The Owners - Strata Plan No 87265 v Saaib; The Owners - Strata Plan No 87265 v Alexandrova

[2021] NSWSC 150

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

The Owners – Strata Plan No 87265 v Saaib; The Owners – Strata Plan No 87265 v Alexandrova [2021] NSWSC 150

Hearing dates:

3–7 February 2020, 11, 12 March 2020

Date of orders:

01 March 2021

Decision date:

01 March 2021

Jurisdiction:

Equity - Technology and Construction List

Before:

Henry J

Decision:

In proceeding 2016/382268:

(1)   The Plaintiff’s summons filed 20 December 2016 be dismissed.

(2)   The Plaintiff pay the First Defendant’s costs of the proceedings as agreed or assessed.

In proceeding 2019/235463:

(1)   There be judgment in favour of the Plaintiff against the Defendant in the sum of $3,425,583.54.

(2)   The Defendant pay the Plaintiff’s costs of the proceedings as agreed or assessed.

Catchwords:

AGENCY – whether implied actual authority to enter building contract – where builder did not sign contract – where numerous documents signed in name of builder – whether builder authorised nephew to enter into contract on his behalf – no authority found from the circumstances

BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – statutory warranties – whether defects part of lot property or common property

CONSUMER LAW – misleading or deceptive conduct – causation or reliance – where home warranty insurance issued due to misleading representations made by insurance broker – whether representations sufficiently causative of loss to Owners Corporation

EVIDENCE – tendency evidence – conduct – whether evidence of builder performing favours for friends characterised as tendency evidence of conduct regarding commercial development

Legislation Cited:

Civil Liability Act 2002 (NSW), s 35

Civil Procedure Act 2005 (NSW), ss 56, 57, 100

Competition and Consumer Act 2010 (Cth), ss 87CB, 87CD; Sch 2 – Australian Consumer Law, ss 18, 236

Environmental Planning and Assessment Act 1979 (NSW), s 109E(3)(b)

Evidence Act1995 (NSW), ss 38, 95, 97, 128, 140(2)

Fair Trading Act1987 (NSW), ss 42, 68

Home Building Act 1989 (NSW), ss 18B, 92, 99

Strata Schemes (Freehold Development) Act 1973 (NSW), s 5

Strata Schemes Management Act2015 (NSW), s 106

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

ABN AMRO Bank NV v Bathurst Regional Council (2014) 224 FCR 1; [2014] FCAFC 65

Anthony v Morton [2018] NSWSC 1884

Arktos Pty Ltd v Idyllic Nominees Pty Ltd [2004] FCAFC 119; ATPR 42-005

Atanaskovic v Birketu Pty Ltd [2019] NSWSC 1006

Australian Competition and Consumer Commission v Birubi Art Pty Ltd [2018] FCA 1595

Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54

Bective Station Pty Ltd v AWB (Australia) Ltd [2006] FCA 1596

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

Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142

Borzi Smythe Pty Ltd v Campbell Holdings (NSW) Pty Ltd [2008] NSWCA 233

Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34

ButchervLachlanElderRealtyPty Ltd (2004) 218 CLR 592; [2004] HCA 60

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25

Carr v Miller [2018] NSWSC 1424

CH Real Estate Pty Ltd v Jainran Pty Ltd; Boyana Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37; 14 BPR 27,361

Chapman v Taylor; Vero Insurance Ltd v Taylor [2004] NSWCA 456

Commonwealth v Amann (1991) 174 CLR 64

Downer EDI Rail Pty Ltd v John Holland Pty Ltd (No 4) [2018] NSWSC 326

Dynamic Lifter Pty Ltd v Incitec Ltd (1994) 30 IPR 198

Elomar v R (2014) 300 FLR 323; [2014] NSWCCA 303

Equuscorp Pty Ltd v Glengallen Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55

Fabre v Arenales (1992) 27 NSWLR 437

Field v Shoalhaven Transport Pty Ltd [1970] 3 NSWR 96

Finishing Services Pty Ltd v Lactos Fresh Pty Ltd [2006] FCAFC 177

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1

Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75

HSDCo Pty Limited v Masu Financial Management Pty Limited [2008] NSWSC 1279

Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357; 43 IPR 545

Henville v Walker (2001) 206 CLR 459; [2001] HCA 52

Houghton v Arms (2006) 225 CLR 553; [2006] HCA 59

I& L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; [2002] HCA 41

Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51; [2000] FCA 1886

Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526

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

Junker v Hepburn [2010] NSWSC 88

Manly Council v Byrne [2004] NSWCA 123

March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12

Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; [1998] HCA 69

Meandarra Aerial Spraying Pty Ltd v GEJ & MA Geldard Pty Ltd as trustee for the G & M Geldard Family Trust [2013] 1 Qd R 319; [2012] QCA 315

Mistrina Pty Ltd v Australian Consulting Engineers Pty Ltd [2020] NSWCA 223

Nominal Defendant v McLennan [2012] NSWCA 148

Painter v Hutchison [2007] EWHC 758 (Ch)

Pola v Commonwealth Bank of Australia (Federal Court, Sundberg J, 19 December 1997, unrep)

Rail Corp New South Wales v Donald; Staff Innovations Pty Ltd [2018] NSWCA 82

Re HIH Insurance Ltd (In Liq) [2016] NSWSC 482; 335 ALR 320

RHG Mortgage Corporation Ltd v Iaani [2016] NSWCA 270

RHG Mortgage Ltd v Rosario Ianni [2015] NSWCA 56

Royal Guardian Mortgage Management Pty Ltd v Nguyen [2016] NSWCA 88

Seven Network Ltd v News Ltd [2007] FCA 1062

Smouha v Fleming (1997) 8 BPR 15,419

Symes v The Proprietor Strata Plan No. 31731 [2001] NSWSC 527

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

Tonna v Mendonca [2019] NSWSC 1849

Twynam Pastoral Co Pty Limited v AWB (Australia) Limited [2008] FCA 1922

Ucak v Avante Developments Pty Ltd [2007] NSWSC 367

Volonakis v Erceg [2019] NSWSC 1875

Vukmirica v Betyounan [2008] NSWCA 16

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55

Warner v Hung, In the matter of Bellpac Pty Limited (Receivers and Managers appointed) (In Liq) No 2 (2011) 297 ALR 56; [2011] FCA 1123

Watson v Foxman (1995) 49 NSWLR 315

Westpac Banking Corporation v Velingos [2011] NSWSC 607

Wheeler v Ecroplot Pty Ltd [2010] NSWCA 61

White v Johnston (2015) 87 NSWLR 779; [2015] NSWCA 18

Yorke v Lucas (1985) 158 CLR 661

Texts Cited:

G E Dal Pont, Law of Agency (4th ed, 2020, LexisNexis)

Neville Moses, Ross Tzannes and Diane Skapinker, Strata Titles NSW (2017, Thomson Reuters)

Peter Butt, Land Law (7th ed, 2017, Thomson Reuters)

Philip Bambagiotti, Building Disputes & The Home Building Act 1989 (NSW) (2012, Thomson Reuters)

Sydney Jacobs, Commercial Damages (Westlaw AU)

Category:

Principal judgment

Parties:

Proceedings 2016/382268

The Owners – Strata Plan No 87265 (Plaintiff)
Tony Saaib (First Defendant)

Proceedings 2019/235463

The Owners – Strata Plan No 87265 (Plaintiff)
Irena Alexandrova (also known as Irina Alexandrova) (Defendant)

Representation:

Counsel:
N Kidd SC with S Ahmed (Plaintiff 2016/382268 and 2019/235463)
S Lawrance with M Fernandes (First Defendant 2016/382268)

Solicitors:
Mills Oakley (Plaintiff 2016/382268 and 2019/235463)
Centurion Lawyers (First Defendant 2016/382268)

Self-represented:
Irena Alexandrova (Defendant 2019/235463)

File Number(s):

2016/382268; 2019/235463

Publication restriction:

Nil

Judgment

1. These reasons deal with two proceedings, which were heard together with evidence in the one being evidence in the other, involving disputes arising from the construction of 11 townhouses located at Livingstone Road, Marrickville, New South Wales (Marrickville property) in 2011 and 2012.

2. The Plaintiff in both proceedings is the Owners Corporation of the strata scheme relating to the Marrickville property, the successor in title to the previous owner of the land and developer of the Marrickville property, Transformer Group Pty Ltd (Transformer Group).

Saaib proceedings

3. The first proceedings (2016/382268) are against Tony Saaib, the builder named in a residential building contract with Transformer Group dated 4 October 2010 relating to the construction of the Marrickville property (4 October Contract).

4. The Owners Corporation alleges that, by the 4 October Contract, Mr Saaib contracted to do residential building work on the common property, that the work has been done in breach of the warranties implied by the Home Building Act 1989 (NSW) (HBA) and that it has suffered loss as a result. The Owners Corporation seeks damages for the total costs of rectifying the common property defects, which are estimated to be around $3,677,491.

5. The dispute in the proceedings is whether Mr Saaib entered into the 4 October Contract and is the builder of the Marrickville property. It is common ground that the signatures on the 4 October Contract purporting to be Mr Saaib’s are not his.

6. The Owners Corporation’s case is that Mr Saaib authorised his nephew, William Zaatini, to enter into the 4 October Contract on his behalf. It also contends that Mr Saaib authorised Mr Zaatini to deal with his insurance broker, Irena Alexandrova, to arrange home warranty insurance for the construction of the Marrickville property.

7. Mr Saaib denies authorising Mr Zaatini to enter into the 4 October Contract on his behalf or authorising Ms Alexandrova (or Mr Zaatini) to arrange home warranty insurance in his name. On Mr Saaib’s case, the 4 October Contract and the home warranty insurance application are some of the many forged documents that were brought into existence without his knowledge by Mr Zaatini and/or Joe Antoun and Nemer Antoun (who are associated with Transformer Group) in order to obtain home warranty insurance and bank finance for the development.

8. Mr Saaib also raises by way of defence that he did not undertake or supervise any building works on the Marrickville property and takes issue with the Owners Corporation’s contention that Transformer Group also assented to the 4 October Contract.

9. It is common ground that there are defects to the common property and there is substantial agreement between the Owners Corporation and Mr Saaib on the extent of the defects and quantum. The remaining disputes are whether some of the defects relate to lot or common property and the total quantum of the claim.

Alexandrova proceedings

10. The second proceedings (2019/235463) are against Ms Alexandrova. They are brought against the possibility that the Owners Corporation’s claim against Mr Saaib does not succeed and his contentions that he did not enter into the 4 October Contract, authorise anyone to enter into that contract on his behalf or authorise Ms Alexandrova to lodge documents with the insurer are correct.

11. The Owners Corporation claims that if Mr Saaib’s contentions are correct, Ms Alexandrova is liable for the costs of rectifying the defects on the basis that she engaged in misleading and deceptive conduct in contravention of s 18 of the Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law (ACL) or s 42 of the Fair Trading Act1987 (NSW) in force at the relevant time (FTA). The conduct that is alleged to be misleading or deceptive is an implied representation that Ms Alexandrova was authorised by Mr Saaib (as the builder) to submit documents to obtain home warranty insurance for the Marrickville property, when she was in fact not so authorised, and the submission of documents to the insurer that were not signed by Mr Saaib.

12. The Owners Corporation claims that Ms Alexandrova’s misleading or deceptive conduct was a material cause of the issuance of the home warranty insurance and construction of the defective Marrickville property and seeks damages from her for the amount that would have been recoverable from a licensed builder or under a valid home warranty insurance policy in respect of the common property defects.

13. Ms Alexandrova was self-represented at the hearing and has not filed a response to the technology and construction list statement filed by the Owners Corporation. At the hearing, the Owners Corporation proceeded on the basis that the allegations it makes against her are denied.

14. In essence, Ms Alexandrova contends that Mr Saaib authorised her to send documents relating to the Marrickville project to the insurer, she had no duty to verify the signatures on the documents submitted to her and she is not liable for any claims made in respect of the defects to the Marrickville property.

15. Other than on one aspect, Ms Alexandrova did not challenge the defects and quantum evidence relied on by the Owners Corporation on the issues of damages.

The evidence and witnesses

16. The Owners Corporation and Ms Alexandrova rely upon two affidavits sworn by her. The first is dated 14 August 2019 (Alexandrova I). The second is undated and filed on 17 December 2019 (Alexandrova II). Ms Alexandrova was cross-examined.

17. Mr Saaib swore three affidavits dated 28 February 2019 (Saaib I), 10 September 2019 (Saaib II) and 15 January 2020 (Saaib III) and was cross-examined. He read affidavits from five other lay witnesses, none of whom were cross-examined, and subpoenaed one lay witness, Noel Dona, to give evidence who gave evidence orally and was cross-examined.

18. As will appear, there is a significant conflict in parts of the evidence given by Ms Alexandrova and Mr Saaib about whether Mr Saaib told Ms Alexandrova that he was to be the builder of the Marrickville property and whether he authorised her to lodge documents with the insurer (which Mr Saaib denies). The parties made submissions concerning the credit and reliability of their evidence which I deal with later in these reasons. In summary, I did not find Ms Alexandrova or Mr Saaib to be reliable witnesses and have approached their conflicting evidence on the basis that the contemporaneous records provide a more accurate reflection of what happened than their recollections of what was said (or not said) more than nine years ago.

19. Mr Zaatini was not called to give evidence and a submission was made by the Owners Corporation that an adverse inference of the kind made in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (Jones v Dunkel) should be drawn from Mr Saaib’s failure to call him as a witness. Mr Saaib also takes a tendency evidence objection in relation to his evidence in cross-examination about a building project at Mount Hay Road, Leura (Leura project).

Expert evidence

20. The Owners Corporation tendered ten expert reports in relation to defects and quantum. None of the Owners Corporation’s experts were cross-examined. Ms Alexandrova was informed that she had a right to question them and chose not to do so. [1] Ms Saaib tendered four expert reports from Steve Dubedat, a forensic document examiner, who opined on whether the signatures attributable to Mr Saaib on 13 documents, including the 4 October Contract, were signed by him. In Mr Dubedat’s opinion they were not.

    1. The transcript does not record part of Ms Alexandrova’s response (T324:29–44) but my notes of 7 February 2020 record that Ms Alexandrova did not wish to cross-examine any of the expert witnesses.

21. Mr Dubedat was cross-examined. He was asked whether being limited to a pictorial representation of the questioned signatures impacted his opinion. He gave evidence that, in this case, there were such significant differences and no significant similarities that the pictorial features were enough to form a positive opinion.

22. During his cross-examination, Mr Dubedat was shown another questioned signature (Exhibit I) and asked whether, using the methodology that he applied in his reports, he would have concluded that it was not the genuine signature of the writer of the specimen signatures. Mr Dubedat’s evidence was that, before coming to any conclusion, he would have to be satisfied that the other questioned signature was written within the same timeframe as the sample signatures and, if he was satisfied of that, then he would agree that the other questioned signature was not the normal or genuine signature of the sample signature writer in that particular time frame. His evidence was that the appropriate timeframe will vary from person to person as some people will change signatures over many years, while others may change their signature overnight. The other questioned signature shown to Mr Dubedat was from a declaration of wages document signed by Mr Saaib in March 2006 (Exhibit F). Mr Saaib’s evidence is that he changed his signature after his divorce in around 2005.

23. Overall, I am persuaded by and accept Mr Dubedat’s evidence that, on the balance of probabilities, the 13 documents Mr Dubedat reviewed with signatures attributable to Mr Saaib were not signed by Mr Saaib. I identify each of those documents in the factual summary below.

FACTS

24. The following is a narrative of the facts and summary of the evidence relating to the Marrickville project, the events leading to the Saaib and Alexandrova proceedings and the Leura project. Unless indicated otherwise, I am satisfied of the following matters.

The principal players and their relationships

25. The Owners Corporation was created and became the successor in title to Transformer Group and owner of the common property on 10 July 2013, when Strata Plan 87265 for the Marrickville property was registered.

26. Transformer Group obtained development consent for the construction of the Marrickville property on 6 August 2008 (Marrickville project). It was deregistered on 17 December 2017. From 2008 to June 2013, Nemer Antoun was Transformer Group’s sole director. Nemer Antoun is the brother of Joe Antoun (now deceased) who had been the sole director of a building company, Award Build Pty Ltd, between September 2008 and February 2012. Award Build was deregistered on 27 January 2013.

27. Mr Saaib migrated to Australia in 1986 and has worked in the building industry since that time, primarily as a formworker. He obtained his builder’s licence on 18 October 2001. Between August 2004 and 31 March 2012, Mr Saaib was licensed to carry out building work that required home warranty insurance.

28. Mr Saaib is a director and secretary of Australian Metropolic Developments Pty Ltd (previously known as Australian Metropolic Formwork Pty Ltd) (AMD), a building company that has held various contractor and builder’s licences. He has also been a shareholder and director of Saaib Construction Pty Ltd, a building company involving his brother, and is listed as the nominated supervisor on the builder’s licence held by Everlasting Developments Pty Ltd, a company associated with Mr Saaib’s brother-in-law.

29. Mr Saaib does not know how to use a computer, has difficulties with written English and typically communicates by telephone.

30. Mr Saaib’s nephew, William (Wajih) Zaatini, is also known as William Mowad.

31. During the period from 2009 to at least 2012, Mr Saaib had a very close relationship with Mr Zaatini. They spoke regularly, almost daily during some periods, and Mr Saaib often spent time at Mr Zaatini’s office in Kingswood from which a business called “Joe’n’Sons” operated. On many occasions, Mr Zaatini helped Mr Saaib with paperwork as a favour to Mr Saaib. Mr Saaib’s evidence is that Mr Zaatini’s sister, Barbara, worked as a bookkeeper from Mr Zaatini’s Kingswood office, did Mr Saaib’s books and liaised with his accountant, Kamel Jabour. He also gives evidence that copies of his tax returns and other paperwork were held at Mr Zaatini’s Kingswood office.

32. Ms Alexandrova is a self-employed insurance and finance broker. She assists clients with applications for construction, residential and commercial finance, as well as obtaining home warranty insurance for building projects.

33. During the period 2000 to 2012, Ms Alexandrova operated her brokering business through Shima Properties Pty Limited (Shima), a company she was a director of until it was deregistered in July 2012. Between 2004 and 2013, Ms Alexandrova had a referral agreement with OAMPS Insurance Brokers Limited (OAMPS) pursuant to which she earned commission for introducing licensed builders to OAMPS.

34. Ms Alexandrova met Mr Saaib in around 2005. She has assisted him with obtaining finance for properties and insurance services relating to his work as a builder. In 2009, Ms Alexandrova assisted him to obtain a loan to purchase his home at Mulgoa and, in March or April 2010, she assisted him to obtain home warranty insurance for the Leura project. Mr Saaib deposed that, in 2010, he spoke to Ms Alexandrova regularly.

25. Ms Alexandrova has also assisted Award Build with insurance for building projects since at least February 2010. She spoke to Joe Antoun once or twice and otherwise liaised with Mr Zaatini in relation to Award Build matters.

26. Mr Saaib introduced Ms Alexandrova to Mr Zaatini. There was a dispute as to when this occurred and when she became aware that Mr Zaatini was Mr Saaib’s nephew. I accept Ms Alexandrova’s evidence that she knew Mr Zaatini was Mr Saaib’s nephew by February 2010. Her evidence is corroborated by Mr Saaib’s evidence in cross-examination that Mr Zaatini got to know Ms Alexandrova “through him” and he introduced Mr Zaatini to Ms Alexandrova as his nephew.

27. During the second half of 2010 and in early 2011, Ms Alexandrova dealt with Mr Zaatini in relation to home warranty and other insurances for the Marrickville project. It is common ground that Mr Zaatini sent Ms Alexandrova the 4 October Contract, the application(s) for home warranty insurance naming Mr Saaib as the builder of the Marrickville property and other documents relating to Mr Saaib, including a Builder Eligibility Profile Change Application which Mr Saaib says he signed when it was blank on 12 October 2010.

Phone records

38. There are phone records in evidence of outgoing calls and text messages from a mobile telephone number XXXX XXX 090 registered in Mr Saaib’s name for the period 1 August 2010 to 30 November 2010 and from a mobile telephone number XXXX XXX 703 registered in Award Build’s name (with invoices issued to Nemer Antoun) for the period 1 July 2010 to 14 January 2011.

39. The phone records identify calls made to the mobile telephone number XXXX XXX 503 registered in Ms Alexandrova’s name and the mobile telephone number XXXX XXX 545 registered in Mr Zaatini’s name. There are no phone records of outgoing calls and text messages from Ms Alexandrova’s number or Mr Zaatini’s 545 number.

40. There are records of two calls and eight text messages from Award Build’s 703 to Mr Zaatini’s 545 number in September and October 2010. While this suggests that someone other than Mr Zaatini was using the 703 number, the coincidence of the timing of calls from Award Build’s 703 number to Ms Alexandrova’s number and references in emails to discussions with Mr Zaatini, together with Ms Alexandrova’s evidence that she only spoke to Joe Antoun once or twice and dealt with Mr Zaatini on Award Build matters and the Marrickville project, satisfy me that Mr Zaatini used Award Build’s 703 number to make calls to Ms Alexandrova and Mr Saaib during the second half of 2010 and early 2011.

The Marrickville project

First Contract

41. On 4 November 2009, Nemer Antoun, on behalf of Transformer Group, appointed Capital One Funds Management Pty Ltd to arrange finance for the Marrickville project. A condition of finance was a “[t]ripartite agreement between the Builder, Lender/(s) and Borrower”.

42. In evidence is a document dated 24 November 2009 described as a residential building contract between Nemer Antoun as the Owner and Mr Saaib as the Builder for works at the site of the Marrickville property, with a contract price of $2.4 million and a commencement date for construction of 11 January 2010 (First Contract) (Exhibit C). The First Contract purports to be signed by the Owner (Nemer Antoun) and the Builder (Mr Saaib) on each page, with one exception; on page 9, the Owner’s signature appears twice. The execution block is not signed by the Builder but is stated to be witnessed by “William Mowad”, who is also listed as the witness of the Owner’s signature.

43. The First Contract includes Mr Saaib’s builder’s licence number, the ABN for Saaib Construction Pty Ltd and contact details for Mr Saaib that refer to his Mulgoa address, Award Build’s 703 number and a fax number that does not belong to him. It contains the standard form BC4 residential building contract terms and includes clause 3 of Schedule 1, which states that the Builder must provide the Owner with a certificate of home warranty insurance (for work over $12,000) before the commencement of work and the demand or receipt of any payment.

44. Mr Saaib’s evidence, which I accept, is that he did not sign the First Contract. He also denies authorising anyone to sign it on his behalf (Saaib II at [8]).

Early 2010: dealings between Ms Alexandrova, Mr Zaatini and Award Build

45. Ms Alexandrova gives evidence that, in early 2010, she had a conversation with Mr Saaib in which he asked her to help his nephew, Mr Zaatini, with obtaining home warranty insurance in relation to Award Build (Alexandrova II at [15]; T175:38–176:21). Mr Saaib denies asking Ms Alexandrova to help Mr Zaatini on some construction projects and gave evidence that Mr Zaatini already knew Ms Alexandrova and, if he needed help, could call her directly.

46. Ms Alexandrova deposes that she spoke to Mr Zaatini in February 2010, at which time he introduced himself as Mr Saaib’s nephew, told her he was in the building industry and asked her to assist him with home warranty insurance, which she agreed to do (Alexandrova II at [16]).

47. Ms Alexandrova says that, from February 2010, she assisted Mr Zaatini to obtain eligibility for home warranty insurance and project specific home warranty insurance for Award Build (Alexandrova II at [17]). She annexes three documents relating to those matters: a home warranty insurance eligibility application by Award Build to Calliden Insurance signed by Joe Antoun on 18 February 2010; an undated “[t]o whom it may concern” letter from “Mr Joseph Antoun” with an “AWARD BUILD PTY LTD” letterhead listing a number of building jobs “we are active in” (but not referring to the Marrickville project) (“to whom it may concern” letter); and two certificates of insurance relating to home building work to be carried out by Award Build at Ewell Street, Balmain dated 12 March 2010.

48. Ms Alexandrova’s evidence in cross-examination was that she received the “to whom it may concern” letter by email from Mr Zaatini and it was prepared because Award Build was intending to lodge an application to increase its eligibility for home warranty insurance so it could undertake the Marrickville project.

49. Pausing here, pursuant to ss 92 and 99 of the Home Building Act 1989 (NSW), a builder is required to obtain home warranty insurance in relation to work to be done under a residential building contract before the building work is undertaken. In order to obtain home warranty insurance, a builder must first be licensed to undertake building work that requires home warranty insurance and be eligible to obtain home warranty insurance from an insurer to cover the value of the contract works or in respect of the type of building works to be undertaken. A builder’s eligibility for home warranty insurance on building projects may be limited by dollar value and by type of works and a builder may apply to an insurer to obtain an increase in eligibility limits.

Second Contract, 13 September letter, Builder’s Side Deed and ANZ offer of finance

50. On 15 April 2010, Australia and New Zealand Banking Group (ANZ), the bank that provided construction finance to Transformer Group, appointed Newton Fisher & Associates Pty Ltd as the quantity surveyor for the Marrickville project. The next day, Newton Fisher wrote to Transformer Group with a list of required information for the Marrickville project that included the following: a signed building contract; the builder’s licence details; home warranty insurance certificates; certificates of currency for “Contract Works Insurance”, “Public Liability Insurance” and “Workers Compensation Insurance”; and a pro forma statutory declaration from a director of the builder that all wages and amounts due to sub-contractors and suppliers have been paid.

51. On 5 May 2010, Mr Zaatini emailed Community Mortgage Corporation Pty Limited (who forwarded Mr Zaatini’s email to Capital One) about items on Newton Fisher’s list, noting that there was already a signed building contract (presumably a reference to the First Contract) and that the owner/builder requirements were not applicable. Mr Zaatini’s email is sent from “@awardbuild.com” and refers to Award Build’s 703 number as Mr Zaatini’s contact number. I infer from this that Mr Zaatini was working with and/or for Award Build in relation to the Marrickville project at this time.

52. Sometime between 17 June and 6 September 2010, another building contract for the Marrickville project came into existence (Second Contract). It is not clear on the evidence who was responsible for the Second Contract but it appears to have been created because Newton Fisher had identified that the Owner referred to in the First Contract was Nemer Antoun and the borrower (of the construction finance from ANZ) was Transformer Group. In a report issued to ANZ on 17 June 2010, Newton Fisher advised that the executed building contract (the First Contract) was to be amended to replace the Owner’s name with Transformer Group and that home warranty insurance was a precondition to payment. The Second Contract was sent to ANZ on 6 September 2010, provided to Newton Fisher on 7 September 2010 and referred to in an email from Newton Fisher to ANZ on 10 September 2010.

53. The Second Contract is a residential building contract dated 24 November 2009 and is in almost identical terms to the First Contract. The key differences which the Second Contract has with the First Contract are as follows: it identifies Transformer Group (not Nemer Antoun) as the Owner; it includes a signature for the Builder (Tony Saaib) on the execution page; “2.65m” is written above the $2.4 million Contract Price and then crossed out; and delay costs, payment of contract price and the method of payment have been included in Schedule 2.

54. Mr Saaib denies signing the Second Contract or authorising anyone to sign it on his behalf (Saaib II at [6]). Mr Dubedat’s evidence, which I accept, is that the “T Saaib” signatures on the Second Contract are not genuine signatures of Mr Saaib.

55. Around this time, a letter dated 13 September 2010 purporting to be signed by Mr Saaib appears to have been created (13 September letter). The 13 September letter refers to “TONY SAAIB PTY LTD”, a company that does not exist, and the same Silverwater PO Box address as that referred to in the “to whom it may concern” letter. The 13 September letter states:

I, Mr. Tony Saaib, have agreed with, The Transformer group Pty Ltd, for the construction of the 11 townhouses at… Livingston rd, Marrickville NSW. As set out with in [sic] the contract, the retention of 10% and up to a maximum of 5% of the contract sumare [sic] to be withheld and payable 50% on completion ie upon issue of the Occupation Certificate and the balance after defects liability period.

If you have any other questions please feel free to call me at any time on … 703.

56. Mr Saaib denies signing the 13 September letter or authorising its preparation. Mr Dubedat’s evidence, which I accept, is that the “T Saaib” signature on the 13 September letter is not a genuine signature of Mr Saaib.

57. The 13 September letter was sent to ANZ. [2] It seems likely to have been created in response to the 10 September 2010 report to ANZ in which Newton Fisher identified that cash retention was not included in the “amended contract” and recommended that it be withheld from drawdown payments.

    2. The 13 September letter was produced on subpoena by ANZ.

58. On 28 September 2010, ANZ issued a letter of offer to Transformer Group for the Marrickville project for $4.61 million of finance, with a construction funding component of $2.65 million (ANZ finance offer). The offer was subject to conditions requiring the following: a fixed price ($2.4 million) contract to be executed with an acceptable builder; a tripartite agreement between ANZ, Transformer Group and the builder, “Tony Saaib Pty Limited”, to be executed prior to drawdown; contractors all risk insurance at a minimum of $3,165,450 to be taken out; and, in advance of drawdowns, evidence of home owners warranty insurance and the provision of statutory declarations. Transformer Group accepted ANZ’s offer of finance on 1 October 2010.

59. Around this time, a document described as a “Building Contract Side Deed” between ANZ, Transformer Group and Mr Saaib was created (Builder’s Side Deed). The Builder’s Side Deed defines “Building Contract” as the contract between Mr Saaib and Transformer Group dated 24 November 2009 (the Second Contract), includes Mr Saaib’s purported signature and records Mr Zaatini as the witness to the signature.

60. Mr Saaib denies signing the Builder’s Side Deed or authorising anyone to sign it on his behalf. Mr Dubedat’s evidence, which I accept, is that the “T Saaib” signature on Builder’s Side Deed is not a genuine signature of Mr Saaib.

29 and 30 September 2010: emails between Ms Alexandrova and Mr Zaatini and alleged conversations between Mr Saaib and Ms Alexandrova

61. Ms Alexandrova deposes (Alexandrova II at [20]) that, in or about mid-2010, she had a telephone conversation with Mr Saaib in the following terms:

Mr Saaib: I have a new project which I will be doing with my nephew William. It’s on Livingstone Road in Marrickville. It will be 11 residential units. William will give you the details and other information you need. He will act on my behalf.

Ms Alexandrova: Why are you doing this? You don’t need a business partner. Don’t you remember what happened to you and your last business partner? He got into trouble and it ended up in Court and it cost you.

Mr Saaib: William is my nephew. I trust him. It’s going to be OK. Can you give an estimate of the cost for the insurance for this new Marrickville project. William will give you all the details.

62. Mr Saaib denies this conversation. His evidence in cross-examination was that he had no knowledge of the Marrickville project at that time (indeed, his evidence is that he did not know about it until 2014), he did not tell Ms Alexandrova that Mr Zaatini would give her details and other information she needed, and he never had a job in Marrickville.

63. At 12:32pm on 29 September 2010, Ms Alexandrova emailed to Mr Zaatini a certificate of home warranty insurance for Award Build for a building project at Belemba Ave, Roselands.

64. Later that day, five emails were exchanged between Mr Zaatini and Ms Alexandrova relating to the Marrickville project, some of which refer to Mr Saaib.

65. At 4:08 pm, Mr Zaatini sent an email from “@joensons.com” to Ms Alexandrova that states:

Irena we are ready for the site at Marrickville now the details are … Livingston rd, Marrickville.

We will be building 11 townhouse you already have the details as you did quote us under Tony Saaib.

Can you please revisit that quote and make the policy ready so I can arrange the payment for it.

66. There is no document in evidence of a “quote…under Tony Saaib”. Ms Alexandrova’s evidence is that she “didn’t quote” but may have given an estimate of the likely insurance cost (Alexandrova II at [24]; T181:11–13). She also gave evidence in cross-examination that she understood the references to “we” in the first and second paragraphs of the email to be to Award Build.   

67. At 5:21pm, Ms Alexandrova sent an email to Mr Zaatini that states:

Tony Saaib was with different Insurer. We have to do new application (attached).

Please fill out and email/fax with the following documents required for multi unit development:

Council Rates to confirm the ownership,

Finance Approval,

Particular of Fixed Price Contract,

Status of Project in Balmain (which stage you are up to)

I also have to request your limit increase.

68. The “new application (attached)” is not in evidence, but I consider it most likely that Ms Alexandrova was referring to an application for home warranty insurance for a multi-unit development that needed to be prepared in order for Award Build to obtain home warranty insurance for the Marrickville project. Ms Alexandrova’s evidence is that the “Project in Balmain” refers to an Award Build project and the reference to “request your limit increase” relates to an increase in Award Build’s eligibility for home warranty insurance for building projects.

69. In the next email, sent at 5:31pm, Mr Zaatini asks:

Can I put it under AWARD BUILD?

70. At 5:37pm, Ms Alexandrova replied, stating:

We are doing under Award Build – you have your own eligibility now, you do not need Tony Saaib.

71. In the next email, sent by Mr Zaatini at 6:40pm, he says:

Would it matter if the contract was under another name?

And using AWARD BUILD’s home owner warranty?

72. When Mr Zaatini wrote this email, presumably he was aware that the Second Contract named Mr Saaib as the builder. I also infer from this email, the earlier emails (for example at [65], [67] and [71]), Ms Alexandrova’s evidence (at [49]) and Mr Zaatini’s use of the Award Build 703 number that Mr Zaatini was either employed by or acting on behalf of and with the consent of Award Build.

73. On 30 September 2010, at 2:07pm, Ms Alexandrova sent an email to Mr Zaatini which does not directly answer Mr Zaatini’s question in his 6:40pm email but says:

Tony Saaib has eligibility with QBE. He has to complete the QBE application attached. The contract has to be under his name as well.

74. In cross-examination, Ms Alexandrova accepted that “something had happened” between sending the email at 5:37pm on 29 September 2010 and the email 2:07 pm on 30 September 2010 to cause her to think that the Marrickville project had to be in Mr Saaib’s name and not in the name of Award Build. Her evidence in cross-examination included the following: that the initial intention was for Award Build to be the builder of the Marrickville project; that she had been assisting Award Build to obtain an increase to its home warranty insurance eligibility limit and the “to whom it may concern” letter was prepared for that purpose; that she became aware from speaking to Joe Antoun that Award Build would not be able to qualify for an increase as a tribunal claim had been made against his licence; that Award Build approached Mr Saaib and introduced him to the project as a “partner”; and that she then heard from Tony that “he might be doing Marrickville”.

75. Ms Alexandrova deposes (Alexandrova II at [29]) that, “shortly after”, she had a telephone conversation with Mr Saaib in the following terms:

Ms Alexandrova: William has been emailing me about the Marrickville project. He is asking whether the building contract can be in another name, using Award Build’s home warranty insurance.

Mr Saaib: I told you it’s fine. Both the building contract and the home warranty insurance will be in my name.

Ms Alexandrova: Do you really want to go ahead with this?

Mr Saaib: Yes.

76. Mr Saaib denies having the “shortly after” conversation with Ms Alexandrova (Saaib III at [4]). His evidence in cross-examination was that he thought he may have had a conversation with Ms Alexandrova in about late September 2010 and, although he could not remember what he said, it was wrong to suggest it was about Marrickville as they only talked about finance or home warranty insurance if that was needed at the time, and he had never heard about the Marrickville project.

77. Ms Alexandrova was cross-examined about the “shortly after” conversation. Her evidence was that "there is no date when that conversation happened” and that it was impossible to clarify exactly when she had the conversation with Mr Saaib.

78. On 30 September 2010, two calls were made from Award Build’s 703 number to Ms Alexandrova’s number which I infer were from Mr Zaatini; the first at 10:02am lasting 10 seconds and the second at 12:18pm lasting 262 seconds (4.36 minutes). Ms Alexandrova does not give evidence of what was discussed on those calls.

The 4 October Contract

79. At 5:29pm on 5 October 2010, Mr Zaatini sent an email to Ms Alexandrova referring to a phone call that afternoon. There is a record of a call at 3:14pm from Award Build’s 703 number to Ms Alexandrova’s number lasting 186 seconds (3.1 minutes), which I infer is a call from Mr Zaatini to Ms Alexandrova.

79. Mr Zaatini’s 5 October email attaches “the application as 4 pages and the contract as 5 pages” and states that he will email the “rates and letter from the bank soon”. The attachments to the email are:

1. the 4 October Contract; and

2. a completed version of a 4-page QBE Builder’s Warranty Insurance application (QBE Application).

81. The 4 October Contract is five pages long. Mr Dubedat’s evidence, which I accept, is that most of the 4 October Contract, including the signatures, is superimposable with the corresponding parts of the Second Contract (Affidavit of Steve Dubedat dated 22 August 2019 at [5]–[7]).

82. There are several differences between the 4 October Contract and the Second Contract: the 4 October Contract does not include “2.65m” written above the $2.4 million Contract Price and then crossed out; 4 October 2010 (not 24 November 2009) is stated to be the date that the parties signed on page 3 and the owner signed the acknowledgement on page 6; and the 4 October Contract does not include Schedules 2, 3 and 4 or the terms and conditions after Schedule 4, or state any commencement date for the works. I infer from this and from Mr Dubedat’s evidence that the 4 October Contract was not signed by any party on 4 October 2010 and that it was created from the first page of the First Contract and pages 2, 3, 4 and 6 of the Second Contract with only the dates changed.

83. The Owners Corporation accepts that Mr Saaib did not sign the 4 October Contract. Mr Saaib also denies authorising anyone to sign the 4 October Contract on his behalf or that he authorised anyone to enter into it on his behalf (Saaib I at [9]).

84. It is not apparent from the evidence why the 4 October Contract, with a different date, was created or who created it.

85. The QBE Application attached to Mr Zaatini’s 5 October email is an application described as “QBE Application for Job Specific Policy Multi-Unit Developments”. It refers to Mr Saaib as the Builder Entity, gives Award Build’s 703 number, lists the Silverwater PO Box referred to in the “to whom it may concern” letter as the office address and identifies Transformer Group (with Nemer Antoun as the contact) as the Owner/Developer. It refers to a signed contract date of “1/10/10” with a fixed price contract of $3,165,450 and describes the development as “11 Townhouses”. Section 9 on page 4, “Builder Declaration and Acknowledgement”, identifies William Zaatini, Construction Manager, as having signed the application “for and on behalf of” Mr Saaib.

86. Mr Saaib denies authorising Mr Zaatini to sign the QBE Application on his behalf (Saaib I at [52](c)).

87. At 11:02pm on 5 October 2010, Mr Zaatini sent another email to Ms Alexandrova attaching a rates notice for the Marrickville property addressed to Transformer Group, advising that the “letter of offer will follow” and asking her to call him in the morning when she has a rough idea of the costs for the “HOW and… the Contractors all risk insurance…in relation to the project”. Based on the wording of that email, it seems that Mr Zaatini had access to ANZ’s finance offer.

88. Ms Alexandrova’s deposes (Alexandrova II at [32]) that, shortly after receiving the 5 October email from Mr Zaatini (she does not say which one; presumably it was the email at 5:29pm), she telephoned Mr Saaib and they had a conversation as follows:

Ms Alexandrova: I have received the QBE application form and the building contract for the Marrickville project. Do you want me to now proceed with submitting these documents to QBE?

Mr Saaib: Yes. And please obtain anything else you need from William.

89. Ms Alexandrova’s evidence in cross-examination was that, at the time of this call, it was her understanding that the construction of Marrickville would be done by a partnership between Award Build and Mr Saaib, although she accepted that this was her “presumption” and that “maybe [Mr Saaib] was just helping them as a family member. Maybe he was a partner”.

90. Mr Saaib denies the conversation with Ms Alexandrova referred to at [88]. When asked in cross-examination whether he recalled Ms Alexandrova calling him on or about 5 October 2010, he said, “Maybe she do, maybe she not. I’m not remember she call me”. He rejected telling Ms Alexandrova that she should proceed with submitting the home warranty insurance application form and building contract for the Marrickville project to the insurer or that she should obtain anything else she needed from Mr Zaatini.

6 October 2010: Ms Alexandrova sends the 4 October Contract and QBE application to OAMPS

91. On 6 October 2010 at 12:47pm, Ms Alexandrova sent an email to Tyron Marais, a broker at OAMPS, with the subject “TONY SAAIB – QBE Application – Marrickville 11 t/houses” attaching copies of the 4 October Contract and the QBE application. The email states:

Please find the application and Fixed price Contract for TONY SAAIB attached. His eligibility is with QBE.

Council Rates are following by next email. Letter of finance approval will be emailed tomorrow morning.

Can you please quote the premium subject to finance approval so I could organise the payment.

92. At 1:34pm that day, Ms Alexandrova emailed Mr Zaatini and told him that QBE would get the premium soon, that there was a short delay and that she would escalate and advise shortly.

93. At 1:46pm, a call was made from Award Build’s 703 number to Ms Alexandrova’s number (which I infer to be from Mr Zaatini) lasting 214 seconds (3.57 minutes). Shortly after, at 1:57pm, Mr Zaatini sent an email to Ms Alexandrova attaching, as requested, the drawings for the Marrickville project.

94. Later that day, at 3:58pm, Ms Alexandrova faxed to Mr Marais a copy of Mr Saaib’s Certificate of Eligibility from Calliden Insurance Ltd (dated 20 January 2010) which identified that Mr Saaib was eligible to obtain home warranty insurance in relation to building contracts not exceeding $500,000. The fax is marked to the attention of “Tyron” with the subject “Re: SAAIB” in handwriting.

7–12 October 2010: Start of eligibility review application process

95. On 8 October 2010, at 2:28pm, Ms Alexandrova emailed Mr Zaatini. The email has a subject line, “Home Warranty Eligibility Review”, and states:

As discussed, please send over the weekend the following docs so I could finish the proposal by Mon and send it to the Insurer for the approval:

1.    Amended architect letter as per my email of yesterday;

1. A letter from the Builder re 2009 and 2010 trading – draft emailed

3.    A letter from engineers or certifiers saying Tony build in the past (until July 2008) multi unit projects;

4.    Application for review of his eligibility – emailed on Thur

96. There are records of four calls made on 7 October 2010 from Award Build’s 703 number to Ms Alexandrova’s number, the last of which was at 3:40pm for 582 seconds (9.7 minutes). Based on Ms Alexandrova’s 8 October email, I infer that these calls were from Mr Zaatini to Ms Alexandrova and they discussed what was required for her to complete a proposal for an application to be made to increase Mr Saaib’s eligibility for home warranty insurance from $500,000 to cover the $2.4 million Marrickville project, which involved, amongst other things, completing a Builder Eligibility Profile Change Application (Eligibility Application).

97. The “email of yesterday” regarding the architect’s letter (point 1), the letter from the builder “draft emailed” (point 2), and the application for review of eligibility “emailed on Thur” (point 4) referred to in Ms Alexandrova’s 8 October email are not in evidence.

98. At 8:05pm on 11 October 2010, Mr Zaatini sent an email to Ms Alexandrova referring to what he “emailed [her] this morning” (which is not in evidence) and attaching the “art ref letter amended as you requested”, which is presumably a reference to an amended architect letter. Mr Zaatini asks Ms Alexandrova to send the forms “to fill out” which he will get signed and emailed back, noting that he had faxed a form on 7 October at 3pm which is also not in evidence.

99. At 8:56pm on 11 October 2010, Ms Alexandrova sent an email to Mr Zaatini stating the following: that different forms for “Construction Insurance and Home Warranty Policies” had been faxed; the “Urban Link reference [the architect ref] – pls include address, year, units number and contact volume”; that she needed one more reference from engineers or certifiers; that the “Builder’s letter is ok”; and that she hoped to “get it [eligibility increase] done with old Financials” she had. Ms Alexandrova’s evidence in cross-examination was that the references to the “old financials” are to financials that she had received by fax from Mr Zaatini.

100. At 2:55pm on 12 October 2010, Ms Alexandrova sent a follow up email asking Mr Zaatini to send through the documents per her email of the night before, noting that she had been trying to call and there was no answer.

13 October 2010: Eligibility Application

101. At 6:47am on 13 October 2010, Mr Zaatini sent an email to Ms Alexandrova attaching “builders eligibility forms”, asking her to let him know if anything needed to be amended and that “the guys have gone over them and they said that they are fine”. Mr Zaatini’s email also states that he would email the letter from the engineer “this afternoon” and that he is ready to make payment for both insurances.

102. There was some debate at the hearing about what “builders eligibility forms” were attached to Mr Zaatini’s email as the email records produced by Ms Alexandrova are incomplete and do not make it clear. Based on the description of “builders eligibility forms” and the emails that followed, I infer that what was attached to Mr Zaatini’s email was a partially completed Eligibility Application dated 12 October 2010 that Mr Saaib accepts he signed and dated when it was a blank form.

103. The partially completed Eligibility Application in evidence includes Award Build’s 703 number, the ABN for Saaib Construction Pty Ltd, the Silverwater PO Box for a postal address, and identifies “William” at the Joe’n’Sons email address as the key contact. Section 3 (“Builder Profile Change Request”) is incomplete with “N/A” written on it. Under section 2 (“Builder History”), the partially completed Eligibility Application states that Mr Saaib acted as the project manager for a “multi-level unit” at Hillcrest Street, Homebush for $15 million in 2009, a project at Imoyes Street, Marrickville for $1.5 million in 2008, and for the construction of 50 units at Watt Street, Gosford for $25 million in 2006. It is common ground that Mr Saaib did not work on these projects. There is no mention anywhere of Livingstone Road or the Marrickville project on the partially completed Eligibility Application.

Mr Saaib’s evidence about signing the Eligibility Application

104. Mr Saaib’s evidence is that, on or about 12 October 2010, he signed and dated pages 3 and 5 of a blank Eligibility Application when he was at Mr Zaatini’s office. He says that he signed the pages after Mr Zaatini told Mr Saaib that there were lots of construction jobs around, that he may be able to get Mr Saaib some of the jobs, that Mr Saaib would need home warranty eligibility to do the jobs, and that he would organise the eligibility for him. Mr Saaib says that after Mr Zaatini printed the form from the computer, he signed and dated the two pages and handed them back to Mr Zaatini who told him he would ask Ms Alexandrova to deal with the application (Saaib I at [54]). Mr Saaib also deposes that, when he signed the blank form, he assumed he would need to pay something if the application was approved, but that Mr Zaatini did not ask him to pay anything or mention the application again and Mr Saaib thought nothing more about it (Saaib I at [56]).

105. Mr Saaib was challenged in cross-examination about the circumstances in which he signed the blank Eligibility Application, his understanding of why it was needed, who would complete the form and what information would be needed to progress the application, and his evidence that he thought nothing more about it.

106. Mr Saaib’s evidence in cross-examination was that Mr Zaatini had a bundle of plans in his office and told Mr Saaib that he needed to get “high eligibility” for home warranty insurance and that he got him to sign the form (T302:41–5). Mr Saaib also gave evidence that Mr Zaatini showed Mr Saaib how many plans “he got” and that he needed to check how much eligibility he had, but it was not for any job or for Marrickville (T303:5–11). He stated that he knew Mr Zaatini would fill in the Eligibility Application form and send it by email to Irena (T304:33–38, T327:35–38), that he knew when he saw the bundle of plans that he needed high eligibility and that Mr Zaatini showed him the plans and said, “look how much plan I’ve got from builder, I can get you job. You need to make high eligibility and to get home insurance and higher eligibility” (T306:11–17).

107. In cross-examination, Mr Saaib accepted he knew that information was required to be added to the form showing he had experience with large home building projects to get an increase in eligibility (T327:44–47) and agreed that, in 2010, he did not have experience in large home building projects (T328:3–12, T328:19–29). Mr Saaib did not accept that he knew Mr Zaatini would be putting information on the form which would falsely state that Mr Saaib had experience with large home building projects (T328:40–43,T333:23–T334:41).

108. Mr Saaib said he relied on Mr Zaatini to “complete the form right, but not bullshit information” (T330:10–15), knew Mr Zaatini would deal with Ms Alexandrova (T330:16–19) but did not know Mr Zaatini was providing emails and other information to Ms Alexandrova without his knowledge (T331:11–25, T333:23–T334:21). He gave evidence that it was his mistake to sign a blank form, that he didn’t know what happened or how Mr Zaatini planned it (T333:23–27). He also gave evidence that he spoke to Ms Alexandrova about eligibility and requested she let him know if there was anything he needed to provide (T330:26–40).

109. Submissions were made that Mr Saaib’s evidence in relation to the Eligibility Application reflects adversely on his credit. I deal with those submissions later in these reasons. At this point, I simply note that I do not accept Mr Saaib’s evidence that he thought nothing more about his Eligibility Application after he signed the blank form on 12 October 2010 and that I find that Mr Saaib spoke to Ms Alexandrova about the Eligibility Application in the days that followed.

13 October 2010: Home Warranty Application

110. At 11:01am on 13 October 2010, Ms Alexandrova sent an email to Mr Zaatini raising four items to be dealt with before lodgement that afternoon.

111. The first item relates to the “Application for HW policies (attached)”. In her email, Ms Alexandrova says it “must be the same signature as on Application for Review” but notes that Mr Zaatini sent the application with a different signature and asks him to get “Tony to sign Page 4 Sec 6 (one page only)”.

112. There was some debate at the hearing and cross-examination of Ms Alexandrova about the references to the “Application for HW policies” and “different signature” in the 13 October email; the attachments to Ms Alexandrova’s email are not in evidence. Based on the wording of that email, the previous emails that refer to “eligibility” and Ms Alexandrova’s evidence, I accept the Owners Corporation’s submission that the attachment was likely a blank application for multiple dwelling projects home warranty insurance and that Ms Alexandrova’s email is to be read as asking Mr Zaatini to ensure that page 4 (of the blank form) was signed by Mr Saaib in his personal capacity, not like the QBE Application that had been signed by Mr Zaatini on Mr Saaib’s behalf (T422:23–42315).

113. The second item of Ms Alexandrova’s 13 October email raises a query as to whether the price of the contract is $2.4 million as per the contract, noting that “the application is for $3,165,450” (presumably a reference to the price referred to in the QBE application). The third item notes that the architect’s reference does not say that Mr Saaib was a project manager. The fourth item states that the Builder’s letter is not signed. As to this last point, when Ms Alexandrova approved the “Builder’s letter” in her email of 11 October 2010, presumably she was referring to an unsigned version that is not in evidence.

114. At 11:27am on 13 October 2010, Mr Zaatini replied to Ms Alexandrova’s email, indicating that the construction cost is $2.4 million and that he will get the home warranty application re-signed by Mr Saaib, the architect’s letter amended and the Builder’s letter signed as soon as possible.

115. At 11:41am on 13 October 2010, Ms Alexandrova replied asking for a call as “[t]his will not be accepted by the Insurer”, referring to the difference between the $2.4 million contract price and the $3,165,450 amount.

116. At 11:47am on 13 October 2010, a call was made from Award Build’s 703 number to Ms Alexandrova’s number for 1096 seconds (18.26 mins), which I infer to be a call from Mr Zaatini. Ms Alexandrova does not give evidence about what was discussed during this call.

117. At 1:05pm on 13 October 2010, Mr Zaatini sent an email to Ms Alexandrova that attaches “the application” and asks whether she is “happy with it”. I infer that this was a NSW Home Warranty Insurance Fund Application for Multiple Dwelling Projects specific to the Marrickville project dated 12 October 2010 which is purportedly signed by Mr Saaib and gives Award Build’s 703 number as Mr Saaib’s contact number and the fax number for Joe’n’Sons.

118. Mr Saaib denies signing the 12 October 2010 home warranty application or authorising anyone else to sign it on his behalf. Mr Dubedat’s evidence, which I accept, is that the “T Saaib” (Builder) signature on the home warranty application is not a genuine signature of Mr Saaib.

119. At 3:46pm on 13 October 2010, Ms Alexandrova sent an email Mr Zaatini, stating:

William,

The amended HW Policies application for $ 2,4 mil you emailed just now, has different signatures. Its [sic] not Tony’s signature.

Attached is the last page of Review application with Tony’s signature.

120. Ms Alexandrova’s evidence is that she believes that her email attached a copy of the last page of the Eligibility Application. The attachment is not in evidence.

13 October 2010: calls between Mr Saaib, Mr Zaatini and Ms Alexandrova

121. At 8:40pm on 13 October 2010, a call was made from Mr Saaib’s number to Mr Zaatini’s 545 number lasting [160] seconds (2.67 minutes). At 8.44pm that night, a call was made from Mr Saaib’s number to Ms Alexandrova’s number lasting 21 seconds.

122. Ms Alexandrova deposes (Alexandrova II at [47]) that, on 13 October 2010, she and Mr Saaib had a discussion, which may have been after he left her a message, in the following terms:

Mr Saaib: How are we going with the Marrickville project insurance application?

Ms Alexandrova: William has been sending me documents for the application for home warranty insurance for the Marrickville project. You need to sign the documents because you are the builder. William sent me a document signed in your name, but it’s not your signature. I asked William to get you to sign it.

Mr Saaib: Don’t worry, William has been helping me complete the documents. It’s no problem. I will sign whatever needs to be signed.

Ms Alexandrova: Also, do you have your 2009 and 2010 financial statements? I don’t know whether your letter will be sufficient. The insurer might want to see the financial statements for your business.

Mr Saaib: I’ll talk to my accountant about it and see what he can do.

123. Mr Saaib denies that conversation although, based on the call record, he accepted in cross-examination that he spoke to Ms Alexandrova after he spoke to Mr Zaatini. His evidence was that he did not remember what they talked about, that maybe she asked, “do you sign the document,” and he told her yes, but that he never knew anything about the Marrickville project and rejected that it was discussed.

14 October 2010: call between Mr Saaib and Ms Alexandrova

124. At 11:49am on 14 October 2010, a call was made from Mr Saaib’s number to Ms Alexandrova’s number lasting 41 seconds. Ms Alexandrova deposes (Alexandrova II at [49]) that she and Mr Saaib had a discussion, which may have been after he left her a message, in the following terms:

Mr Saaib: I have spoken to my accountant. My 2009 financials do not have trading income. My 2010 financials haven’t been completed.

Ms Alexandrova: OK let’s just wait and see what the insurer requires.

125. Mr Saaib accepted in cross-examination that he spoke to Ms Alexandrova on 14 October 2010 and had a further conversation with her, but he “never remember what [he] said to her or what she say to [him]” (T340:03–13, 41–44).

126. Ms Alexandrova’s evidence in cross-examination was that her discussions with Mr Saaib on 13 and 14 October 2010 were about his eligibility upgrade for the purposes of the Marrickville project. She explained that the wording of her affidavit evidence which did not refer to Marrickville being mentioned (Alexandrova I at [12]) was “incorrect” and not what she meant and that Mr Saaib “applied for upgrade of his eligibility” because he joined the Marrickville project (T195:39–43, T196:16–24).

15 October 2010: Lodgement of Eligibility and Home Warranty Applications

127. At 6:27am on 15 October 2010, Mr Zaatini sent Ms Alexandrova an email stating the he waited for her to call last night, but didn’t hear back from her and asked her to call him that morning.

128. At 11:11am that day, Ms Alexandrova sent an email to Mr Zaatini which states:

I have asked Tony about 2009 and 2010 Financial Statements. He has only 09 which does not have trading income.

The Insurer might still require to [sic] provide 09 and 10 Statements for his business if his letter is not sufficient.

Please note there might be further delay as we have to wait for the accountant to prepare the statements.

If I receive today all docs as per my previous email, I will submit the proposal today. The ball is in your court.

129. At 11:31am, Mr Saaib sent Ms Alexandrova a text message. Ms Alexandrova no longer has a copy of that text message. Initially, she deposed that the text message from Mr Saaib was to the following effect (Alexandrova II at [53]):

I’m meeting William this afternoon. Please lodge the insurance application for Marrickville today or William says we will lose contract.

130. In cross-examination, Ms Alexandrova’s evidence was that the text message said “Please call me”. She accepted that, in 2010, Mr Saaib wasn’t proficient in writing English, that he sent “Please call, Irena” because he couldn't properly ask for anything else in a text message and that normally she would contact him because she was trying to be a good broker (T197:13–24).

131. Mr Saaib gave evidence in cross-examination that he does not know how to send text messages himself and that family members or workers help him to send them instead (T341:47–T342:10). He accepted that he was trying to get in contact with Ms Alexandrova that day, that maybe he contacted her about the eligibility application to see how it was going and if there was anything he needed to provide her, but he wasn’t sure what they spoke about after 10 years (T343:6–14). He also gave evidence in cross-examination that he was pouring concrete on 15 October 2010, which he remembered because he had done a tax invoice for the job that day but didn’t get paid for the work as it had been done late (T342:12–16, T342:26–50).

132. There is a tax invoice in evidence dated 15 October 2010 from Australian Metropolic Formwork Pty Ltd (the previous name of AMD) to Dream Constructions for $7,700.

133. At 2:36pm on 15 October 2010, Mr Zaatini sent an email to Ms Alexandrova which states:

Im [sic] here with the man him self [sic] Tony.

I have just informed him that as soon as this is over the line its his shout for drinks.( after all this I know you need it as much I a [sic] do haha ).

I have attached the letter from tony explaining that he has not worked during 09 10 and you can also compare the signatures as well.

134. As noted above, Mr Saaib’s evidence is that he was pouring concrete that day. He also gave evidence in cross-examination that he did not think he visited Mr Zaatini at his Kingswood office during the day, but that it was possible he did so (T345:8–10).

135. At 2:40pm, a call was made from Award Build’s 703 number to Ms Alexandrova’s number lasting 29 seconds, which I infer was from Mr Zaatini.

136. At 2:56pm, Ms Alexandrova sent an email to Mr Zaatini listing three outstanding issues. First, she states that the “[r]eference must be signed and on letter head”. This appears to relate to the “engineer” reference, last mentioned by Mr Zaatini in his 1:05pm 13 October email (“I am still awaiting the engineer for his letter”). Second, Ms Alexandrova states that the progress payment schedule “must be signed by the builder and the owner”. Third, she notes that the signature on the application is still different. This seems to be a reference to the signature on the 12 October home warranty application.

137. At 3:15pm on 15 October 2010, Mr Zaatini sent an email dealing with the first two issues which attached an engineer reference and a signed progress payment sheet.

138. There is no email in evidence attaching another signed home warranty application, although it seems that another signed version dated 15 October 2010 was sent to Ms Alexandrova that day.

139. Ms Alexandrova deposes (Alexandrova I at [58]) that once the documentation was complete and ready to be sent to the insurer, to the best of her recollection, she rang Mr Saaib and they had a discussion in the following terms:

Ms Alexandrova: I have now received all the completed documentation that needs to be sent to the insurer for the Marrickville project. Are you happy for me to now submit these?

Mr Saaib: Yes. Please send them off.

140. In cross-examination, Ms Alexandrova gave evidence that she called Mr Saaib to make sure that he was happy for her to proceed and submit the documents for the eligibility increase and that he hadn’t changed his mind (T197:30–41).

141. Mr Saaib denies the conversation in the terms at [139]. His evidence in cross-examination was that he thought he had a call with her that day and that it was possible it was about the eligibility application (T312:37–T313.9, T344:31–40).

142. At 4:18pm on 15 October 2010, Ms Alexandrova sent an 18-page fax to Mr Marais at OAMPS that is marked (in handwriting) “ATTN: TYRON FM: IRENA / RE: SAAIB / PAGES: 18”. The fax comprises seven documents.

143. The first document is a completed Eligibility Application dated 12 October 2010 and signed by Mr Saaib (which Mr Saaib accepts is his signature). The completed Eligibility Application includes details that were missing on the version referred to at [103]; section 3 (on page two) relating to the Builder Profile Change Request is completed and identifies that it is a request to increase the multi dwelling construction limit from $500,000 to $3.2 million and refers, under part (D) “Reasons for Profile change sought”, to an attached cover letter which is not in evidence.

144. The second document is a letter dated 7 October 2010 from United Consulting Engineers Pty Ltd “Re: Mr. Tony Saaib” purportedly signed by Mark Anthony Boudib, Director, that states that Mr Boudib had been involved as a structural engineer on a number of multi residential and commercial developments where Mr Saaib had been engaged for the project management, including a $13 million development in Homebush (Engineer Reference). I am satisfied that Mr Boudib did not create this reference and it is forged. Mr Boudib produced nothing in response to a subpoena seeking documents relating to Mr Saaib and a copy of the Engineer Reference. Further, Mr Saaib’s evidence is that, as at 7 October 2010, he did not know Mr Boudib (Saaib I, [20]).

145. The third document is a letter from Urban Link Pty Ltd dated 7 October 2010 “Re: Mr. Tony Saaib” purportedly signed by Tony Jreige, Managing Director, that states that he has been involved on a number of sites with Mr Saaib where his role had been “the project management” (Architect Reference). I am satisfied, on the balance of probabilities, that Mr Jreige’s reference was not created by him and is forged. I am also satisfied that the information contained in the reference is false for the following reasons: Mr Saaib’s evidence is that he does not know Mr Jreige (Saaib I at [21]); there is a striking similarity between the terms of the Architect Reference and the Engineer Reference; and the fact that Mr Zaatini seems to have been able to send to Ms Alexandrova an “amended architect reference” within a day of it being requested suggests it was likely prepared by Mr Zaatini.

146. The fourth document is a letter dated 5 October 2010 that is purportedly signed by Mr Saaib, addressed to Calliden Insurance Group, and titled “Re: Tony Saaib Eligibility Review” with a letterhead referring to “TONY SAAIB”, Award Build’s 703 number, and the Silverwater PO Box (Builder’s Letter). The letter reads as follows:

This letter is to advise that I have not traded in 2009 and the most [sic] 2010 financial years, not as a sole trader, nor through my company Saaib Construction Pty Ltd, as I have been mostly residing in 2009 and 2010 overseas, taking a long service leave after 25 years of hard work.

147. Mr Saaib denies signing the Builder’s Letter or authorising anyone to sign it on his behalf (Saaib I at [19]). Mr Dubedat’s evidence, which I accept, is that the “T Saaib” (Builder) signature on the Builder’s letter is not a genuine signature of Mr Saaib.

148. The fifth document comprises financial statements for Saaib Construction Pty Ltd as at 30 June 2008. Presumably, these are the “old financials” referred to in Ms Alexandrova’s email at [99].

149. The sixth document is a home warranty application dated 15 October 2010 purportedly signed by Mr Saaib (Home Warranty Application). This document appears to have rectified the signature issue raised by Ms Alexandrova in her email earlier that day; the signature for Mr Saaib on this version is clearly different (being shorter) than the signature on the version dated 12 October 2010. Mr Saaib denies signing the 15 October Home Warranty Application or authorising anyone to sign it on his behalf. Mr Dubedat’s evidence, which I accept, is that the “T Saaib” signature on the 15 October Home Warranty Application is not a genuine signature of Mr Saaib.

150. The final document is a progress payment sheet dated 15 October 2010 that sets out the expected progress payments for the Marrickville project works (Payment Sheet). It is purportedly signed by Mr Saaib and Nemer Antoun. Mr Saaib denies signing the Payment Sheet or authorising anyone to sign it on his behalf. Mr Dubedat’s evidence, which I accept, is that the “T Saaib” signature on the Payment Sheet is not a genuine signature of Mr Saaib.

October to December 2010: Eligibility and Home Warranty Applications progressed

151. On 20 October 2010, Ms Alexandrova emailed Troy Williams of OAMPS with the subject line “TONY SAAIB – URGENT”, asking him to contact Calliden and advise if anything else was required. Her email refers to needing to “establish this builder a multi-unit profile and get approved his eligibility review”. She notes that several documents had already been faxed to Mr Marais in addition to those contained in her 18-page, referring to “loans, fixed price contract, Rates, Finance Approval – all was faxed to Tyron”. Ms Alexandrova’s fax attaching the loans, rates and finance approval is not in evidence.

152. By email dated 26 October 2010, Mr Marias advised Ms Alexandrova that the application had been submitted to NSW Self Insurance Corporation and requested further documents in relation to eligibility, including a copy of the rates notice for Mr Saaib’s Mulgoa property, his personal tax returns for 2008 and 2009, and further information regarding Saaib Construction Pty Ltd.

153. On 17 November 2010, Ms Alexandrova and Mr Marais exchanged emails regarding Mr Saaib’s Eligibility Application, including QBE’s request for a letter of appointment because Mr Saaib’s home warranty insurance was “with another broker”, and a deed of indemnity.

154. On 2 December 2010, Ms Alexandrova sent a fax of seven pages to Mr Marais that was marked (in handwriting) to the attention of “TYRON” and “FM: IRENA”. The fax consists of two documents.

155. The first document is Mr Saaib’s personal tax return for the financial year ending 2009. According to the header, the tax return was faxed to Ms Alexandrova from the “Joe’n’Sons Constructions” fax number at 11:30am on 2 December 2010. I infer that the document was faxed to Ms Alexandrova by Mr Zaatini.

156. The second document is a letter dated 2 December 2010 purportedly signed by Mr Saaib which states that Mr Saaib has appointed OAMPS to act for him regarding his eligibility for home warranty insurance with QBE (Appointment Letter). Mr Saaib denies signing the Appointment Letter or authorising anyone to sign it on his behalf. Mr Dubedat’s evidence, which I accept, is that the “T Saaib” signature on the appointment letter is not a genuine signature of Mr Saaib.

157. Ms Alexandrova does not give evidence about who she emailed or spoke to about the Appointment Letter or when or from whom it was received it. Based on their prior dealings, I infer that Ms Alexandrova spoke to Mr Zaatini about the Appointment Letter and that he sent it to her on or around 2 December 2010.

158. On 15 December 2010, QBE emailed Mr Marais to confirm that Mr Saaib’s Eligibility Application had been approved, attaching the certificate of eligibility for Mr Saaib and advising that the home warranty insurance for the multi-unit had been approved and that he could process the job, with the premium being $23,952.54. Mr Marais forwarded QBE’s email to Ms Alexandrova.

159. Ms Alexandrova deposes (Alexandrova II at [75]) that, shortly after receiving the email from Mr Marais on 15 December 2010, she telephoned Mr Saaib to advise him that his eligibility was approved and they had a discussion in the following terms:

Ms Alexandrova: I have just been advised by QBE that your eligibility for multiunit projects has been approved up to $2.5 million.

Mr Saaib: Ok, that’s great.

Ms Alexandrova: But we are still waiting for the project specific insurance for the Marrickville project to be approved, and we may still need to submit more information and documents for that.

160. Ms Alexandrova’s evidence in cross-examination is that she remembers calling Mr Saaib to tell him that his eligibility had been approved and that it was her “normal regular practice” to immediately notify builders of their eligibility approval (T198:45–199:2, T199:13–17).

161. Mr Saaib denies that he had any discussion about Marrickville with Ms Alexandrova. In cross-examination, he accepted that he called Ms Alexandrova in December 2010 but did not know whether she told him that the eligibility application had been approved (T353:19–30).

162. At 5:01pm on 15 December 2010, Ms Alexandrova sent an email to Mr Zaatini headed “Premium” advising that the QBE system was still down and asked him to advise the date of construction commencement.

163. On 16 December 2010, Mr Zaatini emailed Ms Alexandrova and supplied the commencement date. Later that day, Ms Alexandrova emailed Mr Marais seeking confirmation of the premium. Mr Marais replied that day noting that the premium would be $27,582.54 excluding fees.

164. The phone records show that, in November and December 2010, eight calls were made from Award Build’s 703 number to Ms Alexandrova’s number and 11 calls were made from Award Build’s 703 number to Mr Saaib’s number. They also show that, in November 2010, 15 calls were made from Mr Saaib’s number to Mr Zaatini’s 545 number and that no calls or texts were made from Mr Saaib’s number to Ms Alexandrova’s number.

January 2011: Home Warranty Certificates issued

165. On 17 January 2011, Mr Zaatini emailed Ms Alexandrova attaching receipts relating to the payment of the home warranty and public liability insurance premiums and Ms Alexandrova’s broker fees for the Marrickville project and asked whether he could get the policy so that he could submit it to the “PCA” and the “bank”. It is common ground that the home warranty and public liability insurance premiums and Ms Alexandrova’s fees were paid by the Antoun family.

166. On 18 January 2011, QBE issued home warranty certificates of insurance in respect of each of the 11 Marrickville units. The home warranty certificates of insurance identify Mr Saaib as the builder of the works and the contract date as 4 October 2010 and are addressed to Transformer Group at Pile St, Marrickville. On 18 January 2011, QBE also issued a certificate of currency for contract works and public liability identifying Mr Saaib as the insured and ANZ as the interested party.

167. Ms Alexandrova deposes (Alexandrova II at [82]) that, on 19 January 2011, after receiving the 11 home warranty certificates of insurance, she called Mr Saaib to tell him that she had received them and asked him whether she should send them to him or Mr Zaatini, and that Mr Saaib told her not to do anything until he called her. When it was put to her that she had no recollection of the call, she gave evidence that “Of course there was a conversation. It’s general practice inform builder that home building certificates are available” (T204:22–27).

168. Ms Alexandrova also gives evidence that, on or about 21 January 2011, Mr Saaib called her and asked her to email the certificates to Mr Zaatini with copies sent to him by mail, which she says she did that day to his home address at Mulgoa (Alexandrova I at [83]–[84]). In cross-examination, she gave evidence that the certificates were also posted to Mr Saaib by OAMPS to his home address (T205:31–34).

169. In cross-examination, Mr Saaib said that it is possible he spoke with Ms Alexandrova on the phone in January 2011 and, while he does not remember what was said, she did not tell him the certificates had been issued (Saaib III at [4]; T355:24–33).

170. There are no documents evidencing that the home warranty certificates were posted to Mr Saaib’s home address by Ms Alexandrova or OAMPS.

171. The phone records show that, in January 2011, one call was made from Award Build’s 703 number to Ms Alexandrova’s number and no calls or texts were made from Award Build’s 703 number to Mr Saaib’s number.

February 2011 to December 2012: Construction of Marrickville property

172. On 15 February 2011, the construction certificate for the Marrickville project was issued by the Certifying Authority identifying “Nemer Anton” as the applicant. The documents accompanying the application are stated to include the “Home Warranty Insurance - QBE”. It appears that work on the Marrickville project commenced soon after.

173. Between April 2011 and August 2012, Transformer Group sought drawdowns under the ANZ construction facility, purportedly to pay claims by the builder. The evidence indicates that Mr Zaatini and his son, Peter Zaatini, were involved in arranging site inspections for (see, for example, CB1777, CB2224) and providing documents to Newton Fisher, including statutory declarations and updated construction programs (see, for example, CB2037ff, CB1816), that were required in order to for Newton Fisher to recommend payment of the drawdowns to ANZ.

174. On 8 April 2011, Newton Fisher emailed Peter Zaatini requesting further information in respect of the first drawdown, including “Worker compensation insurance”. In response, Peter Zaatini emailed a document to Newton Fisher purporting to be a GIO Workers Compensation Certificate, with policy number WC409802157, in the name of Tony Saaib Pty Ltd, with the ABN for AMD, and identifying the period of the insurance as 11 February 2011 to 11 February 2012 (TSaaib P/L GIO Certificate).

175. Mr Saaib submits, and I accept, that the TSaaib P/L GIO Certificate is not an authentic GIO Workers Compensation Certificate. Documents produced on subpoena by AAI Limited include documents relating to GIO workers compensation policies held by Australian Metropolic Formwork Pty Limited for periods commencing from 11 February 2009 that have the same policy number as the TSaaib P/L GIO Certificate. The declaration of wages forms produced on subpoena are signed by Mr Saaib as the director of AMD. No documents were produced in the name of Tony Saaib Pty Ltd.

449. As was put in the Owners Corporation’s written closing submissions at [176]–[177]:

In short, as a result of Ms Alexandrova’s conduct, the plaintiff has been placed in the position of being the registered proprietor of common property in a strata scheme containing building defects, which the plaintiff is required to rectify by force of s.106 of the Strata Schemes Management Act 2015, without being entitled to be compensated for the cost of rectifying the defects by the builder or a home warranty insurer.

In this way, if the Builder’s Contentions are correct, the plaintiff has suffered loss and damage, being the cost of rectifying the building defects, because of the conduct of Ms Alexandrova which contravened of section 18 of the ACL and/or section 42 of the FTA.

Ms Alexandrova’s response

450. As noted above, Ms Alexandrova has not filed a list response but denies the allegations. Based on her written and oral submissions, the matters raised by Ms Alexandrova by way of defence to the claim can be summarised as follows.

451. First, she says that the claim against her personally is not valid as, in 2010, she was trading through Shima and she has limited liability as the director (T496:4–7). By this submission, I understand Ms Alexandrova to be contending that, even if the Court concludes that the submission of the Applications and Related Documents involved misleading and deceptive conduct, she provided those documents in her capacity as a director of Shima only, not in her personal capacity, and so cannot be found to have engaged in the alleged misleading and deceptive conduct and be personally liable.

452. Second, Ms Alexandrova says she believed she was authorised by Mr Saaib to send the Application and Related Documents to OAMPS. She also says that she did not have to provide a letter of appointment because she had previously been authorised and appointed as Mr Saaib’s broker (T500:34–41). Essentially, this submission seeks to raise, by way of defence, that Ms Alexandrova acted honestly and did not know that Mr Saaib was not going to be the builder.

453. Third, Ms Alexandrova submits that she is not a handwriting expert, as an insurance broker she had no duty of care to review or verify the authenticity of Mr Saaib’s signatures on the Related Documents, and all applications are accepted by way of facsimile or email (Ms Alexandrova’s Outline of Submissions at [12]). She also submits that she relied on Mr Zaatini to get Mr Saaib to sign the applications and had no knowledge that the signatures were fraudulent and that her role was limited to attracting business for OAMPS (T497:30–38; T500:20–25). By this submission, I understand Ms Alexandrova to be contending that she was acting as a “mere conduit” of the information, had no knowledge that she was passing on documents that included falsified signatures and, as such, she cannot be personally liable.

454. Fourth, Ms Alexandrova submits that there are others who should have checked the signatures on the 4 October Contract and Payment Sheet, such as ANZ, others who the Owners Corporation could have sued, such as the Department of Fair Trading, the officer who issued Mr Saaib’s builder’s licence and the assessor at QBE who approved his eligibility for multi-unit projects on 15 December 2010, and that she is the victim of fraud and has been duped as well (Ms Alexandrova’s Outline of Submissions at [10]; T498:30–31, T501:15–23). By this submission, I understand Ms Alexandrova seeks to argue that one or more third parties have caused the Owners Corporation loss and should be liable and that her liability, to the extent she has any, should be limited or relieved of entirely along the lines of a concurrent wrongdoer defence.

455. Fifth, Ms Alexandrova submits that the Owners Corporation has no evidence against her, cannot prove that her conduct caused it any loss or damage, and that it is absurd that a broker dealing with home warranty insurance could be sued by any property owner for a builder who refuses to rectify construction defects (Ms Alexandrova’s Outline of Submissions at [3] and [9]; T500:6–7). I take this submission to be putting in issue the Owners Corporation’s claim that her conduct is causative of its loss.

456. Sixth, Ms Alexandrova asserts that some of the cases cited by the Owners Corporation are irrelevant to the proceedings: (Ms Alexandrova’s Outline of Submissions at [11] and [13]).

457. Seventh, Ms Alexandrova’s written and oral closing submissions also raise allegations about her treatment by the Owners Corporation’s legal representatives (solicitors and counsel) during the conduct of the proceedings against her. The Owners Corporation submits, and I accept, that the matters referred to by Ms Alexandrova are not relevant to the issues to be determined or based on evidence that has been admitted in the proceedings. At the hearing, I explained to Ms Alexandrova that she may have other avenues available to her if she has concerns about the conduct of a legal professional.

Issues for determination

458. Based on the above, the key issues for determination are as follows

1. Did Ms Alexandrova engage in the conduct alleged and make the Authorisation Representations?

2. Was Ms Alexandrova’s conduct misleading and deceptive?

3. Has the Owners Corporation suffered loss or damage by or because of Ms Alexandrova’s conduct and, if so, what is the quantum of that loss?

Did Ms Alexandrova engage in the conduct alleged and make the Authorisation Representations?

459. The Owners Corporation’s pleaded case is that Ms Alexandrova engaged in misleading and deceptive conduct by submitting the Application and Related Documents to OAMPS and making the Authorisation Representations and that she is primarily liable. Alternatively, its case is that Ms Alexandrova was involved in Shima’s conduct for which she is liable as an accessory.

460. The facts make clear that Ms Alexandrova sent the Application and Related Documents to OAMPS in the period 6 October 2010 to 17 January 2011 (at [91], [142] and [154]).

461. Both the FTA and ACL prohibit misleading or deceptive conduct by any “person” in trade or commerce: FTA, s 42; ACL, s 18.

462. A director of a corporation who engages in conduct in the course of and for the purposes of the corporation’s business may engage in conduct for which he or she can be primarily liable under the FTA and ACL. The liability is a product of their own conduct which they engaged in as a director. There is no need to find “separate conduct”, being conduct engaged in other than in the capacity as a director, to conclude that a director who engages in conduct for a company can also attract primary and personal liability for that conduct: CH Real Estate Pty Ltd v Jainran Pty Ltd; Boyana Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37; 14 BPR 27,361 at [101]–[105]; Arktos Pty Ltd v Idyllic Nominees Pty Ltd [2004] FCAFC 119; ATPR 42-005 at [13]; Houghton v Arms (2006) 225 CLR 553; [2006] HCA 59 at [44]–[46].

463. In this case, Ms Alexandrova was the “embodiment” of Shima. She was the director of Shima and described it as “her company”. I would infer that she operated it as a one-person business. There is nothing to suggest that Shima had other staff.

464. The evidence demonstrates that Ms Alexandrova was the only person receiving documents from Mr Zaatini and, during the period 6 October 2010 to 17 January 2011, was the only person dealing with OAMPS in relation to the application for home warranty insurance for the Marrickville project. She sent emails to OAMPS from an “Irenaalex” email address and sent the Application and Related Documents by fax from “Irena”. The “Referral Agreement with OAMPS” is not in evidence so it is unclear whether it was in Ms Alexandrova’s name or that of Shima.

465. In that sense, the submission of the Application and Related Documents to OAMPS was, in my view, conduct in which Ms Alexandrova engaged, as well as conduct that could be said to have been engaged in by Shima. It was conduct by a person, namely conduct which Ms Alexandrova engaged in herself even as a director of Shima, for the purposes of s 42 of the FTA and s 18 of the ACL and is, therefore, conduct for which she can be personally and primarily liable. I am also satisfied it was conduct in trade and commerce.

466. It follows that I do not accept Ms Alexandrova’s submission that she did not engage in the conduct herself and cannot be personally liable as she provided the documents in her capacity as a director of Shima.

467. The next question is whether, by submitting the Application and Related Documents to OAMPS, Ms Alexandrova conveyed the Authorisation Representations to OAMPS. I am satisfied that she did.

468. The question of whether a representation arises by implication is to be determined by reference to whether a reasonable person to whom the representation is directed would draw the implied representation in all of the circumstances: Dynamic Lifter Pty Ltd v Incitec Ltd (1994) 30 IPR 198 at 203, applied in Australian Competition and Consumer Commission v Birubi Art Pty Ltd [2018] FCA 1595 at [71].

469. A person who merely acts as a conduit and does nothing more than pass on information will not be found to have engaged in conduct that is misleading or deceptive. In Yorke v Lucas (1985) 158 CLR 661 at 666; [1985] HCA 65 (Yorke v Lucas), Mason ACJ and Wilson, Deane and Dawson JJ stated:

If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive.

470. It is a question of fact as to whether a person does more than pass on information as a conduit. That question is to be decided by reference to all the circumstances of a particular case, having regard to factors such as the nature of the parties, the character of the transaction contemplated and the contents of the documents containing the misleading statements, including whether the documents clearly state that a third party supplied the information conveyed: Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1 (Google v ACCC) at [13]–[15]; Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [40]; Borzi Smythe Pty Ltd v Campbell Holdings (NSW) Pty Ltd [2008] NSWCA 233 at [56] (Beazley JA, Handley AJA agreeing).

471. Ms Alexandrova’s email of 6 October 2010 attaching the 4 October Contract and the QBE application was marked as being in relation to “Tony Saaib – QBE application” and her email states that the documents are for “TONY SAAIB”. Her 15 October email, attaching the Builder’s letter and Home Warranty Application, is identified as relating to “SAAIB”. Although the 2 December email attaching the Appointment letter does not refer to Mr Saaib on the front page, the letter itself, like the Application and other Related Documents, clearly identifies that it is related to the Home Warranty Insurance Application in Mr Saaib’s name. The 4 October Contract, the QBE and Home Warranty Applications each record Mr Saaib as the builder of the Marrickville property and each of the Related Documents are purportedly signed by him

472. The Owners Corporation submits, and I accept, that there is nothing on the Application or Related Documents to indicate that Ms Alexandrova disclaimed any belief that she was not authorised to submit them on Mr Saaib’s behalf. Her referral arrangement with OAMPS, pursuant to which she earned commission for referring licensed builders to OAMPS, involved her arranging applications for home warranty insurance to be completed by or on behalf of licensed builders and sent to OAMPS. Those matters lead me to conclude that Mr Alexandrova was not acting as a ‘post box’ or mere conduit, but someone who was expected to be submitting documents on behalf of those for whom she represented.

473. In my view, by submitting the Application and Related Documents to OAMPS, Ms Alexandrova conveyed that the Application and Related Documents were submitted by her on Mr Saaib’s behalf as the builder of the Marrickville project, and impliedly represented to OAMPS that she was authorised by Mr Saaib to submit them.

Was Ms Alexandrova’s conduct misleading and deceptive?

474. Conduct will be misleading or deceptive if it has a tendency to lead a person into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 (ACCC v TPG) at [39], [49].

475. In characterising conduct as misleading or deceptive or likely to mislead or deceive, it is also necessary to look at the conduct complained of as a whole, up to the time of the relevant transaction: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [25]; Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [109].

476. Ms Alexandrova’s conduct is alleged by the Owners Corporation to be misleading and deceptive if Mr Saaib’s contentions are correct.

477. In the Saaib proceedings, I was not satisfied that Mr Saaib entered into and was a party to the 4 October Contract or authorised Ms Alexandrova (directly or via Mr Zaatini as his agent) to lodge with the insurer the 4 October Contract, the QBE and Home Warranty Applications, and the Appointment Letter. I was also satisfied that Mr Saaib had not signed the Related Documents.

478. The effect of my conclusions in the Saaib proceedings is that his contentions that he did not enter into the 4 October Contract, did not authorise Ms Alexandrova to obtain home warranty insurance in relation to the 4 October Contract, and did not sign or authorise others to sign on his behalf the Related Documents have not been shown to be incorrect.

479. In those circumstances, I accept the Owners Corporation’s submission that Ms Alexandrova’s conduct in making the Authorisation Representations was misleading and deceptive within the meaning of s 42 of the FTA and s 18 of the ACL. Having regard to the nature of the parties and the character of the documents submitted, the Authorisation Representations conveyed by Ms Alexandrova was likely to lead OAMPS into erroneously thinking that the QBE and Home Warranty Applications were made in relation to the 4 October Contract naming Mr Saaib as Builder with his authority, which has not been shown to be true, and that Mr Saaib had signed the Related Documents when he had, in fact, not signed them.

480. As to Ms Alexandrova’s submission that she had no duty to check signatures, there is no allegation in this case that Ms Alexandrova represented that she had verified the contents and signatures on the Application and Related Documents or that they were accurate. Nor is it pleaded that, by submitting the Related Documents, Ms Alexandrova impliedly represented that Mr Saaib had, in fact, signed them. It is simply asserted that her conduct as a whole, which included the submission of documents containing falsified signatures and the making of the Authorisation Representations, would mislead OAMPS which, for the reasons set out above, I am satisfied that it would.

481. I also do not accept Ms Alexandrova’s submission that she could not have engaged in misleading and deceptive conduct because she believed she was authorised by Mr Saaib to make an application for home warranty insurance in relation to the Marrickville project. Intent and honesty are not relevant. A person can engage in misleading and deceptive conduct in contravention of s 18 of the ACL or s 42 of the FTA even though they have acted honestly and had no intent to mislead: Yorke v Lucas at 666; Google v ACCC at [9].

482. Accordingly, I am satisfied that Ms Alexandrova engaged in misleading and deceptive conduct in trade or commerce in contravention of s 18(1) of the ACL and/or s 42 of the FTA as alleged by the Owners Corporation and the alternative pleaded case of accessorial liability does not arise.

483. I should record that Ms Alexandrova’s contentions that she did not know the signatures were forged and honestly believed she was authorised to submit the documents on behalf of Mr Saaib (based on her dealings with Mr Zaatini) are relevant to the question of whether she had the requisite knowledge of the essential elements constituting the contravention to be found liable as an accessory: Yorke v Lucas at 670. In my view, the Owners Corporation has not shown that Ms Alexandrova knew that the signatures on the Related Documents were not Mr Saaib’s. It is also arguable that, based on her dealings with Mr Zaatini, she was not aware of her lack of authority from Mr Saaib. In either case, it seems to me that the Owners Corporation has not established that Ms Alexandrova would be liable as an accessory based on her knowing involvement in contraventions by Shima.

Did the Owners Corporation suffer loss by or because of Ms Alexandrova’s misleading and deceptive conduct?

484. To recover compensation from Ms Alexandrova, the Owners Corporation must establish that it has suffered loss or damage “by” (in the case of s 68 of the FTA) or “because of” (in the case of s 236 of the ACL) Ms Alexandrova’s misleading or deceptive conduct. The different phrases make no practical difference to the test to be applied.

485. What is required is a causal connection between the Owners Corporation’s claimed loss or damage and the contravening conduct: Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; [1998] HCA 69 at [95]; Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 (Henville v Walker) at [130]. This is to be understood as taking up the common law practical or commonsense approach to causation discussed in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 at 515; [1991] HCA 12 (March v Stramare): Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525; [1992] HCA 55

486. There will be a sufficient causal connection between loss and contravening conduct where that conduct materially contributes to the loss or damage suffered. The contravening conduct does not have to be the sole cause of the loss; it merely has to be a sufficient cause: Henville v Walker at [14] (Gleeson CJ), [61] (Gaudron J), [106] (McHugh J).

487. It is not necessary for the Owners Corporation to establish that it relied on the contravening conduct in order to satisfy the concept of causation. It may recover loss or damage it suffers as a result of a third party’s reliance on Ms Alexandrova’s contravening conduct: Re HIH Insurance Ltd (In Liq) [2016] NSWSC 482; 335 ALR 320 at [42]–[44], citing Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526 (Janssen-Cilag v Pfizer) at 532.

488. The causation inquiry on the basis of third party reliance requires a determination of whether the loss or damage is a "real or direct or effective cause of the applicant's loss". The loss must have been “brought about by virtue of” the conduct which is in contravention of s 18 of the ACL or s 42 of the FTA: ABN AMRO Bank NV v Bathurst Regional Council (2014) 224 FCR 1; [2014] FCAFC 65 at [73]–[76], citing Janssen-Cilag v Pfizer at 530–531.

489. There must be a “sufficient and direct link” or a “requisite element of proximity” between the loss and the contravening conduct: Downer EDI Rail Pty Ltd v John Holland Pty Ltd (No 4) [2018] NSWSC 326 at [542]–[543]; Finishing Services Pty Ltd v Lactos Fresh Pty Ltd [2006] FCAFC 177 at [31].

490. The first aspect of the Owners Corporation’s causation case is the claim that Ms Alexandrova’s misleading conduct was relied on by OAMPS (an innocent party), who applied for home warranty insurance covering Mr Saaib as Builder under the 4 October Contract, and the home warranty insurer, QBE (an innocent party), which led to the issuance of the home warranty certificates on 18 January 2011. This claim turns on a finding of reliance by OAMPS on the misleading conduct and, it seems from the pleading, QBE.

491. No direct evidence of reliance on the part of OAMPS or QBE was adduced by the Owners Corporation. It did not call Mr Marais or any other officers from OAMPS or QBE to give evidence or adduce any internal business records of either company that detailed their decision-making processes.

484. The Owners Corporation submits that direct evidence of reliance is not necessary and referred to ACCC v TPG. In that case, the High Court held that “where a representation is made in terms apt to create a particular mental impression in the representee, and is intended to do so, it may properly be inferred that it has had that effect”: ACCC v TPG at [55].

485. Ms Alexandrova submits that ACCC v TPG is irrelevant to these proceedings. I do not accept that submission. Although ACCC v TPG was a case involving misleading advertising, it is authority for the principle, which has been accepted in other cases, that it is not necessary to adduce direct evidence of reliance and that it may be inferred in an appropriate case: Gould v Vaggelas (1985) 157 CLR 215 at 236; [1985] HCA 75; Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357; 43 IPR 545 at [11] (Wilcox J), [45] (Kiefel J); Mistrina Pty Ltd v Australian Consulting Engineers Pty Ltd [2020] NSWCA 223 at [89].

486. Ms Alexandrova’s business involved referring licensed builders to OAMPS for the purposes of brokering home warranty insurance for building projects. There can be no doubt that, by sending the Application and Related Documents to OAMPS, Ms Alexandrova intended to create the impression that she was authorised by Mr Saaib to do so and her purpose was to get OAMPS to arrange home warranty insurance for the Marrickville project in Mr Saaib’s name.

487. There is, thus, a fair inference of fact that OAMPS proceeded to apply to QBE for home warranty insurance because it was induced to believe that Ms Alexandrova was authorised by Mr Saaib to submit the Application and Related Documents and that he had signed the Related Documents. It seems fanciful to think OAMPS would have applied for home warranty insurance from QBE if it knew otherwise.

488. The position is less clear in respect of QBE, who is one step removed and there is no evidence of what documents or information was provided to QBE by OAMPS, or on which it relied. That said, it seems logical to infer that at least the Home Warranty Application and some of the information from the Related Documents were forwarded by OAMPS to QBE and relied on as part of QBE’s decision-making process to issue the home warranty insurance certificates.

489. The second aspect of the Owners Corporation’s causation case is that the issuance of the home warranty insurance certificates enabled building work to be carried out at the Marrickville property.

490. The Owners Corporation submits, and I accept, that obtaining home warranty insurance was a legal and factual precondition to building work being carried out at the Marrickville property. It was a requirement under ss 92 and 99 of the HBA, condition 16 of the development consent granted by Marrickville Council on 6 August 2008 and s 109E(3)(b) of the Environmental Planning and Assessment Act 1979 (NSW). It was also a condition of the ANZ finance offer accepted by Transformer Group that ANZ be provided with evidence of home owner warranty insurance prior to drawdown.

491. Armed with the home warranty insurance certificates, Mr Zaatini and/or Transformer Group obtained the Construction Certificate). Mr Zaatini provided the certificates to Newton Fisher who in turn provided them to ANZ in April 2011 prior to the first drawdown being made available. They enabled Transformer Group to access ANZ’s construction finance and pay for the building works over the course of construction of the Marrickville property.

492. In that sense, I accept the Owners Corporation’s submission that if the home warranty certificates had not been issued, building work would not have proceeded in Mr Saaib’s name.

493. It is true that the Owners Corporation did not itself rely on Ms Alexandrova’s misleading conduct or on the home warranty insurance to enter into any relevant transaction. But that is not necessary. All it needs to show is that it has suffered loss as a consequence of the reliance by OAMPS and QBE.

494. The loss that the Owners Corporation claims to have suffered is the inability to recover the cost of rectifying the Defects from Mr Saaib for breach of the statutory warranties or under the home warranty insurance policy, or another licensed builder.

495. The Owners Corporation’s causation case can be tested by the counterfactual inquiry: what would have happened if the contravention did not occur?

496. The Owners Corporation says that, had Ms Alexandrova not engaged in the contravening conduct, Transformer Group would have had to, and most likely would have, taken steps to contract a licensed builder to do the work and obtain a valid home warranty insurance policy for that work prior to the work being undertaken, because otherwise it would not have been able to construct the building at all. As was put in written submissions, in either case, the defects that exist in the Marrickville property would not have existed at all or compensation for the cost of rectifying the defects would have been recoverable under the statutory warranties from a licensed builder or (if the licensed builder dies, disappears or becomes insolvent) under a home warranty insurance policy.

497. There is a degree of speculation to this counter-factual analysis. There is no evidence of what Transformer Group could and would have done absent the misleading conduct and issuance of the home warranty insurance. But it could not have proceeded with construction without that insurance and it seems reasonable to infer that it would have contracted with a licensed builder in order to do so.

498. The Owners Corporation are now in the position of being the registered proprietor of common property in a strata scheme containing building defects, which it is required to rectify by force of s 106 of the Strata Schemes Management Act, without being entitled to be compensated for the cost of rectifying the defects by the builder or a home warranty insurer. I accept that this position was caused, at least in part, by the insurer’s reliance on Ms Alexandrova’s misleading conduct, which led to the home warranty insurance and construction certificate being issued, the bank funding and the defective building works. Had there been no misleading conduct, Transformer Group could not have embarked on the course it did and the loss that the Owners Corporation has suffered would likely have been avoided.

499. This is, of course, a case where the Owners Corporation’s loss comes at the end of a chain of events that involved various parties including an unlicensed builder (who may or may not have been Award Build, Transformer Group, Mr Zaatini) and Mr Zaatini, who engaged in wrongful acts along the way by creating and deploying 15 false statutory declarations and the fake GIO Certificate and earlier providing Ms Alexandrova with the Related Documents containing the falsified signatures.

500. But contravening conduct need not be the sole cause of loss. Contrary to Ms Alexandrova’s written submissions at [13], it is sufficient that the contravening conduct be a material cause of the plaintiff’s loss and damage; it need not be the sole cause, nor the predominant cause: I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; [2002] HCA 41 at [33] (Gleeson CJ), [57], [62] (Gaudron, Gummow and Hayne JJ).

501. Ms Alexandrova has raised, by way of defence, that others are responsible for causing the Owners Corporation’s loss and should be liable. The conduct of others that is deliberate or wrongful and causes loss does not mean that Ms Alexandrova’s conduct was not causative of the Owners Corporation’s loss, in the sense required by statute.

502. As Mason CJ stated in March v Stramare at 518–519:

As a matter of both logic and common sense, it makes no sense to regard the negligence of the plaintiff or a third party as a superseding cause or novus actus interveniens when the defendant's wrongful conduct has generated the very risk of injury resulting from the negligence of the plaintiff or a third party and that injury occurs in the ordinary course of things. In such a situation, the defendant's negligence satisfies the "but for" test and is properly to be regarded as a cause of the consequence because there is no reason in common sense, logic or policy for refusing to so regard it.

511. In this case, the misleading conduct led to the issuance of the home warranty insurance which generated the very risk that arose, namely the construction of the Marrickville property and the inability of the Owners Corporation to recover from a licensed builder under the statutory warranties or valid home warranty insurance. In other words, the misleading conduct was a link in the chain of causation that has a requisite degree of proximity to the loss suffered.

512. As for the conduct of third parties, s 87CD of the Competition and Consumer Act 2010 (Cth) and s 35 of the Civil Liability Act 2002 (NSW) provide for proportionate liability of apportionable damages claims under s 236 of the ACL and for economic loss in an action for damages under s 42 of the FTA: Competition and Consumer Act, s 87CB; Civil Liability Act, s 34. They allow for the liability of a defendant who is a concurrent wrongdoer in relation to an apportionable claim to be limited to an amount reflecting the proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant’s responsibility for the damage or loss.

513. The principle underpinning the proportionate liability regimes in the Competition and Consumer Act and the Civil Liability Act is that a person who is one of a number of people who have occasioned the same damage should bear the damage proportionate to the extent of their responsibility.

514. As has been said, an obvious precondition to limiting liability on the basis that others are also responsible for the damage is that it is necessary to prove that those others have caused the damage and are legally responsible for it. If the provisions are to operate appropriately, it is essential that any defendant be required to plead the proportionate liability defence in a manner that discloses the cause of action and damage in at least as detailed a manner as would be required for any initiating process for a cause of action: Ucak v Avante Developments Pty Ltd [2007] NSWSC 367 at [35]–[42]; H S D Co Pty Limited v Masu Financial Management Pty Limited [2008] NSWSC 1279 at [18].

515. I acknowledge that Ms Alexandrova is self-represented. That does not, in my view, absolve her of the obligation to plead or at least notify in submissions the basis on which it is alleged that the third parties to whom she has referred are concurrent wrongdoers. This is particularly as Ms Alexandrova was actively encouraged prior to and during the hearing to obtain legal representation in this case.

516. It is not sufficient for Ms Alexandrova to simply raise the possibility that others might be liable without asserting the bases on which they are: Ucak v Avante Developments Pty Ltd [2007] NSWSC 367 at [41]. It was her onus to prove that any damages should be reduced and that the acts or omissions of concurrent wrongdoers caused the loss or damage: Meandarra Aerial Spraying Pty Ltd v GEJ & MA Geldard Pty Ltd as trustee for the G & M Geldard Family Trust [2013] 1 Qd R 319; [2012] QCA 315 at [60], [61].

517. Accordingly, I accept the Owners Corporation’s submission (T446:8–25) that a positive defence that seeks, in effect, to invoke the operation of the proportionate liability regime is not open to Ms Alexandrova. That is not to say that there may not be some third parties whose acts or omissions may have caused the loss and damage that is the subject of the Owners Corporation’s claim. It is simply that it is not open to the Court to make findings in relation to those matters as Ms Alexandrova has not properly availed herself of such a defence.

518. It follows that I am satisfied that the Owners Corporation has suffered loss or damage by or because of Ms Alexandrova’s misleading conduct for which she is liable.

519. The loss and damage which the Owners Corporation is entitled to recover is that which the contravening conduct caused, namely, the costs of rectifying the common property defects that cannot be recovered from the builder or a home warranty insurer. Those costs, which I have quantified previously and total $3,425,583.54, are recoverable as damages from Ms Alexandrova under s 236 of the ACL and/or s 68 of the FTA.

COSTS AND ORDERS

520. The usual order as to costs is that they follow the event: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

521. I see no reason not to make orders in accordance with that rule and will therefore order the Owners Corporation to pay Mr Saaib costs of the Saaib proceedings and make a similar order in the Alexandrova proceedings. The parties are at liberty to approach my associate if they wish to seek a different or special costs order.

522. The Owners Corporation also seeks an order for interest pursuant to s 100 of the Civil Procedure Act up to the date of judgment from 18 November 2018. This is claimed on the basis that the experts have costed the rectification works having regard to the costs of labour and materials as at that date. I am not persuaded that pre-judgment interest should be awarded in this case in circumstances where the claim has succeeded against Ms Alexandrova. In addition to the proceedings against her being commenced in mid-2019, the defects claim that I have allowed includes a 10% contingency and risk amount which should go some way to addressing the risk of escalation costs.

523. For these reasons, I make the following orders:

In proceeding 2016/382268:

1. The Plaintiff’s summons filed 20 December 2016 be dismissed.

2. The Plaintiff pay the First Defendant’s costs of the proceedings as agreed or assessed.

In proceeding 2019/235463:

3. There be judgment in favour of the Plaintiff against the Defendant in the sum of $3,425,583.54.

4. The Defendant pay the Plaintiff’s costs of the proceedings as agreed or assessed.

******

Endnotes

Amendments

01 March 2021 - Para 230: first sentence has full stop after Ms Alexandrova. Second sentence, now reads: "My findings of fact relating to the alleged conversations are set out later in these reasons."

Para 347: second sentence, the word "fact" should be "facts".

Para 348: second sentence, the words "he emails" should be "the emails".

Para 354: the words "(the police repprt)" should be "(the police report)".

Para 356: the word "aganst" should be "against".

Decision last updated: 01 March 2021