Fish v Kurmond Homes Pty Ltd; Kurmond Homes Pty Ltd v Polycrete Australia Pty Ltd

[2025] NSWCATCD 6

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Fish v Kurmond Homes Pty Ltd; Kurmond Homes Pty Ltd v Polycrete Australia Pty Ltd [2025] NSWCATCD 6

Hearing dates:

12 November 2024

Date of orders:

31 January 2025

Decision date:

31 January 2025

Jurisdiction:

Consumer and Commercial Division

Before:

Dr K M George, Senior Member

Decision:

1   By 21 February 2025 Kurmond Homes Pty Ltd is to pay Kyle Fish $55,999.19.

2   Application 2023/00369499 is otherwise dismissed.

3   Application 2024/00147859 is dismissed.

4   If an application for costs is made:

   (a)   The application is to be filed and served, supported by evidence and submissions not exceeding 3 pages in length by 17 February 2025;

   (b)   Evidence and submissions in response to the costs application not exceeding 3 pages in length are to be filed and served by 3 March 2025;

   (c)   Any material in reply is to be filed and served by 17 March 2025.

   (d)   In their submissions the parties are to address whether a hearing on costs should be dispensed with and costs determined on the papers.

Catchwords:

BUILDING AND CONSTRUCTION - Home building - Breach of statutory warranties

Legislation Cited:

Australian Consumer Law 2010

Domestic Building Contracts Act 1995 (Vic)

Fair Trading Regulation 2019

Home Building Act 1989 (NSW)

Home Building Regulation 2014 (NSW)

Cases Cited:

Bellgrove v Eldridge [1954] HCA 36

Briginshaw v Briginshaw (1938) 60 CLR 336

Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd v Deacon [2017] NSWCATAP 185

Duran and Duran v Tafra Pty Ltd [2015] NSWCATCD 110

In the Matter of Hillsea Pty Limited [2019] NSWSC 1152

Let’s Go Adventures Pty Ltd v Barrett [2017] NSWCA 243

Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305

Owners Corporation No.1 of PS613436T v Lu Simon Builders Pty Ltd (Building and Property) [2019] VCAT 286

Owners Corporation PS623721 v Shangri- La Construction Pty Ltd (Building and Property) [2022] VCAT 1499

Panico v Mollier Enterprises Pty Limited t/a JC Diesel Tune [2021] NSWCATCD 56

Pollock v NSW Trustee & Guardian [2022] NSWSC 923

SDL Project Solutions Pty Ltd v Kim; Kim v SDL Project Solutions Pty Ltd [2022] NSWCATCD 10

Tanah Merah Vic Pty Ltd (ACN 098 935 490) v Owners Corporation No 1 of PS613436T and Ors [2021] VSCA 72

The Owners Strata Plan No 92888 v Taylor Construction Group Pty Ltd and Frasers Putney Pty Ltd [2019] NSWCATCD 63

Voli v Inglewood Shire Council [1963] HCA 15

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Kyle Douglas Fish (applicant in 2023/00369499)

Kurmond Homes Pty Ltd (respondent in 2023/00369499 and applicant in 2024/00147859)

Polycrete Australia Pty Ltd (respondent in 2024/00147859)

Representation:

Counsel:
Kurmond Homes Pty Ltd: Mr Kent

Solicitors:
Kyle Douglas Fish: Enright Law Group
Kurmond Homes Pty Ltd: Leeds Lawyers

Polycrete Australia Pty Ltd: Mr Mekuri, Director

File Number(s):

2023/00369499 (formerly HB 23/48520)

2024/00147859

Publication restriction:

Nil

DECISION

INTRODUCTION

1. The homeowner Mr Fish (“the owner”) lodged his application 2023/00369499 against Kurmond Homes Pty Ltd (“the builder”) on 29 October 2023. He seeks an order for payment of an amount of money.

2. At the final hearing the owner stated he is seeking a total of $415,622.00, being the rectification costs of three alleged defects, as calculated by Igor Vavrica (see Scott Schedule dated 9 August 2024), plus legal costs.

3. The application relates to the construction of a new home at Tahmoor, pursuant to a written contract dated 21 March 2022.

4. Pursuant to the contract, the builder poured the concrete slab of the home.

5. The owner contracted directly with Polycrete Australia Pty Ltd (“Polycrete”) for the grinding, sealing and polishing of parts of the concrete slab (“polished concrete work”).

6. Pursuant to a written variation between the builder and the owner, Polycrete conducted the polished concrete work prior to the completion of the new home build and prior to the builder’s final handover to the owner.

7. By further amended Points of Claim dated 14 October 2024, the owner alleges breach of (unspecified) statutory warranties by the builder, pursuant to s 18B of the Home Building Act 1989 (NSW) (“HB Act”).

8. At the final hearing on 11 November 2024, the owner identified the defects as follows:

1. Uneven distribution of the aggregate in the concrete slab;

2. Damage to the surface of the polished concrete slab; and

3. External bricks not installed and cleaned in accordance with manufacturer’s instructions, resulting in mortar smeared across the face.

9. Other identified defects, including to the internal paintwork and refrigerator ventilation, were not pursued at the hearing and were not included in Mr Vavrica’s Scott Schedule. Therefore, I have not addressed them in this decision.

10. The owner’s further amended Points of Claim also raise issues such as alleged breaches by the builder of s 92 of the HB Act; delay to contract completion; and the site supervisor’s frequent absence from site, ‘a breach of statutory obligation of Kurmond Homes’. However, these issues are not material to the money order sought and therefore I have not addressed them in this decision.

11. Further, the relevant ‘statutory obligation’ is not identified, and a failure to take out home warranty insurance is a penalty provision, but it does not provide a cause of action to a homeowner against a builder.

12. The owner does not seek orders against Polycrete.

13. The builder lodged claim 2024/0047859 against Polycrete on 20 April 2024, seeking an order that:

‘Polycrete is joined to proceedings 2023/00369499 as the second respondent’.

14. In subsequent Directions Hearings Polycrete was not joined to proceedings 2023/00369499. Rather, 2024/0047859 was treated as a related matter and both applications were heard together.

15. In its amended Points of Defence dated 20 April 2024, the builder seeks an order that:

In the event that a defect is established in relation to the concrete floors, that Polycrete is wholly liable for the applicant’s claim in relation to that issue.

16. Other than stating the value of the claim to be $228,702.00, the builder’s application against Polycrete did not particularise its claim.

THE EVIDENCE

17. At the commencement of the final hearing the parties identified the documents on which they relied. They were admitted into evidence without objection, subject to weight and relevance.

18. The owner relied on:

1. A folder of documents received by the Tribunal on 23 February 2024 (Exhibit A). That folder includes:

1. Statement of Kyle Fish dated 22 February 2024;

2. Preliminary tender by Kurmond Homes dated 8 November 2019;

3. Extracts from the Residential Building Contract signed by the homeowner and builder dated 21 March 2022 (“the contract”);

4. Variation to the contract dated 21 March 2022 (“variation 16”);

5. Variation to the contract dated 26 May 2022 (“variation 17”);

6. Report by Landmark Inspections;

7. Report by Patrick Mekuri of Polycrete, undated;

8. Quotation from Polycrete dated 23 November 2023;

9. Report by Igor Vavrica dated 20 February 2024.

2. Amended Cost Estimate and Scott Schedule by Igor Vavrica dated 9 August 2024 (Exhibit B).

19. The builder relied on:

1. Statement of Thomas Palermo dated 24 October 2024 (Exhibit C). Annexures to that statement include:

1. Colour Selection Schedule dated 21 March 2022, signed by the owner;

2. Variation to the contract regarding external colours (“the colour variation”);

3. Hand Back of Site (to Owner) Agreement signed by the homeowner on 1 July 2022.

2. Report by Joshua Brook dated 28 June 2024 (Exhibit D).

20. Polycrete relied on a statement by director Patrick Mekuri dated 6 June 2024.

21. Mr Fish, Mr Mekuri, Mr Vavrica, Mr Palermo and Mr Brook gave sworn oral evidence.

22. All parties were provided the opportunity to cross examine the witnesses and make oral submissions.

JURISDICTION

23. I am satisfied that I have jurisdiction to deal with these applications under section 48K of the HB Act.

24. Each claim a “building claim” as that term is defined in sub-section 48A(1)(a) of the HB Act in that they are a claim for a specified sum of money that arises from a supply of building goods and services by the builder to the owner.

25. The work involved is “residential building work” as that term is defined in Schedule 1 sub-sections 2(1)(a) of the HB Act in that it was work involved in the construction of a dwelling.

26. Towards the conclusion of the hearing, the builder’s representative raised the question of whether the cleaning of the floor (which the applicant claimed caused damage to the surface of the polished concrete slab) is excluded from the definition of residential building work in the HB Act.

27. Clause 2(3)(k) of Schedule 1of the Act provides relevantly that the following work is excluded:

any work involved in the installation of any material that forms an upper layer or wearing surface of a floor (even if installed as a fixture) and that does not involve any structural changes to the floor …

28. The ordinary meaning of the word ‘install’ is to position or put in place.

29. The ordinary meaning of the verb ‘clean’ is to free a surface from dirt and marks.

30. I find that cleaning a polished concrete floor does not involve installing material to the floor that forms an upper surface or wearing layer. It involves applying a material and/or tool to the (already existing) upper surface of the floor to remove dirt and marks.

31. I am satisfied that the floor cleaning is not excluded from the definition of residential building work.

32. The reasonable market value of the work exceeded the minimum threshold of $5,000.00 for a building claim set by Schedule 1 Clause 2(3)(a) of the HB Act and Regulation 12 of the Home Building Regulation 2014 (NSW) (HB Regulation), and the claims are less than the $500,000.00 prescribed limit imposed by sub-section 48K(1) of the HB Act on the Tribunal’s order making power.

33. The Tribunal is satisfied that statutory warranties apply to the residential building work carried out by the builder and the owner is entitled to rely upon those statutory warranties pursuant to Part 2C of the HB Act.

34. The Tribunal has the power to make orders relevant to both applications: s 48O.

35. The applications were filed within the timeframes specified in s 48K of the HB Act and within the 2 year time period specified by section 18E for proceedings that involve a claim for a breach of a statutory warranty.

36. The Tribunal therefore has jurisdiction to hear and determine these applications.

THE STATUTORY WARRANTIES

37. Section 18B of the Act sets out the implied statutory warranties:

18B Warranties as to residential building work

(1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work—

(a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract,

(b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new,

(c) a warranty that the work will be done in accordance with, and will comply with, this or any other law,

(d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time,

(e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling,

(f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder’s or person’s skill and judgment.

PROOF

38. Each party bears the onus of proving the facts that are essential elements of their own claim to the civil standard i.e. to the comfortable satisfaction of the Tribunal on the balance of probabilities.

39. The owner must prove, on the balance of probabilities, that the work performed by the builder was defective in the sense that there was a failure to comply with the statutory warranties set out in s 18B of the HB Act.

40. If the owner does prove such a breach, the owner must also prove the cost of the reasonable and necessary work to rectify the defects, although rectification of defective work is the preferred outcome in HB Act proceedings (s 48MA).

41. Satisfaction on the balance of probabilities should not be produced by inexact proofs, indefinite testimony or indirect inferences (Briginshaw v Briginshaw (1938) 60 CLR 336. See also Hallen J in Pollock v NSW Trustee & Guardian [2022] NSWSC 923 at [74]-[75]).

42. There is some dispute between the parties about whether some conversations occurred and/or the content of those conversations.

43. In these circumstances, it is appropriate that the Tribunal place primary emphasis on the objective surrounding facts that are either undisputed or established by contemporaneous documents; the apparent logic of events; and the inherent probabilities and improbabilities of purported events (In the Matter of Hillsea Pty Limited [2019] NSWSC 1152 at [16]-[21] and the authorities referred to therein. See also SDL Project Solutions Pty Ltd v Kim; Kim v SDL Project Solutions Pty Ltd [2022] NSWCATCD 10).

FACTUAL BACKGROUND

44. The following statement of the background to the proceedings either reflects factual matters which are not in dispute or documentary material received in evidence. Save to the extent that matters are said to be in dispute, the statement of the background to the proceedings represents my findings of fact.

45. All costs are inclusive of GST, unless otherwise stated.

46. On 21 June 2019 the builder issued the owner with a preliminary tender for the construction of a ‘Mirage 52’ 4 bedroom home. It included extensive details of provisional allowances, exclusions and structural and design changes requested by the applicant:

1. No reference was made to polished concrete floors or concrete aggregate;

2. A notation regarding ‘Tiling & Flooring Upgrades’ stated:

No allowance – standard carpet to living area etc

47. On 8 November 2019 the builder issued a revised tender which was accepted by the parties by signature on 15 November 2019. The revised tender also made no reference to polished concrete floors or concrete aggregate and contained the same notation.

48. Also on 15 November 2019 the parties signed a Preliminary Agreement whereby, for a fee of $12,000.00, the builder would carry out certain works which might be described as preparatory, including engineering designs, plans, specifications and a final contract.

49. In the following months the parties continued to correspond and discuss the final design specifications.

50. On 16 April 2021 Kieran Stokes, the builder’s Customer Service Officer, emailed the applicant, stating relevantly:

I spoke to my manager regarding the possibility of polished concrete and this is not something that we can approve, unfortunately. The other options you mentioned today were tiles and laminate flooring, which can be selected and discussed with your colour consultant and Manago Tiles when you do your external supplier appointment with them.

51. A few hours later Mr Stokes again emailed the applicant, stating relevantly:

I had a chat to our team re the fireplace and the polished concrete floor ... On the polished concrete flooring, I am afraid that this isn’t something we can approve. With the process being for a rough cut and protective boards, and plastic to be installed after the slab has been poured, how do we build on the slab from there? How do we stand the frame, install gyprock, install cabinetry, install skirting boards, etc if there are boards and plastic in place to protect the slab. If the slab is marked or stained during construction which it almost certainly will be, we won’t be responsible for the remedial work that will be required before the final cut can be completed after handover. I appreciate your position on this and please understand that I am not trying to be difficult, I would just like to be clear with you and ensure you are informed on what can and can’t be done.

52. A document identified as Variation 3 was signed by the applicant on 17 November (the year is not specified, but from the details therein, I infer 2021) and appears to be a variation to the revised tender. Relevantly, it makes provision for a recessed slab in some rooms and refers to a ‘polished slab (by owner)’.

53. On 21 March 2022 the parties signed a contract for the construction of a brick veneer dwelling with attached garage for the amount of $750,660.99.

54. The contract was a standard form HIA home building contract.

55. Schedule 1 to the contract indicates that the contract is 31 pages long and lists its contents which includes 43 clauses.

56. However, the complete contract was not put before the Tribunal. The parties’ documents include only the first 16 pages of the contract, up to and including clause 4.

57. The description of work was detailed in plans and specifications which form part of the contract, including a Colour Selection Schedule, signed by the applicant, which stated relevantly:

1. The bricks would be Austral ‘Sculptured Sands’, with off white mortar and ironed joints;

2. The flooring of the kitchen would be ‘Polished concrete by owner after handover’;

3. The splashbacks to the scullery and laundry would be composed of Austral brick facings in reclaimed ‘San Selmo’;

4. The skirting boards to the polished concrete areas ‘to be painted and tacked on to allow for client to polish after handover’.

58. At least 2 variations formed part of the contract.

59. Variation 16 related to the polished concrete floor and was signed on 21 March 2022. It stated relevantly (the first paragraph being highlighted in red font):

The client has requested works to be carried out on site by an external contractor for polished flooring. Preparation works for polished flooring to be carried out following the completion of brickwork & roof and after gyprock installation and electrical, A/C & Alarm cut-outs. Prepare polished concrete areas including ceiling & protection barrier (Corflute sheets) with finishing buff & reseal polish to be completed after handover.

Kurmond Homes has agreed to allow the client to complete their works as follows:- Prepare, grind and seal all areas nominated on plans (no additional areas are to be touched). Client accepts that subsequent trades normal construction methodology will not be modified to suit grinded concrete areas. This includes, but is not limited to, spray paint, Lumber Crayon markings and chalk dust. The client understands that their selected sealer and protective layer is solely their responsibility and the builder cannot ensure that it will not be compromised during construction and accept that a follow-up polish and seal after handover may be required.

60. Variation 17 dated 26 May 2022 stated relevantly:

As discussed between site supervisor Phil and Patrick Mekuri from Polycrete Australia on 8/5/22 the flooring will be completed in 3 stages:

Stage 1 – first grind to be completed after external drainage

Stage 2 – works for polished flooring to be carried out following the completion of brickwork & roof and other gyprock installation and electrical A/C & Alarm cut-outs. Prepare polished concrete areas including sealing and protection barrier. Protection barrier (Corflute sheets) to be installed by client.

Stage 3 – finishing buff & reseal polish to be completed after handover.

All skirting boards to be painted and tacked on for owner complete concrete flooring and installation of timber floor after handover.

61. Work commenced at the site in around April or May 2022, the exact date being in dispute.

62. On 1 May 2022 the applicant forwarded the builder an email from Mr Mekuri of Polycrete attaching a scope of works for the polished concrete work, together with Polycrete’s insurance details.

63. On 27 June 2022 Michael Kulakovski, Director of the builder, signed a document entitled ‘Hand Back of Site (to Owner) Agreement’ which stated relevantly:

I refer to the construction of the home at the above address whereby are required (sic) to carry out works on site that do not form part of Kurmond Homes Pty Limited (builder) contract obligations. Kurmond Homes will hand back the control of the site to you on 4^th July to 15^th July for first grind for polished concrete flooring and that you acknowledge the following:

...

4. You indemnify Kurmond Homes Pty Limited against all warranty claims for faulty workmanship of the works being undertaken by your nominated contractor ...

64. The applicant signed an acknowledgment and acceptance of the terms and conditions on 1 July 2022.

65. In August 2022 the owner raised concerns about the brickwork with the builder and its site supervisor, Phil Huntington, including that the finish was very messy, with excess mortar and dags, and the cleaning method was damaging the face and colour of the brickwork.

66. On 21 September 2022 the applicant emailed Kelly Hawkins of the builder’s Client Services:

Came to site seen that one brick wall has been cleaned don’t like it at all, all lime wash is gone spoken to Phil he has advised me that this will be fixed also have to put in writing I don’t want the bricks cleaned at all leave the grout as is as I want the industrial look and also would like the bricks to be more lime washed, can you please let me know when the wall will be fixed (sic)

67. In or about November 2022 (the exact dates are disputed), the builder handed over the site to the owner and Polycrete conducted the polished concrete works.

68. After the floor was sealed, Polycrete installed protective boards over the floor.

69. In around December 2022, the site was handed back to the builder and the builder conducted further works, such as gyprocking. The builder demolished and rebuilt part of the external brickwork to achieve a more consistent appearance with the rest of the walls.

70. In May 2023, at the owner’s request, the builder arranged an inspection of the site by Landmark Inspections.

71. On 23 May 2023 the protective boards on the polished floor were removed.

72. A report dated 23 May 2023 was prepared by Novica Strbac of Landmark Inspections. Relevantly:

1. In relation to the polished concrete floor in the living areas:

Cleaning required. Recommendation: Contact a qualified professional.

2. The report includes photographs of the polished concrete floors, the protective boards having been removed.

3. The report includes an inspection of the exterior and notes, for example, that paint touch-ups are required and the porch slab should be ‘cleaned of builders (sic) marks’.

4. No defects were noted regarding the brickwork or aggregate in the concrete slab.

5. The report concludes:

Overall this property appears to be constructed to a reasonable standard however minor defects and touch ups are evident which require repair … Final clean not yet completed.

73. On or about 2 June 2023 the owner conducted the Practical Completion Inspection, including a walkthrough of the premises. He noticed that the polished concrete floor was wet.

74. On or about 2 June 2023 the builder handed the site over to the owner.

75. On 7 June 2023 the owner returned to the site. The floor was dry. He noticed damage to the surface of the polished concrete.

EXPERT EVIDENCE

76. Decisions such as Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 make it clear that, for expert evidence to be accepted:

1. The opinion must clearly indicate the facts upon which it is based;

2. Those facts must be proved so there is a factual basis for the opinion;

3. Reasons or the process of reasoning for the opinion must be disclosed; and

4. Any opinion must fall within the expert’s qualifications and experience.

Igor Vavrica

77. The applicant relied on evidence from Mr Vavrica.

78. I am satisfied that Mr Vavrica is a suitably qualified expert, being a registered architect, a qualified engineer and the holder of a Qualified Supervisor Certificate, with relevant professional experience. He acknowledges the Tribunal’s Experts’ Code of Conduct and agrees to be bound by it.

79. Mr Vavrica’s report is based on an inspection of the applicants’ property on 10 January 2024, as well as a review of documents provided to him by the owner including the contract and photographs taken during construction.

Joshua Brook

80. The respondent relied on evidence by Mr Brook.

81. I am satisfied that Mr Brook is a suitably qualified expert, being a qualified builder with more than 24 years’ experience.

82. His report is based on an inspection of the owner’s property on 25 June 2024, as well as review of documents including Mr Vavrica’s reports.

DID THE BUILDER BREACH THE STATUTORY WARRANTIES REGARDING THE EXTERNAL BRICKWORK?

Brick cleaning method

83. The owner claims that the brickwork has discoloured as a result of the builder failing to clean the bricks in accordance with the manufacturer’s specifications.

84. He relies on Mr Vavrica’s opinion to that effect.

85. Under cross examination, Mr Vavrica conceded that his opinion was based on his misunderstanding that the bricks are San Selmo Reclaimed Original manufactured by Austral.

86. In fact, as Mr Vavrica conceded, the external bricks are Sculptured Sands by Austral.

87. The manufacturer’s specifications for cleaning that brick were not in evidence. In cross examination Mr Vavrica said that he did not enquire with Austral about the recommended cleaning method for that particular brick.

88. Therefore, I am not persuaded that the builder has breached the statutory warranties regarding the cleaning method of the brickwork.

Brick discolouration

89. I am not persuaded on the balance of the evidence that the external brickwork has discoloured, or is a different colour to that specified in the contract:

1. Discolouration is not evident in the photographs attached to Mr Vavrica’s report;

2. Figures 1 and 2 in his report do not offer a clear contrast of the bricks before and after cleaning, being taken of different walls, at different angles, with different light and from different distances;

3. Mr Brook did not note any abnormal discoloration in his inspection, but merely dirt splashes to the lower brickwork;

4. No discolouration was noted in the Landmark report.

90. For those reasons I am not persuaded that the builder has breached the statutory warranties regarding the colour of the brickwork.

Mortar smears

91. The owner also contends that the brickwork has mortar smeared across the face. This is confirmed by the photographs in evidence.

92. However, the evidence does not support the existence of a defect or breach of a statutory warranty. Rather, the evidence supports a finding that the work is incomplete.

93. Mr Vavrica’s report does not identify a defect regarding the mortar but refers to ‘brick walls that have not been cleaned’ (at 3.1.7).

94. Mr Brook’s conclusion at page 10 is:

No defect proven, no defect founded. The external brickwork was inspected in accordance with AS 3700.2018 Masonry Structures with no defects evident.

95. At page 11 Mr Brook states:

I do agree that additional pressure washing is required to the external mortar of the dwelling.

96. By his email dated 21 September 2022 (reproduced above), the owner instructed the builder not to clean the bricks.

97. The builder complied with those instructions. An email from Amanda Rylewski dated 27 September 2022 confirmed:

The bricks won’t be cleaned …

98. The owner does not seek a work order for the cleaning of the bricks because he contends that the mortar cannot be removed without acid wash which, he says, would significantly change the colour of the bricks. For the same reasons as above, I am not persuaded that is the case.

99. Even assuming that the owner would be entitled to damages for the incomplete work (and I make no finding in that regard), there is no evidence to establish the increased cost of completing the incomplete work, the usual remedy in such a case (see e.g. SDL Project Solutions Pty Ltd v Kim; Kim v SDL Project Solutions Pty Ltd [2022] NSWCATCD 10).

100. Moreover, the owner does not seek that remedy. Rather, he seeks damages for the demolition and rebuilding of the brickwork. Because I am not persuaded that the mortar is a breach of a statutory warranty, that remedy is not available to him.

101. Even if that remedy was available to the owner, demolition and rebuilding is neither reasonable nor necessary (Bellgrove v Eldridge [1954] HCA 36). The method is very costly and is based largely on Mr Vavrica’s incorrect identification of the brick type.

102. Finally, I am not persuaded that the builder’s decision to demolish and rebuild a part of the brick wall was anything more than a gesture of goodwill. It is not persuasive evidence that the balance of the brickwork is defective or cannot be cleaned.

103. Therefore, I am not persuaded that the builder has breached the statutory warranties regarding the mortar on the brickwork.

DID THE BUILDER BREACH STATUTORY WARRANTIES REGARDING THE AGGREGATE IN THE CONCRETE SLAB?

104. The owner contends that the builder breached the statutory warranties by pouring the concrete slab in such a way that the aggregate was unevenly distributed, resulting in an unsatisfactory appearance and reduced structural integrity.

105. He relied on Mr Vavrica’s report which states that:

Visual inspection of the ground floor slab surface established that the majority of the concrete surface demonstrates a pattern of parallel zones of higher and lower density of the aggregate … There are also areas of over-vibrated concrete adjacent to edges of the slab and step downs ... (at 3.2.1 and 3.2.2)

106. Mr Vavrica opined that the ‘most likely cause of the defects’ is ‘over-vibration’ by the penetrative vibrator:

resulting in segregation within the concrete mix, with the aggregate sinking to the bottom and cement slurry floating to the surface of the slab.

107. Mr Vavrica states that this results in ‘multiple defects’, including ‘honeycombing’ in the bottom level of the concrete and ‘reduction in concrete compressive strength in the upper zone’, thus reducing structural integrity (at 3.6.1).

108. For the following reasons, the owner has failed to prove breach of the applicable statutory warranties regarding the aggregate:

1. The contract plans and specifications did not state that the aggregate should be distributed in any particular density or consistency (18B(a));

2. The contract plans and specifications did not state that the concrete slab should be poured in a manner or with a finish in preparation for a polished concrete surface (18B(a));

3. The owner did not identify any potentially applicable Australian Standard or provision of the Building Code of Australia regarding distribution of aggregate (18B(c));

4. When questioned by the Tribunal, both experts stated that there is no relevant standard for concrete architectural finishes (18B(c));

5. I am not satisfied that any inconsistency in the aggregate is so significant as to compromise the aesthetic appeal of the polished concrete floor (18B(f)):

1. On the evidence before me, the first time the inconsistency was raised was by Mr Vavrac in his report.

2. The owner did not identify it as an issue he wanted addressed by an independent building inspector in his email to the builder dated 16 May 2023.

3. The owner did not identify it as an issue during his walk-throughs in June 2023.

4. The owner did not reference inconsistent aggregate in his statement of 22 February 2024.

5. The photographs in evidence do not establish that the distribution of the aggregate renders the polished floor unfit for its aesthetic purpose.

6. There is no evidence of the internal condition of the slab. On Mr Vavrica’s evidence, obtaining that evidence would necessitate destructive testing which was not conducted. Therefore, there is not a sound basis for Mr Vavrica’s opinion that the structural integrity of the slab is compromised (18B(a)); and

7. There is no evidence before the Tribunal about the actual method of vibration used by the builder and thus Mr Vavrica’s conclusion that the concrete was ‘over-vibrated’ is largely speculative (18B(a)).

DID THE BUILDER BREACH STATUTORY WARRANTIES REGARDING DAMAGE TO THE SURFACE OF THE POLISHED CONCRETE SLAB?

109. It is not disputed that the sealer has degraded, leaving an irregular splotching effect across the polished slab, of similar appearance to puddle and drip marks. The experts agreed that the damage is plainly visible.

The owner’s evidence and submissions

110. In his statement of 22 February 2024, the owner says that on or about 15 November 2019, ‘just prior to signing the tender’, he had a conversation with Mr Kulakovski, director of Kurmond Homes, about a polished concrete floor.

111. According to the owner, Mr Kulakovski said to him in relation to a polished concrete floor, words to the following effect:

Yes you can have that, we have done that previously for past clients, but you have to find your own contractor.

112. The owner contends:

1. Mr Kulakovski’s statement was a representation that the builder had the capacity and experience to provide a polished concrete finish to the floor (see further amended Points of Claim);

2. Mr Kulakovski’s statement ‘is a representation about goods or services as contemplated by Division 1 of Schedule 2 of the Competition Act 2010.’ (see further amended Points of Claim);

3. Mr Kulakovski knew or ought to have known that the owner would rely on that statement and be ‘induced’ to contract with the builder (see further amended Points of Claim);

4. On 23 May 2023 the owner witnessed the removal of the protective cover over the finished polished floor and no damage was present;

5. His mother saw cleaners at the site on 1 June 2023;

6. The cleaners damaged the floor with some form of acidic cleaning product;

7. The builder attempted to ‘cover it up’ by wetting the floor prior to the owner’s Practical Completion Inspection on 2 June 2023;

8. The damage was obvious during the owner’s return to the site on 7 June 2023;

9. Because of its ‘experience’ with polished concrete floors, the builder should have instructed the cleaner about appropriate cleaning products to avoid damage to the surface.

113. To the extent that the owner claims the builder engaged in false or misleading representations, in contravention of the Australian Consumer Law 2010 (“Division 1 of Schedule 2 of the Competition Act 2010”), the claim must be dismissed because the Tribunal’s jurisdiction is limited to claims where orders would not exceed $100,000.00 (section 79S(7) and clause 13A Fair Trading Regulation 2019).

What caused the damage to the polished surface?

114. Mr Vavrica opines that the cause of the damage was the application of a commercial concrete cleaner, specifically diluted hydrochloric acid, to the surface of the polished concrete (‘acid wash’).

115. I am not persuaded that hydrochloric acid was applied to the floor. In oral evidence, Mr Brook revised the evidence in his report and stated that the irregular, splotchy pattern on the surface of the floor is not consistent with acid wash.

116. Mr Brook agreed that the damage was due to the application of a chemical to the polished floor.

117. There was no evidence before the Tribunal that Polycrete failed to apply the sealant with due care and skill, or otherwise caused the damage to the sealant.

118. Based on the expert evidence, I find that the damage to the floor was caused by the application of some sort of chemical to the top of the sealant.

119. For the following reasons I find that the damage to the polished surface occurred after 23 May 2023:

1. Mr Fish presented as an honest and reliable witness. I accept his evidence that the damage was not present when the protective board was removed on 23 May 2023.

2. Mr Mekuri, who was with the owner on 23 May 2023, confirmed this in evidence before the Tribunal.

3. The report by Novica Strbac dated 23 May 2023 does not record any damage to the floor. I do not accept Mr Palermo’s evidence that the ‘polished concrete floor was not part of the inspection report’: plainly it was. Nor does Mr Palermo provide any basis for his statement that Mr Strbac did not inspect the floor thoroughly. Mr Strbac was thorough in recording even minor defects. If the polished surface was damaged at the time of the inspection, he most likely would have seen it and reported it.

120. I find that the chemical was likely applied by the builder or its cleaning contractor on or about 1 June 2023, just prior to the final handover to the owner:

1. Although the full contract between the owner and builder is not in evidence, construed objectively, there was an implied term (if not an express term) that the builder would hand over the site in a reasonably clean condition.

2. In cross examination, Mr Palermo stated that it is the builder’s usual practice to engage a professional cleaner.

3. There is no direct evidence from the owner’s mother, however, it is likely that the floor was cleaned just prior to the owner’s Practical Completion Inspection which occurred on 2 June 2024

4. I accept the owner’s unchallenged evidence that the floor was wet during the Practical Completion Inspection on 2 June 2023. The gloss of the wet floor would have obscured any damage.

5. I accept the owner’s evidence that he first noticed the damage the next time he attended the site on 7 June 2023. The respondent did not dispute that the owner immediately notified Kelly Hawkins of the damage.

6. There is no evidence that the owner or anyone apart from the builder or its contractor cleaned the floor or applied a chemical to the floor before the damage was evident on 7 June 2023.

121. However, neither the fact of damage, nor the fact that the builder (or its contractor) applied the chemical, is sufficient to establish the builder’s liability.

122. The owner must prove that the application of the chemical was a breach of a statutory warranty.

Did the builder breach the warranty of due care and skill?

123. I turn now to consider whether the builder/contractor’s application of the chemical to the floor was a breach of the warranty of due care and skill.

124. The phrase “due care and skill” is equivalent to the common law duty to take reasonable care: Let’s Go Adventures Pty Ltd v Barrett [2017] NSWCA 243 at [6] (Basten and Gleeson JJA). It is a guarantee that the services will be performed in a “careful, skilful, and workmanlike” manner: Panico v Mollier Enterprises Pty Limited t/a JC Diesel Tune [2021] NSWCATCD 56.

125. The principles applicable to breach of the statutory warranties in s 18B were summarised by the Appeal Panel of the Tribunal in Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd v Deacon [2017] NSWCATAP 185 as follows (at [46]):

Although objective standards such as Australian Standards, the Building Code of Australia and the Guide are of significant relevance in establishing whether work has been performed in a proper and workmanlike manner (Wheeler v Ecroplot Pty Ltd [2010] NSWCA 61 at [10]), the absence of such evidence does not automatically mean a homeowner has failed to establish breach of statutory warranty. In our view, the relevant principle was succinctly stated by Senior Member Goldstein in G MacFayden and Anor v G Tadrosse [2014] NSWCATCD 194 at [46] as follows:

… Evidence of work not being carried out in a proper and workmanlike manner would in my view involve identification of the work in question, a statement of how the expert would expect it to be carried out in in a proper and workmanlike manner and then identification of the factors which establish that the way in which the work has been carried out falls short of it being carried out in a proper and workmanlike manner. Evidence of this nature, if accepted, would form the basis for a finding that sub section 18B(a) of the Act has been breached.

126. Thus, in determining whether work was carried out with due care and skill, it is relevant to consider whether there is any evidence that a reasonable builder would have done things differently. This is because the Tribunal must be satisfied that, objectively, the work was not performed with due care and skill (see also Duran and Duran v Tafra Pty Ltd [2015] NSWCATCD 110 at [39]).

127. Mr Vavrica referred to the Technical Data Sheet for Duel-Tech, the sealer Mr Mekuri said was used to finish the owner’s floor (Exhibit 1 of Mr Vavrica’s report).

128. Under the heading ‘Maintenance’, the Data Sheet states:

Duel-Tech polished floors require very little maintenance other than scheduled scrubbing with water and a neutral or alkaline cleaner. All spills should be cleaned immediately.

129. Mr Mekuri gave evidence before the Tribunal that he did not provide the Technical Data Sheet to the owner or the builder, nor instructions about appropriate cleaning products for the polished concrete floor:

I just know you shouldn’t use acid products. It should be neutral.

130. The owner in cross examination asserted that the use of a neutral, non-acidic cleaning product is ‘common sense’.

131. However, the subjective criticisms of the owner are not sufficient to prove on the balance of probabilities that the cleaning by the builder or its contractor was not performed with due care and skill.

132. No evidence was put before the Tribunal that a reasonable builder or a reasonable cleaner would have done anything differently.

133. The owner relies on a letter from Basil Miranda of CleanInvestor. Apart from stating that he has over 20 years’ experience as a professional cleaner, there are no further details of Mr Miranda’s qualifications or experience. He has not adopted the Tribunal’s Experts’ Code of Conduct.

134. Mr Miranda’s letter goes no further than confirming that, with the benefit of hindsight, the incorrect chemical was used. It does not state that a professional cleaner would have known not to use that chemical or, acting reasonably, would have used a different cleaning product.

135. Nor does Mr Miranda provide a basis for his conclusion that the cleaners used ‘a cheaper acidic chemical’, nor why the use of such a chemical lacks due care and skill.

136. There is no evidence from a suitably qualified expert that a reasonable builder would have known the appropriate cleaning product for the polished floor; would have asked Polycrete for the cleaning specifications; or would have made efforts to identify the relevant Technical Data Sheet and reference it before cleaning.

137. Further, I do not accept that Mr Vavrica has provided a sound basis for his opinion that because the Technical Data Sheet states that the sealant is resistant to red wine for 10 minutes, the chemical therefore was not rinsed within 10 minutes.

138. Nor is there any evidence that a reasonable builder or cleaner (even assuming they had referred to the Data Sheet), would have rinsed an acid based chemical within 10 minutes of application.

139. For the sake of completion, I am not satisfied that the builder had any particular experience or knowledge regarding polished concrete floors, nor that it held out to the owner that it did:

1. There is no direct evidence from Mr Kulakovski about the alleged representations given to the owner on about 15 November 2019, but the builder denies any such conversation took place;

2. It is improbable that Mr Kulakovski made the alleged representations, because if he had, they would likely have been noted in the revised tender signed by the parties on the same day, but there is no reference at all in the revised tender to polished concrete floors;

3. Even if the conversation with Mr Kulakovski did take place, Mr Kulakovski made it clear that the owner would need to engage his own contractor, which is indicative of the builder’s lack of experience;

4. Even if the conversation with Mr Kulakovski did take place, I do not accept that on any reasonable interpretation his words could amount to a representation that the builder had experience or knowledge of the correct cleaning products for polished concrete floors, or more particularly, for floors sealed with Duel-Tech.

140. The fundamental obligation of the Tribunal is to make findings of fact based on evidence, unless the factual issue is a matter of common knowledge or judicial knowledge. I am not satisfied that the appropriate cleaning product for a polished concrete floor is a matter of common knowledge or judicial knowledge.

141. For these reasons the owner has failed to prove that the builder breached the warranty of due care and skill.

Did the builder breach the warranty that all materials supplied will be good and suitable for the purpose for which they are used?

142. The Victorian Civil and Administrative Tribunal has considered the equivalent of the warranty contained in s 18B(1)(b), i.e. s 8(b) of the Domestic Building Contracts Act 1995 (Vic).

143. In Owners Corporation No.1 of PS613436T v Lu Simon Builders Pty Ltd (Building and Property) [2019] VCAT 286 Judge Woodward found:

1. The builder’s obligation to supply materials that are good and suitable for the purpose for which they are used is not limited to an obligation to use reasonable care and skill;

2. The obligation is absolute;

3. The starting point in the analysis in respect of the warranty is to determine the purpose for which the building (and thus the relevant materials) was required.

144. These findings were not disturbed by the Court of Appeal (Tanah Merah Vic Pty Ltd (ACN 098 935 490) v Owners Corporation No 1 of PS613436T and Ors [2021] VSCA 72) and have been applied elsewhere (e.g. Owners Corporation PS623721 v Shangri- La Construction Pty Ltd (Building and Property) [2022] VCAT 1499; The Owners Strata Plan No 92888 v Taylor Construction Group Pty Ltd and Frasers Putney Pty Ltd [2019] NSWCATCD 63).

145. The purpose of a polished concrete floor is not merely functional. Beyond safely supporting the load placed on it, its purpose is to create an aesthetically attractive, shiny finish.

146. The purpose of the sealant is to protect the concrete from damage, as Mr Vavrica said in evidence, and to create the attractive, shiny finish.

147. It is not necessary to identify the specific chemical applied to the sealant to conclude that the chemical was unsuitable for application to the polished floor.

148. Whatever the type of chemical, it has caused dull patches to the finish, a pattern of spills and drops which is obvious and unattractive. This is confirmed by both experts.

149. Because there was an implied term that the builder would hand over the site in a reasonably clean condition, the cleaning of the site falls within the scope of works of the contract and the statutory warranties apply to the cleaning of the site.

150. The statutory warranties extend to contractors engaged by the builder.

151. For these reasons I find that the builder has breached the statutory warranty that all materials supplied will be good and suitable for the purpose for which they are used.

Defence?

152. Because the obligation contained in s 18B(1)(b) is absolute, the fact that the builder was not made aware of the cleaning specifications by Polycrete is not a defence.

153. Nor is it a defence that the builder explicitly disavowed responsibility for the polished concrete floor, including, as the builder contends, by Variation 16. Pursuant to s 18G of the HB Act, warranties may not be excluded by any agreement.

154. The builder pointed to Variation 16 which states:

The client understands that … a follow-up polish and seal after handove (sic) may be required.

155. While that is evidence that the owner accepted the possibility of remedial work after handover, it does not prove that the owner indemnified the builder for the cost of such remedial work in the event it was necessitated by the builder’s breach.

156. The builder also contends that it advised the owner to conduct the polished floor works after handover, but the owner insisted that it be completed during construction (Statement of Mr Palermo, paragraph 22).

157. Section 18F of the Act states relevantly:

(1) In proceedings for a breach of a statutory warranty, it is a defence for the defendant to prove that the deficiencies of which the plaintiff complains arise from--

(a) instructions given by the person for whom the work was contracted to be done contrary to the advice of the defendant or person who did the work, being advice given in writing before the work was done …

158. The builder relies on Variation 16 and the two emails to the owner dated 16 April 2021, whose relevant contents I have outlined above.

159. I am not satisfied that the emails constitute advice to the owner to conduct the polished floor works after construction is complete. They are not sufficiently specific and clear:

1. The emails inform the owner that the builder cannot approve ‘the polished concrete floor’. There is no explicit reference to the proposed works being conducted during or after construction.

2. The second email raises potential problems with finishes and fixtures ‘if there are boards and plastic in place to protect the slab’ and raises the potential of the ‘slab’ being ‘marked or stained during construction’.

3. It is not evident whether the emails refer to the builder itself conducting the polished floor works, or the owner engaging his own contractor to do so.

160. Further, the deficiency about which the owner complains is the degradation of the sealant, which, as I have found, occurred after construction was complete.

161. Variation 16 states that the builder has agreed that the owner’s external contractor will conduct the polished floor works, sets out the basic process and notes that the builder cannot ensure the floor won’t be ‘compromised during construction’. I am not satisfied that this constitutes advice to the owner to conduct the polished floor works after construction is complete.

162. For all these reasons, the builder has not proved a defence pursuant to s 18F.

163. Having established a breach of s 18B(1)(b), there is no utility in the Tribunal addressing the other warranties in s 18B.

WHAT IS THE APPROPRIATE REMEDY?

164. Because the builder did not conduct the polished concrete work, a rectification order is not appropriate (s 48MA).

165. The case law in relation to the cost of rectification is well-settled. Where there is a defect, the rectification method must be both necessary and reasonable and the rectification cost must be reasonable: Bellgrove v Eldridge [1954] HCA 36.

166. Given my rejection of Mr Vavrica’s opinion that the structural integrity of the slab is compromised, the method of rectification his report proposes is neither necessary nor reasonable (see 3.2.15).

167. When questioned by the Tribunal about the appropriate method of rectification, assuming that the only defect to the concrete floor was the degradation of the sealant, Mr Vavrica answered:

Grind, seal and polish.

168. When questioned by the Tribunal, Mr Brook agreed, noting that the removal and reinstatement of the skirting boards and other minor work would also be required (see also Mr Brook’s report, page 16).

169. The cost of such rectification is itemised in the Amended Cost Estimate and Scott Schedule by Mr Vavrica dated 9 August 2024.

170. I am satisfied that the methodology outlined in paragraphs 7.4 to 7.7 of that report is sound and I accept Mr Vavrica’s cost estimates.

171. However, with reference to paragraphs 3.2.15.1 to 3.2.15.6 of Mr Vavrica’s report dated 20 February 2024, it is apparent that some of the costs listed under ‘Polished concrete ground floor slab’ in the Amended Schedule relate to the costs of repairing the ‘improper placement of concrete’ and aggregate which I have dismissed.

172. In relation to the cost of grinding, sealing and polishing, I accept Mr Vavrica’s assessment of $38,016.00, noting that it is a more current assessment than the quotation by Polycrete dated 2 November 2023.

173. I do not accept that an allowance for contingencies is required (see 7.8). The remediation is relatively straight forward, limited to grinding, polishing and sealing, rather than the more extensive rectification proposed by Mr Vavrica. I am not satisfied that contingencies are likely to arise.

174. I find that an adjustment of 7% for preliminaries is reasonable (see 7.9), given the limited remediation, including for protection of existing finishes and insurances.

175. Therefore, doing the best I can on the evidence before me, I find that the reasonable cost of rectification of the degraded polished surface totals $55,999.19, calculated as follows:

1. Remove and store loose furniture - $638.40

2. Remove and store skirtings - $714.40

3. Grind, polish and seal concrete - $38,016.00

4. Reinstall skirtings - $2,232.50

5. Prepare and apply finishing coat to skirtings - $5,536.60

6. Distribute loose furniture - $440.00

7. Preliminaries - $3,330.45

8. GST - $4,830.89

THE BUILDER’S CLAIM AGAINST POLYCRETE

176. The builder contends that Polycrete should have provided the owner and/or the builder with the Technical Data Sheet for Duel-Tech, as a guide for appropriate cleaning.

177. The builder did not articulate the legal basis for its claim against Polycrete.

178. Its claim cannot be based on breach of the statutory warranties because there was no contract between the builder and Polycrete.

179. If its claim is in the tort of negligence, that was not properly articulated.

180. Even if the builder does have a claim in negligence, it has not provided evidence of the competence and skill that is usual among polished concrete contractors to prove a breach of a duty of care by Polycrete (Voli v Inglewood Shire Council [1963] HCA 15).

181. In other words, there is no evidence before the Tribunal that a reasonable professional would have done anything differently to Polycrete, including providing the Technical Data Sheet or other cleaning specifications.

182. Having failed to prove on the balance of probabilities any cause of action, the application against Polycrete is dismissed.

ORDERS

183. The Tribunal makes the following orders:

1. By 21 February 2025 Kurmond Homes Pty Ltd is to pay Kyle Fish $55,999.19.

2. Application 2023/00369499 is otherwise dismissed.

3. Application 2024/00147859 is dismissed.

4. If an application for costs is made:

1. The application is to be filed and served, supported by evidence and submissions not exceeding 3 pages in length by 17 February 2025;

2. Evidence and submissions in response to the costs application not exceeding 3 pages in length are to be filed and served by 3 March 2025;

3. Any material in reply is to be filed and served by 17 March 2025.

4. In their submissions the parties are to address whether a hearing on costs should be dispensed with and costs determined on the papers.

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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: 19 May 2025