Champion Homes Sales Pty Ltd v Pei Huang

Case •

[2024] NSWCATCD 67

•

06 December 2024

No judgment structure available for this case.

Civil and Administrative Tribunal


New South Wales

Medium Neutral Citation: Champion Homes Sales Pty Ltd v Pei Huang [2024] NSWCATCD 67
Hearing dates: 3 and 4 June 2024
Date of orders: 06 December 2024
Decision date: 06 December 2024
Jurisdiction:Consumer and Commercial Division
Before: R. Alkadamani, Senior Member
Decision:

(1) Order that proceedings 2023/00373248 be dismissed.

(2) Order that proceedings 2023/0036998 be dismissed.

(3) No order as to costs to the intent that each party bear its own costs.

Catchwords:

HOME BUILDING – variations – whether deemed variation

MISLEADING AND DECEPTIVE CONDUCT – whether misrepresentations – loss and damage – loss of opportunity

UNFAIR CONTRACT TERMS – standard form contract – special conditions – whether unfair contract terms

Legislation Cited:

Australian Competition and Consumer Act 2010 (Cth)

Director of Consumer Affairs v AAPT (2006) VCAT 1493

Environmental Planning and Assessment Act 1979 (NSW)

Fair Trading Act 1987 (NSW)

Government Information (Public Access) Act 2009 (NSW)

Home Building Act 1989 (NSW)

Petroleum Act 1967 (NSW)

Legal Profession Uniform Law 2014 (NSW)

Cases Cited:

Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248

Nadinic v Cheryl Drinkwater as trustee the Cheryl Drinkwater Trust [2020] NSWCA 2

Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327

Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277

Texts Cited:

None

Category:Principal judgment
Parties: Champion Homes Sales Pty Ltd (applicant in 2023/00373248 and respondent in 2023/0036998)
Pei Huang (applicant in 2023/0036998 and respondent in 2023/00373248)
Representation:

Mr Vardas (Champion Homes Sales Pty Ltd)

Ms Huang (self represented)
File Number(s): 2023/00373248
2023/00369998
Publication restriction: None

REASONS FOR DECISION

  1. Pei Huang (the homeowner) is the registered proprietor of a parcel of land at ** Briens Road, Northmead, NSW 2152 (the Property). Champion Homes Sales Pty Ltd is a builder (the builder). In 2021 the builder was engaged by the homeowner to construct a residential building work at the Property.

  2. Proceedings HB 23/44788 (2023/00373248) were commenced by the builder on 4 October 2023. In those proceedings the builder claimed $94,857.00.

  3. Proceedings HB 23/48135 (2023/00369998) were commenced by the homeowner on 26 October 2023. In those proceedings the homeowner claimed, or initially claimed, a refund of $41,979.00 already paid to the builder, an order that the homeowner does not have to pay the amount of $160,000, an order that the builder pay the homeowner $76,979 and that the builder pay a “penalty of $220,000”.

  4. The matter was heard on 3 and 4 June 2024. At the conclusion of the hearing the Tribunal made directions for the filing of written submissions. The builder’s submissions were directed to be filed by 2 July 2024. The homeowner’s submissions were directed to be filed by 16 July 2024. The homeowner subsequently sought, and was granted, an extension to file submissions by 23 July 2024.

  5. During the hearing the homeowner represented herself.

  6. During the hearing Mr Vardas represented the builder. Mr Vardas is legally trained but is not a practicing solicitor or barrister.

  7. The following evidence was relied on by the builder during the hearing:

  1. Exhibit 1 – statement of Steve Malesev dated 13 November 2023;

  2. Exhibit 2 – statement of Steve Malesev dated 5 December 2023;

  3. Exhibit 3 – statement of Steve Malesev dated 14 May 2024;

  4. Exhibit 4 – statement of Morgan Notley dated 14 May 2024;

  5. Exhibit 5 – statement of George Vardas dated 14 May 2024;

  6. Exhibit 6 – email thread between the builder and the City of Parramatta Council (the Council), commencing on 10 March 2021 to 17 June 2021.

  1. The following evidence was relied on by the homeowner during the hearing:

  1. Exhibit A – document entitled “Annexure A (Table of Variations and Contract Price Adjustments)”;

  2. Exhibit B – document entitled “Annexure B (Documents and Records)” and an enclosed 276 page bundle of documents;

  3. Exhibit C – document entitled “Annexure C Documents and Records)” and an enclosed 83 page bundle of documents;

  4. Exhibit D – document entitled “Chronology” commencing at page 3 to page 46 of the homeowner’s Points of Response to the Application, filed 21 December 2023;

  5. Exhibit E – document entitled “Applicant’s Point of Claim in Supporting the Application” filed 21 December 2023 and enclosed 66 pages;

  6. Exhibit F – document entitled “Annexure D”; and

  7. Exhibit G – statement of Pei Huang dated 1 March 2024.

Findings

  1. I make the following findings.

  2. On 30 September 2003 the Council issued Development Consent JD/00603/03 (the Development Consent) to the homeowner (Ex B, p. 45).

  3. On 8 October 2003 construction certificate CC/151/2003 (the Construction Certificate) was issued in respect of the proposed development on the Property.

  4. Sometime in late 2007 six trees were removed from the Property and payment was made for this work on 17 December 2007. The trees that were removed were marked on a landscape plan which formed a component of the Development Consent (see Ex B, p. 114).

  5. In about December 2020 the homeowner and the builder commenced preliminary discussions and communications concerning construction of a residential dwelling on the Property (see Ex 4, [5]-[11]). Mr Notley was the main employee of the builder with whom the homeowner dealt at this point.

  6. Between about 27 January 2021 and about 5 March 2021 the homeowner communicated with Council employees to ascertain whether the Development Consent was still active (Ex E, [2] and Ex B, pp. 113-114). The homeowner identified that six trees had been removed and that these trees were marked on the landscape plan, which formed a component of the Development Consent documents, had been removed (Ex B, p. 113).

  7. On 12 February 2021 the homeowner sent an email to the Council (Ex B, p. 121) as follows:

Dear Mr Leotta,

I had a few email communication with Mr Issa Trad and I have difficulties in getting the relevant answers and guidance in relation to the DA of JD/00603/03.

The property address: Lot 5 DP 26956

91 briens Road, Northmead NSW 2152.

I hope you are the Mark that I had a conversation with on 10th of February. If not, you are still the person I believe in the position to help me.

I am writing to you to provide the supporting evidences to council. In return I am hoping to get a letter from council confirming the current status of the DA of JD/00603/03 being active.

I am providing the following documentation as evidence:

1. Copy of the original DA JD/00603/03 in 2003, in which it is stated that the tree removal is one of the 4 developments.

2. A PDF file of the approved Landscape Plan as part of the approved plans. In the landscape Plan it is clearly marked 6 trees in the front of the property are to be removed.

3. A cop of Tree removal Approval from Parramatta city council as of 12th of October, 2007. Within the approval, there is an inspector's diagram showing 9 trees are to be removed and these 9 trees includes 6 trees removal indicated in original DA.

4. A PDF of my bank statement which includes the transaction records of the Payment to tree lopper. This transaction records is located on the second page on 17th December, 2007.

I have attached the 4 files including a copy of the DA, copy of the Landscape Plan, copy of the Tree removal approval, and bank statement.

I have sent a copy of this email to my husband to keep him in the loop. We are looking forwards to your response.

  1. On 3 March 2021, Mr Trad, a Council employee, emailed the homeowner as follows:

This is a legal matter that Council cannot confirm the status of the Development Consent or provide it’s (sic) interpretation, it is advised you seek your own legal advice or discuss the matter with your PCA.

  1. The reference to “PCA” was a reference to the principal certifying authority which was, in fact, also the Council.

  2. The homeowner’s statement contends that on 5 March 2021 she orally agreed with the builder that for a fee of $35,000.00 the builder agreed to provide “legal advice, representation to deal with Council [and] preparation of a Tender comprising a complete costing for demolition and construction” (Ex G, [4]). The homeowner’s evidence as to the formation of a contract by reason of discussions on 5 March 2021 was not corroborated by written communications. Nor were the homeowner’s contentions as to the terms of the oral agreement set out in first person. As will be discussed below, the parties subsequently entered into detailed written agreements. Having regard to the detailed content of the subsequent written documents, and the lack of precision in the conversations said to constitute the oral agreement formed on 5 March 2021, I am not satisfied on the balance of probabilities that the parties formed an oral agreement whereby the builder agreed to provide legal advice.

  3. On 5 March 2021 the homeowner provided the builder, in PDF format, with a suite of documents on which the Development Consent was based, including architectural plans, landscape plans and engineering plans. Thereafter the builder communicated with the Council in relation to the status of the Development Consent.

  4. On 5 March 2021 Mr Malesev sent an email to Mr Trad in which Mr Malesev contended that development was “physically commenced on” 17 December 2007 by reason of the removal of the six trees (Ex B, p. 110-111).

  5. On 9 March 2021 Mr Trad responded to Mr Malesev’s email by, in substance, rejecting that the removal of the six trees satisfied the relevant provisions of the Environmental Planning and Assessment Act 1979 (NSW), namely, section 4.53 (Ex B, pp. 109-110; Ex 3, SM-3, pp. 12-13). Section 4.53 provided as follows:

4.53   Lapsing of consent

(1)  A development consent lapses—

(a)  5 years after the date from which it operates if the development consent commences operation after the prescribed period, or

(b)  5 years after the date from which it operates if the development consent commences operation during the prescribed period, or

(c)  2 years after the date on which the development consent would otherwise have lapsed if the development consent commenced operation before, and has not lapsed at, the commencement of the prescribed period.

  1. Mr Trad’s letter also referred to clause 124AA of Environmental Planning and Assessment Regulations 2000 (the Regulations) which was introduced to the Regulations and commenced after the date of the Development Consent. Regulation 124AA provided as follows:

124AA   When work is physically commenced

(1)  For the purposes of section 4.53(7) of the Act, work is not taken to have been physically commenced merely by the doing of any one or more of the following—

(a)  creating a bore hole for soil testing,

(b)  removing water or soil for testing,

(c)  carrying out survey work, including the placing of pegs or other survey equipment,

(d)  acoustic testing,

(e)  removing vegetation as an ancillary activity,

(f)  marking the ground to indicate how land is to be developed.

(2)  This clause does not apply to a development consent granted before the commencement of this clause.

  1. Mr Trad’s letter concluded:

Due to development consent no. JD/00603/03 being issued prior to the commencement of Regulation 124AA of the Environmental Planning and Assessment Regulations 2000, this regulation does not apply to development consent no. JD/00603/03 issued by Council on 30/9/2003.

Therefore, the consent to have been physically commenced within the 5 years, physical works related to the erection of a building or works approved by the development consent were to be commenced prior to 30/9/2008.

The onus of demonstrating 'physical commencement' is the responsibility of the individual acting upon the development consent.

This advice pertains solely to the development application being operationalised.

Please note the absence of a response from Council does not constitute agreeance.

I trust this information will be of some assistance to you.

  1. On 9 March 2021 Mr Malesev responded to Mr Trad (Ex 3, SM-3, p. 14) as follows:

Dear Issa

I think you have missed the point.

You stated that it was up to the PCA to advise whether the consent is active.

You are the PCA (the council has been appointed as the PCA), your records confirm that you are the PCA.

Do you dispute that the CC was issued by council ?

We have advised you that 6 trees have been removed.

The trees were approved for removal in the development consent.

We have given you evidence that a payment was made to a contractor to remove the trees.

Therefore this work has been done before the expiry of 5 years.

In your capacity as the PCA do you accept that we have proven that the trees have been removed before the 5 years have elapsed.

If you accept the proof, then you must agree that the consent is still current and further works can proceed.

In your capacity as the PCA you cannot hide behind the fact that you are also the approving authority and thus refuse to interpret your own consent.

In your capacity as the PCA you are working for the owner of the site as such you must give me or the owner a decision, you said yourself that it is up to the PCA.

Is the consent active or not ?

If you say its not active then give your reasons why its not active

  1. On 10 March 2021 (9:01am) Mr Trad responded to Mr Malesev (Ex 3, SM-3, p. 15) as follows:

Dear Mr Malesev

The below advice pertains solely to the development application being operationalised, this is stated below. The below advice is relevant and you must understand the onus of demonstrating 'physical commencement is the responsibility of the individual acting upon the development consent, it is not up to Council to make this determination for the applicant.

As per previous correspondence dated 04/02/2021 (attached), the applicant has been advised to contact Council's Certification Team on 9806 5050 to discuss the Construction Certificate.

  1. The 4 February 2021 correspondence to the homeowner, to which Mr Trad’s email refers, was not adduced by either party. Notwithstanding the request by Mr Trad that the homeowner contact the Council’s certification team, there is no evidence that Mr Malesev or any employee of the builder communicated this information to the homeowner. The homeowner says the request that she contact the Council was not communicated to her and I accept this evidence.

  2. On 10 March 2021 (10:02am) Mr Malesev sent an email to Mr Trad (Ex 3, SM-3, p. 16) as follows:

Dear Issa

I think you are playing semantics.

As far as I know Council issued the consent and council issued the CC

How your departments are split inside the council is not our concern.

I have asked you to confirm that council has issued the CC

Even if it the certification team is a 'separate' department, you as the council would have to be aware if the CC has been issued.

Once the PCA issue the CC the PCA must advise council within 48 hours of issuing the CC, therefore by perusing your files you should be able to tell me if the CC has been issued.

Which is one of the questions that I have asked you to answer.

I note that in your email to the owner dated 4/2/21 you have not provided an answer.

In your email you say 'if the council is the PCA'

Based on your records please advise is the council the PCA or not.

If the council is the PCA then you as the council (regardless of your various departments) should advise is the consent active or not.

You are paid by the rate payers and for you to play these games is uncalled for.

  1. On 10 March 2021 (10:28am) Mr Trad responded to Mr Malesev (Ex 3, SM-3, p. 17) as follows:

Dear Mr Malesev

Refrain making inaccurate allegations against me.

The issuance of the Construction Certificate has not been discussed apart from a conversation I had with the applicant on 01/12/2020 regarding obtaining a copy of the Construction Certificate through lodging a GIPA (Government Information Public Access) application.

The issuance of a Construction Certificate does not mean Council is still the PCA, this may have changed, and I have advised the applicant to discuss the matter with Council's Certification team.

The issuance of a Construction Certificate does not constitute physical commencement.

In the emails below you have questioned "Is the consent active or not ?" This has been answered below.

  1. At 11:19am on 10 March 2021 Mr Kumar, a team leader at the Council, also sent an email to Mr Malesev (Ex 3, SM-3, p. 18). That email was in the following terms:

Good morning Mr Malesev,

I would refer to the response Issa Trad has provided on the March 2021, where he has clearly articulated the requirements that you need to satisfy for the request you have made. This has the support of the management and is the view of the Council.

This has no relevance to the issue of the construction certificate issued by Council, which is a matter you will need to take up with the Certification Team as has been advised previously.

In case you hold another view, please obtain independent legal opinion on the matter raised in Issa Trad's email dated 9th March 2021.

Council will not be responding to any other enquiries on the matter as we consider the response to be adequately addressed.

  1. On 10 March 2021 Mr Malesev obtained the details of the Council’s manager of the certification team, namely, Mr Mario Trifiro. At 12:21pm Mr Malesev sent an email to Mr Trifiro (Ex 3, SM-3, p.19; Ex B, p. 68). In the email Mr Malesev advised that the Council was the nominated certifying authority, that the builder is to be engaged by the homeowner, referred to the Development Consent and the Construction Certificate and noted that “Part of the development consent involved the removal of six trees” and annexed a bank statement evidencing payment for the tree removal. Mr Malesev asked Mr Trifiro whether he agreed “that the development consent is active and that [the builder and homeowner] may continue with works”.

  2. I now turn to consider a letter dated 10 March 2021.

  3. The evidence of the builder included letter dated 10 Mach 2021 signed by Mr Vardas, an employee of the builder, and addressed to Mr Kumar, an employee of the Council (the 10 March 2021 Letter) (Ex 3, SM-3, pp. 23). The 10 March 2021 Letter set out a reasoned argument to the effect that the tree removals constituted commencement of work for the purposes of the Development Consent. The letter included references to Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council [2005] NSWCA 169; 63 NSWLR 124 and extracted the following paragraphs from the reasons of Tobias JA:

[86] …There is an element of fact and degree in each case. Although in Besmaw Talbot J (at 436 [112]) observed that once Parliament had decided to delete the requirement of substantiality, there was little room for an argument that the works must not be de minimus, and that it was therefore reasonable to exclude any test of the degree and extent of the work under the present statutory regime, nonetheless the requirement that the relevant work relate to the approved subdivision requires a real nexus between them. In particular, the concept that the work must be "physically commenced", requires physical activity which involves an appearance of reality and which is not merely a sham. In other words, the relevant work must be more than merely notional or equivocal in that it must truly be work relating in a real sense to that which has been approved.

[98] …the erection of a dwelling begins with clearing of the site followed by its pegging out and then the digging of trenches for footings. It must logically follow that the erection commences with the first of those items. It matters not that neither the clearing of the site, its pegging out nor the digging of trenches involves the actual erection of the fabric of the building.

  1. There is a dispute between the parties as to whether this letter was in fact sent to the Council. This is important because the homeowner contends that upon reading the letter she believed that the

  1. The builder contends that the 10 March 2021 letter was sent. The homeowner’s evidence is that she made enquiries of the Council and they did not have a record of the letter.

  2. I have concluded that the 10 March 2021 Letter was sent by the builder to the Council. I have come to this conclusion for the following reasons.

  3. First, the letter obviously involved significant effort. It comprises three pages of text, cited relevant legislation and cases and traversed the relevant facts pertaining to the Development Consent and the Property in detail. It would be expected that the builder sent that letter after that effort.

  4. Second, on 11 March 2021 Mr Malesev sent an email to Mr Trifiro suggesting that a letter from the builder be sent to the Council’s legal department (Ex 3, SM-3, p. 19). That email was as follows:

Hi Mario

Further to our discussion, please refer to the attached letter to Council’s legal department.

  1. Third, some of Council’s communications referred to the provision by the builder of “legal advice”. In this respect, an email dated 7 April 2021 from Mr Trifiro to Mr Malesev (Ex 3, SM03, p. 26; Ex 6), recorded:

As you have supplied legal advice I am happy to have our legal team look into this…

  1. Finally, there are limits to the weight I place on the homeowner’s evidence on this issue. The homeowner’s evidence comprised a recital of what she had been informed by Council. First, that evidence was hearsay. Second, the Council employee may have only been searching in their area of responsibility. Third, the underlying parameters of the search and the thoroughness of the Council employee’s efforts are not known. Although it is understandable that a lay person may not appreciate such matters, a more appropriate way in which the homeowner could have sought to establish that the Council had not received the 10 March 2021 Letter would have been to request that the Tribunal issue to the Council a summons for production for that document. If the Council did not produce the document in response a summons for production then it would have provided some foundation for the submission that the 10 March 2021 Letter had not been sent by the builder.

  2. I have taken into account that the builder did not adduce a document which showed that the 10 March 2021 Letter had been sent by email to Mr Kumar. However, the builder adduced evidence that the letter was sent. Mr Malesev said that the 10 March 2021 Letter “had been submitted to Council” presumably around that date (Ex 3, [7]) and “reject[ed] out of hand” that it had not been sent (Ex 3, [8]). Mr Varda’s evidence is that, on 11 March 2021, Mr Malesev sent the 10 March 2021 Letter (Ex 5, [23]) which is consistent with the email dated 11 March 2021 referred to above (Ex 3, SM-3, p. 19).

  3. Weighing up the matters in the preceding five paragraphs, I have concluded that the 10 March 2021 Letter was sent by the builder to the Council.

  4. For completeness, the builder also contended that Mr Trifiro referred to the 10 March 2021 Letter in an email dated 25 June 2021 (Ex 3, SM-3, p. 29). The context of the relevant communications is that on 22 June 2021 Mr Malesev asked whether Mr Trifiro had “actually refer[ed] this matter” to the Council’s legal department (Ex 3, SM-3, p. 27). On 25 June 2021 Mr Trifiro responded “I did not send it to legal as its (sic) my team that will act in the role of the PCA and its our own accreditation/registration that is on the line” (Ex 3, SM-3, p. 29). The builder submitted that the reference to “it” in Mr Trifiro’s communication is a reference to the 10 March 2021 Letter. However, I have concluded that the word “it” in Mr Trifiro’s communication referred to the “matter” raised in Mr Malesev’s 22 June 2021 email, namely, the Development Consent and the question of whether it was active.

  5. On 15 March 2021 Mr Trifiro (Ex 3, SM-3, p. 24; Ex B, p. 66) advised:

As the PC for this job [I am] not satisfied it has not lapsed however I will send to our legal team. I have been told it will take a min of 3 months to get a response.

Should you wish for the change of PCA to happen let me know.

  1. On 15 March 2021 Mr Malesev responded that there “is no request to change the PCA” (Ex 3, SM-3, p. 24). Mr Malesev agreed during cross examination that he did not ask the homeowner whether she wished to change the certifying authority.

  2. On 15 March 2021 the builder provided the homeowner with tender documentation for the proposed construction of a duplex at the Property (see Ex G, 10]-[11] and Ex 1, SM-1, pp. 36-43). The construction price was $893,888.00. One of the terms of the tender required the homeowner to pay the builder a non-refundable fee of $35,000.00, which sum would be credited towards the contract price in the event the parties entered into a contract (see Ex 1, SM-1, p. 43).

  3. The homeowner considered the non-refundable fee of $35,000.00 to be unfair and spoke with Mr Notley about her concerns (Ex G, [11]). The homeowner and Mr Notley came to an understanding which Mr Notley documented in an email on 22 March 2021 (Ex 4, MN-1, p. 32). The covering email described the attached document as “terms and conditions” (Ex 4, MN-1, p. 33). After recording some of the background matters the document attached to the email recorded the following:

The development consent was issued on 30th September 2003 and was valid for five (5) years from that date.

There is debate as to whether the consent is still active.

The owner has carried out works, approved as part of the development consent.

The owner confirmed that these works were carried out in late 2007, well within the five (5) years of the issue of the consent.

Champion Homes will deal with council to obtain confirmation from council that the development consent is active.

If the confirmation is obtained, then arrangements will be made to commence building works.

If the council fails to confirm that the consent is active, then Champion Homes on behalf of the owner and with assistance from the owner will seek a declaration from the Land and Environment Court that the consent is active.

The owner has paid a non-refundable tender acceptance fee to Champion Homes.

Should a declaration be required from the court, Champion Homes will engage legal services to prepare and present the case to the court.

Any costs incurred in taking this action will be paid from the tender fee paid by the owner.

If a declaration is obtained, then the owner will reimburse Champion Homes for the expenses incurred.

If the declaration cannot be obtained then Champion Homes will refund the balance of the tender fee to the owner and the building contract will be at an end, with no further monies to be paid by the owner.

  1. The document attached to the 22 March 2021 email recorded that the homeowner has “paid a non-refundable tender acceptance fee to” the builder. The tender acceptance fee was $35,000.00. During the hearing it was common ground, and I find, that the homeowner paid the tender acceptance fee on 14 June 2021 as to $20,000.00 and on 16 June 2021 as to $15,000.00.

  2. On 31 March 2021 Mr Malesev sent an email to Mr Trifiro (Ex 3, SM-3, p. 25) enquiring whether a response from the Council’s legal department had been received and stating that he, Mr Trifiro, is the PCA and as such had a “duty to the owner to advise”. Mr Malesev’s email concluded “Is the DA active or not”.

  3. On 7 April 2021 Mr Trifiro sent an email to Mr Malesev (Ex 6, p. 2; Ex 3, SM-3, p. 26). That email relevantly recorded:

So in response to you (sic) last email, I don’t feel that the DA is active. Can you please have the applicant contact me ?

Understand there was no request of change of PCA, however I’m giving you client options.

I’m not comfortable as an individually credited certifier to accept the work completed enable the consent to have not lapsed. However there may be a certifier that is comfortable to accept the DA as not lapsed.

As you have supplied legal advice I am happy to have our legal team look into this, however they are not in my control and therefore I can give definitely (sic) time frame.

I would like to make clear that I don’t feel that the DA has not lapsed. Please let me know what your client would like to do.

  1. The penultimate sentence appears to contain a mistake and I infer it should read “As you have supplied legal advice I am happy to have our legal team look into this, however they are not in my control and therefore I can not give definite time frame”.

  2. The homeowner’s evidence is that she was not informed by the builder that she should contact Mr Trifiro. During cross examination Mr Malesev conceded that he did not disclose the 7 April 2021 email to the homeowner. The builder did not adduce any emails showing that Mr Trifiro’s email had been forwarded to the homeowner. I accept the homeowner’s evidence. I find that the builder did not disclose to the homeowner the request from Mr Trifiro that the homeowner contact him.

  3. There was no satisfactory explanation from the builder as to its reasons for not informing the homeowner that Mr Trifiro had requested she contact him. During cross examination Mr Malesev said he did not know why he had not disclosed the communication to the homeowner.

  4. On 13 June 2021 the homeowner accepted a tender (the Original Tender). The Original Tender had been provided by the builder on 15 March 2021. It was a tender for the proposed construction of a duplex at the Property (Ex 1, SM-1, pp. 36-43). The construction price was $893,888.00. A term of the Original Tender required the homeowner to pay the builder a non-refundable fee of $35,000.00, which sum would be credited to towards the contract price in the event the parties entered into a contract (see Ex 1, SM-1, p. 43).

  5. On 13 June 2021 the homeowner also agreed to three separate amendments to the Original Tender (MN-1, pp. 58-59, p. 60 and pp. 61-62; see also Ex F, pp. 1-2). The first document is entitled Tender Amendment No 1 and bears the date 15 March 2021 (Ex 4, MN-1, pp. 58-59). The second document is entitled Tender Amendment No 2 and bears the date 20 April 2021 (Ex 4, MN-1, p. 60). The third amendment document is entitled Tender Amendment No 3 and bears the date 12 June 2021 (Tender Amendment No 3) (Ex 4, MN-1, pp. 61-62). Item 8 of Tender Amendment No 3 was in the following terms:

The development consent was issued on 30th September 2003 and was valid for five (5) years from that date.

There is debate as to whether the consent is still active.

The construction certificate was issued by Council on 7th October 2003.

The owner has carried out works, approved as part of the development consent.

The owner confirmed that these works were carried out in late 2007, well within the five (5) years of the issue of the consent.

Champion Homes will deal with council to obtain confirmation from council that the development consent is active.

If the confirmation is obtained, then arrangements will be made to commence building works.

If the council fails to confirm that the consent is active, then Champion Homes on behalf of the owner and with assistance from the owner will seek a declaration from the Land and Environment Court that the consent is active.

The owner has paid a non-refundable tender acceptance fee to Champion Homes.

Should a declaration be required from the court, Champion Homes will engage [page break] legal services to prepare and present the case to the court.

Any costs incurred in taking this action will be paid from the tender fee paid by the owner.

If a declaration is obtained, then the owner will reimburse Champion Homes for the expenses incurred.

If the declaration cannot be obtained then Champion Homes will refund the balance of the tender fee to the owner and the building contract will be at an end, with no further monies to be paid by the owner.

  1. The layout of Tender Amendment No. 3 contained a page break between the words “Champion Homes will engage” and “legal services to prepare”, which I have noted in the quote extracted in the preceding paragraph.

  2. One significant matter which Tender Amendment No. 3 did not deal with is the party that would be liable for any costs of court proceedings that exceeded $35,000.00. During the hearing the homeowner considered that her exposure did not exceed $35,000.00. The terms of Tender Amendment No. 3 reflect that the builder expected that to be the case, in particular, the words “Any costs incurred in taking this action will be paid from the tender fee paid by the owner”. However, the words “Any costs incurred in taking this action will be paid from the tender fee paid by the owner” do not cover the liability for any costs which exceed, and cannot be met from, “the tender fee paid by the owner”.

  3. From 14 June 2021 to 16 June 2021 the homeowner paid to the builder $35,000.00

  4. On 16 June 2021 Mr Malesev sent an email (Ex B, p. 58) to the homeowner which relevantly stated:

I further understand that Council are now saying that they do not consider the development consent to be active, although they have not provided any reasons.

We have written to council setting out reasons, as to why we say that the consent is current, copy of our letter is attached for your information.

Council advised that they will respond within 90 days, to date we have not had a response.

We will now, (sic) make further representations to council and give them some additional time to respond.

To strengthen our representations please advise on the following: -

You obtained development consent, which permitted the removal of a number of trees.

You then made a separate application for permission to remove the same trees.

Can you please tell me why you needed to make this separate application.

Did the council request this.

Also, please tell me why you only removed the trees and not proceeded any further with the development within the five (5) year period.

  1. The homeowner says, and I accept, that the letter which was attached to Mr Malesev’s 16 June 2021 email was the 10 March 2021 Letter (Ex G, [16]-[17]).

  2. During the hearing there was some focus on Mr Malesev’s assertion that the Council “have not provided any reasons” for their position. At that point in time the substance of the Council’s position was that there had not been a commencement of work within 5 years of the date of the Development Consent and, as set out above, the Council’s position had been communicated to the builder.

  3. On 16 June 2021 the homeowner responded, also by email, to Mr Malesev’s queries in his email earlier that day. The substance of the homeowner’s response was that the Development Consent permitted removal of six trees in specified locations and that the homeowner wished to remove three other trees due to drainage related issues. The homeowner also advised that once she “completed the tree removal” she sent a letter to the tree management office and enclosed a copy. In relation to the final query, the homeowner advised that she was finishing her PhD program and working full time as a medical practitioner at the time and did not have sufficient time to engage with any development (Ex B, p. 59).

  4. On 17 June 2021 at 9:48am the homeowner sent an email to Mr Malesev (Ex B, pp. 60-61). That email relevantly recorded:

I have re attached the files as below:

1. Approved Landscape from DA showing the 6 trees need to be removed.

2. A copy of the communication letter that I sent to the tree management officer following the tree removal as per approved the tree removal TA 620 2007 requirement. PCC would have a original copy as well.

3. A copy of the tree removal approval TA 6202007

I am just through the letter.

I want to correct this as follows:

Parramatta city council did not say that they think the DA consent is not active. They just simply say it is the Pcc certifier's role to define whether the co (sic)

  1. The homeowner’s 17 June 2021 email shows that the homeowner was aware of some nuance in the Council’s position and her email drew a distinction with Mr Malesev’s characterisation of the Council’s position “that they do not consider the development consent to be active”.

  2. On 17 June 2021 at 11:48am Mr Malesev sent an email to Mr Trifilo as follows (Ex 6):

Dear Mario

We have provided you with our detailed view as to why we say that the development consent has not lapsed. In your email below you simply state you are not comfortable that the consent has not lapsed and that you do not feel that the consent has not lapsed.

You do not provide any reasons as to why you take that view or feel that way.

You claim that you have referred the matter to councils legal team, however to date neither the legal team nor you have responded with reasoning for your decision.

Please note that if I do not hear from you by 24th June 2021 we will commence a Class 4 Appeal through the Land & Environment Court seeking a declaration that the development consent has not lapsed.

I suggest you refer this email to the legal team.

  1. On 18 June 2021 the homeowner and builder entered into a building contract for the construction of a duplex at the Property (the Contract) (Ex 1, SM-1, pp. 51-96). The contract price was $897,838.

  2. On 19 June 2021 the homeowner signed another document entitled “Tender Amendment No. 3” (Ex 1, SM-1, p. 47 and Ex 4, MN-1, p. 63). Item 6 of that document provided as follows:

6. The development consent was issued on 30th September 2003 and was valid for five (5) years from that date.

There is debate as to whether the consent is still active.

The construction certificate was issued by Council on 7th October 2003.

The owner confirmed that these works were carried out in late 2007, well within the five (5) years of the Issue of the consent.

Champion Homes will deal with council to obtain confirmation from council that the development consent is active.

If the confirmation is obtained, then arrangements will be made to commence building works.

If the council fails to confirm that the consent is active, then Champion Homes on behalf of the owner and with assistance from the owner will seek a declaration from the Land and Environment Court that the consent is active.

The owner has paid a non-refundable tender acceptance fee to Champion Homes.

Should a declaration be required from the court, Champion Homes will engage

  1. There is a difference in the text of item 8 of the document entitled Tender Amendment No. 3 signed 13 June 2021 (Ex F, pp. 1-2; Ex 4, MN-1, pp. 61-62) and the text of item 6 of the document entitled Tender Amendment No. 3 signed 13 June 2021 (Ex F, p. 6; Ex 1, SM-1, p.47 and Ex 4, MN-1, p. 63). Throughout the hearing the homeowner clearly relied on the version signed by the her on 13 June 2021. The builder’s submissions also referred to the text signed by the homeowner on 13 June 2021 as recording the relevant terms agreed between the parties (see Builder’s Written Submissions filed 9 July 2024, paragraph [71]). The parties did not make any submissions on the significance of the differences between the two documents. Consequently, I will proceed on the basis on which the parties conducted the hearing, namely, that the relevant text is recorded in the document signed 13 June 2021(Ex F, pp. 1-2; Ex 4, MN-1, pp. 61-62).

  2. On 22 June 2021 Mr Trifiro sent an email to another Council employee, Mr Sam Papandoniou, asking him to review the comments and discuss the matter with him (Ex B, p. 65). Mr Malesev was copied into this email. On the same day, Mr Malesev emailed Mr Trifiro to ask for confirmation that Sam was from the Council’s legal department (Ex 3, SM-3, p. 29; Ex B, 65).

  3. The next communication that is relevant is an email of 25 June 2021 from Mr Triffiro to Mr Maselev. The email was sent at 10:12am. The evidence contains two possible versions of this communication. One version is in the exhibit to Mr Malesev’s statement dated 13 November 2023 is at page 102 of exhibit SM-1 (Ex 1, MS-1, pp. 102-103). It relevantly records the following:

Morning Steven, l'm sure you can appreciate with covid everyone is struggling to keep on top of things.

I did not send it to legal as it's my team that will act in the role of the PCA and its our own accreditation/registration that is on the line in the past months i have been try to recruit a s So unless directed by the courts (sic)

Hi Mario 

I checked the file and my opinion is that the works has NOT substantially commenced because of the following

reasons:

-The DA is from 2003 that is 18 years ago

-There was no inspection carried out by council for any items

-There was no geotechnical testing of the ground, survey report carried out or Demolition works done.

Therefore I think we CANNOT accept this CC as works to activate the DA. I hope the above has assisted with your enquire, A new DA and CC is required.

  1. The 25 June 2021 email extracted in the preceding paragraph appears to contain text from another email which was sent to Mr Trifiro, whose first name is Mario. The text from the other email commences with the words “Hi Mario” and concludes “A new DA and CC is required”.

  2. The homeowner’s evidence contains another (possible) version of the 25 June 2021 email from Mr Trifiro to Mr Malesev. The homeowner obtained records of the Council pursuant to an application under the Government Information (Public Access) Act 2009 (GIPA Act). The homeowner contends that the relevant 25 June 2021 is in the following terms (Ex B, p. 145):

Morning Steven, l'm sure you can appreciate with covid everyone is struggling to keep on top of things.

I did not send it to legal as it's my team that will act in the role of the PCA and its our own accreditation/registration that is on the line. I sat down with my team previously and i had no one willing to act in the role of the pca.

I put off getting back to you due to the last few months council has been trying to recruit new Certifier to the team, who was to review my decision with a new set of eyes. This has just happened and they are now on board and have reviewed this query.

Unfortunately for your client this officer/certifier has reviewed the file and has come to the same conclusion, that the works has NOT substantially commenced and

therefore the Certification team CANNOT accept the DA is activated.

If you are dissatisfied with our decision as the certification team to not take on the PCA role of a CC that council issued some 15 years ago, you are more than welcome to take further legal action or council will be more than happy to sign over the role to another certifier

  1. The version of the email at exhibit B, page 145 records information as to a sender (“From: Mario Trifiro”) and a recipient (“To: Steve Maselev”) with the recipient’s email address. The document (Ex B, p. 145) records details of when it was sent as follows “Sent: Friday, 25 June 2021 10:12am”. The email at exhibit B, page 145 also records that at 10:13am Mr Trifiro forwarded the email with the following covering email:

Fyi, lads, just in case he calls you.

Yvette can you please trim this email and draft a letter to the applicant with this info

  1. The homeowner submits that the document at exhibit B, page 145 is the version of the email that Mr Trifiro sent to Mr Malesev on 25 June 2021. The homeowner points to the details recording that the email was sent and that the email in the form at page 145 of exhibit B was obtained from the homeowner by a request made under the GIPA Act.

  2. It follows from the homeowner’s submission that the builder altered the text of the email that it exhibited to Mr Malesev’s statement dated 13 November 2023 at exhibit MS-1, pages 102-103.

  3. The builder says that the email that it exhibited is the document Mr Trifiro sent, namely, the document at exhibit 1, SM-1, pp. 102-103. The builder denies altering the document and notes that the allegation is serious. Indeed, the allegation that the email sent by Mr Trifiro was altered by the builder is a form of dishonesty.

  4. I find that the 25 June 2021 email which Mr Trifiro sent to Mr Malesev is the version at exhibit 1, SM-1, pp. 102-103. I do not accept that Mr Malesev or any other employee has altered the document and exhibited the document which was received. I do so for three reasons. First, the allegation of altering records is a serious allegation and involves, in these circumstances, an element of dishonesty. Second, the document obtained under the GIPA Act (Ex B, p. 145) appears to be an internal draft email which required further refining before being ready to be sent. The words “Yvette can you please trim this email and draft a letter to the applicant with this info” suggest the document obtained under the GIPA Act was a draft which needed to be trimmed and that a letter was to be drafted on the basis of the contents of the document. Thirdly, the document Mr Malesev received on 25 June 2021 was sent to the homeowner on 28 June 2021 (Ex B, p. 64). Consequently, had Mr Malesev intended to alter the document his decision to do so must have been taken in June 2021. However, in June 2021 the parties were not in dispute and there was no apparent motivation to do so.

  5. As stated above, on 28 June 2021 Mr Malesev forwarded Mr Trifiro’s email dated 25 June 2021 to the homeowner, including the text of the communication from another person to Mr Trifiro (Ex B, p. 64). Mr Malesev’s covering email to the homeowner was in the following terms (see Ex 3, SM-3, p. 30; Ex B, p. 64):

According to Mario the DA is not active.

We will now have to commence action through the Land and Environment Court in an attempt to obtain a [declaration] from the Court that the DA is active.

  1. On 29 June 2021 at 11:04am Mr Malesev sent the following email to the homeowner:

Dear Pei

I have obtained advice from a lawyer that I use at times

He has made some comments

Please see below

I note on your bank statement you paid $1,689.81 on 17/12/2017 to ALL TREE LOPPER arborist

Do you have any details or information about them

The case I found was a 2019 Court of Appeal decision in Cardo Management and Maintenance Pty Ltd v Cumberland Council n which the Court held that removal of shrubs was sufficient to prevent the DA from lapsing. However, they drew a distinction with tree removal because under the DA consent in that consent it required an arborist. The Court of Appeal agreed with the developer's submission stating that the removal of shrubs was not part of the tree removal condition which required an arborist to carry out

'pruning work and tree removal'. The Court held that the difference between 'tree' and 'shrub' was understood and as such there was no requirement for an arborist to complete such work lawfully as part of approval works in the consent.

In our case, the relevant DA clause is condition 39:

39. A certified Tree Surgeon/Arborist shall carry out all removals.

Reason: To ensure that removal is undertaken in a safe manner and comply with the Tree Works Industry Code of Practice (WorkCover NSH 1.8.98)

As the onus is on the applicant, we will need some evidence that a certified tree surgeon or arborist actually carried out the works, unless the client can show that she also arranged for shrubs etc to be removed at the same time.

My main concern, therefore, is to show that we complied with the development consent condition.

  1. The “qualified lawyer” to whom Mr Malesev referred in his email was Mr Vardas. Mr Vardas was at that time, and remains, an employee of the builder. Mr Vardas has practiced law in the past, but at the time of Mr Malesev’s communication he did not hold a practicing certificate and had not practiced law for many years.

  2. On 29 June 2021 at 12:07pm the homeowner responded to Mr Malesev’s email and advised that she could not locate receipts (Ex 3, SM-3, p. 32). Her email concluded “Now I understand the main concern with the compliance”. On the same day at 12:16pm Mr Malesev asked whether any other work was undertaken (Ex 3, SM-3, p. 33).

  3. A few hours later, on 29 June 2021, Mr Malesev sent the homeowner an email as follows (Ex 3, SM-3, p. 34):

WITHOUT PREJUDICE

Dear Pei

Further to our telephone discussion earlier today.

We have an agreement in place that we should seek a declaration from the Land & Environment that the DA is active.

I am happy to do so.

However, in my email earlier today I have advised you of the potential problems with the court.

There is no evidence that you used a certified arborist and there is no concrete evidence that you removed the garden bed and shrubs.

It is our opinion that going to court will not provide the outcome that we desire.

In addition the waiting time to be heard in court is a minimum of 6 months and it would possibly take another 3 months to get a decision.

Accordingly I propose the following;

We prepare a new tender based on one of our designs and make amendments as may be required in order to suit the site and council requirements.

The zoning permits dual occupancy, although council requirements have changed since your last DA, these requirements will have to be complied with.

The cost of doing this would be $10,000 and this amount can be transferred from the $35,000 that you have paid.

If you accept the new tender and amend the existing contract accordingly, we would credit the full $35,000 against the tender price.

If you do not accept the new tender, we would refund you $25,000.00 and our dealings would be at an end.

Please let me know what you want to do.

  1. It is unclear on what basis the builder considered that it was entitled to walk away from its obligations under Tender Amendment No 3 and proceed to bring an application in the Land and Environment Court had the homeowner wished to do so. The basis on which the builder was entitled to retain $10,000.00 from the amounts paid by the homeowner if she did not wish to proceed with the builder’s 29 June 2021 “without prejudice” proposal is unclear.

  2. Although the 29 June 2021 communication was headed “without prejudice” neither party objected to the document being received into evidence and both parties referred to the document in the hearing and in their submissions.

  3. On 1 July 2021 the homeowner discussed a way forward with Mr Notley. The substance of the discussions were that the builder would prepare new plans and designs and seek development approval on the basis of those plans (Ex G, [23]).

  4. As at 1 July 2021 the homeowner was aware of the substance of the Council’s position as to whether the Development Consent was active. The arrangements which she had concluded with the builder on their face provided the homeowner with the option of bringing an application to the Land and Environment Court to challenge the Council’s position. That action was to be managed by the builder and the costs would be met from the $35,000.00 paid by the homeowner to the builder. I have recorded above that Tender Amendment No 3 was silent on the liability of the parties for costs in excess of $35,000.00. Although the homeowner believed that the builder was required to meet all costs in excess of $35,000.00 I do not consider that was necessarily the case.

  5. On 2 July 2021 Mr Notley sent an email to the homeowner (Ex 4, MN-1, p. 70) as follows:

Hi Pei,

I hope your well.

Further to our phone call yesterday we have now reviewed the site for consideration of lodging a new application to council.

Your basically have 3 options as per below -

We use the attached plan of our standard design Lawson and change the façade upstairs to brick to help with the nose.

We use our current design make some changes to modernise the floor plan and design like removing the bar and change kitchen shape and move laundry.

We come up with a complete custom design similar to the attached plans.

Please let me know your thoughts.

  1. Mr Notley’s email of 2 July 2021 attached some potential plans for the homeowner to consider.

  2. On 6 July 2021 the homeowner responded to Mr Notley by email indicating that she “liked the design in large” and thanking Mr Notley for re-assuring her that “it is achievable with the budget and this exciting design, which I can see the value of redesign” (Ex 4, MN-1, p. 75). The homeowner also requested a number of changes and inclusions.

  3. On 4 August 2021 Mr Notley sent the homeowner concept plans for a duplex development (Ex 4, MN-1, p. 76).

  4. On 6 August 2021 the homeowner emailed Mr Notley with some queries and suggested changes (Ex 4, MN-1, p. 77).

  5. Between 6 August 2021 and 30 August 2021 a number of further email exchanges occurred between the homeowner and Mr Notley (Ex 4, MN-1, pp. 78-98).

  6. On 30 August 2021 Mr Notley emailed to the homeowner plans incorporating “the final changes as requested” and advised that he had “sent the plans for pricing” (Ex 4, MN-1, p. 99).

  7. On 6 September 2021 the builder provided the homeowner with a new tender, which the homeowner signed and returned on 8 September 2021 (the September 2021 Tender) (Ex 4, MN-1, pp. 106 – 115; Ex 1, SM-1, pp. 112-121). The September 2021 Tender set out a comprehensive list of inclusions. The new tender price for construction of the proposed duplex was $909,689.00 (Ex 4, MN-1, p. 111; Ex 1, SM-1, p. 121). The last page contained the following provisions:

This Tender is valid for fourteen (14) days from the tender date and can be withdrawn by the Builder anytime

thereafter.

Please acknowledge your acceptance of this tender by signing where indicated below. In consideration of accepting this Tender the Owner agrees to pay a non-refundable tender fee in the sum of $35,000.00 and this sum will be credited towards the Contract price.

We will then prepare the architectural plans. Preparation of plans will take a minimum of six (6) weeks.

Unless other written arrangements are made:-

- Preparation of reports required to submit the Development Application will not commence until a
Building Contract is entered into and all monies as set out above have been paid;

- Development Applications will not be submitted for approval until a Building Contract is entered into and all monies as set out above have been paid

- Development Applications will not be submitted on unregistered land

By accepting this Tender, you authorise Champion Homes to disclose information about you and the building site to relevant statutory authorities, other authorities, non-statutory bodies, builder's contractors involved or required in obtaining planning approvals and building permits and carrying out building works.

Upon acceptance of this Tender, any promotions whether current or future, unless itemised in this tender will not apply.

This tender price will be fixed for the entire construction period provided the building works contemplated in the tender are commenced within two hundred and sixty (260) days from the tender date.

No contractual obligation exists between us until a Building Contract is entered into and if the Building Contract is entered into this Tender will form part of the Building Contract.

Please note that the Development Application cannot be submitted until all external colour selections have been finalised to the satisfaction of statutory and other authorities.

Thank you for choosing to build with Champion Homes.

The Owner accepts this Tender without relying on any representations by the builder other than what is disclosed in this tender.

  1. Notwithstanding the words “No contractual obligation exists between us until a Building Contract is entered into and if the Building Contract is entered into this Tender will form part of the Building Contract” in the extract above, the matter was conducted during the hearing and in written submissions on the basis that there was a binding building contract, namely, the Contract signed by the homeowner on 18 June 2021. Consequently, I shall proceed on that basis.

  2. The September 2021 Tender also contained the following term (Ex 4, MN-1, p. 111; Ex 1, SM-1, p. 117):

Notwithstanding anything else, the Tender dated 15th March 2021, the Tender Amendment No. 1 dated 15th March 2021, Tender Amendment No. 2 dated 20th April 2021 and noted in schedule 5 of the Building Contract dated 18th June 2021. These have been superseded by this Tender and Amendments that follow and no longer form part of the Contract. This Tender and Amendments now form part of the Building Contract dated 18th June 2021.

  1. There was significant dispute during the hearing as to whether Tender Amendment No 3 survived having regard to the term in the September 2021 Tender which is extracted in the preceding paragraph. In my view, Tender Amendment No 3 was superseded by the September 2021 Tender. Tender Amendment No 3 was an amendment to the Original Tender, being the document dated 15 March 2021 signed by the homeowner in June 2021. Tender Amendment No 3 could not survive after the document which it varies has itself been superseded. The first five (5) items in Tender Amendment No 3 result in a credit to the homeowner of $3,000.00. Those items were referable to provisions in the Original Tender.

  2. The homeowner’s submission was that the September 2021 Tender did not expressly record that Tender Amendment No 3 was superseded and consequently it remained on foot. It is correct that the September 2021 Tender did not refer to Tender Amendment No 3 being superseded. However, the September 2021 Tender expressly superseded the Original Tender, to which Tender Amendment No 3 was a variation. Tender Amendment No 3 was not a stand alone contract. Rather, Tender Amendment No 3 was a variation of the parties’ rights and obligations in the Original Tender, including by way of additional rights. It follows that Tender Amendment No 3 did not survive after the document which it varies was itself superseded.

  3. On 8 September 2021 the homeowner also signed and returned a document entitled Tender Amendment No 1 which dealt mainly with upgrades to the inclusions (Ex 4, MN-1, p. 116-117).

  4. In October 2021 work commenced on obtaining from Council a new development consent. The builder engaged third parties to prepare a contour survey of the site as well as a site and wind classification report (Ex 1, [27]). After these reports were prepared the builder then commenced working on detailed architectural plans (Ex 1, [28]).

  5. On 18 January 2022 the builder lodged, on behalf of the homeowner, an application for development consent with the Council (Ex 1, [29]). The evidence did not explore in any real detail the events between October 2021 and 18 January 2022.

  6. On 24 March 2022 the builder received correspondence from the Council. During the period 24 March 2022 to 5 August 2022 the builder and the Council engaged in correspondence.

  7. On 30 August 2022 the Council’s determination was finalised but it was not until 20 September 2022 (the September 2022 Development Consent) that the Council notified its approval, subject to conditions, of the development application, which included demolition of the dwelling on the Property and the construction of duplex (Ex 1, SM-1. pp. 137-187).

  8. On 21 September 2022 the builder advised the homeowner of the September 2022 Development Consent decision.

  9. Around 25 November 2022 the homeowner applied for a construction loan (Ex E, p. 14, [40]). The Commonwealth Bank gave conditional approval on 5 December 2022 (Ex E, p. 14, [41]).

  10. In February 2023 there were some communications between the builder and the homeowner as to the terms of the loan approval, including the loan amount.

  11. In March 2023 the builder arranged for a third party to prepare a pre-construction report and a traffic management report for the site were obtained (Ex 1, [38]-[39]).

  12. On 22 March 2023 the principal certifying authority, namely the Council, issued the construction certificate (Ex 1, SM-1, pp. 240-241).

  13. On about 22 March 2023 the bank advised the builder that bank approval for the construction loan was in the amount of $970,000 and at that point in time was unconditional (Ex B, p. 6). Later that day the builder advised the homeowner that the builder had “notified the demolisher to get things underway” (Ex B, p. 4). The demolition work referred to the demotion of the then existing house on the Property.

  1. The meaning of “significant” was considered in Director of Consumer Affairs v AAPT (2006) VCAT 1493. In that case Morris J observed at [33]:

The word “significant” simply means “important” or “of consequence”. It does not mean “substantial”. It is not a word of fixed connotation and besides being elastic is somewhat indefinite. However, in its context, it is designed to identify an imbalance, to the detriment of the consumer, which should be regarded as unfair. In this sense the definition is circular. But it is impossible to avoid the notion of fairness in determining whether a term causes significant imbalance, even though this exercise is designed to ascertain whether a term is unfair.

  1. Clause 49.1 altered the balance of rights between the parties compared to the standard term which would otherwise be present in the Contract. However, clause 49.1 did not cause a “significant imbalance in the parties’ rights and obligations arising under” the Contract. Clause 49.1 altered the time required for payment but not the circumstances which create the underlying liability on the homeowner to pay. The circumstances which give rise to the liability are not altered by clause 49.1.

  2. Moreover, the homeowner would be aware and have forewarning for most circumstances requiring payment under clause 49.1. Subject to some limited exceptions, variations would require the agreement of the homeowner for the liability to arise. The circumstances which would give rise to a contract price adjustment are set out in the Contract.

  3. In terms of detriment, I am satisfied that a 5 day period to pay a contract price adjustment or variation could cause some detriment.

  4. The homeowner contended that clause 49.1 “grants the Builder the unilateral right to demand payment for variations after obtaining the Home Building Insurance” (Homeowner’s submissions, [55]). This is not the meaning or effect of clause 49.1.

  5. Another argument made by the homeowner was that clause 49.1 required the homeowner to pay “very high variation demands” such as the claim for $160,000.00 for onsite stormwater detention (OSD).

  6. The OSD dispute engages clause 53.5 and, in particular, whether “the builder is required to carry out any excluded item under the contract either by the owner, any statutory or other authority”. It is only when those two elements are satisfied, namely, that an item of work is an excluded item and the homeowner or a statutory or other authority requires the work to be undertaken that the item of work will “be deemed a variation signed by the owner and claimed as a variation” under the Contract. Consequently, clause 49.1 would not validly operate in respect of the claim for the $160,000 relating to the OSD unless the builder could satisfy that the item of work was an excluded item and that it was required by the homeowner or a statutory or other authority.

  7. I turn to consider section 25 of the ACL. Clause 49.1 is transparent. It is expressed in reasonably plain language. It is typed and consequently legible. It was presented clearly, in the section dealing with special conditions. The homeowner had physical access to, and an electronic or physical copy of, all the relevant contract documents.

  8. I turn to consider clause 53.5. As I have explained above, clause 53.5 gives rise to a deemed liability only where “the builder is required to carry out any excluded item under the contract either by the owner, any statutory or other authority”. Such a provision reflects the necessity for the parties to address circumstances in which, perhaps, work is required in respect of an item that is otherwise excluded from the Contract. Where the builder is not required to do so by the homeowner but must do the item of work to comply with a regulatory authority the work is deemed to be an agreed variation. The scope of the clause does not mean that the builder can unilaterally decide to add items of work. Assuming the work was not required by the homeowner the builder must establish that the work was in respect of an excluded item and that the it was required by a “statutory or other authority”. In Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327 Basten JA at [47]-[48] explains circumstances where the builder’s obligations to comply with regulatory requirement would properly found a claim for variations notwithstanding that the variation was not in writing and signed by the homeowner.

  9. Having regard to the above, I do not accept that clause 53.5 “cause[d] a significant imbalance in the parties’ rights and obligations arising under” the Contract and I am also satisfied that it was “reasonably necessary in order to protect the legitimate interests” of the builder.

  10. I turn to consider section 25 of the ACL. Clause 53.5 is expressed in reasonably plain language, having regard to the nature of the rights with which it deals. The nature of the obligation in clause 53.5 is necessarily of some complexity, entailing the fulfilment of pre-conditions to the liability of the homeowner. Clause 53.5 is typed and consequently legible. It was presented clearly, in the section dealing with special conditions. The homeowner had physical access to, and an electronic or physical copy of, all the relevant contract documents.

Contracts Review Act and unconscionable contract

  1. The homeowner’s submissions did not directly engage with the Contracts Review Act 1980 NSW and section 89D of the HB Act.

  2. The homeowner relied on substantially the same complaints as dealt with above to contend that the Contract was unconscionable and should be declared void. The complaint concerning unconscionable conduct was not precisely formulated. The Tribunal does not have equitable jurisdiction in this respect. However, the matters that the homeowner relied on are the complaints about misleading and deceptive conduct and “unconscionable conduct before entering the contractual agreements” (Homeowner’s submissions, [273]-[275]). This is the conduct with which I have dealt above. As discussed above, I have not concluded that the builder’s conduct was unconscionable or misleading or deceptive except in respect of the representation concerning “qualified lawyer”. In respect of the representation concerning “qualified lawyer”, I concluded that it did not cause loss or damage.

  3. I accept that the homeowner did not obtain legal advice in relation to the Contract. However, home building contracts are subject to some regulation under the HB Act.

  4. I also note that the homeowner is a well educated person and a medical practitioner.

  5. The Contract price was not exorbitant and it from the complaints about underquoting it would appear the homeowner considered the price attractive.

  6. I am not persuaded that the homeowner has established any claim to relief under s 89D of the HB Act or that the Contract was unconscionable.

Underquoting

  1. A further complaint by the homeowner was that the builder under-estimated its quote, in a manner that was misleading or lacked skill and care. The implication was that the homeowner was induced to enter into contractual arrangements with the builder by the under-quoting. However, the homeowner did not adduce any evidence that showed at the time the quotes were rendered, they were below market value for the contemplated work or any similar cogent evidence. The submission at [193] in relation to the quote from GJ Gardner was not based on any expert evidence or any proper comparison of two scopes of work. I am not persuaded that the homeowner has established that the builder engaged in any ‘under-quoting’ which comprises wrongful conduct, whether because it is misleading, negligently prepared or some other basis.

  2. The homeowner also alleged that the builder knew the allowance in the Contract for the onsite drainage system did not reflect its true cost (homeowner’s submissions, [232]). However, the homeowner did not establish, through evidence, that the builder knew that to be the case at the time the allowance was made.

Demolition work

  1. The homeowner also claimed that the builder commenced residential building work prior to obtaining home warranty insurance. The relevant work was said to be the demolition of the pre-existing structure.

  2. Clause 2(2)(j) of schedule 1 of the HB Act specifically excludes demolition work from the definition of residential building work. The homeowner’s complaint in this respect is not accepted.

  3. Another issue in relation to the demolition work is that the homeowner was charged, and paid, $20,000.00. The homeowner contends that there is “ambiguity” which requires “examination” (Homeowner’s submissions, [198]. The homeowner’s submissions record at paragraphs [196]-[200]:

196. The Builder's submission attempts to justify their actions regarding the demolition process by asserting compliance with the Home Building Act (HBA) and addressing insurance requirements. However, the Builder's actions and omissions raise significant concerns about risk management, financial implications, and legal compliance.

197. Firstly, the Builder contends that demolition work is excluded from the definition of "residential building work" under Clause 2 of Schedule 1 of the Home Building Act. While this may be technically accurate, it does not absolve the Builder from ensuring comprehensive risk management and proper communication of insurance obligations to the homeowner. The lack of explicit insurance coverage for demolition, particularly for unforeseen events like the damaged water pipe, places a financial burden on the Owner. Neither the Builder's subcontractor or Builder made any reference to having any insurance cover when the pipe was broken, instead demanding the Owner to fix it, or pay to fix it.

198. The Tender dated September 6, 2021, includes a clause titled "Demolition By Builder" and mentions a $5,000 Demolition Promotion, specifically for the demolition of the existing dwelling only, mirroring the Building Contract in terms of exclusions related to hazardous materials. The disparity in demolition costs—$20,000 in the Contract versus $5,000 in the Tender-requires a examination. There is ambiguity as to whether the $5,000 represents a discounted rate, a promotional offer, or a revised fee replacing the original $20,000 charge.

199. From a legal standpoint, this discrepancy may reflect on the Builder's transparency and accuracy in contractual dealings. If it is established that the $5,000 was intended as a complete replacement for the original $20,000 fee, but this was not clearly communicated or agreed upon, it could constitute a breach of contract. Furthermore, if the promotional offer was intended as an additional offer, optional service outside the scope of the original contract, the homeowner might argue that they were misled regarding the total costs of demolition.

200. In fact, the Owner paid approximately $43,000 for the demolition, as the Owner had to pay the Builder's subcontractor directly approximately $22,000, in addition to the $20,000 paid directly to the Builder for demolition. This significant discrepancy highlights the need for clear communication and accurate representation of costs.

201. In summary, the Builder's failure to ensure adequate insurance coverage for demolition, manage discrepancies in demolition costs, and communicate effectively with the Owner raises serious concerns about their compliance with contractual and statutory obligations. These issues necessitate a resolution that addresses the financial and legal concerns of the Owner while ensuring that the Builder adheres to their responsibilities under the contract and the Home Building Act. The Owner requests that the Tribunal take these critical issues into account when assessing the validity and enforceability of the demolition-related provisions and the overall contract.

  1. The homeowner’s submissions do not identify a precise cause of action which might found a remedial order that the Tribunal could make. I am not persuaded that the homeowner has established that the $5,000 promotion applied to the Contract between the parties and that the homeowner was consequently charged more than the Contract.

  2. The Contract provides a progress payment in the amount of $20,000.00 was become payable after completion of demolition. Under clause 44.1 of the Contract, the general conditions of the Contract prevail over the tender documents. The reference to the $5,000 in the tender documents was for a promotion.

  3. The homeowner’s real complaint may be that there was no liability under the Contract for certain payments as distinct from complaints about the enforceability or validity of the demolition-related provisions. But the evidence in this respect did not establish the matters asserted in the homeowner’s submissions in [192]-[199].

Other matters

  1. Finally, I observe that the Tribunal does not have equitable jurisdiction to determine some of the complaints in the homeowner’s submissions. Complaints by the homeowner such on the builder’s alleged “conflict of interest”, or the obligations of a party who acts on behalf of another party, such as an agent, to disclose information obtained in the course of acting in the representative capacity, are not within the Tribunal’s jurisdiction. Similarly, the Tribunal does not have jurisdiction to determine the homeowner’s allegations that the $35,000.00 tender fee was really a payment in the nature of trust money (homeowner’s submissions, [240]).

Conclusion as Homeowner’s claims

  1. It follows from the above that I have not accepted that the homeowner has established an entitlement to any relief.

Costs

  1. Both parties have been unsuccessful in their claim and successful in the other party’s claim. The Tribunal did not receive any submissions as to costs. I note both parties did not have legal representation at the hearing. Consequently, I will not make any order as to costs.

Orders

  1. The Tribunal makes the following orders:

  1. Order that proceedings 2023/00373248 be dismissed.

  2. Order that proceedings 2023/0036998 be dismissed.

  3. No order as to costs to the intent that each party bear its own costs.

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


Registrar

Decision last updated: 09 May 2025

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Cases Citing This Decision

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Cases Cited

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Statutory Material Cited

8

Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248
Nadinic v Cheryl Drinkwater as trustee for the Cheryl Drinkwater Trust [2020] NSWCA 2
Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327