Peter Bartel v Catherine Ryan; Catherine Ryan v Peter Bartel

[2018] NSWCATCD 12

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Peter Bartel v Catherine Ryan; Catherine Ryan v Peter Bartel [2018] NSWCATCD 12

Hearing dates:

12 September 2017 13 September 2017

Date of orders:

02 May 2018

Decision date:

02 May 2018

Jurisdiction:

Consumer and Commercial Division

Before:

J A Ringrose – General Member

Decision:

1. On the Hearing of the builder’s claim against the owner (HB 17/04880) the application is dismissed.

 

2. On the Hearing of the owner’s cross claim against the builder, the builder is to pay the owner the sum of $62,300.00 within one month of the date of these orders.

 

3. Parties are at liberty to make a cost application in these proceedings.

 

4. Any cost application pursuant to s. 60 of the Civil and Administrative Tribunal Act 2013 must be lodged in the Tribunal and served on the costs respondent within 21 days of the date of this order, attaching or referring to documents relied upon in support of the application.

 

5. The costs respondent within 21 days after the receipt of the costs application referred to above to lodge in the Tribunal and serve on the costs applicant the submissions, if any, in response to the cost application. Such submissions shall attach or refer to the documents relied on.

 

6. The costs applicant will have 14 days after the receipt of the costs respondents submissions to lodge in the Tribunal and serve on the costs respondent the submissions, if any, in reply to such submissions.

 7. The Tribunal will determine any costs application on the basis of the papers lodged.

Catchwords:

Builder’s claim for cost of variations – owners cross claim for completion of the works and rectification of defective works – variations not in writing – whether the builder is entitled to quantum meruit – rejection of evidence after failure to comply with tribunal directions.

Legislation Cited:

Home Building Act 1989
Civil and Administrative Tribunal Act 2013 s. 38 Sch 4 cl 10(4)
.

Cases Cited:

McDonald v Dennys Lascelles Ltd [1033] 48 CLR 457
Robinson v Harmen [1848] 154 ER 363 at 365
Gibbs CJ in Shervall v Builders Licencing Board (1982) HCA 47
Conway v Brady [2018] NSW CATAP 51
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management Pty Ltd [2013] HCA 46
Grozdanov v N & T Buildings Pty Ltd [2015] NSW CATAP 107
Conroy v Conroy [1917] NSW SR 44
Pavey and Matthews Pty Ltd v Paul [1987] 162 CLR 221

Category:

Principal judgment

Parties:

Peter Bartel – Applicant and cross respondent
Catherine Ryan – Respondent and cross applicant

Representation:

P G Smart of Counsel instructed by Stuart Garrett Lawyers appeared for the applicant (builder).

  Craig Simpson of Counsel instructed by Sommerville Loundry Lomax Solicitors appeared for the respondent (owners).

File Number(s):

HB 17/04880 & HB 17/07208

Publication restriction:

Nil

REASONS FOR DECISION

Background

1. On about 16 October 2015 the respondent owner placed a deposit to purchase a parcel of land known as 1 Murrogun Place, Wollingbar Park Estate. Plans were then prepared for a proposed dwelling and the respondent owner met with the applicant builder to discuss a budget for the building of the house.

2. During the course of discussions the applicant builder and the respondent owner agreed that Ms Ryan’s son Beau would provide carpentry assistance throughout the build to reduce the total cost price. On 16 December 2015 the parties executed a Residential Building Contract (BC4) under which the builder agreed to construct a new dwelling for the owner at 1 Murrogun Place, Wollingbar for a contract price of $163,000.00 inclusive of GST. The house was to be constructed in accordance with plans and drawings prepared by Mr David Robinson, engineering specifications prepared by Hammond and Associates and a Development Approval from Ballina Council. Reference DA 2015/631.

3. By about May of 2016 the parties were in dispute and the owner claimed that in July she was becoming increasingly concerned about delay whilst by September the parties were exchanging text messages or emails concerning progress payments.

4. The respondent owner claims that the applicant builder abandoned the site by late September and communications were then exchanged between the solicitors for the parties.

Applications

5. Peter Bartel filed his application (HB 17/04880) on 1 February 2017 in which he claimed the cost of variations to the contract and requirements not paid for. He claimed a sum of $30,000.00 noting that the owner had refused to pay any variations which became necessary owing to council requirements.

6. The owners cross claim (HB 17/07208) was filed on 13 February 2017 claiming a sum of $120,000.00 and noting that the builder had already been paid $121,825.00 out of a total contract sum of $163,000.00 but that the builder was not even entitled to payment for Stage 3 of the contract as works had not been completed to that stage. The cost of certain rectification works was also claimed.

7. Both matters were listed for directions on 16 March 2017 although it was noted that the builder did not appear and the owners were represented by telephone through solicitors. It was noted at that stage that the builder had not given a notice suspending works pursuant to cl 21 of the contract until 7 March 2017.

8. The owner was directed to send to the builder a copy of all documents including expert reports, witness statements and Scott Schedules by 13 April 2017 and the builder was required to send to the owner all documents including expert reports, witness statements and Scott Schedule by 11 May 2017. Experts were required to meet and prepare a joint statement and orders were made entitling both parties to be legally represented.

9. On 20 April 2017 an extension of time was sought by the builder to 27 May 2017 and the time for compliance by the owners was to be extended to 25 May 2017.

10. On 10 May 2017 the solicitors for the builder sought a further extension of time to 31 May 2017 on the basis that they were obtaining a report from a quantity surveyor. On 7 June 2017 it was agreed between the parties that the owners would send further evidence to the builders by 22 June 2017 and that the matter should be listed in Lismore on an urgent basis. The matters were ultimately both listed for hearing on 12 and 13 September 2017 and, following the evidence, directions were made for both parties to file written submissions with the last submissions to be filed by the applicant builder on or before 22 November 2017.

11. The files and submissions were not received by the member until after that member returned from leave on 10 January 2018.

Applicant Builders’ Submissions

12. In his affidavit sworn on 24 May 2017 Mr Bartel claimed that he had been friends with the owner, Catherine Ryan, for about 7 years and that between 2011 and 2013 she assisted him to prepare his business books.

13. He claimed that in about August 2015 he received a telephone call from Ms Ryan to discuss the building of a house and in September he arranged to meet her at a block of land at Spring Creek Place. He advised her that the land was too steep and a couple of weeks later he met her with her son Beau at 1 Murrogan Place which he described as a better block.

14. Discussions continued between the parties and on 16 November 2015 an application for Combined Development and Construction certificates was lodged. That application provided an estimated cost of the development to be at least $160,000.00 and the costing for the work was arrived at, on the basis that the house was to be constructed to gyprocking and lock up and that the driveway, landscaping, painting, carpets, flooring and fencing would be excluded.

15. Mr Bartel also claimed that Ms Ryan had said that she wanted to build a house as cheap as possible and that her son Beau could work on the job claiming:-

“Beau will help you and can do most of the work to keep costs down and my other son can do all the tiling.”

16. The contract in standard form for a Residential Building (BC4) was executed by the parties on 16 December 2015 requiring works to be undertaken on drawings prepared by David Robinson dated 13 November 2015 for DA No. 215/631 with specifications prepared by Hammond and Associates, Civil and Structural Engineers dated 20 November 2015. It was claimed that the drawings and specifications had been approved by Ballina Council in DA 2015/631 and that the plans and specifications had been proposed through the builder.

17. The cost of the works was to be $163,000.00 with the provision of payments to be made in four stages by payments of $35,175.00 with a final payment of $6,000.00. The commencement date was to be 14 January 2016 subject to Council approval and cl 9 of the contract provided that all variations were to be approved before starting. If necessary a second quoted price was to be agreed upon.

18. Exclusions to the works were described as painting, fencing, driveway and landscaping. No specific reference was made in the contract price for the assistance to be provided by Ms Ryan’s son Beau but this condition was clearly implied and accepted by the actions of the parties.

19. The evidence filed on behalf of the builder in relation to the two claims consisted of the application filed 8 February 2017 being HB 17/04880 and documents annexed thereto, together with an affidavit of Peter Bartel sworn 24 May 2017 with the annexures thereto.

20. At the commencement of the Hearing, Mr Smart of counsel for the builder sought to rely on late evidence as to quantification of the claimed variations. The tender was objected to by Mr Simpson of counsel for the owners and following argument, the admission of the late evidence addressing quantification of the variations, was refused for reasons which will be detailed later in this judgment.

21. In relation to the builder’s claim for $30,000.00 it was submitted that the claimed sum was necessary to complete the dwelling including variations which it is alleged, were authorised by the owner or her representative. Mr Smart submitted further in relation to that claim that refusal to admit the late evidence had compromised the builder’s claim. He nevertheless maintained that the variations did occur and that they were authorised by the owner, and as a result thereof the builder had sustained an undefined loss.

22. It was submitted that the owner was not entitled to terminate the contract at the time she did but that the builder had just cause to suspend the works under the contract due to the breaches by the owner which were identified as follows:-

1. failure to pay the deposit in a timely manner or at all.

2. failure to provide the builder with written instructions in a timely manner or at all.

3. the owner had lacked capacity to pay the builder the contract sum in a timely manner and had failed to provide documentary proof of her ability to pay monies under the contract.

23. It was alleged further that the owner had breached a contract by failing to execute an irrevocable authorisation from her to the lending authority to pay monies when they became due.

24. It was submitted finally in this regard that at the time the owner terminated the contract she had no right to do so as the builder was not in breach of the contract and the owner could not be described as an “innocent party”.

25. In the alternative it was submitted that, if the Tribunal was of the opinion that the owner was entitled to damages, then the builder disputed the amount claimed by the owner on the basis that it was not reflective of a claim that would put the owner in the same position as if the contract was performed in the manner contemplated.

26. Each of these items were then addressed in further detail in the submissions provided by Mr Smart who pointed out that the initial deposit was payable in around January 2016 after a copy of the Home Warranty statement cover had been forwarded. That required a payment of $16,300.00 and he argued that the owner had maintained that she was not obliged to pay the deposit because she had expended the monies from her own account on items which were required to be paid by the builder.

27. By 17 February 2016 Westpac had written to the owner noting that she would be required to contribute a sum of $26,000.00 in her own right before Westpac would release the first progress payment drawdown. That communication required her to show receipts for $26,600.00. In response to this request the owner allegedly forwarded a letter of confirmation from the builder on 9 March 2016 indicating that Ms Ryan had contributed $26,600.00 towards the contracted building price which then enabled Westpac Bank to release other funds. As part of his submission Mr Smart argued that there were a number of pre-contract payments which were not included in the builder’s price although the contract appears to suggest otherwise.

28. It was submitted that the owners breach through failure to pay was never remedied despite the builder consistently maintaining his position that he was entitled to a receipt of an un-deducted deposit of $16,300.00.

29. In relation to the claim that the owner had failed to provide written instructions for a variation relating to house levels, Mr Smart pointed out that the house level was changed from 950cm out of the ground to 2.2m out of the ground at one end of the building. This entailed further costs including, amongst other items, extra brickwork and bricks with longer peers, additional layer and additional excavation. He also noted that 45cm eaves were added to the roofline around the house and that the concrete plank retaining wall at the end of the house was increased because the house levels had changed.

30. He noted that the wall divider creating a separate lounge room was removed and none of these were authorised in writing. Mr Smart also observed that in cross-examination the owner conceded she had orally instructed the builder not to proceed with the installation of certain windows in her bedroom but instead to install a sliding glass door.

31. In submissions he noted that the need for some of these variations was attributed to the plans provided by Mr David Robinson on which the builder relied to prepare his quote and further that the levels were allegedly provided by the owner’s son, Beau Ryan, which gave rise to the need for further excavation.

32. Mr Smart sought to derive an inference that communications between the builder and the owner’s son Beau were sufficient to establish an acceptance by the owner of the variations which were orally communicated by the builder but never put in to writing.

33. Mr Smart of counsel submitted the owner had failed to pay the Stage Payments in a timely manner, suggesting that the initial Stage 1 payment was not received in to the builder’s account until 16 March 2016, some 49 days or so after the invoice had been issued. It was claimed that invoices for earthmoving and other matters which would be regarded as variations were not paid in due time.

34. It was noted that an invoice for the completion of Stage 2 was submitted on 25 February 2016 but was not paid until 27 June, although it is claimed that Stage 2 was concluded on 31 May 2016. The builder issued a further progress payment for lock up on 18 June 2016 but payment was not received until 20 July. It was further argued that the owner had failed to provide an irrevocable authority from the lending authority to pay the builder when monies became due. It was also claimed that the owner failed to produce to the builder at the commencement of works, documentary evidence to establish evidence of capacity to pay the contract sum.

35. The builder pointed out that many things were not included in the contract and reference was made to a statement from the daughter of the builder, Cherie Bartel, which was annexed to Mr Bartel’s affidavit. It is clear that the contract specifically excludes painting, fencing, driveway and landscaping but it was alleged that the quote obtained from W & J Mcpherson for completion of the dwelling include flooring, driveways, paths, retaining walls, a letter-box and handrails on the patios. Reference was also made to the quote from Phil Kelly, estimating $189,557.00 to complete the work but it was argued on behalf of the builder that many items mentioned in his Scott Schedule were not included in the contract and were to be carried out by the owner and her son in his capacity as a carpenter. It was conceded that the contract was signed on 20 December 2015 but just four days after the signing of the contract the builder provided the owner with a written list of his costings that made up the $163,000.00. It is claimed that these costings did not include items such as the variations claimed as well as carpets, kitchen cabinets, benchtops and carpentry labour and it is also claimed that drafting of the plans and the engineer’s costs and the cost of soil testing were extras notwithstanding that they had been included in the signed contract.

36. It was further submitted by Mr Smart on behalf of the builder that the owner was responsible for numerous breaches of the contract and to that extent could not be described as an “innocent party” entitled to claim damages which she now seeks. Reference was made to the decision of the High Court in Mcdonald v Dennys Lascelles Ltd [1033] 48 CLR 457.

37. It was conceded that the builder’s application claim for variation costs of $30,000.00 was without particularisation and quantification and was therefore compromised. It was not conceded that the variations to the contract plans occurred but rather that the owner had failed to provide the builder with written instructions relating to each variation.

38. In the alternative it was submitted that should the Tribunal not be persuaded to dismiss the owner’s claim then the amounts claimed could be reduced to a reasonable cost of the works necessary to complete the dwelling. It was noted that the owner had relied on the expert evidence of Phil Kelly Building Consultant and upon his Scott Schedule. The Scott Schedule was not responded to by an independent expert although the builder had ample opportunity to provide the necessary reports. The only evidence contradicting the views expressed by Mr Kelly were notations on a Scott Schedule by Mr Bartel himself. Mr Bartel is clearly a party who has an interest in the outcome of the claim and therefore his specific costings should not be accepted as an alternative to evidence from an independent expert. The comments made by Mr Bartel in relation to Mr Kelly’s Schedule will nevertheless be taken in to account and fully considered.

39. It was pointed out that the contract was required to take into account the contribution which was to be provided to the building of the premises by Ms Ryan’s son Beau. Mr Smart referred to the principles enunciated in Robinson v Harmen [1848] 154 ER 363 at 365 and submitted that the owner’s claim for damages was to be assessed, taking into account the free carpentry services to be provided by Ms Ryan’s son.

Respondent Owner’s Submissions

40. The evidence provided by the owner included the following documents:-

1. Home Building Application

2. Affidavit of Catherine Ryan sworn 13 April 2017

3. Affidavit in reply of Catherine Ryan sworn 28 June 2017

4. Affidavit of Beau Ryan sworn 28 June 2017

5. Expert report of K. Spec dated 28 February 2017

6. Scott Schedule dated 28 February 2017

41. Further material was provided including correspondence from the Department of Fair Trading, drawings and specifications provided by David Robinson, structural engineering drawings created by Hammond & Associates and a Building Services Inspection report dated 4 October 2016.

42. Mr C Simpson of counsel, on behalf of the owner, submitted that essentially the builder claimed he is and was owed an amount under the contract suspended for non-payment whilst the owner complained that she had paid the builder more than in fact was due to him. His suspension of works was therefore wrongful and she had validly terminated the contract as a result.

41. On 16 December 2015 the parties entered into a fixed price contract for the construction of a dwelling for an amount of $163,000.00. The contract was in the form of the Masters Builder’s Association Residential Contract Form BC4. The contract specifically referred to drawings prepared by David Robinson and engineering specifications provided by Hammond & Associates. The contract also indicated that the builder was responsible for and had provided the drawings and specifications. Certain items were clearly excluded from the work to be done by the builder which included painting, fencing, driveway and landscaping.

42. It is claimed on behalf of the owner that between October 2015 and March 2016 she made various payments to suppliers at the builder’s request or direction and that these payments totalled a sum of $27,358.16. They included payments to draftsmen, engineering and builder’s insurers as well as to the earthmover, the surveyor, the plumber and the concreter.

43. On 20 January 2016 the builder sent an invoice for his deposit of $16,300.00 and on 25 January 2016 the council issued the construction certificate.

44. The builder commenced work on 28 January 2016 and on 29 January he submitted the Stage 1 invoice for $35,175.00. The contract provided that the Stage 1 payment was due when the excavation, footings and survey work was 95% completed.

45. The owner had obtained finance through Westpac and had sent the builder’s invoices to Westpac for payment on 17 February. The bank at that time had asked the owner to confirm if she had made her contribution of $26,000.00 towards the construction costs before they would approve a drawdown. The owner noted that she had already paid in excess of $26,000.00 direct to the builder and invoices were then sent to the bank.

46. On or about 16 March, the bank, on behalf of the owner, paid a sum of $24,875.00 which was calculated as follows:-

Deposit	$16,300.00
Stage 1 payment:	$35,175.00
Total:	$51,475.00
Owner’s contribution:	$26,600.00
Balance payable from bank	$24,875.00

49. On 25 February 2016 the builder had sent an invoice for Stage 2 which included framing. The bank refused to pay that invoice as inspection revealed the work was not complete and that work was not completed until 24 June 2016 when the bank sent another inspector who then authorised the Stage 2 payment of $35,175.18.

50. By 18 June 2016 the builder had sent a Stage 3 invoice being the payment to lock up. That sum was paid by the bank on 20 July 2016 notwithstanding that the dwelling was still not at lock up stage because it was paid without a further inspection.

51. On 11 August 2016 the owner made a complaint to Fair Trading and on 22 August 2016 the builder gave the Stage 4 fix out invoice before that work was completed. The builder left the site in September 2016 and had the safety fencing removed from the site on or about 9 September.

52. On 25 September 2016 the owner sent the builder an email asking him to return and finish the job. A chain of correspondence then ensued between the parties and their solicitors wherein the builder continued to demand allegedly unpaid amounts and the owner requested the builder to return to complete the works. On 14 December 2016 the owner terminated the contract.

53. It was submitted on behalf of the owner that there was a fixed price contract for the works and it was noted that two original documents had been tendered and were signed by both parties. Although the builder had claimed that there was some other version of the contract including handwritten changes by him to the affect that Beau Ryan would be doing some free work to cut costs, he was unable to produce the originals of those pages or any evidence of the alleged alternative version of the whole contract, part of which was included in the tender bundle. The handwriting in the part contract annexed to the builder’s affidavit is clearly different from the handwriting of the other two versions and it was not suggested to the owner in cross-examination or put in the builder’s submissions that the original contracts now in evidence were somehow obtained by fraud or not validly executed. The owner does however concede that there was an arrangement between the builder and Beau for the provisions of assistance on the build.

54. Mr Simpson, on behalf of the owner, has accepted that the builder ultimately breached (with minor omissions and defects) Stage 2 of the works and was thereby entitled to receive (in addition to the deposit money), the Stage 1 and Stage 2 payments totalling $86,650.00 including the deposit. It was submitted however that the builder did not reach Stage 3 (lock up), let alone Stage 4 (fix out) even though he purported to invoice for both stages. It was noted that the builder did, in cross-examination, concede that he did not reach lock up stage and this was apparent from his own document which estimated the cost of bringing the house to lock up stage to be a total of $23,650.00. Photos produced with Mr Kelly’s expert report clearly indicate, among other things, that the external walls and decks of the house were not completed and accordingly in the submission of the owners, the builder was, as at September 2016, not entitled to have been paid any more than $86,650.00 under the contract appear to be correct.

55. In addressing the issue of variations, Mr Simpson of Counsel, on behalf of the owner, pointed out that the builder claims an unspecified amount for alleged variations to the work. The contract was a fixed price contract which required variations to be made in accordance with cl 14 and it was pointed out that there was no written evidence of any kind supporting a claim under cl 14. It was pointed out the invoices rendered while the builder was still engaged in the works did not include any claims for variations although he did claim them later once a dispute arose.

56. It was properly submitted that any claim made by the builder would necessarily require to be established in accordance with quantum meruit principles.

57. Mr Simpson then went on to address each of the five variation claims made noting that the first claim related to variations because house levels had been changed from those indicated on the plans. It was submitted on behalf of the owner in that regard that the builder had contractual responsibility for the plans and he accepted in cross-examination that he was responsible for the levels provided to the draftsman being incorrect. It was submitted that there is no basis on which the owner could be required to pay for increased costs for levels where these occurred as a result of an error by the builder.

58. It was further submitted that even if Beau had in some way contributed to any error then this would not absolve the builder from his responsibility to the owner as Beau was working under the builder’s supervision.

59. It was further noted in relation to this claim that although Mr Bartel claimed to have had discussions with Beau concerning the levels, this does not absolve the builder from his responsibility.

60. The next claim related to the costs of adding 45cm eaves to the existing roof line. The builder does not allege that this was due to any error in the plans although he thought the house would “look silly” without them and they would give some shelter to the windows.

61. The builder did not claim that there were any direct discussions with the owners but on site Beau had simply said “OK, may as well do it”.

62. There is no evidence of any valuation or variations and even if the Tribunal was to find that the owner obtained some benefit from them, she could only be obliged to pay for them on a quantum meruit basis.

63. The third claim for extras related to the cost of a retaining wall. It had been claimed that this was an additional cost because the Council made a late change requiring wall sleepers to be concrete although the builder appeared to concede in cross-examination that the sleepers were to be concrete in any event.

64. It was then submitted that the increased costs were because of an increased height in the walls due to an error in levels. The error in levels was the responsibility of the builder and accordingly no variation would be applied.

65. The fourth variation claim related to the cost of removing a dividing wall in the lounge/living room area. Mr Simpson submitted that there was a factual dispute as to the reason for its removal in that Beau stated that it had to be temporarily removed because the roof trusses were rested on it and their weight had damaged the wall. It was submitted by Mr Simpson that it was inherently unlikely that the builder and Beau would make an important design change to the area without checking with the owner.

66. The final variation claimed related to the sliding glass door which was installed in the bedroom rather than a sliding glass window as shown on the plan. The owner has always accepted that she gave the builder that instruction but there is no evidence from the builder as to the increased cost or any cost savings occasioned by the change. It was submitted by Mr Simpson that the builder accordingly has no entitlement to any further payment based upon the alleged variations to the contract works as the builder’s total entitlement was limited to the contractual amount at that stage of $86,650.00.

67. Apart from direct payments made by the owners to suppliers, or on behalf of the builder, there is no dispute that the owner has paid a total of $95,225.00 to the builder between 16 March 2016 and 19 July 2016, even ignoring the direct payments. By the time the builder suspended works and left the job the owner had paid him more than he was entitled to for the works which had been completed.

68. As to the direct payments the builder has not disputed that the owner has made those payments or that they related to the building works. The builder has argued that some of these payments were pre-contract and some of them were later reimbursed by the builder but there is no denial that the owner had paid these costs.

69. The builder has claimed that three of the payments were subsequently reimbursed, being (a) a payment for builder’s fencing, (b) a repayment of a loan to enable concrete to be delivered from Holcrom Limited and (c) a payment to a plumber. There are still factual disputes concerning the nature and extent of repayments made although the builder ultimately conceded in cross-examination that he only paid one invoice from the plumber and partially reimbursed the monies paid out for the fence. In relation to the repayment of the loan made by Max Finance for concrete, the owner claimed that only one payment for concrete had been made and the second payment had not. Mr Simpson pointed out that the builder was evasive about this issue in cross-examination but ultimately accepted that based on the Holcrom evidence the total amount was made in two payments and accordingly the payment made by the builder had not reimbursed the subsequent payment.

70. In relation to questions of insurance, it was conceded that some insurance payments had been made by the owner. It was accordingly submitted that as at September 2016 the owner had made payments of $27,358.16 or at least payments of $26,600.00 as per the letter of 9 March 2016 to the builder in addition to the $95,225.00 directly paid through the bank.

71. If the total payment of $27,358.16 is accepted then the builder had received $122,583.16 but if the sum is reduced to the amount conceded as paid by the builder, namely $26,600.00 then the total sum paid as of September 2016 was $121,825.00.

72. It is submitted that under cl 28 of the contract the owner was entitled to terminate if the builder failed to proceed with the works with due diligence or suspend the works without cause, providing the owner gave at least 25 days’ notice of her intention to terminate. The builder abandoned the site in September 2016 and on 9 September removed all safety fencing from the site. There is no evidence of work being done after that time and on 18 October 2016 the owner formally gave notice of her intention to terminate unless the builder returned to work. It is clear that the builder did not return to work and on 14 December 2016 the owner terminated the contract.

73. Mr Simpson referred to termination under the general law and the decision of Gibbs CJ in Shervall v Builders Licencing Board (1982) HCA 47.

74. The five breaches of the contract alleged by the builder are disputed in some detail contained in the submissions made by Mr Simpson of Counsel who ultimately submitted that the owner was not in breach of contract in any way that entitled the builder to refuse to perform his obligations thereunder.

75. Mr Simpson pointed out that damages were payable under cl 28 of the contract as the right to terminate the contract was expressly exercised without prejudice to the owners other rights and remedies. It was submitted that the costings sought were a reasonable cost of completing the dwelling less any amount paid under the contract that has not been completed. On that basis it was argued that the owner was entitled to the cost of completing the works referred to the expert report of Mr Kelly (namely $189,557.00) less the cost of painting (being $9,625.00) and the balance of monies payable under the contract had it been completed, being a sum of $40,416.84. It was claimed therefore that the total amount recoverable by the owner was $139,515.16.

76. It was pointed out that there was no expert evidence on behalf of the builder and it was submitted that Mr Kelly’s estimates should be accepted. In relation to the assistance required to be given by Beau under the contract, it was submitted in the first instance that no allowance should be made for that assistance on the basis that there was no evidence that Beau would be willing or able to provide his work free of charge under a new arrangement with a different builder. It was argued in the alternative that if damages were to be reduced the reduction should be limited to the items of carpentry labour identified by Mr Kelly and not as contended by the builder, having Beau complete every conceivable item of work that did not require a specialist.

Decision

77. These related matters (HB 17/04880 and HB 17/07208) were heard together on 12 and 13 September 2017 in Lismore. The proceedings involve a claim by:-

1. the builder Peter Bartel against the home owner Catherine Ryan for allegedly unpaid work under a contract for construction of a dwelling at 1 Murragan Place, Wollongbar.

2. to a claim by the owner against the builder, seeking damages for costs of completing the incomplete work.

Admission of further evidence

78. At the commencement of the proceedings Mr Smart of Counsel, for the builder sought to introduce further evidence in the nature of an expert report addressing the issue of quantum meruit in the builder’s claim. The request to rely on that evidence was refused and it is appropriate at this stage to provide detailed reasons for that decision.

79. HB 17/04880 was filed on 1 February 2017 claiming a sum of $30,000.00 which was then described as variations and requirements not paid and it was noted that the owner had refused to pay any variations due to council requirements and variations to the plan. It is noted that both parties had been represented by solicitors prior to the commencement of these proceedings and the solicitors had been communicating with each other since before this matter was commenced. When the matter was first listed with the related cross claim (HB 17/07208) the owner, Ms Ryan, appeared in person but there was no appearance of the builder. The matter was rescheduled for a further directions hearing with both parties attending by phone and at that time directions were made which included a requirement that the owner serve the builder with all documents including expert reports, witness statements and a Scott Schedule, by 13 April 2017 and that the builder was required to serve all documents on the owner and the Tribunal, including expert reports, witness statements and a response to the Scott Schedule, by 11 May 2017.

80. Direction 4 required the experts to prepare a joint report and the right for legal representation was formally granted to both parties.

81. The directions were forwarded to both parties and they included a note in the following terms:-

Note: Parties must not present any evidence in chief whether spoken    or written at the Hearing of their case unless that evidence has already been provided to the Tribunal and other parties in accordance with    tribunal directions unless the Tribunal grants leave to do so in    accordance with the procedural directions.

Note: Sch 4 cl 10(4) of the Tribunal rules provides that a party, being the applicant, who causes disadvantage to the other party may have his claim struck out.

82. On 13 April 2017 the builder so1ught an extension of time to provide his evidence. The extension of time was granted till 27 April 2017 with the time for the owners to file evidence being extended to 25 May.

83. On 10 May 2017 the solicitors for the builder wrote to the solicitors acting for the owner, seeking a further extension of time to 31 May 2017 as it was proposed that evidence would be obtained from a quantity surveyor to address the quantum meruit issues in matter HB 17/04880. The solicitors for the builder finally provided evidence to the Tribunal on 24 May 2017 although that material was provided only by email and consisted of some 240 pages. The Tribunal advised the solicitors for the builder that the documents were required to be lodged in person or by post in accordance with directions.

84. On 7 June 2017 it was agreed between the legal advisors for the parties that a further extension of time could occur and the owner was required to send any further evidence to the builder by 22 June 2017 with the matter to be listed in Lismore on an urgent basis.

85. At a directions hearing on 8 June 2017 the matter was formally adjourned for a hearing and parties were advised to indicate any other available dates in August and September of 2017 and advise whether any witnesses would be required for cross-examination. The matter was at that stage listed for hearing for two days. On 5 July 2017 the parties were advised that the matter had been listed for hearing on 12 and 13 September and on 18 July the solicitors for the builder requested a change of the date allocated as 13 September was not convenient. They were advised by the Registry that if the builder did not wish to proceed then an adjournment should be requested. The application was listed for further directions on 17 August 2017 when it was noted that any request for production of documents under summons had been withdrawn. It was not until the first day of the Hearing that any request was made for further evidence to be provided.

86. The guiding principle of the NCAT Act and the Procedural Rules as to their application in the Tribunal is to “facilitate the just, quick and cheap resolution of real issues in the proceedings”. Section 31 relating to the practice and procedure of the Tribunal should be implemented in such a way as to ensure that the costs to the parties and the Tribunal is proportionate to the importance and complexity of the subject matter in the proceedings.

87. In Conway v Brady [2018] NSW CATAP 51 the Appeal Panel observed:-

“26 s. 38(4) of the NCAT Act requires that;

The Tribunal is to act with as little formality as the circumstances of the case permits and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.

27   How a tribunal achieves that may differ from case to case but it    is essential that the parties are on notice by the time the matter    comes to final hearing of the nature of the proceedings. The    Tribunal must turn its mind to whether the parties have been       given the opportunity to provide all relevant material so as to       enable it to determine all of the relevant facts in issue. Ideally    that would have already been provided for in any previous       directions hearings.”   

88. In the present case it is noted that both parties have been legally represented since the relevant claims were filed. It is noted further that the initial directions required the builder to provide to the owner and the Tribunal a copy of all documents including expert reports, witness statements and Scott Schedules, by May 2017 and the experts were required to prepare a joint report within that time. Both parties were clearly put on notice, not only of the need to comply with directions, but also of the requirements of Sch 4, cl 10(4) whereby a party causing disadvantage to another party may have his or her application struck out.

89. The builder’s time for compliance was extended to 24 May 2017 on a specific indication that he intended to obtain a quantity surveyors report. The time was extended to 24 May 2017 for that purpose but the material was not provided to the Tribunal in a proper form by 26 May. It would appear that no request was made for a further adjournment or for an extension of time when the matter came before the Tribunal for a directions hearing on 8 June 2017.

90. When the application was again listed for directions on 17 August 2017 no request was made at that stage for an extension of time to provide further evidence and no request was made to rely on additional evidence until the first day of hearing on 12 September 2017.

91. On 7 June 2017 the parties requested that the matter be listed for hearing on an urgent basis. The reason for this request could be regarded as obvious because the builder had vacated the work site in September of 2015 and the owner was awaiting the determination of the claims in order to be able to proceed with the further building works on the house which was not even completed to lock up stage.

92. If the Tribunal had permitted the introduction of a quantity surveyors report or other report addressing the issue an quantum meruit, it would have necessitated a further adjournment of the proceedings to enable the owner to obtain a further report to meet that evidence. The balance of convenience rests clearly with the owner, who has been waiting for completion of her building works for a period of some two years and who would, if the documents were allowed in to evidence have faced a delay of some months before the matter could again be listed for two days. The legal representatives of the builder were unable to advance any satisfactory explanation as to why the further material was not produced in accordance with the earlier directions and they were not able to provide any explanation as to why an earlier application or request had not been made in circumstances where the need for a quantity surveyors report had been foreshadowed on 10 May 2017.

93. The obligation of parties and their representatives to cooperate with the Tribunal to give effect to the guiding principles enunciated in s. 36 of the Act is clearly set out in s. 36(3). That obligation requires a party to the proceedings and an Australian legal practitioner or other person who is representing a party in the proceedings to comply with directions and orders of the Tribunal.

94. The consequences of failure to cooperate in such manner are clearly set out where the failure constitutes action which unreasonably disadvantages the other party in the conduct of the proceedings. Sub-rule (10) 2 provides that where a party causing disadvantage is an applicant, the matter may be dismissed or struck out. It is not appropriate to strike out the builders claim, although that course may have been open having regard to the matters required to be considered under cl 10(3) of Sch 4.

95. Although no specific request was made for an adjournment in this case, the Appeal Panel in Conway v Brady (Supra) observed at para 13 that there are circumstances where failure to adjourn proceedings may not amount to procedural fairness particularly where s. 38 of the Act refers to the procedures of the Tribunal and principles of procedural fairness. A consideration of the detailed directions given to the parties before any request for admission of documents or any application adjournment of the matter is made will be of assistance in determining whether or not that party is entitled to relief.

96. The Tribunal has power to adjourn proceedings under s. 51 of the NCAT Act and that power should be exercised according to the principles set out by the High Court in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management Pty Ltd [2013] HCA 46 procedural fairness may be denied if a decision maker fails to adjourn proceedings where such failure has the effect of depriving a person of adequately presenting the case (see Grozdanov v N & T Buildings Pty Ltd [2015] NSW CATAP 107).

97. In Conway v Brady (Supra) the Appeal Panel observed that the question of whether an application for adjournment of a matter should be granted or refused is a matter within the discretion of the presiding member or judge to be resolved according to the overall requirements of justice in the particular circumstances or case, Conroy v Conroy [1917] NSW SR 44. Its resolution may involve the assessment of competing claims by the litigants … and may require knowledge of the working of the listing system of the particular court or judge and importance in the proper working of that system of adherence to dates fixed for hearing. In these circumstances the builder was not granted leave to rely on further evidence and any request for an adjournment of the matter was declined.

98. The applicant builder’s claim was therefore required to proceed without any evidence of the value of works or of variations undertaken by the builder for the owner and without any expert material relating to the owner’s cross claim although it was not suggested that an expert report in relation to the cross claim was being sought at any time prior to the allocated hearing date.

Builder’s Claim

99. In his chronology Mr Bartel contends that a building contract was apparently drafted and settled between the parties on 8 December 2015 and was executed on 16 December 2015. He agrees that monies were paid to Hammond and Associates, Engineers and to David Robinson, draftsman, prior to that time and those payments were made by the owner.

100. The contract was a fixed price contract for the construction of the dwelling at a cost of $163,000.00 inclusive of GST. The contract was in the standard Master Builders Association form and it specifically referred to drawings prepared by David Robinson and engineering specifications provided by Hammond and Associates. The document also noted that the builder was responsible for, and had provided, the drawings and specifications.

101. Clause 14 of the contract related to any variations and it provided in detailed terms how variations of the works were to be established and how such variations would affect the contract price. Mr Simpson of counsel, on behalf of the owners, submitted that none of the alleged variations were established in accordance with cl 14 and there was no written evidence of any kind in supporting a claim by the builder under that clause. Invoices rendered while the builder was still engaged in the works did not at any time include a claim for variations although that claim was made once a dispute arose.

102. Mr Smart of counsel, on behalf of the builder, conceded that there were no written instructions provided to the builder and no written directions sought by the builder in relation to the variations which he described as follows:-

1. changing of the house level from 950cm out of the ground to 2.2m out of the ground at one end of the building.

2. adding 45cm eaves to the roofline around the house.

3. increasing the size of a concrete plank retaining wall at the rear of the house.

4. removing a wall divider which created a separate lounge room.

5. installing a glass sliding door in the main bedroom instead of windows.

103. He noted that on the day of the hearing evidence relating to the particularisation and quantification of the variations was submitted by counsel for the builder but it was objected to by counsel for the owner and was not admitted into evidence.

104. Mr Smart noted that in her affidavit and in cross-examination the owner had denied any knowledge of the variations and in her affidavit of April 2017 she stated she was never informed of them. He then went on to argue that in cross-examination she was less than truthful and quite evasive in her answers. He claimed that she was living with her son Beau at the same address over a period of three months and he invited the Tribunal to infer that they had discussed these variations.

105. Mr Smart submitted that the owner knew of the variations yet failed in her responsibility under the contract to provide written instructions to the builder. He went on to say that it was just as clear that the builder, to his detriment, and contrary to cl 14(e) of the contract, without being provided written instructions, did not proceed to execute a document costing the value of the variations and forward it to the owner for her agreement and if not agreed, proceed with the variation and charge the cost calculated in accordance with cl 14(i) to the owner.

106. Counsel for the builder has conceded that the variations claimed by the builder were all carried out without the written authority required under the contract or without following the procedure under cl 14(i).

107. Mr Simpson of counsel for the owner, submitted that any claim by the builder for variations would have to be outside of the contract either on the basis of a separate agreement with the owner or in accordance with the quantum meruit principals.

108. In relation to the change of levels Mr Simpson pointed out that the builder had contractual responsibility for the plans and he accepted in cross-examination that he was responsible for the levels provided to the draftsman being correct. There was accordingly no basis upon which the owner could be responsible for any increased costs relating to levels. He pointed out further that even if Beau had in some way contributed to an error he was working under the builder’s supervision and the builder accepted that he was liable to the owner for errors made by Beau.

109. Mr Simpson submitted further that the evidence strongly suggested that the owner and the builder were very frequently in direct oral or text message contact and it would be unlikely that the builder would not communicate directly with her about a problem which now represented a very substantial increase in cost. Mr Simpson submitted finally in relation to this variation that there was no evidence as to the value of that variation.

110. In relation to the claim concerning 45cm eaves around the roofline it would appear that this claim emanated from a builder’s decision that the “house would look silly without them and they would give some shelter to the windows.” The builder does not allege that he had any direct discussion with the owner but simply relies upon a conversation with Beau in which it is alleged that he said “OK, might as well do it”. It is pointed out that Beau denies making such statement authorising the work but in any event there was no evidence that Beau had the authority to bind his mother in relation to these matters. Again, there is no evidence of the value of the variation even if it was to be found that the owner would be liable for it.

111. In relation to the third variation relating to the extra costs of the retaining wall, Mr Simpson pointed out that it was to be an extra cost because the Council had made a late change requiring the sleepers to be concrete. In cross-examination the builder agreed that the pre-contract plan indicated the sleepers were to be made of concrete in any event and to the extent that the builder claims a variation because of an increased height in the walls, then again, the responsibility for that falls back upon the builder who was responsible for the levels.

112. The fourth claim for variation relates to the cost of moving the dividing wall in the lounge/living room area. Mr Simpson pointed out there was a factual dispute as to the reason for its removal because Beau had claimed it was to be removed temporarily because the roof trusses were resting on it as they were being erected and their weight was damaging it. The builder apparently claimed that it was removed because he thought it would create more space and because Beau agreed, and it was pulled down.

113. There is no evidence that Beau had the authority to bind his mother in relation to an agreement for variations and there was certainly no agreement in writing as required under the contract. Further, there is no evidence of the value of this variation and it is likely that it may have actually saved the builder money as it would not have required wall framing, lining, skirting boards or cornices.

114. The final variation claimed by the builder relates to the installation of a sliding glass door in the bedroom rather than sliding glass windows. Mr Simpson conceded that the owner has always accepted that she gave the builder instructions to replace the windows with a sliding door but there is no evidence provided as to any increased cost, (or cost savings), as a result of this change.

115. The principals relating to recovery by a builder on a quantum meruit basis are conveniently set out in the reasoning of Deane J in Pavey and Matthews Pty Ltd v Paul [1987] 162 CLR 221 where His Honour said:-

“There is no apparent reason in justice why a builder who is precluded from enforcing an agreement should also be deprived of the ordinary common law right to bring proceedings on a common indebitatus count to recover fair and reasonable remuneration for work which he has actually done and which has been accepted by the building owner … Nor upon a consideration of the words of s 45 in their context in the Act, am I able to identify any legislative intent to deprive the builder from that ordinary common law right. The section does not make an agreement to which it applies illegal or void. Nor do its words disclose any legislative intent to penalise the builder beyond making the agreement itself unenforceable by him against the other party.”

116. Whilst these principals could entitle the builder to recover some costs for variations, it is clear in relation to the costs associated with the change of levels that the builder must accept responsibility for that change as the contract makes him responsible for the plans under which the building works were undertaken and he acknowledged that payment for those plans, made by the owner, was a payment under the contract. Further in relation to the work done there was no evidence of the value of that variation in any event.

117. In relation to the cost claimed for adding 45cm eaves to the roofline there is simply no evidence that the owner herself agreed to, or authorised, that variation. The builder does not claim to have had any discussions with the owner directly and the owner’s son, Beau, denies making any statements to authorise work on behalf of his mother. Again there is no evidence of the value of this variation even if the Tribunal was to find that the owner was liable for it.

118. The third variation relates to extra costs claimed for the retaining wall. It had been originally claimed that there was an additional cost because the council required the sleepers to be of concrete although it appears to have been accepted by the builder in cross-examination that he was intending to use concrete sleepers in any event.

119. The builder’s submissions now infer that there was an increased cost because of an increased height of the walls due to errors and levels, to the extent that an error in levels is the cause and it is an error for which the builder is responsible for reasons stated earlier. It is again a matter where there is no evidence of the cost of the variation.

120. The fourth claim relates to the cost of removing a dividing wall in the lounge/living area. There was no evidence that this was done on the direction or with the authority of the owner and the evidence of the builder suggests that it was done to create more space. The Tribunal accepts what appears to be the logical submissions of Mr Simpson, suggesting that there was no evidence of the value of the variation and it was likely that it may have actually saved the builder money as it would not have required wall framing, lining, skirting boards or cornices.

121. The final variation relates to the replacement of windows with a glass sliding door in the main bedroom. The owner has always accepted she gave the builder authority to make this change but again there is no evidence as to whether that change was made at an increased cost or a cost saving to the builder.

122. In the circumstances each of the variations claimed by the builder must fail and the builder’s claim is accordingly dismissed.

Owner’s Cross Claim for Rectification Work and Completion

123. The owner claims that at the time when the contract with the builder was terminated, the builder was in breach of the contract having left the site in September 2016 and removed his safety fencing on or about 9 September. It is claimed that when the builder was requested to return to the site to complete the works he refused to do so, notwithstanding that the monies then paid to him exceeded his contractual entitlement at that time.

124. The records show that the builder invoiced the owner for a deposit of $16,300.00 on 21 January 2016, then invoice for the completion of Stage 1 including the footings in a sum of $35,175.00 on 29 January 2016. An invoice for Stage 2 in a further sum of $35,175.00 was submitted on 25 February 2016 although at that stage the evidence suggests that the framing was not completed. In cross-examination Mr Bartel conceded that the Stage 2 invoice was dated of 25 February 2016 but he agreed that when the Stage 2 invoice was sent to the owner the work for Stage 2 had not been completed and he was aware that it was something that he was not entitled to do under the contract.

125. Mr Bartel conceded further in cross-examination that he sent an invoice for Stage 3 on 18 June 2016. He agreed that the house was not at lock up stage at that point and further that it was not at lock up stage when he left the site in September 2016. He conceded that there was over $23,000.00 in work to get to lock up stage before he was entitled to that payment.

126. On 27 August 2016 he issued an invoice for Stage 4 representing a further claim of $35,175.00 and he conceded that at that time, Stage 4 had not been commenced let alone completed.

127. At the time when the builder left the site his entitlement to payments was limited to a sum of $86,650.00 representing an initial deposit of $16,300.00 in payment for 2 Stages in the sum of $35,175.00 each. The parties agreed that by that time he had received a total of $95,225.00 from the owner through payments sent through her directly and through the Westpac Bank. This evidence alone clearly indicates that the owner was entitled to terminate the contract for a failure on the part of the builder to return to work but further that the builder had no entitlement to terminate the contract at that stage and the evidence suggests that he did not even attempt to terminate the contract until March 2017.

128. In relation to direct payments made by the owner to the builder, the builder does not dispute the payments but he contends that some of them were pre-contract and some of them were reimbursed at a later point in time.

129. The initial payments made by the owner totalled sum of $27,358.16 and, although the builder claims that some of those monies were repaid including a payment of $994.40 for the builder’s fence, a payment made for concrete which was a loan and a payment made to the plumber on 9 February 2016 for rough out work, the evidence from the builder as to the nature and extent of payments is unsatisfactory. The owner appears to concede that some payments were made which may restrict her initial payment to a sum of $26,600.00.

123. The builder has refused to return and complete the work and the owner now seeks to recover the costs of completing that work in accordance with quotes obtained and an expert report from Mr Kelly.

124. The owner seeks the sum of $189,557.00 in accordance with the Scott Schedule but a deduction of $9,625.00 must be made for painting which was not to be included. It then becomes necessary to deduct the balance of monies owing under the contract and when the allowance is made for all payments made including the initial total of $27,358.16 the amount remaining under the contract is calculated to be $40,416.84 and the owner’s claim must be reduced to a sum of $139,515.16.

125. It is significant to note that the builder has not provided any independent expert’s report in relation to the cost of completion of works and rectification of defects but has chosen to rely on his own assessments which were simply provided as notations on a copy of the Scott Schedule. This process does little, if anything, to assist the Tribunal in determining the matter otherwise in accordance of the owner’s expert report.

126. There is however one further issue to be considered in this regard. There was an agreement, which was oral but accepted by the parties, that the owner’s son Beau, would provide labouring and carpentry assistance to enable the works to be completed at a cheaper cost. The evidence indicates that Beau was working on the property almost full time for at least three months and accordingly the contract price was in some way dependent upon the continued assistance of Beau until the works were completed.

127. Mr Simpson of counsel has submitted that, in accordance with general principals the owner is to be compensated for the cost to her of completing the contract but not the cost which would have been incurred by the builder to complete it. He contended that there was no expert evidence available from the builder as to the reasonable cost of various items but he further submitted that, apart from items such as painting which ought to be excluded from the work remaining to be done under the contract, as well as other exclusions including floor coverings, there should be no other reductions.

128. He pointed out that the builder would not be completing the works because he had repudiated the contract and it would be necessary for the owner to engage another builder to complete them. He submitted that it would be inappropriate for the Tribunal to reduce damages in the way suggested by the builder unless it could be satisfied that the owner could have the work done by another builder on the same reduced cost basis with Beau contributing his labour free of charge. He submitted that there was no evidence that a different builder would accept the works on a reduced cost base or accept free labour from Beau. He further submitted that there was no evidence from Beau that he would be willing or able to provide his work free of charge under a new arrangement with a different builder.

129. The facts and circumstances in the present case indicate clearly that the builder was to undertake the work set out in the contract on the basis that he would have the benefit of full time assistance from Beau. This appears to be the basis upon which the parties had proceeded and this is the basis upon which the builder agreed to perform the contract works.

130. It is not unusual for costs of completion of works to exceed the charges for work under the original contract. The owner in this case is entitled to be put in the position in which she would have been if the contract had not been breached. On the particular facts of this case the Tribunal is satisfied that the contract contemplated ongoing assistance from her son and it is appropriate that the allowance for that be made in the circumstances. It is noted that Mr Simpson has submitted in the alternative that if damages are to be reduced the reductions should be limited to items of carpentry labour identified by the owner’s expert and not simply as contended by the builder. It is proposed to approach the assessment of compensation on the basis that Beau would remain available to undertake carpentry and general labouring works on a full time basis up to the time when the contract is completed.

131. Although the directions initially provided by the Tribunal anticipated that both parties would provide expert reports in relation to the cost of completion or rectification of work and that the experts would then provide a joint report, this unfortunately never occurred. The builder elected to provide his own expert evidence as to costings. He conceded in cross-examination that it was in his interests to put in the lowest possible pricing.

132. Whilst the report from Mr Phil Kelly dated 28 February 2017 can be regarded as an independent inspection report, the only evidence of the costing of work is the amount which he has included in a Scott Schedule comprising some 62 items for completion of works and 2 items for rectification of defective work. There are no calculations to indicate the basis on which the various items have been assessed and the simple description in the schedule does not indicate in many instances whether he has assessed the completion cost at the high end of low end of the range. He included items such as rendering and painting which were specifically excluded from the contract and some of the costings provided which would have represented PC items, could not be compared with the particular contract because neither PC item schedule.

133. The builder, Mr Bartel, simply provided his evidence of costing by writing a figure against the particular item in the owner’s Scott Schedule. He gave no reasoning for his assessment other than to concede that it was in his interests to assess each item as low as possible. The only other guidance which the Tribunal can call upon in addressing this issue is the schedule of PC items referred to in the quote of W & J McPherson which was also obtained by the owner.

134. Mr Simpson, of counsel, has pointed out that the total costing of Mr Kelly is similar to the full quote of W & J McPherson and is substantially less than the other quote obtained. It is accordingly appropriate to assess each of the items set out in the Scott Schedule having regard to the information available and noting that when the contract was signed both parties agreed that so far as possible the works would be undertaken on a “budget cost” basis as the finances of the owner were limited. It is appropriate therefore to deal with the Scott Schedule by reference to the individual items described in the Schedule prepared by Mr Kelly and marked as Appendix B to his report.

Scott Schedule

No.	Item	Description	Costs Allowed
1	Certification Fees	The item relates to building inspections and approval and Mr Kelly has conceded that if the same certifier is engaged there would be a sum reduction in his assessed fee of $3,520.00	$3,000.00
2	Portable toilet hire	The costs of hiring an onsite toilet is not disputed	$605.00
3	Site signage	This item relates to builders and safety signs and the amount claimed is not disputed.	$77.00
4	Temporary fencing	Building site fencing is required and claimed cost has not been disputed by the builder.	$682.00
5	Sediment control	A sediment barrier is required by EPA and the cost of $462.00 is not disputed.	$462.00
6	Driveway gravel	Although driveway gravel may have been placed on site when the builder vacated the job an allowance for further gravel has been claimed and is not disputed.	$342.00
7	Site cleaning with Bobcat	As the site has been vacant for some time it is claimed it is necessary to clean the site and weeds at a cost of $2,772.00. The Tribunal finds this work could be done by Beau as a labourer.	Nil
8	Waste disposal	The owner’s claim of $2,030.00 is disputed by the builder who suggests it should only be $350.00. There is no evidence to justify either claim but on an assessment of the evidence generally, the Tribunal allows a sum of $1,500.00 taking into account the builder’s concession that he had had an interest in proposing the lowest cost possible.	$1,500.00
9	Termite barrier	The cost claimed is not disputed.	$277.00
10	Scaffolding	The cost claimed to allow trades to complete works at height is not disputed.	$4,950.00
11	Wall frames	A claim for timber to complete wall frames is not disputed.	$165.00
12	Framing hardware	The cost of tidy up rods and bracing is disputed and the builder proposes a total cost of $100.00. In this case the Tribunal prefers the assessment of Mr Kelly as an independent expert.	$825.00
13	Deck material	The owner’s expert claims a sum of $2,723.00 for material for the decking and the patios. The builder assesses the sum to be $2,100.00 but the Tribunal prefers the independent assessment of the owner’s expert.	$2,723.00
14	Carpenter frame	The cost of completing the decking work and the frame work was claimed in a sum of $1,936.00. This claim is work to be done by the owner’s son.	Nil
15	Bath	The cost claimed for the supply of a bath in a sum of $307.00 is not disputed.	$307.00
16	Plumber rough in	The cost for a plumber to rough in pipes and test is claimed in the sum of $7,320.00. This work has already been done and is not required again.	Nil
17	Plumber fitout	The cost for the plumber to complete the fitout to the services is claimed in the sum of $7,309.000. The builder simply contends that the cost should be $2,500.00 but the Tribunal prefers the independent determination of the owner’s expert.	$7,309.00
18	Electrician rough in	The owner claims $3,975.00 for this item and there is no evidence to dispute it.	$3,975.00
19	Electrician fit off	The sum of $9,410.00 is claimed for the electrician to provide fit off services. The builder has not commented on this claim.	$9,410.00
20	Entry frame/door	Mr Kelly has claimed $1,080.00 but the builder suggests that the frame and door could be provided for $600.00. The PC allowance and the quote of W & J McPherson is $1,200.00 and the Tribunal accepts the estimate of Mr Kelly.	$1,080.00
21	External cladding and soffits	The owner’s expert claims $1,320.00 for supply of external cladding and soffiting material. The builder concedes $1,100.00 and the owner accepts the independent assessment of Mr Kelly.	$1,320.00
22	External locks	The claim for supply only of external locks is $330.00. The builder assesses the supply only at $160.00 or $80.00 per door as the home was being built on a “budget base”. The Tribunal accepts the assessment of the builder on this occasion.	$160.00
23	External carpentry	A claim is made for carpenter’s labour for soffits, cladding and fitting of front door and locks. The claim of $4,268.00 is not allowed as this work would be done by the owner’s son Beau as contemplated under the contract.	Nil
24	Sink/Basins	A claim of $574.00 is made for the supply of sinks and basins. That cost is conceded by the builder.	$574.00
25	Bricks supply	The owner claims $4,987.00 for supply of bricks to site. The builder concedes $4,520.00. Neither party has provided reasons for the calculation and the Tribunal accepts the independent assessment of the owner’s expert.	$4,987.00
28	Bricklayers labour	The owner claims a sum of $9,143.00 for the bricklayer to install and lay bricks including sand and hardware and this sum is not disputed.	$9,143.00
29	Brick Clean	The owner claims $946.00 for cleaning of bricks prior to rendering. The contract does not require the builder to render the brickwork and this claim is not allowed.	Nil
30	Internal linings	Supply and install plaster boards/filler board and cornices etc is claimed in the cost of $13,860.00. Mr Kelly conceded that the cost could be reduced in the order of a carpenter’s charge for one day if Beau was able to assist.	$13,260.00.
31	Stairs internal	The owner claims $4,158.00 for installation of stairs from the garage and from the hallway. The builder suggests that this could be done for a total cost of $800.00 whereas Mr Kelly has given evidence that the installation was specialist work and the supplier would install in one day. The costing of the owner’s expert is preferred.	$4,158.00
32	Garage door	The owner claims $1,925.00 for the installation of the garage door to provide vehicular access. That work has already been done and there is no indication of the actual cost paid and it is not claimed by the owner.	Nil
33	Internal hardware	The owner claims $1,100.00 for supply of door furniture and the builder suggests that this could be supplied at a cost of $320.00. The quote of W & McPherson allows a PC costing of $40.00 per door for door hardware and noting that there are 9 doors which may require other items such as hinges. The Tribunal rejects the owner’s assessment and allows a total sum of $500.00 allowing for hinges and/or hardware.	$500.00
34	Internal fixed timber	The owner claims $2,124.00 for supply of doors, architraves and skirting etc. The builder suggested the proper cost is $1,450.00 but in the absence of further detail the Tribunal accepts the independent assessment of the owner’s expert.	$2,124.00
35	Carpenter internal fix	A sum of $2,695.00 is claimed for carpenter’s labour to install doors, architraves and skirtings. This work would have been done by Beau under the original contract and the cost is disallowed.	Nil
36	Laundry tub/sink	The sum of $231.00 is claimed for the supply of a laundry tub or sink and this sum is allowed.	$231.00
37	Cabinet maker to install kitchen	The owner claims a sum of $14,960.00 for the supply and installation of all kitchen cupboards and vanities etc. The builder claims that it was not in the contract but the fit out appears to allow for the supply fitting of kitchen cupboards. The Tribunal has no indication of the standard of kitchen which was to be installed, however it is noted that in the quote of W & J McPherson a PC sum of $8,000.00 is allowed for this item. Installation would be undertaken by the owner’s son but this item for supply is allowed in the sum of $8,000.00 not including appliances.	$8,000.00
38	Bench tops	Supply and installation of kitchen and vanity bench tops. The sum of $3,630.00 is not disputed and although the sum appears to relate to a higher qualify bench top the only evidence available suggests that the present cost should be allowed.	$3,630.00
39	Waterproofing	The sum of $924.00 is claimed for the supply and installation of waterproofing membranes to all wet areas. The builder contends that the work could be done for $600.00 but the Tribunal prefers the evidence of the owner’s independent expert.	$924.00
40	External render	A sum of $11,797.00 is claimed for the cost of supply and installation of external colour render. Render does appear to be a requirement under the contract and the claim is disallowed.	Nil
41	External Balustrades	A claim is made for $2,266.00 for handrails and balustrades for the patios. These would have been necessary under the contract and the sum claimed is allowed.	$2,266.00
42	Ceramic tiles supply	The owner claims $3,657.00 for supply of ceramic tiles. The area to be tiled is approximately 50m² and the allowance made in the quote of W & J McPherson is $35.00 per m². That sum would give rise to a total of $1,650.00 however the builder concedes $2,100.00 which is allowed.	$2,100.00
43	Ceramic tile labour	The claim is made for labour to install the tiles. This was to be done by a relative of the owner and the cost is disallowed.	Nil
44	Silicone Installation	A claim of $1,045.00 is made for supply and installation of silicone door junctions and external articulated joints. The claim is not disputed and is allowed.	$1,045.00
45	Painting	A claim of $9,625.00 is made for painting including supply of external and internal paints. Painting was not included in the contract and the claim is disallowed.	Nil
46	Shower screens and mirrors	$1,513.00 is claimed for the supply and installation of shower screens and mirrors. This sum is not disputed and is allowed.	$1,513.00
47	Wardrobe doors and shelving	The owner claims $1,272.00 for supply and installation of all wardrobe doors and shelving to wardrobes and pantries. On the basis that this work could be completed by a carpenter in one day the claim is reduced by $600.00.	$672.00
48	External timber/hardware	A claim is made for the supply of external stair stringers and timber. This claim is not disputed.	$1,760.00
49	Carpenter external labour	A claim is made for the carpenter to install decking and stairs. This is work which would have been done by Beau and the claim of $4,114.00 is not allowed.	Nil
50	Tapware and bathroom accessories	The owner claims $2,635.00 for the supply of tapware, towel rails and toilet rail holders etc. The builder alleges that this could be purchased for $960.00 and the Tribunal notes that the quote of W & J McPherson shows a PC allowance of $1,500.00 for these items. The Tribunal allows the sum of $1,500.00.	$1,500.00
51	Hot water service	A sum of $1,524.00 is claimed for the supply of a hot water service and this sum is allowed.	$1,524.00
52	Kitchen Appliances	$2,970.00 is claimed for kitchen appliances. The builder concedes an allowance of $1,800.00 but the Tribunal allows a total of $2,300.00 being the allowance for a stove, oven and range hood in the quote of W & J McPherson.	$2,300.00
53	Ceiling batts	The owner claims $2,310.00 and the builder allows $1,800.00. The Tribunal accepts the claim of the independent expert.	$2,310.00
54	Blinds	The owner claims $2,574.00 for supply and installation of blinds. This item is not included in the contract and the claim is disallowed.	Nil
55	Carpenter final fitout	The owner claims $880.00 for the final fitout by a carpenter to install door furniture, towel rails, toilet roll holders and the like. The claim is disallowed as Beau would have undertaken the work in any event.	Nil
56	Floor sanding	The owner claims an allowance of $1,540.00 to sand the joins in the particle board flooring that had swollen from weather exposure. The Tribunal finds that this work could be undertaken by Beau and allowance is made for the cost of hiring a sanding machine in the sum of $300.00.	$300.00
57	Water tank	A claim is made for the supply of a water tank with pump and accessories in the sum of $3,372.00. The size of tank and the type of pump is not specified. The builder claims or concedes a sum of $2,100.00 for this item and in the absence of further particulars as to size, the Tribunal accepts the sum conceded by the builder.	$2,100.00
58	External Concrete	Supply of concrete for water tank footing $280.00. This claim is not disputed.	$280.00
59	External Concrete Labour	The owner claims a sum of $385.00 but this work can be done by Beau and no allowance should be made.	Nil
60	Fly Screens	Supply and install fly screens. The owner claims $2,084.00 for supply and installation. The builder has not provided an alternate figure but after allowances made for installation, the sum of $1,600.00 should be ordered.	$1,600.00
61	Floor coverings	A claim is made for $4,220.00 for supply and installation of carpet and floor coverings. These are not included in the contract and no allowance is made.	Nil
62	House clean	Complete builder clean of property. This claim can be done by Beau and no allowance should be made.	Nil
Total	$100,915.00
Defective Building Work
1	Pier Labour	The owner claims an allowance to prop up floor bearers and relocate metal support plates on metal stumps.	$1,680.00
2	Bricklayer’s Labour	A further allowance is claimed for extra salt floor vents to be installed including labour and hardware items.	$880.00
Total	$2,560.00
GRAND TOTAL	$103,475.00

142. Although the submissions on behalf of the builder infer that the contract was at a “mate’s rates” cost, the prices applied by the builder could not in general be accepted unless there was other support provided for them. Allowance has been made for a consideration of the builder’s estimates but he is under the difficulty of being a person with an interest in the outcome of the matter. Mr Simpson, for the owner, points out that there is no expert evidence from the builder as to the reasonable cost of the various items and while the builder might be able to give his estimate where there is conflict between his evidence as an interested party, and that of an objective expert, the latter ought to be preferred.

143. On the basis of these findings the builder is to pay the owner a total sum of $103,475.00 but it is necessary to deduct from that sum the balance of monies owing under the contract. The Tribunal accepts that after the total of monies paid by the owner to the builder, are adjusted by the sum repayments and the sum of $26,600.00 is accepted in lieu of the initial owner’s payment of $27,358.16. It follows that the sum actually paid under the contract is $121,825.00 and accordingly a sum of $41,175.00 remains owing. When that sum is deducted total found to be owing by the builder to the owner then the balance payable by the builder is a sum of $62,300.00. That sum is to be paid by the builder to the owner within one month of the date of these orders.

144. The parties are at liberty to make submissions in relation to the issue of costs in accordance with the orders made herein.

J A Ringrose

General Member

Civil and Administrative Tribunal of New South Wales

2 May 2018

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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: 01 August 2018