JONES and AFRA CONSTRUCTIONS PTY LTD

Case

[2014] WASAT 54

7 MAY 2014

No judgment structure available for this case.

JONES and AFRA CONSTRUCTIONS PTY LTD [2014] WASAT 54
Last Update:  12/05/2014
JONES and AFRA CONSTRUCTIONS PTY LTD [2014] WASAT 54
Jurisdiction: STATE ADMINISTRATIVE TRIBUNAL   Citation No: [2014] WASAT 54
Act: BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)
Case No: CC:1124/2013   Heard: DETERMINED ON THE DOCUMENTS
Coram: MS N OWEN-CONWAY (MEMBER)   Delivered: 07/05/2014
No of Pages: 16   Judgment Part: 1 of 1
Result: Nominal damages awarded to applicant
Category: B
[Click here for Judgment in Adobe Acrobat Format ]
Parties: KEITH NORMAN JONES
AFRA CONSTRUCTIONS PTY LTD

Catchwords: Claim for delay in completion of construction of dwelling ­ Breach of contract ­ Loss and damage ­ Turns on own facts
Legislation: Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(1), s 5(2), s 11(1)(d), s 41(2)(d)(i), s 43(1)(b), s 36
Corporations Act 2001 (Cth), s 440D
Home Building Contracts Act 1991 (WA), s 3, s 7(a)(1)
State Administrative Tribunal Act 2004 (WA), s 39(1)(e), s 60(2)

Case References: Biggin and Co Ltd v Permanite Ltd (1951) 1 KB 422
Chaplin v Hicks (1911) 2 KB 786
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64
Fink v Fink [1946] HCA 54; (1946) 74 CLR 127
Jones v Schiffmann [1971] HCA 52; (1971) 124 CLR 303
McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377
Robinson v Harman [1848] EngR 135; (1848) 1 Ex 850
Waldron and Afra Construction Pty Ltd [2013] WASAT 207



Orders: The Tribunal makes the following order:
1. The respondent shall pay to the applicant the sum of $100, being nominal damages pursuant to s 41(2)(d)(i) and s 44(1)(b) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA), for the respondent's breach of the contract between the applicant and the respondent dated 19 November 2010.
2. The Tribunal otherwise dismisses the application, the applicant's alleged loss and damage not being proved and an order not being justified as provided for by s 43(1)(b) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA).

Summary: The Tribunal found that the respondent breached the terms of the contract between the parties to construct a dwelling. The Tribunal found that the respondent was 108 weeks and five days delayed on the completion of the dwelling beyond the period for practical completion provided for in the contract between the parties. The Tribunal however found that the applicant's alleged loss and damage was not proved by his evidence, despite an adjournment of the final hearing to assist the applicant to file relevant and cogent evidence in support of the rental value of the applicant's property, including the dwelling (had it been completed) in the relevant period. Nominal damages were awarded.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM : COMMERCIAL & CIVIL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : JONES and AFRA CONSTRUCTIONS PTY LTD [2014] WASAT 54 MEMBER : MS N OWEN-CONWAY (MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 7 MAY 2014 FILE NO/S : CC 1124 of 2013 BETWEEN : KEITH NORMAN JONES
                  Applicant

                  AND

                  AFRA CONSTRUCTIONS PTY LTD
                  Respondent

Catchwords:

Claim for delay in completion of construction of dwelling ­ Breach of contract ­ Loss and damage ­ Turns on own facts

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(1), s 5(2), s 11(1)(d), s 41(2)(d)(i), s 43(1)(b), s 36
Corporations Act 2001 (Cth), s 440D
Home Building Contracts Act 1991 (WA), s 3, s 7(a)(1)
State Administrative Tribunal Act 2004 (WA), s 39(1)(e), s 60(2)

Result:

Nominal damages awarded to applicant

Summary of Tribunal's decision:

The Tribunal found that the respondent breached the terms of the contract between the parties to construct a dwelling. The Tribunal found that the respondent was 108 weeks and five days delayed on the completion of the dwelling beyond the period for practical completion provided for in the contract between the parties. The Tribunal however found that the applicant's alleged loss and damage was not proved by his evidence, despite an adjournment of the final hearing to assist the applicant to file relevant and cogent evidence in support of the rental value of the applicant's property, including the dwelling (had it been completed) in the relevant period. Nominal damages were awarded.

Category: B

Representation:

Counsel:


    Applicant : Ms G Sugars (Acting as Agent)
    Respondent : No appearance 25 February 2014
    Mr RD Gamble (Administrator) 2 April 2014

Solicitors:

    Applicant : N/A
    Respondent : N/A



Case(s) referred to in decision(s):

Biggin and Co Ltd v Permanite Ltd (1951) 1 KB 422
Chaplin v Hicks (1911) 2 KB 786
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64
Fink v Fink [1946] HCA 54; (1946) 74 CLR 127
Jones v Schiffmann [1971] HCA 52; (1971) 124 CLR 303
McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377
Robinson v Harman [1848] EngR 135; (1848) 1 Ex 850
Waldron and Afra Construction Pty Ltd [2013] WASAT 207

REASONS FOR DECISION OF THE TRIBUNAL:

Background

1 The Tribunal made a final order in related proceedings CC 177 of 2003 and CC 573 of 2013 (consolidated proceedings) on 16 January 2014 (as varied by orders made on 25 February 2014). The consolidated proceedings comprised the applicant's claim against the respondent for faulty, unsatisfactory and non-proficient building work and services in the construction of a dwelling at Lot 4, 15 Ferguson Street Falcon, and the respondent's claim against the applicant for payment of the practical completion stage of construction invoice, issued on 9 September 2012 plus interest. In the course of the Tribunal's oral reasons in the consolidated proceeding, the Tribunal found that the applicant's dwelling constructed by the respondent, had not achieved the practical completion stage of construction when the respondent issued its practical completion instalment claim invoice (9 September 2012), nor at the time of the final decision in the consolidated proceeding (16 January 2014).

2 At all times in the consolidated proceeding, the respondent asserted that construction of the dwelling had achieved the stage of practical completion. The Tribunal rejected this submission and found to the contrary. In making an order for the respondent to pay to the applicant the cost of the remedial work of all matters found by the Tribunal to have been faulty, unsatisfactory or undertaken without proficiency, the Tribunal gave credit to the respondent for the balance of the unpaid contract price (including the sum invoiced on 9 September 2012), in recognition of the fact that the cost of the remedial work would be sufficient to bring the dwelling to practical completion and, in fact, would complete the construction of the dwelling to handover.

3 The Tribunal rejected and dismissed the respondent's claim for payment of the practical completion stage claim invoice and interest at 20%, on the basis that the construction of the applicant's dwelling had not achieved the stage of practical completion (because of the multiple defects) and, in the case of the claim for interest, in any event, the contract between the parties did not provide for the respondent to be entitled to interest on any monies due and owing as stage payments.


This application

4 Originally, in this proceeding, the applicant claimed:

          a) the applicant's costs of the consolidated proceedings; and

          b) the loss and damage allegedly suffered by the applicant and caused by the respondent's breach of contract in failing to construct the home to the stage of practical completion, as promised and provided for in the contract between them.

5 The costs of the consolidated proceeding were considered in that proceeding and were the subject of an order for costs made on 25 February 2014 in the consolidated proceeding.

6 The outstanding matter in this proceeding is the applicant's claim for loss and damage caused by the respondent's breach of contract in failing to construct the dwelling to the practical completion stage of construction, as promised and provided for by clause 9(b) and item 9(b) of the Schedule of the contract between the parties dated 16 November 2010.


Jurisdiction

7 The applicant and the respondent entered into a contract for the construction of the dwelling on 16 November 2011 for a contract price of $112,000 including GST. The Tribunal is satisfied that the contract between the parties is a home building contract, within the meaning of that term, as provided for by s 3 of the Home Building Contracts Act 1991 (WA) (HBC Act). The Tribunal is also satisfied that the applicant's complaint, the subject of this proceeding, was made to the Building Commissioner of Western Australia pursuant to s 5(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act), being a claim for a breach of contract that cannot be remedied by the making of a building remedy order, as provided for by s 36 of the BSCRA Act (see: s 7(a)(i) of the HBC Act and s 5(1) of the BSCRA Act). Further, the Tribunal is satisfied that the complaint, the subject of the application, was referred to the Tribunal pursuant to s 11(1)(d) of the BSCRA Act. The Tribunal finds that the proceeding is within the Tribunal's original jurisdiction.


This proceeding in the Tribunal

8 The applicant relied, and is entitled to rely, upon the finding made by the Tribunal in the consolidated proceeding that the applicant's dwelling was not at practical completion, as at 9 September 2012, nor at the time of the final decision in the consolidated proceeding (16 January 2014), and would not be at practical completion, until all of the remedial work was undertaken, the cost of which was assessed and ordered to be paid to the applicant by 14 February 2014.

9 The proceeding was listed for hearing on 25 February 2014, but was adjourned, part heard, at the request of the applicant who, as at that date, had failed to obtain any evidence of market rental value of the applicant's property at Lot 4, No 15 Ferguson Street Falcon, including the dwelling (property), so as to advance a quantifiable claim for his alleged loss and damage for the delay period. At the hearing on 25 February 2014, the applicant abandoned his claim for loss of the number of years of participation in the National Rental Affordability Scheme (NRAS) because of the late completion of the construction of the dwelling by the respondent. The applicant withdrew this aspect of his claim for loss and damage, because he was not in a position to establish, to the satisfaction of the Tribunal, or at all, that he, as an owner, would be eligible to receive NRAS benefits. Further, the applicant also abandoned his claim for recovery of the holding costs of the property which he had made along with, and in addition to, the alleged loss of rental income for the delay period.

10 The applicant informed the Tribunal that his claim for loss and damage, caused by the respondent's breach, was based upon the rental value of the property that he had lost, by reason of the dwelling not having been completed to practical completion stage, in accordance with the contract between the parties, which was to be calculated on the lost market rental for the property for that period.

11 The final hearing was adjourned to 22 April 2014.


External administration of the respondent

12 On 4 March 2014, Messrs GM Carrello and RD Gamble were appointed joint and several administrators to the respondent. By reason of the provisions of s 440D of the Corporations Act 2001 (Cth), the proceeding, was effectively stayed, unless the administrators of the respondent provided the Tribunal with their written consent to the continuation of the proceeding (or an order of the Supreme Court of Western Australia or Federal Court of Australia). A directions hearing was called on the Tribunal's motion and listed for 2 April 2014. The applicant was represented by his mother, Ms G Sugars, at that hearing with the Tribunal's consent, pursuant to s 39(1)(e) of the State Administrative Tribunal Act 2004 (WA) (SAT Act), the applicant being unavailable as he was working offshore on that day. No appearance was initially made for the respondent despite the notice of directions hearing having been issued to the administrators. The Tribunal staff contacted Mr Gamble, who then attended the directions hearing by telephone. During the directions hearing, the Tribunal informed Mr Gamble of the orders made in the consolidated proceedings, the earlier orders made in this proceeding and the applicant's claim in this proceeding. The Tribunal also informed Mr Gamble that the applicant had provided, to the Tribunal, a market rental value appraisal by Mr Stephen Webster, the director and licensee of Professionals Perth, real estate agents, and that the applicant did not intend to provide any further evidence in the proceeding. Mr Gamble undertook to provide the Tribunal with the administrators' consent to the proceeding being determined by the Tribunal.

13 The administrators provided to the Tribunal written consent to the proceeding advancing in this Tribunal by facsimile letter dated 2 April 2014.

14 By reason of that consent, this proceeding is able to proceed to final orders in the Tribunal.

15 During the directions hearing on 2 April 2014, Mr Gamble further consented to the proceeding being finally determined on the documents before the Tribunal upon the basis that:

          1) His consent did not constitute a promise that the respondent would have the wherewithal to pay any assessed amount.

          2) The administrators were not ordered to pay any costs in the proceedings.

16 Mr Gamble indicated that no evidence would be led for the respondent and no submissions would be offered.

17 Accordingly, on 2 April 2014, pursuant to s 60(2) of the SAT Act, the Tribunal ordered that the proceeding be determined on the documents, following the hearing on 25 February 2014, when the Tribunal found and ordered that the respondent was contractually obliged to achieve the practical completion stage of construction of the dwelling by 6 January 2012.


The issues

18 By reason of s 41(2)(d)(i) of the BSCRA Act the Tribunal is empowered to make an order that a person pay specified compensation for loss and damage:

          (i) caused by any breach of the contract or of a provision of the Home Building Contracts Act 1991 Part 2[.]
19 The issues before the Tribunal are:
          1) What date was the respondent contractually obliged to achieve the practical completion stage of construction of the applicant's dwelling?
              The Tribunal finds that the respondent was obliged, by the terms of the contract, to complete the practical completion stage of construction of the applicant's dwelling by 6 January 2012.
          2) The practical completion of the construction of the applicant's dwelling not having been achieved as at 16 January 2014 as found by the Tribunal, what is the period in which the applicant had suffered loss and damage caused by the respondent's breach of the contract, being its failure to achieve practical completion?
              The Tribunal finds that the period of time in which the alleged loss and damage was suffered by the applicant, and caused by the respondent, was 6 January 2012 to 14 February 2014, a period of 108 weeks and 5 days.
          3) What is the value or quantification of the applicant's alleged loss and damage caused by the respondent's breach of contract in failing to construct the applicant's dwelling to the practical completion stage, by the time provided for by the terms of the contract?
              The Tribunal finds that the applicant's alleged loss and damage is not proved and has ordered the respondent pay the applicant nominal damages of $100.



The evidence

20 The applicant relied upon the building disputes booklet of documents prepared for the parties in the consolidated proceedings, to identify the relevant terms of the contract (Exhibit 1 in the consolidated proceeding). The respondent had been provided with a copy of Exhibit 1 in the consolidated proceeding. The booklet is received as Exhibit 1 in this proceeding.

21 At the hearing on 25 February 2014, the applicant gave evidence that he observed that the concrete pad for the dwelling had been laid shortly before 9 June 2011 (described as a few days before), which is the date when the respondent issued the applicant with an invoice for the slab down stage of construction claim, pursuant to the contract between the parties. That evidence was not challenged by the respondent and the respondent did not file any documents to prove to the contrary. The applicant also stated that he observed that the respondent had commenced site works 'about' a month before the slab had been completed. The contract provides in clause 9(b) and item 9(b) of the Schedule, that the respondent was obliged to achieve the practical completion stage of construction '8 months from commencement on site'. This is the only evidence before the Tribunal to ascertain when the respondent first 'commenced on site'. The Tribunal finds, on the basis of the unchallenged evidence of the applicant, that the respondent commenced on site, one month prior to a few days before 9 June 2011. The Tribunal finds that the respondent commenced on site, on or about, 6 May 2011. There is no evidence of any variations to the terms of the contract for the completion of the practical completion stage of construction. Eight months from the date that the Tribunal has determined the respondent commenced on site, is 6 January 2012. Therefore, Tribunal finds that the respondent was obliged, by the terms of the contract, to have achieved the practical completion stage of construction of the dwelling by 6 January 2012.

22 As stated earlier, the Tribunal found in the consolidated proceedings that the respondent failed to reach the practical completion stage of construction of the dwelling by 9 September 2012, or by 16 January 2014. The Tribunal now finds that the respondent's failure to achieve the practical completion stage of construction by 6 January 2014, constitutes a breach of clause 9(b) and item 9(b) of the Schedule of the contract. Further, the Tribunal finds that the respondent refused to provide the applicant with the keys to the dwelling, and the applicant was unable to lay claim to possession of the dwelling. Until conclusion of the consolidated proceedings on 16 January 2014, the applicant was not able to attempt any remedial works himself, so as to rent the property earlier.

23 The Tribunal is aware that the applicant has not conducted any remedial work to the dwelling. The applicant informed the Tribunal at the final hearing on 25 February 2014, that the respondent had not made payment of the sum of $19,388, in accordance with the order made in the consolidated proceeding on 16 January 2014, (as varied by the order made on 25 February 2014, to include the reference to the date for payment that had been omitted from the order made on 16 January 2014). The respondent was obliged to make payment of the ordered sum in the consolidated proceedings by 14 February 2014. The applicant asserts that he has not had the financial capacity to undertake the remedial work, without receiving payment of the ordered amount from the respondent. However, there is no evidence of that assertion before the Tribunal.

24 The Tribunal finds that the cause of the applicant's loss, until 14 February 2014, was the respondent's breach of the terms of the contract. The applicant is under a duty to mitigate his loss, and as no remedial works have been undertaken to the dwelling since 14 February 2014, the Tribunal finds that the cause of the loss since 14 February 2014, is the applicant's failure to attend to, or commence to attend to, the necessary remedial works to have the dwelling ready for occupation by a tenant. The Tribunal finds that the applicant's loss of rent for the period from 6 January 2012 to 14 February 2014, is caused by the respondent's breach of contract in failing to achieve the practical completion stage of construction by 6 January 2012. This is a period of 108 weeks and five days.

25 The applicant produced to the Tribunal, a rental appraisal by Mr Webster dated 24 March 2014 (Exhibit 2). The document is described as a 'Rental Appraisal - 15 Ferguson Street, Falcon'. Mr Webster's statement refers to the opportunity afforded to him to 'offer a suggested rental marketing range for the above­mentioned property' (Tribunal emphasis). No 'range' is identified by Mr Webster, but notwithstanding, he concludes that the market rent for the property is $288 per week. Mr Webster's letter further states:

          This [amount] takes into account the fact that the property is under the NRAS scheme and is marketed at 20% under market value.
26 Further, Mr Webster states:
          The above rental appraisal is not a sworn valuation nor can it be relied on as such. It is merely a price indication for marketing purposes. (Tribunal emphasis)
27 The only other evidence that the applicant produced to the Tribunal, prior to the hearing on 25 February 2014, was an assertion by him, that the property, without a discount of 20%, would achieve a rental of $285 per week and, with a discount of 20%, would achieve $228 per week. The basis of this assertion by the applicant was that one of the neighbouring landlords was receiving this sum by way of rental of his property.

28 Alternatively, the applicant put to the Tribunal that he was prepared to accept the figure that was accepted by the Tribunal in the matter of Waldron and Afra Construction Pty Ltd [2013] WASAT 207 (Waldron),of $175 per week after discount.

29 The Tribunal could not, in the absence of consent of the respondent, rely on either of these alternative figures, without evidence to support the amount claimed being produced by the applicant.

30 The applicant has provided some evidence by way of a written market appraisal from Mr Webster, at a 20% discount, being the amount of $288 per week. However, that weekly rental is stated to be a weekly value at which the property would be, and could be, 'marketed'. The evidence of Mr Webster does not address the likely weekly rent that the property would achieve, more probably than not, as at the date of his appraisal. Although he referred to his experience at managing nine other properties at No 15 Ferguson Street, Falcon, he does not identify the range of rental values for each similar property, so as to be able to identify the weekly rental value of other similar properties. Nor does Mr Webster's letter address what the applicant could, and would more probably than not, have been able to lease the property for, if it had been ready to be leased in January 2012, and throughout the 108 week five day period to 14 February, and the likely term of any lease or leases in that period.

31 Mr Webster was not called by the applicant to give evidence, and there was no submission or response made by the respondent, notwithstanding the fact that the applicant served a copy of Mr Webster's letter on the respondent by mail, to the respondent's address of 'PO Box 247, Applecross WA 6953'.

32 The Tribunal finds that the letter from Mr Webster, concerning the weekly rental rate at which the dwelling could be marketed, is not supportive of a conclusion by the Tribunal that on the balance of probabilities, the applicant would have leased the property for $288 per week, every week, for the period 6 January 2012 to 14 February 2014, had it been completed by the respondent to the necessary standard. The applicant has been given every opportunity to put before the Tribunal, evidence of likely market rental for the property, from early 2012 to the current date. The final hearing of the application was adjourned on 25 February 2014, specifically, so that the applicant could adduce evidence of value in that period.

33 The hearsay evidence of the applicant's neighbour of the sum of $285 per week, less 20% ($228 per week), is not reliable, and the Tribunal cannot make a finding on such information. The applicant's assertion that he should be awarded $175 per week, as in the matter of Waldron, is also incapable of constituting evidence justifying an award of compensation. The finding in Waldron was based upon the evidence led in that matter which persuaded the Tribunal, that more probably than not, the property would have been leased at that sum during the relevant period, as found in that application.

34 Further, in order for the Tribunal to conclude that the applicant's loss and damage is proved to be the value of the weekly rent of the property, for the 108 week five day period, the Tribunal must be satisfied, on the balance of probabilities, that the applicant would have leased the property for the whole period. There is no evidence before the Tribunal that the applicant would have leased the property at all. That fact seems to be assumed by the applicant. It is not unheard of that a property cannot be leased because of lack of demand in an area, at a particular period of time. Nor has the probability of the applicant selling the property as soon as it had been completed been addressed. Further, the Tribunal must be satisfied what the probable weekly rent would have been for the 108 week five day relevant period. There is no evidence of how many weeks a property such as this property would need to be marketed and advertised, before it was leased in that particular area. All of these factors are relevant to a finding that the applicant would have leased the property for a particular sum of money in the relevant period, and that he has lost that sum, because of the respondent's breach of contract. In addition, the Tribunal also required evidence of the likely letting fee payable by the applicant, and any management fee payable by the applicant, to arrive at a just, and realistically, reflective assessment of the applicant's loss and damage caused by the respondent's breach of contract. In this particular proceeding, the Tribunal finds that the applicant's evidence is insufficiently relevant and cogent for it to be persuaded to make a finding of the weekly rental lost by the applicant, and caused by the respondent's breach of contract.

35 The Tribunal is not in a position to make a finding which is not based on any cogent and reliable information, or evidence before it in the proceeding.

36 At the hearing on 25 February 2014, the applicant informed the Tribunal that he did not wish to expend further time and effort to prosecute his claim against the respondent. Notwithstanding that statement, the applicant did file Mr Webster's letter concerning the marketing of the property. At the directions hearing on 2 April 2014, the applicant's representative stated, on behalf of the applicant, that she consented to the proceeding being determined thereafter on the documents before the Tribunal and that the applicant did not wish to expend any further effort to advance his claim. The Tribunal concludes that there is no utility in granting the applicant a further opportunity to adduce relevant evidence of the loss of rental value for the property in the relevant period, and for that reason, shall not make a further order calling upon the applicant to file such evidence.

37 The general rule at common law, as stated by Parke B. in Robinson v Harman [1848] EngR 135; (1848) 1 Ex 850, at p 855 [1848] EngR 135; (154 ER 363, at p 365), is:

          that where a party sustains a loss by reason of a breach
          of contract, he is, so far as money can do it, to be placed
          in the same situation, with respect to damages, as if the
          contract had been performed".
38 In Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64 (Commonwealth v Amann Aviation) Mason CJ and Dawson J stated:
          This statement of principle has been accepted and applied in Australia see Wenham v. Ella [1972] HCA 43; (1972) 127 CLR 454, per Gibbs J. at p 471.
39 Where a contract is not profitable, or the likely profit is not capable of proof, the innocent party is entitled to the costs incurred and thrown away. If a contract is proved to have been profitable, 'the profits lost and the costs actually and reasonably incurred in performance are proper subjects of compensation' (per Brennan J Commonwealth v Amann Aviation). If a contract is proved to be a loss contract, 'the costs actually and reasonably incurred in performance are the subject of compensation, but only to the extent that those losses would have been recovered had the contract been performed, but only to the extent that those losses would have been recovered had the contract been performed' (per Brennan J Commonwealth v Amann Aviation).

40 As stated above, the applicant has failed to establish the profit he expected to receive from the fulfilment of the contract in its terms. This is not a case where the profit is not capable of proof. This is a case where the applicant has failed to produce the available evidence to prove the profit.

41 The Tribunal turns to the applicant's losses referred to in his spread sheet (Exhibit 3). The applicant had withdrawn a claim for costs incurred because he had claimed both the profit and the cost. However, the Tribunal shall consider the costs the applicant has allegedly incurred, given that it cannot conclude that on the evidence a profit that has been lost. The spread sheet refers to the costs that would have been incurred, if the property had been leased (gardening and management fees), as well as holding costs (interest on loans, strata levies and other property holding costs). However, again, the applicant has not produced any documents to prove any of the holding costs.

42 Whilst the settled rule is that mere difficulty in estimating damages does not relieve a court (or Tribunal) from the responsibility of estimating damages as best it can (Fink v Fink [1946] HCA 54; (1946) 74 CLR 127, at p 143; McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377, at pp 411-412; Chaplin v Hicks (1911) 2 KB 786, at p 792; Jones v Schiffmann [1971] HCA 52; (1971) 124 CLR 303 per Menzies J), there must be evidence of the actual and likely costs and profits. Where precise evidence is not available, the court must do the best it can: (Biggin and Co Ltd v Permanite Ltd (1951) 1 KB 422, per Devlin J at [438] as cited with approval in Commonwealth v Amann Aviation).Uncertainty as to the profits to be derived from a business, by reason of contingencies, is not a reason for a court refusing to assess damages: see McGregor on Damages (15th ed, 1988), paragraphs 357 to 359 (Tribunal emphasis). However, the Tribunal cannot substitute guesswork for evidence. The authorities referred to above, concern the evidence of the prospects of the profit being realised, not the evidence to support the basis of the calculation of the profit, or the incurring of the costs. The evidence is available - it just has not been led by the applicant.

43 In this case, the likelihood of the property being leased; the likely lease term or terms, the gross weekly rental value, the costs of holding, marketing and leasing the property, were not the subject of any cogent evidence, or evidence at all, so as to enable the Tribunal to calculate the likely profit lost or costs incurred by the applicant, for which the respondent is liable for breach of contract. This is required before the Tribunal considered the contingencies of the likelihood that, had the contract been performed in its terms, the applicant would have continued to lease the property, or whether he would have sold the same, for example, along with other factors that the Tribunal would need to consider, as to the contingencies affecting the claim for profits. Similarly, in the alternative, if the Tribunal were to order the applicant be reimbursed his costs thrown away by reason of the breach of contract, the Tribunal must first have evidence before it, that the costs were in fact incurred. A spread sheet that asserts that some costs were incurred, without any proof that the costs were in fact incurred, does not allow the Tribunal to be satisfied that the alleged loss and damage was suffered.

44 The loss and damage not having been proved for the breach of contract by the respondent, as found by the Tribunal, is recognised by the award of nominal damages. The Tribunal awards the sum of $100 by way of nominal damages for the respondent's breach of the contract between the parties.


Conclusion

45 The Tribunal concludes that the applicant's alleged substantive loss and damage, caused by the respondent's breach of contract, as referred to above, is not proved. The Tribunal is satisfied that the applicant is entitled to nominal damages pursuant to s 41(2)(d)(i) of the BSCRA Act for compensation the respondent's breach of contract. Otherwise, the Tribunal declines to make an order, pursuant to s 41(2)(d)(i) of the BSCRA Act, on the basis that such an order is not justified, as provided for by s 43(1)(b) of the BSCRA Act.


Orders

          The Tribunal makes the following order:

          1. The respondent shall pay to the applicant the sum of $100, being nominal damages pursuant to s 41(2)(d)(i) and s 44(1)(b) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA), for the respondent's breach of the contract between the applicant and the respondent dated 19 November 2010.

          2. The Tribunal otherwise dismisses the application, the applicant's alleged loss and damage not being proved and an order not being justified as provided for by s 43(1)(b) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA).

      I certify that this and the preceding [45] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

      ___________________________________

      MS N OWEN-CONWAY, MEMBER


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Cases Citing This Decision

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Cases Cited

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Statutory Material Cited

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Fink v Fink [1946] HCA 54
Jones v Schiffmann [1971] HCA 52