SDL Project Solutions Pty Ltd v Kim; Kim v SDL Project Solutions Pty Ltd

[2022] NSWCATCD 10

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

SDL Project Solutions Pty Ltd v Kim; Kim v SDL Project Solutions Pty Ltd [2022] NSWCATCD 10

Hearing dates:

30, 31 March 2021; 8 July 2021; written submissions timetable to 21 September 2021; agreed transcript filed 15 October 2021

Date of orders:

15 February 2022

Decision date:

15 February 2022

Jurisdiction:

Consumer and Commercial Division

Before:

G Sarginson, Senior Member

Decision:

1. In Matter HB 20/42551 SDL Project Solutions Pty Ltd is to pay James Jong In Kim the sum of $112,853.21 within 28 days of the date of this decision.

2. In Matter HB 20/32292, the application is dismissed.

3. The homeowner is to file and serve all costs submissions and documents by 14 days from the date of this decision.

4. The builder is to file and serve all costs submissions and documents by 28 days from the date of this decision.

5. The homeowner is to file and serve all costs submissions in reply by 35 days from the date of this decision.

6. The costs submissions are to include reference to whether or not the parties seek a further oral hearing on the issue of costs. The Tribunal may determine it appropriate to decide the issue of costs without further oral hearing pursuant to s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW).

7. The costs documents and submissions are to be filed in hard copy with the Tribunal.

8. Both parties have leave to apply in writing to vary or extend the timetable for costs submissions and documents.

Catchwords:

BUILDING AND CONSTRUCTION — Home building —Termination of contract — Repudiation — Which party lawfully terminated contract — Building defects — Incomplete work — Payments made under contract — Assessment of damages — Quantum meruit claim by builder — Principles applicable

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Home Building Act 1989 (NSW)

Cases Cited:

Australian Financial Services and Leasing Pty Ltd v Hills Industries Limited [2014] HCA 14; (2014) 253 CLR 560

Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613

CCS 251 Elizabeth St Pty Ltd v Hellenic Club Ltd [2021] NSWCATAP 279

Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64

Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658

David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353

DB Homes Australia v Kes [2019] NSWCATAP 221

DCT Projects Pty Limited v Champion Homes Sales Pty Limited [2016] NSWCA 117

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

Dimitropoulos v Capital Constructions Pty Ltd; Capital Constructions Pty Ltd v Dimitropoulos [2018] NSWCATAP 100

Hadley v Baxendale (1854) 156 ER 145

Harold R Finger & Co Pty Ltd v Karellas Investments Pty Ltd [2016] NSWCA 123

Hyder Consulting Australia Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd and Anor [2001] NSWCA 313

In the Matter of Hillsea Pty Limited [2019] NSWSC 1152

Kurmond Homes Pty Ltd v Marsden [2018] NSWCATAP 2

Leung v Alexakis [2018] NSWCATAP 11

Llamas v Rockwall Constructions Pty Ltd; Rockwall Constructions Pty Ltd v Llamas [2019] NSWCATCD 75

Paraiso v CBS Build Pty Ltd [2020] NSWSC 190

Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 22

Rekrut and Scott v Champion Homes Sales Pty Ltd [2017] NSWCATAP 187

Repfix Industries Pty Ltd v FBD Group [2020] NSWDC 514

Rice v JR and SD Farmer t/as Urban Bespoke Homes [2020] NSWCATAP 208;

Robinson v Hindmarsh Construction Australia Pty Ltd [2021] NSWCATAP 51

Roude v Helwani [2020] NSWCA 310

Rudas and Andrassy v Eid [2021] NSWCATAP 4

Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344

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

Suecha Pty Ltd v VSD Glass & Timber Pty Ltd [2020] NSWCATAP 170

Tabcorp Holdings Pty Ltd v Bowen Investments Pty Ltd [2009] HCA 8 [17]; (2009) 236 CLR 272

Thurston v Goway Travel Pty Limited [2020] NSWCATAP 140

Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27

Woodward v Warwick Green Building Pty Ltd [2021] NSWCATAP 210

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Matter HB 20/32292:
SDL Project Solutions Pty Ltd (Applicant)
James Kim (Respondent)

Matter HB 20/42551:
James Jong In Kim (Applicant)
SDL Project Solutions Pty Ltd (Respondent)

Representation:

Counsel:
M Maconachie (James Kim)
D O’Connor (SDL Project Solutions Pty Ltd)

Solicitors:
Fox & Staniland Lawyers (James Kim)
Adams & Partners Lawyers (SDL Project Solutions Pty Ltd)

File Number(s):

HB 20/32292; HB 20/42551

Publication restriction:

Nil

REASONS FOR DECISION

1. In this decision, any reference “the homeowner” is a reference to Mr Kim; and any reference to “the builder” is a reference to SDL Project Solutions Pty Ltd.

2. Ms Choi is the wife of Mr Kim. Mr Laphai is a director of the builder.

3. This is a residential building dispute involving construction of a duplex residential dwelling in a north-western suburb of Sydney NSW.

4. The building works involved demolishing an existing a single dwelling on land. That dwelling was occupied by Mr Kim’s parents, who had lived there for approximately 20 years. The land was co-owned by Mr Kim.

5. The dispute involves a complex history of factual matters which it is necessary to detail.

6. On 17 January 2018, the parties entered into a written contract for the residential building works in the standard form contract of NSW Fair Trading.

7. The contract price was $1,093,607.50, subject to Variations (Clause 13 of the Contract); and adjustments for Provisional Sum items (Clause 10 of the contract). The written contract had a line crossing out Clause 11 (Prime Cost Items Schedule).

8. It is not in dispute in the proceedings that the homeowner made all payments to the builder for variations and progress payment stages other than the last progress payment stage ($109,360.73 being the amount identified in the contract as the final progress payment stage); and 3 invoices issued by the builder (for “delivery of PC items”; partial completion of a driveway; and the builder’s “final invoice” for the amount the builder asserts it is owned for partial completion of the final progress payment stage of works).

Relevant Contractual Provisions

9. The Provisional Sums schedule under Clause 10 of the contract identified 8 items (Brick Supply; Joinery; Fixtures and Fittings; Appliances; Tile Supply; Floor Finishes; Lighting Supply and Landscaping) with a provisional sum for each item identified. The total cost of Provisional Sum items was $226,369.50.

10. Pursuant to Clause 10 of the contract, depending upon whether the cost of the Provisional Sum item exceeded or was less than the amount identified in the schedule, either the builder was to give a credit to the homeowner for the cost to the builder that was less than the amount identified for the item in the schedule; or the homeowner was to pay the amount that the item exceeded the amount in the schedule, plus 15% builder’s margin and GST. Any such addition or deduction was to be taken into account at the next progress payment stage, “or as agreed between the parties”. The contractor was to provide documentary evidence of the actual cost of the Provision Sum items “at the time payment is requested”.

11. Pursuant to Clause 12 of the contract, there were 7 progress payment stages of work. Clause 10 includes the following words:

Payment of a progress payment is not to be regarded as acceptance by the owner that the work has been completed satisfactorily or in accordance with the contract documents.

If there is any bona fide dispute in relation to the quality of work done, the dispute must be dealt with in accordance with the dispute resolution procedure set out in Clause 27. In those circumstances, the dispute must be dealt with in accordance with the dispute resolution process set out in Clause 27. In those circumstances, the parties agree as follows:

(a) the owner may withhold from the progress payment an amount estimated by the owner, acting reasonably, equal to the owner’s estimate of the value of the disputed item.

(b) the contractor must continue to carry out its obligations under this contract, pending resolution of the dispute.

12. Under Clause 6 of the contact, the works were to be completed within 50 weeks from the date of commencement of work (as defined in Clause 5) and any extension of time within Clause 7 of the contract.

13. Clause 8 of the contract defines when works are complete under the contract. In this matter, for reasons that will be discussed, works were not complete under the contract with a dispute between the parties as to whether the homeowner or the builder lawfully terminated the contract during the last progress payment stage.

14. Clause 13 of the contract deals with variations. Work to be done or materials used under the contract may be varied at the request of the owner; or the builder; or due to matters that could not have been foreseen by an experienced, competent and skilled builder at the date of the contract; or due to a requirement of a statutory authority or Council. If a variation was requested by the builder, the owner is not liable to pay if the necessity for the variation was due to fault of the builder.

15. Under Clause 13, the procedure for variation is that the builder “must” provide to the owner a notice in writing containing a description of the work and the price (including GST) before (emphasis added) commencing with the work. The notice “must” be signed and dated by both parties to constitute acceptance. The only exception to this is where work must be done promptly as there is a likely hazard to health or safety or damage to property and the work could not be done promptly if the variation had to be put in writing before commencing the work.

16. The importance of variations being in writing and signed by both parties before work has been performed was discussed in detail (although in the context of the standard form Master Builders Association BC 4 contract) in Paraiso v CBS Build Pty Ltd [2020] NSWSC 190 at [32]-[57] and [60]. Neither party referred to this decision in their submissions, nor the provisions of Sch. 2 Cl. 1 (2) of the HB Act (which stipulates that by reason of s 7E of the HB Act it is a term of all home building contracts that any agreement to vary the contract or vary the plans and specifications for work to be done under the contract must be in writing and signed by or on behalf of each party to the contract).

17. Clause 14 of the contract deals with the time for payments of progress payment claims (as distinct from Variations, which are dealt with in Clause 13 of the contract). It is unnecessary to further discuss Clause 14 at this point of the decision.

18. Clause 19 of the contract pertains to access to the site and materials handling. Relevantly, the builder must bear the costs of “delivery of materials to the work, handling of materials, removal and disposal form the site of rubbish, surplus materials, excavated material, vegetation and demolished or dismantled structures”. Clause 19 further states:

…

The owner must allow the contractor, and any employee or sub-contractor of the contractor, to access the site during the currency of this contract.

The owner or the owner’s representative must communicate and deal with the contractor personally or with such person nominated by the contractor as the contractor’s authorised representative.

The owner must not give directions to the contractor’s employees or sub-contractors.

19. Clause 24 of the contract deals with suspension of work. Pursuant to Clause 24 a builder may give the owner a written notice (as set out in Clause 23 of the contract) of a suspension of work by reason of the matters set out in Clause 24 of the contract (including, relevantly, the owner failing to provide satisfactory evidence of title; the owner failing to pay progress payments or the owner failing to give the builder or its subcontractors access to the site).

20. Clause 25 and 26 of the contract deal with termination of the contract (Clause 25 is termination by the owner; Clause 26 is termination by the builder). Neither clause, however, states that it is the exclusive method to terminate the contract. Consequently, even if a party has not complied with Clause 25 or 26, a party may terminate (discharge) the contract by electing to terminate upon the other party engaging in repudiatory conduct, rather than electing to keep the contract on foot (Dimitropoulos v Capital Constructions Pty Ltd; Capital Constructions Pty Ltd v Dimitropoulos [2018] NSWCATAP 100 at [60] and [67]).

21. Clause 27 of the contract deals with the manner of resolving disputes between the parties to the contract. Clause 27 will be discussed in detail later in the decision.

Performance of Works by the Builder and Disputation between the Parties

22. Work commenced on or about 27 April 2018, starting with demolition of the existing house. Excavation works and construction of the duplex dwelling followed afterwards.

23. Between about April 2018 and August 2018 the homeowner and Ms Choi sought that the builder significantly change the layout of one of the duplexes. This was to divide that duplex into various living quarters. According to Mr Laphai, the homeowner intended to use one of the duplexes as a “boarding house”/separate living quarters. The documents of each party contain extensive emails dealing with the change to the layout.

24. The homeowner does not dispute that the layout of one of the dwellings was changed after works commenced, although it was not clearly explored in evidence the purpose of doing so.

25. One example of the change to the layout is an email from Ms Choi to Mr Laphai dated 3 August 2018 (Court Book pp. 296-297) where Ms Choi instructed Mr Laphai to provide her with a “plan with all the prospective structures in it” and Ms Choi makes extensive comments about amending one of the contractual plans.

26. No issue was raised in the proceedings by either party whether or not local Council consent was required for the changes to the layout and prospective use of part of the premises.

27. Between about 16 January 2018 and 5 September 2019 there were communications between the homeowner and the builder on a ‘WhatsApp’ telephone group chat that had been established to facilitate communication.

28. There were also numerous oral and written communications (most by email and some by text message) between the homeowner; Ms Choi; and the builder during the period that work was occurring.

29. An issue in dispute in the proceedings is whether the homeowner and Ms Choi and the homeowner not only “introduced” contractors and tradespersons to the site (and the builder) to perform works; but additionally directly instructed the contractors regarding the performance of the works. In considering that issue, contemporaneous emails between the parties carry significant evidentiary weight.

30. Mr Laphai’s evidence (pp. 86-87 Court Book) was that in late 2018 Ms Choi had requested a “budget” for items which were “not part of the provisional sum allowance in the contract in order to engage their own subcontractors”.

31. Mr Laphai asserted that the homeowner and Ms Choi directed the builder to use various contractors, and “continued to instruct subcontractors directly”. Mr Laphai asserted that in August 2019 Ms Choi “continued to make changes on site and gave “direct instructions” to tradespersons she and the homeowner had arranged to perform work on the site.

32. The homeowner and Ms Choi agreed that they had directed the builder to use various contractors, but denied that they had attended on site and gave contractors instructions as to how to perform works.

33. Rather, their evidence was that the contractors remained under the direction and control of the builder, and what they had done was to direct the builder to use certain contractors/tradespersons. The builder charged a profit margin under the contract at each progress payment stage for all works performed, including the works performed by the contractors that the homeowner and Ms Choi had ‘introduced’ to the site.

34. The evidence of the homeowner (p. 818 Court Book) was that at a meeting with the builder in December 2017 (months before the contract was signed) the homeowner stated he “knew” “various trades who could be used for the flooring, tiling and joinery work” and it was agreed that the homeowner would “nominate” such tradespersons on the basis that the builder would contract with them; pay them; co-ordinate the works; and would charge me the builder’s margin.

35. The evidence of Ms Choi (p. 856 of the Court Book) was that the builder “used her as a middleman (sic)” to arrange for the joiner, tiler and waterproofer to go on site” and that the works performed by such tradesperson were under the direction and control of the builder.

36. The homeowner, Ms Choi, and Mr Laphai were cross examined on who engaged tradespersons and who directed them. This issue will be further discussed later in the decision in the context of the issue of repudiation.

37. However, it is abundantly clear from the contemporaneous emails between Ms Choi and the builder that in the period to September 2019 the homeowner and Ms Choi not only determined which tradespersons would be used to complete significant aspects of the work (tiling, joinery, flooring, and waterproofing) but also coordinated when such tradespersons would attend the site.

38. On 21 May 2019, Mr Laphai emailed Ms Choi a “schedule of works for your project”. The email stated as follows:

Hi Yoomin,

Please find below schedule of works for your project.

We have made plans to concurrently undertake the carpentry fit out, tiling and flooring works. As you have requested to engage your own subcontractors for tiling and flooring, they are NOT committing to our timeframe. Could you please advise their start and finish date for these two trades. The plan is Benson (SDL Supervisor) to be on site (while undertaking carpentry fit out) to manage these two trades.

As you can appreciate, it is not feasible for us to make a plan for supervision of these trades if they are not committing to a program.

39. On 23 May 2019, Mr Laphai emailed Ms Choi as follows:

Hi Yoomin,

Further to your joint walkaround with your tiler and our supervisor Benson, the following issues were raised by your tiler regarding waterproofing works completed by his own waterproofer:

Balcony angle on the Unit B requiring cutdown/removal

All bathroom shower angles require cutdown

The tiler and the waterproofer were arranged by yourself and Benson has explained to them both about each other requirements (sic) onsite on numerous times.

Benson has further spoken to yourself this morning and agreed to undertake the following task Today (sic) in order to avoid further delay to our program as your waterproofer can not (sic) make it to site today (understandably these modifications should be done by the waterproofer on his own works):

Balcony angle on the Unit B will be removed.

Ground floor Unit A main toilet shower angle will be cut down for wheelchair access

All other Bathroom (sic) shower angle will be left as currently installed with a stepdown in the tile within area

Once the above is completed by SDL today:

Waterproofer will come to site tomorrow to check on everything over again with Benson and touch up as necessary

Tiler will start on site Saturday (not as promised Friday) but has assured Benson that he would still maintain the original duration of one week (Completion date 31/05)

Lastly, could you please ask your flooring guy for a more accurate start and finish date so that we can make plan (sic) accordingly.

40. On 23 May 2019, Ms Choi responded to Mr Laphai’s email as follows:

Hi Seng,

Thank you for clarifying everything on the email.

The only thing I have not confirmed is the exact time the tiler can make it Friday as he is driving down from Gosford after work. I will confirm the time later today and let Benson know.

I have also emphasised to Steve (flooring) that we are on a tight time frame and he understands. When the tiler finishes all internal tiling by Friday next week, Steve will start the following Monday.

When do you expect the flooring to finish?

So I can let Steve know.

41. Mr Laphai responded to Ms Choi’s email as follows:

Hi Yoomin,

Thanks for your email.

The tiler has confirmed with Benson that he cannot start tomorrow but will start Saturday 25/05 and finish next Friday 31/05.

If the flooring can start on Monday 03/06 (say each unit 2-3 days) then we can start joinery and fitting and fixture work on the same week.

Regards

Seng

42. On 23 May 2019, Ms Choi responded as follows:

Ok I will speak to Steve and let him know of our expected timeline.

I went to see the house yesterday and it is coming along nicely…

43. Ms Choi sent a further email to Mr Laphai on 23 May 2019 as follows:

Hi Seng,

I have spoken to Steve and his estimate of timeframe for Epping is 5 days each house so a total of 10 days. Once unit is finished you can have the carpentry go in.

Hope you are okay with that.

Steve will start 3^rd June (Monday).

I have confirmed that joinery can start following Monday 10^th of June.

Please confirm if you are happy with this date.

I have also asked all bathroom items to be delivered to site on 6 and 7^th of June. I have asked Nelson to have the garage door installed by that date so it can be securely stored in the garage.

Kind Regards

Yoomin

44. On 23 May 2019 Mr Laphai responded to Ms Choi’s email as follows:

Hi Yoomin,

Thanks,

Can the joiner (James) please send through the shop drawings of everything he is supplying and installing so that we can make appropriate check and coordinate with other trades.

Regards

Seng

45. Between about mid-2019 and September 2019 the parties fell into dispute about various aspects of the building works.

46. In evidence, the homeowner and Ms Choi blame the builder for the disputes arising; and Mr Laphai blames the homeowner and Ms Choi.

47. Issues that gave rise to disputation include:

1. Whether particular work fell within the scope of work under the contract.

2. Works purportedly performed or engaged directly by the homeowner.

3. Whether valid variations had been issued by the builder.

4. The homeowner complaining that the builder had issued excessive and unreasonable variations, most of which the homeowner had paid in any event.

5. Mr Kim and Ms Choi allegedly attending site and directing contractors (whether engaged by Mr Kim and Ms Choi; or engaged by the builder).

6. Delays in the progress of works.

7. Removal of soil and spoil from the site.

8. A dispute about whether the builder was responsible for a mixer not being installed in one of the bathrooms of the premises, and who would be responsible for the cost of installing the mixer and re-performing tiling/plumbing/ and waterproofing works so this could occur.

9. The additional costs of constructing a driveway.

10. Gas and electricity being connected to the premises. The builder asserts this was the homeowner’s responsibility because it was not included in the contractual scope of works, and the failure to do so was delaying completion of the works.

48. In July 2019, there was a dispute between the homeowner and the builder regarding the removal of soil from the site. Contemporaneous emails are set out at pp. 329-352 of the Court Book.

49. The builder had performed excavation work to install on-site detention tanks as part of the drainage system for the premises. There was a stockpile of soil and spoil from such works, and earlier excavation works. The builder suspected that the soil was contaminated, and obtained a quotation/proposal for a waste classification report (i.e. soil testing) from JK Environments, and provided it to the homeowner with a proposed variation to have the soil tested. The amount of soil/spoil and its position was also affecting the performance of other building works.

50. The homeowner refused to agree to have the soil tested and the proposed variation. The homeowner did not believe the soil was contaminated (or that there was a real risk of contamination) and did not accept the advice of the builder in this regard. In the early stages of the building works the builder had raised a variation (which the homeowner had paid for) in respect of asbestos contamination of soil, and the homeowner believed that the builder was trying to ‘double charge’ the homeowner. Under Clause 1 of the contract, “asbestos removal” was an excluded item that did not fall within the scope of works.

51. The homeowner directed the builder (which the builder agreed to) that he would arrange for removal of the soil/spoil from the site rather than pay for a variation. The homeowner arranged for trucks and bobcat to remove the soil/spoil, which occurred over a number of days. The homeowner also used an excavator sub-contractor of the builder to assist in the loading of soil/spoil. The homeowner then took the soil/spoil to an undisclosed location.

52. The builder, despite Mr Laphai’s view that the soil may be contaminated (including potential asbestos contamination; that a soil contamination report was required; and despite having occupation and control of the site under the contract, allowed the homeowner to remove the soil/spoil. No Notice of Breach or Notice of Suspension of Works was issued by the builder to the homeowner under the contract in regard to the conduct of the homeowner in removing and disposing of potentially contaminated soil/spoil.

53. Rather, the builder continued works under the contract.

54. In late August 2019 there was a dispute between Ms Choi and the builder about the circumstances in which a wall mounted mixer tap was not installed in the basin for the main bathroom in ‘Unit B’ of the dwelling.

55. On 28 August 2019, Ms Choi sent an email to Mr Laphai (Court Book pp. 356-357) that referred to Ms Choi having attended “Domayne today” to “return the two faulty toilets and ask them about the missing plumbing part for the bathtub”.

56. In respect of the wall unit mixer, Ms Choi asserts that “Benson” of the builder asked her at the start of April 2018 to have “all the plumbing items that are required for rough in stage ready”, and that the wall mixer was “picked up on 15 April at the warehouse” by “Benson”. Ms Choi complains that there was “no excuse” for the mixer not to have been fitted, and that the builder should take “full responsibility for the mistake that occurred”.

57. Mr Laphai responded to this email on 28 August 2019 (pp. 355-356 Court Book) by stating that he “disagreed” the mixer not being installed was the builder’s responsibility. Mr Laphai stated that the homeowner and Ms Choi had “signed off” the following stages “with multiple visits to the bathroom”:

“Rough in stage

Plastering stage

Waterproofing stage (engaged by Owner)

Tiling stage (engaged by Owner)”

58. Mr Laphai stated that it was “only when I brought up that there is a spare mixer that you wanted wall mounted tap”. The email of Mr Laphai concluded with the following:

I am trying very hard to help with finishing your project with all the engineering issues with external works but it seems all one sided at the moment. Hopefully we can arrive at an amicable solution tomorrow as I am going backward on this project very quickly.

59. Ms Choi responded to this email on 28 August 2019 as follows:

Questions for you to consider.

1. Have I supplied you with all the items that are required for the rough in stage? YES

2. When he picked up the mixer did Benson know where the mixer had to go? YES

3. Did he forgot (sic) to give this to the plumber? YES

4. Is it my responsibility as an owner to pick up the mistake during the stages you had mentioned? NO

I cannot see anywhere in the contract that I am responsible for coordinating any of this work and remember I am not employed by you or getting paid by your company.

I have introduced the tiler and waterproofer which has nothing to do with you forgetting to install the wall mixer…

If I didn’t pickup (sic) your mistake, I am sorry but you cannot put that responsibility or liability on me. You are the builder and I am your client.

If you disagree with what I said in this email and I am being unreasonable we should both get a second opinion from a third party.

First step in resolving this problem will be agreeing who is responsible for this mistake and then second step is to find a solution.

I will not discuss solutions unless this is clarified. Once we know whose (sic) at fault then we will take about how we resolve the issue.

60. Mr Laphai responded to this email on 29 August 2019 as follows:

Hi Yoomin,

Thanks for your email. Please note of the following logic (sic) for finishes:

You have sourced tiles and you have directly instructed the tiler which tiles go where.

You have sourced joiner and you have ensured how it will be installed directly with him.

You have sourced tapware and vanity and same logic applied here, yes (sic) I am a builder not a mind reader.

I have allowed you to store your tiles and PC items in my warehouse for months at no charge. I have personally helped with delivery and even yesterday helped with returning the broken toilet. Your email seems to suggest somehow I am responsible for damage and missing parts. If you want a wall mounted tap for Unit B, let me know which type and I will cost up the removal of the tile (sic) and wall, waterproofing and installation of new tapware and retiling.

Please also supply outstanding PC Items as listed below:

…

61. Mr Laphai’s email then listed a number of “left side” and “right side” fittings and fixtures that he had asserted had not been supplied by the homeowner and Ms Choi.

62. On 4 September 2019, there was a lengthy WhatsApp exchange between the homeowner and Mr Laphai (pp. 607-608 Court Book). The exchange started when the builder stated that the “council driveway” would cost “around $13-15k”.

63. The homeowner responded by asserting, in substance, that the builder had been “ripping off” the homeowner by issuing variations for things that were in the scope of works under the contract, and things where the parties had agreed the homeowner could “save money” on Provisional Sum items by “bringing our friends like floor tiles and joinery”. The homeowner stated, in substance, that the homeowner wanted the builder to complete the works without further variations; the homeowner was not going to ‘do the builder’s job for it’ and after completion the homeowner would do any further works “myself”.

64. Mr Laphai responded by stating that the builder had not issued unreasonable variations; the scope of works in the contract did not include “100 sq. m” of driveway; the driveway now sought to be constructed was addition work; and the builder had tried to “help” the homeowner and inform the homeowner of additional costs. The exchange concluded with Mr Laphai stating that he would send a variation notice for all additional works, and “only if approved I will proceed”.

65. On 5 September 2019, the local Council emailed the builder about arranging for an inspection of the driveway works.

66. On 5 September 2019, the builder emailed the homeowner as follows in regard to the driveway works:

James/Yoomin

The cost to construct and coordinate with council for driveway outside property boundary is $15,000 plus GST.

Please provide an approval prior to proceeding.

67. On 5 and 6 September 2019, Mr Laphai sent the homeowner two invoices. Invoice 80679 was for $220 for “delivery of PC items”. Invoice 80680 was for $8,250 for “driveway outside boundary and layback (partially completed) work cancelled halfway”.

68. On 6 September 2019 the homeowner emailed Mr Laphai in respect of the driveway as follows:

Hi Seng,

Please send me an invoice detailing the breakdown cost of $15,000.

Also, please explain the scope of works included in the building contract of the external works. We need an explanation of why there are extra cost above what’s in the contract.

69. On or about 9 September 2019 there was a site meeting between the homeowner and Mr Laphai. Like almost every factual issue in this dispute, their recollection of what was said at the meeting was in vehement disagreement. Both Mr Laphai and the homeowner were extensively cross examined about this meeting.

70. Mr Laphai’s version of events was that the homeowner told him he wanted “no more variations” and that the builder had “two options”. The first was to compete the work “without variations” and rectify defects. The second was that the homeowner would “talk to a third party”; get a “second opinion” and “get another builder to complete the work”.

71. According to Mr Laphai, he said the builder could not complete the works until the homeowner had arranged for “gas and electricity mains to the property” and the builder had been requesting this for “six months”. The builder said he would not complete the driveway “for nothing” and required “written approval”. According to Mr Laphai, the homeowner told him he had chosen “option 2” and the homeowner would get a new builder to complete whilst complaining to NSW Fair Trading. According to Mr Laphai, the homeowner said the “contract is terminated” and for the builder to “leave the site”.

72. Mr Laphai further asserts that the homeowner took possession of the site that day by preventing the builder from having access to keys and told Mr Laphai the builder could not access the site until “Fair Trading or a third party resolves the issues between us”.

73. The homeowner’s version of the conversation was that he told the builder that there should be “no more variations” because he was upset with the number of variations that had been issued during the course of the building works (but which the homeowner had paid in any event) which the homeowner believed fell within the scope of works under the contract or otherwise were ‘unfairly’ charged by the builder. The homeowner’s version of events was that he told the builder that he and his wife wanted a “second opinion” from NSW Fair Trading on what works fell within the scope of works under the contract; the delay in completing the work; the builder being responsible for rectification of the bathroom in ‘Unit B’; and whether the builder had issued valid variations. He denied that he told the builder that the contract was terminated. The homeowner denied that he had removed the key from the letterbox and took possession of the property.

74. According to the homeowner, the substance of the conversation was that he told the homeowner that he wanted the works to continue without further variations, and wanted NSW Fair Trading’s intervention into the dispute, but did not seek to prevent the builder from having access to the site and end the contract with the builder.

75. On 9 September 2019 there was an email exchange between the parties after the site meeting.

76. At 2.24 pm Mr Laphai emailed the homeowner and Ms Choi stating that he had received “a few emails from both of you” on Friday 6 September 2019. He referred to an email of Ms Choi “recommending” the builder seek legal advice, sent at 7.01 pm. He then referred to an email of the homeowner sent at 9.49 pm, which Mr Laphai asserted put forward the “options” of:

1. The builder continuing the work “as per plan and contract price without any further variations”. The homeowner referred to wanting the dwelling completed “as per plan” and obtaining an Occupation Certificate. The homeowner continued to complain that the builder had put the works “on hold” due to its “mistakes” and had claimed items as variations which were not part of the scope of works.

2. The second option was “a second opinion about the issues e.g. Department of Fair Trading and legal (sic)”. As there had been “problem after problem” and the parties were not coming to “any sort of resolution”, the homeowner would (if option 2 was chosen) “engage a private builder to go over and find any possible defects” and “seek a legal advice from our lawyer to go over the contract and all the variations paid till dated also (sic) the current ones on the table”. The homeowner would “get a price for each variation paid “to be revisited” and “re-investigate” the duration of the build because it is taking “far too long”.

77. On 9 September 2019 at 5.54 pm Ms Choi sent the following email to the Mr Laphai:

Hi Seng,

Thanks for getting back.

Our previous email indicated two options for you to choose from. It was intended to move forward with the project. , not backwards and argue with the past…

It seen (sic) little ambiguous which option you want to proceed with but this is my interpretation of your email. The variations you have requested are all within reasonable ground (sic) hence if we are not in agreement with you it needs to be taken further.

It seems a little ambiguous which option you want to proceed with but this is my interpretation of your email. The variations we have been requested to pay (sic). Also due to the fact you have told us unless variation is agreed and paid you will not proceed with any work.

We do not agree with most of the things on your email you have sent today so our only option is to get a third party opinion.

We will be contacting fair trading (sic) and Ian Macpherson (our property lawyer) to go through the building contract and discuss the issues tomorrow.

There will be no more discussions on who is responsible for the variations as this clearly has not narrowed our problem down. This will be hopefully resolved by a third party. At this stage, this seems to be the only option although it is unfortunate it had to end this way.

78. On 10 September 2019, Mr Laphai emailed Ms Choi in response as follows:

Hi Yoomin,

It is indeed unfortunate. You are putting words in my mouth again by stating that “unless variation is agreed and paid you will not proceed with any work”. It’s you and James who stated not to proceed with any works unless I have something in writing from one of you.

Although you have given me verbal instructions to do the council driveway, I have stopped work due to your email below.

I cannot proceed with any further fit off works as items you have bought and meant to be supplied are missing as per my email 06/09. I will forward below email to all my subcontractors so that they are aware of the status. Please let all your subcontractors (joiner, floorer, waterproofer, and tiler etc.) know of your intention.

I await your response.

79. On 11 September 2019, the homeowner lodged an online complaint about the builder with NSW Fair Trading. The complaint relevantly stated as follows:

Your complaint: Builder is Requesting (sic) variations for the items included in the contracted price for the new build. Not agreeing to the mistakes that their staff made during the process and asking owners to pay for the re build (sic) or putting variations to cover his cost. Stop working before the variations paid up front. Taking long time to complete the work. Blaming us as an owner that it is our responsibility to supervise their work. All the staff left the company that we have been engaged with the Principal (sic) of the company is denying responsibility and blaming previous staff and not accepting.

…

Desired outcome: Someone else to complete the work.

…

80. On 11 September 2019, the builder sent the homeowner a tax invoice. The tax invoice contained the description “final invoice”. The invoice contains no details of the work performed. The invoice simply contains an amount (based on the builder’s estimate that 80% of the works pursuant to the final progress payment stage had been completed); less a Provisional Sum “credit-debit adjustment”. There were document attached that set out the Provisional Sum adjustment. Those document identifies 4 items (Fixtures; Appliances; Tiles; Landscaping; Brick Supply; Joinery; and Floor Finishes) and what the builder purportedly spent on each of those items as compared to the allowances in Clause 10 of the contract.

81. The “final invoice” was for $36,330.76, being the amount the builder purportedly was owed in respect of the final progress payment stage ($79,535.09) with a credit for the adjustment for Provisional Sums under Clause 10 of the contract as assessed by the builder in favour of the homeowner ($46,507.13).

82. On 17 October 2019, the builder wrote to NSW Fair Trading to respond to the homeowner’s complaint. The letter comprises 12 pages, including various photographs. That letter forms the basis of the response by NSW Fair Trading to the homeowner’s compliant.

80. That letter does not state in substance that the homeowner had unreasonably terminated the contract or prevented the builder from returning to site. It makes no mention of such issues; even taking into account the fact that Mr Laphai is not a lawyer, and may not have understood the legal meaning of the words “termination” or “repudiation”.

81. The builder’s letter to NSW Fair Trading dated 17 October 2019 concludes with the following:

SDL reserves the right to pass on all remobilisation, delay costs, and delay charges received from the subcontractors who has (sic) been working us (sic) to complete the project but cannot complete the works due (sic) the missing items which were bought and arranged by the Owner and also can not (sic) access the site due to half completed driveway.

SDL states that it is continuing to suffer damages due to lack of cooperative behaviour of Mr Kim and hold Mr Kim liable for all costs and damages as a result of his conduct should the dispute be required to be brought before the NCAT (sic) for resolution.

SDL looks forward to working with you to achieve an amicable outcomes (sic) to this dispute. Please do not hesitate to contact the undersigned with any queries regarding above submission.

85. The explanation given by Mr Laphai in cross examination was that he believed he was simply responding to the issues raised by NSW Fair Trading, and did not need to state that the homeowner had told him the contract was terminated; the homeowner had taken possession of the site and the homeowner was intending to engage a new builder to complete the works.

86. However, it is notable that not only did the builder not make any reference to the contract being at an end (in clear words or substance); but that the letter concluded by stating the builder would work with NSW Fair Trading to achieve “an amicable outcome”. Although the letter referred to the builder reserving the right to claim damages against the homeowner due to his “conduct”, it does not clearly state the builder regards the contract has having ended due to the “conduct” of the homeowner (and Ms Choi).

87. On 21 October 2019, Ms Harrold of NSW Fair Trading wrote to the homeowner in response to the complaint. The letter contains refers in detail to the position of the builder to the complaint after NSW Fair Trading had contacted Mr Laphai. It is useful to set out the letter in detail because it contemporaneously sets out many of the issues in dispute between the parties.

88. The letter stated as follows:

89. Mr Laphai requested “further evidence and clarification” on the following complaints by the homeowner:

1. The builder purportedly charging electrical allowances to cover temporary electricity and meters.

2. The builder purportedly charging for core fill in retaining walls.

3. An “internal door variation” that the homeowner disputed.

4. Gyprock cut out and architraves.

90. Mr Laphai responded to the other complaints of the homeowner as follows:

91. Additional bathroom fee. Mr Laphai stated that costs had been explained on site and the homeowner had agreed to pay the fee. The additional work included works should the homeowner wish to convert one of the dual duplexes into six individual self-contained units to include one disable toilet and service provisions for additional kitchens and bathrooms.

92. Tree removal. Mr Laphai stated that a written variation (VO3) included the breakdown in the cost prior to undertaking tree removal and the homeowner had approved the variation. The work was performed and paid for.

93. Extra concrete works. Mr Laphai stated that a written variation (VO9) included the breakdown in cost prior to the undertaking of the work and the homeowner had approved the variation. The work was performed and paid for.

94. Asbestos removal and certificate fee. Mr Laphai stated that a written variation (VO1) included the breakdown in cost prior to the undertaking of the work. The work was performed and paid for.

95. Additional work due to contaminated soil. Mr Laphai stated that the site had previously been backfilled with building materials including asbestos material and the homeowner was aware of this. Mr Laphai stated that such information was not provided to the builder and that during excavation the builder discovered a significant amount of building materials including a substantial amount of asbestos which was found buried on site. According to Mr Laphai, all the excavated soils were treated as asbestos contaminated soil which is excluded from the contract price.

96. Lifting of brick pavers on the Council strip and removal of soil and bricks from the site. Mr Laphai stated that the homeowner had removed the contaminated soil because the homeowner did not want to pay for a soil classification report or removal in accordance with environmental Regulations. Mr Laphai asserted the homeowner had been told by the builder that the builder accepted no liability for where the soil was being disposed of because no proper classification for the contaminated material excavated onsite.

97. Demand for upfront payment of $15,000 plus GST for driveway. Mr Laphai stated that the work to construct the driveway on Council property (16 meters long) had been approved by Ms Choi. Ms Choi requested an invoice for the driveway, which was provided by the builder. Mr Laphai stated that Mr Kim then instructed that no work was to be performed without a signed written variation. The builder had co-ordinated with the local Council; and the stormwater engineer for drainage requirements. The builder had performed excavation and set out works. However, the concrete pour was cancelled at the direction of the homeowner.

98. Purchase and charges for extra electrical appliances; vanity; bathroom fit outs in the sum of $37,000. Mr Laphai asserted that the builder had only received the invoices requested by the homeowner “last month” and “has had to backtrack and complete a stocktake of what has been installed and what items are missing”. Mr Laphai stated he had attempted to “work out the issue of missing and broken items” with Ms Choi. Mr Laphai stated that the builder was never provided with a list of items that had been purchased by the homeowner; and some items purchased by the homeowner were “delivered to various locations” arranged by the homeowner. The locations included the site; the builder’s warehouse; the joiner’s warehouse and the supplier’s warehouse. Some items allegedly paid for were missing.

99. Common wall installed in incorrect position. According to Mr Laphai, Ms Choi “requested the layout of the units (sic) to be changed to accommodate the boarding house style unit”. Mr Laphai stated that the builder had “communicated that this will impact some of the structural systems of the house” but Ms Choi had “approved this”.

100. Delay in completion of work. Mr Laphai stated the builder had attempted to work with the homeowner to complete works without delay, but “due to the site conditions and constraints, the driveway on the Council property must be poured first in order to provide a safe access to the properties (sic) for all workers”. According to Mr Laphai, the lack of the driveway was “delaying any subcontractors coming back onsite for (sic) finishing the works”.

101. Mr Laphai also told NSW Fair Trading that:

1. The joiner who the homeowner had engaged direct had “broke (sic) the cooktop”.

2. The tiler who the homeowner had engaged direct had “wrongly cut out the fixture under the instruction” of the homeowner.

3. A “finished wall” had been “demolished under instruction” from the homeowner to “install an in-wall mixer” and the homeowner refused to pay for the wall “to be repaired”.

4. There is “asbestos and contaminated soil on site” which the homeowner “promised in early September” would be removed.

5. The builder “reserved the right” to charge for storage of the homeowner’s fittings and fixtures in its warehouse over a 6 month period. Mr Laphai stated “a tax invoice has been issued” by the builder which had not been paid by the homeowner.

6. The builder had completed works “which included external civil works, stormwater works and internal fit off (sic) works” in the amount of $79,535.09 plus GST. The builder had invoiced the homeowner for this amount and it had not been paid.

7. The builder had requested the homeowner to connect gas and electricity to both dwellings, which was “yet to be completed”. Mr Laphai stated “the service cannot be fit off or commissioned without having the main connections to both units (sic)”.

8. Ms Choi had “directly engaged and instructed contractors onsite to make changes” and Ms Choi had asserted that the builder would be required to “pay for those charges (sic)”.

9. The builder had “completed a number of works free of charge in order to keep progress onsite”.

10. The builder “reserved the right” to “pass on all remobilisation, delay costs and delay charges” because subcontractors could not complete the works due to the “missing items that were bought and arranged” by the homeowner and that subcontractors could not access the site due to the driveway not being completed.

102. The letter of NSW Fair Trading concludes in a standard way by informing the homeowner that the intervention of NSW Fair Trading had not achieved a resolution of the dispute, and the homeowner may obtain legal advice with the option of commencing proceedings in NCAT.

103. As of 9 September 2019, the builder had ceased to perform construction work. However, no Notice of Suspension of Work had been issued by the builder under the contract. No Notice of Breach had been issued by the builder. No formal letter or email had been written by the builder stating that the homeowner had unfairly or unreasonably terminated the contract, or had terminated the contract at all. No formal letter or email had been written by Mr Laphai stating that the homeowner had repudiated the contract and the builder had accepted the homeowner’s repudiation.

104. After the complaint to NSW Fair Trading by the homeowner, there were discussions between Mr Kim and Mr Laphai about the builder resuming work.

105. On 25 October 2019 Mr Kim sent two emails to Mr Laphai that were, in substance, similar. The second email stated that the first email contained typographical errors and incomplete sentences. The second email included the following:

Anyways, make it simple, I am sure you understand where I am coming from.

Before it gets any worst (sic), I want you to think about resolving the issues and move on with our own lives.

It is very depressing to see the house on hold especially when half of the duplex belongs to my parents.

I want you to continue the work and complete the project.

Moving forward please limit our involvement as it can create issues (Contacting Council, relevant authorities etc. etc.)

No More Delays. You as a builder can finish as to the plan and complete without any alterations.

As you said the project is in its final stage and there should not be any uncertainty of works as only the fit out works left on the job.

I will wait for your response and hopefully we can resolve in most gentlemanly way and shake hands at the end.

I just can’t stand looking at the house unfinished and creating family issues.

106. Mr Laphai sent an email to Mr Kim on 29 October 2019 that attached a copy of the builder sent to NSW Fair Trading. The email stated as follows:

Please thoroughly review attached response I have made to Fair Trading regarding your allegations and accusations. Please call me once you have done this and have all the responses to the issues that have been raised.

As you are aware, I was personally on site daily from July trying to complete this project but the good momentum on progress we were having was halted due to:

Threat of legal actions (sic)

Threat of engaging a third party builder.

Missing PC items to finish off the fitting off.

Main service and connection delay.

Complains (sic) and allegations to Fair Trading.

Also as you appreciate, now that I have started on new projects, I need to fit you into schedule once we agreed on way (sic) to move forward. I will have to also speak to subcontractors to see their availability and happy to come back to finish off the job, etc.

Look forward to hearing from you.

107. On or about 1 November 2019, Mr Kim and Mr Laphai met at the builder’s office to discuss the builder completing the works. According to Mr Kim he and Mr Laphai agreed to “finish the project and move on” and that the builder would “try” to have the works completed by Christmas. Mr Kim asserts that he told Mr Laphai that if Ms Choi was “getting in the way” Mr Kim would “step in”.

108. Mr Laphai asserts that at the meeting on 1 November 2019, the homeowner apologised to him for “terminating the contract” earlier, and said this was due to family problems. The homeowner denied that he said those words. Mr Laphai stated that at the meeting he needed “everything in writing” before the builder would complete the works; as well as the homeowner to deliver “PC items” and the homeowner to organise connection of the gas and electricity. According to Mr Laphai, the homeowner said he would ensure such matters were attended to.

109. In the period about 18-21 November 2019, the builder liaised with the gas and electricity providers for the site connection to be made. Emails between the homeowner and Mr Laphai on 22 November 2019 are contemporaneous evidence of what occurred (Court Book pp. 422-433)

110. On 22 November 2019, Mr Laphai emailed the homeowner as follows:

James,

I have helped you with Jemena (sic) for gas connection and DP’s for electrical connection in the past few days; these are things that should have been done awhile ago. I will get back to you about the driveway.

Please advise on our previous quotes (sic) submitted for:

1. Driveway

2. Make good of bathroom for unit a (sic) upstairs.

111. On 22 November 2019, the homeowner replied to this email as follows:

Thank you Seng for helping us out for the Gas and DP.

Yes it should have been done a while ago. For some reason they didn’t come to us for connection. Only recently when I chased up they acted upon.

Seng, as you do this day in day out, the procedure and your advise (sic) is very much appreciated saving us a lot of run around. One little phone call from you can save us months of waiting and run around.

Even with gas, when jamena (sic) came asking me for connection, I didn’t have any idea what to say and what to tell them. Yes I appreciate your quick phone call to them to tell then where and what to connect as you know exactly where things are and what work has done for them… (sic)

Jemena (sic) could not connect yesterday as they were called in for urgent call out but same guy will come back really soon to do the connection and he did say it’s all easy for him to connect after speaking to you.

1. With the driveway.

You told me to leave it with you and you will come back to me with a discounted price as you allowed cross over in your lump sum. Wasn’t (sic) that in our meeting..??

So, you were waiting for me…????

Let’s make it clear.

For driveway. Take off what you allowed as we have discussed the difference of price will be added onto our next progress payment schedule as the contract.

You just advise me how much were are out of pocket as the and the work progresses.

2. With make good of bathroom in Unit A (sic). Upstairs. I am not 100% sure what has happened so let us work this out and also proceed. Let’s have a talk about this soon when I find out what has happened. Regardless the work has to proceed and we work out the costing to be liable. You can’t just leave it like that.

Do the work add to the bill. If it is fault we have to pay, if it is the contractor’s fault they pay. But regardless we have the work booked in to fix the problem. Let’s talk next week about this.

Can we meet on site on Monday and we go through one by one so we are on the same page. This way we both know what needs to be done and when.

We go over one by one any future jobs on site and both make a note so don’t repeat or go around in circle (sic) with petty things.

112. On about 25 November 2019, Mr Kim, Ms Choi and Mr Laphai attended the premises and performed a joint inspection. According to Mr Kim, this was to “see what needed to be done” to complete the works.

113. According to Mr Laphai (Court Book pp. 89-90) both Mr Kim and Ms Choi who told the builder that they had been using “friends” to do work on the property after Mr Laphai asked them “who has been working here?”

114. In both evidence in chief and cross examination, Mr Kim and Ms Choi denied that words were spoken by Mr Laphai that works had been performed at the site in the period between 9 September 2019 and 25 November 2019 at the direction and control of the homeowner and Ms Choi.

115. Cross examination of the homeowner and Ms Choi as to what works (if any) been done at the site in the period between 9 September 2019 and 25 November 2019 (as compared to works that had occurred in the period after 19 December 2019 and other issues purportedly discussed at the meeting) was brief and the answers vague. The cross examination of Mr Kim about what was said at the meeting is at (T:30/03/21 pp. 84-88).

116. On the issue of whether the homeowner and Ms Choi had engaged any building works on site in the period between 9 September 2019 and 25 November 2019 the following evidence was given by Mr Kim (T: 30/03/21 p 84):

Builder’s Counsel: And at that meeting specifically when Mr Laphai showed up he immediately made the observation that people had been working on the site. Do you accept that?

Mr Kim: No

Builder’s Counsel: And that you said to him “Well, I’ve been using friends to finish off as much as possible”. Do you recall saying that?

Mr Kim: No

117. However, the following evidence was given by Ms Choi (T: 31/03/21 pp. 8-9):

Builder’s Counsel: So what I am saying to you is when did you recommence work to the property?

Ms Choi: When?

Builder’s Counsel: Yes.

Ms Choi: It would have been very-it will be March.

Builder’s Counsel: So in March and was there any work done before March?

Ms Choi: Possibly yes.

Builder’s Counsel: What’s the present state of the property, is the building work finished?

Ms Choi: No, not completely, there are incomplete works still.

Builder’s Counsel: But is it more or less finished or is it just some finishing-

Ms Choi: Yeah.

Builder’s Counsel:…work to do, yes?

Ms Choi: Yeah, I mean these ones (sic) will be rendering and painting and yeah, things like that.

Builder’s Counsel: People are living in the property I assume.

Ms Choi: Yes we are.

Builder’s Counsel: Do you recall which builders did-I understand you say that the builders had not entirely completed but to you know which builder it was that you and your husband engaged to complete the works?

Ms Choi: Yes Pearce, Pearce and Son.

Builder’s Counsel: Sorry, what were they called?

Ms Choi: Pearce and Son.

Builder’s Counsel: That was I assume you signed a construction contract with them?

Ms Choi: No I don’t remember signing a contract or anything.

Builder’s Counsel: Okay.

Ms Choi: Yeah it was more like, it wasn’t really-he wasn’t engaged as a, like a, builder but he, he introduced us to things like if there was air-conditioning then he goes, yeah, you got to use this-and he did the landscaping and things like that.

Builder’s Counsel: But they were more or less the people who were bringing the job to completion for you?

Ms Choi: Yeah, they were helping, helping, he was more of a family friend.

Builder’s Counsel: Before you purported to terminate the builder, you actually used not only family friends but members of your own family as sub-contractors, that’s true isn’t it.

Ms Choi: No, what do you mean by that, I don’t remember that at all.

118. Mr Laphai asserted that Mr Kim had the keys to the property, not the builder. Mr Laphai asserted that there was a dispute about the homeowner paying for builder’s margin, because there was no need to pay a builder’s margin if Mr Kim could direct subcontractors.

119. Mr Laphai asserts he told Mr Kim at the meeting on 25 or 26 November 2019 that one of the past “problems” was that the homeowner had instructed sub-contractors direct. Mr Laphai asserted that Ms Choi requested the builder send the homeowner an email stating that the builder was terminating the contract so that the homeowner could make an insurance claim. The builder refused. The meeting ended in acrimony, with Ms Choi leaving the meeting early.

488. Just as the homeowner failed to provide sufficient evidence to establish the cost of completing incomplete work, the builder has failed to provide sufficient evidence to establish the reasonable value of the works it performed in respect of the driveway and works under the final progress payment stage.

489. Accordingly, the builder’s quantum meruit claim is dismissed.

The Issue of Costs

501. It is appropriate for the parties to make costs submissions after they have had the opportunity to consider the factual and legal findings made by the Tribunal.

502. The Tribunal makes orders to deal with the issue of costs, which are set out below.

Summary of Findings

503. The homeowner has succeeded on the issues of defective works and adjustment/credit under Clause 10 of the contract. The total amount is $112,853.21, calculated on the basis of $34,106.82 (defects) plus $78,746.39 (Provisional Sum item credits).

504. The builder’s claim is dismissed. Accordingly, there is no set-off or separate order in favour of the builder.

ORDERS

1. In Matter HB 20/42551 SDL Project Solutions Pty Ltd is to pay James Jong In Kim the sum of $112,853.21 within 28 days of the date of this decision.

2. In Matter HB 20/32292, the application is dismissed.

3. The homeowner is to file and serve all costs submissions and documents by 14 days from the date of this decision.

4. The builder is to file and serve all costs submissions and documents by 28 days from the date of this decision.

5. The homeowner is to file and serve all costs submissions in reply by 35 days from the date of this decision.

6. The costs submissions are to include reference to whether or not the parties seek a further oral hearing on the issue of costs. The Tribunal may determine it appropriate to decide the issue of costs without further oral hearing pursuant to s 50 (2) of the Civil and Administrative Tribunal Act 2013 (NSW).

7. The costs documents and submissions are to be filed in hard copy with the Tribunal.

8. Both parties have leave to apply in writing to vary or extend the timetable for costs submissions and documents.

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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: 14 March 2022