Gordon v We Build Australia Pty Ltd

[2025] NSWCATCD 93

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Gordon v We Build Australia Pty Ltd [2025] NSWCATCD 93

Hearing dates:

25 September 2024

Date of orders:

8 July 2025

Decision date:

08 July 2025

Jurisdiction:

Consumer and Commercial Division

Before:

D Goldstein, Senior Member

Decision:

(1)   In 2023/00470340 We Build Australia Pty Ltd must pay Gregory McGrail $4,540.25 immediately.

(2)   In 2023/463572 We Build Australia Pty Ltd must pay Barry James Gordon $4,390.78 immediately.

(3)   In the event that a party is minded to make an application for costs, such application must be lodged in the Tribunal and served on/given to the costs respondent within 14 days of the date of the orders in these proceedings either attaching or referring to the documents relied upon in support of the application.

(4)   The costs respondent will have 14 days after the date it receives the application to lodge in the Tribunal and serve on/give to the costs applicant its submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.

(5)   The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.

(6)   Subject to the parties’ submissions, the Tribunal will determine any costs application made on the basis of the submissions and papers filed in the Tribunal.

Catchwords:

BUILDING and CONSTRUCTION

Legislation Cited:

Home Building Act 1989

Cases Cited:

Blacktown City Council v Hocking [2008] NSWCA 144

Commissioner for Fair Trading v Aboukalam [2024] NSWCATAP 205

Hiperia Holdings Pty Limited v Sghabi; Sghabi v Hiperia Holdings Pty Limited [2024] NSWCATAP 105

Nguyen v Cosmopolitan Homes [2008] NSWCA 246

Strong v Woolworths Ltd [2012] HCA 5

X-Build Construction Services Pty Ltd v O’Rourke [2020] NSWCATAP 181

Texts Cited:

None cited

Category:

Principal judgment

Parties:

Barry James Gordon: applicant
Daniel Phillip Southcombe: first respondent
We Build Australia Pty Ltd: second respondent
Gregory McGrail: applicant
Daniel Phillip Southcombe: first respondent
We Build Australia Pty Ltd: second respondent

Representation:

Counsel:
M. Klooster for the second respondent

Solicitors:
Equium lawyers for the applicants
Francom for the second respondent

File Number(s):

2023/00463572
2023/004770340

Publication restriction:

Nil

REASONS FOR DECISION

1. These reasons for decision deal with 2 applications in the Tribunal.

Background

2. The first respondent (“developer”) contracted with the second respondent (“builder”) for the construction of a dual occupancy in [suburb]. After an occupation certificate was issued the developer sold the dwellings to each of the applicants (“owners”). Soon after building defects became apparent. The owners instituted proceedings against the developer and the builder holding them responsible for the loss and damage they sustained by reason of the defects. The developer was declared bankrupt before the hearing and played no part in the hearing. The builder stated in its points of defence that its contract with the developer was terminated some time before the issue of the occupation certificate and that the developer carried out the building work which the owners claim to be defective.

3. The main issue in these proceedings is whether the builder constructed the work the owners state is defective. The builder states that it did not and that it was the developer who was responsible for the work said to be defective. The parties who would have actual knowledge of the relevant facts, the builder and the developer have not given evidence. The owners state that they have no knowledge of what transpired between the developer and the builder which is not surprising. Nonetheless the owners instructed their expert that the builder was responsible for carrying out all of the work that is defective.

4. The developer sold the residence which was the 220A [address] to Mr McGrail. Residence 220B was sold to Mr Gordon. I will refer to these residences as 220A and 220B respectively.

5. These proceedings will for the most part be determined on the documents and inferences which can properly be drawn from the facts.

Jurisdiction

6. There is no dispute that the owners’ claims are building claims and that the Tribunal has the jurisdiction to hear and determine the claims pursuant to the Home Building Act 1989 (“HBA”).

7. Since the owners did not contract with the builder it is necessary to find that the Tribunal’s jurisdiction arises pursuant to s18D of the HBA which states.

A person who is a successor in title to a person entitled to the benefit of a statutory warranty under this Act is entitled to the same rights as the person’s predecessor in title in respect of the statutory warranty.

8. I find that the owners who are the successors in title to the developer are entitled to the benefit of the statutory warranties under section 18B of the HBA as the developer was entitled to those warranties under the building contract entered into with the builder.

9. The implied warranties set out in s18B of the HBA are as follows:

(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.

10. The owners allege that the statutory warranties were breached by the builder and as a result there are building defects in the residential dwellings they purchased from the develop and that they will sustain loss and damage in rectifying those defects.

11. The hearing took place on 25 September 2024. In accordance with Tribunal directions the parties’ filed final written submissions. I was also provided with a copy of the transcript of the proceedings.

12. The evidence at the hearing was:

1. Exhibit A, applicant’s bundle of documents in the Gordon proceedings;

2. Exhibit B, applicant’s bundle of documents in the McGrail proceedings;

3. Exhibit C, five pages of photographs – February 2021;

4. Exhibit D, 2 pages of photos – July 2020;

5. Exhibit E, letter dated 24 November 2021 from the builder to the certifier;

6. Exhibit 1, the builder’s bundle of documents as to tabs K, H, I &J;

7. Exhibit 2, examples of the builder sending documents to the developer

8. Exhibit 3, examples of the developer dealing with contractors directly;

9. Exhibit 4, Annexures to the affidavit of Mr. H. J. Saade, dated 9 September 2024.

10. Exhibit 5, Summons directed to the developer; and

11. Exhibit 6, documents produced in response to summons dated 16 May 2024 issued against the developer.

The contract

13. Since the owners cause of action against the builder is under ss18D and 18B of the HBA, the terms of the contract are to some extent irrelevant, Nonetheless the contract and some of its provisions play an important part of the factual background. The work to be carried out under the contract is described in schedule 2 of the contract by reference to drawings.

14. The builder was entitled to be paid by staged payments which were amended from 30 stages to 12 stages. The stages describe the work the builder was required to carry out before it was paid. By differing means the parties agree that the builder carried out stages 1 - 5 and most of stage 6.

15. The work that the parties agree the builder carried out was as follows by reference to the staged payments schedule 11 of the contract as amended, so far as can be ascertained from the poor quality photocopy of Appendix O in evidence:

1. Stage 1    Deposit;

2. Stage 2    Site preparation Preliminaries - demolition – excavation

3. Stage 3   Slab down (Ground Level - All) Concrete, ground level duplex & garage & studio. Termite, duplex & garage & studio. Plumbing, duplex & garage & studio. Form work removed duplex & garage & studio;

4. Stage 4   Slab down (level 1 Duplex) Bricks (Ground & level 1 – Duplex) Concrete Level 1 - Duplex Masonry works Ground & Level 1 – Duplex; and

5. Stage 5   Framing and Structural Steel – (Duplex) Timber Slab (Level 2 Duplex) Bricks party wall (Level 2 Duplex) Timber Structural Steel Duplex. Masonry works Level 2 Duplex.

16. The builder’s counsel conceded that the builder carried out roof sheeting, T73(5).

17. Although the builder signed a building contract to construct the residences, the owners accept that it may have not completed all of the required building work. Nonetheless they state that the builder did carry out the building work which has been proven to be defective.

18. The builder’s Points of Defence assert that it entered into a contract dated 19 October 2018 with the developer and that contract was terminated or about 5 November 2020. The builder states between the contract date and the termination date it completed part only of the building works, but not the whole of the building works under the contract. It is further alleged that after 5 November 2020 the developer completed the balance of the building works.

19. It is alleged by the builder in its Points of Defence that the developer, not it, completed the following work:

Lock Up—Duplex

Duplex Windows and Glazing

Rough In — Duplex

Duplex Electrical and Lighting

Duplex Plumbing

Duplex HVAC & all other services

Duplex Waterproofing

Fixings — Duplex

Duplex Fixtures and Fittings

Duplex Sanitary and Tilings

Duplex Joinery

Framing, Bricks and Roofing(garage/Studio)

Garage/Studio Timber Frame

Garage/Studio Masonry Works

Garage/Studio Roofing

Finishes and Practical Completion

Duplex and Garage/Studio Plastering, rendering and floor finishes

Duplex and Garage/Studio Painting

Garage/Studio Windows and Glazing

Garage/Studio Electrical Lighting

Garage/Studio Plumbing

Garage/Studio HVAC & all other services

Garage/Studio Waterproofing

Commission services,

hydraulics external works and landscaping

Experts

20. The parties engaged experts to provide opinions on the subject of whether the work carried out was defective. Mr Irvine provided a report on behalf of the owners. Dr Cunniffe was engaged to provide a report on behalf of the builder. There was no objection to either Mr Irvine or Dr Cunniffe providing opinion evidence in the Tribunal.

21. In a report dated 18 March 2024 Mr Irvine estimated the costs to complete and rectify the defects that were observed.

22. The owner’s expert having been instructed that all relevant work was carried out by the builder, has not offered an opinion about whether the work he found to be defective would or would not have been carried out in stages 1 - 6.

23. The builder’s expert states that he was instructed that the builder’s contract was terminated effective on or about 5 November 2020. He also states that he was instructed that the developer engaged other contractors to complete the development and then sold 220A and B to the owners in or about December 2021. The same comment made in the preceding paragraph about the owners’ expert may be made in connection with the builder’s expert, namely he did not in his report offer an opinion about whether the work he has commented on would or would not have been carried out in stages 1 - 6.

24. The builder’s expert said at ES 06 of his report:

“The signed Schedule 11 - Progress Payments details the works completed by Builder.”

25. I find that this is a mischaracterization of Schedule 11. I find that Schedule 11 does not detail the work completed by the builder. It details the works to be completed by the builder in order to entitle it to payment.

26. The defective work referred to in the 18 March 2024 report in relation to 220A was:

1. Non-compliant brickwork, flashing installation, Atrium and internal areas;

2. Non-compliant waterproofing detailing to wet areas and localised leaking bathroom en-suites in bedrooms 3 and master bedroom;

3. Miscellaneous Items, 9 items, namely;

1. 2nd floor balcony balustrade;

2. 2nd floor balcony capping;

3. Master bedroom en-suite;

4. Bedroom 1, air conditioning control panel not fitted flush;

5. Bedroom 1 structural steel base plate fixed to the interior of the room;

6. Rear yard stone bench not adequately sealed;

7. Studio rear door lock;

8. Rear courtyard tundish not fitted to storm water pipe at rear; and

9. Studio bathroom grate drain, graded away from drain discharge point.

4. Roof sheets damaged during construction and or remedial works.

27. The defective work referred to in the 18 March report in relation to 220B was:

1. Non compliant structural floor frame installation Bedroom 1;

2. Non compliant window door subsill and brickwork installation, Atrium and internal areas adjacent;

3. Non compliant grading of floor tiles resulting in water ponding bathroom;

4. non compliant waterproofing detailing to wet areas and en-suites in bedrooms 3 and master bedroom;

5. Non compliant wall flashing and masonry construction, bedroom 3;

6. Miscellaneous Items (10);

1. 2nd floor balcony balustrade;

2. 2nd floor balcony capping;

3. Shower rose refitting incomplete;

4. Master bedroom en-suite. Floor tiles chipped;

5. Entry gate latch binds when closing;

6. Rust stain to rear floor tiles caused by scaffold fitted over tiles without protective cover;

7. Vertical capping tile dislodged from BBQ areas;

8. Screw fittings not removed between kick board and robe cabinetry;

9. Ground floor entry floating floorboards not installed in accordance with manufacturers requirements; and

10. Bedroom 1 skirting board frameworks not detailed to remove obstructions and undulations in finishes. Weld plate protrudes outside the frame’s bottom plate.

7. Roof sheets damaged during construction and or remedial works.

The builder’s concessions

28. The builder conceded in its written submissions that in connection with 220A, item 3(e) (Miscellaneous Items) bedroom 1 structural steel base plate fixed to the interior of the room rather than below the bottom plate, that it carried out this work and that the cost of rectification was $832.90.

29. In connection with 220B, item (6.j) (Miscellaneous Items) bedroom 1 skirting board frameworks not detailed to remove obstructions and undulations in finishes, the builder conceded in its written submissions that it carried out this work and that the cost of rectification was $696.96.

30. The builder’s counsel conceded that the builder supplied and installed the roof sheeting. T.73(5)

Did the builder carry out the work the subject of these proceedings

31. I have decided that it is necessary to determine from the outset whether the builder carried out all of the work the owners state was carried out in breach of the statutory warranties with the result that there are defects in the residences they purchased from the developer. The necessity to do this arises directly from 12 bii. and iii. of the builder’s points of defence filed in both proceedings.

32. The determination of the issue of whether the builder carried out all of the work which is the subject of the owners’ defective work claim and the broader question of whether the contract between the developer and the builder came to an end and whether after that the developer completed the work described in the contract must be determined on the documentary evidence which has been admitted into evidence in these proceedings and also on the cross examination of the witnesses. A difficulty that is inherent in this process is that the builder did not press the affidavit of Mr Saade sworn on 9 September 2024. Mr Saade was a director of the builder and would possibly have had full knowledge of the work that the builder carried out and the work that it did not carry out. The other person who presumably would have had a full knowledge of the relevant facts was the developer. He did not give evidence in these proceedings.

Onus

33. The builder submits that the owners bear the legal and evidentiary burden of establishing that it carried out work in breach of the statutory warranties in s18B of the HBA. It has referred to the decision of an Appeal Panel in Hiperia Holdings Pty Limited v Sghabi; Sghabi v Hiperia Holdings Pty Limited [2024] NSWCATAP 105. In those proceedings there was a similar difficulty in that the appellant was the successor in title to original owners who engaged a second builder (builder) to complete building work undertaken by another builder (first builder). The first builder went into administration. The builder was the respondent in the appeal. The appellant was required to establish that the defective work, the subject of his claim, was built by the respondent/builder.

34. At [106] the appeal panel stated:

“The onus was on the owner to prove that the builder installed the windows. Unless the builder installed the windows, the builder could not be liable for water penetration though the windows. We are not satisfied that the owner has discharged the onus placed upon him in this regard.”

35. Also at [115], the appeal panel stated:

“However, notwithstanding the unsatisfactory aspects of Mr Merheb’s evidence the onus was always on the owner to prove who had undertaken the work subject to the claim.”

36. I accept the position as stated by the Appeal Panel in Hiperia Holdings Pty Limited v Sghabi; Sghabi v Hiperia Holdings Pty Limited and that the onus is on the owners to prove that the builder carried out the work which they state is defective.

Evidence relied upon by the owners

37. The owners’ case as referred to in its final written submissions, relies on Exhibits A, B, C, D, and E. Their submissions at [28] state a number of matters of a general nature relating to the contract which is at tab 5 of exhibit A.

38. The owners’ evidence which I apprehend is relevant to the question of whether the builder had undertaken the work the subject of their claims in these proceedings is that the builder:

1. was named as the builder in the Certificate of Installation of Termite Management;

2. Issued the certificate of the window installation on 24 November 2021, which was signed by a director of the builder,

3. issued the certification as to the common firewall construction on 24 November 2021 which was signed by a director of the builder;

4. issued the compliance certificate for common wall sound separation on 24 November which was signed by a director of the builder.

5. was named in the Certificate of Compliance for Waterproofing;

6. was named in the Certificate of Termite Management installation; and

7. issued the BASIX Compliance certificate (undated) signed by a director.

39. It is also submitted at [64] and elsewhere of the owners’ final written submissions that the evidence establishes that the builder undertook the construction of the properties to lockup and beyond, and that this included the completion of the external brickwork and installation of flashing and windows.

39. It is also submitted by the owners at [112] that the evidence establishes that the builder undertook the construction of the property up to “lockup” including the laying of the roof sheets and roof capping.

40. At various parts of the owners written submissions [72] and [76] and elsewhere it is stated:

“There is no evidence sufficient to support a finding that We Build was not “responsible” for this work.

There is no evidence that the works listed were not done by We Build.”

42. I find that this approach is erroneous. The owners are required to prove on the balance of probabilities that the builder carried out the work they refer to in breach of the statutory warranties such that a defect that requires rectification exists. This is not achieved by alleging that work was carried out in breach of the statutory warranties and there is no evidence that the works were not done by the builder. That approach reverses the evidentiary onus which the owners must satisfy.

43. The owners place weight on Exhibit C which is a series of five photographs or images recorded in February 2021 which show dwellings 220A and 220B in the course of being constructed in a seemingly advanced state with the builder’s “banners” fixed to temporary fencing at the outside of each property.

44. The owners also place weight on exhibit D which is a series of two photographs or images recorded in July 2020 which show dwellings 220A and 220B in the course of being constructed in a less advanced state than indicated in exhibit C, but also with the builder’s “banners” fixed to temporary fencing at the outside of each property.

45. The owners state in their written submissions that the photographs in exhibit C and D demonstrate objectively:

1. contrary to the alleged termination of the Contract, the builder was still responsible for the works as at February 2021 (there being no other reasonable explanation for the builder’s banner remaining on site, if it was to have no further involvement);

2. the works completed as at February 2021 included internal ceiling and wall linings and internal painting, which was building work that was not undertaken until after lock up (as it requires the property to be water tight);

3. based on Appendix 0 to the report of Dr Cunniffe (a document about which there was no evidence from the builder), the works completed as at February 2021 equated to stage 10 of the Revised Schedule of works;

4. contrary to the builder’s case, lock up was already achieved (the roof, and windows had been installed) as at July 2020; and

5. the works completed by the builder, already exceeded that which its expert (Dr Cunniffe) was asked to assume, by July 2020.

46. At [131] of their closing written submissions, the owners submit that the evidence adduced by them established a positive case that the builder was responsible or liable for all of the works the subject of the claims made out by them in these proceedings.

47. In Strong v Woolworths Ltd [2012] HCA 5 Heydon J discussed the legal and evidentiary burden at [45] – [55] of his judgement. At [52] – [54] Heydon J stated, footnotes omitted:

“In the first sense, “evidential burden” refers to the duty of one party (usually the party bearing the legal (ie persuasive) burden, who in most instances will be the plaintiff) to call sufficient evidence to raise an issue as to the existence or non-existence of a fact in controversy. This must be done to prevent a no case submission succeeding (or if the relevant evidential burden rests on the defendant, to prevent the issue otherwise being withdrawn from the jury). The Privy Council (Lord Hodson, Lord Devlin, Viscount Dilhorne, Lord Donovan and Lord Pearson) criticised the expression “evidential burden of proof” as follows:

“It is doubtless permissible to describe the requirement as a burden, and it may be convenient to call it an evidential burden. But it is confusing to call it a burden of proof. Further, it is misleading to call it a burden of proof, whether described as legal or evidential or by any other adjective, when it can be discharged by the production of evidence that falls short of proof.”

However that may be, this is what Wigmore called the duty of producing evidence.

In the second sense, “evidential burden” refers to circumstances in which a plaintiff calls evidence sufficiently weighty to entitle, but not compel, a reasonable trier of fact to find in the plaintiff’s favour. There is then said to be an “evidential burden” in the sense of a “provisional” or “tactical” burden on the defendant: if the defendant fails to call any or any weighty evidence, it will run a risk of losing on the issue – that is, a risk that at the end of the trial the trier of fact will draw inferences sufficiently strong to enable the plaintiff to satisfy the legal (ie persuasive) standard of proof. The “provisional” or “tactical” burden raises the question whether a defendant should as a matter of tactics “call evidence or take the consequences, which may not necessarily be adverse.

The third sense in which the expression “evidential burden” is employed arises where a plaintiff, in discharging the evidential burden in the first sense, calls evidence so strong that a reasonable trier of fact would be bound to decide the issue in the plaintiff’s favour if the defendant calls no evidence. It is sometimes said that an “evidential burden” rests on the defendant which, if not discharged, will cause the defendant to lose and which, if discharged so as to cause the trier of fact either to reject the plaintiff’s evidence or to be undecided, will result in the legal (ie persuasive) burden on the plaintiff not being satisfied.”

48. The submission of the owners referred to at [46] refers to a “positive case” the precise meaning of which is not referred to in the extract cited above. Putting aside the words used, I accept that all of the evidence referred to by them raises, at the least an issue as to whether or not the builder did in fact carry out the work which their expert states is defective. Evidence of this nature according to the extract cited above imposes an evidential burden on the builder because if it fails to call any, or any weighty evidence it will run the risk of losing on the issue of whether it carried out the work the subject of the owners’ claims.

49. While considering the evidentiary burden and issues relating to the burden of proof, I will also refer to the judgement of McDougall J. in in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [55] as follows:

“(1) A finding that a fact exists (or existed) requires that the evidence induce, in

the mind of the fact-finder, an actual persuasion that the fact does (or at the

relevant time did) exist;

(2) where on the whole of the evidence such a feeling of actual persuasion is

induced, so that the fact-finder finds that the probabilities of the fact’s

existence are greater than the possibilities of its non-existence, the burden of

proof on the balance of probabilities may be satisfied;

(3) where circumstantial evidence is relied upon, it is not in general necessary

that all reasonable hypotheses consistent with the non-existence of a fact, or

inconsistent with its existence, be excluded before the fact can be found; and

(4) a rational choice between competing hypotheses, informed by a sense of

actual persuasion in favour of the choice made, will support a finding, on the

balance of probabilities, as to the existence of the fact in issue.”

Evidence relied on by the builder – builder’s submissions

50. The evidence the builder refers to is primarily documentary in nature.

51. The builder submits that the staged payments schedule contained in Schedule 11 of the contract signed by the builder and developer on 19 October 2018 was amended by a revised Schedule 11 signed by the builder and developer on 16 August 2019. The effect of the new schedule 11 was that the 29 staged payments referred to in the contract signed on 19 October 2018 was changed so that there were11 staged progress payments. The revised Schedule 11 is of significance in these proceedings because apart from identifying the 11 staged progress payments, it gave a brief description of the work within each stage.

52. The builder then submits that:

1. On 5 November 2020 the contract between the builder and the developer was terminated;

2. it had only completed stages 1 – 5 and part of stage 6 at the time of termination; and

3. thereafter the developer completed the balance of the works.

53. There is no witness statement or affidavit from the builder to prove the above matters.

54. As part of the factual background, the builder refers to the fact that the contract provided that the developer was entitled to retain 10% of each progress claim up to a maximum of 5% of the contract value. And that 50% of retention money held by the developer would be released on practical completion with the balance of the retention being released on the issue of the final certificate.

55. The builder submits that the revised Schedule 11 confirmed that the developer had paid the builder progress claims 1, 2, 3 and 4. Progress claim 4 related to “Slab down – (Level 1 duplex) Bricks Ground & Level 1 – Duplex”.

56. The builder then submits that on 8 November 2020 the developer released retention monies totalling $68,200 to the builder. It is submitted that these retention funds were released at a time when the works were nowhere near practical completion. So much might be inferred from the photographs in Exhibit D, which were taken in July 2020. The builder refers to and relies on exhibit 4 to demonstrate that on 8 November 2020 the developer sent to the builder an email which stated:

“Please find attached payment receipt for remaining [suburb] retention release ($68,200 GST incl.)”

57. At page 2 of Exhibit 4 is a Commonwealth Bank receipt which indicates that an amount of $68,200 was paid to the builder on Sunday 8 November 2020.

58. The next fact relied upon by the builder is that on 11 November 2020, the developer sent a message to a waterproofer, Mr Kizana asking to meet him on site to go over the job. Page 551 of Exhibit 1 is a copy of a text message relied upon to establish the submission.

59. Reference is also made to Exhibit C and the photographs dated February 2021 showing the front of each dwelling with the builder’s banner as referred to earlier.

60. The builder refers to a range of certificates which may be described as compliance certificates. They are as follows:

1. Certificate of compliance dated 19 December 2020 issued by Mr Kizana for the waterproofing works in the bathrooms, laundry and balconies referring to the builder as the client but providing the developer’s contact details;

2. Certificate issued on 13 September 2021 by a glazing contractor to the developer certifying that glazing works carried out to the shower screens and balustrades complied with the applicable safety standards. This document is at Exhibit 4 at page 52 and relates to 220A & B;

3. online certificate compliance electrical work test report documents in exhibit 4 produced in October and November of 2021 by Mr. L Mikhael which name the developer as the customer;

4. Certificates of Compliance for plumbing and drainage works and gas service compliance certificate both dated 23 September 2021, both in relation to 220A and B;

5. Certificate issued on 24 November 2021 to the certifier in which the builder confirmed that the common wall, which separated each dwelling was built using common double brick with gyprock on both sides and achieved the required fire rating;

6. Certificate issued on 24 November 2021 to the certifier in which the builder confirmed that the common wall which separated each dwelling achieved the required sound insulation levels;

7. Certificate dated 24 November 2021 to the certifier in which the builder confirmed that the windows had been fitted with child protection mechanisms;

8. A certificate issued by Allstar Aluminium Pty Ltd on 24 November 2021 certifying that windows and doors supplied complied with applicable safety standards; and

9. Smoke alarm certifications for 220A and 220B,

61. The builder also submits that on 22 November 2021, the developer obtained a survey to establish the floor space ratio of the completed dwellings. A letter from a surveyor to the developer dated 22 November 2021 which is in exhibit 4 is referred to as the evidence to support this submission.

62. They builder relies on the fact that on 12 December 2021, the developer obtained a letter of compliance from the City of Sydney that the works had been inspected and generally complied with certain conditions of the development consent. The letter from the City of Sydney to the developer dated 12 December 2021 in exhibit 4 is relied upon as the evidence to support this submission.

63. In addition, exhibit 4 contains a letter dated 24 January 2022 from Sydney Water to the developer stating that the document titled Certificate of construction for the constructed stormwater drainage at No. [address] had been reviewed and found to meet the conditions of Sydney Water’s on site detention design approval letter dated 3 December 2018.

64. The builder also relies upon a document in Exhibit A which establishes that on 25 January 2022, the developer applied for a Final Occupation Certificate.

65. The builder’s submissions refer to numerous facts concerning the developer’s action in having work carried out to 220A and 220B and the facts relating to the actions of the developer in dealing with the owners’ complaints that there were defects in 220A and 220B that required rectification. The builder’s submissions are lengthy and in my view there is no utility in setting them all out in these reasons. It is sufficient in my view to state that I consider the facts and circumstances raised at [5.3] of the builder’s submissions to be of particular relevance.

Matters raised by the owners in reply

66. The owners submit in reply that:

1. The weight of the evidence is that before 5 November 2020 the works were already at the lock up stage and most of most or all of the defective works had been completed by that time;

2. The revised Schedule 11 established that by 16 August 2019, all of the works were up to “Lock Up” stage for the duplex and had been completed except for windows and glazing and that this was demonstrated on schedule 11 where there was a “tick” next to some items and a “x” next to other items;

3. It is plain from the evidence of Mr Kizana that the “rough in” had been undertaken prior to his commencement of the waterproofing work, as demonstrated by the photographs annexed to his affidavit because the photographs demonstrate that the plumbing and electrical “rough in” had been completed;

4. the builder’s expert agreed that as a matter of logic one must accept the rough in must be undertaken before the installation of the wall and ceiling linings, and it is clear that before 11 November 2020 that the rough in had been completed (I interpose to note that no transcript reference has been cited to support this submission particularly in relation to the date 11 November as referred to)

5. The evidence referred to in the builder’s submissions seeks to establish that the developer was responsible for work various items of work that that took place after 5 November 2020 which have no relevance to the defective work the subject of the owners claims such as:

1. supply and installation of kitchen fit out and appliances;

2. supply and installation of bathroom fittings;

3. supply and installation of wardrobes;

4. supply and installation of air conditioning;

5. all of the work associated with each garage/studio;

6. landscaping and paving;

7. application of sealants; and

8. remedial work to the second floor terraces and planter boxes.

6. Exhibit C establishes that the scaffolding had been removed and the subject properties were already watertight, rendered and painted by February 2021. Reference is made to the evidence of Dr Cunniffe, T58.

67. In connection with the evidence about the developer’s return of retention to the builder, the owners submit that the email from the developer to the builder dated 8 November 2020 attaching the payment receipt for the [address] retention bears little resemblance to other emails sent by the developer to the builder and that the Commonwealth Bank receipt for the amount referred to in the email, namely $68,200 came from an unidentified account. The owners cast doubt on the providence of these documents and submit that the documents do not prove termination of the contract between the developer and the builder.

Dr Cunniffe’s evidence

68. Dr Cunniffe was cross examined at the hearing. His evidence which was relevant to the primary issue in these proceedings, namely whether the builder carried out the work the owners state is defective was addressed when he was shown exhibit C. In connection with the photographs in exhibit C, Dr Cunniffe stated that he could see capping on the second floor but did not know the condition of the roof or if it had been finished, but he could see capping and roof plumbing. So far as the roof was concerned, as stated elsewhere in these reasons, counsel for the builder conceded that the builder had carried out the roofing. Dr Cunniffe also agreed that the glazing was in, that the building was painted, and that render had been finished.

69. In connection with the photographs in exhibit D, Dr Cunniffe stated at T64/5:

“VENTURA: July 2020. Is it apparent from that, even though the building’s at an earlier stage of completion from the photos — from the later image, that the glazing is also — appears to be in in those photographs?

WITNESS CUNNIFFE: Yes. Yes but the — I mean windows and doorframes have to go in at the frame stage. And they should be then protected until the cladding is finished. And then the finish — so in this case, render, and then that’s to ensure that the seals are intact. And then once it’s painted, then there’s beading that goes round to make it — to ensure that it’s watertight. So there’s a stage of things that happen.

VENTURA: All right. And look, in that photograph, does it appear that the front of the building’s been rendered around the windows?

WITNESS CUNNIFFE: There’s rendering on the side walls but I can’t see it on either side of the sliding doors. I think it’s in progress. Yeah, maybe a base coat, a base coat of render on the side walls.

VENTURA: So did you say it appears to be in progress, you meant the rendering?

WITNESS CUNNIFFE: Yes. On those — those front — front walls, but there doesn’t appear to be any rendering at the back. So it’s in progress.

VENTURA: All right. Given the process that you described a short time ago for the Tribunal, is it fair to say that once your rendering’s in progress, you want to finish it and get to lock up pretty quick? Stop water getting inside?

WITNESS CUNNIFFE: Well it’s covered, so no. You do it in the proper order. It’s typical that you will have multiple tradies onsite and you don’t want them interfering and damage what they’re doing, so you stage it accordingly.

So, I’m even questioning the rendering because the glazing hasn’t been covered with a protective coating and yet the later photos show the coating on. Rendering can be really messy and if you get sand cement, it etches into the glass. So I’m thinking that the rendering probably hasn’t started because they haven’t protected the glass yet.”

70. I find that the cross examination of Dr Cunniffe on exhibit D did not produce evidence which established that the builder carried out the work the owners state is defective. Dr Cunniffe’s evidence is that in July 2020 when exhibit D was taken, that there was a “stage of things” that happen with windows and doorframes, and that after consideration he concluded that the rendering around the windows probably hadn’t started because the trades had not protected the glass from the sand and cement that was associated with rendering.

71. Dr Cunniffe was cross examined about:

1. waterstops in the master en suite;

2. the bottom plate of a structural beam protruding into the bedroom;

1. downpipes;

2. roof sheeting;

3. flashing around windows;

4. balcony capping – water stain leaching; and

5. scaffolding rusting when sitting on a tiled surface.

72. At T67 Dr Cunniffe stated that the installation of a steel beam in a floor could be done any time up to wall linings are provided. (Refer to the defect at [28(a)]). Apart from this item of evidence and the roof sheeting, I find that Mr Cunniffe’s evidence when being cross examined did not directly address the issue of whether the builder carried out the work which the owners now state is defective.

Mr Saade’s evidence

73. Mr Saade is a director of the builder and was called to give evidence to address the question of why the builder’s banners appeared at the front of the site in Exhibit C. Mr Saade stated in chief, that on termination the fencing was left behind and that the developer took over the hire of the fencing. Mr Saade also stated that the builder did not put up the banner which is shown in exhibit C because it wasn’t on site when the photographs were taken. The only inference available from this evidence is that the developer put the builder’s banner up on the fencing after the builder had left the site.

Mr Kizana’s evidence

74. Mr Kizana provided a witness statement for the builder. He states that the developer told him that he was the owner of the builder and requested waterproofing works at the site. A text message was attached to his statement in which the developer asked to meet the following day stating that he needed external areas waterproofed ASAP as sheeting started on Monday. Mr Kizana’s evidence was that on 12 November 2020 he quoted for waterproofing works in respect of 8 bathrooms, 8 balconies and 2 laundries on the site. He also states that between 27 November and 17 December 2020 he completed the waterproofing works on the site and on 19 December, he provided a certificate of compliance in respect of the waterproofing works. Mr Kizana’s evidence was that when he completed the waterproofing work and provided a certificate of compliance on 19 December 2020 he was not made aware that the developer was not the owner of the builder.

75. Mr Kizana was cross examined about his communications with the builder’s director. He stated that he thought that the developer was the owner of the builder and said that the developer was paying him. There was nothing arising from Mr Kizana’s cross examination that assists the owners in proving that the defective building work was carried out by the builder. I find that Mr Kizana performed the waterproofing work to the bathrooms and ensuites in 220A and B in an arrangement with the developer.

Findings of material fact

76. I find that the builder was named as the builder in the Certificate of Installation of Termite Management which was dated 1 March 2019. The building contract was dated 19 October 2018, which indicates that the termite management system was installed relatively early in the work. The defects the subject of the owners’ claims do not relate to the termite management system.

77. The builder admits that it was carrying out work as late as 24 June 2019, refer to Revised schedule 11 which states that the builder was paid the progress claim for stage 4 on 24 June 2019, I find that the Certificate of Installation of Termite Management dated 1 March 2019 is compelling evidence that the builder by its subcontractor installed the termite management system. I do not find the Certificate of Installation of Termite Management dated 1 March 2019 to be evidence that is highly persuasive that the builder carried out the work the subject of the owners’ claims in these proceedings.

78. I find that it is common ground that the builder did issue a letter dated 24 November 2021 to the certifier, which stated that all windows installed at [address] had been fitted with the necessary child protection mechanisms signed by a director of the builder. This certificate was issued almost a year after the time that the builder alleges that it terminated the contract with the developer. The same finding applies to the:

1. the certification as to the common firewall construction dated 24 November 2021; and

2. the compliance certificate for common wall sound separation dated 24 November.

79. I find that the builder was named in the Certificate of Compliance for Waterproofing dated 19 December 2020. However I find that this document is not evidence that is highly persuasive, given the evidence of Mr Kizana in his witness statement and having regard to the fact that the document refers to the developer’s telephone number. Of greater importance is the developer’s text message to Mr Kizana of 11 November 2020 asking to meet him on site to go over the job. I find that Mr Kizana’s evidence establishes that the developer engaged him on or about 11 November 2020 to do waterproofing work for 220A and B.

80. When Mr. Kizana was being cross examined he was referred to a document in exhibit 2 from himself to the builder, dated 10 December which enclosed a waterproofing invoice. The document establishes that Mr Kizana contacted the builder at least once after the developer’s text message to Mr Kizana of 11 November 2020. The evidence in exhibit 2 also establishes that the builder sent the invoice to the developer asking him to pay it. In cross examination Mr Kizana said that all payments came from the developer. Having regard to the totality of Mr Kizana’s evidence, particularly that he was paid by the developer, I find that it is persuasive evidence to support a finding that Mr Kizana contracted with the developer and that there was some confusion in his mind whether the developer was associated with the builder.

81. I find that on 8 November 2020 the developer knowingly released retention monies totalling $68,200 to the builder. Items 7B and 8 of Schedule 1 of the 220A and B contracts by reference to clauses C1 and C2 allowed for the developer to have security by way of retention which would be 10% of each progress claim to a maximum value of 5% of the contract sum. The developer’s rights to draw on the retention were contained in clause C4. There is no direct evidence which addresses why the retention was returned. I find that the developer’s contractual rights to hold retention and to have recourse to it was a valuable right that would not lightly be given up. I find that the return of retention by the developer to the builder is a fact which is capable of supporting an inference being made that the developer took over the works in November 2020 because the builder and developer ended their contractual relationship at that time. I do not accept the owners’ submissions in reply regarding the documents that evidence the return of retention.

82. In connection with [5.3] of the builder’s submissions I find that the references to page 9 and 10 of exhibit 3 are relevant. I find that on 12 November 2020 the developer sent to a company LJ Buildings Pty Ltd the plans and schedules for the [address] site which I infer is a reference to the developments at [address] and [address]. I also find that on 7 December 2020 Mr. Chen from LJ Buildings wrote to the developer attaching an invoice and that on 7 December the developer wrote to Mr Chan who signed himself as “Lucius” attaching a payment receipt which indicated that a payment had been made in the sum of $31,350.00. I also find that that the payment receipt referred to the builder, but only did so as a reference, most probably a reference to 220A and B for the purposes of identification. In addition on 22 March 2021 Lucius from LJ Building sent an invoice to the developer for tiling works at the [address] site and also at another site. I find that the documents on pages 9 and 10 of Exhibit 3 show that on 25 March 2021 the developer made a payment of $15,745 to LJ Buildings for tiling at the [address] site. I find that the evidence referred to above is persuasive evidence that as from 12 November 2020 the developer became personally involved in arranging and paying for building work to be carried out at 220A and B.

83. The builder has also referred to evidence relating to the developer’s actions in December 2020. I find that the email from Surface Gallery to the developer on 22 December 2020 in exhibit 3 relating to having material packed and ready for collection via courier by Tuesday 12 January for delivery on 13 January 2021 to be persuasive evidence that as at 22 December 2020 the developer was personally involved in arranging for building work to be carried out at 220 A and B. This finding is confirmed by the developer’s email to Surface Gallery on 8 January 2021 which states that he would attend to payment of materials supplied for the [address] (220A and B). The developer stated among other things:

“Place and through invoice for the Marrickville job remaining payment and I’ll fix up both [address] and [address] at the same time.”

84. In connection with this transaction, the evidence in Exhibit 3 indicates that the developer paid Surface Gallery the sum of $17,345.19 for tiles supplied for [address] on 11 January 2021.

85. I find that the January 2021 payment of materials supplied for 220A and B is a persuasive indicator that the developer, not the builder was carrying out the work. Had the builder been proceeding under the contracts for 220A and B, it would have been responsible for payments for materials supplied for the contract work.

86. I find that the builder did issue the BASIX Compliance certificate (undated) signed by a director. While this document is undated, I find it to be relevant because the builder’s director certified that the proposed development has been installed and completed in accordance with the commitment set out in the Basix Certificate 888714M—03.

87. In connection with exhibit D, I find that in July 2020 the builder was in possession of the site undertaking its obligations under the contract with the developer. That much may be inferred from the fact that the builder’s case is that the contract was terminated in November 2020. It follows that the builder was proceeding with its contractual obligations before that time.

88. In connection with exhibit C, as stated above, the owners submit that the photographs in exhibit C demonstrate objectively:

1. contrary to the alleged termination of the Contract, the builder was still responsible for the works as at February 2021 (there being no other reasonable explanation for the builder’s banner remaining on site, if it was to have no further involvement);

2. the works completed as at February 2021 included internal ceiling and wall linings and internal painting, which was building work that was not undertaken until after lock up (as it requires the property to be water tight);

3. based on Appendix 0 to the report of Dr Cunniffe which is the revised schedule 11 (a document about which there was no evidence from the builder), the works completed as at February 2021 equated to stage 10 of the Revised Schedule of works;

4. contrary to the builder’s case, lock up was already achieved (the roof, and windows had been installed) as at July 2020;

5. the works completed by the builder, already exceeded that which its expert (Dr Cunniffe) was asked to assume, by July 2020.

89. I find that exhibit C combined with Mr Cunniffe’s evidence when being cross examined, is persuasive evidence that at the time the photos were taken:

1. the builder’s banners were fixed to what appears to be temporary fencing at the front to 220A and B;

2. dwellings were in an advanced state of construction;

3. The windows had been installed; and

4. Painting and rendering appeared to be complete.

90. What might be inferred from exhibit D and C will depend upon the facts. In Commissioner for Fair Trading v Aboukalam [2024] NSWCATAP 205 an Appeal Panel at [58] considered the difference between drawing an inference and conjecture in the following passage:

“With respect to ground 3, the Appellant submitted that the Tribunal erred in law by failing to draw the only probable conclusions from the evidence before it: Strahan v Taree Municipal Council [1963] NSWR 59. The Appellant referred to the judgment of Spigelman CJ in Seltsam Pty Ltd v McGuinness (2000) 49 NSWLR 262 in which the Chief Justice discussed the difference between conjecture and inference. His Honour stated that it is often difficult to distinguish between permissible inference and conjecture [84]. The Chief Justice referred to a passage in the judgment of Sir Frederick Jordan in Carr v Baker (1936) 36 SR (NSW) 301 at 306 in which it was said that the ”existence of a fact may be inferred from other facts when those facts make it reasonably probable that it exists; if they go no further than to show that it is possible that it may exist, then its existence does not go beyond mere conjecture. Conjecture may range from the barely possible to the possible.”

91. The case of X-Build Construction Services Pty Ltd v O’Rourke [2020] NSWCATAP 181 is authority for the proposition that great care should be exercised when drawing conclusions or making findings based on photographic evidence. At [59] the appeal panel referred to the Court of Appeal decision in Blacktown City Council v Hocking [2008] NSWCA 144. Of relevance is the passage from that decision cited by the appeal panel at [61]:

“Tobias JA, with whom Giles JA agreed, said at [167]:

[167]   The use of photographic evidence has been the subject of discussion in this Court. Its admissibility as a visual reproduction is beyond doubt: R v Travers (1958) 58 SR (NSW) 85 at 108. However, in Short v Barrett, Court of Appeal, 5 October 1990 (unreported), Meagher JA, with the concurrence of Clarke and Handley JJA, observed that in relying on his own interpretation of photographic evidence, the trial judge had overlooked the “sage advice” of Lord Reid in C Van der Lely NV v Bamfords Ltd [1963] RPC 61 at 71. His Lordship said:

‘Lawyers are expected to be experts in the use of the English language, but we are not experts in the reading or interpretation of photographs. The question is what the eye of the man with appropriate engineering skill and experience would see in the photograph, and that appears to me to be a matter for evidence. Where the evidence is contradictory the judge must decide. But the judge ought not, in my opinion, to attempt to read or construe the photograph himself; he looks at the photograph in determining which of the explanations given by the witnesses appears to be most worthy of acceptance.’”

92. Also of relevance is the passage cited at [62]:

“And at [169]:

“It should be noted that the use by a trial judge of photographs is nothing new. They can, as the authorities to which I have referred confirm, be descriptive of what a witness says he or she saw, being a representation of the witness’ knowledge and observations. But they should not be used by a judge to make findings of fact which are otherwise unsupported by the evidence and are therefore no more than conjectural: Schmidt v Schmidt [1969] QWN 3 at 6; Beaton v McDivitt (1985) 13 NSWLR 134 at 142.”

93. Having regard to the authorities referred to above, I find as follows in connection with the findings that the owners seek in connection with exhibit C. First, as to [88(a)] I do not find that exhibit C establishes that the builder was still responsible for the works as at February 2021. There is an explanation for the builder’s banner being on the temporary fences as at February 2021 from Mr Saade, which I accept. Secondly as to [88(b)] exhibit C is evidence that internal ceiling and wall linings and internal painting, were present at February 2021, and the revised payment schedule does indicate that this work was to be undertaken after stage 6 – “Lock up”. Thirdly as to [88(c)] that the works completed as at February 2021 equated to stage 10 of the Revised Schedule of works, the owners’ expert has not given an opinion about what stage the works were at when the photos in exhibit C were taken. Nor has the builder’s expert, at least in connection with the work that would have been or definitively was carried out by the builder at the date shown on exhibit C by reference to the revised schedule 11. The authorities state that in the absence of expert opinion at issue, I should not attempt to interpret the photographs to ascertain at what stage the works were at when they were taken. I will also not accept the owners’ solicitor’s submissions about the stage the works were at when the photographs in exhibit C were taken. He is not an expert and should only refer to the evidence, not give evidence. Fourthly, as to [88(d)] that lock up was already achieved (the roof, and windows had been installed) as at July 2020. Referring to “Lock up” as referred to or defined in the revised payment schedule and not as a generic term, I reject the finding sought by the owners in [88(d)] that the windows had been installed as at July 2020, based on Dr Cunniffe’s evidence when he was equivocal in his response to the owners’ solicitor’s question as to whether the glazing appeared to be “in” in July 2020. Having regard to exhibit D. Dr Cunniffe stated:

‘Yes. Yes, but the - I mean windows and door frames have to go in at the frame stage. And they should be then protected until the cladding is finished. And then the finish - so in this case, render, and then that’s to ensure that the seals are intact. And then once it’s painted, then there’s beading that goes round to make it - to ensure that it’s water tight. So there’s a stage of things that happen.’

94. Dr Cunniffe concluded that the rendering around the windows probably hadn’t started because the trades had not protected the glass from the sand and cement that was associated with rendering. I would also add that an “x” was placed against “Windows & glazing – Duplex” in the revised schedule 11 indicating as at 16 August 2019 that such element of stage 6 the “Lock up” stage had not been completed. I am not persuaded that at July 2020 the lock up stage had been completed because based on Dr Cunniffe’s evidence the glazing had not been completed. There is also the fact that I do not accept exhibit D as evidence that every window and glazed door referred to in drawing 14, the Windows and Door Schedule, had been supplied and fully installed as at July 2020. I find that to reach such a conclusion based on exhibit D alone would be conjecture as referred to in Commissioner for Fair Trading v Aboukalam.

95. In addition, I decline to find that the photographs in exhibit C demonstrate objectively that the builder was still responsible for the works in February 2021 because there was no other reasonable explanation for the builder’s banner remaining on site. What is shown in the photographs cannot support such a finding. I find that apart from the photo of the builder’s banner on site in February 2021, the owners have not referred to any other facts which make it reasonably probable that the builder was still responsible for the works in February 2021. While it is possible to find that at February 2021 exhibit C is persuasive evidence of internal ceiling and wall linings and internal painting having been carried out in 220A and B, I decline to find on the basis of exhibit C alone that such building work was not undertaken until after lock up (as it requires the property to be water tight). The photographs in exhibit C cannot possibly sustain such a finding. Nor is it possible to draw such an inference from the photographs in exhibit C. What the owners suggest in that regard is in my view conjecture. I find that the photographs in exhibit C cannot form the basis of a finding that at February 2021 the works as carried out equated to stage 10 of the revised schedule of works.

96. To make such a finding would be contrary to the authorities referred to in X-Build Construction Services Pty Ltd v O’Rourke as extracted above.

97. The builder’s Points of Defence assert that the contract dated 19 October 2018 with the developer was terminated on or about 5 November 2020. I find that there is no documentary or other evidence which establishes that the contract was terminated on or about 5 November 2020.

215. The owners’ submissions in reply is much the same as were made in connection with the Master bedroom en-suite in the 220A claim as referred to at [151 - 152]. This submission is rejected for the same reasons as were previously provided. It follows that this item of claim is rejected.

Screw fittings not removed between kick board and robe cabinetry

219. Mr Irvine says very little about this item in Appendix A2 of his report. There are no references to photographs. Dr Cunniffe has taken a photograph of this defect at 8.30.3 of his report. There are 2 screws involved.

220. Defects as trivial as this ought not be brought before the Tribunal. This item of claim is rejected.

Ground floor entry floating floorboards not installed in accordance with manufacturers requirements

221. Mr Irvine stated that the ground floor entry floating floor boards were not installed in accordance with the manufacturer’s requirement. He stated that floating floor boards where glue fixed were not fixed in accordance with the manufacturers requirements. The references to photographs that he provided by reference to Schedule E3 were incorrect. Dr Cunniffe agreed that the floating floorboards to the front of the property had been glued down and recommended that the relevant section of the floating floor boards be removed and installed as per the manufacturer’s installation guide. Mr Irvine has not attached the manufacturer’s installation guide to his report.

222. Counsel for the Builder states that there is no evidence that the builder carried out these works which it is submitted formed part of Stage 10, as referred to in Schedule 11.

223. The owners submit that there were no documents produced under the summons directed to the developer to support the builder’s contention that the developer carried out these works. As observed earlier in the reasons submissions of this nature tend to reverse the onus of proof. As also stated earlier in these reasons, the onus is on the owners to establish that the builder carried out this work. I find that there is no evidence at all that the builder carried out the flooring work, and that it is likely that this work was included in either stage. 8 or 10 of Schedule 11. In that regard stage 10 refers to “Floor finishes”.

224. For these reasons I reject this item of claim.

Bedroom 1 skirting board frameworks not detailed to remove obstructions and undulations in finishes. Weld plate protrudes outside the frame’s bottom plate.

225. The builder accepts liability for this item of the 220B claim.

Roof sheets damaged during construction and or remedial works

226. For the reasons provided for the same item of claim raised in connection with 220A, the owners are successful in connection with this item of claim.

Section 48MA of the HBA

227. I am required to consider s48MA of the HBA which states:

A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.

228. The builder does not press for an order which gives effect to s48MA. It states that it does not oppose a money order. I will therefore make a money order to reflect the extent to which the owners of 220A and B were successful.

220A money order

229. The owner of 220A was successful in the following claims:

1. Second floor balcony capping;

2. Bedroom 1 structural steel base plate fixed to interior of room; and

3. Roof sheets damaged during construction or remedial works.

230. The owner of 220B was successful in the following claims:

1. Second floor balcony capping;

2. Rust stain to rear floor tiles;

3. Bedroom 1 structural steel base plate fixed to interior of room; and

4. Roof sheets damaged during construction or remedial works.

Quantum

231. The owners’ solicitors obtained a quotation from easyTrades which they then used to complete a scott schedule which is in evidence in exhibits A and B. The owners’ expert Mr Irvine prepared cost estimates, which are explained at Section 9 of his report. He stated that the rates provided in Appendixs A1, A2 and B1 and B2 to his report were based on the rates provided in Rawlinson’s Construction Cost Guide 2024. Appendix B2 of his report was a schedule of rectification for 220A. It was a an itemised priced make up of the rectification he considered to be appropriate. Appendix B1 of his report was a schedule of rectification for 220B. I prefer Mr Irvine’s detailed estimate of the cost of rectification to the scott schedules prepared by the owners based on the easyTrades quotation which is not broken down into component prices.

232. In Appendix B1 and Appendix B2 Mr Irvine allowed for a contingency of 10%, for preliminaries of 15% and a contractor’s margin of 20%. Counsel for the builder submitted that given the limited nature of the work that the builder was responsible for rectifying there was no need for a contingency or preliminaries. I find that a contingency should be allowed to accommodate material increases and increases in labour costs. I agree that an allowance for preliminaries is not warranted given the small number of items that the owners have been successful on. Dr Cunniffe described what preliminaries address in his report. I find that based on that description of preliminaries they have no application in the outcome that I have found. Otherwise, I will accept Mr Irvine’s assessment of the rectification costs for 220A and B where there has been a finding in favour of the owners.

233. The estimated cost of rectification for 220A was as follows. The amount estimated by Mr Irvine for second floor balcony capping was a total of $940.00 made up as follows:

1. Labour $498 00;

2. Sundries, $60.00;

3. Paint affected walls. $332.00; and

4. Sundries (Paint) $50.

234. The builder concedes a sub total of $631.00 for the item structural steel base plate fixed to the interior of the room.

235. The amount estimated by Mr Irvine for Roof sheets damaged during construction or remedial works was a total of $1,534.00 made up as follows:

1. Remove ridge cap along to 220B and 4 damaged roof sheets east pitch, $249.00;

2. Replace 4 X damaged roof sheets east pitch $249.00;

3. Reinstall existing ridge, $83.00;

4. Touch up marks, remove sealant $83.00; and

5. Sundries $870.00.

236. The total amount found in favour of the owner of 220A is $3,002.00.

220B

237. The estimated cost of rectification for 220B was as follows.

238. The amount estimated by Mr Irvine for second floor balcony capping was a total of $558.00 made up as follows:

1. Remove capping    $166.00

2. Fit capping    $166.00;

3. Paint affected walls. $166.00; and

4. Sundries   $60.00

239. Mr Irvine did not provide an estimate of the rectification cost for the rust stain to rear floor tiles. The scott schedule in exhibit A which was prepared by the owner of 220B based on the Easytrades quotation does not break the miscellaneous items down with the result that the rectification cost of this item is not specifically priced. Mr Cunniffe stated:

“Allow for the affected area to be professionally cleaned and made good.”

240. Given that this is a minor item and the owners have not provided an estimate, I will allow $180.00 for the cleaning as estimated by Mr Cunniffe at page 103 of exhibit 1.

241. The amount estimated by Mr Irvine for Bedroom 1 structural steel base plate fixed to interior of room was a total of $631.00 made up as follows:

1. Carpenter $249.00;

2. Welder $83.00;

3. Plasterboard repair $83.00;

4. Painter $166.00; and

5. Sundries $50.00.

242. The amount estimated by Mr Irvine for roof sheets damaged during construction was a total of $1,534.00 made up as follows:

1. Remove Ridge cap on 220B   $249.00;

2. Replace 4 damaged roof sheets east pitch $249.00;

3. Reinstall existing ridge   $83.00;

4. Touch up marks, remove sealant   $83.00; and

5. Sundries   $870.00.

243. The total amount found in favour of the owner of 220B is $2,903.00.

Contingency, preliminaries and profit

244. The experts allow allowances for these items in their respective assessment of the cost of rectifying defects. While they agree on a contingency of 10% they do not agree on profit. Mr Irvine allows for a margin of 20%. Dr Cunniffe allows for a 25% margin. I will allow the higher margin. Then GST must be added.

Final calculations

245. The amount found in favour of the owner of 220A was $3,002.00 x 10% contingency = $3,302.20 x 25% profit = $4,127.50 + GST = $4,540.25.

246. The amount found in favour of the owner of 220B was $2,903.00 x 10% contingency = $3,193.30 x 25% profit = $3,991.62 + GST = $4,390.78.

Costs

247. In the event that a party is minded to make an application for costs, such application must be lodged in the Tribunal and served on/given to the costs respondent within 14 days of the date of the orders in these proceedings either attaching or referring to the documents relied upon in support of the application.

248. The costs respondent will have 14 days after the date it receives the application to lodge in the Tribunal and serve on/give to the costs applicant its submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.

249. The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.

250. Subject to the parties’ submissions, the Tribunal will determine any costs application made on the basis of the submissions and papers filed in the Tribunal.

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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: 10 October 2025