SOLIMAN and BEYOND BUILDERS PTY LTD
[2024] WASAT 57
•7 JUNE 2024
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: SOLIMAN and BEYOND BUILDERS PTY LTD [2024] WASAT 57
MEMBER: MR E CADE, MEMBER
HEARD: 29 MAY 2024
DELIVERED : 7 JUNE 2024
FILE NO/S: CC 181 of 2024
BETWEEN: MICHAEL SOLIMAN
First Applicant
MARIAM MEGALAA
Second Applicant
AND
BEYOND BUILDERS PTY LTD
Respondent
Catchwords:
Home building work contract complaint - Home building work contract remedy order - Commencement date - Completion date - Breach of contract - Compensation for financial loss - Assessment of financial loss
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5, s 5(2), s 6(3)(b), s 11(1)(c), s 17, s 38, s 41, s 41(2)(d)(i), s 43, s 43(1), s 43(2)(a), s 43(2)(b)
Building Services (Complaint Resolution and Administration) Regulations 2011 (WA), reg 6
Home Building Contracts Act 1991 (WA), s 7, s 8, s 10, s 17, s 17(a)(i), s 27, Pt 2
State Administrative Tribunal Act 2004 (WA), s 32(4), s 32(6)(c), s 39(1)(f), s 63(2)
Result:
Application allowed in part
Category: B
Representation:
Counsel:
| First Applicant | : | In Person |
| Second Applicant | : | No appearance |
| Respondent | : | No appearance |
Solicitors:
| First Applicant | : | N/A |
| Second Applicant | : | N/A |
| Respondent | : | N/A |
Case(s) referred to in decision(s):
Alison Louise Lobbe atf Lobbe Newman Trust and Kelpie Endeavours Pty Ltd atf Testa Rossa Family Trust and Quality Builders Pty Ltd [2014] WASAT 110
Byham and Afra Constructions Pty Ltd [2014] WASAT 38
Deshmukh and Distinctive Building Services Pty Ltd [2024] WASAT 15
Lampman and Afra Constructions Pty Ltd [2014] WASAT 27
Waldron and Afra Construction Pty Ltd [2013] WASAT 207
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
These proceedings concern a home building work contract (HBWC) complaint made by the applicants to the Building Commissioner pursuant to s 5(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRAAct).
The first and second applicants are the owners of the home the subject of the complaint (owners). The respondent is the builder of the home (builder).
The owners' complaint is that they entered a fixed price HBWC on 10 November 2021 pursuant to which the builder was to construct a new two storey home for the owners by 9 March 2024 (this being 540 days after the builder commenced the works), but on building the home to the suspended slab stage in or about October 2023 the builder suspended work on the site and as at the date of the final hearing it has not resumed the works.
On 14 March 2024 the Building Services Board refused to renew the builder's building contractor registration on financial grounds.
The application was listed for final hearing at the Tribunal on 29 May 2024. At the conclusion of the final hearing the Tribunal reserved its decision.
The owners at the final hearing requested the Tribunal make orders (which the Tribunal understood as a request that the Tribunal make HBWC remedy orders pursuant to s 43 of the BSCRA Act) that requires the builder to pay compensation to the owners for the financial loss caused to them by the builder's failure to bring the home to practical completion in accordance with the HBWC.[1]
[1] The Tribunal has proceeded on the basis the orders are sought pursuant to s 41(2)(d)(i) of the BSCRA Act.
The position of the builder to the application and orders sought is not known to the Tribunal, as the builder did not attend the final hearing, and nor did the builder lodge any documents with the Tribunal.
For the reasons which the Tribunal will now give, the effect of the orders it will make are:
(1)That by no later than 3 July 2024 the respondent must pay compensation to the applicants in the amount of $56,075, being the sum over and above the balance of the HBWC price the owners must pay to a new builder to complete their home, and less the amount paid to them by the home indemnity insurer.
(2)That by no later than 3 July 2024 the respondent must pay compensation to the applicants in the amount of $6,181, being the sum the owners have paid for rental accommodation since 10 March 2024 up to the date of the final hearing.
(3)The application is otherwise dismissed.
Procedural history
The proceedings originated with a notice of complaint containing one complaint item given by the owners to the builder and then lodged with the Building Commissioner on 3 December 2023 (complaint item 1), and a further notice of complaint containing two complaint items given by the owners to the builder and lodged with the Building Commissioner on 22 March 2024 (complaint item 2 and complaint item 3).
Complaint item 1 is a HBWC complaint that the builder did not build the home within the time period required by the HBWC. Complaint item 2 is a building services complaint that the suspended slab does not conform to the building plans. Complaint item 3 is a HBWC complaint that the owners suffered a financial loss due to the failure by the builder to build the home within the time period permitted by the HBWC.
On 22 March 2024, a delegate of the Building Commissioner referred the three complaint items to the Tribunal pursuant to s 11(1)(c) of the BSCRA Act for it to deal with pursuant to s 43 of the BSCRA Act.
The proceedings in the Tribunal
Prior to the final hearing the owners, in accordance with orders made by the Tribunal on 19 April 2024, lodged with the Tribunal and gave to the builder the book of documents on which they intended to rely at the hearing and their minute of proposed orders sought.
The Tribunal's orders dated 19 April 2024 ordered the withdrawal of the owners' complaint item 2. Consequently, only complaint items 1 and 3 are to be determined by the Tribunal at the final hearing.
In accordance with its usual practice, the Tribunal compiled the owners' documents into a paginated hearing book (HB) which it made available to the parties prior to the final hearing.
The only party who attended the final hearing was the first applicant. That is, neither the second applicant nor the builder attended the final hearing.
At the commencement of the final hearing on 29 May 2024, the Tribunal:
(a)attempted to telephone the builder to inquire if it intended to participate in the hearing, but these calls went to voicemail;
(b)confirmed through its records that the application was served on the builder, and that the Tribunal's orders dated 19 April 2024 (which included an order listing the application for final hearing on 29 May 2024) had been sent by email to the builder at 2.04 pm on 27 April 2024 and had been accessed by the builder at 2.39 pm on the same day; and
(c)telephoned the second applicant who confirmed that she was aware of but did not wish to participate in the final hearing and said that she wished to be represented by the first applicant, her husband, at the final hearing.
The Tribunal then determined two preliminary issues:
(a)given it was satisfied the application had been served on the builder, and that the builder had been given notice of the final hearing, the Tribunal decided that pursuant to s 63(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) it was proper to hold the final hearing in the absence of the builder; and
(b)given the request made by the second applicant, the Tribunal decided that pursuant to s 39(1)(f) and s 63(2) of the SAT Act, it was proper to permit the first applicant, in the absence of the second applicant, to represent the second applicant at the final hearing.
With the consent of the first applicant the HB was then admitted into evidence as Exhibit 1. The documents in Exhibit 1 then became evidence in the proceeding. The Tribunal then explained to the first applicant the right of the owners to make opening and closing submissions, to call and give evidence and to examine, cross-examine and re-examine witnesses.[2]
[2] SAT Act, s 32(6)(c).
The first applicant on behalf of the owners gave an oral opening submission and then under affirmation gave evidence for the owners, but did not call any other witnesses to give evidence on behalf of the owners. As already noted, the builder did not attend the final hearing.
The owners request the Tribunal make orders (which the Tribunal understood as a request that the Tribunal make HBWC remedy orders pursuant to s 43 of the BSCRA Act) to require the builder to pay compensation to the owners for the financial loss caused to them by the builder's delay in achieving practical completion of the home.[3]
[3] The Tribunal has proceeded on the basis the orders are sought pursuant to s 41(2)(d)(i) of the BSCRA Act.
The owners, in their schedule of complaint items referred by the Building Commissioner to the Tribunal, also sought orders that the builder resume building their home and that the builder compensate them for the 'mental harm' they claim to have suffered while waiting for their home to be built. During opening submissions, however, the owners withdrew their application for these orders.
Neither the owners nor the builder has terminated the HBWC, which therefore remains on foot.
The builder's position on the orders sought by the owners is not known to the Tribunal. The builder did not lodge any documents or submissions with the Tribunal and did not attend the final hearing.
Statutory framework
These proceedings are within the original jurisdiction of the State Administrative Tribunal (Tribunal) pursuant to the Home Building Contracts Act 1991 (WA) (HBCAct) and the BSCRA Act.
The legislation relevant to the proceedings are s 7, s 8, s 10, s 17 and s 27 of the HBC Act; s 5, s 41 and s 43 of the BSCRA Act and reg 6 of Building Services (Complaint Resolution and Administration) Regulations 2011 (WA) (BSCRA Regulations).
The BSCRA Act
In these proceedings the Tribunal's power to make a HBWC remedy order pursuant to s 43(1) of BSCRA Act is dependent on certain preconditions being met. These are that:
(1)each complaint by the owners that the builder is in breach of the HBWC must not be a breach in respect of which a building remedy order may be made, and also must not be made more than 3 years after the cause of action arose;[4] [5]
(2)each HBWC remedy order must relate to a complaint item that has been referred to the Tribunal; [6] and
(3)under s 43(2)(a) and (b) of the BSCRA Act, the value of work or the amount to be paid pursuant to a HBWC remedy order is not to exceed $500,000.
[4] HBC Act, s 17(a)(i).
[5] BSCRA Act, s 6(3)(b).
[6] BSCRA Act, s 43(1).
The Tribunal will now consider each of these pre-conditions in turn.
The complaints by the owners are not as to breaches in respect of which a building remedy order may be made
The owners' complaints in this proceeding is made pursuant to s 5(2) and s 17 of the BSCRA Act.
Pursuant to s 17(a)(i) of the HBC Act an owner may make a complaint pursuant to s 5(2) of the BSCRA Act only if the complaint alleges a breach of contract which is not a breach in respect of which a building remedy order may be made. A building remedy order may be made in respect of a complaint that building work is not carried out properly or proficiently or that it was faulty or unsatisfactory.[7]
[7] Pursuant to s 38 of the BSCRA Act a building remedy order may be made in respect of a complaint that a regulated building service 'has not been carried out in a proper and proficient manner or is faulty or unsatisfactory'. In general terms, this is a complaint that a building service has been performed to an unacceptable standard.
In their building complaint item 1 and item 3 the owners did not complain that the builder's work was not carried out properly or proficiently or that it was faulty or unsatisfactory. Rather, the owners' cause of action in respect of each complaint is that on 10 March 2024 (being the day after the date by which the home was to reach practical completion) the builder became (and remains) in breach of the HBWC, as the home had not achieved practical completion by that date.
The Tribunal finds that as each of the items of complaint before the Tribunal at the final hearing related to this contractual breach by the builder, that neither complaint item is a complaint about which a building remedy order could be made but rather that they are complaints about which a HBWC remedy order might be made.
The complaints by the owners must not be made more than 3 years after the cause of action arose
For reasons the Tribunal will give later, it is satisfied that the HBWC required that the home achieve practical completion by 9 March 2024 and that by this date it had not in fact achieved practical completion, and nor has it yet achieved practical completion.
The owners made their complaint to the Building Commissioner about these causes of action on 3 December 2023 and 22 March 2024, with the result that each complaint was made within the 3 year period required by s 6(3)(b) of the BSCRA Act.
Each HBWC remedy order must relate to a complaint item that has been referred to the Tribunal
The Tribunal has considered whether each HBWC remedy order sought by the owners relates to a complaint item that has been referred by the Building Commissioner to the Tribunal.
The proposed HBWC remedy order that the builder pay compensation to the owners for the cost of completing the home is within both complaint item 1 and complaint item 3. The proposed order that the builder pay the owners compensation for their rental payments is also within both complaint item 1 and complaint item 3.
The Tribunal is therefore satisfied that each order sought by the owners relates to a complaint item referred by the delegate of the Building Commissioner to the Tribunal.
the value of work or the amount to be paid pursuant to a HBWC remedy order is not to exceed $500,000
For the reasons the Tribunal will give later the sum it will order the builder to pay to the owners as compensation for the additional costs they will incur to engage a new builder to complete the home is $56,075. The sum the Tribunal will order the builder to pay to the owners as compensation for their rental expense due to the builder's delay in completing the home pursuant to the HBWC is $6,181.43.
These sums are both separately and in combination below the amount of $500,000 which is prescribed by s 43(2)(b) of the BSCRA Act.
The Tribunal's discretion to make a HBWC remedy order under s 43(1) of the BSCRA Act
Section 43(1) of the BSCRA Act provides:
(1)If the Building Commissioner refers a HBWC complaint to the State Administrative Tribunal, the Tribunal may —
(a)if satisfied that the order is justified, make a HBWC remedy order; or
(b)otherwise, decline to make the order[.]
The Tribunal considered the proper construction of the discretion conferred by s 43(1) of the BSCRA Act in Deshmukh and Distinctive Building Services Pty Ltd [2024] WASAT 15 (Deshmukh). The Senior Member in that decision said at [59] - [60]:
59.In my view the considerations concerning whether a HBWC remedy order is justified to resolve a HBWC complaint that a respondent has breached a home building work contract are:
(1)Is there a valid home building work contract between the applicant and the respondent to the proceeding?
(2)What are the relevant terms of the contract?
(3)Has the respondent breached the relevant terms of the contract?
(4)Has the applicant suffered loss, damage, or detriment which can be addressed by a HBWC remedy order?
60.In my view, if the Tribunal is satisfied that there is a valid home building work contract between the applicant and the respondent, and that the respondent has breached a relevant term of the contract which can be addressed by way of a HBWC remedy order then the Tribunal is required to make a HBWC remedy order. It then has a discretion regarding the HBWC remedy order it will make under the provisions of s 41(2) of the BSCRA Act.
The Tribunal accepts this is the proper construction of s 43(1) of the BSCRA Act.
The home building works contract (HBWC)
After examining the HBWC at pages 1 to 14 of the HB the Tribunal finds that the HBWC contained the following relevant details and terms:
(a)clause 2: The parties are Michael Soliman Shawky Soliman (first applicant) and Mariam Nashaat Naiem Megalaa (second applicant) and Beyond Builders Pty Ltd (builder);
(b)clause 2: The registered building practitioner is Atalla Abbas, who is also a director of the builder;
(c)clause 2.2 timing: The commencement date for works is either 10 business days after either loan approval or a building permit is obtained, whichever is the later, and the finish date is 540 days after the works have commenced.
(d)clause 3: The contract price is $405,000;
(e)specifications addenda: Specifies that finishings are to be of 'Premium Level';
(f)clause 4: Progress payments fall due as each of the following stages of works are done:
Payments stage
% of contract price
Amount $
1. Deposit
6.5%
$26,325
2. Ground slab
15%
$60,750
3. Ground floor plate height
14%
$56,700
4. Suspended slab
10%
$40,500
5. Upper floor plate height
8.5%
$34,425
6. Roof cover
13%
$52,650
7. Lock-up
12%
$48,600
8. Ceilings & Plastering
11%
$44,550
9. Practical completion
10%
$40,500
10. Total
100%
$405,000
Some notable features of this HBWC are:
(a)it does not make time of the essence;
(b)it does not provide for liquidated damages due to delay; and
(c)it does not contain any provision as to termination of the contract.
Based on the viva voce evidence given by the first applicant at the final hearing in combination with the documents in the HB, the Tribunal finds:
(a)the HBWC is a valid contract between the owners and the builder, and as neither the owners nor the builder has terminated the HBWC it remains on foot;
(b)the building permit was issued on 5 September 2022;
(c)'days' in the HBWC means calendar days and not working days, and as the building permit was the later of the conditions governing the commencement of the works, the builder was to achieve practical completion within 540 days of 5 September 2022, that is, by 9 March 2024;
(d)the owners paid the builder the deposit on or by 8 September 2022, the ground slab stage payment on or about 9 October 2022, the ground floor plate height stage payment on or about 10 February 2023, and the suspended slab payment on or about 8 June 2023. The payments by the owners to the builder total $184,275, and the total of the remaining (unpaid) stage payments is $220,725;
(e)during the 540 day building period under clause 2.2 the builder did not give any notice it required an extension of time to complete the works;
(f)the builder has not performed work on the home since 13 October 2023;
(g)the owners weekly rental payments up to 30 April 2024 was $530 per week, and from 1 May 2024 this rose to $580 per week;
(h)on 3 April 2024 Rafidi Construction Pty Ltd quoted the owners $476,300 to complete the home and on 6 April 2024 Renova builders quoted the owners $510,680 to complete the home;
(i)on 8 April 2024 the home indemnity insurer proposed to settle the owners' claim for the policy limit of $200,000 less an excess of $500, on the basis of the quote given by Rafidi Construction Pty Ltd, which it calculated would result in a loss to the owners of $255,075. The owners accepted the insurer's proposal and on or around 8 April 2024 the insurer paid to the owners $199,500;
(j)the insurer's payment has the effect of reducing the amount the owners are to pay a new builder to complete their home over and above the unpaid stage payments in the HBWC contract price to $56,075; and
(k)the owners have not yet signed a contract with a new builder for the completion of their home only because they are not able to obtain finance.
After considering the viva voce evidence of the first applicant and on inspecting the photographs of the home at pages 111 to 113 of the HB, the Tribunal is satisfied that as at the date of the final hearing on 29 May 2024 the home achieved the suspended slab stage on or around 9 October 2023 and that no further works were thereafter carried out by the builder on the home after 13 October 2023, with the consequence the home did not achieve practical completion by 9 March 2024 as required by clause 2.2 of the HBWC.
That is, with reference to the matters set out at [59] in Deshmukh the Tribunal finds that the HBWC is a valid building contract, the relevant term of the contract is clause 2.2 and by not bringing the home to practical completion by 9 March 2024 or within any reasonable time after that date, the builder is in breach of that clause.
Issues in dispute/issues to be decided
The Tribunal is now required to determine the following issues in this proceeding:
(1)whether the owners have suffered a financial loss due to the builder's breach in not achieving practical completion by 9 March 2024;
(2)if so, whether the owners' have mitigated their losses to the extent they are required or able to; and
(3)if so, whether the HBWC remedy order it should make is that the builder pay compensation to the owners for this financial loss.
The Tribunal will now deal with each of the issues in dispute in turn.
Whether the owners have suffered a financial loss due to the builder's breach in not achieving practical completion by 9 March 2024
Pursuant to s 41(2)(d)(i) of the BSCRA Act the Tribunal may order the builder 'pay specified compensation for loss or damage' caused by any breach of the contract or of a provision of Part 2 of the HBC Act.
The Tribunal notes that the HBWC does not limit the amount of compensation the owners may claim for delay by setting a rate for liquidated damages. Therefore, if the owners are entitled to claim compensation for their losses due to a breach by the builder, they are able to claim their actual losses and are not limited to any rate of liquidated damages.
The owners in their opening submissions claim they have suffered financial loss due to the builder's delay in bringing the home to practical completion, because:
(1)they now need to engage a new builder to complete their home and this will incur an additional cost over and above the contract price set out in the HBWC; and
(2)as they are unable to occupy their home they must continue to pay for rental accommodation until such time as their home is brought to practical completion.
The owners submit that the quotes they submitted to QBE Insurance for the cost of the completion of the home show that on a basis most favourable to the builder they will need to pay an additional sum of $255,575 to the new builder of their home over and above the remaining unpaid stage payments in the contract price in the HBWC of $220,725.
The Tribunal has carefully examined the builder's quotes and the correspondence from the indemnity insurer and it is satisfied that the owners' submission on this issue is correct.
The owners submit that as they intended to occupy the home when it was completed in or around 9 March 2024 and that as they were unable to do so, that they must now pay for rental accommodation until such time as their home does reach practical completion.
The owners submit that as they have not been able to obtain finance for the completion of their home and so have not signed with any builder, they do not know when their home might achieve practical completion.
So as to do all that they can to preserve their right to claim for their rental payments once they are able to determine when their home might achieve practical completion, the owners expressly limit their claim for compensation in this application to the rent they have paid from 10 March 2024 to the date of the final hearing. They submit that their rental payments from 10 March 2024 to 30 April 2024 is $3,861.43 and from 1 May 2024 to 29 May 2024 is $2,320, for a total of $6,181.43. The Tribunal has carefully examined the owners' tenancy agreements at pages 51 to 110 of the HB, and it is satisfied that their submission on this issue is correct.
If so, if whether the owners' have mitigated their losses to the extent they are required or able to
The Tribunal accepts that the correct measure of the owners' financial losses is the sum of compensation that is required to place them in the same situation as if the builder was not in breach of the HBWC or if the contract had been performed by the builder.
The Tribunal accepts that the owners are also required to mitigate any financial losses they have suffered. That is, the builder cannot be required to compensate the owners for any failure by them to take reasonable steps available to reduce or mitigate the extent of their loss.[8]
[8] See for example Hippydaze Pty Ltd and Mener Group Pty Ltd [2019] WASAT 92 at [157] to [164] and see Deshmukh and Distinctive Building Services Pty Ltd [2024] WASAT 15 at [66] – [72].
With the respect to the claim by the owners for compensation for the additional costs they will incur to complete the building of their home, the Tribunal finds:
(a)the owners lodged their complaint in respect of the builder's delay in completing their home with the Building Commissioner on 3 December 2023 and the builder became in breach of clause 2.2 of the HBWC on or immediately after 9 March 2024;
(b)on 14 March 2024 the Building Services Board refused to renew the builder's building contractor registration on financial grounds;
(c)on or around 8 April 2024 the home indemnity insurer paid the owners $199,500 in settlement of their insurance claim; and
(d)the owners are not able to engage a new builder to complete the home at this time as they do not have the funds to pay for the additional cost to complete the new home, and neither can they obtain finance for that sum.
With respect to the owners' claim for the additional funds needed to complete their home, the Tribunal is satisfied the owners acted reasonably as they took prompt action to lodge their complaint about the builder's delay, to make their claim to the home indemnity insurer, to make inquiries as to the cost of engaging a new builder and then to make inquiries for finance.
With respect to the owners' claim for their rental costs since 10 March 2024, the Tribunal is satisfied that the owners acted reasonably in maintaining their rental accommodation.
The Tribunal is satisfied that the failure of the owners to immediately engage a new builder to complete the works is due to the dire financial situation the builder's delay has placed them in, and that they have therefore taken all reasonable actions available to them to mitigate these financial losses, and that no component of these losses is due to any failure by them to reduce or mitigate the extent of their loss.
If so, whether the Tribunal should make a HBWC remedy order that the builder pay compensation to the owners for their losses
The Tribunal must firstly determine whether the owners' losses are sufficiently connected to the builder's breach of the HBWC due to its delay in building the home.
The test of remoteness for financial loss due to breach of contract is set out in the decision of the Tribunal in Alison Louise Lobbe atf Lobbe Newman Trust and Kelpie Endeavours Pty Ltd atf Testa Rossa Family Trust and Quality Builders Pty Ltd at [70]:[9]
[9] Alison Louise Lobbe atf Lobbe Newman Trust and Kelpie Endeavours Pty Ltd atf Testa Rossa Family Trust and Quality Builders Pty Ltd [2014] WASAT 110 (Quality Builders Pty Ltd).
70As set out by Justice Le Miere in Total Waste Management Pty Ltd v The City of KalgoorlieBoulder [2010] WASC 234 (2 September 2010), at [31]:
…
Loss or damage will not be recoverable if it is too remote, the tests of remoteness being those stated in what are described as the two limbs of Hadley v Baxendale (1854) 156 ER 145, 354.
For present purposes those tests can be expressed in the statement of principle formulated by Lord Reid in Koufos v C Czarnikow Ltd (The Heron II) [1969] 1 AC 350, 385 and which has been adopted in this country: see GEC Marconi Systems [938]; Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344, 368
The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation.
The Tribunal is satisfied that each of the financial losses claimed by the owners is of a kind that a reasonable builder would have realised was sufficiently likely to result from the breach of the HBWC by failure to complete the home on 9 March 2024.
With respect to the increased cost of building the home after that date, the Tribunal has informed itself pursuant to s 32(4) of the SAT Act that building costs have risen substantially from June 2021[10] such that it finds that the quotes obtained by the owners for the completion of their home are reasonable.
[10] Input to the house construction industry: >
With respect to the requirement that the owners remain in rental accommodation until such time as they are able to occupy their home, the Tribunal accepts as a matter of common experience that a family with two children (such as the owners' family) will need to rent accommodation while they wait for their home to be built.
The Tribunal pursuant to s 32(4) of the SAT Act has informed itself that the median rent in Perth for a two bedroom home for the 12 month period ending May 2024 is $550 per week, and for the same period the median rent for a three bedroom home is $620 per week.[11] The Tribunal is therefore satisfied that the cost of the rental accommodation claimed by the owners is reasonable for a family of two adults and two children.
[11] >
That is, the Tribunal is satisfied that the owners' increased costs to complete their home and their rental costs from 10 March 2024 are losses they should be compensated for by the builder on the basis they would not have incurred these costs but for the builder's breach of the HBWC.[12]
[12] See Lampman and Afra Constructions Pty Ltd [2014] WASAT 27; Quality Builders Pty Ltd; Byham and Afra Constructions Pty Ltd [2014] WASAT 38 and Waldron and Afra Construction Pty Ltd [2013] WASAT 207.
Secondly, the Tribunal is satisfied that the owners are not required to terminate the HBWC before being eligible to claim compensation pursuant to s 41(2)(d)(i) of the BSCRA Act[13] and that it is sufficient that the builder is in breach of the HBWC.
[13] See Deshmukh and Distinctive Building Services Pty Ltd at [69].
The Tribunal therefore finds that a HBWC remedy order is justified with respect to the additional cost of building the home and the continued rental payments made by the owners due to the builder's breach in not bringing the home to practical completion by 9 March 2024, as was required by the HBWC.
Pursuant to s 43(1) of the BSCRA Act, the Tribunal must in consequence make an order with respect to the complaint items 1 and 3 and the orders sought.
The orders the Tribunal will make in respect of complaint items 1 and 3, pursuant to s 41(2)(d)(i) of the BSCRA Act, is that the builder is to compensate the owners by paying to them the sum of $56,075 for the additional costs they will now incur in completing the building of their home, and that the builder pay to the owners the sum of $6,181 (rounded down) for their rental payments up to the date of the final hearing.
Orders
The Tribunal orders:
Pursuant to a home building work contract the parties entered on 10 November 2021 the Tribunal, under s 43 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA):
1.Order that by no later than 3 July 2024 the respondent must pay compensation to the applicants in the amount of $56,075.
2.Order that by no later than 3 July 2024 the respondent must pay compensation to the applicants in the amount of $6,181.
3.The application is otherwise dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MR E Cade, MEMBER
7 JUNE 2024
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