Lichaa v Boutros

Case [2021] NSWCA 322


Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Lichaa v Boutros [2021] NSWCA 322
Hearing dates: 27 October 2021
Date of orders: 16 December 2021
Decision date: 16 December 2021
Before: Macfarlan JA at [1]
Gleeson JA at [2]
Rein J at [3]
Decision:

(1) Appeal allowed in part as to ground 5.

(2) Set aside orders 1 and 4 made by Olsson SC DCJ on 16 March 2021.

(3) Remit the proceedings to the District Court for a new trial limited to the following issues:

(a) Are any of items 1-6 and 8-18 identified as defective by Mr Verinder in the Amended Scott Schedule breaches of the Contract (including the implied terms)?

(b) If the answer to (a) is yes, what is the necessary remedial work reasonably required to bring Ms Lichaa’s house into conformity with what was promised by the Contract?

(c) What are the costs of the work required and identified in (b)? Direct that insofar as the work includes demolition of the first floor in its entirety, Mr Verinder’s costing should be used, but updated to reflect any increase or diminution in the costs identified by reason of the passage of time.

(4) Respondent to pay the costs of the appeal.

(5) Respondent to have a certificate under the Suitors’ Fund Act 1951 (NSW) if otherwise qualified.

(6) Costs of the proceedings below to abide the outcome of the new trial.

Catchwords:

APPEALS — Procedural fairness — Failure to give reasons — Adequacy of reasons – failure to engage with the case presented by each party – duty to give reasons for rejecting evidence of expert or preferring evidence of one expert over another – whether the primary judge failed to adequately explain why the Appellant’s expert evidence was rejected or why the Respondent’s expert evidence was preferred.

BUILDING AND CONSTRUCTION — Contract — Termination — Repudiation – the Respondent, the builder, was shut out from site after repudiatory conduct by the Appellant, the owner – whether the owner repudiated the contract.

BUILDING AND CONSTRUCTION — Contract — Damages — Defects – relevance of repudiation to claims for damages for defects – whether repudiation by the owner not relevant – Appellant had accrued rights in respect of work carried out prior to determination of the contract.

BUILDING AND CONSTRUCTION — Contract — Damages — Defects – engagement of second builder to complete work of the Respondent including repair of defects of Respondent not exculpatory of Respondent and not relevant to the loss claimed in respect of defects solely the result of work performed by the Respondent – whether owner had accepted the defective work.

BUILDING AND CONSTRUCTION — Contract — Damages – proof of loss – adequacy of evidence supporting loss – where failure to mitigate damages not pleaded – whether evidence from the Appellant’s expert that would enable the Appellant’s loss to be calculated albeit on the basis of demolition of the building.

Legislation Cited:

Home Building Act 1989 (NSW), ss 18A,…

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AGLC
Lichaa v Boutros [2021] NSWCA 322
Case
[2021] NSWCA 322
Decision Date

CaseChat Overview and Summary

In *Lichaa v Boutros*, the appeal concerned a dispute arising from a building contract. The appellant, Ms Lichaa (the owner), had terminated the contract with the respondent, Mr Boutros (the builder), alleging repudiatory conduct. The primary judge had found in favour of the builder regarding claims for defective work, and the owner appealed this decision to the Court of Appeal of the Supreme Court of New South Wales.

The central legal issues before the Court of Appeal were whether the primary judge had failed to provide adequate reasons for rejecting the owner's expert evidence and preferring the builder's expert evidence, thereby breaching the duty of procedural fairness. Additionally, the court considered the relevance of the owner's alleged repudiation to the builder's liability for defects, and whether the owner had accepted the defective work. The court also examined the adequacy of the evidence presented to support the owner's claims for damages, particularly in light of the builder's failure to plead failure to mitigate.

The Court of Appeal allowed the appeal in part, specifically concerning the ground relating to procedural fairness and the adequacy of reasons. The court found that the primary judge had not adequately explained why the owner's expert evidence was rejected or why the builder's expert evidence was preferred. Consequently, the court set aside the orders of the primary judge and remitted the proceedings to the District Court for a new trial limited to specific issues concerning whether certain identified defects constituted breaches of the contract, the necessary remedial work, and the costs associated with that work. The court directed that the builder's expert's costing, updated for the passage of time, should be used for any demolition of the first floor. The builder was ordered to pay the costs of the appeal, with the costs of the proceedings below to abide the outcome of the new trial.

Orders

Orders of the court

(1) Appeal allowed in part as to ground 5.

(2) Set aside orders 1 and 4 made by Olsson SC DCJ on 16 March 2021.

(3) Remit the proceedings to the District Court for a new trial limited to the following issues:

(a) Are any of items 1-6 and 8-18 identified as defective by Mr Verinder in the Amended Scott Schedule breaches of the Contract (including the implied terms)?

(b) If the answer to (a) is yes, what is the necessary remedial work reasonably required to bring Ms Lichaa’s house into conformity with what was promised by the Contract?

(c) What are the costs of the work required and identified in (b)? Direct that insofar as the work includes demolition of the first floor in its entirety, Mr Verinder’s costing should be used, but updated to reflect any increase or diminution in the costs identified by reason of the passage of time.

(4) Respondent to pay the costs of the appeal.

(5) Respondent to have a certificate under the Suitors’ Fund Act 1951 (NSW) if otherwise qualified.

(6) Costs of the proceedings below to abide the outcome of the new trial.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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