Sasa Zecevic v Mohammed Abdulrahim

[2014] NSWCATCD 212

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Sasa Zecevic v Mohammed Abdulrahim [2014] NSWCATCD 212
Hearing dates:	7 August 2014
Decision date:	24 October 2014
Jurisdiction:	Consumer and Commercial Division
Before:	P Boyce, Senior Member
Decision:	The respondent is to pay the applicant the sum of $4,389.00 on or before 15 November 2014; Costs reserved.
Catchwords:	Building defects, owner builder
Legislation Cited:	Home Building Act 1989
Cases Cited:	R v Tang [2006] NSW CCA 167 Daubert v Merrel Dow Pharmaceuticals Inc 509 US 579 [1993]
Category:	Principal judgment
Parties:	Sasa Zecevic (applicant) Mohammed Abdulrahim (respondent)
Representation:	Solicitors: Stojanovic Solicitors (Applicant) Watson & Watson (Respondent)
File Number(s):	HB 13/65933
Publication restriction:	Unrestricted

reasons for decision

Application

1. This application is a building claim made pursuant to the Home Building Act 1989 (“Act”).

2. The applicant is a home owner and the respondent is a builder licenced pursuant to the provision of the Act.

3. The home owner applicant filed an application in the Home Building Division of the Consumer Tenancy and Trader Tribunal (“CTTT”) on 13 May 2013 in relation to building work carried out by the respondent at the applicant’s home at Casula, New South Wales.

4. In the application the applicant states that the dispute is about “rendering has cracked all around the house; must fix to stop it falling & stop it affecting the structural integrity of the walls; price to fix $50,000”.

5. On 26 September 2013 the CTTT made ex parte orders that the respondent pay the applicant $39,450.00 being the amount determined to be the cost of rectifying “defective works [;] being rendering and rising damp”.

6. On 23 October 2013 the respondent appealed the decision of the CTTT to the District Court of NSW.

7. On 20 November 2013, by consent, the District Court made orders:

1. The Appeal is allowed

2. The matter is to be remitted to the Consumer, Trader & Tenancy Tribunal for re-hearing

3. The defendant pay the Plaintiff’s costs of the District Court proceedings

8. The application is now heard de novo.

Jurisdiction and Legislation

9. S48A of the Home Building Act defines:

“building claim” means a claim for:

(a) The payment of a specified sum of money, or

(b) The supply of specified services, or

(c) Relief from payment of a specified sum of money, or

(d) The delivery, return or replacement of specified goods or goods of a specified description, or

(e) A combination of 2 or more of the remedies referred to in paragraphs (a-d) that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods and services, but not include a claim that the regulations not to be a building claim”.

“building goods and services” means goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services:

(a) Supplied by the person who contracts to do, otherwise does, that work, or

(b) Supplied in any circumstances prescribed by the regulations to the person who contracts to do that work.

10. S3 of the Home Building Act defines:

“residential building work” means any work involved in, involved in co-ordinating or supervising any work in:

(a) The construction of a dwelling, or

(b) The making of alterations or additions to a dwelling, or

(c) The repairing, renovation, decoration or protective treatment of a dwelling”.

11. S48K(1) of the Act provides:

Jurisdiction of Tribunal in relation to building claims

(1) The Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 (or any other higher or lower figure prescribed by the regulations).

12. The Tribunal is satisfied that it has jurisdiction to hear and determine the application before it.

Statutory warranties

13. S18B of the Act provides:

Warranties as to residential building work

The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work:

(a) a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract,

(b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new,

(c) a warranty that the work will be done in accordance with, and will comply with, this or any other law,

(d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time,

(e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling,

(f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder’s or person’s skill and judgment.

14. S18C of the Act provides:

18C Warranties as to work by others

(1) A person who is the immediate successor in title to an owner-builder, a holder of a contractor licence, a former holder or a developer who has done residential building work on land is entitled to the benefit of the statutory warranties as if the owner-builder, holder, former holder or developer were required to hold a contractor licence and had done the work under a contract with that successor in title to do the work.

(2) For the purposes of this section, residential building work done on behalf of a developer is taken to have been done by the developer.

Facts

15. 14 The respondent was an owner builder of the residential premises at 27 and 27A *********** Casula. The application is in respect of 27A ************ Casula (“premises”).

16. The respondent completed the building works in 2009 and an occupation certificate for the premises was issued on 9 December 2009.

17. The applicant purchased the residential premises from the respondent by contract dated 6 December 2008 and the contract was completed on 26 June 2009.

18. In about 2011 through his own observations the applicant became aware that cracks started to appear in the render and in some parts of the wall render started to come away from the brick walls.

19. The applicant did not contact the respondent to give notice of his claim.

20. On the respondent’s evidence he first became aware of the claim by the applicant when he was served with a copy of the orders made by the CTTT on 26 September 2013.

Evidence

21. The applicant’s evidence is comprised in:

1. A bundle of documents filed with the Tribunal on 13 March 2014, and tendered being:

1. An affidavit of the applicant sworn on 13 March 2014 with exhibits to it of;

1. A copy of the contract for sale dated 4 December 2008 of the residential premises the subject of the proceedings;

2. A copy of the plans for the residential premises the subject of the proceedings;

3. A copy of a pre purchase building report prepared by GND Building Pty Ltd and dated variously 12 September 2008 and 9 December 2008;

4. A copy of a Final Occupation Certificate issued by Liverpool City Council on 5 January 2009;

5. A copy of a Home Owners Warranty Certificate issued by QBE Insurance for the residential premises;

6. A copy of a fax dated 5 July 2012 from the applicants solicitor to the respondents solicitor claiming the repairs to the alleged defects in the render;

7. A copy of a quote dated 31 July 2013 from KOS Constructions NSW Pty Ltd to remove up to 280m2 of render and repair, repaint the rectified walls at a cost of $39,450.00;

8. A copy of a quote dated 26 July 2013 from Sydney Metro Builders to remove cracked existing render for up to 274m2, render and repaint for a cost of $34,245.00 plus a quote for insertion of a damp course at a cost of $8,800.00;

2. An affidavit sworn by Novica Strbac, the director of GND Building Services Pty Ltd on 13 March 2014 with exhibits to it of:

2. Building Defects Report for the premises and dated 6 August 2013 Strbac Report (”Strbac Report”);

3. A Scott Schedule prepared by GNS setting out the works to remedy the alleged defects and the estimate of cost at $38,669.00.

22. The respondent’s evidence is contained in the following documents tendered to the Tribunal, including:

1. An affidavit sworn 14 May 2014 by the respondent with the following exhibited to it:

1. A copy of an owner builders certificate awarded to the respondent by Tafe NSW;

2. A copy dated 28 September 2006 of Development Approval from Liverpool City Council for two detached double storey dwellings to be erected on the respondent’s land;

3. A copy dated 18 October 2006 of an Owner Builders Permit issued by NSW Office of Fair Trading to the respondent;

4. A copy of a construction certificate dated 23 January 2007 issued by Liverpool City Council for the premises;

5. A copy of a final occupation certificate dated 5 January 2009 issued by Liverpool City Council for the premises;

6. A copy of a buildering inspection report dated 19 January 2009 for the premises;

7. A copy of a Home Owners Warranty Certificate issued by QBE Insurance for the residential premises on 19 January 2009;

8. A copy of a fax dated 26 May 2009 from the applicant’s solicitor to the respondent’s solicitor attempting to negotiate the reduction in the price of the premises;

9. A copy of a pre purchase building report prepared by GND Building Pty Ltd and dated variously 12 September 2008 and 9 December 2008;

2. A buiding report dated 16 June 2014 by AMD Building Consultants Pty Ltd (“Daniels’ Report”);

3. A Scott Schedule in reply admitting and denying claims with a total estimate of cost being $2,849.00 payable by the respondent. A copy of an affidavit dated 3 July 2014 by the director of AMD with the Daniels’ Report attached

23. The evidence of the applicants expert is tendered to the Tribunal through its director Novica Strbac and, includes its observations:

2.0.1    There are numerous works that are defective.

3.0   Exterior-Structural Defects

3.0.1    The condition of the walls is generally poor.

3.0.2   Peeling paint and salt deposits are noted to wall surfaces at or near floor level.

3.0.3   Rising damp is evident to the base of all external masonry walls. Damp proof coursing material may not be installed, may have been breached or may have deteriorated. . Quotations should be obtained from a suitably qualified contractor to rectify damp areas. The cost to replace damp proof coursing material can range upwards from $200.00 per lineal metre.

3.0.4   Cracks are evident to all external walls. Visible cracking has been categorized as a structural defect.

3.0.5   There are areas of drummy plaster to all external walls. This is where the plaster and render does not adhere properly to the brickwork or substrate. Badly affected areas will need to be re-rendered.

4.1    External Walls.

4.2   The condition of the walls is generally poor.

4.3    Peeling paint and salt deposits are noted to wall surfaces at or near floor level to all elevations more likely to north and North West elevations.

4.4   Rising damp is evident to the base of all external masonry walls. Testing the level of moisture to the external walls I used Tramex moisture encounter plus level of moisture was reading between 30-80% to the base of all masonry walls.

Damp proof coursing material may not be installed, may have been breached or may have deteriorated. Quotations should be obtained from a suitably qualified contractor to rectify damp areas. The cost to replace damp proof coursing material can range upwards from $200.00 per lineal metre. It is advisable to complete rectifications as soon as possible to minimise and eventually stop further damages to the structure and/0r part of building. Most of all health of the tenants is to be taken into consideration; therefore this rectification requires urgent action. Mould and their spores may cause health problems or allergic reactions such as asthma and dermatitis in some people.

4.5   Cracks are evident to all masonry and fibre cement walls, more likely to North and North West elevations. Rectification is required.

4.6    Visible cracking has been categorized as a structural defect.

4.7.   There are areas of drummy plaster to all external walls. This is where the plaster and render does not adhere properly to the brickwork or substrate. Badly affected areas will need to be re-rendered.

24. The applicant’s Scott Schedule and the respondent’s reply are set out as follows:

25. At the hearing Mr Strbac’s evidence was that he:

1. conceded that the problems with the render was not throughout the whole of the external walls of the premises and that in his opinion about a third of the render was “drummy” and that where “crazing” had occurred the render did not need to be removed;

2. Mr Strbac concluded that there was rising damp, attributable to the failure of the damp course, even though he was not able to visual inspect below the damp proof course

26. The respondent’s expert evidence is tendered to the Tribunal through the expert’s director Andrew Daniels. Referring to Mr Strbac’s numbering, the relevant extracts of Mr Daniels response to Mr Strbac’s observations are set out, as they are so far apart on reaching a consensus as to the alleged defects and there effect:

2.01   (Strbac’s paragraph number)

11.1   There was no evidence of numerous defects…

11.2   There was a few locations of drummy, loose and delaminating cement render and evidence of some paint peeling below external Damp Proof Course line (DPC);

3.0.1   (Strbac’s paragraph number)

11.3   I found the condition of the walls to be sound and generally presented in a proper workmanlike manner with some common minor material defects;

3.0.2   (Strbac’s paragraph number)

11.5   It was observed that the new external concrete paving along the full extent of the eastern and rear western walls was abutting the walls with no appreciable fall and drainage away from the base of the walls;

11.6   It was noted that there were minor salts (efflorescence) evident and minor paint peeling at the base of the internal East single skin brick wall of the garage;

11.7    It was further observed that the external eastern finished surface area of the paving was installed at a higher level than the garage floor and below the Damp Proof Course (DPC);

11.8   The DPC location in the brick work Complies with the BCA Part 3.3.4.5 and is at or about the internal surface of the Garage. The external paving is not in compliance with the BCA Part3.3.4.5(c)(ii): “The height of the DPC must be not less than 75mm above the finished surface level of adjacent paving, concreted or landscaped areas that slope away from the wall”;

3.0.3   (Strbac’s paragraph number)

11.15   It is my view that it has not been demonstrated in the Strbac Report that there is no effective or deteriorated DPC and wall flashing to the external walls;

11.17   I found that the new paving has been installed without coving and or falls away from the base of the external walls. All paving surrounds have bridged the base of the rendered walls and the stagnant water, where the concrete paving has parted from the wall rises via the cement render to cause the paint to peel;

11.18    There was no evidence that the rising damp has at any time bridged passed (sic) the DPC line. All minor paint peeling observed in the relatively few location around the building were below that line.

3.0.4.   (Strbac’s paragraph number)

11.20   There was no evidence of any structural cracks throughout the external walls. All render cracks observed were hair line in nature. There was some displacement of render at the front elevation at or about the first floor lateral control joint;

11.21   …The joints are relatively fine and although visible are not apparent.

3.0.5.   (Strbac’s paragraph number)

11.26   The only drummy render to the external walls was found at the South East corner of the Garage wall approximately 1.2 m2 in area, at the vertical reveals and part sills of three windows to areas of drummy render0.5 m2. All at Eats and North elevation to the Ground Floor;

11.27    There was also a render crack at the DPC line on the First Floor Level-Adjacent to the corner of the Front Balcony, over the Garage door, and returned to the eastern wall of the Main Entry.

27. The Daniel’s Report recommends that the economic life of the external painting is nearly at an end and that when the applicant paints the external walls the issue of the hairline cracks in the render will be resolved. The drummy render can be repaired without the need for scaffold as the drummy areas are accessible from ground level.

28. It is not in dispute that the applicant installed the concrete pathway.

Findings

29. The facts in this matter are largely agreed upon. The essence of the dispute is the degree to which the respective experts disagree.

30. The applicant bears the onus of proof. It is for him to provide evidence to the civil standard of proof in support of his claim if he is to succeed in his application.

31. The Tribunal is satisfied on the evidence before it that the applicant is entitled to the benefit of the warranty in s18B of the HBA as he is the immediate successor in title to an owner builder. S18C affords the applicant standing in these proceedings.

32. The applicant relies on the Strbac Report to support his contention that he is entitled to damages as compensation for the breach of the warranty in s18B. The respondent relies on the Daniels Report.

33. The Tribunal must determine whose expert evidence is to be preferred.

34. The respondent agitates for a finding that evidence of Mr Daniels is to be preferred over Mr Strbac. The respondent questions the veracity of Mr Strbac evidence, including:

1. The Strbac Report does not comply with the principles set out in Makita (Australlia) Pty Limited v Sprowles [2001] 52 NSWLR 705 in that it does not set out clearly the assumptions that the expert opinion is based on;

2. Mr Srbac conceded in cross examination that some of his opinions were “speculation” or “a guess” particularly in relation to rising damp. Speculation is not sufficient upon which to base “specialised knowledge”; R v Tang [2006] NSW CCA 167 citing with approval the definition of “specialised knowledge” set out in the reasons in Daubert v Merrel Dow Pharmaceuticals Inc 509 US 579 [1993] at 590:

“knowledge connotes more than subjective belief or unsupportive speculation. The term applies of known facts or to any body of ideas inferred from such facts or accepted as truths on good premises”

3. An error made in his calculation of the whole of the render, calculated to be that be 274 m2 needing to be replaced , for which he conceded that the area was much reduced to about a third of that area.

4. The method of costing used by Mr Strbac is not identified by any standardised practice or reference, such as Rawlinson or Cordells.

35. The applicant encourages the Tribunal to not discount Mr Strbac’s evidence as he has willingly conceded the deficiencies’ in his evidence.

36. Mr Daniels opinion in response to the Mr Strbac’s evidence in respect of the issues as follows:

1. Rising Damp-There is no evidence that the DPC has failed or has been breached ( [11.18] in response to Strbac Report [3.03]);

1. Cracks in external walls-There was no evidence of any structural cracks throughout the external walls ([11.20] in response to Strbac Report [3.04]);

2. Drummy Render- The only areas of drummy render to external walls was found at the South East corner of the Garage wall approximately 1.2 m2 in area, at the vertical reveals and part sills of three windows to areas of drummy render of 0.5 m2 ([11.26] in response to Strbac Report [3.05]);

3. Installation of path by applicant-paragraph’s [11.5]-[11.9] and [11.15]-[11.18] is attributed by Mr Daniels to have caused the moisture in the wall and the flaking of the paint.

37. The Tribunal accepts Mr Daniels assertion that the remedy for the hairline cracks is through painting the walls of the premises and that with the age of the premises it is nearing the time when the premises should be repainted. It is a cost that the applicant will bear in any case in maintaining the premises.

38. The installation of the paving/ pathway was done by other than the applicant and that part of the application cannot be maintained against the respondent.

39. Mr Daniels has based his calculations of the cost of remedying the defective work that he has identified based on Cordell’s Building Cost Guide 2014 and if not included in that guide, Rawlinson’s Building Cost Guide 2014. His calculation of the cost to remedy the extent of the defects after taking into account the concession he made as to the increase in area of repair work is:

1. (a) Removal existing render where drummy      $1,456.00

2. (b) Render wall where required         $1,456.00

3. (c) Removal of rubbish from site         $ 280.00

Sub Total  $3,192.00

Plus Builders Margin @25%            $ 798.00

Plus GST @ 10%                  $ 399.00

TOTAL  $4,389.00

40. Mr Daniels has put before the Tribunal his expertise and his evidence is based on specialised knowledge and factual assumptions.

41. The Tribunal prefers the evidence of Mr Daniel’s in respect of the works to be done to remedy the alleged defects and the methodology upon which he has calculated the costing.

42. The Tribunal is not persuaded by the applicant’s submissions that if the Daniels Report is preferred by the Tribunal. Then the proper damages should be $4,081.00 to remedy the work plus $3,861.00 for the “Cost of Work by Others”.

43. The applicant submits that the “Cost of Work by Others” referred to in the Daniel’s Report includes $1,000 plus GST for work conceded by Mr Daniels in cross examination and adding GST to painting and materials which he had omitted.

44. The Tribunal is not satisfied that the “Cost of Work by Others” referred to by Mr Daniels is as submitted by the applicant. Those works are the works that the applicant would be responsible for in any case when the building is repainted in the ordinary course of building maintenance.

45. Accordingly the Tribunal finds that the applicant has established that he is entitled to damages by way of compensation for the statutory warranty set out in s18B of the Home Building Act and the Tribunal assesses those damages in the amount of $4,389.00.

46. The respondent submits that the issue of costs should be reserved for further submissions. The applicant makes no submissions as to costs.

47. The Tribunal reserves its decision as to costs to allow both parties to make submissions on the issue of costs only and the Tribunal makes the following directions.

1. The applicant may make written submissions by filing those submissions as to costs with the Tribunal and serve a copy of those submissions on the respondent within 14 days of the decision date;

2. The respondent may make written submissions by filing those submissions as to costs with the Tribunal and serve a copy of those submissions on the applicant within 21 days of the decision date.

3. The issue of costs will be determined by the Tribunal on the papers.

(signed)

P Boyce

Senior Member

NSW Civil and Administrative Tribunal

24 October 2014

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: 05 February 2015