Sharma v Premutico

[2025] NSWCATCD 101

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Sharma v Premutico [2025] NSWCATCD 101

Hearing dates:

12 February 2025

Date of orders:

31 July 2025

Decision date:

31 July 2025

Jurisdiction:

Consumer and Commercial Division

Before:

G K Burton SC, Senior Member

Decision:

(1)   Order that Gustavo Premutico pay Sanjay Sharma $24,070 immediately.

(2)   Make no order as to the costs of the proceedings.

Catchwords:

BUILDING and CONSTRUCTION – HOME BUILDING – identity of builder – correct revision of contract - refund of alleged overpayment – alleged defective works – work or money order

Legislation Cited:

Home Building Act 1989 (NSW)

Home Building Regulation 2014 (NSW)

Cases Cited:

BNT Constructions PL v Allen [2017] NSWCATAP 186

Brennan Constructions PL v Davison [2018] NSWCATAP 210

Brooks v Gannon Constructions PL [2017] NSWCATCD 12

Clements v Murphy [2018] NSWCATAP 152

David Securities PL v Commonwealth Bank of Australia (1992) 175 CLR 353, [1992] HCA 48

Galdona v Peacock [2017] NSWCATAP 64

Kumar v Sabharwal [2017] NSWCATAP 200

Kurmond Homes PL v Marsden [2018] NSWCATAP 23

Paraiso v CBS Build PL [2020] NSWSC 190

Wright v Foresight Constructions PL [2011] NSWCA 327

Xu v Jinhong Design & Constructions PL [2011] NSWCA 277

Category:

Principal judgment

Parties:

Sanjay Sharma (applicant)
Gustavo Premutico (respondent)

Representation:

Applicant self-represented
Respondent by Mr V Stanton (friend)

File Number(s):

2024/00300459

Publication restriction:

Nil

REASONS FOR DECISION

Outcome of proceedings

1. I have decided that the applicant is entitled to a money order against the respondent for part of the applicant’s claimed amount.

2. Both parties did not have legal representation at the final hearing and there was no application for or grant of leave for legal representation; no mention of legal representation was made during the hearing. There are no costs orders made.

Background, issues, procedural matters

3. In these proceedings filed 12 August 2024 the applicant, himself a licensed builder, alleged that he had engaged the respondent personally for concreting work undertaken by sub-contract to the applicant in a new build in Ermington, a northwestern suburb in Sydney, NSW.

4. The applicant initially claimed $7,700 as the cost to remediate alleged defective works that breached the statutory warranties in s 18B of the Home Building Act 1989 (NSW) (HBA) and $39,186 for alleged overpayment. The amounts claimed altered in the course of evidence.

5. The respondent was appropriately licensed at the period of the works but not presently, so far as disclosed in the evidence. The works constituted residential building work as defined in HBA Sch 1 paras 2(1)(a), 2(3)(a) and 3(1) with Home Building Regulation 2014 (NSW) reg 12. The works required homeowners’ warranty HBCF insurance since they exceeded $20,000 in the reasonable market cost of labour and materials involved: HBA ss 7(2)(f1), 92, 94; Home Building Regulation 2014 (NSW) reg 53. There was no dispute raised in these proceedings that the project was appropriately insured as to amount.

6. The claim was brought within time for any type of defect and within the monetary limit for the Tribunal’s jurisdiction under HBA ss 18B, 18E and 48K.

7. It was not entirely clear whether the works had been completed and, if not, what was the ongoing status of the contract between the parties (whatever that contract was). There was no claim filed by the respondent based on any alleged wrongful ending of the contract or for unpaid monies under the contract. The invoices in May 2024 were in a context that suggested they were for final works. The applicant’s overpayment and defect claims appeared to proceed on the basis that the works had been done and did not include a claim for incomplete works. I have therefore proceeded on the basis that the contract works were complete and fully paid.

8. Directions to prepare the matter for final hearing were made in the first respondent’s absence on 12 September 2024. Amended directions were made on Wednesday 28 October 2024. The reasons for the amendment stated that Mr Vernon Stanton (who was the same person who sought leave to appear for the respondent at final hearing) appeared for the respondent and said that the respondent was ill and in an unnamed hospital according to a text over the preceding Saturday requesting Mr Stanton to appear for the respondent. The reasons noted that Mr Stanton said that he was a friend and was described in documents as working with the respondent. The respondent was said to have been served with the applicant’s documents on 24 September 2024 but not with the originating application which contained information on amount claimed and the basis of the claim. The respondent was said to have filed but not served some documents.

9. Apparently the senior member conducting the directions hearing refused leave further to speak that day, after the applicant contested Mr Stanton’s permission to speak for the respondent, as the senior member considered that there was need to hear in those circumstances from the respondent directly. Mr Stanton then left the hearing saying that to proceed was procedurally unfair. As already noted, amended directions for preparation were issued.

10. The respondent’s illness prompted a further extension of time; the applicant filed documents in reply on 16 January 2025.

11. At final hearing the respondent arrived late at about 9.30am. He was the sole director at the time of the relevant works of a company called Rite Crete (NSW) PL. By the time works ceased in May 2024 that company was in liquidation. Mr Stanton was described as a friend assisting him and was not part of the company.

12. When Mr Stanton then sought leave to appear for the respondent, the applicant objected and said that Mr Stanton was involved in the company, used to answer all communications and ran the business behind the scenes, with that being said to him by the respondent when working onsite.

13. I granted leave for Mr Stanton to represent the respondent because it might assist the telling of the story.

14. The applicant said that he had not been asked to file a full ASIC search but from looking at ASIC records and licensing records he agreed that the company earlier mentioned was in liquidation as at 8 April 2024. There was a final notice from the liquidator in December 2024 that the company was to be de-registered but he did not know if that had occurred because he stopped engaging with the liquidator. He had not sought to re-register and join the company as a second respondent.

15. The applicant said that the status of the company didn’t matter because his contract for works was with the respondent personally. The respondent said the contract was with the defunct company.

16. The identity of the contracting builder and the terms of the contract were the main issues in the proceedings but there remained dispute on alleged defects and alleged refund.

Identity of contracting party; contract terms; basis for refund

17. The applicant said that the original agreement was concluded orally on 25 August 2023 and recorded in a text that he sent to the respondent on that day. The text was in evidence. No party to the contract other than the applicant and the respondent was mentioned in the text.

18. The applicant said that the respondent insisted on a revised contract which was a single page with a handwritten date under signatures of 26 September 2023. It was signed personally by each of the parties under their typed names - with no reference to a company - and the words “Agreement between” above those typed names. Against the applicant’s typed name was “(Builder)”; against the respondent’s typed name was “(Concreter)”. In the document was a statement “Gus [the respondent] to provided active ABN”.

19. The applicant said that the September document was revised from the original agreement by escalating the contract price to $90,109. A total contract price did not appear on either the original or the revised contract.

20. Rather, in both versions of the contract there was a formula which varied in some respects between the two versions and which set rates of charge for various items. Quantities for those items were not included.

21. The applicant put into evidence a sheet that he said he presented at the meeting of 31 January 2024 referred to below. This was said to contain the contracted cost of works at $76,863 calculated from setting out the area of each component of works and applying the price in the revised contract to that area (how that figure related to the alleged revised contract price of $90,109 was not explained). Against that were set out payments totalling $63,730 to that point.

22. The applicant said, in the final calculations in evidence, that total payments of $126,270 were progressively extracted from him, with $61,870 of those payments at the respondent’s instruction being paid to the account of the company including $30,850 being paid after date of liquidation of 8 April 2024 (which was not known at the time to the applicant); some payments at the respondent’s instruction were paid direct to suppliers.

23. The applicant in his final calculations adhered to the total paid but increased the costing (using the same calculation method as earlier described) to account for further items; the higher total costing was $87,585.50 and included an item (Bondek) for which the applicant was responsible under the revised contract of September 2023. The claimed overpayments were $38,684.50.

24. Pouring finished on 28 May 2024, allegedly with defects. The applicant said that he was paying interest and could not proceed with the rest of the works until rectification occurred and that alternative supply was tight.

25. On 30 January 2024 the respondent had allegedly told the applicant that the respondent had a new business, being the company, and a new partner called Vernon (the Mr Stanton referred to earlier), with a new “take or get lost” contract price of $122,000 lump sum.

26. The respondent put into evidence a handwritten document said to be signed by Mr Stanton, the respondent and the applicant. It recorded payments “to Gus [the respondent] thus far” as $63,780, being $50 above the applicant’s figure mentioned earlier. It went on (quotations in these reasons are reproduced as the original text appeared, including errors of spelling and grammar):

“Total contract value for [the property] Everything including labour, site prepare, materials, Gus’s profit, excavation, machine, Bondek etc is now inclusive of all, risks lumpsum contract of $122,000 including GST. To be paid till end of the project = 122,000.00 – 63780 To be paid till end of project including GST and everything else incl risks = $58,220 [then the signatures, names printed and the date of 30/01/2024]”.

27. Invoices were issued in the company’s name after 30 January 2024. The company had not been relevantly licensed since 16 June 2023. The running balance of monies paid, recorded on these invoices, included the monies paid to the respondent before the intrusion of the company.

28. The respondent appeared to deny his signature on both the September and January documents. Mr Stanton, who clearly knew the respondent well enough to know his signature, was present at the January meeting when the document was allegedly signed and who was present at the hearing, did not give corroborative evidence of that doubt. The documents were in some respects of benefit to the respondent and the January meeting clearly was to discuss contract revision. I do not accept that the signatures were not those of the respondent or that the respondent did not approve the varied contract.

29. The alleged imposed further-revised contract on 31 January 2024 constituted a variation to the then written contract of 26 September 2023. Under HBA s 6(1)(b) with ss 7E(1) and Sch 2 para 1(2) 10 such a variation must be in writing to be enforceable, absent a claim in quantum meruit: Paraiso v CBS Build PL [2020] NSWSC 190 at [32]-[43], [99]-[103]; Xu v Jinhong Design & Constructions PL [2011] NSWCA 277 at [105]-[106].

30. However, the builder can rely upon a variation by way of defence to a claim by an owner for a refund of monies paid in respect of them if as a matter of fact the variation was established as agreed or accepted by the owners and was properly valued: Wright v Foresight Constructions PL [2011] NSWCA 327 at [6]-[8], [43]-[48], [56]-[59].

31. The applicant said that his signature did not indicate agreement to the further variation of the 26 September 2023 agreement on 30 January 2024 and that at most it showed what the applicant had already paid and would further pay under sufferance to get the job finished so the overall project was not further held up:

“For plaintiff the only purpose of this document is as a proof to establish how much [the respondent] was paid prior to the meeting and how much extra he was illegally demanding for the completion of works. This document is an Evidence to shows what was being forced and being unreasonably demanded in the meeting. This document by no means supersedes the building works contract signed on 26 September 2023 that was in force at that time because: it does not acknowledged the contract in force, there was no intention of superseding that contract and no legal procedure was followed; [Mr Stanton] was the first party to sign this document whereas he did not hold any building work Contractor’s Licence. He is not authorised to sign any building work contract.”

32. The respondent contested the unwillingness of the applicant to sign the January document and said that the applicant wrote the document recording that agreement apart from signatures.

33. Monies can be recovered in some circumstances when they were not paid under a revised agreement reflecting a compromise of a legitimate claim: see, eg, the discussion of principle in David Securities PL v Commonwealth Bank of Australia (1992) 175 CLR 353, [1992] HCA 48 at 373-374.

34. Here, it seems to me that, contrary to the applicant’s contention just quoted, there was a compromise agreed. The applicant has not sought to bring the situation within relief from contracts entered into under duress or other legally-recognised compulsion, as opposed to difficult commercial circumstances. In the higher, fixed total inclusive of GST in the January document was now included significant items that had been disputed as to their previous inclusion (such as excavation and some machinery) and items that previously were to have been paid (if required) separately by the applicant (such as Bondek).

35. However, I agree with the applicant’s contention that, in the varied scope of works and contract price and form (lump sum), there was no express or even implied variation of the contracting parties. They remained the applicant and the respondent. There was no express alteration of the supplier to the company. Such a significant change would require more explicitness than the signature of a person (Mr Stanton) whose capacity in signing was not expressed and not clear in the evidence. It would also require an express acknowledgement of novation by existing parties. There was no express reference to the respondent and Mr Stanton signing on behalf of the company in addition to signing (for the respondent) personally. In contrast, there was continuing reference to what had been paid “to Gus [the respondent]” and to the inclusion in the fixed price of “Gus [the respondent]’s profit”.

36. The September document and the further-revised January document were therefore both between the applicant and the respondent. The company had no contractual or other basis to make demands for payment. The contracting parties remained the applicant and the respondent. The applicant’s payments were made to third party suppliers direct at the instruction of the respondent, or to the respondent or to the company. To the extent that they were paid to the company, they were also made at the instruction of the respondent.

37. Accordingly, the applicant is entitled to an order against the respondent for monies paid above the revised contract price. On the available evidence the amount of overpayment, taking into account the revised contract price and scope in the January agreement, is $4,270.

Defective works; work order or money order

38. The applicant relied upon an independent building assessment and quotation of $19,800 including GST dated 20 September 2024. The respondent did not adduce an independent expert building report, challenged the expertise and independence of the writer of the assessment and quotation but did not require him for cross-examination, and did not cross-examine the applicant in detail on the alleged defects.

39. Defects the subject of examination in the assessment were: 9m section of high drop edge beams not plumb, allowing insufficient room (65mm instead of 150mm) for cavity and brickwork on the toe of the beam; non-compliance with structural engineer’s specification of concrete cover for reinforcing steel in OSD and garage floor; misalignment of set-down between main slab on one unit with entry porch, again not compliant with drawings; non-compliant size of entry porch on each unit, reducing amenity.

40. The assessment said that attempted rectification (undertaken by the respondent after the company went into liquidation) of the first defect was itself defective in that it exposed steel reinforcing.

41. The assessment quoted $18,000 plus GST and a week minimum to fix the defects. The assessment was not inherently unreasonable as to cost or time given the described defects.

42. Under HBA s 48MA, a work order is the preferred, not the mandatory, outcome for defective work: Galdona v Peacock [2017] NSWCATAP 64 at [65]. The respondent, despite saying that the company was the contracting party, indicated a willingness to remediate any found defects. I have found that the respondent, as a party to the proceedings, was the contracting builder, so s 48MA can apply.

43. Personal animosity is not sufficient to displace the primacy of a work order for defective work, as the test is objective and the flexibility of s 48O permits an order that the builder fulfil a work order by engaging another party to carry out the work order on behalf of the builder. However, relational breakdown is an element in objective assessment, as can be the builder’s conduct in unrelated projects and as will be doubts about the builder’s capacity (including being currently licensed) or skills to undertake the required remediation, the builder’s attitude to the standard of work done and willingness to return, any history of attempted but ineffective remediation and the likelihood of further dispute not meaning that a work order would be a timely or cost-effective resolution: Brooks v Gannon Constructions PL [2017] NSWCATCD 12 (appeal not affecting s 48MA decision); Galdona at [64]; BNT Constructions PL v Allen [2017] NSWCATAP 186 at [33]-[36]; Kumar v Sabharwal [2017] NSWCATAP 200 at [29]-[30]; Clements v Murphy [2018] NSWCATAP 152 at [30], citing with approval Kurmond Homes PL v Marsden [2018] NSWCATAP 23 at [31]-[32], [46]; Brennan Constructions PL v Davison [2018] NSWCATAP 210 at [15]-[21].

44. Here, the applicant sent numerous emails seeking the respondent’s attendance onsite to remediate detailed defects in June and July 2024. The respondent’s answers said, among other matters, that the wet weather was delaying site work, that the applicant had not paid all amounts owing and that the applicant’s certifiers and engineers had conducted numerous pre-pour checks. The applicant disputed these allegations. They were not the subject of determinative evidence advanced by the respondent.

45. The parties made serious allegations against each other and there was clearly no trust between them. There was doubt over whether the respondent remained relevantly licensed. The respondent denied that it was the responsible contracting party. There is high likelihood of further disputes over the required scope of remediation works.

38. In those circumstances, a work order is not appropriate. The applicant is entitled to a money order against the respondent for the assessed amount of remediation cost being $19,800.

Conclusion

47. I shall make a money order in favour of the applicant against the respondent for the overpayment and the assessed remediation cost of defective works, totalling $24,070.

Orders

48. I make the following orders:

1. Order that Gustavo Premutico pay Sanjay Sharma $24,070 immediately.

2. Make no order as to the costs of the proceedings.

**********

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: 13 October 2025