Lee v The Australian Construction and Building Group Pty Limited

[2015] NSWCATCD 18

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Lee v The Australian Construction and Building Group Pty Limited [2015] NSWCATCD 18

Hearing dates:

17 June 2014 and 10 September 2014

Decision date:

04 February 2015

Jurisdiction:

Consumer and Commercial Division

Before:

P. Boyce, Senior Member

Decision:

(a) Within 14 days of publication of this decision the applicants and the respondent are to agree on a timetable for the completion of:

(i) the External Works identified in the Scott Schedule; and,
(ii) the remedying of the defects identified by the report of Building & Construction Reports authored by Mr Barry Morris dated 1 August 2014.

(b)The applicants must permit access to the premises at all reasonable times by the respondent and its contractors to carry the External Works and rectification of the Internal Works without obstruction or hindrance;

(c) The timetable for completion of the External Works and rectification of the Internal Works by the respondent must show that the works will be completed by the respondent at its cost within 4 months of the date of publication of these orders subject to the weather provisions as set out in the Consent Orders of 2 December 2013;

(d)The respondent is to pay to the applicants $4128.66 being two thirds of the cost of the inspections and report by Building & Construction Reports on or before 28 February 2015.

(e) In all other respects the Consent Orders made by this Tribunal on 2 December 2013 are affirmed.

Catchwords:

Renewal of proceedings, enforcement of consent orders

Legislation Cited:

Civil and Administrative Tribunal Act 2013 No 2 2013
Civil Procedure Act 2005
Consumer Trader and Tenancy Tribunal Act 2001
Home Building Act 1989
Civil and Administrative Tribunal Rules 2014

Cases Cited:

Kovalev v Minister for Immigration and Multicultural Affairs [1999] FCA 557
Ainsworth v Wilding[1896] 1 Ch 673
Harvey v Croydon Union RSA (1885) 26 Ch D 249 Deputy Commissioner of Taxation (NSW) v Chamberlain (1991) 28 FCR 21
Abigroup v Abignano (1992) 112 ALR 497
Dowdle v Hillier (1949) 66 WN (NSW) 155
Cristel v Cristel [1951] 2 KB 725 at 730
Re Porteus [1949] VLR 383
Wentworth v Woollahra Municipal Council (CA (NSW), 31 March 1983, unreported

Texts Cited:

Ritchie’s Uniform Civil Procedure NSW

Category:

Consequential orders (other than Costs)

Parties:

Gak Hee Lee and Suk Jin Lee (Applicants )
The Australian Construction and Building Group Pty Limited (Respondent)

Representation:

Counsel: Ms Carmel Lee for the Applicants
Solicitors: CLS Legal (Applicants)
CCS Legal (Respondent)

File Number(s):

HB 14/02364HB 12/24099

Publication restriction:

Unrestricted

reasons for decision

Application

1. This is an application to renew proceedings for the enforcement of certain Tribunal orders pursuant to s 43 of the Consumer Trader and Tenancy Tribunal Act 2001 made on 2 December 2013.

Background

2. The applicants are home owners and the respondent is a builder.

3. On 10 September 2010 the applicants engaged the builder to construct a home. The contract price for the home was $748,000.00 and the home was to be built within 32 weeks from the contract date.

4. A dispute arose between the applicants and the respondent and the applicants filed an application with the Consumer, Trader and Tenancy Tribunal (“CTTT”) on 30 April 2012 (HB 12/24099) seeking orders pursuant to the Home Building Act 1989 (“HBA”).

5. The respondent ceased work on the home on or about 17 June 2012.

6. The applicants took possession of the home on or about 27 August 2012.

7. On 2 December 2013 HB 12/24099 was resolved on terms between the parties and resulting consent orders were made on 2 December 2013 by the CTTT.

8. The Consent Orders are reproduced for ease of reference:

1. (1) “The Respondent to complete the internal and external works on the property at * ******* Street, Lindfield in accordance with Schedule 1 attached to this order.

2. The Respondent to make payments to the Applicant in accordance with Schedule 2 attached to this order.

3. If the Respondent fails to carry out the work specified in schedule 1, on or by the dates specified therein and/or fails to make payments specified in Schedule 2, on or by the dates specified therein, Schedule 3 applies.

Schedule 1

Work to the property to be undertaken by the Respondent

1. Work to commence on or before 12 December 2013.

2. Internal works are to be completed by the Respondent on or before 24 December 2013. The work will be the internal work identified by the Scott Schedule and outstanding works under the Contract. For the sake of clarity, internal works also include the garage.

3. External works to be commenced on or before Monday 21 January 2014 and completed on or before 29 February 2014 by the Respondent. The work will be the external work identified in the Scott Schedule and the work outstanding under the contract.

4. The Respondent will undertake rectification of any defects in work executed by ACBG (or its contractors) that arise within the defects liability period. For the sake of clarity the defects liability period is three months after the completion of works and the rectification works identified within the defects liability period are to be completed by ACBG within three months of the date of notice of the defect rectification.

5. The independent expert to determine whether the completion of the work has been undertaken in accordance with this schedule and industry standards. The expert’s determination is final and binding on the parties. The Applicant’s solicitor is to provide the Respondent’s solicitor the names of three independent experts within 3 days of the date of this order. The Respondent is to nominate one of three independent experts nominated by the Applicant to be appointed to inspect the works and make the required determinations under Schedules 1 and 3 of this order within 3 days of the Applicant’s solicitor’s notification.

Payment for Work

6. The Respondent is to be responsible for payment of the contractors who undertake the work.

Inclement Weather

7. This provision applies only to external works on the property.

8. The Respondent may claim a day by way of an extension of time for inclement weather. In the case of a dispute between the parties the expert’s opinion shall prevail.

9. Inclement weather means the existence of heavy rain or abnormal climatic conditions (whether those be hail, snow, severe dust storm, extremely high temperature by virtue of which it is not safe for the Respondent to work whilst the same prevail.

Schedule 2

Payments to be made by the Respondent to the Applicant

10. The Respondent to pay the Applicant $45,000 as follows:

1. $10,000 by lump sum, cleared payment on or before 25 December 2013,

2. $15,000 by lump sum cleared payment on or before 14 January 2014,

3. $20,000 by lump sum payment on or before 14 February 2014.

Should the Respondent fail to make the payments above, a money order for that amount will be entered in favour of the Applicant.

Certificates

11. The Respondent is to release progressively to the Applicant the certificates held by it and required for interim and final occupation certificates. Any certificates held by the Respondent for work done to allow for an interim occupation certificate to be provided to be released by 25 December 2013.

12. The remaining certificates will be released on or before 28 February.

Schedule 3

13. The applicant will choose three independent experts and from those experts the Respondent will choose one to use. The expert is to inspect the work completed. The expert will determine the cost to complete the works under the Building Contract dated 12 October 2010.

14. The decision of the expert shall be final and binding on both parties. The costs of the expert shall be paid by the Respondent. The fees of the expert in undertaking inspections of the work and preparing any required report on his or her findings are to be paid by the Respondent.

15. Pursuant to s48O(i)(a) of the Home Building Act, 1989 the Respondent will pay the Applicants the amount found by the independent expert to be the cost of completing the building work, by way of restitution, immediately.”

Legislation

9. The application now before the Tribunal was filed on 13 January 2014 by the applicants seeking orders pursuant to s 43 of the Consumer, Trader and Tenancy Tribunal Act 2001 (“CTTTA”) to renew proceedings for the enforcement of orders.

10. S 43 of the CTTTA provided:

Enforcement of certain Tribunal orders

(1) If the Tribunal makes an order in relation to any proceedings, the Tribunal may, when the order is made or later, give leave to the person in whose favour the order is made to renew the proceedings if the order is not complied with within the period specified by the Tribunal.

(2) If an order has not been complied with within the period specified by the Tribunal, the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal, within 12 months after the end of the period, stating that the order has not been complied with.

(3) The provisions of this Act apply to a notice lodged in accordance with subsection (2) as if the notice were an application made in accordance with section 24.

(4) When proceedings have been renewed in accordance with this section, the Tribunal:

(a) may make any other appropriate order under this Act as it could have made when the matter was originally determined, or

(b) may refuse to make such an order.

(5) This section does not apply if the operation of an order has been suspended.

(6) A notice under this section must be in the form prescribed by the regulations.

11. The Consumer, Trader and Tenancy Tribunal ceased operation on 31 December 2013. The New South Wales Civil and Administrative Tribunal (“NCAT”) began operation in place of the former tribunal on 1 January 2014.

12. Schedule 1, Part 2, Subdivision 4, Section 12 of the Civil and Administrative Tribunal Act 2013 2013 (NSW) (“CATA”) states that the provision of Subclause 8 of Schedule 4 of CATA extends to an order made by CTTT as if the order before the establishment day of the New South Wales Civil and Administrative Tribunal [on 1 January 2014] had been made by NCAT in exercise of functions allocated to the Consumer and Commercial Division of NCAT.

13. Subclause 8 of Schedule 4 of CATA provides:

Renewal of proceedings in respect of certain Division decisions

(1) If the Tribunal makes an order in exercise of a Division function in proceedings, the Tribunal may, when the order is made or later, give leave to the person in whose favour the order is made to renew the proceedings if the order is not complied with within the period specified by the Tribunal.

(2) If an order has not been complied with within the period specified by the Tribunal, the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal, within 12 months after the end of the period, stating that the order has not been complied with.

(3) The provisions of this Act apply to a notice lodged in accordance with subclause (2) as if the notice were a new application made in accordance with this Act.

(4) When proceedings have been renewed in accordance with this clause, the Tribunal:

(a) may make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined, or

(b) may refuse to make such an order.

(5) This clause does not apply if:

(a) the operation of an order has been suspended, or

(b) the order is or has been the subject of an internal appeal.

14. Subclause 8 of Schedule 4 of the CATA is largely in similar terms as s 43 of the CTTTA.

15. The respondent agrees that the Tribunal’s order has not been complied with, but that is due to the Applicant’s “acts of prevention and frustration”. However, the respondent submits that the applicants have not given the notice required in subclause 8(2) to enliven the Tribunals jurisdiction.

16. The applicants filed their application to renew the proceedings under the provisions of s 43 of the CTTT Act. The saving provisions of the CATA permit the renewal application to be dealt with under subclause 8 of Schedule 4 of the CATA.

17. The notice required under subclause 8(2) of Schedule 4 of the CATA (and under s 43(2) of the CTTTA) was given by the filing of the application by the applicants on 13 January 2014.

18. The applicants are entitled to bring renewal proceedings to enforce the orders of the original matter.

19. In light of the above, the applicable legislation that applies to the current dispute is the Civil and Administrative Tribunal Act 2013 (NSW) and the Civil and Administrative Tribunal Rules 2014 (NSW).

Alleged Breach of Orders

Schedule 1 of the Consent Orders

20. The applicants submit that during the period between 3 and 24 December 2013 they provided access to the site to permit the respondent to carry out the Internal Work. The Internal Work was not completed on or before 24 December 2013.

21. The Consent Orders required the Internal Works to be commenced before 12 December 2013 and to be completed by 24 December 2013. The Internal Works were those works identified in the Scott Schedule prepared by their respective experts and agreed to by the parties.

22. The External Works were to be commenced on or before 21 January 2014 and to be completed before 28 February 2014. Again, the External Works were identified in the Scott Schedule;

23. It is the respondents contention that the Internal Works were completed before the Christmas Holidays in 2013;

24. The Consent Orders provided for extensions of time for inclement weather for the External Works. On the respondent’s evidence, the weather on the commencement date of 21 January 2014 was inclement and workers arriving at the site could not commence the work and were sent home by the respondent.

25. On 21 January 2014 by email the applicants’ daughter directed the respondent to stay away from the property, preventing the respondent from carrying out the External Works. She continued to communicate with the respondent that it was not to carry out any further work, threatening to have the respondent’s director arrested for trespass if he attended the site.

26. Despite being warned by the applicants, the respondent submits that they attempted the major tasks of reinforcing and infilling external retaining walls and constructing a pergola the respondent stopped work. The applicants’ failure to select an external tile, to allow access to the garage and any further access to the site prevented the External Works to be completed.

27. Mr Morris was engaged by the applicants’ daughter and he prepared and expert report dated 1 August 2014 which the respondent submits identifies a blend of incomplete and defective work with Mr Morris’s estimate of cost of remedy to be $339,311.31 (“Morris Report”).

28. The respondent says that the Morris Report records how the applicants have substantially increased the scope and cost of the External Works, caused by their own placement of uncontrolled fill against incomplete and reinforced retaining walls prior to installation of subsoil drainage and waterproofing.

29. The applicants seek a money order for the amount of $339,311.31.

Schedule 2 of the Consent Orders

30. It is common ground between the applicants and the respondent that the orders for payment of money by the respondent to the applicant were breached as follows:

1. Order 10(a) required the payment of $10,000 by 25 December 2013. The respondent did not pay this amount by the due date;

2. The applicants sought and were issued with a certified money order from the Tribunal on 9 January 2014;

3. The applicants filed their application to renew the proceedings on 13 January 2014;

4. Order 10(b) required the payment of $15,000 by 14 January 2014;

5. The respondent paid to the applicants the amount of $25,000 on 27 January 2014;

6. Order 10(c) required the payment of $20,000 by 14 February 2014;

7. The respondent paid $20,000 to the applicants on 17 February 2014;   

31. The respondents evidence and submissions in response to this allegation are that:

1. The respondent submits it could not make the first payment due under the Consent Orders as the applicants were overseas and unable to be contacted. As soon as the respondent was able to contact the applicants the first and second payments were made.

2. The applicants’ only remedy pursuant to Schedule 3 of the Consent Orders for the failure to make payments in Schedule 2 on time was to obtain a certified money order for enforcement of the Consent Order. That was done and the breach remedied by the respondents payment of the moneys due to the applicants;

3. After preventing the respondent from completing the works through threats of trespass and a false allegation that the respondent was unlicensed, the applicants seek to exploit minor delays in the Schedule 2 repayments to procure a money order for an inflated cost to complete. The cost to complete is inflated and includes costs to rectify defective works carried out by the applicants after they occupied the site;

4. The respondent seeks an order from the Tribunal that it be allowed to complete the original scope of works in accordance with the Consent Orders and that the applicants should bear the sole costs of their premature engagement of their expert, Mr Morris and the costs incurred since the date of the Consent Orders;

32. The applicant’s evidence is that:

1. the respondent commenced the Internal Work on the property on 3 December 2013 and continued until 24 December 2013. The works were not completed by 24 December 2013;

2. the External Work remains incomplete

3. the respondent failed to release the relevant certificates required for the interim and final occupation certificate and in doing so breached Order 12.

33. The respondent agrees that it has not complied with the consent orders made by the CTTT on 2 December 2013.

34. However, the respondent says that notwithstanding the failure to comply it was prevented and frustrated from carrying out the orders.

Schedule 3 of the Consent Orders

35. The applicants contend that the failure by the respondents to comply with either of the first two schedules of the Consent Orders, that is to undertake the rectification work in accordance with Schedule 1 of the Consent Orders and its failure to make the payments in accordance with Schedule 2 triggered the effect of Schedule 3 to the Consent Orders.

36. The respondent submits:

1. that the reliance by the applicants on the words in paragraph 3 of the Consent Orders demonstrate a misunderstanding of their meaning:

If the Respondent fails to carry out the work specified in schedule 1, on or by the dates specified therein and/or fails to make payments specified in Schedule 2, on or by the dates specified therein, Schedule 3 applies.

2. that the applicants’ reliance on the words “and/or” to justify the trigger for Schedule 3 to come into effect is incorrect.

3. The Consent Orders provided for two distinct remedies for two possible defaults. Firstly, for incomplete or defective work; an expert determination of the value to complete or rectify that incomplete and defective work. Secondly, for a default in payment the issue of a money order (which is referred to in the “Note” included in Schedule 3.

4. The applicants enforced the money order and prevented the respondent from complying with the order that the works be completed. As such, they have no entitlement to a further order for the cost to complete the works.

Jurisdiction

37. It is common ground between the parties that the Tribunal has no jurisdiction to enforce an order for the payment of money. The appropriate method is set out in s78 of the CATA, that is, a certificate identifying that a person is liable to pay the certified amount is issued by a Registrar and is filed in the registry of a court having jurisdiction to give judgement for a debt of the same amount. The money order then operates as a judgement of that court.

38. The applicants sought and obtained a money order against the respondent and filed it in the Local Court. It operated as a judgement of that court for the purposes of enforcement.

37. The Tribunal has no further jurisdiction in relation to the payment of the money in the Consent Orders. The Tribunal function was fulfilled by the issue of the Registrar’s certificate.

Limited Jurisdiction concerning Orders made by Consent

40. The applicants submit that the Tribunal has limited jurisdiction to alter a judgement made by consent and is limited to correcting orders only “in exceptional circumstances”.

41. The binding nature of consent orders was summarized by French J in Kovalev v Minister for Immigration and Multicultural Affairs [1999] FCA 557:

In making a consent order the Court exercises judicial power. This is a power conferred upon it by Parliament under Chapter 3 of the Constitution. Its exercise is a public function and operates to bund the parties. Its public character applies to agreed orders disposing of private litigation between citizens or corporations and proceedings brought by or against governments and their agencies or public authorities.

An order disposing of proceedings by consent must be self explanatory as must any order. It is not appropriate to make and order of uncertain content or the content of which is to be derived from material which are not on the public record.

42. The applicants submit that if parties do not agree and they fail to set aside the orders, then judgement can only be reviewed under separate proceedings brought for the purposes of setting aside the judgement aside unless there has been a slip or omission or where the judgement drawn up is inconsistent with what the court decided; Ainsworth v Wilding [1896] 1 Ch 673. A consent judgement can only be set aside where consent was given by mistake, obtained by fraud or where a party was taken by surprise in consenting to the judgement; Harvey v Croydon Union RSA (1885) 26 Ch D 249; Deputy Commissioner of Taxation (NSW) v Chamberlain (1991) 28 FCR 21.

43. When the Consent Orders were made:

1. They were made during the course of the hearing of the application;

2. Both parties were legally represented; and,

3. They were the result of a full day’s negotiation regarding the form and nature of the Consent Orders.

44. The applicants submit that the Tribunal does not have jurisdiction to revisit the orders made by consent of the parties.

45. The respondent agrees with the conclusion reached by the applicants that the Tribunal does not have jurisdiction to revisit the Consent Orders.

46. The Tribunal is satisfied that it has limited jurisdiction to revisit the Consent Orders. It does not propose to do so other than making them capable of being carried out despite the applicants frustration of the original Consent Orders

Procedure the Tribunal should adopt to give effect to the Orders as Agreed between the Parties

47. The applicants submit that the Tribunal should regard the current proceedings before it as seeking interlocutory orders to give effect to the Consent Orders and assert that the respondent has breached each of the schedules to the Orders.

48. They contend that Schedule 3 should be read as a “leave to apply” order. That is, it requires the Tribunal to make an order in proceedings “in the nature of an application to give effect to the Consent Orders”.

49. The applicants argue that approach is consistent with the overriding purpose of litigation in NSW as set out in s 56 of the Civil Procedure Act 2005 (“CPA”), that is, the key issues and earlier orders of the dispute provide the “just quick and cheap” resolution of the proceedings.

50. The guiding principles of the Tribunal as set out in S 36 of the CATA are consistent with s 56 of the CPA as they also provide for the Tribunal to facilitate the “just quick and cheap” resolution of the real issues.

51. The applicants further contend that the Tribunal can deal with the current application by way of implied “leave to apply” in Schedule 3, by analogy with s 73 of the CPA. That is, a court may determine questions about compromises and settlements and so should this Tribunal.

52. The extension of this argument to the Tribunal is that s 38 of the CATA compliments the provisions of the CPA in that it allows the Tribunal to determine its own procedure in relation to any matter for which the CATA or the procedural rules do not otherwise make provision. Further, s 29(2) of the CATA allows the Tribunal to make ancillary and interlocutory decisions.

53. The applicants also ask the Tribunal to make an additional order, based on the evidence of the independent expert to give effect to the Consent Orders between the parties. The applicants submit that the scope of liberty to apply provisions were stated in Abigroup v Abignano (1992) 112 ALR 497 at 509:

The reservation of liberty to all parties to apply to a court is a provision directed essentially to questions of machinery which may arise from the implementation of a court’s order. They include cases where a court may need to supervise the enforcement of orders after they have been made.

Abigroup approved Ritchie at [36.16.65]:

Liberty to apply in relation to a final order, is limited to matters concerning the implementation of the earlier order: Dowdle v Hillier (1949) 66 WN (NSW) 155; Cristel v Cristel [1951] 2 KB 725 at 730; Re Porteus [1949] VLR 383. It does not extend to the substantive amendment of the judgement or orders in respect of which the liberty to apply was granted (Wentworth v Woollahra Municipal Council (CA (NSW), 31 March 1983, unreported).

54. The applicants seek to have the expert selected by the respondent, Mr Morris, to complete a study of the works and determine the total cost of rectification work. Once the assessment is made, the amount determined by Mr Morris should then be entered by the Tribunal as a money order against the respondent.

55. The respondent’s contention is that the applicants’ proposed procedure would not result in the “just, quick and cheap” resolution of the proceedings and that the applicants are attempting to frustrate the implementation of the Consent Orders in “an attempt to procure a money order for an inflated cost-to-complete, after preventing the respondent from completing the works under the contract”. The inflated cost-to-complete includes costs to rectify defective works carried out by the applicants and not by the respondent, after the applicants occupied the site. The respondent submits to accept such a submission would not facilitate a “just resolution” of the proceedings.

56. The respondent contends that for the Tribunal to accept the Morris Report would be a denial of procedural fairness and says the appropriate order is that the respondent be permitted to return to the site to be allowed to complete the work.

Findings

57. The Consent Orders made 2 December 2013 were intended by the parties to resolve all the issues between them. They proposed a mechanism to address the outstanding work and provide for a refund of the overpaid contract price.

58. So far as the payments of monies to the applicant by the respondent as proposed in Schedule 2 is concerned, the remedy for default was clearly set out in the Consent Orders. The remedy is twofold; firstly, if the respondent failed to make the payments of the instalments on time, then the applicants were entitled, and they did, obtain a money order against the respondent. Secondly, Consent Order 3 envisages the consequence of failure to make those payments specified in Schedule 2 on time, then the remedy in Schedule 3, becomes available to the applicants.

59. The Tribunal notes that although paragraph 11 and 12 in Schedule 2 provides for the release of “certificates”, Consent Order 2 is silent on the obligation for the respondent to do so. The consequence of the failure to do so was not contemplated in Consent Order 3.

60. Similarly, if the respondent fails to complete the Internal and External Works on the property in accordance with Schedule 1, then the consequences result in the trigger for Schedule 3 to become operative.

61. The Tribunal regards the compliance with the Consent Orders 1 and 2 as not mutually exclusive and the breach of either results in the provision of Schedule 3 being invoked. This was clearly the intention, despite the respondent’s contrary argument, with the use of the words “and/or” in Consent Order 3.

62. The drafting of the Consent Orders was made with the benefit of each party’s legal representative and the transcript of the Tribunal Member’s consideration of the terms of the Consent Orders and his discussion with the party’s representatives in evidence as part of the transcript tendered. It is clear, that there was no misunderstanding of the nature and effect of the Consent Orders by the parties at the time the orders were made.

63. If the applicants relied solely on the respondent’s breach of Consent Order 1 to invoke Consent Order 3 then their frustration of the respondent’s willingness and ability to carry out the work by their interfering in its access to the site, would their reliance on Consent Order 3 untenable. By their wrongdoing and frustration of the respondent’s performance of the work, they seek to benefit by relying on the benefit of Consent Order 3.

64. However, the effect of the respondent’s breach of Consent Order 2, despite subsequent remedy, is that Consent Order 3 is enlivened.

65. It was in the minds of the parties at the time of making the Consent Orders that there are consequences for a breach of the orders. The mechanism put in place by Consent Order 3 and Schedule 3 is evidence in support of the parties’ state of minds at the time.

66. An expert has been chosen. His role is to “inspect the work completed” and “determine the cost to complete the works under the building contract dated 12 October 2010.”

67. Schedule 1 paragraph 4 of the Consent Orders requires the respondent to carry out rectification work of any defects arising in a defects liability period of three months after the completion of the works and to be carried out within three months of the date of notice of the defect rectification. The intention is that this be for defects arising from the Internal Works carried out by the respondent before 24 December 2013 and any External Works carried out after 21 January 2014.

68. If the applicants have prevented further works or permission for the respondent to come back on site to carry out those works, then any remaining incomplete works that were part of the Scott Schedule the cost for which is sought by the applicants by way of restitution will not have the benefit of the defects liability period referred to in the Consent Orders. It can only relate to the Internal and External Works that the respondent has been permitted to actually carried out.

69. Despite the failure to comply with the time limits imposed by the Consent Orders in relation to his appointment, Mr Morris is the expert nominated by the respondent. The Morris Report records that Mr Morris attended the work site on 19 December 2013, 25 and 26 February 2014. The visit on 19 December was instigated by the respondent. The respondent did not pay Mr Morris. The applicants paid Mr Morris the sum of $6194.00 “as they required the Building Inspection Report in order to outline the internal works that have not been completed by the respondent”.

70. The second Morris Report dated 1 August 2014 includes works that exceed the scope of work envisaged by the Consent Orders. The amount for which the respondent is liable should not include general defects of works that had taken place prior to the Consent Orders being made as that was not contemplated by the Consent Orders. The amount claimed by the applicants of $339,311.31 includes work beyond what was intended by the Consent Orders.

71. The applicants admit that the Morris Reports’ were commissioned by them in support of their claim, notwithstanding part of that cost was in compliance with the Consent Orders. The Tribunal will discount the amount of those costs based on its own assessment as work done by Mr Morris in consideration of the Consent Orders was then used by the applicants in support of these renewal proceedings.

72. The Consent Orders stipulate that report by the expert agreed by the parties (Mr Morris) is purely for the purpose of the terms of Schedule 3 paragraphs 13 and 14.

73. The Tribunal considers that an apportionment of two thirds of the cost to be payable by the respondent and one third by the applicants as a just apportionment.

Conclusion

74. If the terms of Schedule 3 are followed as originally intended the matter will be resolved in accordance with the Consent Orders. Mr Morris should comply strictly with the terms of paragraphs 13 and 14 of Schedule 3. That is:

1. Inspect the Internal and External Work (“works”)set out in the Scott Schedule;

2. Determine the cost to complete the works under the Building Contract dated 12 October 2010 and the cost to rectify any defects arising from the Internal Works and the External works completed by the respondent after the date of the Consent Orders;

3. Mr Morris’s fees of undertaking inspections of the work and preparing any required report on his findings must be paid by the respondent.

75. The intent of the Consent Orders was the upon Mr. Morris’s determination of the amount required to complete the extent of the building works found by him to be incomplete in accordance with the Consent Orders, the amount so determined would be paid by the respondent immediately. The Tribunal notes that paragraph 14 of Schedule 3 provides that the decision of the expert is final and binding on both parties.

76. The respondent seeks orders for it to be permitted to return to the site and complete its works in accordance with the Consent Orders. The applicants have frustrated the respondent’s attempts to returning to the site to complete the External Works. The applicants’ actions of seeking the orders they seek after wrongfully denying access to the respondent to permit the External Works to be carried out should not result in the benefit they would obtain by such an order. Such an order would be contrary to a just resolution of the dispute.

77. The respondent should be given the opportunity to do complete the External Works before the enforcement provisions of Schedule 3 are invoked.

78. The Consent Orders resolved the dispute between the parties. The Tribunal is reluctant to interfere with orders made by consent reached by the parties properly advised.

79. However, to permit the respondents to complete the External Works and to be allowed to carry out defects to the Internal Works completed as envisaged by the Consent Orders the Tribunal makes the following Orders:

1. Within 14 days of publication of this decision the applicants and the respondent are to agree on a timetable for the completion of:

1. the External Works identified in the Scott Schedule; and,

2. the remedying of the defects identified by the report of Building & Construction Reports authored by Mr Barry Morris dated 1 August 2014.

2. The applicants must permit access to the premises at all reasonable times by the respondent and its contractors to carry the External Works and rectification of the Internal Works without obstruction or hindrance;

3. The timetable for completion of the External Works and rectification of the Internal Works by the respondent must show that the works will be completed by the respondent at its cost within 4 months of the date of publication of these orders subject to the weather provisions as set out in the Consent Orders of 2 December 2013;

4. The respondent is to pay to the applicants $4128.66 being two thirds of the cost of the inspections and report by Building & Construction Reports on or before 28 February 2015.

5. In all other respects the Consent Orders made by this Tribunal on 2 December 2013 are affirmed.

P Boyce

Senior Member

Civil and Administrative Tribunal of New South Wales

4 February 2015

**********

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: 29 April 2015