The Owners Strata Plan 80867 v Da Silva

[2024] NSWDC 263

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

The Owners – Strata Plan 80867 v Da Silva [2024] NSWDC 263

Hearing dates:

16 – 19 October 2023

Date of orders:

5 July 2024

Decision date:

05 July 2024

Jurisdiction:

Civil

Before:

Waugh SC DCJ

Decision:

(1) Judgment for the plaintiff against the first defendant in the sum of $317,707.93.

(2) List the matter for directions before me at 9:30 AM on Friday 12 July 2024.

Catchwords:

BUILDING AND CONSTRUCTION – Home Building Act 1989 - contract to undertake residential building work– non est factum – purported oral variation to scope of works - waterproofing - failure to comply with Australian Standard and Building Code of Australia

BUILDING AND CONSTRUTION – Statutory duty of care under s37 of Design and Building Practitioners Act 2020 – waterproofing - failure to comply with Australian Standard and Building Code of Australia

Legislation Cited:

Civil Liability Act, 2002

Design and Building Practitioners Act 2020.

Home Building Act 1989

Home Building Regulation 2004

Uniform Civil Procedure Rules

Cases Cited:

Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185

Fox v Percy (2003) 214 CLR 118

Jones v Dunkel [1959] HCA 8, (1959) 101 CLR 298

Kazzi v KR Properties Global Pty Ltd t/as AK Properties Group [2024] NSWCA 143

Kuhl v Zurich Financial Services (2011) 234 CLR 361

Paraiso v CBS Build Pty Ltd [2020] NSWSC 190

Petelin v Cullen (1975) 132 CLR 355

Roberts v Goodwin Street Developments Pty Ltd (2023) 110 NSWLR 557

The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2023] NSWCA 301

TheOwners-Strata Plan Number 87060 v Loulach Developments Pty Ltd (No 2) [2021] NSWSC 1068

Watson v Foxman (1995) 49 NSWLR 315

Xu v Jinhong Design & Construction Pty Ltd [2011] NSWCA 277

Texts Cited:

Cross on Evidence by the Hon J D Heydon AC

Category:

Principal judgment

Parties:

The Owners – Strata Plan 80867 (Plaintiff)
John Da Silva (First Defendant)

Representation:

Counsel:
Mr W Marshall (Plaintiff)
Mr V Gray (First Defendant)

Solicitors:
Swaab (Plaintiff)
Corporate & Civil Legal (First Defendant)

File Number(s):

2021/190339

Publication restriction:

Nil

Judgment

1. The plaintiff is the Owners Corporation for the strata scheme of the “Lamia” building at 276 – 278 Marrickville Road, Marrickville in New South Wales. Some of the lots in the building are commercial, some are residential. The strata plan was registered on 30 July 2008.

2. Mr Da Silva, the first defendant, is a tiler and waterproofer. He and tradesmen working under his supervision removed and replaced the tiles on the common balcony terrace for units 301, 302 and 303 (some of the residential lots) between late July 2014 and early April 2015. Each of the units has aluminium sliding doors giving access to the same common balcony terrace.

3. The Owners Corporation complains that the work Mr Da Silva did and supervised was defective. It says that as a result of the work, water enters units 301, 302 and 303 from the common balcony terrace in periods of rain, something which did not happen before Mr Da Silva and the tradesmen did their work.

4. The Owners Corporation sues Mr Da Silva for breach of contract or, alternatively, for breach of a duty of care imposed by section 37 of the Design and Building Practitioners Act 2020.

5. It is common ground that, subject to some issues about causation, if the Owners Corporation succeeds on either basis, then the work needs to be redone and the Owners Corporation is entitled to damages for the full cost of rectification. The quantification of those damages is mostly agreed.

6. Most of the issues between the parties concern questions of liability.

7. In response to the claim for breach of contract:

7.1 First, Mr Da Silva asserts that he cannot be liable in contract because he has a good defence of non est factum. If he succeeds in that defence, there is no enforceable contract against him - the contract he signed is void. Mr Da Silva says he actually did the work pursuant to a written contract dated 29 May 2014 between his company (Tile Projects Pty Ltd) and a company called Haralambis Construction Pty Ltd.

7.2 Secondly, if he fails on his non est factum defence, Mr Da Silva accepts that the contract included the express terms relied upon by the Owners Corporation, but says that the parties varied the terms of the contract; in particular, he says they changed the scope of work he was required to undertake. He says he did the varied work properly. He goes so far as to say that the variations agreed absolved him of the requirement to comply with the Building Code of Australia and the relevant Australian Standards.

7.3 Thirdly, Mr Da Silva says if he is bound by the contract and the scope of works was not changed, then the Owners Corporation has not proved that the work he did caused the damage it claims.

8. In response to the Owners Corporation’s claim based on s.37 of the Design and Building Practitioners Act 2020:

8.1 Mr Da Silva accepts that he owed the Owners Corporation the duty of care stated in s.37 because the work he did was construction work.

8.2 He says that the “construction work” he carried out was the work he actually did, which he says was in accordance with the varied scope of works agreed by the parties.

8.3 He says that the economic loss of the Owners Corporation was caused by the deficient or absent waterproofing relating to the sliding door and window fixtures, and not arising from the construction work he carried out (T268).

8.4 Mr Da Silva says that reasonable care did not require him to have any involvement in rectifying defects in the existing sliding door and window fixtures (T267), or to undertake significant work that he had been instructed not to do and for which he would not be paid (T270).

8.5 He says if the scope of works was varied during the course of the work such that compliance with the Building Code of Australia and Australian Standards were dispensed with (which he says was the case), reasonable care did not require him to then stop the work rather than complete it (T271).

8.6 Mr Da Silva also raises a number of defences based on provisions of the Civil Liability Act, 2002.

9. The balance of these reasons proceed under the following headings:

A. FACTS THAT ARE EITHER COMMON GROUND OR ESTABLISHED BY CONTEMPORANEOUS DOCUMENTS

A.1 What happened before Mr Da Silva commenced the work

A.2 What happened whilst Mr Da Silva undertook the work

A.3 What happened immediately after Mr Da Silva finished the work

B. DID THE OWNERS CORPORATION AND MR DA SILVA HAVE A BINDING CONTRACT IN ACCORDANCE WITH THE DOCUMENT SIGNED BY MR DA SILVA ON 22 JULY 2014?

B.1 Non est factum is the issue

B.2 Mr Da Silva’s evidence

B.3 Mr Da Silva’s submissions about non est factum

B.4 The Owners Corporation’s submissions about non est factum

B.5 What needs to be decided?

B.6 Should I draw a Jones v Dunkel inference in relation to the failure of either side to call Mr Haralambis?

B.7 Further findings of fact about what happened when Mr Da Silva signed the document

B.8 Is Mr Da Silva entitled to succeed on his defence of non est factum?

B.9 My findings

C. WHAT WERE THE TERMS OF THE CONTRACT?

D. DID THE OWNERS CORPORATION AND MR DA SILVA VARY THE TERMS OF THE CONTRACT?

D.1 Mr Da Silva’s submissions

D.2 The Owners Corporation’s submissions

D.3 My analysis and findings

D.4 Legal point: any variation had to be writing signed by the parties to be effective

E. BREACH OF CONTRACT: THE WORK THAT MR DA SILVA ACTUALLY DID OR SUPERVISED DID NOT COMPLY WITH MR EVANS’ SCOPE OF WORKS, THE AUSTRALIAN STANDARD OR THE BUILDING CODE

E.1 Mr Da Silva’s admissions in cross-examination

E.2 The experts’ evidence, going to breach and causation

E.3 Mr Moisidis’ evidence going to breach and causation

F. MY FINDINGS ON BREACH OF CONTRACT

G. DAMAGES FOR BREACH OF CONTRACT

G.1 Causation

G.2 Quantification of damages

H. THE CLAIM BASED ON BREACH OF A DUTY OF CARE IMPOSED BY SECTION 37 OF THE DESIGN AND BUILDING PRACTITIONERS ACT 2020.

H.1 The Design and Building Practitioners Act, 2020

H.2 The Owners Corporation’s case

H.3 Mr Da Silva’s response

H.4 My analysis and findings

I. IS MR DA SILVA ENTITLED TO SUCCEED ON ANY DEFENCES BASED ON PROVISIONS OF THE CIVIL LIABILITY ACT, 2002?

I.1 Contributory negligence

I.2 Proportionate liability

J. COSTS

K. MY ORDERS

A. FACTS THAT ARE EITHER COMMON GROUND OR ESTABLISHED BY CONTEMPORANEOUS DOCUMENTS

10. Most of the relevant facts are either common ground or established by contemporaneous documents. I will set those out now. Some matters of fact were contentious. I will address those separately.

11. Having regard to the issues raised by the parties I will focus on 3 different periods of time: (i) what happened before Mr Da Silva commenced the work; (ii) what happened whilst Mr Da Silva undertook the work; and (iii) what happened immediately after Mr Da Silva finished the work.

A.1 What happened before Mr Da Silva commenced the work

12. Either Haralambis Construction Pty Ltd or another company controlled by Mr Con Haralambis (the second defendant) and his brother Mr Ari Haralambis had built the building and obtained the registration of the strata plan. Mr Con Haralambis was a practising solicitor and owned one of the lots in the building. He was also a member of the executive committee of the Owners Corporation.

13. In around July 2013, the Owners Corporation engaged Mr Paul Evans, a building consultant, of PA Evans and Associates Pty Ltd to carry out an inspection of the building in order to identify any defects, particularly any defects relating to the common property. (Mr Evans had previously inspected the building in February 2012 and provided a report to the Owners Corporation on 8 March 2012 which was very limited in its scope.)

14. Mr Evans inspected the building on 15 July 2023 and found that there were a number of defects in the common property requiring remediation. He set out them in a written report dated 23 July 2013. Included in his report were defects concerning the common balcony terrace for units 301, 302 and 303. The defects Mr Evans identified were:

• Insufficient and in some areas no control joints in the tile and bedding.

• Delaminating and drummy skirting tiles.

• Advanced efflorescence (that is, unsightly white salt and crystal deposits on the finished surface of the tiles and between the tiles).

• Insufficient fall in the tile bed and ponding in a range of isolated areas.

• Poor drainage.

15. Mr Evans did not suggest that there was any problem with water entering into units 301, 302 and 303 from the common balcony terrace.

16. The strata manager provided a copy of Mr Evans’ defects report to Mr Haralambis (or his company) on 28 October 2013. This led to communications passing between Mr Haralambis, the strata manager and the executive committee of the Owners Corporation, which included:

16.1 On 10 December 2013 Mr Haralambis (writing on behalf of Haralambis Management Pty Ltd) provided a detailed response by email to the strata manager. In the email, Mr Haralambis proposed to undertake various repairs, including to level 3 balcony tiling to units 301, 302 and 303 (his reference to unit 310 in the email being an obvious typographical error for 301).

16.2 On 15 January 2014 the executive committee sent an email to Mr Haralambis and the strata manager asking a number of questions about the proposed repairs.

17. On 24 February 2014 the strata manager sent an email to the executive committee with a fee proposal to engage Mr Evans to oversee the outstanding defects works.

18. On 13 April 2014 Mr Haralambis sent an email to Mr Evans, copied to the executive committee and the strata manager, setting out a suggested scope for the tiling rectification to level 3.

19. In or around May 2014 the Owners Corporation engaged Mr Evans to produce a scope of works to remediate the defects he had identified. (He did not prepare a draft scope of works until 30 May 2014.)

20. On 19 May 2014 Tile Projects Pty Ltd (Mr Da Silva’s company) provided a “Quotation for Rectification” to Haralambis Management Pty Ltd for the project “Marrickville Rectifications”. The quotation was for preparing and waterproofing the floor and supplying and fixing tiles for a total of $30,000 plus GST, or $33,000 inclusive of GST. Mr Da Silva said that he prepared this quotation and gave it to Mr Haralambis on 19 May 2014. This was well before Mr Evans had prepared his draft scope of works dated 30 May 2024, and the quotation makes no reference to any scope of works document. There is no evidence that the Owners Corporation was aware that this quotation had been obtained.

21. On 22 May 2014 Mr Haralambis sent an email to Mr Evans and “the ECM” saying “We have a tiler who can tentatively start within 3 — 5 weeks and we will require your scope of works and details ASAP to allow these works to proceed”. Mr Haralambis’ reference to the ECM was a reference to the Executive Committee of the Owners Corporation. The email was also sent to the strata manager (Beth Cocking of Strata Plus Pty Ltd).

22. On 26 May 2014 Mr Da Silva received an email from Mr Haralambis referring to their recent meetings and discussions and noting that “you are our preferred tiling and waterproofing tenderer provided we sign a Subcontract by 5pm Wednesday, 28 May 2014”. The subcontract Mr Haralambis referred to was for 3 separate projects: one at Rushcutters Bay, one at Chalmers Street and a third at “Lamia - unit 310, 30 and 303 Marrickville Road Marrickville works”. The email included a summary of the subcontract sum for each project. Excluding GST, the sum for the Rushcutters Bay project was $259,000, for the Chalmers Street project $176,000 and for the Marrickville works on the Lamia building $30,000. Enclosed with the email was a subcontract, revised scope of works and sketch of floor plans for 276 – 278 Marrickville Road, Marrickville.

23. Mr Da Silva said he signed the subcontract on 29 May 2014. He says he then attended a meeting at Mr Haralambis’ office in Surry Hills the following day (30 May 2014) at which time Mr Haralambis said to him words to the effect “I am going to change the quote for the Marrickville job to $24,949.72 plus GST and you can make up the difference on the charges for the other job sites”. Mr Da Silva said the documents were then amended (including the contract sums) by Mr Haralambis and signed by Mr Haralambis. The documents as signed and amended were included in the Court book (pages 356 to 425). This is the agreement pursuant to which Mr Da Silva says he, or perhaps more correctly his company Tile Projects Pty Ltd, did the work the subject of these proceedings. There is no evidence that the Owners Corporation was aware that this agreement had been entered into. It is important however to recognise a few things about the document:

23.1 It is stated to be a “subcontract”.

23.2 The parties are Haralambis Construction Pty Ltd, defined as the Builder, and Tile Projects Pty Ltd, defined as the subcontractor, abbreviated to SC.

23.3 It related to all 3 projects I have mentioned.

23.4 In the schedule (Court book page 357) the “Builder’s representative” is stated to be “Ari Haralambis or such other person as advised from time to time by the builder”. The “Subcontractor’s representative” is stated to be “John Da Silva …”.

23.5 In the same schedule, against the words “Quality Assurance”, it is stated “in accordance with relevant Australian Standards and Building Code of Australia (BCA)”.

23.6 Mr Da Silva’s contractor licence number is handwritten in the schedule as well as another number.

23.7 In the table under clause 15 in the additional terms and clarifications (Court book page 361 – 362) item 14 is “Repair all of Level 3 — being units 301, 302 and 303 at Lamia — 276-278 Marrickville Rd Marrickville incl demolition, removal, new 3 coat waterproof membrane, screed, tiles, grates, expansion joints, skirting tile, supply and install tiles and all related works and materials”. In the same table, the printed “subcontract sum” of $30,000 has been crossed out and $24,949.70 has been written by hand.

23.8 In the table under clause 17 (Court book page 363 – 364) it says that “All works to units 301, 302 and 303 Marrickville Rd Marrickville being Lamia apartments to be completed within 6 weeks of the date of this subcontract”.

23.9 It sets out an agreed scope of works (Court book page 369 – 370).

24. Mr Evans prepared his draft scope of works on 30 May 2014.

25. On 2 June 2014 Mr Evans provided his draft scope of works to the strata manager (Beth Cocking of Strata Plus Pty Ltd) by email. On the same day Ms Cocking emailed a copy to Mr Haralambis and Ms Helen Sotiras (an employee of either Haralambis Management Pty Ltd or Haralambis Construction Pty Ltd) and to the members of the executive committee of the Owners Corporation (Ms Schifreen, Ms Bartolo, Ms Conlon, Mr Elliott, Mr Cis, Ms Rogers and Mr Stoker).

26. Later on 2 June 2014, Mr Haralambis sent a copy of page 9 of Mr Evans’ draft scope of works to Mr Da Silva and his brother Mr Ari Haralambis. He addressed the email to Mr Da Silva and said “Look at details for level3 Marrickville – can we discuss as need to agree with Strata”. (Mr Da Silva said that he had no discussion with Mr Haralambis about this email.)

27. On 3 June 2014 Mr Haralambis sent a long email to Mr Evans, copying in the members of the executive committee of the Owners Corporation and the strata manager. He attached to the email a copy of Mr Evans’ draft scope of works with “our preliminary marked up comments” in red. In the email, which Mr Haralambis signed off above the name Haralambis Management Pty Ltd, Mr Haralambis said:

“The agreement with the Owners Corporation is that Haralambis Construction Pty Ltd (on a without admission and without prejudice basis) will attend and rectify the tiling works in accordance with an agreed scope subject to your regular inspections”.

28. Later on 3 June 2014, Mr Haralambis sent an email to Mr Da Silva confirming their meeting on 30 May 2014 and attaching copies of various documents relating to the subcontract for the 3 projects.

29. On 4 June 2014 Mr Evans sent an email to Mr Haralambis with his detailed response to Mr Haralambis’ comments and suggestions regarding the draft scope of works, sending a copy of his email to the members of the executive committee of the Owners Corporation, the strata manager and to Mr Ari Haralambis.

30. On the same day (4 June 2014), Mr Haralambis sent Mr Da Silva an email outlining the proposed timetable for the work, commencing Wednesday, 23 July 2014.

31. On 11 June 2014 Ms Bartolo (the secretary of the executive committee of the Owners Corporation) sent an email to Mr Haralambis and Mr Evans, copying in the members of the executive committee and residents directly impacted by the works to be done, the strata manager and Mr Ari Haralambis, seeking clarification on certain matters and giving executive committee approval on others. One matter Ms Bartolo sought clarification of was that the work would be completed to the Australian Standard, foreshadowing that Mr Evans would be engaged by the executive committee to check the work and ensure this was done.

32. On the same day (11 June 2014) Mr Evans sent a reply to Ms Bartolo and all of the other recipients of her email saying, amongst other things, that he would be pleased to take on the role of contract administration “when and if the general details and requirements of my scope of works are agreed and published past the draft stage”.

33. On 17 June 2014 Ms Bartolo (the secretary of the executive committee) sent an email to Mr Haralambis, copying in the members of the executive committee, the strata manager, Mr Ari Haralambis and Mr Evans, asking the following questions:

“1. Referring to Paul Evans Email (04.06.2014) 3.4 & 3.5 - it is our understanding that Home Owner Warranty Insurance must be provided prior to work commencing. Who will be providing the EC with a certificate of Home Owners Warranty insurance?

2. Referring to Paul Evans Email (04.06.2014) 9.13, 9.16 & 9.19 - Will the works and specification be carried out to the Australian Standards as Paul Evans highlighted in his scope of works?

3. Will there be a registered builder/foreman overseeing the works?”

34. On 19 June 2014 Mr Da Silva emailed copies of Tile Project Pty Ltd’s certificates of currency for public liability and workers compensation insurances to Haralambis Management Pty Ltd and Mr Haralambis.

35. On 20 June 2014, Mr Haralambis responded to Ms Bartolo’s three questions of 17 June as follows:

“1. Con has discussed this with Paul Evans and as the original building licence used was that of Ari Haralambis, Haralambis Construction Pty Ltd which has the same licence holder being Ari Haralambis (Licence Number: 41026 5) will use Project Tiles Pty Ltd to carry out the works in relation to which we provide the following licence details:

a. Tiling Licence for John Da Silva 6284C (attached);

b. Tiling Licence for Faical Bechara 188036C (attached)

2. Tile Projects confirms that all works will be carried out to Australian Standards and the Building Code of Australia. Tile Projects will provide suitable certificates on completion;

3. John Da Silva the Managing Director of Tile Projects will supervise and manage the works;”

36. On 30 June 2014 Ms Bartolo sent an email to Mr Haralambis, copying in the members of the executive committee, the strata manager, Mr Ari Haralambis and Mr Evans, seeking specific clarification on who would be purchasing Home Warranty Insurance, whether it would be Mr Ari Haralambis or Mr Da Silva. She said that the executive committee was required to sight the insurance prior to work commencing and to send a copy to the strata manager for their records. Ms Bartolo also reminded Mr Haralambis that Mr Evans was unable to accept a number of Mr Haralambis’ proposed variations to the scope of works because they would not meet Australian Standards. Ms Bartolo asked for confirmation from Tile Project and/or Mr Da Silva that the work will be completed as per Mr Evans’ recommendations. She also asked for a costing of the works so that the executive committee could determine if they had sufficient funds to cover Mr Evans fees to oversee the works.

37. Mr Haralambis replied to Ms Bartolo 3 July 2014. He said that as the defects are being carried out pursuant to the same building licence (Ari Haralambis licence number 41026 S) that carried out the original works, no additional home warranty insurance is required. He then set out some details of the way in which “the tiling contractor has indicated” he will perform the work. Finally, he said that it was a matter for the executive committee, in reference to the executive committee’s suggestion that they would engage Mr Evans to oversee the works.

38. On the same day (3 July 2014), Mr Evans provided his comments in response to Mr Haralambis. He sent his email to Mr Haralambis and copied in the executive committee, the strata manager and Mr Ari Haralambis. He took issue with the suggestion that Mr Ari Haralambis’ licence was used to carry out the original works and suggested that it could not be used to contract for building works. He explained that the Home Building Act required home warranty insurance to be provided for the contemplated works. He also took issue with what Mr Haralambis had said about the way in which the tiling contractor had indicated he will perform the work.

39. Mr Haralambis replied to everyone by email on 4 July 2014. He said that “we will arrange for home warranty insurance to be obtained”. Mr Haralambis also said that “we have finalised negotiations and the total cost of the works (is) $17,832 plus GST – we have signed the subcontract for works to proceed”. He also described the way in which some of the work would be done. At the foot of this email, as with the other emails I have mentioned, Mr Haralambis signed off above the name Haralambis Management Pty Ltd.

40. On 9 July 2014 Mr Evans informed the strata manager (Beth Cocking of Strata Plus Pty Ltd) by email that he had decided to withdraw his services. He said:

“Good afternoon Beth

Due to the circumstances with this project based on what I have experienced to date I think it will be very difficult for me to continue to achieve the necessary outcomes as there have been too many unanswered questions plus a number of issues in my scope that have been questioned and have been refuted by a member of the OC and these are not issues that are negotiable for me and should not be negotiable for the OC in my opinion.

It is clear that my role in assisting the OC will be constantly under challenge so I would rather the OC seek alternative technical advice than that which I have provided.

I get it that this is all very difficult for the OC to digest and negotiate such a large amount of technical and legal data. Under normal circumstances I would be engaged as an expert consultant and just insist on what steps must be followed to achieve the best outcome for all of the Owners not just the vested interests.

Accordingly I have regrettably decided to withdraw my services from this Strata Scheme, I hope you will understand the difficulty of my position.”

41. On 10 July 2014 the strata manager advised the members of the executive committee of Mr Evans’ decision. The members of the executive committee included Mr Haralambis.

42. Mr Evans confirmed his decision on 11 July 2014, in a further email after being pressed to change his mind. He told the strata manager:

“Good morning Beth

Thanks for your email. I don't see a role for myself that would not end in conflict so in the best interests of the Owners Corporation I think they will be better off with a new Consultant. I have tried very hard to achieve a fair and reasonable outcome for all stakeholders but I can't sign on to a compromised solution that constantly challenges best practice.

I am quite willing to explain my Scope of Works or provide any assistance to get a new consultant up to speed quickly (no fee required)”

43. On 11 July 2014 Mr Haralambis sent Mr Da Silva an email, copying in his brother Mr Ari Haralambis. He asked Mr Da Silva to “please provide your quotation confirming the price for all works at $17,832 plus GST to include the following”… “3. Preparation of slab and application of new polyurethane membrane in accordance with Paul Evan’s specification. … 7. All works in accordance with Paul Evan’s specification as agreed. …”. In his affidavit evidence, Mr Da Silva acknowledged that he received this email but says that he never provided Mr Haralambis with the quotation he wanted, nor discuss it further with him.

44. By 21 July 2014 the Owners Corporation had engaged the services of Mr Bill Moisidis of Bellmont Façade Engineering to oversee the works, then due to commence on Wednesday 23 July. Mr Moisidis’ fee proposal, accepted by the Owners Corporation, was “to provide inspections/review of technical reports/specifications/provide technical advice as required”.

45. On the same day (21 July 2014) Mr Haralambis (again writing on behalf of Haralambis Management Pty Ltd) sent an email to Mr Moisidis, Ms Coking (of the strata manager), Ms Natasha Rogers (the Chair of the executive committee and owner of Lot 105) and Ms Helen Sotiras (an employee of either Haralambis Management Pty Ltd or Haralambis Construction Pty Ltd). Attached to the email were a number of documents including and relating to a home building contract between Haralambis Construction Pty Ltd and the Owners Corporation for a contract price of $9,350 to undertake work including the installation of a rubbish chute and bin in relation to the tiling rectification works. In the body of the email Mr Haralambis said: “We will forward a copy of the John Da Silva contract and associated documents tomorrow”.

46. On 22 July 2014 Mr Da Silva met with Mr Haralambis in Mr Haralambis’ office in Surry Hills. It was at this meeting that Mr Da Silva signed the document which the Owners Corporation alleges constituted its written agreement with Mr Da Silva. I refer to this meeting in more detail elsewhere.

47. On 22 July 2014 at 12:58 PM Mr Haralambis sent an email to Mr Moisidis, Ms Rogers (the Chair of the executive committee) and Ms Cocking (of the strata manager), copying the email to himself and to Mr Da Silva. The “Subject” was described in the header of the email as “Lamia Tiling Rectification Project – Contract – John Da Silva (Tiling)”. In the header of the email, the first attachment was described as “Tile Projects – Home_building_contract_over_5000 Signed JDS.pdf”. The body of the email referred to a number of attachments, including the following:

“1. Home Building Contract Over $5000 signed and dated 22.07.2014 by John Da Silva;

…

2. Paul A Evans and Associates Scope of Works 14.05.2014;

3. Clarifications and Changes to P.A Evans and Associates Scope of Works dated 21.07.2014

4. Copy of John Da Silva's licence;

5. Tech Sheet - Bostik Dampfix PU;”

Attached to the email was a complete copy of the home building contract, which included page 2 of 27 as signed and dated by Mr Da Silva.

48. On 22 July 2014 at 3:59 PM Ms Emily Osborne of Haralambis Management Pty Ltd sent a list of names and contact details for “the project at Lamia” to Ms Rogers, Mr Haralambis, Ms Bartolo, Ms Shifreen and Mr Moisidis, copying in Mr Da Silva and Mr Ari Haralambis. Mr Da Silva’s role is described in the list as “Tiling Contractor”. Mr Ari Haralambis’ and Mr Con Haralambis’ roles are described as “Builder”. Mr Moisidis, referred to as Bill, is described as “Consultant to strata”.

49. On 22 July 2014 at 11:09 PM Ms Rogers replied to Mr Haralambis’ email attaching the home building contract signed and dated by Mr Da Silva, saying:

“Con,

Have reviewed documents below and will sign on behalf of the OC.

You can leave hard copy in my mail box (#105)

I can scan back to you for distribution.

regards

Natasha”

50. On 23 July 2014 at 6:03 AM, Mr Haralambis replied to Ms Rogers email, saying “Thx”. Mr Haralambis sent copies of the email to Mr Moisidis, Ms Cocking and Mr Da Silva as well as his brother and Ms Osborne. The “Subject” of the email was again described as “Lamia Tiling Rectification Project – Contract – John Da Silva (Tiling)”.

51. On 23 July 2014 at 4:30 PM, Mr Haralambis sent a hold/inspection point checklist to Mr Moisidis and Mr Da Silva, copying the email to his brother and Ms Rogers.

52. On 23 July 2014 at 6:42 PM, Mr Moisidis sent Mr Haralambis an email with a number of questions, copying in Mr Ari Haralambis and Ms Rogers.

53. On 23 July 2014 at 8:43 PM Mr Da Silva sent an email to Mr Haralambis with his comments about some items on the control/inspection checklist.

54. On 23 July 2014 at 9:46 PM Mr Haralambis replied to Mr Moisidis and Mr Da Silva, copying in Mr Ari Haralambis and Ms Rogers, and providing his comments in response to Mr Moisidis’s questions. One of the questions that Mr Moisidis had asked was “I understand that someone else is doing the waterproofing - Bechara? Does he need to be up to speed with all this also? Is the membrane system to be used confirmed as being that in Paul Evans scope?”. Mr Haralambis’ comment was: “he is working under John Da Silva — so John will brief him and manage him”.

55. On 24 July 2014 at 4:49 PM Mr Haralambis sent an email to Mr Da Silva with the stated subject “Lamia Tiling Rectification Project – John Da Silva Contract Signed” and the attachments described as “Da Silva Contract – Duly Signed.Pdf”. In the body of the email Mr Haralambis said:

“John,

We enclose signed contract by the Owners Corporation for the above project.

Please contact me should you have any queries.

Con Haralambis”

The attached contract was signed by the Owners Corporation on 23 July 2014 on the same page that Mr Da Silva had signed on 22 July 2014.

56. The work started on or about 28 July 2014.

A.2 What happened whilst Mr Da Silva undertook the work

57. On Monday 28 July 2014 Mr Moisidis sent the first of what counsel for the plaintiff referred to as 4 warning emails. He sent the email at 10.20 am to Ms Rogers (the chair of the executive committee), Mr Ari Haralambis, Mr Con Haralambis and Mr Da Silva, copying in Ms Cocking (of the strata manager). The email said:

“Hi All

I met with Ari this morning.

The deck is being cleared of debris today and tomorrow, and grinding of the membrane is likely to start the day after. I noted today that the screed was reinforced.

At same stage this week, I'd like to get a handle on the amount of fall achievable and Ari has kindly advised that he can obtain these levels by using his laser / dumpy level. I will speak to Ari mid-week this week to see when I can get back to site to see what has been exposed.

The drains will be blasted clean by Ari's plumber this week also.

Ari will be able to remove some of the glue from the skirting tiles on the concrete parapet as well as off a face block — so we can see what sort of finish is achievable (from an aesthetical point of view)

The limiting factors, as I had mentioned before will be the height of the balustrade (maintain correct parapet to finished floor height) and the sub sills. Both these factors are limiting the screed height. Discussion has occurred(today and last week with Con) around raising the screed height to cover the sub sill leg in part. My position on this is that I do not recommend this due to the following reasons:

- 1. Corrosion of the sub sill due to embedment of aluminium

- 2. Lifting of the finished floor height in comparison with the step down height

- 3. At present the weep holes are approximately 30mm above the tile level. Increasing the tile level brings the surface water to a height almost level with the weep holes. This does not allow the windows/sub sills to perform as designed.

I am conscious of the issue that we don't want to create more problems that what we had, so I am considering alternatives for the composition of the screed — something that will allow thinner beds to be used and therefore allow the tiler to pick up 15mm of height for example or more. Grinding of the slab around each drain (as discussed by Con) will assist in increasing that catchment area.

Once the site has been cleared and we have some levels, we will have a better idea of what heights there are to utilise.”

58. A little explanation is required to understand what Mr Moisidis was talking about in his email of 28 July 2014. In cross-examination he explained or accepted that the sub sills are at the base of the sliding door; the balustrade is, in effect, on the opposite side of the balcony; the screed is a cement layer that creates a fall towards the drain. He said he believed that the drains were centrally located so that you needed to increase the height of the screed nearest the apartment to allow for a fall towards the drain. In referring to “lifting of the finished floor height in comparison with the step down height” he was referring to lifting the finished floor height outside (on the balcony) compared to the inside floor height (inside the unit). He agreed that in effect he was concerned that there would be a similar height between the outside floor (on the balcony) and the inside floor (inside the unit). He agreed that his 3^rd point about increasing the tile levels closer to the levels of the weep holes had a similar consequence to raising the floor height. He agreed that if the external floor is at a lower height, water can escape the weep holes and by gravity fall to the outside finished wall and that if you raise the external floor, the water cannot escape by gravity because there is nowhere for it to fall. He agreed that it was for this reason he advised against raising the screed height and covering part of the sub- sill leg.

59. Mr Moisidis gave unchallenged evidence (which I accept) about meeting with Ms Rogers and Mr Con Haralambis on 28 July 2014 after sending this email.

59.1 He made a file note after the meeting (Exhibit 1). He recorded in his file note: “Meeting with Natasha Rogers + Con Haralambis to raise cavity flashings and build new hobs to doors. Natasha Rogers advised that strata plan does not want to raise door hobs so not to step over so wants to keep as is. Con Haralambis advised this is dangerous. Bill Moisidis confirmed limited certificate is not correct way to do this.”

59.2 In his affidavit evidence he said that aided by the file note, he recalled that during their meeting on 28 July 2014, he advised Ms Rogers and Mr Haralambis that the scope of works to rectify the water ingress ought to involve removing the existing sliding doors and raising the hobs which would allow the raising of the cavity flashings. Ms Rogers and Mr Haralambis advised that the Owners did not want to undertake these works. He recalled that he advised Ms Rogers and Mr Haralambis in this meeting that if his advice was not going to be heeded then Bellmont would not be able to certify the works as complying with the applicable building codes. He recalled advising Ms Rogers and Mr Haralambis that Bellmont would only be able to oversee the works and assess that they were being completed in line with the scope of works prepared by Mr Haralambis and agreed to by the Owners.

60. On Monday 4 August 2014 Mr Moisidis sent the second of what counsel for the plaintiff referred to as 4 warning emails. He sent the email at 10.17 am to Mr Ari Haralambis, copying in Mr Con Haralambis, Ms Osborne (an assistant to the Haralambis brothers), Mr Da Silva, Ms Rogers and Ms Cocking. The email said:

“Hi Ari

These drains are hot dip galvanised correct? ... you mentioned on site last week. If so (or grade 316 stainless), I have no problem with them. At my first meeting with Con, he suggested using the strip drains to assist in obtaining falls and the owners had no objection.

I don't believe the Owners have an issue with any drain in particular, just ensuring that the tile falls are sufficient enough to get the water to the drains.

Further to our meeting on Friday, I have again given consideration to the issue of covering the subsill. My position hasn't changed on the issue of tiling up over the leg of the subsill. I do not recommend it.

Subsills require that minimum set down (ie the leg of the subsill at the very least) to allow the weep holes to function fully and correctly in times of heavy rain and high wind gusts. Also, please see attached photo of a subsill in constant contact with wet cementitious screed (this is 14 years old).

I suggest you contact laticrete (that was the additive supplier's drum I saw on site on Friday - or another supplier if you have a preference - I know that Parchem and BASF have similar products) and discuss with them what they can provide to you which will allow you to use minimal screed thickness - so that your levels are not covering your subsills. High additive contents (in lieu of water) may increase your strength, reduce shrinkage, reduce the thickness of screed required to allow you to achieve falls.

In addition to the above, it may be of significant benefit to also grind the slab down around the floor drains to a larger area than what you currently anticipate to assist with improving the drainage.

The only other scenario I can see (aside from raising subsill heights) which may assist is installing new floor drains (coring through the slab). This will obviously mean that you will have some surface pipes in the balconies below, but it may prove to be a very reasonable solution considering the risks of raising the tile bed.

Please contact me to discuss this further - no doubt we will need to.”

61. In cross-examination Mr Moisidis explained that high wind gusts are relevant to the set down because as the wind is blowing against the sub- sill or the sliding door the water in that sub- sill cannot escape because its passage is being blocked by the wind blowing the water back in. He agreed that in effect the more wind, the greater the likelihood that the water will be blown back towards or into the apartment if the wind is going in that direction.

62. On Tuesday, 5 August 2014 at 4:23 PM Mr Haralambis sent an email to Ms Rogers, Mr Ari Haralambis, Mr Moisidis and Mr Da Silva setting out confirmation of works that had been agreed at a meeting between himself, Mr Moisidis, Mr Ari Haralambis and Mr Da Silva on Monday, 4 August 2014 between 4.30 and 5 PM. As with his other emails, Mr Haralambis signed off the email above the name Haralambis Management Pty Ltd.

61. On Friday 8 August 2014 Mr Moisidis sent the third of what counsel for the plaintiff referred to as 4 warning emails. He sent the email at 4.27 pm to Mr Con Haralambis and Ms Rogers, copying in Mr Ari Haralambis, Mr Da Silva and Ms Cocking. The email said:

“Hi All

I agree with Con's meeting minutes, though need to advise that there was one point that I reiterated at the meeting which has not been minuted below.

This is the issue of screeding and tiling over the leg of the subsill (in part) and our concern with this procedure with respect to corrosion, lifting of the finished floor level and also performance of the sliding doors.

It was noted by the tiler that he could use a higher additive to sand/cement ratio and thereby reduce the thickness of the screed and hence avoid covering the subsill leg (in part), but the tiler identified that this would slow him down when laying the screed and would cost more as the would require additional buckets of product. I don't believe that this is an appropriate reason to avoid using the additive.

This needs to be clearly documented and all risks associated with proceeding with the tilers (Tile projects) methodology clearly understood so that the warranty implications for the tiler are also clear. I can't recall if there was any proposed warranty issued by the tiler.

64. On Monday 15 September 2014 Mr Moisidis sent the fourth of what counsel for the plaintiff referred to as 4 warning emails. He sent the email at 4.00 pm to both Mr Haralambises and Mr Da Silva (John), copying in (amongst others) Ms Cocking, Ms Rogers, Ms Shifreen and Ms Bartolo, with stated subject “Lamia – Window sub sills”. The email said:

“Hi Con / Ari/ John

Please see the attached photo of a sub sill which was buried in a tiled bed and had grout packed in behind it (from another project we are inspecting which is 10 years old). The level of corrosion is tremendous.

As you know, I have advised my concerns with burying subsills previously and hence why we advised you that a thin bed screed should be used to avoid this issue. The thin bed screed allows for greater falls to be created by going from feather edge up to the required 30mm (or so).

The reason the thin bed screed was not used was because John advised that it would cost more and be slower and that its more difficult to lay the screed.

I just need to reiterate this again, so it is clear and there is no misunderstanding and obviously, to make it clear that this method was not my recommendation and that I recommended against this method of burying subsills. I NOTE that it is not ALL subsills that have this issue.

Based on the above, we are now in a position of trying to overcome the issue of buried sills by waterproofing or sealing or by some other means protecting them from corrosion. le trying to make the best out of the situation created with the seals.”

65. On 12 October 2014 Ms Bartolo (the secretary of the executive committee) sent an email to Mr Con Haralambis, Mr Da Silva and Mr Ari Haralambis about the timing of the completion of the works. Ms Bartolo asked if they could be completed by Saturday 18 October. Mr Con Haralambis then took the matter up with Mr Da Silva in an exchange of emails on 12 and 13 October 2014, copying in Mr Ari Haralambis.

66. On 27 November 2014 Bellmont Façade Engineering Pty Ltd wrote a letter to the proprietors of the strata plan care of the strata manager providing a certificate of final inspection for the balcony of unit 301. The letter was signed by Mr Peter Nguyen of Bellmont Façade. Emails leading up to the provision of the letter show that Mr Moisidis was involved in its preparation. The letter stated:

“Bellmont Façade Engineering was engaged by the Executive Committee of SP 80867 to inspect, comment on the balcony rectification works completed by Haralambis Constructions and John Da Silva of Tile Projects at the above mentioned address. The final inspection was undertaken on Wednesday 26th November 2014 and was accompanied by Eve Bartolo. The visual inspection consisted of an external inspection of the balcony rectification works concerning the external tiled balcony terrace.

Subsequent to our inspection, we identified the following minor works that require further rectification:

…

Bellmont Façade Engineering confirms that the scope adopted by Haralambis Constructions, Tile Projects and the Owners has been completed as per the agreement reached. It should be clear however, that this certificate is not intended to confirm that the works have been completed in accordance with the Building Code of Australia.”

67. On 19 December 2014 an inspection carried out by Mr Moisidis, Mr Da Silva, Mr Con Haralambis and the supplier of the tile adhesive of the terrace tiling for Ms Shifreen’s unit (Unit 303) revealed that the adhesive had adhered well to the back of the tile but not to the upper layer membrane. The problem was common to the remainder of the balcony. It required the removal of the existing tiles, the application of a new compatible moisture seal coating and the re-laying of new tiles. All of this was explained in an email from Mr Moisidis to Ms Rogers, Mr Da Silva and the Haralambis brothers on 23 December 2014. It was envisaged that the rectification work would need to be done in the New Year.

68. A program for undertaking this rectification work was laid out in an email from Mr Con Haralambis to Mr Moisidis, Ms Rogers, Mr Ari Haralambis, Mr Nguyen and Mr Da Silva on 22 January 2015.

69. Mr Da Silva attended the site on 11 February 2015 and removed approximately 1.5 square metres of tiles to create a test patch for this rectification work.

70. On 28 February 2015 Mr Da Silva sent a draft program plan to Mr Moisidis and the Haralambis brothers to proceed with the rectification work in full commencing the following Monday (2 March 2015).

71. On Wednesday, 4 March 2015 Mr Moisidis reported to the executive committee of the Owners Corporation, the Haralambis brothers, Mr Da Silva and the strata manager that Mr DeSilva had that day stripped the tiles and was applying the moisture seal coat to the terraces.

72. The work was finally completed by 7 April 2015 (per letter from Mr Moisidis dated 15 April 2015).

A.3 What happened immediately after Mr Da Silva finished the work

73. On 15 April 2015 Mr Moisidis sent a letter to the Proprietors of SP 80867 care of the strata manager. The subject of the letter was stated as “Level 3 Terrace Rectification Works 276-278 Marrickville Road, Marrickville – SP 80867”. The letter said:

“Bellmont Façade Engineering confirms that the remedial waterproofing and tiling scope of works adopted by Tile Projects and the Owners Corporation has been completed as of 7 April 2015.

Please do not hesitate to contact the undersigned should you require any further assistance.”

74. On 20 April 2015 a series of emails passed between Ms Rogers (the chair of the executive committee), Mr Dick Lopes (the occupant of unit 301), Ms Shifreen (the owner of unit 303), Mr Ari Haralambis, Mr Con Haralambis, Mr Moisidis and other unit owners. It appears that each email was copied to the whole group.

74.1 At 8:17 PM, Ms Rogers sent an email to Mr Ari Haralambis and Mr Con Haralambis stating:

“Claudia in apt 302 has just contacted me to say she has arrived home to find a significant amount of water in her apartment.

I have gone to have a look – the sliding tracks in both her rooms that open onto the balcony are overfilling with water which has travelled along the floorboards.

She has mopped up the water on the surface and has towels and sheets down at present.”

74.2 At 8:27 PM Mr Dick Lopes replied all stating:

“I can report the same water presence in unit 301 in the east facing door sliding tracks but not overflowing. Will put down towels tonight in case it worsens”.

74.3 At 8:54 PM Ms Shifreen replied to Mr Lopes:

“It happens every time there’s rain and strong wind.”

74.4 At 9:07 PM Mr Con Haralambis wrote:

“No one has ever reported that water enters sliding doors onto timber floor

Ava says it happens all the time ???? Is that water in tracks or on timber floors Ava?

I can be there tomorrow morning to have a look will Claudia be there say 7:30 am?”

74.5 At 9:14 PM Ms Rogers addressed an email to Mr Con Haralambis:

“ Con,

This is the first time that Claudia has experienced it.

One thought was that there may be some debris covering the drainage holes in the external sliding tracks – it was too dark and wet to tell.

I will contact her to ask about tomorrow and let you know.

Thank you”

74.6 At 9:45 PM Ms Schifreen said:

“Con

The water wells up in the tracks and overflows onto the timber floors.

I have spoken to you about this and Imogen and I both emailed you about it. It is also a list of things I emailed to Strata plus that I brought up with Paul Evans.”

74.7 At 9:47 PM Mr Con Haralambis said:

“Water in tracks I understand and it drains out / dries out etc – that is how they are designed

But entering onto timber floors I am not aware of and certainly not in the Paul Evans report we are working to

Please contact me should you have any queries.”

74.8 At 10:12 PM Ms Shifreen said:

“Con, as I said, Imogen and I emailed you about and it was mentioned in an email I sent to strata plus about some things I bought up with Paul Evans.”

75. The emails continued on 21 April 2015:

75.1 At 1:03 AM Ms Shifreen said:

“PS Con, You suggested I contact Bradnam’s, which I did. They didn’t offer a solution.”

75.2 At 7:19 AM Mr Haralambis said:

“That was for water sitting in track which they advised drained or dried out – again ni one has advised water going through doors onto timber floors

Please provide copies of the correspondence you are referring to”.

75.3 At 7:33 AM Ms Shifreen said:

“I did.”

75.4 At 7:40 AM Ms Shifreen said:

“It’s the same problem, Con. The water wells up in the tracks because it doesn’t drain fast enough in heavy rain and overflows onto the timber floors. That’s the reason you advised me to contact Bradnams and the reason they tried to make the drain holes bigger.

B. DID THE OWNERS CORPORATION AND MR DA SILVA HAVE A BINDING CONTRACT IN ACCORDANCE WITH THE DOCUMENT SIGNED BY MR DA SILVA ON 22 JULY 2014?

B.1 Non est factum is the issue

76. Did the Owners Corporation and Mr Da Silva have a binding contract in accordance with the document signed by Mr Da Silva on 22 July 2014? The only question here is whether or not Mr Da Silva succeeds on his defence of non est factum.

77. Counsel for Mr Da Silva submitted that the court should accept Mr Da Silva’s evidence about the actual signing and circumstances surrounding the signing by Mr Da Silva of the document. Based on the court accepting that evidence, Mr Gray submitted that it was a “plain case of non est factum”.

B.2 Mr Da Silva’s evidence

78. Mr Da Silva admits that it is his signature on page 2 of 27 of the home building contract relied upon by the Owners Corporation.

79. He describes the circumstances in which he came to place his signature on that page in his affidavit of 14 February 2023 (more than 8 years after the event) as follows:

“16. On 22 July 2014 Tile Projects was ready to commence work on the Lamia Project on 23 July 2014. I met with Con Haralambis at his office in Surry Hills. I knew that Con Haralambis was both a practising solicitor and a director of a group of related companies engaged in the construction industry of which Haralambis Construction was one and Haralambis Management was another. The meeting lasted approximately 5 - 10 minutes. Con Haralambis and I discussed matters other than the Lamia Project but in relation to the Lamia Project Con Haralambis said to me words to the effect:

CH: I need to get you to sign this for the Owners' Corporation so you can start work on the site. It is for insurance and work, health and safety purposes.

17. Con Haralambis pointed to a single sheet of paper on his desk partly obscured under a pile of papers. It is common, but not invariable, for me to be asked to sign documents which confirm that formalities to perform building work on a particular site are in order, e.g. that the work will be done by a licensed tradesman, that required insurances are in place, etc. I pulled the sheet of paper to expose more of it so I could sign it. I signed the piece of paper believing that it was a routine document of this type for the Lamia Project and left it on Con Haralambis's desk. I did not know the piece of paper was a contract under which I would have personal liability and I would not have signed it had I known that (I had already signed a sub contract between Haralambis Construction and Tile Projects for Tile Projects to do the Lamia Project work (page 7)).

18. … The document I signed on 22 July 2014 was a single sheet of paper - it certainly did not have attached to it the other pages purporting to be a contract between Owners Corporation 80867 and me personally …”

80. Pages 5 to 27 inclusive of the document relied upon by the Owners Corporation as the contract have handwriting against the typed words “Contractor initials”. Mr Da Silva denied that he had placed his initials on those pages, and the Owners Corporation did not assert otherwise.

81. In his affidavit dated 25 August 2023, Mr Da Silva said:

“5. … I reaffirm that when I attended the office of Con Haralambis on 22 July 2014 I had no knowledge or belief that I was there to sign another contract with the Owners for the Marrickville Lamia Apartments tiling work. Con Haralambis had a one page document form ready for me to sign, he told me, for commencing the tiling work at the Marrickville Lamia Apartments site ( and the Rushcutters and Surry Hills sites) but we never discussed anything to do with a second contract for the Marrickville Lamia Apartments project and especially a contract to be made by me personally. I signed the document form in the circumstances described in paragraphs 16 to 18 of my first affidavit.

7. … I confirm that at the meeting at Con Haralambis's office on 22 July 2014 there was no mention of any new contract for the Marrickville Lamia Apartments project — It is something I would remember and I would have refused outright to sign a second contract in my own name. If I had signed a second HIA contract form knowing what the form was I would have initialled every page at the time I signed the document. I was very familiar with the HIA standard form contracts and I knew I had to initial or sign every page.”

82. In his affidavit of 14 February 2023 Mr Da Silva accepted that he received the email sent by Mr Haralambis on 22 July 2014 at 12:58 PM, attaching a copy of the contract after Mr Da Silva had signed page 2 of 27, but said (at paragarph 20) that he “paid no attention to the documents”. He said “it looked to me they were and I assumed they were about the documents I signed on 30 May 2014 … I did not open the attachments to the email or print them.”.

83. In the same affidavit Mr Da Silva accepted that he received the email sent by Mr Haralambis on 24 July 2014 attaching a copy of the contract signed by the Owners Corporation, but said (at paragraph 25) that he “assumed it was a copy of a contract the Plaintiff signed with Con Haralambis”. He said he did not print the attachment.

84. In cross-examination:

84.1 Mr Da Silva said that he wrote the date 22/07/14 under his signature on the page he signed.

84.2 He was challenged on his evidence that Mr Haralambis told him it was for insurance and work, health and safety purposes. When it was drawn to his at attention that he had already provided to Mr Haralambis certificates of currency and details for his company’s public liability and workers compensation insurances on 19 June 2014 (proof of which is provided by an email of that date), Mr Da Silva suggested that it was about health and safety and that in any job he has to go to, all his workers need to sign a form about health and safety. When it was drawn to his attention that only he was being asked to sign the document and not his workers, he suggested that it was about insurances because the site induction related to insurance anyway and suggested he needed to sign to confirm that all of his workers had been complying.

84.3 He said “the table was full of documents like plans and other things”.

84.4 Mr Da Silva gave the following evidence (T137):

Q. And did Mr Haralambis point to the document? Or how did--

A. Yes.

Q. --you know what to sign?

A. No. Well, we had been discussing - so I got, like I told you - and I didn’t tell him. Telling you now. I wasn’t - that was this office for five, ten minutes. We discuss all the jobs. And before I go he - he - he said to me, “Please sign up here before you sign works”. And, guess what? I done it.

84.5 Mr Da Silva contradicted his own affidavit evidence about pulling out the page he signed in order to see more of it. In his affidavit he had said “I pulled the sheet of paper to expose more of it so I could sign it”, whilst in cross-examination he denied that he pulled the page out at all. His evidence in cross-examination was (T137):

Q. And you say you had to pull the page out to see so that you could sign it - from under the papers.

A. No, no. I didn’t pull it. It just sign - “please sign up here”. He give me the pen, and I sign it under - on the - on the spot.

84.6 Mr Da Silva said that he did not notice that the document he signed was “2 of 27”. He agreed with the suggestion that he just signed it.

84.7 He said that he knew Mr Haralambis was a solicitor and asked the rhetorical question why could he not trust him?

84.8 When asked about the email sent by Mr Haralambis on 22 July 2014 at 12:58 PM (attaching a copy of the contract after Mr Da Silva had signed page 2 of 27) Mr Da Silva admitted receiving that email the same day he signed a document in Mr Haralambis’s office. He admitted that the email said “Here’s a copy of the contract Mr Da Silva has just signed” but said he “just didn’t read” the email. He agreed that he “ignored that email”.

84.9 When asked about the email sent by Mr Haralambis on 24 July 2014 (attaching a copy of the contract signed by Mr Da Silva and the Owners Corporation), Mr Da Silva admitted receiving the email but said that he probably didn’t read it, then said he saw the email but didn’t read it at all.

B.3 Mr Da Silva’s submissions about non est factum

85. Mr Gray submitted that the court should accept Mr Da Silva’s evidence because:

85.1 The court should draw a Jones v Dunkel (1959) 101 CLR 298 inference against the Owners Corporation because of its failure to call Mr Haralambis as a witness. The court should infer that no evidence Mr Haralambis could give would have assisted the Owners Corporation’s case about the circumstances surrounding Mr Da Silva signing the 22 July 2014 contract document (written outline paragraph 2). The court can have full confidence in Mr Da Silva’s evidence, supported in critical respects by the failure of the plaintiff to call Mr Haralambis (paragraph 3).

85.2 Mr Da Silva was straightforward and frank in giving his evidence. This was demonstrated by his frank admission about 2 matters in particular that did not help his case, namely (a) the fact that he had received from Mr Haralambis a copy of the “contract” dated 22 July 2014 and did not respond to it in any way; and (b) the fact that he knew the waterproofing work which he carried out at the Lamia apartments did not comply with the relevant Australian Standard (paragraph 4). Mr Da Silva openly acknowledged that after receiving Mr Haralambis’s email of 22 July 2014 he had never sent any email repudiating the 22 July 2014 contract.

85.3 Mr Da Silva was candid and responsive and did not attempt to evade any questions (paragraph 4).

85.4 It was not put to Mr Da Silva that his evidence was false. The cross-examination was directed to establishing the unlikelihood that his evidence was true (paragraph 18). It was never put to Mr Da Silva in cross-examination that he knew perfectly well that the document he signed was a home building contract; and his assertion that he did not believe that it was a home building contract was not challenged (T251).

H.2 The Owners Corporation’s case

244. Mr Marshall (Counsel for the plaintiff) summarised the Owners Corporation’s case against Mr Da Silva in his written closing submissions as follows:

244.1 Mr Da Silva owed the Owners Corporation the duty to exercise reasonable care to avoid economic loss caused by defects in or related to the Lamia building and arising from the construction work performed by Mr Da Silva.

244.2 Mr Da Silva, in order to meet that duty of care, was required to either:

1. perform the construction works in accordance with the Building Code of Australia (BCA) and the relevant Australian Standard (AS 4654.2 – 2012); or

2. if Mr Da Silva was instructed to perform the construction works in a manner inconsistent with the BCA and the Australian Standard, to expressly warn the Owners Corporation in writing of the likely economic loss that would be caused if Mr Da Silva so performed the construction works; or

3. if the instructions continued such that Mr Da Silva was unable to perform (or was prevented from performing) the construction works in accordance with the BCA and the relevant Australian Standard, Mr Da Silva should have refused to perform the construction works.

244.3 Performing the construction works in accordance with the BCA and the relevant Australian Standard (AS 4654.2 – 2012) would have involved Mr Da Silva doing those things pleaded at paragraph 38 of the Amended Statement of Claim. Paragraph 38 of the Amended Statement of claim set out a list of 19 precautions that it was alleged ought reasonably to have been taken by a reasonable person in Mr Da Silva’s position. Mr Da Silva did not do so.

244.4 Having failed to exercise such reasonable care, Mr Da Silva failed to discharge his duty of care and was therefore negligent.

244.5 By so failing to exercise such reasonable care, Mr Da Silva has caused economic loss to the Owners Corporation in the form of damage to the common property of the building which the Owners Corporation is liable to repair, damage caused to the owners’ property by the defective common property and costs that must be incurred by the Owners Corporation in removing the defective work performed by Mr Da Silva and replacing it with compliant work.

244.6 The scope of work required to achieve this outcome, and the cost of doing so, has been agreed by all the experts in the proceedings. The cost is $462,707.93.

H.3 Mr Da Silva’s response

245. I have already set out in general terms at the start of these reasons Mr Da Silva’s response to the claim based on a breach of the statutory duty. For ease of reference I repeat it now:

245.1 Mr Da Silva accepts that he owed the Owners Corporation the duty of care stated in s.37 because the work he did was construction work.

245.2 He says that the “construction work” he carried out was the work he actually did, which he says was in accordance with the varied scope of works agreed by the parties.

245.3 He says that the economic loss of the Owners Corporation was caused by the deficient or absent waterproofing relating to the sliding door and window fixtures, and not arising from the construction work he carried out (T268).

245.4 Mr Da Silva says that reasonable care did not require him to have any involvement in rectifying defects in the existing sliding door and window fixtures (T267), or to undertake significant work that he had been instructed not to do and for which he would not be paid (T270).

245.5 He says if the scope of works was varied during the course of the work such that compliance with the Building Code of Australia and Australian Standards were dispensed with (which he says was the case), reasonable care did not require him to then stop the work rather than complete it (T271).

245.6 Mr Da Silva also raises a number of defences based on provisions of the Civil Liability Act, 2002.

246. In addition to accepting that he owed the Owners Corporation the duty of care stated in section 37 because the work he did was construction work, Mr Da Silva made a number of relevant admissions on the pleadings. He has admitted that:

246.1 The Lamia building is a “building” within the meaning of section 36 of the DBP Act.

246.2 The works were “residential building work” within the meaning of the Home Building Act, 1989, and “building work” and “construction work” within the meaning of s.36 of the DBP Act.

246.3 The owners corporation is the “owner of the land” and an “Owners Corporation” within the meaning of s.36 of the DBP Act.

H.4 My analysis and findings

247. Many of Mr Gray’s submissions for Mr Da Silva raise matters I have already considered and determined when dealing with the claim for breach of contract. It is simplest for me to address those submissions first.

248. As to the submission that the “construction work” Mr Da Silva carried out was the work he actually did, which he says was in accordance with the varied scope of works agreed by the parties, I have already found that I am not satisfied that there was a varied scope of works agreed by the parties.

249. As to the submission that the economic loss of the Owners Corporation was caused by the deficient or absent waterproofing relating to the sliding door and window fixtures, and not arising from the construction work he carried out, I have already dealt with this issue in considering causation for the breach of contract. I have already found that the work Mr Da Silva carried out in breach of the Australian Standards and Building Code of Australia was the cause of the water ingress.

250. As to the submission that Mr Da Silva says that reasonable care did not require him to have any involvement in rectifying defects in the existing sliding door and window fixtures, or to undertake significant work that he had been instructed not to do and for which he would not be paid, this raises what is really now a false issue on the facts as I have found them and on the way the Owners Corporation puts its case.

251. As to the submission that if the scope of works was varied during the course of the work such that compliance with the Building Code of Australia and Australian standards were dispensed with (which he says was the case), reasonable care did not require him to then stop the work rather than complete it, I have already found that I am not satisfied that the scope of works was varied during the course of the work such that compliance with the Building Code of Australia and Australian standards were dispensed with.

252. I move then to Mr Marshall’s submissions for the Owners Corporation.

253. I find that Mr Da Silva owed the Owners Corporation a duty to exercise reasonable care to avoid economic loss caused by defects in or related to the Lamia building and arising from the construction work performed by Mr Da Silva. This duty of care arises from section 37 of the DBP Act.

254. I find that in order to meet that duty of care Mr Da Silva was required to perform the construction works in accordance with the Building Code of Australia and the relevant Australian Standard (AS 4654.2-2012). That requirement is consistent with the evidence of the 3 expert witnesses (Mr Taylor, Dr Cunniffe and Mr Hamilton) and Mr Da Silva’s obligations under the contract.

255. I find that Mr Da Silva breached that duty of care by failing to perform the construction works in accordance with the Building Code of Australia and the relevant Australian Standard. I have already made findings in that regard when considering the breach of contract.

256. Bearing in mind that section 5B of the Civil Liability Act 2002 applies I make the further following findings:

256.1 I find that the risk of harm including damage to property was foreseeable. The risk was that if the waterproofing work was not performed in accordance with the Building Code of Australia and Australian Standard then it may fail. Mr Da Silva conceded as much in cross examination and 2 of the 3 experts gave unqualified support to that proposition.

256.2 I find that the risk was not insignificant. It was not far-fetched or fanciful.

256.3 I find that a reasonable waterproofer in Mr Da Silva’s position would have taken the precaution of complying with the Building Code of Australia and the Australian Standard. This is something he had agreed to do under the contract in any event.

257. I have already found that the work Mr Da Silva carried out in breach of the Australian Standards and Building Code of Australia was the cause of the water ingress. The parties have agreed that the work needs to be redone and the Owners Corporation is entitled to damages for the full cost of rectification That addresses factual causation under section 5D(1)(a) of the Civil Liability Act 2002. As to section 5D(1)(b), it is appropriate in my view for the scope of Mr Da Silva’s liability to extend to the harm caused bearing in mind that the duty of care is imposed by statute and the mischief to which the statute is directed as explained by Kirk JA and Griffiths AJA in Roberts.

258. I have already dealt with the quantification of damages.

I. IS MR DA SILVA ENTITLED TO SUCCEED ON ANY DEFENCES BASED ON PROVISIONS OF THE CIVIL LIABILITY ACT, 2002?

I.1 Contributory negligence

259. Rule 14.16 of the Uniform Civil Procedure Rules provides that “A defendant who relies on contributory negligence must plead specifically the contributory negligence.”.

260. Mr Da Silva pleaded contributory negligence in paragraphs 53 to 55 inclusive of his defence.

261. In an outline of written submissions provided to the court and to the Owners Corporation on the morning of the last day of the hearing, Mr Gray set out an entirely new allegation of contributory negligence unrelated to the pleaded defence. He addressed the written submission allegation of contributory negligence in his oral closing submissions.

262. Mr Marshall for the Owners Corporation addressed the new allegations of contributory negligence very briefly in his oral reply, as best he could having only been presented with them earlier that morning and listening to Mr Gray speak. Mr Marshall did not take a pleading point, but that that does not remove the force of rule 14.16.

263. In the circumstances I do not propose to address Mr Gray’s written or oral submissions about contributory negligence any further.

I.2 Proportionate liability

264. Mr Da Silva also pleaded a proportionate liability defence under Part 4 of the Civil Liability Act, 2002. Mr Gray referred to it also in his outline of written submissions.

265. Section 34(3A), which is in Part 4, provides that “This Part does not apply to a claim in an action for damages arising from a breach of statutory duty under Part 2C of the Home Building Act 1989 and brought by a person having the benefit of the statutory warranty”. Section 18B is in Part 2C of the Home Building Act 1989. I have found that the Owners Corporation has the benefit of the statutory warranty.

266. As I have already mentioned, in The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2023] NSWCA 301, the Court of Appeal held that Part 4 of the Civil Liability Act 2002 does not apply to a claim for damages for breach of the statutory duty because, amongst other reasons, the statutory duty is expressed to be non-delegable.

267. Having regard to those matters, I do not propose to address the question of proportionate liability any further.

J. COSTS

268. In the event that the Owners Corporation succeeded in its claim it submitted that the court should invite subsequent submissions on costs.

269. I therefore defer making any decision about costs and I will list the matter for directions.

K. MY ORDERS

270. I have found that the Owners Corporation is entitled to damages in the sum of $462,707.93 for breach of contract and for breach of the statutory duty of care.

271. The parties agreed that this sum should be reduced by $145,000 to reflect the contribution to be paid to the Owners Corporation through its settlements with the second and third defendants, Mr Haralambis and Bellmont Façade Engineering Pty Ltd.

272. In those circumstances it is appropriate, as the Owners Corporation submitted, to give judgment for the Owners Corporation against Mr Da Silva in the sum of $317,707.93.

273. I make the following orders:

273.1 Judgment for the plaintiff against the first defendant in the sum of $317,707.93.

273.2 List the matter for directions before me at 9:30 AM on Friday 12 July 2024.

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Amendments

05 July 2024 - 5 July - corrected table of contents placement

Decision last updated: 05 July 2024