Su v Winning Builders Pty Ltd

[2024] NSWCATCD 44

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Su v Winning Builders Pty Ltd [2024] NSWCATCD 44

Hearing dates:

18 & 19 January 2023, 6 & 7 November 2023, Written Submissions dated 8 December 2023, 12 February 2024 & 11 March 2024

Date of orders:

13 June 2024

Decision date:

13 June 2024

Jurisdiction:

Consumer and Commercial Division

Before:

D G Charles, Senior Member

Decision:

1 Within 28 days of the date of these orders, the Respondent is to pay to the Applicants, the amount of $15,342.16.

2 A work order is made pursuant to s 48O(1)(c) of the Home Building Act 1989 NSW, on the terms and conditions as set out in [191] of the Reasons.

3 If any party seeks an order for costs of the Proceeding, orders and directions are made, as set out in [193] of the Reasons.

Catchwords:

BUILDING AND CONSTRUCTION – application of s 48O(1)(c) of the Home Building Act 1989 NSW – jurisdiction & discretion - work order to include items of incomplete work – other terms and conditions of work order - third party contractor condition in work order – no structural columns direction in work order - delay damages to owners – no contract price adjustment.

Legislation Cited:

Home Building Act 1989 NSW

Civil and Administrative Tribunal Act 2013 NSW

Civil and Administrative Tribunal Rules 2014 NSW

Cases Cited:

Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248

Little v J & K Homes Pty Ltd [2017] NSWCATAP 84

Project 4301 Pty Ltd v Buildcarp Constructions Pty Ltd [2022] NSWCATCD 30

Precise Builders (NSW) Pty Ltd v Hones & Krel [2018] NSWCATAP 112

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

Aytul Ak Tankiz v Ferat Ak & Ramazan Ak [2014] NSWSC 1044

Tomlin v Ford Credit Australia [2005] NSWSC 540

Onassis v Vergottis [1968] 2 Lloyd’s Rep 403

Textralian Enterprises v Perpetual Trustees (Victoria) Limited [2000] NSWCA 176

HM&O Investments v Ingram [2012] NSWSC 958

ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24

Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327

Paraiso v CBS Build Pty Ltd (2020) NSWSC 190

Bannister & Hunter v Transition Resort Holdings (No 3) (2013) NSWSC 1943

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

Westpoint Management Ltd v Chocolate Factory Apartments Ltd; Chocolate Factory Apartments v Westpoint Finance [2007] NSWCA 253

Owners SP 92450 v JKN Para 1 Pty Limited [2023] NSWCA 114

Brambles Holdings v Bathurst City Council [2001] NSWCA 61

Hadley v Baxendale [1854] EngR 296; (1854) 9 Ex 341; (1854) 156 ER 145

C.Czarnikow Ltd v Koufos [1969] 1 AC 350

Texts Cited:

None cited.

Category:

Principal judgment

Parties:

Jiam Yu Su (First Applicant)

Bao Ling Zhao (Second Applicant)

Winning Builders Pty Ltd (Respondent)

Representation:

Counsel:

M Klooster (Applicants)

D Hughes & R Sud (Respondent)

Solicitors:

Construction Legal (Applicants)

Doyles Construction Lawyers (Respondent)

File Number(s):

2022/00430188 (formerly HB 22/18103)

Publication restriction:

Unrestricted

REASONS FOR DECISION

Background Facts & Overview of Matters in Dispute

1. Jian Yu Su and Bao Ling Zhao (Owners) are the registered proprietors of a residential property at Ermington NSW (Property).

2. On 30 June 2020, Winning Builders Pty Ltd (Builder) attended the Property and thereafter provided a quote to the Owners, to carry out alterations and additions to the Owners’ residence on the Property, which then consisted of a single storey dwelling with a lower level garage.

3. I am satisfied that the Builder’s quote was in respect of “residential building work” within the meaning of the Home Building Act 1989 NSW (HB Act).

4. On 3 July 2020, the Owners paid the Builder an amount of $25,000.

5. On 3 August 2020, the Builder says that the parties discussed variations to the engineering plans which were to form part of a proposed building contract; such variations having the effect that columns located inside the residence on the Property would be moved to outside the residence on the Property (the Oral Variation).

6. The Owners dispute ever agreeing to the Oral Variation.

7. On 6 August 2020, the parties signed an agreement, in a standard form for home building works over $20,000, that the Builder would carry out alterations and additions to the Owners’ existing residence on the Property, for a fixed price of $165,000 (referred to as either the Building Contract or the Contract).

8. There is no dispute that the Building Contract complies with the requirements of Part 2 Division 1 of the HB Act.

9. The Building Contract contains the following pertinent terms:

1. The works must commence within 14 days of approval issuing from the principal certifying authority (PCA),

2. The works must be completed within 26 weeks from commencement (cl 6),

3. Any claim for an extension of time must be documented and made by the Builder within 10 business days of the occurrence of an event,

4. The contract drawings (cl 1) referred to architectural plans by Sydney Access Consultants bearing date 3 August 2020, and undated plans prepared by structural engineers, HB2 Engineers,

5. The Builder must comply with the statutory warranties contained in s 18B(1) of the HB Act.

6. That the Builder is to engage the engineer (and therefore, the engineer engaged by the Builder cannot be a relevant professional for the purposes of s 18F of the HB Act).

10. The architectural plans of Sydney Access Consultants bearing date 3 August 2020, show that the works involved the addition of a first storey above the rear half of the dwelling, cantilevered above an open ‘bbq kitchen’ at the rear of the dwelling. The outdoor porch area was to be incorporated into the dwelling and was to become the location of a stairwell and laundry.

11. However, at the time the Building Contract is signed, the only engineering plans for the Property that existed were:

1. Engineering Drawings: Notes and Specifications Rev 1 dated 10 April 2020,

2. Engineering Drawings: Footings Rev 1 dated 10 April 2020,

3. Engineering Drawings: Level 1 Floor Framing Plan Rev 1 dated 10 April 2020.

These are referred to as the Original Engineering Plans or the Rev 1 Plans.

12. The Original Engineering Plans, or Rev 1 Plans, prepared by Som Lam (Mr Lam) of HB2 Engineers, provide for the first floor to be supported by 12 structural steel beams passing through the interior and floor of the dwelling, and to be footed in the ground beneath the dwelling.

13. On 27 August 2020, an application for a Complying Development Certificate (CDC) was received by the PCA.

14. On 29 August 2020, an application for a CDC and a checklist signed by the Owners, is received by the PCA, but at this time the only existing engineering plans for the Property are the Original Engineering Plans, or Rev 1 Plans.

15. On 31 August 2020, the PCA carries out a pre-CDC inspection.

16. On 4 September 2020, the following revised engineering plans also prepared by Mr Lam of HB2 Engineers, issue:

1. Engineering Drawings: Notes and Specifications Rev 2 dated 4 September 2020,

2. Engineering Drawings: Footings Rev 2 dated 4 September 2020,

3. Engineering Drawings: Level 1 Floor Framing Plan Rev 2 dated 4 September 2020.

These are referred to as the Revised Engineering Plans or Rev 2 Plans.

17. The Revised Engineering Plans or Rev 2 Plans provide for the first floor to be supported by only three (3) structural steel columns, with the remaining structural columns to be located around the exterior of the Owners’ dwelling.

18. There is a factual contest as to whether the Revised Engineering Plans or Rev 2 Plans form part of the Building Contract.

19. On 15 September 2020, home warranty insurance under Part 6 of the HB Act, issued.

20. On 16 September 2020, a CDC (attaching the Original Engineering Plans or Rev 1 Plans) is issued by the PCA, together with Notices regarding the commencement of the works.

21. On 21 September 2020, the Builder wrote to the PCA attaching the Revised Engineering Plans or Rev 2 Plans.

22. On 25 September 2020, the PCA issued a further copy of the CDC, this time attaching the Revised Engineering Plans or Rev 2 Plans, but with the stamp still bearing the date 16 September 2020.

23. In or about December 2020, the Builder says that there was a further oral variation to the effect that the requirements of the Building Contract regarding extensions of time could be dispensed with, and the parties could proceed on an informal basis (Further Oral Variation).

24. The Owners dispute the existence of a Further Oral Variation. The Owners say that they never agreed to any informal arrangement regarding the extension of time procedures prescribed by the Building Contract.

25. While there is a factual dispute as to when works commenced, the parties accept that on 1 October 2020, the construction period under the Building Contract, commenced. This is because the Building Contract required construction to begin within 14 days after the certifier issued the relevant approval.

26. The Builder has not lodged any extension of time request in accordance with the terms of the Building Contract.

27. The Owners contend that in the absence of any extension of time requests of the Builder as per the Building Contract, and the available evidence not supporting that there was a Further Oral Variation, the Builder was required to complete the works no later than 1 April 2021, being 26 weeks after 1 October 2020.

28. By April 2021, on the Builder’s own evidence, the Builder had only started putting up the roof.

29. On 26 June 2021, SafeWork NSW issued Improvement Notices and Prohibition Notices (SafeWork NSW Notices). The SafeWork NSW Notices confirmed that workers on the Property are exposed to serious health risks, whether it is a risk as to things falling from height (where scaffolding is incomplete and unsafe), whether it is a risk as to electrocution, or whether it is a risk as to exposure to asbestos fibres.

30. In or about November 2021, the Builder started waterproofing the bathrooms.

31. On 25 November 2021, Ms Evelyn Su on behalf of the Owners lodged a complaint in respect of the Builder’s work, with Fair Trading NSW.

32. On 21 January 2022, Fair Trading NSW issued a notice to the Builder requiring it to complete 14 items of incomplete work by mid-February 2022.

33. On 2 March 2022, a building consultant from Tyrells, Gordon Xue, inspected the Property and issued a report on 17 March 2022 (Tyrells Report), which refers to 37 items of defective work. The Tyrells Report confirmed that the Builder used asbestos to support columns, that there are broken asbestos sheets in the subfloor, and that the Owners should immediately engage an engineer to advise on the temporary support required to make the building site safe.

34. There is a factual contest as to whether the Owners changed the locks and prevented the Builder from accessing the Property in mid-March 2022.

35. On 1 April 2022, an engineer engaged by the Owners inspected the building site and issued a report which confirmed that urgent shoring must be installed.

36. On 27 April 2022, the Owners commenced a proceeding in the Tribunal by lodging their application for orders under the HB Act (Proceeding).

Procedural History of the Proceeding, the Parties’ Exhibits for Hearing, and the Parties’ Written Submissions following the Hearing.

37. The Owners commenced the Proceeding as an application for an order to pay money pursuant to the HB Act, s 48O(1)(a), consisting of in addition to the Owners’ claim for delay damages, an amount of damages (well exceeding the contract price of $165,000) on account of the costs of bringing the works under the Building Contract to completion, including alleged defective work.

38. The Proceeding was case managed by the Tribunal in the usual manner prior to the commencement of the hearing on 18 and 19 January 2023. There were directions’ hearings on 27 May 2022, and on 29 August 2023, where the parties were ordered to file and serve points of claim, points of defence, and lay and expert evidence in support of their respective cases.

39. In the case of the second directions’ hearing, the Proceeding was adjourned to be specially fixed by the Divisional Registrar for a two (2) day hearing. Extensions of time to comply with prior directions of the Tribunal, were also made during the second directions’ hearing on 29 August 2022, and then by orders made in chambers on 26 September 2022.

40. There was correspondence (referred to below) between the parties, and their solicitors, in December 2022, following the Owners’ service of a notice purporting to terminate the Building Contract. This prompted an application by the Builder to vacate the specially fixed hearing on 18 and 19 January 2023. In dismissing the Builder’s application to vacate the specially fixed hearing dates, the Tribunal said on 23 December 2023:

Having regard to the points of claim of the applicants the issue of whether the applicants terminated the building contract pursuant to its terms or under the general law does not arise for determination.

41. The hearing on 18 and 19 January 2023 was adjourned part heard before me. Leave was granted to the Builder to amend its points of defence to include a defence based on the issue relating to whether the scope of works under the Building Contract included, as the Builder contended (relying upon lately served written evidence – see below), the Revised Engineering Plans or Rev 2 Plans, and for the Builder to pursue another defence based upon s18F of the HB Act (although, in fact, a s18F defence was subsequently not pursued by the Builder). Materially (for the purposes of adjourning the hearing on 19 January 2023), in respect of the Builder’s case that the Revised Engineering Plans or Rev 2 Plans are part of the Building Contract, the Builder was given leave to rely upon (lately served) further evidence, i.e., written evidence which was not included in the Joint Tender Bundle, marked on 18 January 2023, the first day of the hearing, as Exhibit 1. The Builder’s further evidence consisted of the second affidavit of Jimmy Yuen (Mr J Yuen) dated 11 January 2023, a supplementary report of Steven Maxwell Alexander (Mr Alexander) of Steven Alexander Pty Ltd (SAPL) dated 16 January 2023, and a supplementary report of Mr Lam dated 17 January 2023.

42. Because leave was granted in respect of additional written evidence in the Builder’s case, as a matter of procedural fairness, and at the request of the parties’ legal representatives, an adjournment was required to facilitate the carrying into effect of further directions for the Owners to file and serve their documents responding to the Builder’s lately served evidence, and for any additional evidence in chief in the Owners’ case as to quantum, and then for the Builder to file and serve any other documents strictly in reply to the Owners’ documents: see orders 8 and 9 made on 19 January 2023.

43. With the adjournment granted, the parties’ experts, George Dahrie (Mr Dahrie) of Noviion Engineering, in the Owners’ case, and Mr Alexander of SAPL, in the Builder’s case, were also directed to prepare an updated joint report, arising from their consideration of the issues raised in the lately served additional evidence of the Builder: see order 12 made on 19 January 2023.

44. In the lead-up to the hearing on 18 January 2023, the Owners had contended that they could bring a claim for damages by way of rectification costs based upon breaches of the statutory warranties in s 18B of the HB Act, because the Building Contract had ended (c.f., Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 (Brewarrina) at [67] – [68]) when they issued a termination notice to the Builder on 13 December 2022, relying on their rights at common law as opposed to the provisions of the Building Contract. Pertinently in this regard, the Tribunal had referred some months earlier (in fact, at the first directions’ hearing on 27 May 2022) to Brewarrina and at that time, had noted that “the contract between the parties is still on foot”.

45. Notwithstanding their earlier conduct of the Proceeding, on 17 January 2023, the Owners served Preliminary Submissions indicating that in respect of their claim for the Builder to bring works under the Building Contract to completion, including any defective work, they sought a work order and not a money order.

46. Both parties opened their cases before me at the hearing on 18 and 19 January 2023, and I admitted evidence in the form of the parties existing joint bundle at the time, which became Exhibit 1. The Owners by their counsel, submitted that the issue of termination of the Building Contract no longer arose for determination by the Tribunal as the Owners now sought a work order only, and that in those circumstances, the Owners were ready to proceed with the hearing.

47. While the Owners’ position may have changed during the Proceeding as regards the appropriate relief that they sought under the HB Act, I recognise that the Builder has always disputed in the events which have occurred, that the Building Contract had come to an end, just as I recognise that the Builder has always disputed that a money order is an appropriate remedy in the circumstances of this case for bringing the works under the Building Contract to completion (including alleged defects). Clearly, the Builder has always contended in the Proceeding that the Building Contract remains on foot and that the Building Contract has not reached practical completion.

48. The Builder has also maintained that the Owners’ purported termination of the Building Contract on 13 December 2022 was invalid, in that the Owners’ Notice was not given in accordance with the termination clauses in the Building Contract, and further that the said Notice could not be relied upon under the general law to terminate the Building Contract because any right of termination accruing to the Owners had been lost upon affirmation of the Building Contract by the Owners’ solicitors’ letter of 12 August 2022, or alternatively, the right to terminate the Building Contract under the general law had been lost because such right had not been exercised by the Owners within a reasonable time, and the Owners’ delay in exercising the right to terminate the Building Contract had caused prejudice to the Builder.

49. When the hearing resumed before me later in the year (i.e., on 6 and 7 November 2024), the Owners had elected not to file and serve any additional evidence in chief for their case as to quantum. The Owners’ counsel confirmed that the Owners did not seek an order to pay money on account of the costs of bringing the works under the Building Contract to completion (including alleged defects); rather, the Owners sought a work order requiring the Builder to pay a third party building contractor to bring the works under the Building Contract to completion (including alleged defects).

50. Following the hearing, the Owners’ Closing Submissions dated 8 December 2023 (Owners’ Closing Submissions) at [5.1], [5.8] – [5.14] brought a further clarification as regards the relief sought by the Owners in the Proceeding – i.e., should the Tribunal find that the Builder is not required to rectify the defects to bring them into conformity with the Original Engineering Plans or Rev 1 Plans, but not otherwise, the Owners then claim $13,200 by way of restitution or alternatively, as a ‘Contract Price Adjustment’.

51. This order to pay money in an amount of $13,200 was put in addition to the Owners’ claim for delay damages in an amount of up to $43,645.80.

52. On the other hand, the Builder submitted that no work order should be made at all in the Proceeding, i.e., that the Builder should simply be allowed to return to the Property and complete the works under the Building Contract, as it has always contended should be the case from the time it said that it was denied access to the Property by the Owners in or about mid-March 2022. The Builder further relied upon its solicitor’s letters to the Owners’ solicitors dated 21 June 2022 (Exhibit 1A, pages 1,958 – 1,959) and 11 August 2022 (Exhibit 1A, pages 1,960 – 1,961).

41. Alternatively, the Builder submitted that if the Tribunal determines that a work order is the appropriate relief in the circumstances of the case, such order should require the Builder (and not a third party contractor) to undertake the works to bring the Building Contract to practical completion, and to fix any defects. Furthermore, the Builder said that because the works are incomplete (and not defective), any order for it to carry out works at the Property should be limited to those works where there is a dispute as to how they should be completed, and that no work order should be made in respect of works that the parties agree are incomplete, and where there is no dispute as to how the works should be completed.

42. The Builder also said that the Tribunal should dismiss the Owners’ claim for a money order for ‘Contract Price Adjustment’ in respect of an alleged cost saving to the Builder relating to the steel columns. The Builder argued that the Owners’ claim was very lately raised by the Builder and that it lacks a proper legal basis and evidentiary foundation.

43. As to the Owners’ claim for a money order by way of delay damages, the Builder submitted that the claim should be dismissed due to a lack of evidence of loss, or alternatively, that the claim should be rejected insofar as it relates to the period after the Owners re-took possession of the Property (or, as the Builder submitted, the Owners denied access to the Builder).

44. Both parties were granted leave to have legal practitioners representing them at the hearing on 18 and 19 January 2023, and on 6 and 7 November 2023. All hearings were conducted in person with the parties’ experts also present in person. The parties appeared by their respective counsel.

45. Pursuant to prior directions of the Tribunal, the parties produced a Joint Tender Bundle (also known as ‘the Tribunal Book’), which (as I indicated previously) was admitted into evidence on 18 January 2023 as Exhibit 1 and comprising 558 pages. The Tribunal Book was then updated for the further hearing on 6 and 7 November 2023 when it became a book of three (3) volumes comprising 2,077 pages (Exhibit 1A), including the parties’ written lay and expert evidence, the Complying Development Certificate and attachments (at pages 1,873 to 1,957), correspondence between the parties’ solicitors’ in the period June – December 2022 (at pages 1,958 to 1,971), and copies of the orders of the Tribunal in the Proceeding (at pages 2,031 to 2043).

46. As to the written expert evidence for the Proceeding, the Tribunal Book contained the following documents and reports:

• Building Defects Report dated 7 July 2022, with Scott Schedule, from the Owners’ expert witness, Mr Dahrie of Noviion Engineering,

• Affidavit from the Builder’s expert witness, Som Lam (Mr Lam) of HB2 Engineering & Development dated 19 August 2022,

• Response Schedule to Building Defects Report dated 19 August 2022 from the Builder’s expert witness, Mr Alexander of SAPL trading as Building Diagnostics and Compliance Consultants,

• Joint Expert Scott Schedule of Mr Dahrie and Mr Alexander dated 28 November 2022 (First Joint Report),

• Supplementary Report of Mr Alexander dated 16 January 2023,

• Supplementary Report of Mr Lam dated 17 January 2023,

• Building Defects Report of Mr Dahrie dated 19 May 2023,

• Response Schedule to Building Defects Report of Mr Alexander dated 15 June 2023,

• Letter of Mr Sam in response to the Building Defects Report of Mr Dahrie, dated 16 August 2023,

• Affidavit of Mr Sam dated 23 August 2023,

• Joint Building Defects Report with comments of Mr Alexander dated 26 October 2023 (Updated Joint Report).

59. The Tribunal Book also contained the Owners’ written lay evidence, as follows:

• Affidavit of Evelyn Su (Ms Su) dated 10 November 2022 with Exhibit ES – 1,

• Affidavit of Bao Ling Zhao (Ms Zhao, also known as Pauline Zhao) dated 21 November 2022 with Exhibit BLZ – 1,

• Supplementary Affidavit of Ms Zhao dated 13 July 2023 with Exhibit BLZ – 2,

• Supplementary Affidavit of Ms Su dated 13 July 2023,

• Affidavit of Jian Yu Su (Mr Su) dated 13 July 2023.

60. The Builder relied on the following written lay evidence as set out in the Tribunal Book:

• Affidavit of Jimmy Yuen (Mr J Yuen) dated 22 August 2022, with Attachment 1,

• Supplementary Affidavit of Mr J Yuen dated 11 January 2023 with Exhibit JY – 2,

• Further Supplementary Affidavit of Mr J Yuen dated 8 September 2023, with Exhibit JY – 3.

61. During the hearing, the following further documents were tendered and marked as Exhibits 2 to 6:

• An enlarged copy of page 137 of Exhibit 1A being part of the Original Engineering or Rev 1 Plans (Exhibit 2),

• An enlarged copy of page 1836 of Exhibit 1A being part of the Rev 2 Plans (Exhibit 3),

• Email correspondence during August/September 2023 between the parties’ solicitors as regards arrangements of the experts for their joint report (Exhibit 4),

• Email correspondence in September 2023 between Mr Dahrie and Mr Alexander (Exhibit 5), and

• Copy of AS 3740 – 2010 Waterproofing of domestic wet areas (Exhibit 6).

62. The experts, Mr Dahrie, Mr Alexander, and Mr Lam each gave sworn oral evidence in joint session (on 7 November 2023) subject to cross examination by counsel. On 6 November 2023, the Owners, Mr Su, and Ms Zhao, together with Ms Su (who was not a party) gave affirmed oral evidence in the Owners’ case, subject to cross examination by counsel, and Mr J Yuen gave affirmed oral evidence in the Builder’s case, also subject to cross examination by counsel. Mr Su and Ms Zhao gave their oral evidence with the assistance of a Cantonese speaking interpreter.

63. Further, the parties provided a Transcript of the hearing on 18 and 19 January 2023 at pages 1972 to 2030 of Exhibit 1A, and of the hearing on 6 and 7 November 2023 as an attachment to the Owners’ Closing Submissions (hereinafter, collectively referred to as the Transcript). Transcript references in these Reasons will be indicated by the letter ‘T’ with a page number and then a dot followed by the line numbers on the relevant page of the Transcript.

64. The parties’ counsel provided written outline opening submissions at the commencement of the hearing on 18 January 2023: see at pages 2044 to 2059 of Exhibit 1A (‘Opening Submissions of Builder’ dated 18 January 2023), and at pages 2060 to 2076 of Exhibit 1A (‘Applicants’ Preliminary Submissions’ dated 17 January 2023).

65. At the resumption of the adjourned hearing on 6 November 2023, both parties’ counsel provided further opening submissions, as follows:

• Applicants’ Further Preliminary Submissions dated 5 November 2023, and

• Builder’s Revised Opening Submissions dated 3 November 2023.

66. Furthermore, pursuant to directions made on 7 November 2023 at the conclusion of the evidence, the parties’ legal representatives have now provided their closing written submissions, as follows:

• Owners’ Closing Submissions 8 December 2023 (Owners’ Closing Submissions), with a form of proposed work order,

• Builder’s Closing Submissions dated 12 February 2024 (Builder’s Closing Submissions), with a form of proposed work order,

• Owners’ Submissions in Reply dated 8 Match 2024 (Owners’ Reply Submissions).

67. In making my decision in relation to the Owners’ application for orders of the Tribunal, I have considered the entirety of the written material including the Exhibits, the Transcript, and the written submissions and supporting documents of the parties. In these Reasons for Decision, I may focus on the material which I consider is central to the considerations of the application for orders of the Tribunal; but to the extent that the Reasons may not refer to a specific piece of evidence or singularly deal with a submission, it should not be assumed that I have ignored that evidence or submission.

68. As in any civil proceedings, applicants for orders of the Tribunal bear the legal onus of presenting sufficient evidence to satisfy the Tribunal, on the balance of probabilities, that the orders sought in the application must be made.

The Primary Issues for the Tribunal’s consideration and determination

69. Various factual and legal issues arise in the Proceeding around these questions:

1. In the context of the Owners’ case to bring the works under the Building Contract to completion, is the Tribunal’s discretion engaged to make a works order whether under subsection 48O(1)(c)(i), or subsection 48O(1)(c)(ii) of the HB Act (Jurisdiction and Discretion)?

2. If so, what should be the terms and conditions of the works order (Work Order Terms and Conditions), specifically:

1. Whether the works order should impose, as the Owners advocate, a condition that the Builder retains a suitably qualified third party building contractor to perform the works (Third Party Contractor Condition),

2. Whether the works order should contain, as the Owners advocate, a direction to the Builder to move the structural columns (Structural Columns Direction),

3. Considering the parties’ experts’ differences of opinion in their Updated Joint Report, to determine the scope of works for specific items in the works order (Scope of Works for Specific Items).

3. Should the Tribunal make an order to pay money under s 48O(1)(a) of the HB Act for a ‘Contract Price Adjustment’, as the Owners contend (Contract Price Adjustment)?

4. Should the Tribunal make an order to pay money under s 48O(1)(a) of the HB Act for delay damages, as the Owners contend (Delay Damages)?

70. For the Jurisdiction and Discretion issue, especially whether either of subsection 48O(1)(c)(i) or subsection 48O(1)(c)(ii) of the HB Act, is engaged in the circumstances, I must weigh all the evidence to make findings as to whether (or not) the Builder has wrongfully refused to complete the works required under the Building Contract. This involves consideration of the evidence in the Owners’ case that the Builder abandoned the works on or about 14 February 2022 when it is said (by the Owners) that the Builder stopped attending the Property: see the Owners’ points of claim dated 10 June 2022 at [11], [15], and [18]. Similarly, I must weigh the evidence in the Builder’s case that work under the Building Contract ceased because of the Owners’ ‘wrong’ not the Builder’s, that the Builder has been denied access to the Property to complete the works since about mid-March 2022, and that the Builder has repeatedly, since mid-March 2022, indicated its willingness and readiness to return to work: see the Builder’s amended points of defence dated 16 February 2023 at [11], [15], and [18].

71. The issues for consideration in respect of the question concerning the Structural Columns Direction, include whether the Builder has made out the three (3) reasons why it says no order should be made to move the structural columns. Relevantly, the Builder contends:

• Firstly, on a proper interpretation of the Building Contract, the Builder was free to select the location of the structural columns,

• Secondly, there was agreement by the Owners (i.e., the Oral Variation, as alleged by the Builder), or failing that acquiescence, in the location of the structural columns,

• Thirdly, it would not be reasonable to order the relocation of the said columns which the experts agree are structurally sound and capable of supporting the structure of the Owners’ dwelling.

72. For the question concerning Delay Damages, the issues for consideration are whether the Builder has established on the available evidence, the Further Oral Variation regarding the delay claim procedure under the Building Contract, as well as other matters of proof such as quantum of loss, causation of loss, and remoteness of damage.

Jurisdiction and Discretion

73. While it is common ground that the Building Contract is still on foot, I find that such circumstance is not, in and of itself, an impediment to a work order being sought or made. The Tribunal has unique powers available to it under subsection 48O(1)(c) of the HB Act:

“(1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate:

…

(c) an order that a party to the proceedings:

(i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or

(ii) do or perform, or refrain from doing or performing, any specified act, matter, or thing.”

74. I am satisfied that those powers should be exercised in this case to compel the Builder to complete the works under the Building Contract. In this regard, I do not accept the Builder’s case as regards lack of jurisdiction to make a work order: see the Builder’s Closing Submissions at [14(a)] and [55]. There is no doubt that the Tribunal has power under subsection 48O(1)(c) of the HB Act to make a work order when the relevant contract is on foot and works remain incomplete (see Little v J & K Homes Pty Ltd [2017] NSWCATAP 84 at [22]), and even in circumstances where a builder is ready, willing, and able to complete the relevant work (see, for example, Project 4301 Pty Ltd v Buildcarp Constructions Pty Ltd [2022] NSWCATCD 30 at [88] – [91]).

75. Nor do I accept the Builder’s case (see, for example, the Builder’s Closing Submissions at [2], [3], [58], and [129] – [132]) that to grant the Owners the relief they now seek (c.f., the order to pay an amount of up to $490,000, as sought in the application lodged 27 April 2022), is to permit them to rely on their own ‘wrong’ (principally, the allegation that the Owners denied the Builder access to their Property), to obtain a work order. To the extent it can be said that the Owners refused access to the Builder on and from 28 March 2022, the Builder had rights under the Building Contract which it did not exercise, although I am not persuaded that the Builder can be criticised for not exercising those rights in circumstances where the Owners commenced the Proceeding less than a month after taking possession of the building site. In any event, access to the Owners’ Property is a necessary term and condition of any work order made by the Tribunal.

76. On the Owners’ case, the Builder was required to complete the Contract works by 1 April 2022, and as to the works the Builder had completed to that date, the Owners argued there were defects that were significant in their nature and extent, some of which were disputed by the Builder. Pertinently, SafeWork NSW had already issued compliance notices to the Builder on 26 June 2021. It is of no moment the Owners accepted (see T45.26-35 and T58.23 – T59.1) that the Builder thereafter ceased engaging in unsafe work methods on the Owners’ Property. The fact that SafeWork NSW became involved in the first place is the material point. That the Builder took steps to ensure the building site was safe as it was directed to do by the compliance notices, does not detract from the Builder’s strict obligations as regards carrying out works in a safe manner. It was those strict obligations which had been breached, and it was the Builder’s breach, which prompted SafeWork NSW to issue the compliance notices. In all the circumstances, I am satisfied there was no ‘wrong’ on the Owners’ part, and that they were compelled to pursue the Proceeding to get certainty as to what works the Builder is obliged to carry out to complete the Building Contract.

77. As to their conduct of the Proceeding since instituting it on 27 April 2022, I find that the decision by the Owners in or about January 2023 (when represented by Australian legal practitioners) to pursue a work order only in respect of incomplete works, was made, consistently with s 36(3) of the Civil and Administrative Tribunal Act 2013 NSW (NCAT Act), to facilitate the just, quick, and cheap resolution of the real issues in dispute between the Owners and the Builder.

78. In the exercise of the Tribunal’s discretion under subsection 48O(1)(c) of the HB Act, and in balancing the interests of the Owners (on the one hand) and the Builder (on the other hand), I find that a work order is the appropriate form of relief, for the following reasons:

1. First, a work order is in keeping with the “preferred outcome” under s 48MA of the HB Act.

2. Second, if made, a work order will significantly reduce the chances of the parties having to come back to the Tribunal to reagitate outstanding and contested issues between them. That outcome is clearly undesirable. Further, it does not align with the Tribunal’s guiding principle in 36(1) of the NCAT Act, which, as indicated, is to facilitate the just, quick, and cheap resolution of the real issues in the Proceeding.

3. Third, I am satisfied that there has been a systematic failure on the Builder’s part to comply with the obligations imposed on it by the HB Act, and under the Building Contract, which is evidenced by:

1. The Builder’s acceptance of payment of $25,000 on 3 July 2020, prior to home warranty insurance being obtained and in contravention of the HB Act in subsection 92(2),

2. During the Contract works, the Builder’s failure to maintain a safe work site, resulting in SafeWork NSW issuing improvement and prohibition notices,

3. The Builder not following the procedure for extensions of time under the Building Contract,

4. The Builder’s failure to bring the Contract works to practical completion within the time specified in the Building Contract,

5. The Builder’s preparedness only to carry out works that it says are defective, and not the works which the Owners say are defective or those works which the Tribunal determines are defective.

4. Fourth, my findings (see below) as regards the unreliability of the evidence of the Builder’s director, Mr Yuen.

5. Fifth, during the hearing, I observed personal animosities, and a lack of trust, between the parties. Of course, personal animosities, and a lack of trust, between a builder and an owner, in and of themselves, are not sufficient to displace the “preferred outcome” in s 48MA; nevertheless, the relevant discretion of the Tribunal in the HB Act (s 48O(1)(c) and s 48MA) to make a work order is to be exercised objectively, and a relational breakdown between an owner and a builder is an element of the Tribunal’s objective assessment. The relational breakdown favours a work order being made with terms and conditions (see under the next heading - ‘Issues arising for the Work Order Terms and Conditions’) to ensure that the nature and extent of the works the Builder must complete is clearly defined such that the chance of further litigation is reduced.

6. Sixth, plainly, there is a dispute about what works need to be carried out, which is a further basis as to why the Tribunal ought to make a work order.

7. Seventh, considering my earlier finding of no ‘wrong’ on the Owners’ part, I find that no real, or substantial, prejudice arises to either party if a work order is made by the Tribunal.

Issues arising for the Work Order Terms and Conditions

79. In their Closing Submissions, the Owners’ legal representative and the Builder’s legal representative, respectively, attached a form of Work Order with terms and conditions to Work Order (annexure A) and a scope of rectification works (annexure B).

80. The competing forms of the Owners, and the Builder, respectively, i.e., with their different terms and conditions of work order and their scope of works for the disputed items, raise these issues:

• Whether the Builder, or an appropriately licensed third party building contractor, should undertake the rectification works,

• Whether the works order should contain a direction to the Builder to move the structural columns,

• Considering differences of opinion between the experts, Mr Dahrie, and Mr Alexander, in their Updated Joint Report, to determine the scope of works for specific items in the works order,

• Whether there should be an order for inspections during the rectification works, and if so, whether Mr Dahrie, or Mr Alexander, is appointed by the order as the Inspector, who pays the costs of the Inspector, and how often (or at what ‘hold points’ during the rectification works) should the Inspector carry out his inspections,

• The time for completion of the rectification works, including when the period for completion of the rectification works is to commence,

• Whether the work order should provide for the (more detailed) terms and conditions on quality of construction, statutory approval, insurance of work and personal injury, Builder’s indemnity in favour of the Owners, damage to property, maintaining access, minimal disturbance, and cleaning up, ‘making good’ defects in rectification works (without affecting the Owners’ right of renewal of the Proceeding, and Work Health and Safety,

• In the event of renewal of the proceedings pursuant to Clause 8 of Schedule 4 of the NCAT Act, whether there is a notation that the Builder “irrevocably consents” to a money order, as per paragraph 5 of the Owners proposed form of work order.

81. I will consider these issues under the various headings below.

Third Party Contractor Condition

82. The Builder submitted that a work order requiring the Builder to pay a third-party builder to bring the works to completion is contrary to the statutory scheme of the HB Act and is an “extraordinary approach” (Builder’s Closing Submissions at [60]). I disagree. The Appeal Panel has clearly stated that the principle set out in s 48MA is not limited to ensuring that a builder personally rectify defects in its work. For instance, in Precise Builders (NSW) Pty Ltd v Hones & Krel [2018] NSWCATAP 112, the Appeal Panel observed at [19]:

The policy objective of the HB Act, to ensure that a homeowner has the benefit of statutory warranties in respect of building work conducted on his or her land, is therefore satisfied if the Builder contracts with a licensed third-party contractor to undertake the remedial work in satisfaction of its obligations under the orders.

Furthermore, in Little v J & K Homes Pty Ltd [2027] NSWCATAP 84, the Appeal Panel stated that a respondent’s obligation in an order made under subsection 48O(1)(c)(i) could be fulfilled by the respondent retaining a licensed builder to carry out the work the subject of an order under that subsection (at [26]-[27]), and alternatively, that an order made under subsection 48O(1)(c)(ii) is “clearly intended to authorise the making of orders having wider operation than requiring the performance of building works by the builder. That provision would authorise an order that the builder cause specified work to be completed” (at [28]).

83. The Builder further submitted that its conduct does not justify a third party contractor condition in a work order, and that the appropriate course (if the Tribunal is minded to make a work order), in the exercise of the Tribunal’s discretion having regard to s 48MA and s 48O(1)(c) of the HB Act, is to have the Builder complete the work without paying a third party’s profit margin. In this respect, I have considered the Builder’s detailed submissions (see Builder’s Closing Submissions at [60] – [77]), and I am satisfied that further ‘in reply’ submissions of the Builder (see Builder’s Closing Submissions at [61]) are neither warranted, nor required. I agree with the findings of fact and law contended for in the Owners’ Closing Submissions at [6.1c] – [6.1f], to which the Builder’s Closing Submissions responded. The findings contended for by the Owners are entirely consistent with my findings in these Reasons under the heading ‘Jurisdiction and Discretion’ (see particularly, [78a] – [78g] above). Additionally, while there is some evidence that asbestos was found on site while the digging of foundations was in progress (Exhibit 1A page 1001, see also T30.40-43), there is also objective evidence that a broken piece of asbestos was used as a structural element to support the works carried out by the Builder: see Exhibit 1A, page 785 (Photo 5). I find that the Builder’s use of such building techniques is a further reason which does not favour a work order allowing the Builder to do the work. In essence, the Tribunal in the face of such evidence, cannot have confidence in the Builder carrying out the terms of a work order in a safe manner.

84. Put simply, the Tribunal must be satisfied that the Builder can comply with the terms and conditions of a work order but without the continued supervision of the Tribunal. That would be a completely undesirable outcome and it would be inconsistent with the Tribunal’s guiding principle in s 36(1) of the NCAT Act. I find that a work order with a third party contractor condition, and other conditions (as to which, see below under the heading ‘Other terms and conditions of a work order’), satisfies the objective of the just, quick, and cheap resolution of the real issues in the Proceeding, and furthermore, that a work order with such conditions properly balances the interests between the parties.

Other terms and conditions of a work order

85. The parties accept that if a work order is made, there should be stipulations as to time. I will allow six (6) weeks for completion, with provision for reasonable extension(s) of time where there is delay beyond the respondent’s reasonable control, and for the works to commence 28 days (not 14 days, as the Owners advocated) after the date of the Tribunal’s orders.

86. Equally, the parties accept that the Owners should be ordered to permit access to the Builder and any employee and/or subcontractor of the Builder as and when required on two (2) business days’ notice, and for the rectification works the subject of the order to be carried out between 7:00 am and 5:00 pm Monday to Friday.

87. I am satisfied that there is a need for an expert, Mr Dahrie (as the work order is for the Owners’ benefit), to act as the ‘Inspector’ and to sign off on the rectification works the subject of the work order, and for the costs of the Inspector to be borne by the Builder. Without such provision in the work order, I find that in all reasonable likelihood, the parties will simply end up in further dispute(s). In such circumstances as the present case, it is not unusual for the Tribunal to provide for an Inspector to sign off on the requirements of a work order, so that there can be no doubt about the works done, the works not done, and the works not done properly.

88. I am further satisfied that the work order should have terms and conditions as to Quality of Construction, Licensing Requirement, Statutory Approval, Completion of the Rectification Works, Insurance of Work and Personal Injury, Builder’s Indemnity in favour of Owners, Damage to Property, Maintaining Access, Minimal Disturbance, and Cleaning Up, Defects in Rectification Works, and Work, Health, and Safety. Those terms and conditions align with the Builder’s obligations under the HB Act. Given the Builder’s previous non-compliance, I am satisfied that their inclusion in the work order, is warranted. As regards the Builder’s submission (Builder’s Closing Submissions at [83]) that these provisions are in some way, “superfluous”, that is not a reason for the Tribunal to decline to include them in a work order.

Whether the work order should contain a direction for structural steel columns (items 1 – 8 of annexure B to the work order)

The Builder’s Submission

89. The Builder says there are three (3) reasons why no order should be made moving the columns.

90. Firstly, that on a proper interpretation of the Building Contract, the Builder was free to select the location of the columns. Accordingly, if I find that the Contract allowed the Builder to implement the Rev 2 Plans, the factual dispute between the parties (i.e., the second reason, as set out in the next paragraph) is not relevant.

91. Secondly, that there was agreement by the Owners, the so-called Oral Variation, or failing that acquiescence, in the location of the columns.

92. Thirdly, that it would not be reasonable to order the relocation of the columns, which can support the structure. The gravamen of the Builder’s submission is that removing and replacing the columns will be costly and would extend the period to completion substantially, such that in the circumstances it would not be reasonable or necessary to order the columns to be moved: see Bellgrove v Eldridge (1954) 90 CLR 613 (Bellgrove v Eldridge).

93. I will deal firstly with the factual contest (the second matter) before turning to the proper interpretation of the Contract (the first matter), and then the third matter as regards the application of the principles in Bellgrove v Eldridge, and the various cases following that decision.

The evidence in relation to placement of the columns

94. Whilst it is common ground that discussions between the Owners and the Builder commenced in or about July 2020, the primary difference between the parties is what was discussed at a meeting on 3 August 2020.

95. There are differing accounts of what was discussed at the meeting of 3 August 2020, which was, of course, before the Contract was signed. Mr Yuen on behalf of the Builder (see his affidavit sworn 11 January 2023 at [16] – page 1545 of Exhibit 1A), states that Ms Zhao said words to this effect in the presence of Mr Su: “I realised the other day that based on the engineer’s plans, there will be columns which will be visible inside the house”, and that thereafter Ms Zhao asked (page 1546 of Exhibit 1A) for visible columns inside the house to become external columns, to minimise interference with the kitchen cabinetry and for aesthetic reasons. Mr Yuen says that he further suggested to Ms Zhao during their 3 August 2020 meeting that the Owners think over the issue for a couple of days. Mr Yuen then says (see his affidavit sworn 11 January 2023 at [19] – pages 1546 – 1547 of Exhibit 1A) that on 6 August 2020 (i.e., the date of the Contract), during a meeting at the Owners’ Gladesville NSW restaurant, the Owners confirmed they “would like to go ahead and have the supporting steel be on the outside of the house”.

96. Mr Yuen relies on file notes of his conversation: see pages 1562 – 1563 of Exhibit 1A, the authenticity of which are disputed (at least as to whether they are contemporaneous documents and therefore whether the documents carry any weight in the Tribunal’s enquiry), as well as various WeChat conversations (i.e., in the form of text messages) in the period from 25 September 2020 to 29 November 2020, which are said to evidence the parties’ agreement as to the placement of columns externally or failing that, the Owners’ acquiescence in the changed location of the columns– see pages 1001, 1004, 1007 – 1008, 1013, 106 – 1018, and 1023 of Exhibit 1A.

97. Ms Zhao in her affidavit affirmed 13 July 2023 denied that the conversations on 3 and 6 August 2020 took place: Exhibit 1A page 941 at [27] and gave evidence that Mr Yuen had said to her in or about early August 2020 that the Builder would provide an “all-inclusive bundle” which included engaging a structural engineer “to prepare structural plans and designs”: Exhibit 1A pages 941 – 942 at [31]. In his affidavit affirmed 13 July 2023, Mr Su denied having the conversations of 3 and 6 August 2020 with Mr Yuen, or any conversations about structural designs at all: Exhibit 1A pages 1489 – 1490 at [22] – [23]. Mr Su also recalled conversations with Mr Yuen in relation to an “all-inclusive bundle” and engaging a structural engineer: Exhibit 1A page 1488 at [13].

98. Mr Yuen, Ms Zhao, and Mr Su were cross-examined on their written evidence. Mr Yuen accepted that Ms Zhao was referring to the Original Engineering or Rev 1 Plans (Exhibit 2), where she had referred to the “engineer’s plans”: see T87.10-20, T89.35-40. While Ms Zhao said she could not recall being shown the Rev 1 Plans prior to the Contract being signed (T22.5-11), she denied asking Mr Yuen to move the internal structural columns that were “ugly” to become external structural columns (T22.16-39). Mr Su denied any conversation regarding changing the design so that “ugly” internal columns would be on the outside of the house (T72.26-30). Mr Su confirmed that the Builder had not shown him the Rev 1 Plans before the Contract was signed (T69.32-34), and that there had been no discussion between the parties about the location of the structural steel columns before the Contract was signed (T73.19-22). Mr Su accepted that he relied on Mr Yuen about arrangements in relation to the engineer: T73.14-17, T78.1-15.

Did the Oral Variation occur?

99. The Builder bears the onus to the requisite standard of proof (i.e., on the balance of probabilities) that the Oral Variation occurred. Whether the Oral Variation is established requires factual findings bearing upon the credibility (and ultimately, the reliability) of the evidence given by the lay witnesses.

100. The Tribunal’s assessment of the character of the witnesses and of the way the witnesses gave their evidence is of primary importance. Where a witness gives evidence on a particular issue which is found to be extremely improbable, inherently incredible, or inconsistent with probabilities derived from objective circumstances, the Tribunal may find that of itself undermines a witness’s credibility in relation to the balance of the evidence given by the witness: see Aytul Ak Tankiz v Ferat Ak & Ramazan Ak [2014] NSWSC 1044 at [75] – [76] & [138]. The Tribunal may also be able to draw conclusions as to a witness’s attitude to proceedings not only from the objective effect the proceedings may have on that witness’s financial situation but also from their behaviour in the witness box, including emotional reactions visible when giving evidence and indicating a strong sense of grievance: see, for example, Tomlin v Ford Credit Australia [2005] NSWSC 540 at [43] (Tomlin v Ford Credit Australia); see also what Lord Pearce wrote in his dissenting speech in Onassis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431:

Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by overmuch discussion of it with others? Witnesses, especially those who are emotional, who think they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist.

101. Courts and Tribunals have considered the following grounds as relevant in coming to adverse conclusions about a witness’s credibility: see Textralian Enterprises v Perpetual Trustees (Victoria) Limited [2000] NSWCA 176 per Heddon JA at [85]. Where a witness:

1. Appeared argumentative,

2. Appeared evasive,

3. Appeared prone to volunteer material,

4. Was not responsive to the question,

5. Under cross examination, he or she gave potentially important evidence which would have appeared in the witness’s affidavits if it proceeded from genuine recollection,

6. Appeared to lack genuine recollection and be defensive about answering without first having access to whatever document might help,

7. Gave evidence which was in disconformity with the allegations appearing in the pleadings.

102. In such circumstances, the Tribunal may find it appropriate to accept the evidence of those witnesses only where the evidence is supported by contemporaneous records, is inherently probable – objectively ascertained, or is against interest: see, for example, Tomlin v Ford Credit Australia, at [43] – [44] and HM&O Investments v Ingram [2012] NSWSC 958 at [32] – [34] & [44].

103. Ultimately, the plausibility of the witnesses’ testimony must be tested against context and that which was revealed objectively by contemporaneous documents. As Bell P put it in ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24 at [212], this is an exemplary approach to fact-finding and the assessment of witness credibility.

104. In my opinion, Ms Zhao and Mr Su presented as witnesses of truth. They answered the questions put to them, and they made concessions contrary to the Owners’ interest, as necessary. For example, Ms Zhao conceded in cross examination (T24.38 – T25.2) that at the time she signed the Contract, she did not mind whether the structural steel columns were placed inside or outside the house. This was because Mr Yuen had not told her whether the columns would be built inside or outside the house, because she did not know that she had a choice in the matter, and because she was content at that time for Mr Yuen to build the structure of the house in a manner which complied with the applicable building standards (T23.15-35). Similarly, Ms Zhao admitted that when she prepared a list of incomplete works which formed part of her daughter, Evelyn Su’s email of 17 January 2022 to NSW Fair Trading (Exhibit 1A page 770), she knew that the structural steel columns were located outside the house and did not consider it a problem at the time: T63.37 – T64.39.

105. My impression generally was that in giving their oral evidence, neither Ms Zhao nor Mr Su were trying to predict what the cross examiner was seeking to achieve and that they simply answered each question truthfully and honestly and to the best of their ability. Nor was it put to either of Ms Zhao, or Mr Su, at any time during their cross examinations, that they were being untruthful when they gave their evidence.

106. I accept Ms Zhao and Mr Su as reliable witnesses of fact. To the extent there are evidentiary contests between their evidence and the evidence of Mr Yuen, I prefer their evidence. Materially, to the extent the Builder’s case is that Ms Zhao could understand, even interpret, the Rev 1 Plans, this is not supported by Ms Zhao’s evidence. In this respect, I accept:

1. Ms Zhao had no building experience (Exhibit 1A, page 940 at [22]),

2. She did not have the required knowledge or experience to understand that the external beam placements deviated from the Rev 1 Plans (Exhibit 1A, page 947, at [62]),

3. She did not read or understand documents in English and trusted Mr Yuen to make things work (T18.41 – T19.2),

4. She had no idea what the Builder was proposing as regards the placement of external columns (T23.15-19).

107. In my opinion, it is inherently improbable that someone with no knowledge or ability to read the Rev 1 Plans would be able to discern what they depict (assuming they were ever provided to the Owners) and then to raise that concern with Mr Yuen, without any assistance from Mr Yuen.

108. I reject the evidence of Mr Yuen for various other reasons.

109. There is no evidence whatsoever that the Owners were provided with the Rev 1 Plans prior to 3 August 2020. There was written evidence (Exhibit 1A page 1545 at [15]) that on 1 August 2020, Mr Yuen had received from Mr Lam some engineering designs in respect of the proposed extension to the second storey of the Owners’ home; however, in my opinion, whether (or not) Mr Yuen had “seen” the Rev 1 Plans prior to 6 August 2020, the date he “received” the plans, is of no moment. As indicated, Mr Yuen made these pertinent admissions in cross examination:

1. That he was sure the meeting with the Owners took place on 3 August 2020 (T86.30-32).

2. That Mr Yuen received the Rev 1 Plans (Exhibit 2) on 6 August 2020 (T85.20-23).

3. That the plans Ms Zhao were referring to when she used the phrase “engineering plans” on Mr Yuen’s version of the material conversation in his written evidence, were the Rev 1 Plans (T87.10-20, T89.35-40).

The admission in (iii) was made on two separate and distinct occasions during Mr Yuen’s cross examination.

110. The Builder’s counsel had the opportunity to explore these issues, with Mr Yuen in re-examination but elected not to do so. Accordingly, no attempt was made to clarify Mr Yuen’s evidence that he received the Rev 1 Plans on 6 August 2020 and that he was sure the meeting with Ms Zhao occurred on 3 August 2020. In my determination, those admissions demonstrate that Mr Yuen’s recollection of what he said was discussed on 3 August 2020 (i.e., a recollection that Ms Zhao spoke about what is depicted by the Rev 1 Plans), is unreliable, and further, that the discussions for which the Builder now contends, did not, in fact, occur. To the extent the Builder also now submits (see Builder’s Closing Submissions at [106] – [108]) that the dates on the Rev 1 Plans are erroneous, the Builder could, and should, have put that proposition to Mr Lam, the author of the Plans, at the hearing, but it did not do so. I therefore place no weight on the Builder’s submission.

Registrar

Decision last updated: 20 December 2024