Hanna v Kersten; Kersten v Hanna

[2019] NSWCATCD 26

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Hanna v Kersten; Kersten v Hanna [2019] NSWCATCD 26

Hearing dates:

15 and 16 November 2018 with written submissions by 21 December 2018 and 29 January 2019

Date of orders:

12 March 2019

Decision date:

12 March 2019

Jurisdiction:

Consumer and Commercial Division

Before:

G K Burton SC, FCI Arb, Senior Member

Decision:

1. Order that Thomas Peter Kersten t/as Castleridge Constructions and Anthony Lawrence Kersten pay Alice Hanna, $106,829.90 on or before 12 April 2019.

 

2. Note the provisional view of the Tribunal that the respondents are to pay the applicant's costs of the proceedings on the ordinary basis.

 

3. Note the parties' agreement at hearing that they do not wish a further hearing on costs and that costs can, if the provisional view of the Tribunal on costs is contested, be determined on the papers.

 

4. Order the parties to notify the Tribunal on or before 19 March 2019 if they contest the provisional view of the Tribunal on costs.

 

5. Order as follows if either party indicates in accord with order 4 that the provisional view of the Tribunal on costs is contested:

 

(1) Written submissions in chief and any further evidence on costs in chief is to be lodged with the Tribunal and served on the other party on or before 2 April 2019.

 (2) Written submissions in reply and any further evidence on costs in reply is to be lodged with the Tribunal and served on the other party on or before 16 April 2019.

Catchwords:

Home Building - licence in one partner - identity of builder - misleading conduct - recovery of GST - jurisdiction - implied terms - statutory warranties - principles governing work order or money order - proportionality - quantum meruit - just and equitable where no insurance

Legislation Cited:

A New Tax System (Goods and Services Tax) Act 1999 (Cth)
Civil and Administrative Tribunal Act 2013 (NSW)
Civil and Administrative Tribunal Rules 2013 (NSW)
Environmental Planning and Assessment (Compliance with NCC and insurance requirements under the HBA) Regulation 2000 (NSW)
Environmental Planning and Assessment (Planning) Regulation 2000 (NSW)
Fair Trading Act 1987 (NSW)
Home Building Act 1989 (NSW)
Home Building Regulation 2014 (NSW)
Partnership Act 1892 (NSW)

Cases Cited:

A-G (NSW) v Gatsby [2018] NSWCA 254
Barwick v Shetab [2017] NSWCATAP 127
Bellgrove v Eldridge (1954) 90 CLR 613
Blessed Sydney Constructions PL v Vasudevan [2018] NSWCATAP 98
BNT Constructions PL v Allen [2017] NSWCATAP 186
Bonita v Shen [2016] NSWCATAP 159
BP Refinery (Westernport) PL v Hastings SC (1977) 180 CLR 266
Brennan Constructions PL v Davison [2018] NSWCATAP 210
Brewarrina Shire Council v Beckhaus Civil PL [2005] NSWCA 248
Brooks v Gannon Constructions PL [2017] NSWCATCD 12
Catapult Constructions PL v Denison [2018] NSWCATAP 158
Clements v Murphy [2018] NSWCATAP 152
Codelfa Construction PL v SRA NSW (1982) 149 CLR 337
David Securities PL v CBA (1992) 175 CLR 353
Eddie Lau Constructions PL v Transdevelopment Enterprise PL [2004] NSWSC 273
Felton v Mulligan (1971) 124 CLR 367
Galdona v Peacock [2017] NSWCATAP 64
Jenkinson v Chaw [2015] NSWCATAP 127
Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45
Jones v Dunkel (1959) 101 CLR 298
Kumar v Sabharwal [2017] NSWCATAP 200
Latoudis v Casey (1990) 170 CLR 534
Little v J&K Homes PL [2017] NSWCATAP 84
Macquarie International Health Clinic PL v SSWAHS [2010] NSWCA 268
Maiolo v Chiarelli [2016] NSWCATAP 81
Marr v JCK Building Solutions PL [2018] NCATCD 4 December 2018
Masters Home Improvement Aust PL v North East Solutions PL [2017] VSCA 88
Mineralogy PL v Sino Iron PL [No 16] [2017] WASC 340
Oppidan Homes PL v Yang [2017] NSWCATAP 67
Oshlack v Richmond River Council (1998) 193 CLR 72
Pastrovic & Co PL v Farrington [2011] NSWDC 94
Renard Constructions (ME) PL v Min Public Works (1992) 26 NSWLR 234
Roxborough v Rothmans of Pall Mall Ltd (2001) 208 CLR 516, [2001] HCA 68
Secured Income Real Estate PL v St Martins Property Investments PL (1979) 144 CLR 596
Tabcorp Holdings Ltd v Bowen Investments PL (2009) 236 CLR 272, [2009] HCA 8
The Craftsmen Restoration and Renovations v Thomas Boland [2008] NSWSC 660
Thompson v Chapman [2016] NSWCATAP 6
United Group Rail Services Ltd v Railcorp NSW (2009) 74 NSWLR 618
Vella v Mir [2019] NSWCATAP 28
Walker Group Constructions PL v Tzaneros Investments PL [2017] NSWCA 27 at [186];
Zistis v Zistis [2018] NSWSC 722

Category:

Principal judgment

Parties:

Alice Hanna (Applicant and Cross-respondent)
Thomas Peter Kersten t/as Castleridge Constructions and Anthony Lawrence Kersten (Respondents and Cross-applicants)

Representation:

Counsel:
M Atkinson, Solicitor (Applicant)
T O Bland (Respondents)

  Solicitors:
Michael Atkinson & Associates, Solicitors (Applicant)
Tonkin Drysdale Partners, Lawyers (Respondents)

File Number(s):

HB 17/45942 and HB 18/22227

Publication restriction:

Nil

REasons For Decision

Background, procedural history, agreed facts

1. The applicant owns the residential premises in Mt Colah, NSW the subject of these proceedings. There was a written building contract entered into on about 10 May 2016 for a contract sum of $65,000 (reflecting prior quotation on about 6 May 2016) in respect of kitchen replacement and rear extension.

2. Who comprised the individuals that were "the builder" under that contract is one of the issues in the proceedings. The owner says it was both respondents; the respondents appear to say, at least for resisting liability being attracted to the second respondent, that it was only the first respondent. The first respondent is one of the sons of the second respondent.

3. There was a written contract variation on about 1 July 2016 for $3,390 to include supply, installation, surface preparation and painting of a French double door set opening onto the existing north side deck. On about 20 July 2016 there was a further variation to include additional electrical, plumbing and insulation works for $2,258. On about 2 July 2016 the parties agreed to reimburse the home owner for appliances she had purchased in the amount of $2,000. The total contract price was therefore $68,748. The contract price, the variations and the refund were all inclusive of GST.

4. The proceedings began in the Local Court of NSW on 21 August 2017 when the owner, self-represented, filed a statement of claim for a refund of the $62,248 (including GST) that she had paid to that point plus interest and filing and service fees, totalling $65,999.64. A defence was filed on 21 September 2017. It said that the respondents were sub-contractors to the home owner as owner/builder/principal contractor and put in issue the alleged defective work in the statement of claim, including by saying that some matters arose from the owners’ instructions or choices.

5. The respondents also filed a cross-claim on 21 September 2017 for an amount totalling $7,762.43 being the unpaid 10% of contract price on completion plus interest, costs and solicitors’ fees. I shall continue to call the parties who filed the cross-claim "the respondents" because of the contention about who was the builder.

6. In her defence to cross-claim filed 4 October 2017 the owner admitted the contract price and variation but said the contract time was 6-8 weeks and the job was still not finished after 5.5 months. The owner denied liability to pay anything further as the work was defective and never completed, cost of rectification and completion exceeded the amount withheld and there had been no proper demand for the remaining 10%.

7. The proceedings were transferred to the Tribunal on 20 October 2017.

8. There was delay in preparation of the matter for hearing after the initial Tribunal directions hearing on 20 November 2017. The timetable made on that day was extended on the owner’s application on 15 December 2017 and again on 8 January 2018 (with respondents’ consent to second extension and no comment on first extension). A further extension was granted to the owner on 1 February 2018 when the matter had been listed on 29 November 2017 for hearing on 19 February 2018.

9. On 19 February 2018 a further adjournment was granted “for the owner to provide its expert evidence today and to allow the builder to put on his evidence”. The owner was directed to lodge an amended points of claim “addressing s 48MA [of the Home Building Act 1989 (NSW) (HBA)] and how the contract has come to an end”, as the owner alleged the contract had ended on 30 January 2018. The respondents were to raise any quantum meruit claim.

10. Further delay in the owner’s expert providing his report occurred, with a further extension of time at a directions hearing on 14 May 2018 and extension of time for the respondents’ evidence and any evidence in reply on 20 July 2018. A notice of listing dated 21 August 2018 set the matter for a 2 day hearing on 15 and 16 November 2018.

11. Directions for further amended points of claim and defence and final evidence with some extensions of time were made on 21 September 2018. The further amended points of claim arose because the owner said that the second respondent father had previously admitted being a party to the contract along with the first respondent son but now said he was not a contracting party and, accordingly, was to be the subject of a misleading conduct claim.

12. At the hearing on 15 and 16 November 2018 the parties were both legally represented, leave having been granted on 1 February 2018 on the owner’s application and the owner having retained solicitors on 17 January 2018. The parties’ legal representatives had reduced the evidence into a court book which I marked as Ex J2; there were some further individual documents that became separate exhibits as numbered on the Tribunal file record. At the conclusion of the hearing, I made directions for lodgement and exchange of written submissions in chief by 21 December 2018 and lodgement and exchange of written submissions in reply by 29 January 2019. Both parties provided written submissions in chief and in reply, with the respondents' reply submissions the last to be received, on 1 February 2019.

13. Some of the foregoing reflects a statement of agreed facts which I marked as Ex J1 and which was spoken to in brief oral submissions at the end of an extended second hearing day to complete the evidence. Two further statements of agreed fact in that document were: (1) the son was licensed as a carpenter contractor; (2) the father was the registered holder of the business name that had been registered on 19 February 2016. It was admitted by the son that his carpentry licence expired 16 September 2017 (having been in place prior to that "at all material times"). It was not seriously in contest that the father had not at relevant times held any form of contractor licence. The son's carpentry licence was now renewed as I understood it.

14. It was common ground that neither respondent took out insurance for this project. The reason for that state of affairs, and the form of the contract, was in contention as part of the owner/builder and father's liability issues.

15. It was also not contradicted that at the time of progress payments neither the father nor the son was registered for GST. The significance of that fact was in contention, including that the Tribunal had jurisdiction to deal with it.

16. The owner claimed that the contract was terminated on 30 January 2018 if it had not already been abandoned during 2017, and that the last contact with the builder was 18 November 2016. In the final form of the points of defence dated 26 October 2018 there was no pleading to the allegation that a notice of termination of the 2016 contract was forwarded by the owner to the respondents on 30 January 2018.

17. The evidence established that there was no work done on the site after November 2016 at the latest, no communication (except in respect of the proceedings) after about 18 November 2016 and that the contract works period by late 2016 had been grossly exceeded without a detailed explanation or applications for extension of time with supporting justification or grants of extension of time. There was no pleaded allegation that the owner had by her termination notice repudiated the contract nor that the respondents had elected to affirm the contract.

18. I consider that the owner was justified in issuing the termination letter of 30 January 2018 or in treating the contract as having been abandoned by that time, and that the contract was at an end by 30 January 2018 if not by late 2016 or some point in 2017.

19. Accordingly, there was no need to consider the effect of the contract remaining on foot on either this claim or on any renewal if a work order was granted and then renewal for alleged non-compliance was sought: Brewarrina Shire Council v Beckhaus Civil PL [2005] NSWCA 248; Blessed Sydney Constructions PL v Vasudevan [2018] NSWCATAP 98 and authority discussed therein.

20. The owner's claim for breach of the statutory warranties was brought within time (whatever the character of the defects or the state of completion of the work) under HBA s 18E.

Parties' claims at hearing and resolution of some claims

21. The owner's claim was summarised in written submissions as: (a) damages for incomplete and defective work totalling $92,669.54 founded on the owner's expert's report and the outcomes in a conclave report; (b) a refund of GST paid to the builder of $5,658.91 as it was said not to have been remitted to the Australian Taxation Office (ATO) by the builder; (c) accommodation and removalist's fees totalling $17,122.16.

22. The owner's claim for accommodation and removalist expenses was not the subject of an express pleading in the final points of claim (titled second further amended points of claim and lodged 27 September 2018) but was the subject of uncontradicted evidence. It was contested in submissions as not justified if the respondents' expert's version of remediation was accepted.

23. Unlike the original pleading, there was no separate or alternative claim for a refund of the amount paid under the contract net of GST, only a refund of the GST component.

24. The owner's claim was put as for breach of the statutory warranties in HBA s 18B and also as implied warranties with similar content. The statutory preference in HBA s 48MA for a work order was said to be displaced in favour of a money order on the grounds: "complete" breakdown of relationship; failure to acknowledge defective work and reservation about ability to rectify; restricted licence; inability to obtain proper insurance.

25. The final points of claim, as foreshadowed when the amendment was sought and as described in the procedural history above, added a claim to the effect that the father was liable for the same claimed losses (under s 236 of the Australian Consumer Law (ACL)) for misleading conduct in trade or commerce under ACL s 18 as the damages for breach of contract and its implied or statutory warranties. The alleged misleading conduct was: representing that the business conducted under the business name registered to the father was a licensed builder, being a father and son carpentry business, with the son's licence, that the business specialised in renovations and extensions which required a higher level of quality workmanship and that all works would be in accord with the Building Code of Australia (BCA). The owner was alleged to have entered into the 2016 contract in reliance on that conduct. The same claimed loss for "rectification of defective work", rather than a refund, was pleaded. Reference was made inferentially to the ACL being part of the law of NSW, which it is under s 28 of the Fair Trading Act 1987 (NSW) (FTA). The Tribunal has clear jurisdiction to deal with such a matter arising under State law: Jenkinson v Chaw [2015] NSWCATAP 127.

26. The respondents' points of defence dated 26 October 2018 said that work in the existing sub-floor space was outside the contract scope of works (which meant there was no obligation to "address any asbestos issue"), denied defective work or breach of implied warranty and denied implication of warranties "as they are legislated by [HBA s 18B]". In so far as defective work was found, the respondents said that an order under HBA s 48MA was the appropriate remedy, not monetary compensation, because the son could do all the work required to be rectified except the roof (which he offered to pay for as mentioned below), denied a complete breakdown of relationship and said the other matters raised by the owner were irrelevant.

27. In relation to the claim for defective roofing, the respondents said that the son orally told the owner that the pitch of the roof was too low and the type of roofing the owner stipulated, being colour bond, was not suitable but was instructed to use it anyway. The respondents also said that any roofing remediation was beyond the son's licence and expressed a willingness to pay an amount equal to the amount shown in the respondents' expert report which was about half the owner's expert's costing.

28. The admission that there was no written advice to use the colour bond roofing before the alleged instruction was in legal effect a concession of that amount because a work order under HBA s 48MA could not be made, although the respondents' points of defence did not make the concession. There is authority that HBA s 18F(1)(a) is the only defence based on owner's instructions and must be complied with: Vella v Mir [2019] NSWCATAP 28 at [85]-[87], citing The Craftsmen Restoration and Renovations v Thomas Boland [2008] NSWSC 660 at [95]-[97] and Pastrovic & Co PL v Farrington [2011] NSWDC 94. I respectfully agree with the reasoning and conclusion in that authority. Whether or not (for other reasons) and against whom such money amount is to be awarded are discussed below.

29. The respondents' denial of implied warranties "as they are legislated by [HBA s 18B]" correctly, in my view, accepted that there was no question that the statutory warranties under HBA s 18B applied in favour of the owner, irrespective of the ability or otherwise of the respondents to rely upon and enforce the contract. HBA s 18B implies the warranties by "the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract" into "every contract to do residential building work". There is no issue that the scope of contracted work was residential building work as defined in the HBA and it clearly was such. The final sentence of HBA s 10(1) and HBA s 11 make it express that the rights and remedies under a building contract of the person other than a contractor are not affected by a contractor's inability to enforce the contract for damages or other remedies. The face of the contract itself said "No provisions in this contract can restrict or remove the statutory warranties applying to this contract under the Home Building Act 1989".

30. The alleged implied warranties would therefore fail at least one element of the test in BP Refinery (Westernport) PL v Hastings SC (1977) 180 CLR 266 at 283 as repeated in Codefla Construction PL v SRA NSW (1982) 149 CLR 337 at 346-347, namely, that the term sought to be implied was necessary. I accordingly do not need to consider further the alleged implied warranty issue.

31. The respondents' admission, referred to above, that part of the work in the contract was beyond the son's carpenter's licence meant that there was a contravention of HBA s 4(1) to that extent and, at least to that extent, that the contract could not be enforced by whoever were the contracting parties for the building work contractor, in addition to removing the option of a work order for what was beyond the scope of the son's licence (the roof was admitted as beyond scope, as already said). The points of defence went on to accept, so far as the son was concerned (whom the defence said was the party at risk of liability under the statutory warranties and that the father worked under the son's supervision), that the contract was not enforceable by reason of HBA ss 7 and 10.

21. It is not necessary to decide the scope of correctness of the admission in the preceding paragraph beyond the roofing. This is because the points of defence, correctly in my view, admitted that the contract was not enforceable by the son (or any party to the building contract) by reason of HBA ss 92 and 94. Those provisions require that a contractor to an owner/builder is required to take out insurance for the contracted work, which was not done, with the statutory consequence just stated.

22. The son consequentially sought a quantum meruit of the "proper value of the works" as detailed by the respondents' expert. The respondents said that the quotation of $65,000, which was the contract price, was "indicative only" (as supported by $85,000 being crossed out on the quotation and replaced by $65,000) and that the true amount was that determined by their expert. The points of defence acknowledged that the test in HBA s 94(1A) was required to be met for this claim to succeed, and said it would not be just and equitable to deny the son the value of the works that was not covered by existing payments.

23. The points of defence put in issue who was liable as a contracting party on the statutory warranties, in a manner that will be discussed separately below. At the outset though, it is clear from the preceding admissions that the identity of the builder, and associated liability questions, are relevant only to who is liable to the owner for net amounts found to be owing to her.

24. The points of defence denied the alleged misleading conduct and other elements of the misleading conduct claim.

25. The points of defence denied that the Tribunal has jurisdiction to determine the owner's claim to recover GST paid but otherwise said that the respondents "do not plead" to the relevant paragraphs.

26. Linked to the preceding denials, the points of defence alleged that the owner was an owner/builder, that the respondents contracted with the owner as sub-contractors and that in such role the son would "engage" on behalf of the owner trades for which the son was not licensed to do the work, pay them and recoup those payments in progress payments from the owner.

27. The slightly earlier amended points of cross-claim dated 17 August 2018 essentially repeated the matters in the preceding paragraph but with the focus on the son as the contracting party. To the basis for a quantum meruit was added that the owner encouraged and requested an undervaluing in the contract of the works, so the respondent should not be capped by the contract price. The claim for the balance of the contract price was present although presumably one reads that in light of the concessions already mentioned in the later final points of defence dated 26 October 2018. The allegations were denied by the owner.

28. In light of the findings I have made in the course of setting out the contentions in the pleadings, the following matters remain to be determined:

1. (1) Is the owner entitled to recover the GST?

2. (2) Who were the contracting parties, who is liable for any breach of the statutory warranties and is the owner an owner/builder?

3. (3) Is the father liable for misleading conduct and what would be the appropriate measure of loss if he is?

4. (4) What breaches of statutory warranty have been established?

5. (5) For breaches established, is a work or money order appropriate?

6. (6) To the extent that a money order is appropriate, for how much?

7. (7) Is it "just and equitable" under HBA s 94(1A) for the son to claim in quantum meruit and, if so, for how much?

GST recovery

40. The submissions that the Tribunal had no jurisdiction were not developed with full argument or reference to authority. It is however clear that the Tribunal is not a court of the State, irrespective of a State court's jurisdiction to deal with matters arising under the GST legislation: A-G (NSW) v Gatsby [2018] NSWCA 254; Zistis v Zistis [2018] NSWSC 722.

41. That of itself does not place the current claim beyond jurisdiction. It would be beyond jurisdiction if the claim was a matter arising under a law made by the Commonwealth Parliament.

42. However, the claim is not of that character. Rather, the claim is one in quasi-contract or restitution under the general law. Its resolution may involve in the course of its determination issues concerning interpretation of the incidence and operation of the GST legislation, but that does not mean that the controversy to be quelled is one where the restitutionary rights, liabilities and obligations to be determined owe their existence to the Commonwealth law or require Commonwealth law for their enforcement: Felton v Mulligan (1971) 124 CLR 367 at 374.

43. Here the known facts from the positive evidence are: the respondents charged the owner GST for the supply of building services and were paid that GST; the respondents were not registered for GST at relevant times. The respondents have not asserted, in response to the owner's claim in the proceedings for a refund, that the owner knew they were not registered for GST.

44. It is also known that, in response to the owner's claim in the proceedings for a refund because they were not registered at relevant times for GST, the respondents have simply said that they had paid what they had to pay according to their accountant but did not know if that included paying or accounting to the Australian Taxation Office (ATO) in respect of GST they had collected including from the owner.

45. It is also known that the respondents did not provide evidence from their accountant and did not put into evidence business activity statements, invoices, payment records and other accounting material which was in their possession, custody or control (either directly or with their accountant) that would show what happened to the GST paid by the owner, what input tax credits were claimed by the respondent on materials that were then supplied as part of the owner's job, and whether there was any differential treatment of GST charged to the owner in respect of materials, labour and services.

46. Whether or not the respondents were required to be registered for GST is not known, again because documents within the respondents' possession, custody or control were not placed by them into evidence: A New Tax System (Goods and Services Tax) Act 1999 (Cth) ss 9-5, 9-40, 23-5, 23-15, Pt 6-2 Divs 184, 188.

47. The collection of the GST from the owner raises an inference that from the owner's standpoint the respondents were liable for a taxable supply and required to on-pay the GST paid by the owner to the ATO or account for its payment (as part of their overall GST obligations) but had not performed the obligation because they had not registered to create the mechanism to do so. Performance of the inferred obligation to on-pay was the quid pro quo for the owner paying the GST.

48. In that circumstance, there was an evidential onus on the respondents to show that they had in fact paid the GST to the ATO or accounted for its payment, beyond mere assertion, in order to rebut the inference.

49. In the absence of such proof, there is no basis for concluding that the respondents have "paid on" the GST. In those circumstances, there has been a total failure of separable consideration for the owner's payment of the GST amount and the owner is entitled to recover the amount of such GST payment: compare Roxborough v Rothmans of Pall Mall Ltd (2001) 208 CLR 516, [2001] HCA 68 at [13] et seq, [101] et seq and [194]-[199]; and see David Securities PL v CBA (1992) 175 CLR 353 at 383-384. Here the total failure of consideration is not from the absence of liability to pay the ATO but, rather, in non-performance of the obligation to pay on to the ATO.

50. The absence of such proof when it was available to the respondents from a person (the accountant) or documents within the respondents' control enables the inference to be drawn that the evidence not called or tendered would not have assisted the respondents' case. This is a permissible use of such absence because the owners do not need in the relevant matters the absence of evidence as positive evidence in the owners’ favour, only the absence of contradiction to reinforce the positive evidence, and inferences therefrom, in favour of the relevant findings contended for by the owners, as I have just described: Jones v Dunkel (1959) 101 CLR 298 esp at 312. This provides reinforcement for the conclusion reached as described in preceding paragraphs, but that conclusion is reached without need to resort to the inference validated in Jones v Dunkel.

Who were the contracting parties and liable on the statutory warranties? Is there an owner/builder?

51. The final form of the points of defence does not in fact deny that the contract was with both the son and the father, even if the contentions in the earlier-lodged amended cross-claim focus on the son as the contracting party (although the father remains a cross-claimant). This is made clear by the pleading in the final form of the points of defence that the owner's alleged representation (contested by the owner) that she was an owner/builder was "a representation as to a matter of fact upon which [son] as a licenced [sic] carpenter and [father] as a partner in the business relied upon at all times" and again that "[son] and [father] as a partnership were being retained as sub-contractors to [owner] as an owner builder".

52. Further, the second paragraph of the quotation dated 6 May 2016 said "As discussed, my sons [named] and I are a Father and Sons carpentry business that specialise in renovations and extensions that require a higher level of quality workmanship and client satisfaction whilst remaining price competitive due to our low overhead structure". The father and the son's witness statements both referred to their being in business under the name Castleridge Constructions.

53. Rather, what appears to be alleged is that, because the son was the only licence-holder, the son was the only one liable for breach of statutory warranty for any defective work and the only one entitled to claim a quantum meruit if permitted by HBA s 94(1A).

54. Whether or not the father worked under the son's supervision, as alleged in the points of defence, is irrelevant to this issue of liability if the father in fact is a contracting party. The question is the persons liable under the statutory warranties as a matter of contract and statute.

55. The respondents' contention is in effect that one can be a contracting party but not liable on warranties compulsorily implied by statute into that contract. As a matter of logic, principle and policy this cannot be the case. If it was, every person in a building partnership that entered into a building contract would be able to escape liability except for the actual licence holder or a person who ought to hold a licence.

56. It is also not the case on the wording of the HBA. HBA s 18B refers to the warranties being by "the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract". HBA s 4(1) makes it clear that a person contracting must be "as or on behalf of an individual, partnership or corporation that is the holder of a contractor licence authorising its holder to contract to do that work".

57. A partnership is not in itself a legal entity, unlike the other two categories of individual or corporation in HBA s 4(1). A partner contracts as agent of the partnership and has authority to bind the partners within the scope of the partnership business, absent unusual provisions known to the other contracting party: Partnership Act 1892 (NSW) ss 5(1), 6(1). Accordingly, the signature of the son on the contract bound his father as a member of the partnership when the son, admitted on the final points of defence described above, signed the contract "as or on behalf of [a] … partnership" as stated in HBA s 4(1). Partners are jointly and separately liable for debts and obligations of the partnership: Partnership Act s 9.

58. Further, the wording of HBA s 4(1) makes it clear that the person who actually signs the contract on behalf of a partnership contracting does not have to hold the licence personally, although (as here) he may. Rather, that person must be contracting "as or on behalf of [a] … partnership … that is the holder of a contractor licence authorising its holder to contract to do" the contracted work. In other words, it is the partnership that must hold the contractor licence. A partnership can only hold property by one of its partners, but that property is then held as partnership property for the partnership, not the partner personally: Partnership Act s 8.

59. Once it is recognised that the contractor licence relevant to the contract scope is held for the contracting partnership, then the person referred to in s 18B who holds the contractor licence or is required to hold a contractor licence is the partnership being all of its members.

60. HBA s 4(1) resonates on the above interpretation with HBA s 7(1) which requires a contract to be in writing and signed "by or on behalf of each of the parties to it". HBA s 7(2)(a) with (6) and (7) makes it clear that the holder of the contractor licence must be clearly included in the names of the parties but that there may be other parties to the contract whose names must be in the contract.

61. In this case, the final points of defence, as said earlier, stated that the contract was made with the partnership of son and father, using the son's carpentry licence as partnership property. Accordingly, the father is liable for any found breach of the statutory warranty in respect of work done in performance of the contract, as much as the son, because as a partner entitled to the benefit of the licence to enter into the contract the father is as much a holder of the licence, or a person required to hold the appropriate licence, as the son.

62. The form of the pleading that leads to the conclusion is consistent with the owner's version in evidence of contested conversations prior to entry into the contract that the quotation and contract were with the partnership of father and son trading as Castleridge Constructions. Her uncontested affidavit evidence was that she telephoned "a representative of Castleridge Constructions" in April 2016 about replacing the back deck.

63. The later witness statements of the son, the father and a further son did not really gainsay this evidence. Rather, they were directed to saying that nothing was said to the owner that could lead her to believe that the business of Castleridge Constructions was a licensed builder or that Castleridge Constructions held the son's licence. The first component of that evidence is contradicted by the documents mentioned in preceding paragraphs, particularly the quotation. For reasons already explained, who held the licence for the partnership does not matter.

64. It also is consistent with the statement, set out in full above, in the collective ("we") in the quotation and with the context for those statements being use of the business name Castleridge Constructions that was owned by the father. "Castleridge Constructions" was the letterhead of the quotation and one reproduction of it at the end of the quotation had both father and son's names and mobile phone numbers as part of it. It is clear that the business name was held by the father as partnership property.

65. As stated earlier, the specifications and scope of contract works were expressed on the face of the contract to be "as per our quotation dated and issued 6/5/2016". The bank account details on the face of the contract were for the partnership.

66. It is also consistent with invoices issued to the business name by the electrical contractor (Ex B1).

67. Accordingly, I find that the partnership of both son and father contracted with the owner and both son and father are liable for any breach of statutory warranties, and also able to participate in any quantum meruit claim permitted under HBA s 94(1A).

68. Although the respondents sought to tie the owner/builder issue to the identity issue, the owner/builder allegation is strictly irrelevant to that issue and to the defects claim.

69. The respondents' points of defence, having said that they relied upon the alleged owner/builder representation set out above, do not expressly say how they relied upon it to found the estoppel against the owner that they assert.

70. If implicitly they relied on it for the matters set out in the sub-paragraphs of the points of defence at the same point in the pleading, it is not clear how the two are connected. Thus, the immediately following sub-paragraph says that the son and father were retained as a partnership which does not assist the respondents' case as already discussed.

71. The next sub-paragraph says that owner builders were at that time unable to insure the works as a contractor. That I doubt is correct, in the absence of any relevant amendment to HBA ss 92 and 94 being pointed to that post-dated the contract and nothing else being pointed to as support. Even if it was correct, there is no logical connection between that situation and what is said in the subsequent sub-paragraphs (after the estoppel assertion) that the son as a licensed carpenter would engage trades beyond his licence on behalf of the owner, pay them and recoup under the contract progress payments.

72. None of those consequences logically flows from the owner/builder proposition. An owner/builder would be able to rely upon the sub-contractor's insurance for the work those sub-contractors did irrespective of whether they were engaged directly by the owner/builder or by a head sub-contractor. An owner/builder would still have an "insurance gap" for work not done by sub-contractors irrespective of the means of engagement.

73. Finally, the asserted proposition bears no resemblance to the contract signed with the owner or to the quotation. Rather, it and in particular the second variation for electrical work looks like a standard head contractor arrangement with the owner and that head contractor bringing in sub-contractors. This is also consistent with the head contractor having a restricted licence. There was no document that said the owner was an owner/builder.

74. The points of cross-claim in addition said that in reliance upon the alleged owner/builder representation the son entered into the wrong type of building contract that did not comply with HBA s 7 "as subcontractors are not bound by section 7". It is not made clear how subcontractors are not bound by HBA s 7 when the only relevant restriction in s 7 for its application, for contracts after 1 March 2015, is that the contract price exceeds $20,000, which it does in the present contract: Home Building Regulation 2014 (NSW) reg 5(1)(b). HBA s 7(8) does not apply because an owner/builder does not have to take out a contractor licence.

75. I have focused on the pleading to make the above points because it is the clearest exposition of the case theory behind the owner/builder allegation and contains the clearest admissions.

76. However, my conclusions on the evidence reviewed in the next section of these reasons is consistent with the foregoing conclusion.

Alleged misleading conduct and its consequences

77. Given my preceding findings, this aspect does not need to be determined. In case the matter goes further, I do so.

78. The allegation depends upon acceptance of the conversations of the owner and her mother before the contract was entered into. I accept that those conversations occurred in the manner testified to by those two persons for the following reasons.

79. First, that the father represented that he was in partnership with the son is consistent with the matters I have examined under the preceding heading about contracting parties.

80. Secondly, the alleged representation is also consistent with the state of the pleadings until a late pleading in August 2018 by the father sought to divorce himself from liability under the statutory or implied warranties.

77. Thirdly, the respondents' denial depended upon oral evidence of the father and son corroborated by another son. It became clear during that other son's evidence that his witness statement had been prepared by or at least with the assistance of his father after a discussion of their respective recollections. It is therefore of no independent probative assistance. Two versions of the final signed witness statement also emerged, one dated 28 October 2018 and one dated 5 November 2018. While largely consistent in substance with each other, there was no real explanation why there were two versions.

78. Fourthly, the evidence of the owner and her mother, oral and written, was clear, directly to the point and largely consistent. The explanation for why building material was lying around the house (that the owner had cleaned it out from behind the shed) was reasonable. In any event, such a circumstance did not infer on its own that other recent building work had been done, let alone the identity and status of whoever did any such work.

79. In contrast, the father and the son's evidence, particularly its oral testing, did not impress me as clear recollection. Their witness statements were inconsistent on the main issue of what was said about the owner being an owner/builder in the central disputed conversations on 14 April 2016 and 4 May 2016. The location of the conversation was different on 14 April 2016 in the two versions. Further, the son had a second attempt at recollection in a subsequent witness statement on what the owner allegedly said, where the statement aligned more closely with his father's evidence in the father's earlier witness statement.

80. Even more significantly, the father did not mention, in his account of the 4 May 2016 conversation, that the topic of owner/builder was raised at all, whereas the son said it was mentioned twice and in words that sounded like self-serving support: "We can certainly do that under your direction as owner builder"; "Being an owner builder we can work together and do something for $65,000". The reference to owner/builder in each of those alleged conversations does not logically support the context. For the first, the context was the scope of work; in the second the context was the reduction in price for the particular work to be done by the respondents.

81. The son also had a second attempt in a subsequent witness statement about the conversation on 2 May 2016. This fleshed out in line with the pleaded case matters alleged in that conversation which had not been said in the first attempt at setting down the conversation.

82. Second attempts at what must have been known to be central conversations does not add to the probability of occurrence of what was subsequently recalled.

83. The electrician who did work at the property said in his statement said that the owner advised that she was owner building. If the statement was intended to convey that it was said in a meeting on 2 May 2016, being the day that the electrician said the son called him to arrange an onsite meeting, then the recollection is incorrect (if that is what is intended) that the father and son were doing carpentry work on that day because the contract had not even been given to the owner on that day. If it was intended to convey a later date, as he thought was the case in cross-examination by reference to the house not being occupied and being packed up, then no date is specified. The recollection is vaguely expressed and the electrician's invoice was not expressed to be a tax invoice, was prepared at the top of quotation letterhead without its own letterhead and was given to and paid by the partnership, with no reference addressing it to the owner. As previously analysed, that was consistent with the electrician being a sub-contractor to the respondents, as he apparently had been previously on a number of projects. He agreed in cross-examination that he gave no quotation to the owner.

84. The representations were inaccurate because they linked the partnership and its business name and ABN, owned by or attributed to the father, to the son's licence if those matters were later denied and were incorrect. The representations were in trade or commerce.

85. It is consistent with the probabilities that the representations were relied upon by the owner to enter into the contract. She would want to know with whom she was dealing, that if it was more than one person there was a licence, and that the business name and ABN of the business represented the people behind it. As stated earlier, her first contact was by the business name.

86. If the owner had not entered into the contract she would not have the allegedly defective work to deal with. An appropriate measure of loss is the cost of rectifying that work or an order that the person who was responsible rectify the work.

87. The premise of the misleading conduct allegation is, as just stated, that the represented link between the partnership, business name and ABN, licence and father and son were inaccurate because it was denied or in fact was found to be inaccurate. Such represented link was denied by the son and the father, but I have found that represented link to be accurate despite the denial. In that situation, there is no need for the owner to rely upon the alleged misleading conduct because she obtains the same relief under her primary claim for breach of statutory warranty. If I am elsewhere found to be wrong in this finding, then the owner can fall back on this alternative basis for relief.

Work order not appropriate

92. It is useful, as background to the following discussion, to record the principles concerning a work order.

93. A work order is the preferred, not the mandatory, outcome where there is a choice of remedy: Galdona v Peacock [2017] NSWCATAP 64. Personal animosity is not sufficient to displace the primacy of a work order for defective work as required by HBA s 48MA, as the test is objective, but relational breakdown is an element in objective assessment: Brooks v Gannon Constructions PL [2017] NSWCATCD 12 (appeal not affecting s 48MA decision); BNT Constructions PL v Allen [2017] NSWCATAP 186 at [33]-[36]; Kumar v Sabharwal [2017] NSWCATAP 200 at [29]-[30]; Clements v Murphy [2018] NSWCATAP 152; Brennan Constructions PL v Davison [2018] NSWCATAP 210 at [15]-[21].

94. The parties are also under an obligation under Civil and Administrative Tribunal Act 2013 (NSW) (CATA) s 36(3) to co-operate to achieve the guiding principle in CATA s 36(1) which extends to the necessary co-operation, including provision of access, to ensure that work orders can be implemented in an orderly manner: Maiolo v Chiarelli [2016] NSWCATAP 81 at [40]-[46], [55]. This reinforces the express obligation in HBA s 18BA(3)(b), (5).

95. Such a duty to co-operate is congruent with the parties' duties to act with fidelity to the bargain, not deny the other party the benefit of the bargain, and to co-operate by doing what was reasonably necessary to secure performance of the contract: Secured Income Real Estate PL v St Martins Property Investments PL (1979) 144 CLR 596 at 607; and as to good faith, Mineralogy PL v Sino Iron PL [No 16] [2017] WASC 340 at [828]-[831]; Masters Home Improvement Aust PL v North East Solutions PL [2017] VSCA 88 at [99]; Macquarie International Health Clinic PL v SSWAHS [2010] NSWCA 268 at [12]; United Group Rail Services Ltd v Railcorp NSW (2009) 74 NSWLR 618 at [70]-[74], [100], [101].

96. In Little v J&K Homes PL [2017] NSWCATAP 84 at [24] an Appeal Panel of the Tribunal said that, "[i]f a builder wrongfully refuses to complete building work governed by the HBA", the Tribunal had jurisdiction pursuant to s 48O(1)(c)(i) to make a work order to direct the builder to complete specified work. The wording of the statutory provision does not include an additional element of conduct by use of the word "wrongfully". Accordingly, the Appeal Panel must have been referring to where the builder disputes liability for a defect and loses in that dispute or where the builder says it is ready, willing and able to remedy the alleged defect either in the course of completing the project or by acceptance that the work requires remediation after completion of the project.

97. Alternatively, the words used by the Appeal Panel may simply be introductory to or descriptive of the general work that s 48O(1)(c) is intended to do. The discussion in Little at [20]-[28] makes it clear that the Appeal Panel was not intending a restricted scope for s 48O(1)(c) in its analysis. The Appeal Panel considered that the provision, in either or both of its sub-paragraphs, extended to ordering a builder whose licence had lapsed to fulfil contractual obligations by retaining a licensed builder to carry out the completion or remediation work.

98. A narrow or restricted scope would not give effect to the broad words of s 48O. All that is required is for the Tribunal to be determining a "building claim" for the Tribunal to be empowered to make one or more of the permitted orders. "Building claim" is defined, for Part 3A in which s 48O appears, in s 48A(1) to mean (in summary) a claim for payment of money, supply of specified services, relief from payment, delivery, return or replacement of goods or a combination of the foregoing. The focus is on the existence and content of relief sought in the claim.

99. It could be argued that the exercise of the power in s 48O in conjunction with s 48MA is, or should in exercise of discretion be, affected by the conduct of the builder. If, for instance, a builder and an owner had agreed entirely on a schedule of work to be done and the builder was still entitled to the site or was being given reasonable access to the site as part of a resolution of proceedings, that may be a factor in simply noting the builder's undertaking to do the agreed remediation work, much as one would note an undertaking to a court in lieu of making a compulsive specific order, although in some circumstances it may still be appropriate to make a work order in those circumstances.

100. Where there is no such entire agreement - no coalescence between what an owner is prepared to accept and what the builder is prepared voluntarily to undertake - then, even if "wrongful" did have a part to play in the exercise of discretion, there would be a "wrongful refusal to complete building work" if any of the items outside of what the builder was prepared to accept voluntarily was found to be required to be completed after a contested hearing. A work order in the usual course would be required for those items. Usually there would be no obvious benefit to having a work order for some items and no work order for other items in that situation.

101. A work order does not enable the Tribunal in effect to impose on the builder, by that work order, a binding scope of works and/or a different practical completion date or state. In relation to exercise of discretion whether or not to make a work order, the Tribunal would ordinarily take into account whether the contract period for the works had passed, the state of the works, nature of the work compared with what remained to be completed, and the proportionality principles discussed below.

102. A factor in the exercise of discretion to grant a work order is the need to give confidence to both parties about, not only the scope of works complained about in these proceedings that are found to require completion or remediation, but also the time in which they are to be performed and what happens if they are not performed or if there is a dispute over performance, and associated questions such as reasonable access. The guiding principles for work orders that are set out in the cases already cited indicate there may be a benefit in an order, coupled with the necessary order for access, to achieve co-operative endeavour.

103. The making of a work order also fits within the mechanism for renewal of proceedings for any alleged non-compliance provided for in CATA Sch 4 para 8. The right to renew is usually expressly provided for if a party considers a work order or access order has not been properly complied with. The relations between the parties may not have been sufficiently damaged to deny the statutory preference for a work order but may mean that a renewal application to seek relief for alleged non-compliance is a real risk of occurrence. Renewal to seek an alternative order to the work order, such as monetary compensation, necessarily will bring the contract to an end if it has not already ended, as the Appeal Panel made clear in Blessed Sydney Constructions PL v Vasudevan, cited earlier, at [27], [40]-[43], [49]-[53], [58]-[75].

104. In this case the son has expressed that he is ready, willing and able to remediate what is found by the Tribunal to require remediation, apart from the roofing component which he accepts he is not qualified to do and offers money if it is a defect for which he is responsible (the amount offered may or may not be sufficient depending on whether his expert's assessment is upheld). There is no joining in that position by the father, whom I have also found liable for any remediation relief (whatever form that relief takes). There is no offer or other indication that either the father or the son is willing to arrange at their expense for another builder to undertake any remediation work. There is no voluntary offer of remediation, only in relation to what the Tribunal finds father and son are liable to remediate.

105. Further, it is clear on the written and oral evidence that there is a fundamental lack of trust by the owner of the respondents. The contest over whether or not the owner said to the respondents that she was an owner/builder cemented the complete breakdown of relationship. There is a very high likelihood that forcing the parties on each other will produce only further litigation in the form of renewal proceedings about the quality of remediation and the reasonableness of access. Some of the remediation claimed, that I have found in favour of the owner, requires expertise beyond the son's licence. In the circumstances already described, the owner should be allowed the choice of remedial builder.

106. In circumstances, it does not seem appropriate to impose a work order for the relief that I find. The appropriate form of relief is a money order under HBA s 48O(1)(a).

What work was defective and what damages flow

Agreed defects between experts

107. The owner's expert produced a report dated 7 May 2018. Annexure E to that report (pp 164-166) was a spread sheet summary of conclusions which was handed up in expanded form for ease of reading and became MI2. The respondents' expert's report was dated 18 June 2018. The owner's expert produced a reply report dated 7 September 2018 dealing with quantum meruit that had been raised in the respondents' expert's report. The experts conclaved by telephone on 4 October 2018, discussed a draft report based on the Scott schedule and produced a conclave report dated 16 October 2018.

108. The experts did not fully agree on any of the six items and were significantly apart on defect and amount. This is reflected in the total figures of $92,669.54 for the owner's expert and $6,877.76 for the respondents' expert.

109. They agreed item 4 metal roofing was a defect but the respondents' expert was about 50% of the cost of the owner's expert's rectification because of a difference in scope of work and cost methodology.

110. They agreed in part on item 5 external timber joinery and doors but were very significantly apart (by about 90%) on scope and methodology of required remediation.

111. There was very limited agreement on one aspect of item 6 internal joinery installation but that produced only a nominal proportion of the owner's expert's assessment of cost of remediation.

112. They agreed the percentages for preliminaries at 10%, builder’s margin at 20% and remedial contingency at 10%, plus GST at 10%.

113. I shall accordingly make findings on each of the six items taking into account the limited areas of agreement as I examine each.

General structure of reports

114. The owner's expert provided reference to parts of the National Construction Code (NCC) with which the builder was legally required to comply given (in the absence of planning approval) the dates of quotation and contract in 2016: clause 145(1)(b) of the Environmental Planning and Assessment (Planning) Regulation 2000 and reg 98 of the Environmental Planning and Assessment (Compliance with NCC and insurance requirements under the HBA) Regulation 2000 (NSW). The relevant edition of the NCC was 2016 volume 2 adopted in NSW on 1 May 2014. The performance standards were set out in volume 2 section 2 with, where applicable, referenced Australian Standards. The subject dwelling was a class 1a single dwelling under the classification in section 1.3.2 of Part 1.3 of volume 2.

115. The owner's expert provided a detailed scope of works and calculation of cost of remediation. He said "I have considered the nature of the site, the available ground clearances beneath the sub-floor and the issue of the asbestos contamination and I have formed the opinion that a partial or "patch" repair of the works is not possible or practical". He said that he had attempted to minimise duplication of site and establishment costs, which gave an 8 to 12 week period required for the remediation works in which the owner would require to be relocated for health and safety reasons.

116. The owner's expert gave a detailed explanation of his costing methodology. This included why he did not simply adopt Cordell or Rawlinson: "these publications are prepared for the purposes of feasibility studies of the likely cost of new building work, the labour rates and time allowances for various elements assume that the project is being constructed from commencement. … This is confirmed in the introduction sections of each of those publications and reinforced the 'how to use' guides at each section for the apportionment of time and cost and margins for each type of project." After pointing to the notations in Rawlinson that particular circumstances and conditions of the project must be reviewed when using the data, including contract requirements, the owner's expert concluded: "It is my opinion that these publications are therefore not appropriate for remedial building work and therefore cannot be relied upon for remedial building processes. I have therefore adopted adjusted rates, that consistent with the recommendations set out in the published rates guides, would apply to a rectification project with similar complexities to that identified at the subject property." The expert said the methodology he then detailed "is also in accordance with the 'Australian Standard of Measurement of Building Works', the method adopted by the Australian Institute of Quantity Surveyors."

117. The owner's expert was cross-examined on one aspect only of his costing generally, being the allowance in items 3 and 5 (decking and external doors) of 2 hours in each totalling $195 plus add-ons of providing safe access and protection of surrounding elements of building and finishes. He acknowledged the overlap in work area but disagreed there was duplication in costing. Given his opinion (already quoted) that he sought to minimise duplication of site and establishment costs when trying to group items "while at the same time addressing the individual defect" and that such effort was clearly evident in the other items without challenge, and the small amount involved, I am not prepared without more specific basis to say that there was duplication here. While the areas of remediation overlapped they were still discrete.

118. I accept the owner's expert's detailed methodology of costing and apply it to the findings on liability below.

Principles governing remediation

119. Under HBA s 48O(1)(c) the owner is required to specify action by the builder that is grounded in proof by the owner of, not only the defect, but also the manner of remediation: Catapult Constructions PL v Denison [2018] NSWCATAP 158 at [46]-[61] and the authority there cited. In my view as I set out in Marr v JCK Building Solutions PL [2018] NCATCD 4 December 2018 at [46]-[54], an element of the manner of remediation in certain circumstances may inherently require inspection to establish the need for and required scope of remediation, and the nature of the required remediation, if the investigation says it is necessary, is specified in advance so it guides the investigation.

119. In Bellgrove v Eldridge (1954) 90 CLR 613, [1954] HCA 36, the High Court said that the scope of remedial works must not be disproportionate to the defect. The High Court has also stated that there is a high bar for unreasonableness or disproportion once a breach is established: Tabcorp Holdings Ltd v Bowen Investments PL (2009) 236 CLR 272, [2009] HCA 8 at [13]-[20]; see also Walker Group Constructions PL v Tzaneros Investments PL [2017] NSWCA 27 at [186]; Barwick v Shetab [2017] NSWCATAP 127 at [88]. The analysis in the paragraphs in the Tabcorp decision, and the authority there reviewed, also makes it clear in these passages that reinstatement, provided it is not extravagantly disproportionate, is the appropriate measure of relief. Reinstatement means what the builder was obliged to build, namely, contract works with a certain standard of amenity and presentation which includes not being at risk of emergent problems returning or growing. It also means that the form and finish of remediation and rectification produces an outcome that matches other components of the contracted works in form and finish and makes the works of the originally-intended quality and integrity.

Item 1 unbonded asbestos cladding sub-floor

121. The owner's expert said that a builder, given the age of the building and the detailing of fibre-cement sheet which was visible where it was not over-clad by vinyl weatherboards, ought to have looked, on pre-quotation inspection, for evidence of asbestos. The nature of the work required demolition of some of the fibre cement walls. The area of alteration to the existing building was greater than 10 square metres. The indicators just mentioned meant that there should have been properly-qualified assessment and testing. There remained similar material in the sub-floor area. There was a risk that run-off could transmit unbonded asbestos fibres down the slope to the rear of the property into adjoining properties.

122. The owner's expert relied for his opinion on the SafeWork NSW Code of Practice for safe removal of asbestos.

123. The respondent's expert effectively said that allocation of responsibility for such inspection and identification depended upon his instructions that the owner was an owner/builder and responsible.

124. I have already found that the owner was not an owner/builder.

125. The quoted and contracted scope of works provided for modification and construction (including extension in places) of the kitchen, laundry and decking with steps to ground. The quotation became part of the contract. The contract expressly stated on its first page "Specifications and scope as per our quotation dated and issued 6/5/2016".

126. This work necessarily included work in the sub-floor area and on its structures for support of the work above, and disturbance by removal of existing walls made of fibre-cement sheeting. The work was expressly referred to in the quotation (even if some of it was beyond licence) as "All necessary excavation pier holes and brick peering [thus]" and "Demolition and removal off site" of an existing rear concrete ramp, in addition to what was necessarily included by the descriptions "supply and construction of a new floor structure that extends out from the existing kitchen area" and "Supply and construction of new exterior walls to surround the new extension".

127. The timber invoice included 4.8 lm of "90x90 RH treated pine CCA H4 2/2.4" which was consistent with a high level of termite treatment for ground contact; whether sufficiently high is the subject of item 2 below.

128. The son stated that some asbestos was removed to the tip and provided dockets. Why what remained was not removed was not explained apart from the alleged status of the owner as owner/builder.

129. In my view, given the scope of work just described and irrespective of the status of the owner (owner/builder or not), the respondents had an obligation as part of their scope of work to check for asbestos and, if found, have it properly assessed and tested and, if confirmed as containing asbestos, price in its removal. There is no indication that the respondents did so. There is simply the evidence that they removed some of the asbestos only.

130. There was not clear evidence about the location of all the remaining asbestos, that is, whether it was directly where the scope of work required the respondents to investigate the sub-floor and advise on what they had found, or further under the sub-floor which was beyond their scope of works, although the photographic evidence suggested both. The respondents may well, if they had inspected, sighted and prudently and properly drawn to the owner's attention potential asbestos beyond the area of their works, and suggested what action the owner might consider taking. For loose sheeting that potentially contained asbestos within their scope of works, the obligation to have proper assessment and testing, and if necessary removal, remained on them.

131. The owner's expert fairly said (as summarised in the conclave report) that "the identification of asbestos on site would have formed work that would be classified as a variation as the value and extent would not be known without appropriate pre-construction assessment". This would be the fall back position if the asbestos had not been identified pre-contract.

132. On the owner's expert's assessment, the respondents could fairly be criticised for not identifying and properly assessing and testing the scope of a potential issue with asbestos before contract and pricing it in accordingly. Equally, though, on the owner's expert's assessment, inferentially shared by the respondents' expert given his instructions, it was clear that the contract price did not allow for asbestos removal.

133. When one combines the position in the preceding paragraph with the uncertainty how much of the remaining asbestos was within the area being worked on by the respondents, I am left with an absence of proof of how much of what the owner's expert has costed was within the scope of works area and with the concession that if later discovered it would be a variation (even if it should have been part of the contract price because discovered pre-contract) for which the owner would pay.

134. In those circumstances, I consider that the owner has not established that the respondents are liable to reimburse her for the expert's assessment of removal cost of the remaining asbestos at $5,460.

135. In case the matter goes further, I ought to make it clear that I do not accept that what the owner's expert has identified as asbestos ought to have been tested by the owner's expert before his opinion could be accepted. It is clear that there was a risk of asbestos on site because the son said they treated all fibre cement sheeting as asbestos, that is, the type of material gave rise to the risk. The respondents also removed some of the same material. The basis of the owner's expert's opinion was that, given its apparent nature (from the type of material and the age of the building) all the residual material ought to have been properly assessed and tested by the respondents and be treated in the appropriate manner.

Item 2 sub-floor structure

136. The effect of the owner's expert's opinion was substantial reconstruction of the entire deck in order to remediate the defects with the sub-floor structure. He identified the following major defects:

1. (a) H3 treated pine used for the supports in-ground where H5 was the appropriate level for house stumps by reference to the relevant standard including National Construction Code (NCC) Part 1.2.1; H4 was suitable for landscaping in-ground structures such as pergolas, greenhouses and fenceposts.

2. (b) The live floor and roof load required design and certification of the pad footings for the timber supports for the extension by a suitably qualified engineer and there was no evidence of same. There was accordingly no assurance that the size or thickness of the pads or the depth of penetration of the timber posts, in the context of the ground material, was adequate support under NCC section 3.2.5.6.

3. (c) The sub-floor area had been entirely enclosed by weatherboards to ground level. This provided no access for periodic maintenance or repairs or termite inspection and inadequate ventilation (contrary to NCC Part 3.4.1) and separation to prevent timber decay. The weatherboards were not of appropriate treatment level to be in contact with the ground.

4. (d) On removal of the bottom row of weatherboard for sub-floor inspection, the concrete access ramp was discovered and ought to have been removed as part of the scope of works. Further, it had been incorporated into the sub-floor framing support.

5. (e) There was no visible compliant termite barrier.

6. (f) The complete enclosure also would need to be removed to gain access to the concealed drainage overflow relief gully, which was contrary to AS-3500.2 section 4.6 that required access to and clearance around a gully to enable clearance of blockages and to check the seal remained charged so as to prevent escape of sewer odours. The gully required relocation outside the building footprint.

7. (g) The size of the extension may require development consent.

137. Leaving aside costing and necessity for any development consent, which was beyond expertise, the owner's expert assessed the works required to cost $10,309.

138. The owner's expert commented in his report as follows:

The builder, in constructing a footing of unknown depth and detail, using material that is not fit for its intended purpose, has caused a significant increase in the necessary scope of work in order to provide a compliant structure.

Retrospective approval for the works is not able to be obtained as the foundation strata and floor, wall and roof framing, tie-down and connection details relevant to the structural stability and integrity of the building works is not able to be inspected or evaluated.

It will therefore be necessary to carefully deconstruct the structural floor framing work carried out by the builder and to reconstruct the work to compliant building details and to the requirements set out in section 3 of the NCC.

139. The respondents' expert disputed there was inadequate clearance, accepted the respondents' instruction that H4 timber was used for the support posts and said that, while H5 may offer a better protection, H4 was suitable and fit for purpose given the location and lightweight nature of the works from his building experience, although he was not a structural engineer. He said that design and certification were the responsibility of an owner/builder, as was instigation of a termite management programme. He also said that to his inspection there was deterioration or failure in the structure due to inadequate support after being up for about two years. He said the cost of replacing the stumps, if found to be required, would be $2,200 for labour and materials. There was an allowance in the conclave report of $425 for what the respondents' expert recommended, being construction of an under-house access door.

140. The respondents' expert recorded the respondents' assertion through the son at the inspection meeting on 27 July 2018 that the owner was an owner/builder that the owner had orally agreed to leave the ramp. This instruction did not appear in the respondents' evidence and was not put to the owner. There was no written variation on an important matter when written variations were present on other matters. Accordingly, there was no proper basis for it in the expert report. The absence of writing meant that the instructions defence was not available by reason of HBA s 18F(1)(a), as elaborated earlier.

141. The respondents' expert also gave the opinion that the owner had suffered no loss because it was common practice in his experience to leave such ramps. That was irrelevant to liability or quantum when removal of the ramp was a specific part of the scope of works and contract performance and price.

142. Both experts disputed that the other had provided support for their opinion that the support posts were H3 (owner's expert) and H4 (builder's expert). The invoice for timber annexed to the son's most recent witness statement shortly before hearing post-dated the conclave report. It referred to H4 and H2 timber and it was not clear if it was the only invoice for timber or where the timber on it was used. When challenged in concurrent evidence, the owner's expert pointed to the H3 stamp on the support posts.

143. The foregoing evidence supports acceptance of the owner's expert's assessment of the inadequacy of treatment category of the posts, since neither expert supported H3 treatment level for in ground posts. Even if the posts had been H4, I accept that H5 was the required standard as put forward by the owner's expert.

144. If I was wrong on that acceptance, in any event the respondents did not provide brick piers in concrete as required by the quotation which became the contract scope of works. There was no suggestion of variation of that requirement.

145. I also prefer the owner's expert's opinions on the other aspects described above. They were supported by reference to appropriate compliance standards, by the weight of photographic evidence and by the contract scope of works in the case of the ramp that should have been removed and in the case of the required brick piers.

146. There was no documentary evidence that the deck support had been designed or certified appropriately, which would clearly be required for exercise of due care and skill, to ensure compliance with appropriate standards and to ensure reasonable fitness for occupation from at least a safety point of view, as the statutory warranties require in HBA s 18B(1)(a), (c) and (e). No plans or specifications were signed and attached to or otherwise incorporated into the contract as required by the wording on the first page of the contract and by HBA s 7(2)(d). The absence of such plans reinforces the conclusion concerning breach of the statutory warranties just mentioned.

147. Much of the respondents' expert's opinion was undermined by his reliance upon his instruction, which I have found against. However, I would have come to the same conclusion simply on what the respondents ought to have done to carry out their contract work. There was no evidence that they sought plans, suggested they were appropriate or that they couldn't or wouldn't proceed without them. The evidence was to the contrary as already indicated.

148. Construction of works with ground contact inherently, in accord with the NCC requirements already mentioned, required implementation of a termite protection programme which ought to have been included implicitly in the contract price or explicitly excluded and discussed with the owner.

149. The requirement for ramp removal and further support would necessitate the removal of at least part of the decking and installation of proper support. In the event I have found that the footings as a whole require removal and replacement with properly designed and certified structures of the material required by the contract scope of works, in addition to removing the ramp, relocating the gully, providing proper clearance and access and providing a proper termite barrier. This appears to require removal and relaying of the entire decking.

150. I therefore adopt the owner's expert's assessment of the cost, which will absorb whatever under-house access structure is made.

Item 3 external timber decking and stairs

151. The experts agreed that the nails used were non-compliant because not galvanised with ammonium class 3 rating for external use: NCC Part 1.2.2. The respondents' expert put the costs of replacing the decking and nails at $380.

152. The owner's expert's total cost was $10,125. This was because the owner's expert was of the view that the stairs were so defective in workmanship and compliance as to require demolition and starting again in respect of the stairs and decking. The owner's expert pointed to the following major defects:

1. (a) Support in-ground under stairs by H3 treated posts - this raised the same matters as canvassed in item 2, except the owner's expert accepted H4 treatment for the stairs: AS-1684.2 section 3.4.

2. (b) No clearance for periodic termite risk inspection and management between deck and stairs with live loads, and rest of existing building: NCC Part 3.1.3.

3. (c) Non-compliant timber connections to secure the timber posts to the bearers and joists and defective cutting and assembling of timber components.

153. The respondents' expert's opinion was premised upon an instruction from the son at the inspection meeting on 27 July 2018 that the timber decking and stairs were only ever intended to be a temporary structure to serve until the owner proceeded with her original intention of replacing the deck to her pool and pergola area. Again, there was no other evidence from the respondents to support the instruction and it was not put to the owner.

154. I prefer the owner's expert's opinions on the contentious aspects just described. They were supported by reference to appropriate compliance standards and by the weight of photographic evidence. Additionally, on the principles derived from Bellgrove v Eldridge and Tabcorp, discussed earlier in these reasons, the owner is entitled to an end result which provides amenity; amenity includes aesthetic as well as practical components. I therefore adopt the owner's expert's assessment of the cost.

Item 4 metal roofing

155. The disagreement between the experts, as previously noted, was over the scope and method of remediation which dramatically affected the costing: owner's expert $4,935; respondents' expert $2,541.76.

156. The owner's expert identified the following major defects:

1. (a) Metal roofing overlap capping and joints not properly detailed and with gaps to prevent "blow-back" of rainwater with risk of interior water penetration; poorly-aligned roof sheet overlaps, with gapping and sharp and jagged edges; no evidence of anti-capillary breaks; barge capping inadequate end overlap and in incorrect sequence with openings facing upstream so not self-flashing.

2. (b) Inadequate cutting of roof sheeting and flashing, with short infill sections and patchwork result where continuous sheet layout required, resulting in premature corrosion of exposed metal edges: NCC P2.2.2.

3. (c) No anti-condensation blanket from sarking within new kitchen roof.

157. The owner's expert concluded that the absence of the sarking required the removal of the roofing elements and then corrective reinstallation with replacement of elements damaged by the incorrect detailing.

158. The respondents' expert's assessment of costs was largely based on Cordell's guide. No information was given on the edition of Cordell. I have addressed above my acceptance of the owner's expert's method of costing generally, including his critique of simply accepting Cordell.

159. Accordingly, I prefer the owner's expert's opinions on the contentious aspects just described. They were supported by reference to appropriate compliance standards and by the weight of photographic evidence. I therefore adopt the owner's expert's assessment of the cost.

Item 5 external timber joinery and doors

160. The owner's expert identified the following as general defects:

1. (a) The external doors required a minimum of 3x100mmx75mm butt hinges and only two had been installed: AS-1909.

2. (b) The door sets were 40mm thick with only a 35mm rebate which is appropriate for internal doors (which are 35mm thickness).

3. (c) Tops and bottoms of door leaves not fully sealed to prevent moisture uptake: AS-1909.

4. (d) New French doors fitted without proper weatherproof detail to prevent water entry; builder installed a timber cover strip over the door joint which is suitable for internal joinery and has failed; no rebate on leading edge to fit a weather seal.

5. (e) Weatherboard cladding poorly detailed at timber trims, mitres and butt joints and fixed to framing using nails not fit for purpose - 1mm diameter gun nails not secured or have deflected through the face of the trims and boards; nails that are filled and painted over in external cladding are required to be minimum 40mmx2.8mm gauge bullet head nails.

161. The owner's expert said that the remediation required removal and replacement of all trim and also the doors. Otherwise there was the risk, with a lesser solution, of damage to framing and doors and further damage to timber framing. Total cost was $13,141.

162. The respondents' expert agreed that the door had not been fitted with due care and skill in all respects identified by the owner's expert but said that the identified defects could be remedied without replacement of the doors. The cladding had been installed in an appropriate manner; the opening up of the mitred architrave joints was a symptom of timber shrinkage and after two years with a lack of maintenance was a natural occurrence; the photos by the owner's expert were taken too close and inside the NSW Fair Trading Guide to Standards and Tolerances. Cost of accepted remediation was $1,190.

163. There was no other evidence, to support what the respondents' expert said, about what maintenance ought to have been engaged in by the owner to avoid such shrinkage or that the owner had been told, and such matters were not put to the owner.

164. I prefer the owner's expert's opinions on the contentious aspects just described. They were supported by reference to appropriate compliance standards and by the weight of photographic evidence. Additionally, on the principles derived from Bellgrove v Eldridge and Tabcorp, discussed earlier in these reasons, the owner is entitled to an end result which provides amenity; amenity includes aesthetic as well as practical components. I therefore adopt the owner's expert's assessment of the cost.

Item 6 internal joinery installation

165. The respondents' expert said that he observed defective plasterboard (three holes behind the refrigerator that needed to be filled) in the kitchen and allowed $200 for that rectification.

166. The respondent's expert also acknowledged that the respondents installed the kitchen and that two appliances did not fit in their openings, but said that this was a result of "poor design". He went on to say that he was "instructed the Owner had total control over the design of the Kitchen and is responsible for the design of the Kitchen".

167. This instruction was not supported by the admitted evidence on behalf of the respondents. It was contradicted by the scope of works in the quotation, which became a contract document, and which relevantly included "Supply and installation of a new kitchen set out as provided by our concept design including generously proportioned double sink, mixer tap-set, mid-range quality brand electric cooktop and oven".

168. As previously noted, the respondents agreed to the owner buying her own appliances and gave her a partial refund. However, there was no written variation, as required by HBA s 18F(1)(a) (discussed earlier), of joinery or its dimensions or change of design to fit what the owner purchased. There is no evidence of communication on such a topic.

169. The owner's expert set out the following defects in addition to the three holes already mentioned:

1. (a) Incomplete work, with finish not to a trade standard - screw fasteners projecting through and damaging the finishes;

2. (b) Poor fitting of appliances into joinery, with impact on aesthetics and on use of appliances.

3. (c) Installation of timber skirting and internal architraves not carried out with due care and skill.

170. The remediation required, after removal to effect rectification of the floor frame covered in earlier items, was reinstallation with appropriate adjustment and finishing including replacement of damaged door, drawer and trim panels, at a cost of $13,141.

171. On the matters in (c) above, the respondent's expert said that this involved minor filling which could be done by the internal painter and that at the meeting of 27 July 2018 he had been instructed by the son that it was agreed with the owner as a contract variation that she would be responsible for the internal painting. Again, there was no written variation, no supporting evidence from the respondents and no cross-examination of the owner.

172. On the limited material provided by the respondents' expert once his constraint by instructions is set apart, I prefer the owner's expert's opinions on the contentious aspects just described. They were supported by the weight of photographic evidence when there was no evidence that other than standards of due care and skill were involved. Additionally, on the principles derived from Bellgrove v Eldridge and Tabcorp, discussed earlier in these reasons, the owner is entitled to an end result which provides amenity; amenity includes aesthetic as well as practical components. I therefore adopt the owner's expert's assessment of the cost.

Outcome on owner's building claim

173. Omitting item 1 and accepting the other items as set out above, and grossing up by the agreed percentages and method for preliminaries, builders margin and remedial contingency, the owner is entitled to compensation in the amount of $83,948.83.

Removal expenses and rental

174. The owner's expert, if accepted as I have, was uncontradicted about the need for the owner to re-locate during 8-10 weeks of remedial work.

175. The owner's evidence about rental in an adjacent suburb was uncontradicted. The real estate agent who prepared a conforming expert report for the owner said that leases shorter than 12 months were rare and not usually less than six months, with an extra cost (if shorter than six months was accepted) to compensate the landlord for extra re-leasing expenses. The rental for the usual lease range was $620-$650 per week. I have taken the midpoint rental of $635 per week for the minimum period of 6 months that the real estate agent said was likely to be a requirement, giving a rental of $16,510.

176. The owner's quotation for removal expenses was also uncontradicted. On the basis of the information in the quotation, I would have allowed the minimum charge of two and half hours, with three men which the removalist's quotation said worked out cheaper in terms of hours, once to move out and once to move back in. The number of hours removal would take was not specific in the evidence. While 2.5 hours may seem a short period the suburb of rental is immediately adjacent and not all items would need to be moved for a temporary relocation to permit work in part of the house. I would accordingly have awarded $416.08 twice, totalling $832.16. However, the owner claimed only $306.08 twice, totalling $712.16, being the minimum charge of 2.5 hours without the extra man.

Total of owner's compensation

177. On my findings and reasons the owner is accordingly entitled to $5,658.91 plus $83,948.83 plus $16,510 plus $712.16 totalling $106,829.90 including GST where applicable.

Is the builder entitled to quantum meruit and, if so, in what amount?

178. In Eddie Lau Constructions PL v Transdevelopment Enterprise PL [2004] NSWSC 273, Barrett J (as his Honour then was) at [44]-[54] said that non-provision of insurance clearly of itself could not deny a quantum meruit, otherwise HBA s 94(1A) would be of no utility. A broad but principled discretion had to be exercised on the facts of the case. Ignorance or misunderstanding of the insurance obligation may be more deserving of favourable treatment than deliberate contravention.

179. In the present case the following matters appear to me to be relevant and preponderant in exercising the discretion to refuse a quantum meruit. This is so even if the respondents were accepted that they misunderstood the scope and incidence of their insurance obligation, which I am not convinced they have made out on the evidence because it is influenced by their alleged understanding that the owner was an owner/builder which I have not accepted.

180. First, the respondents have been paid and have had the use of the contract price apart from the final 10% in accord with the contract, even though they were not entitled to enforce the contract, and this is not being refunded.

181. Secondly, and most importantly, given the found defective work almost the entirety of what the respondents have done will need to be demolished, taken away, properly designed and certified and done again, to a cost exceeding the amount of the alleged value of what the respondents built on even their expert's assessment of value of their work done. Although the value of the work to the recipient is not the measure of a quantum meruit and the quantum meruit focuses on the quality and extent of the work actually done, as Barratt J recognised in the authority cited in Eddy Lau at [67] and [77]-[82], it is a factor in exercise of discretion to award a quantum meruit: at [63].

182. As a related matter, in this case there is no basis for entire offset of the quantum meruit against the defective work remediation cost, with the balance being paid to the builder. Rather, the respondents would still owe the owner money and the absence of insurance, for which the respondents were responsible, increases the recovery risk to the owner.

183. Finally, Barrett J also referred to the wrongful conduct of a party as a factor in the just and equitable balancing, at [59]-[61]. Here the respondents have by their work caused the owner to lose the benefit of having work properly done, both by delayed performance while on site and by the conduct of this litigation. The delayed benefit is now nearly three years since when the work was to have been completed under the contract. As discussed earlier, there is no allegation that the owner repudiated the contract: Renard Constructions (ME) PL v Min Public Works (1992) 26 NSWLR 234 (CA) at 278.

184. If I was wrong in the above exercise of discretion then I would have preferred the owner's expert's position in his report in reply on quantum meruit, namely, that an accurate or detailed assessment of the value of the work done cannot be carried out. What the parties bargained for, for whatever reason, as the price is a factor but not determinative or decisive in determining reasonable value of work done; see the authorities set out in Eddy Lau at [67]-[70]. Here, if it was not very influential as a ceiling, it would be the respondents who have undertaken work requiring extensive remediation and whose non-compliance with the law would grant them a windfall benefit. That appears to me to be a classic touchstone to find a cap on unjust enrichment in the bargain itself.

185. Further, the respondents' experts' assessment is based on use of Cordell without adequate exposed reasoning concerning the circumstances of this project. In particular, as the owner's expert pointed out in his reply report, the Cordell estimates have an inbuilt percentage for overheads and builder's margin. There is accordingly a double count on these items in the estimate of the respondents' expert. If that double count was removed, the amount would be $51,470.89 plus $5,147.09 if the respondents had established an obligation to pay GST. Both amounts are less than what the respondents have already been paid by the owner, even when the GST paid by the owner is refunded under the orders made for reasons given above.

186. The owner's expert also pointed to the absence of primary material identified by the respondents' expert such as materials invoices. To this could be added the absence of actual hours recorded in a work diary. The owner's expert said that none of such primary material was provided to him or mentioned by the respondents' expert. None of it was in evidence.

187. While, like the contract price, actual cost may be relevant to reasonable value of work done but is not a controlling factor (Eddy Lau at [75]), the absence of such material being provided to the expert when it must have been in the control of the respondents is a weakness in the process adopted by the respondents' expert.

Costs - provisional view

188. Both parties asked for costs to be reserved until the substantive outcome was known. Both indicated that they were prepared to have costs determined on the written submissions they provided. Accordingly, the requirements of CATA s 50 are satisfied, to the extent (if any) that they apply to a separate costs determination when there has been a hearing on the merits of the matter.

189. However, it may be useful to the parties if I indicate my provisional view on costs on the basis of the above findings.

190. CATA s 60, together with rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW), provide that the ordinary costs rules apply, even in the absence of special circumstances required by s 63, where "the amount claimed or in dispute in the proceedings is more than $30,000".

191. That amount was exceeded throughout the owner's iterations of her claim. Accordingly, in my view the ordinary costs rules apply to these proceedings.

192. My prima facie view is that costs should be ordered in favour of the applicant owner on the ordinary basis as agreed or assessed, unless the parties tender material and/or make submissions that justify an award of costs on the indemnity basis as agreed or assessed, in whole or part, or in some other allocation between the parties.

193. The starting point for exercise of costs discretion on the usual principles is that costs follow the event. “The event” is usually the overall outcome of the proceedings – did the successful party have to go to the Tribunal (in this case) to get what it achieved, rather than being offered at least that relief. If there are distinct issues on which the party seeking relief did not succeed, that may be taken into account in the exercise of costs discretion. Some recent Appeal Panel decisions have made no order as to costs (to the intent that each party paid its or their own costs) where there has been a measure of success on both sides: Johnson t/as One Tree Constructions v Lukeman [2017] NSWCATAP 45 at [25]-[29]; applied in Oppidan Homes PL v Yang [2017] NSWCATAP 67.

194. For an award of costs on other than the ordinary basis, a party’s conduct of the proceedings themselves, or the nature of the proceedings themselves (for instance, misconceived), or an outcome less favourable than an offer, are considered. The principles are explored in Latoudis v Casey (1990) 170 CLR 534, Oshlack v Richmond River Council (1998) 193 CLR 72 and in this Tribunal in Thompson v Chapman [2016] NSWCATAP 6 and Bonita v Shen [2016] NSWCATAP 159, citing earlier consistent authority. The principles have resonance with at least some of the "special circumstances" in CATA s 63 that are required to justify a costs order when rule 38A does not apply.

195. In this case, the owner has succeeded on all but one aspect of her building claim, being a relatively small monetary part of that claim. That issue was interwoven with the other issues in terms of evidence.

196. I consider that the outcome and reasons in Johnson and Oppidan do not qualify the application of orthodox principles for exercise of costs discretion on which I have come to my provisional view. The exercise of discretion in Johnson was in relation to the costs on appeal only: Johnson at [4]. The clear mixed outcome on appeal grounds meant that the original decision was maintained in a central respect but the original claim was otherwise to be the subject of a re-hearing. The outcome in Oppidan reflected the outcome of the primary hearing which involved claims by both parties. The respondents here have lost on both the owner's claim and their claim.

197. I do not however see the basis for award of costs on the indemnity basis in favour of the owner. The respondents were entitled to test the owner's claim for relief in its entirety. There was no indication of significant misconduct in the proceedings by either party.

198. Of course, the orders will reflect that the parties have the opportunity to put forward submissions and any material on costs that either reinforces or opposes, or seeks to modify, my provisional views on costs. I have provided for two rounds of written submissions in chief and in reply from the last day of the period for the parties to notify any challenge to my provisional view on costs, thus necessitating further written submissions. Those submissions would of course include any challenge based on offers made to compromise the proceedings.

Order

199. I make the following orders:

1. 1. Order that Thomas Peter Kersten t/as Castleridge Constructions and Anthony Lawrence Kersten pay Alice Hanna, $106,829.90 on or before 12 April 2019.

2. 2. Note the provisional view of the Tribunal that the respondents are to pay the applicant's costs of the proceedings on the ordinary basis.

3. 3. Note the parties' agreement at hearing that they do not wish a further hearing on costs and that costs can, if the provisional view of the Tribunal on costs is contested, be determined on the papers.

4. 4. Order the parties to notify the Tribunal on or before 19 March 2019 if they contest the provisional view of the Tribunal on costs.

5. 5. Order as follows if either party indicates in accord with order 4 that the provisional view of the Tribunal on costs is contested:

6. (1) Written submissions in chief and any further evidence on costs in chief is to be lodged with the Tribunal and served on the other party on or before 2 April 2019.

7. (2) Written submissions in reply and any further evidence on costs in reply is to be lodged with the Tribunal and served on the other party on or before 16 April 2019.

**********

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: 31 May 2019