Subedi v AA Concrete Pty Ltd

[2017] NSWCATCD 54

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Subedi v AA Concrete Pty Ltd [2017] NSWCATCD 54
Hearing dates:	24 July 2017
Decision date:	04 August 2017
Jurisdiction:	Consumer and Commercial Division
Before:	Francesco Corsaro, SC, Senior Member
Decision:	1.  The respondent, AA Concrete Pty Ltd is to immediately pay the applicant, Mr Manish Samedi, the amount of $8,415.21.
Catchwords:	Building claim – breach of contract – failure to complete works and delay to works – contract terminated – damages for breach
Legislation Cited:	Home Building Act 1989 (NSW)
Category:	Principal judgment
Parties:	Manish Subedi (Applicant) AA Concrete Pty Ltd (Respondent)
Representation:	Applicant in person The Respondent did not appear at the hearing
File Number(s):	HB 17/04767
Publication restriction:	Unrestricted

REASONS FOR DECISION

INTRODUCTION

1. The applicant, Mr Manish Subedi, commenced proceedings against the respondent, AA Concrete Pty Ltd (AA Concrete) by lodging an application with the Tribunal on 1 February 2017. By that application, Mr Subedi claims the amount of $50,000 from AA Concrete, said to be the amount of the loss and damage that Mr Subedi has incurred due to AA Concrete’s breach of contract relating to landscaping and other external works to Mr Subedi’s residence.

PROCEDURAL HISTORY

2. The Tribunal first listed Mr Subedi’s application before the Tribunal on 27 February 2017. A telephone direction hearing took place that day. Mr Subedi appeared by telephone, AA Concrete did not. According to the Tribunal’s file, the Tribunal called AA Concrete’s telephone number. That call was answered and the company name confirmed to the Tribunal as being AA Concrete’s telephone. When the Tribunal member asked to speak to Mr Richard Saunders, the receiver disconnected the call. This action prompted the Tribunal member to note:

The Tribunal notes that if the respondent refuses to serve any evidence or attend the hearing the matter will proceed in its absence and any order made will be binding on the respondent.

3. The Tribunal made a number of procedural orders to ensure that the application could proceed to hearing, including orders for the service of expert reports and any documentary material on which the parties intended to rely.

4. The Tribunal fixed the application for hearing on 24 July 2017, and notified the parties of the hearing date that had been allocated in the usual way.

5. All written notification of the orders and directions made by the Tribunal that have been sent to AA Concrete’s registered office has been returned to the Tribunal marked “return to sender”.

6. Mr Subedi appeared at the hearing on 24 July 2017 in person. AA Concrete did not appear. I considered that AA Concrete was properly notified of the hearing date by notice sent to its registered office, and last known address. I saw no justification for prejudicing Mr Subedi, who appeared ready to proceed at the notified hearing. Accordingly, I believed that it was appropriate for the Tribunal to proceed to hear and determine Mr Sabedin’s application in AA Concrete’s absence.

7. Mr Sabedi relied on the application and the documentary material provided to the Tribunal. When I enquired whether Mr Sabedi have provided AA Concrete with a copy of that material, Mr Sabedi showed me the original envelope sending the material to AA Concrete’s registered office returned and unopened and marked “return to sender”. As I considered that Mr Sabedi had complied with the Tribunal’s directions, and I considered that AA Concrete had an obligation to ensure the currency of its registered office, I permitted Mr Sabedi to rely on the documents provided to the Tribunal in support of his application.

JURISDICTION

8. The Civil and Administrative Tribunal of New South Wales has the jurisdiction and the functions conferred by the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act), or any other legislation: section 28 of the NCAT Act. That includes the jurisdiction to hear and determine any “building claim” brought in accordance with Part 3A the Home Building Act 1989 (NSW) (the HB Act), where the amount claimed does not exceed $500,000 or such other prescribed amount: section 48K of the HBA.

9. The term ‘building claim’ is defined to mean ‘goods or services supplied for or in connection with the carrying out of “residential building work” or specialist work, being goods or services:

1. supplied by the person who contracts to do, or otherwise does, that work, or

2. supplied in any circumstances prescribed by the regulations to the person who contracts to do that work.

10. I find that the landscaping and other works that AA Concrete agreed to carry out for Mr Samedi was work carried out for use in conjunction with a dwelling, and therefore ‘building work’.

11. It follows that the Tribunal has the jurisdiction to hear and determine the application.

12. On the basis of the oral evidence of Mr Sabedi, and the documents provided to the Tribunal, I find that Mr Sabedi and AA Concrete made a partly oral and partly written contract by which:

1. AA Concrete agreed to:

1. supply and install buffalo turf to the front and rear of Mr Sabedi’s residence, with 50mm of topsoil to be used as underlay bedding;

2. supply and install a 25 mpa concrete driveway and side path, charcoal colour concrete to be 100mm thick and council cross over being 125mm thick, with s172 mesh to be used in that construction and a layer of crusher dust to be layered prior to the placement of the concrete;

3. supply and install timber garden edging of treated timber construction;

4. supply and install 800 mm high block, core filled, and ag line drained retaining walls running along the front of the property;

5. supply and install block piers and maubau timber fence; and

6. to provide all necessary excavation and the removal of spoil

7. (the Works).

2. Mr Sabedi agreed to pay AA Concrete the lump sum price of $36,450.00 by way of the following progress payments:

1. an amount equal to 10% of the contract price as a holding deposit on the acceptance of AA Concrete’s quotation (the Deposit);

2. an amount equal to 40% of the contract price after the completion of excavation (the First Payment);

3. an amount equal to 30% of the contract price “at the middle of the job”, which the parties discussed and agreed would be after the completion of the driveway component of the Works (the Second Payment); and

4. the remaining 20% of the contract price on completion of the Works (the Final Payment); and

3. Mr Samedi notified Mr Saunders that it was essential for AA Concrete to complete the Works by Christmas 2016, making it known that he and his wife were living in accommodation that they had to vacate, and that if the Works were not finished by Christmas 2016, Mr Samedi would incur substantial costs in that regard, and Mr Saunders agreed on AA Concrete’s behalf that the Works would be completed by that time.

13. Mr Samedi gave evidence, corroborated by reference to the documentary material on which he relied, that:

1. he paid AA Concrete the Deposit and the First Payment;

2. he paid the First Payment before the completion of the excavation, and did so to assist AA Concrete;

3. Mr Saunders claimed the Second Payment prematurely, before the completion of the driveway;

4. Mr Samedi declined to pay AA Concrete the Second Payment but he agreed to pay AA Concrete an amount of $5,000 on account of the Second Payment, to provide AA Concrete with an incentive of fulfilling its obligations;

5. AA Concrete abandoned the Works, and failed to either return to complete the items left outstanding, or to acknowledge Mr Samedi’s requests for AA Concrete to complete the Works;

6. In January 2017, Mr Samedi terminated his agreement with AA Concrete and notified Mr Saunders that he would employ others to finish the Works, and would look to AA Concrete to compensate him for the loss and damages resulting from AA Concrete’s failure to honour its contractual obligations. Mr Saunders response was that Mr Samedi could do whatever he wanted.

14. I accept Mr Samedi’s evidence and make those findings.

15. I find that:

1. AA Concrete breached its contractual obligations to Mr Samedi, by failing to complete the Works as it had agreed to do, and to do so by 25 December 2016, as Mr Saunders assured Mr Samedi that it would;

2. By that conduct, AA Concrete fundamentally breached the terms of its contract with Mr Samedi, and further, or alternatively, repudiated its agreement with Mr Samedi;

3. Mr Samedi was entitled to terminate the contract with AA Concrete, as it did; and

4. Mr Samedi is entitled to recover compensation for the loss and damage caused by AA Concrete’s breach and repudiation of its contract.

16. Mr Samedi gave evidence of the additional costs that he has incurred in employing others to complete the Works left unfinished by AA Concrete, and to pay for the necessary materials used to finish that work On the basis of the oral evidence and documentary evidence provided to me at the hearing, I find that Mr Samedi made the following payments, and incurred the following costs to complete the Works (as established by invoices provided to the Tribunal)

1. the amount of $3645.00 paid to AA Concrete for the Deposit;

2. the amount of $14,580.00 paid to AA Concrete for the First Payment;

3. the amount of $5,000 paid to AA Concrete for the Second Payment;

4. the amount of $386.09 paid to Bunnings Supply for cement and concrete mix;

5. the amount of $12,000 paid to Ductien Dinh for the completion of the driveway and path. I record that Mr Samedi provided me with the original invoice for this payment which I returned to Mr Samedi at the conclusion of the hearing;

6. the amount of $924 paid to Camden hire for the hire of machinery to complete landscaping and levelling of the ground and the amount of $52.95 for fuel for those machines paid to the BP Service Station at Leppington;

7. the amount of $242 paid to Gregory Hills for soil used to complete the landscaping component of the Works;

8. the amount of $445 paid to Waratah Landscape and Garden (WLG) for underlay soil for the Buffalo turf for soil used to complete the landscaping component of the Works. I record here that Mr Samedi explained that the underlay soil work was carried out in two phases, and Mr Samedi tendered (and I returned) an original invoice recording a payment of $170 to WLG in addition to that recorded in the copy invoices that remain in the Tribunal’s file;

9. the amount of $349.20 paid to Bunnings for fertilizer used in the underlay soil for the Buffalo turf. I record here that Mr Samedi explained that as the underlay soil work was carried out in two phases, fertilizer was used in each phase, as required to ensure proper growth of the Buffalo turf. Mr Samedi tendered (and I returned) originals invoices recording these payments to Bunnings; and

10. the amount $9.97 paid to Bunnings for consumables used for the small tools required for the works. Again, Mr Samedi tendered (and I returned) an invoice which recorded this payment

17. Mr Samedi gave sworn evidence that he also made the following cash payments to complete the Works. Although Mr Samedi did not have any document to corroborate the payments made, I accept his evidence and find that Mr Samedi paid two labourers the amount $2400 in cash for them to work for six days each to complete the landscaping and block work walls ($200 per day).

18. Mr Samedi also claimed the same daily rate for the same period by way of compensation for the same period, I do not accept that Mr Samedi, who works in a bank, is entitled to charge and recover for his own time in assisting others to complete the Works.

19. On the basis of these findings, it has cost Mr Samedi the amount of $40,204.21 for the Works. If AA Concrete had performed the contract it had with Mr Samedi, Mr Samedi would have procured the same work for the contract price of $36,450.00. Accordingly, Mr Samedi is entitled to compensation from AA Concrete for this difference, namely the amount of $3,754.21 and an order that AA Concrete pay Mr Samedi that amount, with that amount payable immediately by AA Concrete. The amount of interest claim by Mr Samedi is claimed on the amount paid for the Deposit, the First Payment and part of the Second Payment, and I find that there is no basis for that claim.

20. The rule in Hadley v Baxendale [1854] EWHC Ex J70 is a leading English contract law case which deals with the issue of damages. It states that a party that breaches a contract will be liable for all losses that could reasonably been expected that would result from the breach. In this case, I accept Mr Samedi’s evidence that he notified AA Concrete of the importance of ensuring that AA Concrete complete the Works before 25 December 2016, failing which Mr Samedi would become liable to additional costs and expenses associated with the current living arrangements he and his wife had. Although Mr Samedi did not tell Mr Saunders in express terms that unless AA Concrete finished the Works on time to enable them to move into their residence, that they would have to pay for rented accommodation until the Works were finished, in my opinion, that additional expense was reasonably foreseeable if the Works were delayed to prevent Mr Samedi and his wife moving into the premises. Accordingly, I find that AA Concrete entered into the contract with Mr Samedi with that express knowledge and understanding, provided as a result of the discussion between Mr Samedi and Mr Saunders, before Mr Samedi agreed to accept AA Concrete’s quotation.

21. I accept Mr Samedi’s sworn evidence that he incurred that amount of $4500 rent because AA Concrete failed to complete the Works by the agreed date. The documentary material on which Mr Samedi relied included a letter from his landlord acknowledging the receipt of the rent, which Mr Samedi swore was paid to his landlord in cash. I propose to include an order that AA Concrete also pay the amount of $4,500 paid by Mr Samedi for rent for the period that he was unable to occupy his own due to the incomplete Works.

22. I am satisfied that AA Concrete did damage to the underground drainage pipes and the residence’s water pipes, as illustrated in the photographic evidence on which Mr Samedi relied. I am satisfied that Mr Samedi paid the following costs to rectify that damage, and I propose to order AA Concrete to pay Mr Samedi these amounts for breach of its obligation to carry out the Works with reasonable care:

1. The amount $800 paid to Otis Plumbing, and

2. the amount of $81 for pipes and accessories as established by the copy invoices and receipts on which Mr Samedi relied.

23. Mr Samedi claimed compensation for an amount of $780.27 paid to Bunnings for a letterbox. Having reviewed the scope of the AA Concrete Works set out in the AA Concrete quotation, I see no justification for this claim, and I reject it.

24. Accordingly, I order that AA Concrete immediately pay Mr Samedi a total amount of $8,415.21 for AA Concrete’s breach of its contract with Mr Samedi.

F Corsaro, SC

Senior Member

Civil and Administrative Tribunal of New South Wales

4 August 2017

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 06 September 2017