Martin v Giro Construction Group Pty Limited

[2015] NSWCATCD 133

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Martin v Giro Construction Group Pty Limited [2015] NSWCATCD 133

Hearing dates:

5 December 2014 and 4 February 2015

Decision date:

29 October 2015

Jurisdiction:

Consumer and Commercial Division

Before:

T Simon, Senior Member

Decision:

1. The respondent is to pay the applicant the amount of $123,318.14 immediately.

 

2. In the event that she intends to make an application for costs, the applicant is to provide any documents and submissions in relation to costs to the respondent and the Tribunal, either in person or by post by 15 November 2015.

 

3. The respondent is to provide any documents and submissions in relation to costs to the applicant and the Tribunal, either in person or by post on 30 November 2015.

 4. The issue of costs will be decided on the papers. In the event that the parties wish to be heard in person they must advise the Tribunal on or before 30 November 2015.

Catchwords:

Home Building, scope of works, successor in title, defects, breach of statutory warranty

Legislation Cited:

Home Building Act (NSW) 1989

Cases Cited:

Nguyen v Cosmopolitan Homes [2008] NSWCA 246

Category:

Principal judgment

Parties:

Linda Martin (applicant)
Giro Constructions Pty Limited (respondent)

Representation:

Counsel: Ms Beechy for the applicant
Mr S Goldstein for the respondent

File Number(s):

HB 14/11410

Publication restriction:

Nil

Reasons for the Decision

1. The applicant in these reasons will be referred to as the homeowner and the respondent as the builder.

2. The application was lodged with the registry on 26 February 2014. The matter was heard over two days on 5 December 2014 and 4 February 2015.

3. The applicant is seeking damages and rectification orders for alleged breaches of statutory warranty totalling $147,709.44.

Background to the Matter

4. The homeowner purchased the residential premises in mid-2008. Various defects were notified to the builder on 26 July 2009 and after no response the applicant made a complaint to Fair Trading. The builder did rectify some defects in May 2011. However some of the works were not dealt with because the builder denied that they were within his scope of works.

5. Further defects became apparent in 2012 and 2013 and the builder was notified in relation to them. Most of the rectification works have now been completed by the applicants. The defects relate to the following:

1. The structural inadequacy of both the rear balcony and the support beam for the rear of the house

2. Water entry to the house from the front/side terrace

3. Water entry to the ground floor ceiling from the upper side balcony

4. Leaking pool and falling off of pool tiles

5. Leaking balconies around posts

6. A major issue is the scope of works that were undertaken by the builder and the denial by the builder in relation to the works.

Jurisdiction

7. Mr Christopher Michael Favaloro, who is a director of the respondent corporation, gave evidence about the contract. At paragraphs 8 and 9 of his statement dated 3 October 2014 in relation to the contract with the previous owner, he states:

8 In June 2007, a cost plus contract for $685,990.00 (incl. GST) was signed. Giro’s counterpart of the contract was destroyed in a flood office flood on or about late 2008. Giro still maintains records of the trade summary, list of exclusions and notes. Copies of those documents are included in my evidence bundle “CF” at Tab “CF 2”

9. On or about April 2008 construction of the house was completed. Attached to my evidence bundle “CF” at “CF 3” are photographs of the property used for advertising purposes in relation to its sale

8. Section 18E of the Home Building Act (NSW) 1989 as it applied at the time allowed for proceedings for a breach of a statutory warranty to be commenced within 7 years after which the work was completed. The Tribunal accepts the evidence of the builder on this point and accepts that the application was made by the homeowners within time. It is also uncontested and the Tribunal is satisfied the contract related to residential works and that the matter is a building claim in accordance with section 48K of the Act. In that regard the Tribunal is satisfied that it has jurisdiction to decide the matter.

The Scope of the Contract

9. An issue of contention in relation to these proceedings is the original scope of the works. The applicant is a successor in title and it is not disputed that she is entitled to the benefit of the statutory warranties as contained in section 18D of (the Act). It is not disputed that if the scope of works are established that the homeowner is entitled to the benefit of the statutory warranties as a successor in title.

10. The Tribunal does not have before it a copy of the contract between the builder and the previous owner. The homeowners themselves not being a party to the contract could not give evidence in relation to the scope of works contained in the contract.

11. Mr Favaloro in his statement dated 3 October 2014 at paragraphs 5 to 9 states how he came to contract with the previous owner. Starting at paragraph 12 of his statement Mr Favaloro states that he advised the homeowner or her husband since at least the inspection of August 2009 that he was not responsible for some of the defects now claimed because they were outside of the scope of the work that he contracted to do with the previous owner Ms Dickson. He stated that Ms Dickson had elected to undertake some of the works herself by employing and supervising other contractors. He also indicated that he sent the homeowner a letter on 3 December 2010 advising that many of the trades employed on the site were employed directly by the previous owner. Mr Favaloro also refers to the Complaint Inspection Advice from Fair Trading dated 30 June 2011 notes:

The builder to provide copy of contract including scope of works & items to be done by previous owner Vanessa Dickson.

12. In effect the only documents that the Tribunal has before it that could be relevant to establishing the scope of works are attached to the statement of Mr Favaloro dated 3 October 2014. They include:

1. The statement of Mr Favaloro himself.

2. A trade summary

3. A trade breakup which includes a list of exclusions and notes

4. Tender documents

13. The Tribunal also had before it documents relating to the initial works from the documents summonsed from the builder by the applicant.

The submissions of the homeowners on the scope of the works

14. The homeowner makes submissions that there is enough evidence before the Tribunal to accept that the works that they now claim are defective were within the scope of the works of the builder.

15. There is evidence that the homeowners did write to the previous owner seeking information in relation to the scope of works and any contract or variations and received no response. Neither party issued a summons for the previous owner to appear. A summons was issued by the homeowners to the builder. In excess of 450 pages were produced. However the contract and three of the critical pages that would have related to carpentry and external works are missing. The previous owner was also not joined to these proceedings.

16. The homeowners refer to various issues regarding the credibility of Mr Favaloro’s evidence. Particularly the fact that much of the evidence he gave and the documents produced were self-serving. They highlight that the builder did not produce the documents relevant to the initial works until they were summonsed. They also highlight that out of the hundreds of documents produced - only a few key documents and the contracts were missing, with the builder claiming they were lost in a flood. They state that those key documents and the contract would have been determinative of the important scope of works dispute. More than 450 pages of progress claim documents were produced, but 3 pages relevant to the carpentry and external works were missing. The homeowner highlights that none of the other documents show signs of water damage. The homeowner notes that the builder did not produce the originals of the summons documents and when they requested them they were told by the solicitors for the builder that they were instructed by their client that the files had come from electronic format. However, in cross examination Mr Favaloro had asserted that the solicitor had misunderstood his instructions and the files were in hard form.

17. The homeowners also highlight that key invoices that would have conclusively established the scope of works were missing. They allege that progress claim 4 would have likely shown whether the window/door installation adjacent to the front/side balcony was within scope and would have attached the relevant subcontractor invoices that would have demonstrated whether the work was within the scope. In particular page 2 of the carpentry summary in progress claim 4 and the section for external works is missing. The external works would have shown whether the relevant pool work and front side balcony tiling were within the scope of works. However the homeowner maintains that the Tribunal can still infer from the remaining invoices and progress payments that the works were within the scope of works. In particular they refer to the total amount claimed for progress payment 4 which totals $214,104.00. They demonstrate that after the tax invoices that are provided are totalled, there is a difference of $86,108.65 which must relate to the missing carpentry and external works amount. They make submissions that it can be inferred that given the amount that has been allocated for those works they were substantial and capable of including the pool waterproofing, tiling and carpentry work in dispute. They make submissions that production of the documents would have demonstrated without any dispute that the defect works now claimed were within the scope of the works between the builder and previous owner.

18. The homeowners make submissions that the self-serving evidence of Mr Favaloro should not be accepted in light of the failure to produce the contract and progress claim documentation and in the absence of compelling corroborating evidence. Further, where documentation exists which casts doubt on Mr Favaloro’s evidence, they state that the Tribunal can make inferences in relation to the documentation.

The submissions of the builder on the scope of the works

19. The homeowner makes submissions that where the builder denies that the alleged defects were within the scope of works, then the homeowner bears the onus of proving that the allegedly defective works did form part of the builder’s works under the contract. They make submissions that absent any evidence otherwise the homeowner fails to discharge the burden of proof.

20. The builder makes submissions that the following items now claimed by the applicant fall outside the works because it never contracted to complete them and the previous owner employed other trades to complete them. They relate to items 2 to 5 as contained in paragraph 5 above:

1. The builder submits that it did not complete the external tiling and window and door installation to the front/side terrace and as such are not responsible for the water ingress there or to the upper side balcony.

2. In relation to the pool they submit that they did not carry out “any further works after the block walls and the concrete floor had been completed” and that they “only built the walls and the concrete floor of the pool.”

3. They did not install the balustrades to the balcony and so cannot be responsible for the leaking around the posts on the balconies.

21. The builder also makes submissions that the previous owners refusal to respond to correspondence requesting the contract is consistent with the builders position that it is not responsible for the alleged defects. They suggest that the fact that the previous owner has not replied would lead to the conclusion that that the information would reveal that the previous owner was responsible for the work rather than the builder. They state that the homeowner should have, but has not joined or summonsed the previous owner and so cannot discharge its burden of proof.

Findings on Scope of Works

22. The Tribunal does not accept the submission of the builder that any failure by the homeowner to summons the previous owner or join her as a party could lead to any inference that the previous owner must be responsible for the works. The Tribunal also draws no inference from the fact that the previous owner has not been summonsed or joined as a party.

23. The builder did from at least the time when Fair Trading undertook its inspection indicate that the previous owner was responsible for some of the works which relate to defects.

24. The Tribunal does not find Mr Favaloro to have been a credible witness and agrees with the homeowner that it is extraordinary that out of over 450 pages, none of which appear to have been damaged by water, only the contract and three key documents went missing in a flood. However, the fact that the builders evidence may not be credible or that it is suspicious that certain documents are missing does not in itself positively establish the scope of the works.

25. The relevant principles in relation to discharging the burden of proof in civil cases were helpfully summarised by the New South Wales Court of Appeal in Nguyen vCosmopolitan Homes [2008] NSWCA 246 at [55] as follows:

(1) A finding that a fact exists (or existed) requires that the evidence induce, in the mind of the fact-finder, an actual persuasion that the fact does (or at the

relevant time did) exist;

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

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

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

proof on the balance of probabilities may be satisfied;

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

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

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

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

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

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

26. The Tribunal is faced with the fact that it has no positive evidence before it that the builder did the works. The builder denies he has done the works. The homeowner suggests the Tribunal can simply draw inferences that the works were within the scope of works from the fact that Mr Favaloro is not a credible witness, it is suspicious that key documents are missing from the summons documents and the fact that the balance of the unaccounted amount in progress payment 4 would have more than covered the works. While Mr Favaloro may have not been particularly persuasive in some aspects, he has maintained from prior to the proceedings that in relation to some of the works they were not within his scope of works and that the previous homeowner had contracted with other contractors directly. While the Tribunal accepts that in certain circumstances it may draw an inference from the evidence before it as to the scope of works, it is not persuaded that in this case it can draw the inference that the builder was the one who actually undertook the works relating to the defects contained in paragraph 20 above. While there is an unexplained balance relating to carpentry and external works in progress payment 4, there are no tax invoices which properly identify what those amounts were for. The Tribunal rejects that in this case it can simply infer that those unaccounted tax invoices would have been for the works now in contention. Further, while the Tribunal does not find the Mr Favaloro to be an entirely credible witness, he has at least from the time the complaints were initially made indicated that the previous homeowner was responsible for some of the works and has taken responsibility in relation to some defects for works. The Tribunal does not find that the applicant has established that the builder’s scope of works with the previous owner extended to scope of works denied by the builder in paragraph 20 above. Except in relation to the pool, where the Tribunal finds there is some contemporaneous evidence that does indeed contradict the builder’s assertion. That issue will be dealt with in more detail below.

27. The Tribunal accepts that the builder did the works relating to the rear balcony and support beams. The Tribunal has considered the defects in light of the findings in relation to the scope of works and deals with alleged defect in turn.

Rear Balcony and Support Beams

28. The homeowner has since demolished and reconstructed the rear balcony and claiming the amount of $56,905.56 for the rectification works. The homeowner claims that the balcony had to be demolished because of the following four defects:

1. The support beam adjacent to the rear balcony was inadequate.

2. The members for the rear balcony were undersized

3. The way the balcony floor joists were attached was inadequate to support the beam

4. The waterproofing was inadequate.

The Expert Evidence

29. Before turning to each of these matters, a few observations regarding the expert evidence. The homeowner relied on an expert report by Mr Neil Monteith dated 3 March 2014 and a supplementary report dated 10 November 2014. Mr Monteith attended for cross examination. The homeowners also relied on site inspection reports from an independent engineer, Mr Errington dated 8 April 2013 and Charles Rickard dated 26 July 2009. Mr Errington and Mr Rickards did not attend for cross examination and the letters from them do not comply with the expert code of conduct. The builder relies on the evidence of Mr Christopher Favaloro who is presently the director and the licensed supervisor of the respondent builder. Clearly this compromises Mr Fovaloro’s independence in giving evidence as an expert. Certainly his expert evidence would not comply with the expert code of conduct. Further even as a lay witness the Tribunal has found issues with his credibility in that much of the evidence given by him was self-serving. In that regard, where in contest, the Tribunal prefers the expert evidence of the homeowner, including the engineer’s statement.

The support beam adjacent to the rear balcony was inadequate

30. There is no dispute that the plans required a 250mm PFC steel beam to be installed. The parties agree that the steel beam is not there now. In essence the homeowner alleges that it was never there and the builder alleges that it was previously installed and that the only relevant conclusion is that it has been removed during the works done to demolish the balcony.

31. The homeowner makes submissions that the steel beam was never used and a wooden beam was used instead. They rely on the supplementary report of Mr Monteith that there is no evidence of a steel beam there. Further Mr Monteith states at page 6 of the report:

It is my opinion that there is no evidence that any steel section has been installed over the sliding doors to the living room and nor is there evidence to suggest it was ever installed as the steel cap on the 90x 90 steel post does not have the room to fit both 50 mm LVL and a 65 mm flange of the PFC

32. The builder relies on the following to establish that the beam was installed.

1. The structural drawing identifies that that the steel PFC beams were required to be installed.

2. There are invoices from EDcon Steel dated 27 September which show that the steel beams were purchased.

3. The principal certifying authority found that the installed framework was satisfactory prior to it being covered.

33. The builder accepted in cross examination that he never saw the beams being installed and has never seen the steel beam.

34. The Tribunal did not find the evidence of the builder convincing. His evidence in relation to the steel beam has always been that it was there, however in an email dated 22 October 2013 to Mrs Martin he suggested the balcony joists were over the beam and he confirmed in cross examination that was his belief at the time. On receipt of the experts report which identified that the joists were nailed into a supporting timber beam, his evidence in his witness statement was that the 250mm PFC “was installed under the first floor and an LVL was bolted to the outside of that PFC” indicating that the steel beam was behind the wooden support beam. It was put to Mr Monteith that the steel beam could have rested partly on the 90mm post and partly off it and he accepted that this was possible, but in his opinion it would not have been done that way because it is not appropriate building practice.

33. The Tribunal prefers the evidence of Mr Monteith in that there had never been any steel beam installed. The tax invoice for the purchase of the steel does not mean in itself mean that it has been installed and although it was put to Mr Monteith that the beam may have fit in the space, the Tribunal finds it unlikely that it would have been put in.

34. Further the plans and certifiers report are not conclusive that the beam was ever installed. The inspection record dated 1 April 2008, of Dix Gardner the accredited certifier shows that the inspection prior to the covering of the framework took place on 18 October 2007 before the balcony was constructed. The builders time worksheet show a notation on 22 October 2007 that the site foreman and two men spent 20 hours installing the posts and beam on the back verandah. Entries and notation in relation to the balcony continue from that date. The report from Rebal Engineering lacks details in relation to the inspections. The Tribunal does not find as is contended by the builder that those inspections would lead to the conclusion that the principal certifying authority specifically found that the installed framework was satisfactory prior to it being covered.

35. The Tribunal finds that the beam was never installed.

36. In the alternative the builder makes submissions that even if the Tribunal finds that the steel beam was not installed at the time, the Tribunal should find that the 250 x 45 LVL beam by itself was capable of carrying the design load. In this regard the builder relied on a Hyspan table used by Mr Monteith and he suggests that it is capable of carrying the load. The Tribunal also does not find this persuasive as the table related to verandah beams and not floor bearers.

37. However more importantly the physical evidence shows it has failed. Mr Monteith observes in his report dated 3 March 2014 at 2.1.21 and states

I was able to check the bow down in the centre of this LVL beam as being 15mm at the centre.

40. The Tribunal finds that had a steel beam been installed as required by the plans the beams would not have bowed. More importantly the fact that the beam has bowed is consistent with Mr Monteith evidence that the failure to install the steel beam has resulted support beam being inadequate and that the wooden beam is not adequate.

41. The Tribunal finds that the failure to install the steel beam was a defect which was is in breach of section 18B of the Act which requires that the works will be done in a proper and workmanlike manner and in accordance with the plans. Further, it does not accept that the wooden beam was adequate.

Undersized Members for the Rear Balcony

42. Mr Monteith observed that the timber joists are inadequate because they are grade 5 orgeon timber as opposed to laminated veneer lumber (LVL) as asserted by Mr Favaloro. The builder again relies on evidence of purchase at the time, including a quotation from Belmont Timber and an invoice consistent with it. Mr Monteith relies on photographs provided by the owners in coming to his assessment that they are not LVL’s.

43. The builder makes submissions that it was incumbent on the homeowner to retain one of the joists to demonstrate that they were defective and that the Tribunal should draw an adverse inference in relation to that and that the owner has failed to discharge her onus.

44. The homeowner also relied on measurements taken by Mr Monteith that show bowing. The builder challenges that evidence on the basis that Mr Monteith has not indicated where he took his measurements and how many measurements he took or any photographs that supported the measurements he took and accordingly failed to comply with the expert conduct. The Tribunal accepts from Mr Monteith’s resume that he an expert with extensive experience. He presented as a credible witness.

45. Having considered all of the evidence on this point including the builders submissions in relation to absence of cracking, separation and/or drumminess in the tiles on the balcony and the certifiers inspections, the Tribunal still prefers the evidence of Mr Monteith. The Tribunal accepts his evidence the joists were grade 5 oregon timber and not LVL's and finds that the members for the rear balcony were undersized.

1. The way the balcony floor joists were attached was inadequate to support the beam

46. Once again the Tribunal prefers the evidence of Mr Monteith on this point. Mr Monteith gave expert opinion on this point, that it would have been impossible to have driven nails into the end of the balcony joists if in fact there had been a steel beam. At 2.4 of his report dated 10 November 2014, Mr Monteith states that even if multiple 90mm power driven nails had been driven through the LVL it would be totally unacceptable to provide support for the joists.

47. Having considered this evidence against Mr Favaloros evidence (even that given in cross-examination), the Tribunal prefers the expert evidence of Mr Monteith for the reasons given previously including the independence Mr Monteith and issues of credibility.

Waterproofing was Inadequate

48. It is agreed between the parties that water is penetrating through the ceiling and that there is indeed a defect. The homeowner rely on the report of Mr Monteith dated 3 March 2014 which notes at page 5 that the failure of the membrane is allowing water to penetrate into the ceiling void and that there is water staining to the ceiling in the living area. They also refer to the report of the structural engineer Mr Christopher Errington dated 8 April 2013 in which he notes that deflections to the existing balcony were found to be leaking due to inadequate waterproofing.

49. The homeowner also relies on a letter from Mr Chris Favaloro dated 3 December 2010 and addressed to Mr and Mrs Martin, in which he states that the only items Giro will be involved in having repaired are:

…the waterproofing to the rear balcony and northern balconies and repair of the damaged areas associated.

other items you refer to were not part of Giro’s scope of works”

50. They rely on a further letter from the builder to Splendid Group Pty Ltd who appears to have been the waterproofer, dated 3 December 2015 in which the builder notes that a complaint has been lodged to the Department of Fair Trading and that states:

The defects below are your responsibility:

The waterproofing to the rear balcony has failed causing substantial water damage to the villa board ceiling below.

The water proofing to the Northern side balcony has also failed causing the WRC slats below to rot and marking the exterior of the prefinished wall panelling.

51. The respondent does not dispute the defect, but maintains that the water penetration has resulted from work done by others. In particular work done around the installation of the balustrades done by the previous owners and /or Mr Mark Atherton who later waterproofed around the handrails. They make submissions that subsequent rectification works undertaken by the owner confirm that further rectification work was required because the work of Mr Atherton had failed. They also refer to the area where the balcony is leaking.

52. Once again the Tribunal accepts the opinion of Mr Monteith in relation to the likely cause of the leak. He states in his report that it may be due to:

The sagging effect of the deck or more likely due to the unsupported sheeting ends causing the membrane to fracture

53. Either which cause would be the responsibility of the builder. The Tribunal is not satisfied that the defect is connected to the balustrade work by the previous owner or Mr Atherton.

Was Demolition of the balcony required?

54. The respondent claims that even if the Tribunal was to find (as it has) that the waterproof membrane was defective, the entire demolition and reconstruction of the balcony was not required. They state that repairs for waterproofing could simply have been undertaken by replacing the membrane.

55. The applicant makes submissions that they previously invited the builder to attend to the defects and they did not accept.

56. Perhaps if the waterproofing had been the only problem then it could be said that the entire balcony would not have need to be demolished. However, given the findings on the other issues, including the undersized beam, the Tribunal accepts the evidence contained at page 6 in the report of Mr Monteith dated 3 March 2014 that the rear balcony needs to be demolished and reconstructed. The Tribunal also accepts the evidence of the homeowners that the costs to do so were in total $56,905.56 including architects costs and investigative costs.

Water Entry to the House from the Front/Side Terrace

57. While the Tribunal has found that it can’t be established that Giro did the tiling and the window installation in this area, the homeowner submits that in any event the builder is still liable, as it relates to a defect in his works. In his report of 3 March 2014, Mr Monteith notes at page 8 of his report that;

The construction of internal and external continuous concrete floor slab without a reasonable set down to the external is in my opinion not good building practice and certainly not recommended practice and is not in accord with AS 4654.2, Waterproofing membrane systems for exterior use-above ground level

As4654 recommend is a 100 mm step at this junction and an angle fixed to the concrete at the internal link of the door frame with the membrane turned up to this angle.

The existing construction falls well short of the recommended construction and has failed due to the method employed and allowed moisture to enter over the angle stop and become entrapped behind the angle and into the ply substrate which in turn has provided moisture into the underside of the Tongue and Groove boarding.

I am of the opinion that if moisture enters the living area floor the building is not compliant with section P2.2.3 of the PCA…

58. In relation to the step down, the builder states that the plans show a 20mm step down and they simply built in accordance with the plans and that Giro even allowed for more than what the plans required which was 25 -30mm. They state that Mr Monteith’s complaint that the step down should have been 100mm is misconceived. They also state that Mr Monteith agreed that the work was carried out with what was required by the BCA at the time and that when the work was carried out, the BCA did not require a 100mm step down.

59. The Tribunal agrees with the submissions of the homeowner that even if the builder was simply following the plans, then if it is a defect, section 18F of the Act, as it was at the time only allows such a defence if the builder has objected in writing.

60. In an invoice of the builder addressed to Splendid Group Pty Limited dated 18 January 2008 an amount of $770.00 is for “angles for all exterior balconies.” The Tribunal is satisfied that as a result of the subcontractor undertook those works for the builder and that they are within the builder’s scope of works. The Tribunal is satisfied that although the builder may not have been responsible for the tiling, they were responsible for the angles for the side balcony through their subcontractor Splendid Group Pty Ltd.

61. In his supplementary report dated 10 November 2014, Mr Monteith expresses the opinion at page 7, point 2.10 that he is:

Still of the opinion that water enters at the window/door positions and that is indicative of faulty waterproof membrane and detailing.

62. The builder claims that the cause of the water entry is the way in which the tiles were laid (use of mortar rather than the stipulated adhesive) and the fact that the windows were installed without a sub sill. They state that the defective work was due to work undertaken by contractors who the previous owner engaged. They also suggest that the issue has been exacerbated by the non-replacement of a tile which has damaged the waterproof membrane and created a water path.

63. Having considered the evidence on this point the Tribunal prefers the evidence of Mr Monteith who as stated above is an independent expert. The Tribunal accepts from his evidence that the angles to the side of the balcony and waterproofing have created the issue and that the defect is not as a result of the tiling or windows done by other contractors. Further, the Tribunal does not find that the removal of tiles is what has caused the damage to the waterproofing or created the water path.

64. The builder also makes submissions that even if they are liable, the Tribunal should not allow the amount claimed by the owner as the works undertaken were not necessary and the subsequent contractors undertook a significantly greater amount of work than was recommended by Mr Monteith, in particular in relation to the tiling, screeding and waterproofing work.

65. The owner claims $51,501.42 in relation to the works and a further rectification order in relation to the replacement of 3 rows of wooden flooring adjacent to the terrace which they say have insufficient thickness to survive another sanding and have deteriorated and become spongy to walk on.

66. Having considered the evidence on this point the Tribunal accepts that the tiling, waterproofing and screeding work were not within the required scope of Mr Monteith’s rectification recommendations. At page 8 of his report dated 3 March 2014, Mr Monteith notes :

It would also be my opinion that to rectify this problem as best as can be done will require the removal of the window/door framing and the installation of a new water stop angle on the inside of the door sill and new waterproof membrane and the re-installation of the door/window frame.

67. However contained in her evidence, the homeowner has provided a discrete invoice for the tiling and waterproofing works dated 6 January 2014 and totalling an amount of $11,932.80. Accordingly the Tribunal is satisfied that it can deduct that amount from the overall amount of $51,501.42 and allows an amount of $39,568.62 in relation to the defect.

68. Having considered the defect in relation to the rectification of the flooring, the Tribunal is not satisfied, particularly from the evidence of Mr Monteith that this is a defect and that the builder is required to undertake rectification work. No order is made in relation to the rows of wooden flooring.

Water Entry to the Upper side Balcony and repair of leaking balconies around posts

69. The builder claims they are not liable in relation to this part of the applicants claim because it is not within the scope of works. The homeowner themselves note that the evidence on this point “is not as strong as on the other claims as there has been no intrusive investigation of the specific waterproofing methodology employed.” Having considered the evidence, particularly that of Monteith on this point the Tribunal can’t be satisfied that the defect has arisen as a result of the work of the builder and the amount is not allowed.

70. In relation the leaking balconies, the Tribunal cannot be satisfied that the balustrade posts were installed by the builder and is not satisfied to allow the amount.

The Pool

71. The homeowner abandoned some of its original claims and the only claims she presses relate to waterproofing of the pool which she claims is causing efflorescence from the adjacent balconies and penetrating the grouting and causing tiles to fall off and causing the pool to leak 2-3 centimetres per week in winter.

72. The builder relies on exclusions contained in a trade break up relating to the works with the previous owner to demonstrate it scope of works. It states

Swimming Pool including excavation, concrete works, tiling internally and surrounded area, gate 1200 high safety fence, all connections, equipment, solar heaters etc.

73. The homeowner highlights that waterproofing is not specifically excluded. The builder relies on invoices from the tiler and water proofer which do not allow for waterproofing and tiling to the pool. The builder also relies on tender documents which show exclusions. The homeowner highlight that despite the terms of the exclusion in the tender documents, the builder subsequently constructed the pool structure and undertook the concreting works and so the documents contradict in that respect what eventually occurred. In that regard the Tribunal finds that the tender documents are not a complete reflection of the final exclusions and clearly the contract must have been varied to some degree while the works were undertaken.

74. The builder also highlights that earlier complaints by the homeowner and the initial report of Mr Monteith did not include these defects in relation to the pool. They suggest that this is indicative of the fact that the homeowners were aware this was not within the builder’s original scope of works. The Tribunal rejects that submission and does not draw such an inference.

75. Having considered all the evidence and submissions from the parties on this point, the Tribunal finds that the builder did do the waterproofing works to the pool. In particular, the Tribunal is persuaded by a warranty that Mr Martin obtained from Council. The warranty is from Splendid Group Pty Ltd, who did the other waterproofing works for the builder. The warranty notes Giro Construction Group Pty Ltd as the primary contractor and the warranty is issued for the swimming pool. The Tribunal finds that the builder did do the waterproofing in relation to the pool.

76. In his statement dated 7 August 2014 Mr Martin stated at paragraph 33 that efflorescence from the adjacent balconies were penetrating the waterproofing and causing tiles to fall off, the pool was leaking and that the side walls were wet. CJBOM Pty Limited who was the builder that subsequently undertook the rectification works noted leaking in the daily time sheet at the time of doing the works. The Tribunals finds from the evidence that the waterproofing had failed.

77. The homeowners claimed an amount of $26,843.96 for the pool rectification. In that regard they relied on a series of invoice which has been provided from. CJBOM Pty Ltd. Mr Martin has helpfully summarised in a schedule at the end of his statement the invoices relating to the pool rectification works and the invoices have also been provided. The builder claims that from invoice 4c a total of $6,918.00 for pool supplies should be excluded because it is unexplained. However, in the same schedule there is clearly a deduction in the total figure for pool supplies for exactly $6,918.00. The builder also suggests that invoice 3c includes administration charges and expenses which are normally included in as part of the builder’s margin. There is no evidence to support the assertion and the Tribunal accepts that these costs were part of the genuine costs of rectification. The builder also states that there is no details to support invoice 7 totalling $5,966.40, however the invoice clearly states in the description under the heading of “Pool”,

Invoices for tiling and waterproofing including screed.

78. Having considered the evidence and submissions the Tribunal is satisfied that the total amount claimed by the homeowner for the pool should be allowed.

Orders

79. In accordance with the findings above, the Tribunal allows the following amounts to the homeowner.

$56,905.56 in relation to the rear balcony

$39,568.62 in relation to the front/side terrace

$26,843.96 in relation to the pool

Total amount to be awarded to the applicant $123,318.14.

T Simon

Senior Member

Civil and Administrative Tribunal of NSW

29 October 2015

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 07 January 2016