Scozza v Jih Building Design Pty Ltd

[2023] NSWCATCD 120

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Scozza v JIH Building Design Pty Ltd [2023] NSWCATCD 120

Hearing dates:

18 August 2023

Date of orders:

25 September 2023

Decision date:

25 September 2023

Jurisdiction:

Consumer and Commercial Division

Before:

K George, General Member

Decision:

1. The application is dismissed.

Catchwords:

CONSUMER LAW — Consumer guarantees — Supply of services — Guarantee as to due care and skill — Guarantee as to fitness for a particular purpose — Guarantee as to reasonable time for supply

Legislation Cited:

Australian Consumer Law 2010 (NSW)

Fair Trading Act 1987 (NSW)

Fair Trading Regulation 2019 (NSW)

Home Building Act 1989 (NSW)

Cases Cited:

Ballard v Multiplex [2012] NSWSC 426

Briginshaw v Briginshaw [1938] HCA 34

Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd v Deacon [2017] NSWCATAP 185

Duran and Duran v Tafra Pty Ltd [2015] NSWCATCD 110

Hadley v Baxendale (1854) 9 Ex 341

JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237

Khan v Khang [2014] NSWCATAP 48

Let’s Go Adventures Pty Ltd v Barrett [2017] NSWCA 243

McCrohan v Harith [2010] NSWCA 67

Nguyen v Cosmopolitan Homes [2008] NSWCA 246

Panico v Mollier Enterprises Pty Limited t/a JC Diesel Tune [2021] NSWCATCD 56

Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768

Pollock v NSW Trustee & Guardian [2022] NSWSC 923

Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31

State of New South Wales v Moss (2000) 54 NSWLR 536

Strogylos t/as Auto Clinic St Andrews v Vella [2020] NSWCATAP 156

Troulis v Vamvoukakis [1998] NSWCA 237

Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (No 2) (2011) 297 ALR 56

Texts Cited:

Corones' Australian Consumer Law, 5th ed, 2023

Category:

Principal judgment

Parties:

Marina Scozza (Applicant)

JIH Building Design Pty Ltd (Respondent)

Representation:

Marina Scozza, self-represented (Applicant)

Jason Harb, director (Respondent)

File Number(s):

GEN 23/30319

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. The respondent is in the business of designing buildings. In October 2021 the applicant engaged it to produce a Feasibility Report about the construction of a ‘granny flat’ on her premises and, subsequently, concept designs that were submitted to the local council prior to a possible development application.

2. The applicant claims that the respondent breached specific guarantees in the Australian Consumer Law 2010 (NSW) (ACL), regarding the provision of services:

1. Guarantee as to due care and skill - section 60

2. Guarantees as to fitness for a particular purpose - section 61

3. Guarantee as to reasonable time for supply - section 62

3. The applicant seeks an order for payment of a total amount of $14,030.00:

1. The refund of the cost of the Feasibility Report - $1925.00

2. The refund of the cost of the concept drawings - $2530.00

3. Consequential loss of $9575.00 ‘being the cost of further reports required by [the respondent] and incurred rental expense.’

4. Ms Scozza appeared in person at the hearing and relied on two bundles of documents. The documents were admitted into evidence, subject to weight and relevance and marked as Exhibit A1 and Exhibit A2.

5. Mr Harb, a director of the respondent, appeared in person and relied on two bundles of documents. The documents were admitted into evidence, subject to weight and relevance, and marked as Exhibit R1 and Exhibit R2.

6. Both Ms Scozza and Mr Harb gave sworn oral evidence at the hearing. Both were given the opportunity to question each other in regard to the evidence of the opposing party and all relevant factual events.

Procedural history

7. Ms Scozza’s application is dated 4 January 2023 in related matter GEN 23/00232.

8. The application was originally heard and determined by the Tribunal on 20 March 2023. The Tribunal dismissed the application.

9. Ms Scozza appealed the Tribunal’s decision.

10. On 27 June 2023 the Appeal Panel allowed the appeal and remitted the proceedings to the Tribunal for determination.

11. The application was re-registered as GEN 23/30319 and came before the Tribunal again for final hearing on 18 August 2023.

Jurisdiction

12. For the following reasons I am satisfied that the Tribunal has jurisdiction to hear and determine this application:

1. The applicant is a “consumer” pursuant to s 79D of the Fair Trading Act 1987 (NSW) (“FTA”). This was not in contention (section 79H).

2. The claim involves the supply of services to the applicant for consideration pursuant to s 79G

3. The claim is for an amount which is within the jurisdictional limit of $100,000: (s 79S(7) and cl 13A Fair Trading Regulation 2019 (NSW));

4. The supply of services was within New South Wales (s 79K); and

5. The claim is registered within 3 years of the cause of action. (s 79L).

13. Section 28 of the FTA stipulates that the ACL is a law of NSW. Accordingly, it applies to the Tribunal’s jurisdiction.

Factual background

14. The following statement of the background to the proceedings either reflects factual matters which are not in dispute or documentary material received in evidence. Save to the extent that matters are said to be in dispute, the statement of the background to the proceedings represents my findings of fact.

15. On 19 October 2021 the applicant enquired of the respondent about the construction of a secondary dwelling, i.e. a ‘granny flat’ at her home in Bulli.

16. On 20 October 2021 the respondent sent the applicant a fee proposal (A1-7). The costs were broken into 3 stages.

17. Stage 1 was a Feasibility Report for the amount of $1,750.00. The proposal states:

‘Report includes 10.7 Planning Certificate & DBYD … Upon receipt of the 10.7 Planning Certificate, additional reports may be required from our consultants, however confirmation will be provided, once received.’

18. One of the optional fees listed was a Bushfire Report for an estimated $700.00.

19. Stage 2 of the proposal was a ‘Concept Design – Granny Flat’ for the amount of $2,300.00.

20. Stage 3 itemised a number of activities concerning the development application in the total amount of $3,550.00.

21. These prices were exclusive of GST.

22. The fee proposal states it is ‘Valid To: 19 November 2021’ and:

‘After the acceptance of the fee proposal. A concept design (sic) will be completed within 14 working days after formulating a brief. Further to the accepted design a further 15 working days is required to finalise the DA plans & all third-party plans & reports.’ (A1-9)

23. Detailed Terms and Conditions of Trade were attached to the fee proposal which I will refer to below.

24. Attached to the fee proposal was a document headed ‘RE: ACCEPTANCE OF FEE PROPOSAL’. It has blank spaces to include details of the project, client name etc and a space for the client’s signature and date of signing:

‘By signing the understated you agree to engage JIH to undertake works as listed & terms of trade are understood.’

25. The same attachment also includes the respondent’s bank account details and states:

‘Due to the nature of the project we kindly request a deposit which amounts to all services prior & inclusive of concept design.’

26. I accept the applicant’s submission that the required deposit amount for all 3 stages was therefore $4,050.00, plus GST.

27. It is common ground between the parties that the ‘RE: ACCEPTANCE OF FEE PROPOSAL’ was not signed by the applicant, nor returned to the respondent.

28. Ms Scozza gave oral evidence that she had a telephone conversation with ‘Emily’, the respondent’s Project Administrator, on 21 October 2021 stating that she would not sign the ‘RE: ACCEPTANCE OF FEE PROPOSAL’, nor make the full deposit because she would only agree to proceed with the Stage 1 Feasibility Report before any concept design for the granny flat was commenced.

29. There was no evidence from ‘Emily’ before the Tribunal to contradict this account. I accept Ms Scozza’s evidence of this conversation.

30. The applicant’s payment of $1,925.00 to the respondent on 21 October 2021, the cost of Stage 1, is consistent with this evidence.

31. On 2 November 2021 the respondent provided the applicant with a quotation for a report from APZA Services, a bushfire consultant:

‘If you approve of his quote, please sign the form attached and email through to me.’ (R2-5)

32. The respondent did not seek pre-payment of the report from the applicant.

33. The signed and dated acceptance of the quotation by Ms Scozza is among her documents (A1-23). She gave oral evidence that she emailed it to the respondent, but such an email is not in evidence.

34. Mr Harb disputes that Mr Scozza returned the signed acceptance and says that is the reason the respondent did not obtain the bushfire report.

35. Given the dispute on this issue, in the absence of the actual email I am not satisfied that the applicant returned the signed and dated acceptance to the respondent.

36. On 19 November 2021 the applicant paid CEH Consulting Pty Ltd the amount of $1,925.00 inclusive of GST to prepare a survey as part of the respondent’s feasibility report (A1-24).

37. On 26 November 2021 Ms Scozza emailed the respondent:

‘Just wondering if we have all of the pieces yet and what the next steps/timeframes are?’ (A1-29)

38. Emily replied on behalf of the respondent on 8 December 2021:

‘Your feasibility will be ready next week …’ (A1-30)

39. On 23 December 2021 the respondent emailed the applicant the completed Feasibility Report (A1-31). It states relevantly:

‘The proposal seeks approval for granny flat (sic) dwelling … The subject lot has been classified as Bush Fire Prone Land.’ (A1-43)

40. The Report then highlights the following in bold, italics, underlined:

‘It is our recommendation that the service of a bushfire consultant be engaged to evaluate the bushfire classified zones. APZA Services has provided the following advice:

“The granny flat will need to be positioned within the blue box [referring to a marked-up site photograph] if a granny flat were to be positioned within the E3 Zoning. The 11-meter setback from all boundaries will achieve a BAL-29 outcome, but the proposed granny flat is further away than the 11 meter the BAL might be lower.”’

41. When questioned by the Tribunal about how APZA Services provided advice, when the respondent had not commissioned a report, Mr Harb responded that the advice was preliminary, informal advice provided to the respondent because of their working relationship.

42. The Tribunal notes that BAL refers to Bushfire Attack Level and measures the severity of a building’s potential exposure to ember attack, radiant heat and direct flame.

43. The Report, signed by Mr Harb, recommended obtaining advice from other contractors regarding, for example, tree preservation, biodiversity and flood levels.

44. The Feasibility Report concludes relevantly:

‘The subject site for a granny flat will be achievable pending the above recommendations & further liaison with council...

We believe that any redevelopment of the site through sensible design could comply with LEP & DCP requirements.

Should you wish to proceed to the next stage, please feel free to contact us for a fee proposal to undertake the next steps for your development site.’

(A1-45, 47)

45. Over the next few months, the applicant sought alternative opinions.

46. The applicant, independently of the respondent, obtained a report, dated 31 May 2022, from Bushfire & Evacuation Solutions (A1-90).

47. The report determined that for a granny flat to comply with statutory requirements and NSW RFS guidelines:

1. Vegetation would need to be cleared and maintained for a distance of 56 metres north of the proposed dwelling; and

2. Development consent would require approval to clear native vegetation (A1-95).

48. According to the applicant, she also met with an architect on site who, with the input from the bushfire consultant, advised that a granny flat would never obtain council approval on the site.

49. On or around 23 June 2022 the applicant and Mr Harb had further telephone discussions. The parties agree that Mr Harb reiterated his advice that a granny flat could be built on the site and the respondent could draft a proposal to put before council for the amount of $2,530.00.

50. According to Ms Scozza, Mr Harb told her it would take a week to prepare the proposal. When questioned by the Tribunal about this evidence, Mr Harb replied:

‘I don’t think I would say anything contradictory to the terms and conditions. Even if I did say that, there are still disclaimers in the terms and conditions.’

51. Given these conflicting, I am not satisfied on the basis of Ms Scozza’s evidence alone that the respondent committed to a one week time frame.

52. On 29 June 2022 the applicant emailed the respondent:

‘As per my conversation with Jason of last week could we please organise a pre concept design for the purposes of a pre DA meeting. It is for the granny flat with garage underneath.’ (A1-99)

53. On 6 July 2022 the respondent sent the applicant an invoice for $2,530.00 for

‘the concept stage at … Georges Ave, Bulli. … Would you like to organise a time to see Jason and discuss your design for the granny flat?’ (A1-100)

54. The invoice itself was not in evidence.

55. On 6 July 2022 the applicant paid the invoice and emailed respondent:

‘I believe Jason is of the understanding that we are trying to promptly and cost effectively get a better understanding of whether a granny flat with garage under will receive approval on the site and if so where. I don’t believe he will be investing energy into anything above and over the basic shell and it [sic] placement until we are more hopeful.’ (A1-101)

56. In oral evidence Ms Scozza said the purpose of the email was:

‘to clear up that we are not designing a granny flat, just a foot print on a piece of paper, was my understanding.’

57. On 6 July 2022 Emily on behalf of the respondent replied relevantly:

‘Not a problem. Jason will review your site and provide a concept plan.’ (A1-102)

58. On 19 July 2022 Ms Scozza emailed the respondent:

‘Hi, Just wondering how this is progressing?’ (A1-105)

59. On 20 July 2022 Emily replied:

‘Concepts are under way and we will send them over to you for review at the start of next week.’ (A1-106)

60. On 21 July 2022 Ms Scozza emailed Emily:

‘Are we able to book the meeting with council in readiness?’ (A1-107)

61. On 7 August 2022 Ms Scozza emailed the respondent:

‘I don’t have any record of a response or receiving a concept plan. Can you please look into this as it is really starting to drag on well beyond the estimated timeframes and the matter is quite time sensitive.’ (A1-108)

62. On 12 August 2022 Emily replied:

‘Sorry for the delay. As Jason was on sick leave for the last week, there is a slight delay with the plans, however we will send through the concept plans once they are ready.’ (A1-109)

63. A few hours later Ms Scozza responded:

‘I am not sure if you are considering the correct matter. Our concept plans were expected some three weeks before last week. Can you please look into the matter further.’ (A1-110)

64. Less than 30 minutes later Mr Harb emailed Ms Scozza the site and floor plans:

‘The position of the granny flat is critical in ensuring we stay clear of the tree mark as medium (outlined in red).

Please review the position and design and advise accordingly.’ (A1-111)

65. Later that evening Ms Scozza replied:

‘Great thanks Jason. Can we now get this into a discussion with council?’ (A1-112)

66. On 13 August 2022 Mr Harb emailed Ms Scozza, agreeing to organise a meeting with council. He identified some issues with the site and asked the applicant to consider some design options such as an elevated pole home (A1-113)

67. On 14 August 2022 the applicant replied:

‘Can we take it to the meeting with the cut in and garage under living please? How long will it take to get the meeting?’ (A1-114)

68. On 15 August 2022 Mr Harb replied:

‘I’ll see what I can do as far as a single garage is concerned however any driveway and retaining walls leading to the granny flat will encroach onto the tree TPZ. Would you consider a compacted gravel driveway?’ (A1-115)

69. On 15 August 2022 the applicant responded:

‘We are hustling wanting to rush it in front of council so we can find out what we can and cannot do. We have cleared undergrowth and could look at taking out trees if council allowed. We are just aware that we are now in a position of “what can we have?” Rather than heavily investing in what we want. In having said that if we can have a garage as large as possible (as we think it won’t affect the ratios) that would be great.’ (A1-116)

70. Mr Harb replied on 16 August 2022:

‘I would advise to get a pre lodgement under way and discuss these options with council. The garaging will create cut and retaining walls which do form part of the tree encroachment. In saying that we also need to lift the dwelling so there is no cut to allow adequate height under the dwelling for the garage. I will have Emily apply for the pre-lodgement today.’ (A1-117)

71. According to Ms Scozza’s written evidence:

1. On 18 August 2022 she received an invitation to attend a pre-lodgement meeting on 24 August 2022 at 9.45 am;

2. Over the next week until the meeting she attempted to contact the respondent for information about the meeting and how it would proceed;

3. On 24 August 2022, prior to the meeting, Emily telephoned Ms Scozza and said:

‘You are not required to do anything. Jason will do all that is required. However, you are welcome to attend and ask questions if you think it is necessary.’

72. On 24 August 2022 the applicant attended the council meeting. Mr Harb did not attend. Three council representatives attended.

73. The applicant’s chronology provides her brief account of the meeting. In summary, council expressed concern at the lack of supporting documentation, including a bushfire report. Council informed her that the plans as submitted did not include a garage and ‘council staff seemed confident that a garage would not be achievable …’ (A1-5).

74. Mr Harb gave oral evidence that the documents he submitted to council are the 3 pages which appear in R1-37,38,39. They do not depict a garage beneath the granny flat.

75. According to Ms Scozza, Mr Harb returned her telephone call on 24 August 2022, apologised for failing to attend, and undertook to follow up with council, and update her, perhaps as early that afternoon (A1-5).

76. Mr Harb gave oral evidence that he did not attend the meeting because he was suffering from the symptoms of hyperthyroidism: ‘I was not in a good state. I couldn’t even get on the phone.’

77. By 1 September 2022 Ms Scozza had not heard anything further from Mr Harb, so she sent him an email which said relevantly:

‘I had engaged your organisation as consultants to assist and guide in this matter and have found the process to be very slow, unprofessional and all but redundant in terms of guidance. We seem to have no more clarity on this matter than when we commenced the process and have been caught paying $600 per week in rent whilst we have been awaiting the process to progress.

The tedious chasing of this matter has culminated in a pre lodgement meeting attended by myself without our consultants being present …it seemed to me that the entire proposal in fact hinges on a BAL requirement that I cannot even be sure has been assessed before charging us for further services and progressing our matter further….

I wish to request a full refund of payments made to date as I cannot ascertain what has been provided for my investment of time, money and effort in a process that my consultant is failing to provide a level of expertise, guidance or progress on.’ (A1-119)

78. The respondent has refused to provide a refund.

Was there a contract or contracts between the parties?

Contract 1

79. For the following reasons I find that on 21 October 2021 the parties entered into a contract whereby the respondent would provide the applicant with a Feasibility Report regarding the construction of a granny flat in return for payment of $1925.00, including GST:

1. The respondent’s offer is contained within the fee proposal sent to the applicant on 20 October 2021;

2. On 21 October 2021 the applicant verbally communicated her acceptance of the respondent’s offer of the Feasibility Report, but explicitly rejected the offer of Stage 2 and Stage 3 contained within the quotation;

3. The ‘RE: ACCEPTANCE OF FEE PROPOSAL’ included the fees for Stages 1, 2 and 3 and this was not accepted, signed and returned by the applicant;

4. The applicant paid the respondent $1925.00, the cost of the Stage 1 Feasibility Report.

80. For the following reasons I find that the respondent’s Terms and Conditions of Trade did form part of the contract:

1. The Terms and Conditions of Trade were provided to the applicant on 20 October 2021;

2. The Terms and Conditions of Trade state relevantly at 2.1:

‘The Client is taken to have exclusively accepted and is immediately bound jointly and severally by these terms and conditions if the Client places in order for, or accepts, Services provided by JIH.’

3. By accepting the offer of the Feasibility Report, the applicant ‘placed an order’ for the respondent’s services;

4. The respondent’s request that the applicant sign the ‘RE: ACCEPTANCE OF FEE PROPOSAL’ was to confirm, relevantly, that the applicant understood the ‘terms’. Her signature was not required to accept the terms.

81. The scope of Contract 1 was to conduct a study about the feasibility of constructing a granny flat at the applicant’s premises at Bulli.

Contract 2

82. For the following reasons, and based on the factual background I have outlined above, I find that the parties entered into a second contract on 6 July 2022:

1. On 29 June 2022 the applicant emailed the respondent an invitation to negotiate the preparation of a:

‘pre concept design for the purposes of a pre DA meeting … for the granny flat with garage underneath.’

2. On 6 July 2022 the respondent, via an invoice, made an offer to the applicant for the above services in return for payment of $2530.00, including GST for the ‘concept stage’ of the granny flat;

3. On 6 July 2022 the applicant communicated her acceptance of the offer by paying the respondent $2530.00.

83. I find that The Terms and Conditions of Trade did not form part of Contract 2 because the respondent did not send the Terms and Conditions of Trade to the applicant with its offer, nor is there evidence that the respondent brought them to the applicant’s attention.

84. I find that the scope of Contract 2 was:

1. The preparation of a concept plan for a granny flat with a garage underneath; and

2. Presentation of the concept plan by the respondent at a meeting of the local council to ‘get a better understanding’ of whether it will receive council approval.

85. I base this finding on the scope stated in the email from the applicant on 6 July 2022. The respondent confirmed this scope by Emily’s return email stating, ‘Not a problem.’

86. I note that in its written submissions to the Tribunal the respondent accepts that this was the scope of the contract (R2-1).

87. I am not satisfied on the basis of the applicant’s evidence alone that Mr Harb on behalf of the respondent agreed to complete the concept design within 1 week:

1. Mr Harb gave evidence that he would not commit to a time frame different to the Terms and Conditions (which he submitted do apply to all the transactions between the parties); and

2. The emails between the parties do not record any agreed time frame.

Did the respondent fail to conduct the services with due care and skill?

Relevant law

88. Section 60 of the ACL provides:

‘If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill.’

89. The test to be applied is objective i.e. what standard and quality could reasonably be expected from a competent person in the particular profession. There will be a failure to comply with the guarantee if the work was carried out in a careless or unskilled manner (Corones' Australian Consumer Law, 5th ed, 2023, page 365)

90. The phrase “due care and skill” is equivalent to the common law duty to take reasonable care: Let’s Go Adventures Pty Ltd v Barrett [2017] NSWCA 243 at [6] (Basten and Gleeson JJA). It is a guarantee that the services will be performed in a “careful, skilful, and workmanlike” manner: Panico v Mollier Enterprises Pty Limited t/a JC Diesel Tune [2021] NSWCATCD 56.

91. The applicant bears the onus of proving her claim on the balance of probabilities.

92. In respect of proving a fact on the balance of probabilities, Hallen J in Pollock v NSW Trustee & Guardian [2022] NSWSC 923 set out the applicable authorities as follows at [74]-[75]:

‘Emmett J in Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (No 2) (2011) 297 ALR 56; [2011] FCA 1123 wrote at [48]:

“When proof of any fact is required, the court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences: see Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 361-2; [1938] HCA 34; [1938] ALR 334 at 342.”

In Nguyen v Cosmopolitan Homes [2008] NSWCA 246, speaking with the concurrence of McColl and Bell JJA, McDougall J, similarly, had expressed the view, at [44]-[52], that proof on the balance of probabilities required a feeling of actual persuasion; that the event in question was more likely than not to have occurred; with “a probability in excess of 50%”. His Honour repeated that view in Ballard v Multiplex [2012] NSWSC 426 at [126].’

93. In determining whether services were provided with due care and skill, it is relevant to consider whether there is any evidence that a reasonable provider of equivalent services would have done things differently. This is because the Tribunal has to be satisfied that, objectively, the work was not performed with due care and skill (see, e.g. Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd v Deacon [2017] NSWCATAP 185 at [46]; Duran and Duran v Tafra Pty Ltd [2015] NSWCATCD 110 at [39]).

Contract 1

94. The service provided pursuant to Contract 1 was the preparation of a Feasibility Report.

95. For the applicant to succeed, she must establish on the balance of probabilities, that the work performed by the respondent in preparing the Report was not performed with due care and skill.

96. The applicant did not clearly submit in what way the respondent’s preparation of the Feasibility Report lacked due care and skill.

97. She was critical of the respondent’s failure to obtain a bushfire report to inform the Feasibility Report.

98. The Tribunal notes that in the Appeal Panel in Khan v Khang [2014] NSWCATAP 48 at [48]-[54] held that in disputes involving a small amount of money under the Home Building Act 1989 (NSW) a quote or brief report may be sufficient to establish breach and loss, and that an extensive and detailed expert report is not necessary.

99. Although in a different legislative context, I am of the view that the same principle applies here.

100. The applicant has provided no evidence from a builder or town planner that the work performed by the respondent was not performed with due care and skill. Specifically, there is no evidence that a reasonable provider of a feasibility report would obtain an expert bushfire report, prior to completing the report.

101. Moreover, the competed Feasibility Report does recommend the applicant obtain a bushfire report, as well as other expert reports.

102. I am not satisfied that the respondent’s failure to mention the bushfire report in response to the applicant’s query on 26 November 2021 amounts to anything more than poor customer service.

103. The subjective dissatisfaction and criticisms of the applicant are not sufficient to prove on the balance of probabilities that the work performed by the respondent was not performed with due care and skill.

104. I dismiss this part of the applicant’s claim.

Contract 2

105. The relevant services pursuant to Contract 2 were the preparation of a concept plan for a granny flat with a garage underneath and presentation of the concept plan to the local council to ‘get a better understanding’ of whether it will receive council approval (A1-101).

106. By definition, a concept plan provides a conceptual presentation of the proposed design, in particular the size, shape and location of the building on the land.

107. Mr Harb said in evidence:

‘The critical question was whether a granny flat could go in this position regardless of its specific design.’

108. The applicant did not provide evidence to challenge this. There is no evidence from a builder or town planner that the work performed by the respondent in preparing the concept plan was not performed with due care and skill, including because the respondent did not include a garage beneath the proposed granny flat on the plan.

109. The applicant’s subjective complaint about the concept design is not sufficient to prove on the balance of probabilities that the work performed by the respondent was not performed with due care and skill.

110. Mr Harb did not attend the council meeting. The concept plan was still presented to Council and given consideration. The applicant was understandably disappointed at Mr Harb’s absence, however, there is no evidence, just the applicant’s subjective view, that his absence meant the work was not conducted with due care and skill.

111. I dismiss this part of the applicant’s claim.

Were the services not reasonably fit for purpose?

Relevant law

112. Section 61 of the ACL provides:

‘(1) If:

(a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and

(b) the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer;

there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose.

(2) If:

(a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and

(b) the consumer makes known, expressly or by implication, to:

(i) the supplier; or

(ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the services were conducted or made;

the result that the consumer wishes the services to achieve;

there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result.

Contract 1

113. The particular purpose of the Feasibility Report was to investigate the potential for the development of a granny flat on the applicant’s land. The result that the consumer wished the services to achieve was a conclusion as to whether the development was feasible or not.

114. The applicant does not clearly submit in what way the Feasibility Report was not fit for that purpose although she did tell the Tribunal:

‘I was charged for a feasibility study that said [the granny flat] was feasible and it wasn’t.’

115. The evidence does not support such a finding.

116. The applicant’s own assessment from a bushfire consultant determined that a secondary dwelling on the land would require clearing and ongoing management of vegetation and council approval for clearing native vegetation. The assessment did not conclude the development was not feasible.

117. The applicant’s written submissions in Exhibit A2 refer to conversations with Matt Dixon, architect, and a bushfire consultant. According to Ms Scozza, both professionals expressed strong doubts as to whether a granny flat would be approved on the site, including because of the BAL rating.

118. However, such evidence is hearsay and Ms Scozza’s recollection of the conversations is arguably self-serving. I do not put weight on this evidence. The appropriate course would have been for the applicant to provide a brief written report from those professionals.

119. The completed Feasibility Report provided the section 10.7 certificate and identified relevant features of the site, compliance requirements, environmental impacts and provided a conclusion that development of a granny flat was feasible, subject to obtaining additional information and liaising with council.

120. I find that the Feasibility Report was reasonably fit for the purpose the services were acquired by the consumer.

121. The applicant’s subjective dissatisfaction with the Report, and her contention that other professionals believed the development was not feasible, does not render the Report not fit for purpose.

Contract 2

122. The applicant made known to the respondent that the particular purpose in obtaining the concept plan, its submission to council and subsequent meeting was to:

‘promptly and cost effectively get a better understanding of whether a granny flat with garage under will receive approval on the site and if so where.’ (A1,101)

123. There is no evidence from a professional who has the skills, training and experience regarding concept plans (e.g. builder or town planner) that the concept plan submitted to council was not reasonably fit for that purpose.

124. In written submissions to the Tribunal regarding the concept design, the applicant says:

‘the items presented to council were both insufficient and were not in accordance with my requirements (as agreed in our initial agreement). The matter as submitted to council was not fit for purpose.’ (Exhibit A2)

125. In her application to the Tribunal Ms Scozza states:

‘By conclusion of the meeting it was my understanding that reports, details and elements for consideration were missing from the submission.’

126. Apart from her subjective understanding, the applicant did not provide evidence that the respondent’s submission to council was incomplete.

127. Nor did the applicant provide evidence from a relevant professional that the absence of the garage rendered the concept plan not fit for purpose. Moreover, on the applicant’s own evidence, the proposed garage was discussed at the council meeting, and she obtained feedback from council that:

‘a garage, even if submitted, would not of been (sic) acceptable due to a matter of parking provisions or the like.’

128. There is no evidence from a professional who has the skills, training and experience regarding pre-lodgement meetings with council that Mr Harb’s absence rendered the meeting not reasonably fit for the purpose of obtaining ‘a better understanding’ of whether the granny flat would obtain approval.

129. The applicant’s perception that council was ‘surprised’ by Mr Harb’s lack of attendance is not evidence that his lack of attendance rendered the meeting not fit for purpose.

130. Subsequent to the meeting, the applicant received the Pre-Lodgement Notes from council, setting out the further information required to prepare a development application and comply with council’s and legislative requirements.

131. I am satisfied that the services did provide the applicant with ‘a better understanding’ as to whether and where the granny flat might receive approval. It was never the purpose of the services to provide the applicant with a definitive understanding: that is the purpose of a DA application.

132. The applicant has failed to prove that the respondent breeched the consumer guarantee pursuant to section 61.

Were the services not supplied within a reasonable time?

133. Section 62 provides:

If:

(a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and

(b) the time within which the services are to be supplied:

(i) is not fixed by the contract for the supply of the services; or

(ii) is not to be determined in a manner agreed to by the consumer and supplier;

there is a guarantee that the services will be supplied within a reasonable time.

134. Given my earlier finding that the Terms and Conditions do not form part of either contract, the provisions regarding time of supply therein are not relevant to this dispute.

135. I am satisfied that the applicant made known to the respondent her desire to obtain the Feasibility Report as soon as possible.

136. The respondent took nearly 2 months to supply the Feasibility Report.

137. While this might seem to be a lengthy period of time, the applicant did not provide evidence from a relevant professional about the time reasonably required to supply a Feasibility Report.

138. The respondent took approximately 5 weeks to provide the concept plan to the applicant. Around 2 weeks later the meeting with council occurred.

139. Arguably some guidance about the reasonable time required is provided by the respondent’s fee proposal which states:

‘After the acceptance of the fee proposal. A concept design (sic) will be completed within 14 working days after formulating a brief …’ (A1-9)

140. The reference to a ‘brief’ is not explained. The timeframe is therefore unclear.

141. I accept that the applicant was concerned to obtain feedback from council promptly and therefore from her perspective, 5 plus weeks is a lengthy period of time.

142. However, the applicant did not provide evidence from a relevant professional about the time reasonably required to supply a concept plan and obtain a meeting with council.

143. The work involved in preparing a Feasibility Report and a concept plan and therefore the reasonable time required to supply these documents is a not matter of common knowledge or judicial knowledge. The provision of these documents is a specialist service.

144. The obligation of the Tribunal is to make findings of fact based on evidence, and a conviction of actual persuasion of the existence of a fact is required before it can be found.

145. On the evidence before the Tribunal, I cannot be satisfied that the services were not provided within a reasonable time.

What is the applicant’s loss?

146. If I am wrong, and the respondent did breach one or more of the consumer guarantees in the ACL, the applicant’s claim fails for different reasons.

147. The remedies for breach of consumer guarantees are set out in s 267.

148. Because the applicant is seeking compensation, she must prove not just that the applicant breached a guarantee, but that the breach was a ‘major failure’ under s 267(3)(4).

149. The meaning of ‘major failure’ is set out in s 268. I leave aside the question of whether any alleged breach could be a major failure. Instead, I turn to the issue of whether the applicant has proved she has suffered loss or damage.

150. The applicant has not established how she is entitled to a refund of the cost of the Feasibility Report and concept plan.

151. The only remedies for a ‘major failure’ are set out in s 267. Either:

1. Compensation for reduction in the value of the services below the price paid or payable by the consumer for the services. (s 267(3)(b)); or

2. Damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure (s 267(4).

152. The refund of the monies paid to the supplier of the services does not fall within either category, nor does refund of the monies paid to other contractors, such as the cost of the bushfire report.

153. The applicant gave evidence that while the granny flat proposal was being explored, she paid the rent of another person who would otherwise have lived in the granny flat. Therefore, she claims, she incurred a loss of around $6,000.00, being rent she paid as a result of the respondent’s alleged breaches.

152. The applicant provided a list of what appear to be extracts from bank statements showing payments of $600.00 paid to a ‘B Grimes’ over several weeks. A notation next to each payment states ‘rent’ (A1-122).

153. I am not satisfied that any such loss was caused by a breach of the respondent.

154. Moreover, if the applicant did incur a loss, such loss is too remote from any breach by the respondent.

155. Pursuant to the principle in Hadley v Baxendale (1854) 9 Ex 341 damages are only recoverable as may fairly and reasonably be considered as arising naturally (that is, according to the usual course of things) from the breach, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach.

156. Even if I was to accept the applicant’s evidence that she had told the respondent she was paying the rent, I am not satisfied that the applicant’s payment of rent pursuant to a private arrangement with a third party is a reasonably foreseeable loss as a result of an alleged breach by the respondent.

Conclusion

159. I am not persuaded on the balance of probabilities that the respondent breached the consumer guarantees pursuant to ss 60, 61 and 62 of the ACL.

160. Further, even if the respondent did breach one or more of those guarantees, she has failed to establish her entitlement to any remedy because she has not proved loss.

161. Having failed to prove on the balance of probabilities any cause of action, the application is dismissed.

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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: 06 October 2023