL ITEMS
Item | Complaint | Cost | | 1. General External Items | a The brick paving lay pattern is reported to be incorrect, the pavers were suppose[d] to be laid on a 45 degree pattern. There are missmatched pavers to the driveway crossover that require replacement. | $1,500 | | b The plumbing pipe above the bathroom is not adequately clipped into place. | $50 | | c The ceiling insulation is not fitted flush in the areas viewed. | $100 | | d The ceiling joins, as viewed from the manhole access panel, are not all backblocked. | $200 | | e The bathroom ceiling fan is not yet ducted to the external. | $100 | | f The ceiling access frame has not been timber trimmed out. | $100 | | g Patch the wall plaster next to the living room flyscreen door. | $100 | | h Refit the loose reticulation control box. | $50 | | i Finish the gate and side screens. The specification for the gate and screen is reported to be Midalia Steel – Gramlit Slatted Aluminium. The current installation of the screens is very poor. | $950 | | j Remove the concrete at the base of the gate post so a paver can be installed. | $50 | k The brick paving outside the front entry and two sliding doors is high. | $500
| | l Remove the excess soil from the front verge. | $300 | | m The landscaping needs maintenance and replating. | $900 | | n The front number signs are not of equal size. | $50 | | o Repair the rough plaster and paint finish around the aluminium frames. | $700 | | p The fence post holes should be cram colour cement filled. | $300 | | q Lower the plumbing inspection point. | $50 | r Remove the blue tape from the roof gutters. | $50
| s Re-cut the paving bricks around the plumbing and other fixtures. | $300
| | t All stormwater outlet grates should finish level with the brick paving. | $150 | | u Paint repair the scratches to the store room roof downpipe. | $50 | | v Repair the wall chips to the store room, next to the living room sliding door, to the kitchen corners. | $200 | | w The store room walls are moisture stained. The walls may not have been adequately seal painted. | $600 | x Fill and repaint the holes to the mixed use window frame. | $200
| | y Patch around the air conditioning unit's power conduit. | $50 | | z Remove the wall paint off the roof eaves lining. | $200 | | aa Paint the front roof gutter overflow spout. | $50 | | bb Repair the wall crack above the store door frame. | $100 | | cc Paint the roof top vent pipe. | $50 | | dd The store room roof cover is not sufficiently screw fixed into place. | $200 | | ee The roof flues are not underlap fitted to the roof eaves sheets. | $250 | | ff Clean the plaster and paint droppings off the entry and bedroom roof. | $100 | | gg The roof sheets have not been upturned on their top edges. | $600 | | hh Many of the roof fixings (30%) are over tightened and require replacement. | $700 | | ii The TV aerial cable is not mechanically sealed through the roof sheets. | $150 | | jj Patch the wall plaster above the entry roof gutter. | $50 | | kk Patch and paint the front roof barge boards. | $100 | ll Clean the marks off the brick paving. | $100
| | mm Paint the plastered sills to the sliding and entry doors. | $150 | | nn Remove the store room ceiling paint from the walls. | $50 | | oo Patch the store wall around the light switch. | $50 | pp The rear bitumen finish is rough and needs repair. Note: A pathway is reported to have been constructed along this roadway, but this has not yet been installed. | qq Repair the wall chips to the surrounding boundary limestone walls. | $300
| rr The meter box viewing panel Perspex is cracked and requires replacement. | $100
| | ss Replace or gap fill the rough cut and open ceiling joint strips to the carport ceiling. | $150 | TOTAL: | $38,290 | 37 The Tribunal is satisfied, on the available evidence, that the uncontradicted BSP Report provides reasonable cost estimates for the necessary remedial works and therefore finds the cost of the remedial work for the allowed items is $38,290. 38 This sum will permit the applicant to complete the unit's construction to handover. The applicant concedes that at handover he would be obliged to pay the respondent the sum of $31,920 for the outstanding lockup, practical completion and handover stages under the contract. For the reasons set out in Waldron at [41], the Tribunal shall credit $31,920 against the remedial costs of $38,290 and make a final building remedy order pursuant to s 36(1)(b) of the BSCRA Act in the sum of $6,370.
Issue 2: contractual complaint 39 This complaint is made pursuant to s 5(2) of the BSCRA Act and s 17 of the HBC Act, being one in respect of which a building remedy order may not be made. The contract is a 'home building work contract' within the meaning of that term as defined in s 3 of the HBC Act, it being a contract for the construction of a dwelling that does not exceed $500,000 (the contract price is $112,000). The Tribunal may make a home building work contract order as defined by s 41 of the BSCRA Act in the event of a referral of a complaint made pursuant to s 5(2) of the BSCRA Act: see s 11(1)(d), s 41 and s 43 of the BSCRA Act. 40 The applicant claims a breach of the term concerning the time in which the respondent is contractually obliged to complete the construction of the unit.
The date of commencement 41 The applicant led evidence that the siteworks for the strata development commenced before the building licence issued on 3 June 2011 (Exhibit 1, HB R1, page 10). The applicant tendered copies of photographs of the cleared site dated 26 May 2011, taken by the project manager of the developer, Yaran Property Group (Exhibit 2). The applicant submits that the date of commencement should be taken from the date of the building licence and cites the Tribunal decision of Thumolano and Afra Construction Pty Ltd [2013] WASAT 17 (Thumolano). 42 The respondent's Building Complaint Form nominates the date of commencement as 1 October 2011 (Exhibit 1, HB R1, page 2). There is no evidence before the Tribunal to substantiate this assertion. We give the respondent's documentary evidence little weight. Exhibit 1 demonstrates that the respondent repeatedly wrote to the applicant and the Commission claiming that the unit was practically complete and at the handover stage under the contract. These claims are inconsistent with Mr Afrasiabi's testimony on the first hearing date, that practical completion had not yet been reached. 43 In determining the date of commencement the Tribunal had regard to the contract.
Relevant clauses of the contract 44 The relevant clauses to the contract are: 2. NECESSARY APPROVALS (a) Subject to Clause 2(b), this Contract is conditional on the following occurring within FORTY FIVE (45) working days from the date of this Contract: (i) a building licence under Part XV of the Local Government (Miscellaneous Provisions) Act 1960 being issued in respect of the Works[.] 9. TIME FOR PERFORMANCE (a) Subject to this Contract the Builder shall commence the Works within the number of working days specified in Item 9(a) of the schedule or as soon thereafter as may be reasonably practicable calculated from the latest of the following dates: (i) on which the Owner shall have complied with the conditions referred to in Clause 2; (ii) on which the Owner satisfied all requirements under Clause 3(c), if applicable, and Clause 3(d); (iii) on which the Builder is satisfied that the boundaries of the Site have been adequately delineated; (iv) on which the Builder is satisfied that both an adequate water supply and an adequate power supply for the carrying out of the Works are available to the Site; [and] (v) on which the Builder has received approval from all relevant authorities. (b) Subject to this Contract the Builder shall complete the Works (bring the Works to Practical Completion Clause 19(a)) by the time specified in Item 9(b) of the Schedule. The Builder is entitled to an extension to the time for completion of the Works due to delay from a cause beyond the Builder's sole control including: (i) any of the following events which affect directly or indirectly access to or the condition of the Site or the Works or any person engaged on or material employed in or to be employed in or in relation to the Works, namely: acts of God, fire, explosion, earthquake, civil commotion, theft or acts of vandalism, flooding, inclement weather, strikes, industrial action, lockouts or holidays granted in accordance with industrial awards, vehicle accidents, unavailability of labour, vehicles or equipment or permits required; (ii) any alterations to the Works; (iii) any instruction or delay in instruction by or any omission of the Owner; (iv) any deliberate and substantial prevention of or interference with the Works or the progress thereof caused by the Owner; (v) any delay in the supplies of materials or transport or labour; (vi) any dispute with or proceeding being taken or threatened by adjoining or neighbouring owners concerning the continuation or variation of delivery to or completion of the Works upon the Site; (vii) any cessation of work pursuant to Clause 7(e)(ii); (viii) any delay caused by the Owner providing materials, goods or work; (ix) any delay in the commencement of or continuance with the Works, caused by or resulting from an order or directive of a relevant authority or proceeding before the Builders' Registration Board or the Building Disputes Tribunal, the Registrar, a mediator, an arbitrator or a Court; or (x) any delay caused by proper investigation of any of the above by the Builder or the Owner. (c) The Builder shall give to the Owner a notice of any extension of time to which the Builder is entitled within TWENTY (20) working days of the Builder being aware of both the cause and the extent of the delay. 19. PRACTICAL COMPLETION (a) 'Practical Completion' means when the Works are completed except for any omissions or defects which do not prevent the Works from being reasonably capable of being used for its intended purpose. (b) The Builder shall notify the Owner when the Builder considers that Practical Completion has occurred and within FIVE (5) working days the Owner and the Builder or his or her representative shall meet at the Works to carry out a pre-handover inspection. If said prehandover inspection does not occur the Contract shall be dealt with pursuant to Clause 18 hereof. (c) During the prehandover inspection the parties shall agree to a list of items which require completion or rectification or give notice to the other party within FIVE (5) working days under Clause 18 hereof. (d) The final payment shall be due within TEN (10) working days after Practical Completion and upon payment thereof the Builder shall hand the keys to the Works to the Owner or to such persons as the Owner may direct and on acceptance of the keys the Owner shall be deemed to have entered into possession of the Works and to have acknowledged that the works have been completed by the Builder in accordance with this Contract and the Builder shall thereupon be relieved and discharged from all responsibilities under this Contract other than the Builder's obligations pursuant to Clause[s] 14 and 19(c). … 45 Although item 9(a) of the schedule to the contract provides that the time to commence the works was 'upon settlement of the land', a matter on which the applicant led no evidence, this is subject to the issue of necessary approvals, including the building licence under clause 2(a)(i) of the contract. In addition, clause 9 of the contract lists a number of preconditions to the commencement of construction. 46 The Tribunal accepts the submission of the applicant that the commencement of the works under the contract occurred on 3 June 2011, the day the building licence issued.
Contractual date of completion 47 The contractual date to complete the works is specified in item 9(b) of the schedule to the contract as '8 months from commencement on site'. 48 The Tribunal is satisfied, for the reasons set out in Thumolano,that the contractual period for completion was eight calendar months from the date on which work commenced, or should have commenced, on site. Based on the finding that the contractual commencement date was 3 June 2011, the contractual date for practical completion of the unit is 2 February 2012, subject to any claim by the respondent for an extension of time. 49 Clause 9(c) of the contract provides that the builder shall give to the owner notice of any extension of time to which it is entitled within 20 working days of the event giving rise to the delay. The applicant testified that he was not notified of any claimed extensions of time. We accept this submission in the absence of any evidence to the contrary. 50 Accordingly, the contractual completion date remains 2 February 2012.The respondent conceded, through Mr Afrasiabi on the first day of hearing, that practical completion had not yet been achieved. We are satisfied that practical completion was not achieved by the last day of the hearing on 7 March 2014. 51 The applicant initially claimed damages of $50,807 in his Scott Schedule (Exhibit 1, HB A2, page 191) for a variety of losses. However, during the final hearing the applicant moved to the position that he was entitled to recover his loss of market rental income from the date on which the home unit should have been completed to 7 March 2014. The applicant did not lead any evidence on the expected time of completion of the remedial works. 52 The applicant testified that there is a shortage of rental properties in the area, and he intended to advertise the unit for lease before practical completion in order to obtain rental income from the actual date of completion. He had previous experience with another investment property of signing up tenants from the date of practical completion. He expected to earn rental income from 3 February 2012. We are satisfied that this was a reasonable expectation in the circumstances. 53 The contractual documents make reference to the National Rental Affordability Scheme (NRAS) and we accept the applicant's evidence that the respondent was well aware that the applicant intended to obtain income from the unit as a rental property. The unit may qualify for NRAS financial incentives under the National Rental Affordability Scheme Act 2008 (Cth) in the future but is not registered by NRAS to date. We consider the potential loss of future NRAS incentives too remote to include in our determination of damages. The applicant did not pursue this claim, in any event. 54 Damages for loss of rental income flow naturally from a breach of contract, such as the failure to complete within time, and fall within the first limb of the rule of assessment of damages in Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145. There being no liquidated damages clause in the contract, there is no bar to the applicant's claim. 55 The applicant produced written rent appraisals from Professionals licensed real estate agency, dated 20 January 2012 and 20 January 2013, as evidence of the achievable weekly rental for the unit (Exhibit 1, new (white) HB, pages 118 and 119). We accept this evidence and find the damages are as follows:
| Number of weeks' lost rent in 2012 from contractual date of completion (3 February 2012) | = 47 | | Number of weeks' lost rent in 2013 | = 52 | | Number of weeks' lost rent in 2014 (to 9 March 2014) | = 10 | Total weeks of lost rent | 109 | | 47 weeks x $264 | = $12,408 | | 52 weeks x $275 | = $14,300 | | 10 weeks at $275 + 4% | = $ 2,860 | Total loss of rental income | $29,568 | 56 Accordingly, the Tribunal is satisfied that the applicant is entitled to $29,568 in damages for the respondent's breach of contract arising from the delay in completion of the unit from 2 February 2012 to 9 March 2014. 57 The applicant made a late claim for reimbursement of water charges in the sum of $458. The claim was not identified in the initial complaint and is outside of our jurisdiction. In any event, the evidence submitted fails to establish a breach of the contract, relevant 'faulty workmanship' or the applicant's actual loss to the requisite standard. This claim is dismissed.
Issue 3: claim for costs of the proceedings 58 The applicant sought reimbursement of expenses listed in the Scott Schedule (Exhibit 1, HB A2, page 182). These included reimbursement of legal expenses prior to filing the complaint, Mrs Yvonne Byham's airfares between Perth and New South Wales (in order to appear as the applicant's agent at the hearings), building inspection reports, printing, stationery and travel to and from the building site. 59 Section 49 of the BSCRA Act states: Costs and expenses (1) Subject to this section, the Building Commissioner or the State Administrative Tribunal may make such orders for costs as they think fit in relation to proceedings arising from a building service complaint or a HBWC complaint. (2) The Building Commissioner must not award costs to a party for the services of a representative of that party unless, in the opinion of the Building Commissioner, it is fair to do so, having regard to (a) whether a party has acted in relation to a complaint in a way that unnecessarily disadvantaged another party; or (b) whether a party has been responsible for prolonging unreasonably the time taken to deal with the complaint; or (c) the relative strengths of the claims made by each of the parties; or (d) any other matter the Building Commissioner considers relevant. … 60 The principles relevant to an application for costs are set out in Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188. 61 The Tribunal finds that the respondent did not assist in the speedy resolution of this dispute. The respondent failed to comply with Tribunal orders on several occasions and failed to attend several directions hearings and the last four days of the final hearing. The respondent failed to attend the Tribunal ordered mediation or notify the applicant of its inability to attend, despite being aware that the applicant's agent was flying from New South Wales to Perth for the mediation. The respondent failed to file any response to the applicant's Scott Schedule and other documents ordered by the Tribunal. The respondent made undertakings to the Tribunal and consented to various orders with which it then failed to comply. 62 The Tribunal finds the respondent delayed the proceedings and conducted itself unreasonably, causing unnecessary disadvantage to the applicant. The applicant incurred considerable costs in pursuing his justified claims. The applicant summonsed witnesses who were ultimately not required to testify at the final hearing due to the absence of the respondent. 63 The Tribunal considers that the applicant's inspectors' costs in this proceeding of attendances at site, inspections, preparation of reports, including costing the remedial work, should be paid by the respondent. 64 Of the witnesses who were formally summonsed by the applicant, only Mr Ron Lyster, the former operational manager of Yaran Property Group, gave relevant evidence that was of real assistance to the Tribunal in its determination of the matter. In the absence of the respondent at the hearing, the testimony of the remaining witnesses was not necessary and their attendance fees are not allowed. 65 The Tribunal sees fit to award costs under s 49 of the BSCRA Act as reasonable costs incurred by the applicant for the proper conduct of the proceedings as follows: |