Tarbuck and Anor v Robertson and Anor (Civil Dispute) - [2018] ACAT 115

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

TARBUCK & ANOR v ROBERTSON & ANOR (Civil Dispute) [2018] ACAT 115

XD 122/2018
Catchwords: CIVIL DISPUTE – renovation works – application for balance owing on contract – counter-claim for cost of rectifying defective work – building work not in compliance with building standards – building work not conducted in a proper and skilful way

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 48

Building Act 2004 s 88
Fair Trading (Australian Consumer Law) Act1992 s 260, 267

Cases cited:Saltalmacchia v Tayser Automotive Group Pty Ltd trading as Naunawading Great Wall [2014] VCAT 1463
Boyd v Agrison [2014] VMC 23

Tribunal:Senior Member E Ferguson
Senior Member G Trickett

Date of Orders:  15 November 2018
Date of Reasons for Decision:         15 November 2018
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL       )          XD 122/2018

BETWEEN:
MICHAEL TARBUCK AND DENNIS TARBUCK
Applicants

AND:

DON ROBERTSON AND NOELENE ROBERTSON

Respondents

TRIBUNAL:Senior Member E Ferguson
Senior Member G Trickett

DATE:15 November 2018

ORDER

The Tribunal orders that:

Judgment for the applicants on the claim in the sum of $3,775.
Judgment for the respondents on their counter claim in the sum of $25,150 comprised of:
(a)Damages assessed at $25,000 being the jurisdictional limit of the tribunal’s jurisdiction; and
(b)$150 being the filing fee.
The amount payable by the respondents at order 1 shall be credited against the amount payable by the applicants at Order 2.
The applicants shall pay to the respondents within 28 days the sum of $21,375 being the difference between the amounts payable at Orders 1 and 2.

………………………………..
Senior Member E Ferguson
Delivered for and on behalf of the Tribunal

REASONS FOR DECISION

Introduction

In this decision a reference to the ‘tribunal’ or ‘ACAT’ refers to the ACT Civil and Administrative Tribunal generally and a reference to the ‘Tribunal’ refers to the presently constituted Tribunal.
The applicants, Michael and his father Dennis Tarbuck, undertook renovations (the works) to the respondents’ home in the ACT (the property). The works consisted of renovations to the kitchen and laundry and the construction of a deck. Separate quotes were issued and accepted for each aspect of the works.
The respondents paid the applicants a total of $85,475 for the works.[1] The applicant claims $12,425 for the balance owing for the works.
[1] The parties agreed at the hearing that the respondents had paid the applicants $85,475.00; Transcript of proceedings, 2 August 2018, page 21
The respondents dispute the agreed price of the works and liability for work not completed by the applicants.
The respondents counter claim for damages for the cost of rectifying defective work and completing incomplete work. They rely on grounds of negligence as well as breach of statutory warranties and guarantees.
The respondents say they suffered loss in excess of $50,000 but limit their counter-claim to $25,000 being the jurisdictional limit of the tribunal.

The hearing

The Tribunal heard this matter on 2 August 2018. All the parties represented themselves.
Both applicants and the first respondent gave evidence under oath and were cross-examined.
The respondent’s expert witness, Peter Leary also gave evidence under oath and was cross-examined.
The applicants left before the hearing finished and the Tribunal concluded the proceedings in their absence.
After hearing the parties’ evidence and submissions the Tribunal reserved its decision. The Tribunal’s decision with reasons are set out below.
In reaching its decision the Tribunal relied upon the parties’ submissions, the oral evidence at the hearing, and the following documents provided by the parties.
The applicants’ documents:
(a)Application filed 31 January 2018.
(b)Quotation for kitchen and laundry issued by the applicants dated 14 December 2016 with attached sketch plan of proposed works (the kitchen and laundry quote).
(c)Quotation for deck issued by the applicants dated 28 February 2017 (the deck quote).
(d)Floor plan of existing structure.
(e)Timeline.
(f)Photos of works.
(g)Letter of demand dated 1 June 2017 for $12,425 with invoice for the unpaid balance for the works of 25 May 2017 attached (the invoice).
(h)Email dated 31 May 2018 from Peak Consulting to the first respondent and another recipient with hand-written annotations.
(i)Receipts for materials submitted by applicants.
(j)Report on proposed window opening by Antoun El Hajeh, structural engineer, dated 18 December 2016 with attached plans.
(k)Document titled ‘Comments to Scott Schedule re XD 122/2018’ filed 30 July 2018.
The respondents’ documents:
(a)Response and counter claim filed 5 March 2018.
(b)Cost estimate report of Peter Leary of Peak Consulting dated 23 February 2018
(c)Building report for approval by Capital Certifiers dated 22 June 2018.
(d)Report of Blakeney Munns Consulting Engineers dated 2 February 2018 with attached photographs.
(e)Photographs of the works.
(f)Respondents’ timeline.
(g)Scott Schedule filed 15 June 2018.
(h)Bundle of photographs of the work done to install glazing and associated structure and brickwork.[2]
(i)Email from Don Robertson to [email protected] dated 30 November 2016 at 4:04pm.[3]

The factual background

[2] Admitted to evidence at the hearing and marked Exhibit #R1
[3] Exhibit R2

The following facts were either undisputed or established to the Tribunal’s satisfaction on the balance of evidence.
On 14 December 2016 the applicants issued the respondents with a quote for the kitchen and laundry with an attached sketch plan.
In early January 2017 the applicants commenced works.
On 28 February 2017 the applicants issued the respondents with the quote for the deck – it is not clear when the deck was commenced – but by cessation of work on 25 May 2017 the framework and some of the decking had been installed, which remains onsite.
The respondents supplied the decking to the applicants for installation.
On 25 May 2017 the respondents suspended work by applicants until the respondents concerns regarding home warranty and building approval issues were resolved.
On 29 May 2017 the works were inspected by Peak Consulting.
On 31 May 2017 the respondents received an email report on works from Peak Consulting.
On 3 July 2017 the respondents appointed a draftsman to prepare building plans for approval.
On 14 August 2017 the respondents received plans from the draftsman.
On 1 September 2017 the respondents appointed a building certifier.
On 12 December 2017 a site inspection was conducted by the certifier, engineer and building consultant to assess certification requirements.
The respondents received the engineers report.
On 31 January 2018 the applicants filed the civil dispute application with the tribunal.
On 28 February 2018 Peak Consulting provided to the respondents its report estimating the costs of rectifying defective work.
On 5 March 2018 the respondents filed their response and counter claim.

The claim

The applicants rely on two quotes they provided to the respondents for a total of $100,500 comprised of:
(a)the kitchen and laundry quote for $88,750; and
(b)the deck quote for $11,750.
The basis for the claim is set out in the applicants’ invoice sent to the respondents on 1 June 2017. Although the invoice is a little unclear the outstanding balance claimed under the contract for the works is effectively calculated by adjusting the two quotes as follows:
In relation to the kitchen and laundry:
(a)By adding $5,600 for the following items which at the hearing the respondents conceded were agreed:[4]
(i)      variation to sliding door $5,100; and
(ii)      extension to bench top $500.
(b)By adding $4,700 for the following variation which the respondents dispute:
(i)      Lounge/dining alterations $6,500 less the painting allowance of $1,800.
(c)By subtracting $5,100 for specified incomplete work.
(d)By subtracting the sum of $85,475 paid by the respondents for the kitchen and laundry.
In relation to the deck:
(a)The applicants have only claimed $3,750 of the $11,750 quoted because the deck was not completed.
(b)The respondents have not made any payments for the deck.
[4] Transcript of proceedings, 2 August 2018, page 23. The respondents previously asserted in annexure A to their response at [1.7] that the agreed variation added $3,300 to contract price
The Tribunal notes that the invoice contains a minor mathematical error. The balance, and hence the amount claimed, should be $12,225 not $12,425.

Response to the claim

The respondents asserted that the second applicant was not a proper party to the proceedings and denied liability on the following grounds:
(a)The applicants failed to complete the work and therefore are not entitled to payment. The respondents do not seek a refund of monies paid.[5]
(b)The respondents dispute they agreed to pay the additional sum of $10,300 as asserted by the applicants for variations – but at the hearing admitted they agreed to variations at an additional cost of $5,600.
(c)The applicants have claimed payment relating to sub-contractors which have already been paid by the respondents. The respondents on this point provided no evidence, particulars or submissions.
(d)The respondents sought to set off their counter claim against any amount owing by them under the contract.

The claim – issues

[5] Response at [2.11]

The outstanding issues for determination in relation to the claim are:
(a)Does the second applicant have standing?
(b)What is the correct contract price?
(c)Have the applicants completed the work, and if not, are they entitled to be paid under the contract?

Proper applicant(s)

The respondents asserted that the second applicant, Dennis Tarbuck, was not a party to the contract with the respondents and therefore lacked standing to enforce it. The respondents submit that, “Only Michael Tarbuck has standing as the person trading as Tarbuck Enterprises…”[6]
[6] Response at [2.2]
At the hearing the applicants asserted for the first time in the proceedings that it was not the applicants but rather ‘Tarbuck Enterprises’, a company of which the applicants were joint directors, which contracted with the respondents.[7]
[7] Transcript of proceedings, 2 August 2018, pages 5-6
Michael Tarbuck said ‘Tarbuck Enterprises’ has since been deregistered, although he was not sure when. He submitted that although neither applicant was a party to the contract they were still entitled to payment because “they did the work”.
The applicants did not produce a company search or any other evidence of the registration, office holders or history of ‘Tarbuck Enterprises’.
The Tribunal notes that the quotes were issued on behalf of both applicants and contained no reference to a company.
The contract for the works was formed by the respondents accepting those quotes. Accordingly the Tribunal is satisfied that the respondents entered a contract with the two applicants personally. As parties to the contract both applicants have standing to enforce the contract.

Contract price

Kitchen and laundry
Applicants’ contentions

The applicants say the parties agreed to increase the price for kitchen and laundry by $10,300 to take account of additional work requested by the respondents. This would take the agreed price from $88,750 to $99,050.
However in their invoice the applicants only charged the respondents $93,950 after discounting the price by $5,100 for incomplete work as follows:
(a)$3,000 deduction for:
(i)      kitchen pantry panel and doors (including labour and materials);
(ii)      external linings over window;
(iii)     relocate downpipe; and
(iv)     architrave doorways total and study.
(b)$2,100 deduction for:
(i)      tile splashbacks $300; and
(ii)      painting to kitchen/family room $1,800.
The Tribunal notes that the respondents paid a total of $85,475 therefore the unpaid balance for the kitchen and laundry is, on the applicants’ figures, $8,475.
Respondents’ contentions
The respondents asserted in their response that only $3,300 was agreed for variations.[8] However, at the hearing they conceded that they agreed to an extra $5,600 which would make the agreed contract price $94,350.
Outstanding balance
[8] At [3.5]
The variations to the contract regarding the kitchen and laundry were verbal and the applicants have failed to establish to the Tribunal’s satisfaction that the respondents agreed to variations to the value of $10,300.
The Tribunal notes that the respondents concede that that contract price was increased by agreement by $5,600 to cover extra work.
Accordingly, the Tribunal finds that the final agreed contract price for the kitchen and laundry was $94,350.
The Tribunal also finds that a further amount of $5,100 is to be discounted from that price for incomplete work as conceded by the applicants. Taking the amount payable by the respondents to respondents under the contract to $89,250 of which the respondents have paid $85,475.00 leaving an unpaid balance for the kitchen and laundry works of $3,775.
The deck
The agreed price for construction of the deck was $11,750 of which the applicants only claimed $3,750.00 because they did not complete it.
The respondents raised the failure to complete, in regard both to the deck and other aspects of the works, as an issue in both their response to the applicants claim and their counter claim.[9] We will address the issue of the deck when we get to the counter claim.
Incomplete work
[9] Item 3 of the respondents’ Scott Schedule
The respondents’ dispute liability to pay the invoice on the grounds that the applicants failed to complete the works contracted for. In their response they say:
The contract does expressly not state (sic) when payment of the Contract Sum is due. According, the Applicants are only entitled to payment once the Works are complete.[10]
[10] Response at [2.4]
The respondents’ timeline shows that they made a series of payments, described as ‘progress payments’, on account of the kitchen and laundry works.
The payments varied between $328 and $12,000 and were made at irregular intervals during the period between the quote being issued on 14 December 2016 and suspension of works in May 2017.
It seems likely that these payments were paid on production of an invoice but in any case the logical conclusion is that the parties agreed that the applicants would be paid for work as it was performed rather than at the completion of the works.
Accordingly, the Tribunal finds that the applicant was entitled to be paid for completed work as the job progressed.

Counterclaim

The legal framework

The terms of a building contracts in the ACT can include:
(a)Express oral or written terms.
(b)Terms implied under the common law.
(c)Statutory warranties implied under the Building Act 2004 if the cost of the works as defined by that Act are more than $12,000.
The respondent is also entitled to the protection of the Australian Consumer Law (ACL)[11] guarantees, which are mandatory and cannot be excluded, restricted or modified by contract.
[11] Competition and Consumer Act 2010 (Cth) Schedule 2 sets out the Australian Consumer Law- adopted in the ACT section 7 Fair Trading (Australian Consumer Law) Act1992
The respondents are consumers within the meaning of the ACL[12] because:
(a)they normally reside in the ACT; and
(b)the services were of a kind ordinarily acquired for personal domestic or household use or consumption.
[12] Section 3 ACL
The ACL provides consumer guarantees that services:
(a)will be rendered with due care and skill; and
(b)any product resulting from the services, will be fit for a purpose that the consumer made known to the trader; and
(c)will be supplied within a reasonable time.
Part 6 of theBuilding Act 2004(the Building Act) applies to residential building work in the ACT if the cost of the work is over $12,000and is not otherwise exempt.
If Part 6 applies to work then:
(a)the builder is required to have complying building work insurance, or a Fidelity Fund certificate from an approved Fidelity Fund Scheme;
(b)any contract for such work is taken to contain the statutory warranties set out in section 88 of the Building Act; and
The cost of building work is calculated for the purposes of part 6 under section 86(1) as follows:
(a)if a contract has been entered into for carrying out of the building work – the cost of the work as fixed by the contract; or
(b)in any other case:
(i) an amount agreed between the construction occupations registrar and the builder; or
(ii) if an amount is not agreed – an amount worked out by the registrar.
The applicants did not argue and it would be illogical to conclude that the deck did not form part of the total works as the work under both quotes was performed concurrently. Accordingly the total cost of the works as fixed by the contract exceeded $12,000 and therefore the Act applies.
The statutory warranties at section 88 relevantly include:
(a)the works will be carried out in accordance with the Building Act;
(b)the works will be carried out in a proper and skilful way; and
(c)good and proper materials will be used in carrying out the works.
An owner may also be able to claim damages for negligence against a builder provided they can establish that:
(a)the applicants owed them a duty of care;
(b)the applicants breached that duty of care ;
(c)the breach caused them injury or loss; and
(d)the loss sustained was not too remote a consequence of the breach.

Opportunity to rectify

Where an owner suffers loss as a result of defective or incomplete building work a relevant issue may be whether they gave the builder a reasonable opportunity to rectify or complete the works.
Under the ACL if a builder fails to comply with a consumer guarantee the consumer may be required to give the builder an opportunity to remedy the failure within a reasonable time. But they only need to do so if the failure is both capable of being remedied and is not a major failure.[13]
[13] As defined by section 260 of the ACL
If an owner asserts they suffered loss caused by the builder’s breach of contract or negligence they are under a duty to mitigate their losses.
They are not entitled to be compensated for that loss or part of it, if the loss, or part of the loss, to be compensated could have been reasonably avoided. Failure to give an opportunity to rectify could be a relevant consideration.

Remedies

The respondents have sought compensation/damages.
The criteria for compensation differs depending on which of the respondents grounds are relied upon but all require the complainant to prove they suffered loss caused by the relevant contravention. Despite the availability of alternative causes of action a person can only be compensated once for same loss.

Particulars of the counter claim

The respondents claimed the actual loss they suffered or $25,000, being the jurisdictional limit of the ACAT. They included in that amount the cost of the filing fee on the counter claim rather than of claiming it separately as a cost under Section 48 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act).
The respondents filed a Scott Schedule setting out the details of the items making up the counter claim as directed by the Tribunal.[14]
[14] See Attachment A of these reasons
The core of the counter claim as set out in the Scott Schedule is that the applicants in breach of statutory warranties and/or consumer guarantees failed to:
(a)complete the works;
(b)perform work to required standard; and
(c)obtain approvals and meet administrative standards required by Building Act.

The Scott Schedule is based on the items listed in Peter Leary’s cost estimate report. The respondents claim $52,435.77 (subject to jurisdictional limit of the ACAT) being the cost of rectification estimated in the report.
The applicants did not file a response to the counter claim but prior to the hearing filed a list of comments on each item in the Scott Schedule.
The applicants denied liability for the Scott Schedule items on basis that:
(a)they had not charged for work not completed;
(b)the work was not otherwise defective; and
(c)the respondents denied them a reasonable opportunity to rectify/complete works.
The respondents also claimed the costs of obtaining the following for the purposes of the proceedings:[15]
(a)$2,883 for Mr Leary’s cost estimate report; and
(b)$2,000 for the report by consulting engineers Blakeney Munns.
[15] Transcript of proceedings, 2 August 2018, page 132
The total cost of Blakeney Munns report was $2,900. At the hearing the respondents conceded that an engineer’s report was necessary anyway for the purposes of obtaining certification. However, a report just for certification would have cost them approximately $900, they attribute the extra cost of $2,000 to the reporting on matters relevant to the proceedings, and accordingly agreed to limit their claim to this portion of the cost.[16]
[16] Transcript of proceedings, 2 August 2018, page 138
They also claimed $1,000 for the cost of replacing the carpet in their study on the grounds that the applicants negligently damaged the carpet in the course of carrying out the works.[17]

Methodology

[17] Transcript of proceedings, 2 August 2018, page 138

The purpose of damages is to place the person who suffered loss as a result of the breach in the same position, insofar as it is possible, as they would be in, had the breach not occurred.
Where the breach in question arises from defective or incomplete building works the measure of damages is the cost of rectifying or completing the works.
In this case any loss suffered by the respondents as a result of the applicants’ defective or incomplete work has at least been partially addressed by the discount for incomplete work of $5,100 the applicants applied to the amount claimed (see paragraph 43 above).
It is difficult to work out precisely how the discount should be taken into account with regard to individual items in the Scott Schedule, as the invoice and the Schedule do not itemise the works on the same basis. Fortunately, it is not necessary to do so.
In our view it is more efficient and logical to determine how much if any damages the Tribunal should award the respondents by adopting the following approach:
(a)In relation to each item in the Scott Schedule determine whether the work complies with statutory warranties and guarantees, and if not:
(i)      determine the cost of rectifying or completing works to required standard in relation to that item;
(ii)      determine the total cost of rectification for all Scott Schedule items;
(iii)     deduct from the total at b) the amount of $5,100 already discounted by the applicants.
(b)After considering the other aspects of the counter claim assess the total damages capped at the jurisdictional limit of the tribunal.

Scott Schedule Items

Item 1 – defective brickwork

The respondents contended that the brickwork needed to be demolished and rebuilt as it was poorly constructed and needed to comply with building standards.
They relied on the evidence of Mr Leary that the as constructed work included:
(a)excessive perpend joint sizes;
(b)the flashings to the opening where not installed (refer item 9);
(c)the oversized brickwork opening was excessive for the proposed window frame and the wall control joint between the new and existing brickwork was not constructed properly as it should have been formed as a sealant joint which would permit building movement rather than the as constructed rigid mortar joint.
The respondents relied on building standards and produced photographs of the installation of the window and associated brick-veneer wall and sill that showed that:
(a)the sill flashing was not installed (refer item 9);
(b)the perpends were excessively oversized;
(c)mortar was used to fill the control joint; and
(d)there was an oversized gap between the window frame jamb and the brickwork veneer wall.
The applicants conceded that the flashings had not been installed. They contended:
(a)that the brickwork complied with building standards and the excessive gap at the window jamb could be closed off with an aluminium angle; and
(b)in their oral evidence they called into question the labour rate of $55 an hour nominated by the respondent’s witness Mr Leary, however, they did not provide the Tribunal with an alternative hourly labour rate.
The respondents claimed for the cost of demolishing and rebuilding the brickwork as estimated by Mr Leary at $2,994.26 comprised of:
(a)Labour: demolition of brickwork $330.
(b)Labour: cleaning and stacking bricks $110.
(c)Labour: dispose of spoil $257.50.
(d)Labour: supply and delivery of new bricks $540.
(e)Bricklayer: $605.
(f)Brick cleaning: $300.
(g)Carpenter: control joint installation: $142.
(h)Labourer: clean site: $82.50.
(i)Sub-total $2,367.
(j)Profit and margin at 15%: $355.05.
(k)Sub-total: $2,722.05.
(l)GST: $272.21.
Findings
The Tribunal finds that the applicants did not construct this work in a proper and skilful way due to the oversized perpends, incorrectly constructed control joint and non-installation of the flashing.
The respondents have included costs for cleaning and stacking of bricks for reuse as well as purchasing new bricks. We have determined that the labour cost for cleaning and stacking bricks of $110 is not to be included in the claim.
We find the cost of rectifying the applicants defective work for item 1 to be $2,855.11 comprised of:
(a)Sub-total $2,257.
(b)Profit and margin at 15%: $338.55.
(c)Sub-total $2,595.55.
(d)GST $259.56.
Item 2- execute mandatory administration and approvals
The respondents contended that the work required approvals from various authorities and from a building certifier. These included:
(a)a drainage plan (as constructed);
(b)a plumbing permit and compliance inspection;
(c)a notice of electrical safety;
(d)drafting plan amendments;
(e)a glazing certificate; and
(f)waterproofing and termite certificates.
The respondents relied on Mr Leary’s evidence that the work required building approval which under the Building Act mandated the appointment of a certifier for the building work.
In attachment 1 of the respondents’ response Mr Leary set out the administration of certification that would be required by a certifier.
The applicants conceded (refer attachment B of the applicant’s submission) that the drainage plan; plumbing permit and compliance inspection should be provided by the plumber they employed to carry out the work.
The applicants contended:
(a)any documents related to gaining building approval were the responsibility of the owners; and
(b)they had installed the vapour barrier to the underside of the in-fill slab.
The respondents claimed for the cost of approvals from various authorities as estimated by Mr Leary at $4,832.30 comprised of:
(a)Plumber: drainage diagram $750.
(b)Plumber: permit $370.
(c)Plumber: compliance inspection $150.
(d)Electrician: notice of electrical safety $550.
(e)Draftsman: $1,550.
(f)Window supplier: glazing certificate $150.
(g)Termite specialist: protection certificate $150.
(h)Waterproofer: certificate: $150.
(i)Sub-total $3,820.
(j)Profit and margin at 15% $573.
Sub-total $4,393 plus GST $439.30 Total $4,832.30.
Findings
The Tribunal finds that the applicants did not gain the approvals as set out above.
The Tribunal agrees with the applicants that if amended plans, other than the drainage plan, are required to be drafted that it is a cost that should be borne by the respondents as it is the owner’s responsibility under the Building Act to engage and therefore pay for the building certifier and provide the documents to the certifier for building approval.
We find the claim for item 2 to be $2,871.50 comprised of:
(a)Sub-total: $2,270
(b)Profit and margin at 15%: $340.50
(c)Sub-total :$2,610.50
(d)GST: $261
Item 3 – defective/incomplete deck work
The respondents supplied the decking timber and the applicants supplied the structural timber for the deck.
The respondents contended that the timber deck structure:
(a)was not installed in a workman like manner;
(b)did not comply with building standards;
(c)was commenced without the requisite approval: and
(d)needed to be demolished and rebuilt.
The respondents relied on:
(a)photographs of the deck as partly constructed; and
(b)a report prepared by Mr Bryan Munns, a director of Blakeney Munns Consulting Engineers. The report stated that the structural timbers where untreated and where constructed with insufficient clearance from the ground. The engineer’s proposed structural redesign included pad footing to support the piers.
The respondents also relied on the oral evidence of Mr Leary that:
(a)the timbers were treated pine, however, they were not treated to the level necessary for structural timber at or close to the ground.
(b)some of the joists were greater than allowed in the relevant Australian Standard; and
(c)the timber piers should have been supported on concrete pad footings and not as constructed.
The applicants contended that:
(a)the structural timbers were treated timber and complied with the building standards. They relied on the quotation provided to the respondent for the construction of the deck dated 28 February 2017 which states that the timbers will be treated pine;
(b)the works complied with building standards; and
(c)approval was not required.
The respondents denied liability for the applicant’s claim for $3,750 for the incomplete deck on the basis they received no benefit from the works.
They also counter claimed for the cost of demolishing and re-instating the deck as estimated by Mr Leary at $13,751.18.
At the hearing the respondents reduced their counter claim to the estimated cost of demolition specified in Mr Leary’s report of $1,955 excluding profit/margin and GST less the value of the salvageable materials.
Findings
The Tribunal finds that the applicants did not construct this work in compliance with building standards and not in a proper and skilful way. The piers were required to be supported on pad footings and some of the spans of the structural members were too great.
The Tribunal does not have enough evidence before it to conclude that the timbers where not treated to the level required, however, to obtain access for the excavation of the necessary pad footings it would probably require the framing to be demolished.
The Tribunal cannot determine if any of the bearers or joists could be salvaged and therefore has not included an amount for this.
As it seems likely that the deck will need to be demolished and a salvage value for the materials cannot be established the Tribunal agrees with the applicants that they derived no benefit from its construction. Accordingly, we have disallowed the applicants’ claim for $3,750.00 in relation to it.
We further find in favour of the respondents claim for item 3 to be $2,473.08 calculated as follows:
(a)Sub-total: $1,955.
(b)Profit and margin at 15%: $293.25.
(c)Sub-total: $2,248.25.
(d)GST: $224.83.
Item 4 – defective kitchen work
The respondents contended that the kitchen joinery and range-hood were not installed in a workman like manner and have either not been finished or are not fit for purpose.
They also contend that the splashback tiling has not been completed. The kitchen and splashback were included in the quotation dated Wednesday, 14 December 2016.
The respondents relied on photographs of the kitchen as constructed.
The applicants conceded that the kitchen had some incomplete work and that this needed to be completed.
The applicant relied on the letter of demand for unpaid invoice dated 1 June 2017 which they sent to the respondents where it sets out that the invoice had been reduced by $3,000 for work to be completed which included in part the pantry panel and doors. In the same invoice they identified $300 credit due to the respondent for the tile splash-back.
The respondents claimed $6,676.67 for the cost of adjusting various joinery items; supply of some joinery panels; completion of some items, and completion of the tiled splash-back, comprising 20 separate items.
Findings
The Tribunal finds that the applicants did not construct this work in a proper and skilful way and that the joinery is not fit for purpose.
We find the claim for item 4 to be $6,676.67 calculated as follows:
(a)Sub-total: $5,278.
(b)Profit and margin at 15%: $791.70.
(c)Sub-total: $6,069.70.
(d)GST: $606.97.
Item 4 – defective laundry works
The respondents contend that the laundry has not been waterproofed and the new slab area had not been provided with a termite treatment as required by the building standards.
The respondents relied on the evidence of Mr Leary. He stated that the whole of the laundry was required to be waterproofed and that this had not been done, and the washing machine and joinery that extended to the floor would need to be removed to allow for this work.
Mr Leary had included the cost of tiling the floor, skirting and splashback in his scope of works estimates.
The applicants conceded that the waterproofing was not installed. The laundry floor and skirting tiling were not included in the quotation dated Wednesday, 14 December 2016. The splashback in combination with the kitchen splashback were included as credits to the respondents in the letter of demand for unpaid invoice dated 1 June 2017.
The respondents claimed for the cost of disconnecting the plumbing; removing the cabinetry and washing machine; removal of bi-fold doors; termite protection; waterproofing, floor screed and tiling; reinstalling items, and installing an exhaust fan.
This amount is made up of 14 items:
(a)Sub-total: $4,368.
(b)Profit and margin at 15%: $655.20.
(c)Sub-total: $5,023.20.
(d)GST: $502.32.
Findings
The Tribunal finds that the contract did not include the installation of waterproofing, floor finishes or tiled skirtings. We have determined that waterproofing of the laundry would normally be done prior to applying the floor finish so that the surface is protected from damage and its warranty is safeguarded.
We make the following observation. For a certificate of occupancy to be issued it would require that the laundry would not only need to be waterproofed but would also need to have the flooring and skirting materials installed over the waterproofing membrane.
It follows that, as the respondents were responsible for the future installation of the floor finish we determine the respondent is additionally responsible for the waterproofing of the laundry.
We determine that the applicants should not have installed the joinery that extends to the floor and also the washing machine given that the floor finish and skirting were required to be installed by others.
The applicant did not construct this work in a proper and skilful way, as the building standards require termite treatment of the laundry.
We have determined that the cost for waterproofing, floor screeds and tiling as they are outside the scope of agreed works are not to be included in the claim.
We find the claim for item 5 to be $3,402.85.
(a)Plumber: disconnect plumbing $150.
(b)Cabinetmaker: remove cabinet and washing machine $315.
(c)Cabinetmaker: remove bi-fold doors $70.
(d)Specialist: termite protection $450.
(e)Cabinetmaker: reinstall cabinet and washing machine $560.
(f)Cabinetmaker: complete missing joinery components and reinstall doors $725.
(g)Electrician: install exhaust fan $195.
(h)Plumber: reconnect plumbing $225.
(i)Sub-total: $2,690.
(j)Profit and margin at 15%: $403.50.
(k)Sub-total: $3,093.50.
(l)GST: $309.35.
Item 6 – defective works within living room
The respondents contended that the vapour barrier and termite treatment to the underside of the living room floor concrete slab was compromised by the cutting of the section of the existing slab to install plumbing to the relocated laundry within the existing house.
The respondents relied on building standards and the evidence of Mr Leary. Mr Leary stated that in his opinion the cutting of the slab would have damaged the vapour barrier located under the slab.
He stated that there are solutions available that would permit the installation of a barrier between the existing slab and the new slab when pouring the slab infill to prevent water penetration and potential termite entry.
No evidence was produced to inform the Tribunal as to what termite treatment was provided to the original house and how this treatment was compromised by the new work other than the damage to the vapour barrier and that penetrations of ground slabs, such as drainage pipe work, require measures to limit termite entry.
Mr Leary gave evidence that the respondents intended to remove the existing floor finishes and replace them with another flooring system. This work did not form part of the contract between the respondents and the applicants.
The applicants contended the new in-fill concrete slab was constructed properly with a vapour barrier installed.
The respondents claimed the cost of:
(a)a CCTV inspection of the drainage; grinding of the slab; on slab termite treatment;
(b)waterproofing the 30sqm of living room floor; and
(c)levelling screed to the floor slab.
Mr Leary estimated the cost of the work referred to in the preceding paragraph at $5,762.08 made up of:
(a)Plumber: CCTV inspection $480
(b)Specialist: grind concrete slab $720
(c)Specialist: on-slab termite treatment $1,185
(d)Waterproofer: waterproof 30sqm of living room $1,310
(e)Ceramic tiler: $860
(f)Sub-total $4,555
(g)Profit and margin at 15% $683.25
(h)Sub-total $5,238.25
(i)GST $523.83
(j)Total $5,762.08
Findings
The Tribunal finds that the applicants did not construct this work in a proper and skilful way as the junction between the edges of the existing slab and the new infill slab had resulted in cracking due to shrinkage.
We consider that treatment should have been provided at the time of pouring the new concrete infill slab. The applicants did not provide evidence to the Tribunal that the new vapour barrier was fully sealed to the existing vapour barrier.
The respondents have included costs for treatment to 30sqm, which they stated, was for the living room as a whole. We consider this to be excessive and reduce the extent to the area associated with the in-fill slab and therefore consider an area of 15sqm as appropriate.
The respondents have included costs for making good to the new slab for future NIC floor finishes. We consider the items associated with this work should be confined to the in-fill slab only and consider the amounts may be excessive, however, the applicants provided no evidence as to what area of floor this work should be confined to. We therefore have made no adjustments to the costs for this work.

We have determined that the termite treatment and waterproofing items are to total $1,043 ($593 + $450) in lieu of the claimed $2,085.
We have identified, after the hearing, that the amounts stated on page 10 of Mr Leary’s report have some discrepancies. The claim for concrete grinding totalled $600 however the labour cost was $720. The claim for Waterproofer totalled $900 however it was made up of $560 for labour and $750 for materials. The two separate totals for all labour and materials total $4,555 as set out however the total for all items in the “Item Total” column is not $4555 but rather $4,025. We have therefore determined that the amounts claimed in the “Item Total” column are the total amount to be applied, which is the lesser amount.
We find the claim for item 6 to be $3773.45:
(a)Plumber: CCTV inspection $480
(b)Specialist: grind concrete slab $600
(c)Specialist: on-slab termite treatment $593
(d)Waterproofer: waterproof 30sqm of living room $450
(e)Ceramic tiler: $860
(f)Sub-total: $2983.
(g)Profit and margin at 15%: $447.45.
(h)Sub-total: $3,430.45.
(i)GST: $343.
Item 7- defective structural steel installation- kitchen
The respondents contend that:
(a)the steel lintel over the new kitchen window is not supported suitably by steel posts;
(b)the timber plate above the lintel is not fixed adequately to the lintel; and
(c)the framing above the lintel is not adequately braced.
The respondents relied on a report prepared by Mr Bryan Munns, a director of Blakeney Munns Consulting Engineers.
Mr Munns recommended, amongst other things, that the lintel be re-supported by steel columns due to the lack of space to construct adequate timber frame walls.
The applicants conceded that the timber plate had not been fully fixed to the lintel. They relied on the structural design, dated 18 December 2016, prepared for the renovation by Antoun El Hajjeh, a structural engineer, which showed the size of the lintel (designated as TB1) and the support at each end of the lintel to be provided by double studs. During the hearing a photograph was produced which depicted the framing support to the lintel to be double studs at each end.
The respondents claimed for the cost of:
(a)bolting the lintel and timber plate;
(b)disassembling the wall frame and replacing with steel columns including welded plates;
(c)part reframing the wall; and
(d)fixing plywood bracing to the frame above the window.
This work was estimated by Mr Leary at $4,106.06, comprised of:
(a)Carpenter: prop and secure lintels $400.
(b)Carpenter: bolt plate to lintel $144.20.
(c)Carpenter: disassemble part wall framing $280.
(d)Electrician: make save $161.
(e)Carpenter: install steel columns $305.
(f)Carpenter: welding $594.
(g)Carpenter: bolting plate and cleat $249.20.
(h)Carpenter: spry welds with rust inhibitor $81.
(i)Carpenter: complete wall framing $700.
(j)Carpenter: install plywood wall bracing $167.
(k)Carpenter: secure trusses and framing $82.
(l)Labourer: clean site $82.50.
(m)Sub-total: $3,245.90.
(n)Profit and margin at 15%: $486.89.
(o)Sub-total: $3,732.79.
(p)GST: $373.28.
Findings
The Tribunal finds that the applicants did support the lintels to the details as set out by the engineer Antoun El Hajjeh, however, the applicants did not adequately fix the plate to the lintel and did not adequately brace the framing above the window.
We have determined that the cost associated with the replacement of the double stud supports with steel columns is not to be included in the claim.
We find the claim for item 7 to be $393. 67 comprised of:
(a)Carpenter: bolt plate to lintel $144.20.
(b)Carpenter: install plywood wall bracing $167.
(c)Sub-total: $311.20.
(d)Profit and margin at 15%: $46.68.
(e)Sub-total: $357.88.
(f)GST: $35.79.
Item 8 – defective steel installation – sliding door
The respondents contended that the steel lintel over the new living room glazed sliding door is not supported properly by steel posts and that the timber plate above the lintel is not fixed adequately to the lintel.
The respondents relied on a report prepared by Mr Bryan Munns, a director of Blakeney Munns Consulting Engineers.
Mr Munns recommended, amongst other things, that the lintel be re-supported by steel columns due to the lack of space to construct adequate timber frame walls.
During the hearing a photograph produced depicted the framing support to the lintel at one end to be three studs however one of the studs was not next to the other two attached studs and was therefore not in conformity with the design engineer’s specification of a triple stud support.
The applicants conceded that the timber plate had not been fully fixed to the lintel. They relied on the structural design, dated 18 December 2016, prepared for the renovation by Antoun El Hajjeh, a structural engineer, which showed the size of the lintel (designated as SB1) and the support at each end of the lintel to be provided by triple studs.
Neither party to the hearing could provide a photograph of the as constructed support for the lintel at the other end of the opening. The floor plan shows a return wall at this location. The respondent contended that the support at the other end could not have been constructed with triple studs as there was not enough room to install it.
The respondents claimed for the cost of bolting the lintel and timber plate; disassembling the wall frame and replacing with steel columns including welded plates, and part reframing the wall.
This work was estimated by Mr Leary at $3,708.35 comprised of:
(a)Carpenter: prop and secure lintels $400.
(b)Carpenter: bolt plate to lintel $145.60.
(c)Carpenter: disassemble part wall framing $280.
(d)Electrician: make save $161.
(e)Carpenter: install steel columns $295.
(f)Carpenter: welding $490.
(g)Carpenter: bolting plate and cleat $284.20.
(h)Carpenter: spry welds with rust inhibitor $81.
(i)Carpenter: complete wall framing $635.
(j)Carpenter: secure trusses and framing $77.20.
(k)Labourer: clean site $82.50.
(l)Sub-total: $2,931.50.
(m)Profit and margin at 15%: $439.73.
(n)Sub-total: $3,371.23.
(o)GST: $337.12.
Findings
The Tribunal finds that the applicants did not support the lintel at the exposed side of the opening to the details as set out by the engineer Antoun El Hajjeh and the applicants did not adequately fix the plate to the lintel.
The respondents have not provided evidence to enable the Tribunal to make a proper determination as to the support at the other end of the lintel.
We have determined that the cost associated with the replacement of the triple stud supports with steel columns is not to be included in the claim, however, an amount needs to be included for rectifying the end support to provide an appropriate triple stud support.
We find the claim for item 8 to be $2,155.15 comprised of:
(a)Carpenter: prop and secure lintels $400.
(b)Carpenter: bolt plate to lintel $145.60.
(c)Carpenter: disassemble part wall framing $280.
(d)Electrician: make save $161.
(e)Carpenter: complete wall framing $635.
(f)Labourer: clean site $82.50.
(g)Sub-total: $1,703.70.
(h)Profit and margin at 15%: $255.55.
(i)Sub-total: $1,959.25.
(j)GST: $195.90.
Item 9 – defective windows and doors
The respondents contended that the new kitchen window and new living room sliding glazed door were not provided with the flashings to the sill and threshold respectively.
They contended that the window and doors would need to be removed to install the flashings and then reinstated. This work would also affect adjacent trimmings, eaves and wall linings etc.
The respondents also contended that the hall door architrave needs to be fitted and the bedroom door needs to be fully installed including the door handles.
The respondents relied on building standards and produced photographs of the installation of the window and associated brick-veneer wall and sill that showed there was no sill flashing installed.
The applicants conceded that the flashings had not been installed.
The applicants relied on the letter of demand for unpaid invoice dated 1 June 2017 which they sent to the respondent where it sets out that the invoice had been reduced by $3,000 for work to be completed which included in part external linings over the window and architrave doorways to hall and study.
The respondents claimed for the cost of removing and reinstalling the glazing with flashings; making good to or installing new linings, moulds etc., and rectifying door surrounds and rectifying one internal door as estimated by Mr Leary at $5,079.35 this amount is made up of 22 items:
(a)Sub-total: $4,015.30.
(b)Profit and margin at 15%: $602.30.
(c)Sub-total: $4,617.60.
(d)GST: $461.76.
Findings
The Tribunal finds that the applicants did not construct this work in compliance with building standards and not in a proper and skilful way.
We find the claim for item 9 to be $5,079.36:
(a)Sub-total: $4,015.30.
(b)Profit and margin at 15%: $602.30.
(c)Sub-total: $4,617.60.
(d)GST: $461.76.
Carpet
They respondents submit that the applicants owed them a duty of care to take care of their property while undertaking the works and to avoid reasonably foreseeable loss.
They claim that the applicants breached that duty and negligently damaged the carpet in their study. They seek damages to compensate them for the cost of replacing the carpet in the study.
Mr Robertson told the Tribunal[18] that the applicants cut a square out of what he described as a “perfectly good quality carpet” in their study without the respondents permission:
There was an existing study where he installed the door. We moved the door. It was moved into the passageway. He cut the doorway and then one day he came and installed the door and because he didn't cut the bottom off the door to clear the existing carpet the door wouldn't open or close so he ripped up the carpet to enable the door to open and close.
…..Yes, he cut it. You can see that there's a piece missing. The underfelt or the foam underneath is still present but he cut the carpet off the top so the door would open. Now, let's assume we were letting him come back to finish the job. He would still have to take the door off and cut the bottom off. When carpet gets reinstated it's still not going to be clear. He still has to do that work anyway.
[18] Transcript of proceedings, 2 August 2018, page 138-140
The respondents relied on a photograph of the damage, which the Tribunal accepts supports their account.
The applicants failed to address the respondents’ claim for the carpet in the materials they filed and had left the proceedings by the time Mr Robertson gave oral evidence on the issue.
The respondents engaged the applicants’ professional services to perform the works.
The applicants had a duty of care to perform those functions with reasonable care and skill so as to avoid foreseeable risks to the respondents.
It was not only foreseeable but inevitable that cutting the carpet would cause the respondents’ loss.
That loss could have been avoided by performing the job with reasonable care and skill and trimming the door to fit the opening or by hanging the door to open outwards, rather than cutting the carpet to accommodate the arc of the door opening.
The Tribunal finds that the respondents suffered foreseeable loss, being the cost of repairing the carpet, as a result of the applicants’ negligence.
Mr Robertson told the Tribunal:
I went to a carpet shop and I gave them the dimensions of the carpet. I said, “Mid-range carpet, installed, what would it cost?” It was around about a thousand dollars. That was the quote that I was given. That's where that money came from.[19]
[19] Transcript of proceedings, 2 August 2018, page 139
In the absence of corroborating evidence from a carpet supplier of the reasonable cost of repair, and whether it was necessary to replace the carpet in the entire room, the tribunal has insufficient evidence to assess the respondents’ damages in relation to the carpet and so does not allow this aspect of the counter claim.
Reasonable opportunity to rectify.
The Tribunal is satisfied that to the extent the defects contravene ACL guarantees, the number and extent the defects taken collectively constitute a major failure within the meaning of section 278(a) because the services would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure.[20] Accordingly there is no requirement for the respondents to give the applicants an opportunity to rectify.[21]
[20] Saltalmacchia v Tayser Automotive Group Pty Ltd trading as Naunawading Great Wall [2014] VCAT 1463, at [59]; Boyd v Agrison [2014] VMC 23
[21] Section 267(4) of the ACL
The Tribunal is also satisfied that the respondents have taken reasonable steps to mitigate their loss as a result of the applicants’ contravention of the statutory warranties under the Building Act. The Tribunal notes that the respondents made several unsuccessful attempts to fix issues with attachment of the kitchen cabinets. Given the number and extent of the defects it would be unreasonable to expect the respondents to give the respondents further opportunity to rectify.

Conclusion

Applicants’ claim

Based on the Tribunals findings the respondents are liable to pay to the applicants the sum, of $3,775 for kitchen and laundry works but are not liable for any payment for work on the deck.
Respondents counter claim
Based on the Tribunals’ finding the respondents have suffered loss of $29,680.84 as a result of the respondents’ contravention of statutory warranties and guarantees. Accordingly we have assessed damages on the counter claim at $25,000 being the jurisdictional limit of the ACAT.

Costs

The Tribunal has a discretion under section 48(2)(a)(i) of the ACAT Act to order the parties to pay each other’s filing fees because each of them has at least partially succeeded in their applications (which includes counter claims).
We have decided not to exercise our discretion in favour of the applicants because the overwhelming majority of their claim was disallowed.
We have allowed the respondents filing fee on their counter claim because they were awarded the full amount claimed.
The tribunal has discretion under section 48(a)(ii) to order the successful party “any other fee incurred by the applicant that the tribunal considers necessary for the application.” We have not allowed the respondents’ costs of the reports referred to at paragraph 79 above because these costs are not fees and therefore cannot be awarded under section 48(2)(a)(ii).
………………………………..
Senior Member E Ferguson
Delivered for and on behalf of the Tribunal

HEARING DETAILS

FILE NUMBER:	XD 122/2018
PARTIES, APPLICANT:	Michael Tarbuck and Dennis Tarbuck
PARTIES, RESPONDENT:	Don Robertson and Noleen Robertson
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member E Ferguson Senior Member G Trickett
DATES OF HEARING:	2 August 2018

Attachment A

ACAT FILE NO:
APPLICANT:

RESPONDENT:

SCOTT SCHEDULE
WHERE DEFECTIVE WORKMANSHIP OR MATERIAL CLAIMED

XD 122/2018

Michael & Dennis Tarbuck

Don & Noeleen Robertson

KEY

Item No.

Item Number (for identification only)

Contract

_Set out what should have been done to comply with contract either under specification of original work and variation or what should be done to complete in good and workmanlike manner (if

quality not specified\.

Applicant's Comments
Set out defect alleged

Applicant's Estimate of Loss

Cost of rectification of defect or diminution of value because of defect

Respondent's Comments

Comments should admit, deny. or not admit, or raise a point of law.

Respondent's Estimate of Loss

This should be completed even though the liability is denied

Tribunal Member's Comments
For use of the Tribunal Member

ITEM No.	CONTRACT	APPLICANT		RESPONDENT Counterclaim		TRIBUNAL MEMBER'S Comments
ITEM No.	CONTRACT	Comments	Estimate of Loss	Comments	Estimate of Loss	TRIBUNAL MEMBER'S Comments
1	Construct work in accordance with required standards	Defective brickwork	$2,994.26 Refer to Peak Consulting Cost Estimate Report dated 23 February 2018
2	Execute mandatory administration and approvals	Clearance Certificates	$4,332.30 Refer to Peak Consulting Cost Estimate Report dated 23 February 2018

ITEM No.	CONTRACT	APPLICANT		RESPONDENT Counterclaim		TRIBUNAL MEMBER'S Comments
ITEM No.	CONTRACT	Comments	Estimate of Loss	Comments	Estimate of Loss	TRIBUNAL MEMBER'S Comments
3	Construct work in accordance with required standards	Deck demolition and reinstatement of defective deck	$13,751.18 Refer to Peak Consulting Cost Estimate Report dated 23 February 2018
4	Construct work in accordance with required standards	Defective kitchen work	$6,676.67 Refer to Peak Consulting Cost Estimate Report dated 23 February 2018
5	Construct work in accordance with required standards	Defective laundry works	$5,525.52 Refer to Peak Consulting Cost Estimate Report dated 23 February 2018
6	Construct work in accordance with required standards	Defective works within living room	$5,762.08 Refer to Peak Consulting Cost Estimate Report dated 23 February 2018
7	Construct work in accordance with required standards	Defective structural steel installation - Kitchen	$4,106.06 Refer to Peak Consulting Cost Estimate Report dated 23 February 2018

ITEM No.	CONTRACT	APPLICANT		RESPONDENT Counterclaim		TRIBUNAL MEMBER'S Comments
		Comments	Estimate of Loss	Comments	Estimate of Loss
8	Construct work in accordance with required standards	Defective structural steel installation - Sliding door		$3,708.35 Refer to Peak Consulting Cost Estimate Report dated 23 February 2018
9	Construct work in accordance with required standards	Defective windows and doors		$5,079.35 Refer to Peak Consulting Cost Estimate Report dated 23 February 2018

Item No.	Item Number (for identification only)
Contract	_Set out what should have been done to comply with contract either under specification of original work and variation or what should be done to complete in good and workmanlike manner (if quality not specified\.
Applicant's Comments	Set out defect alleged
Applicant's Estimate of Loss	Cost of rectification of defect or diminution of value because of defect
Respondent's Comments	Comments should admit, deny. or not admit, or raise a point of law.
Respondent's Estimate of Loss	This should be completed even though the liability is denied
Tribunal Member's Comments	For use of the Tribunal Member