Thomas v Reliance Building Services (Aust) Pty Ltd ACN 097 397 549 (Civil Dispute) - [2024] ACAT 37

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

THOMAS v RELIANCE BUILDING SERVICES (AUST) PTY LTD ACN 097 397 549 (Civil Dispute) [2024] ACAT 37

XD/713/2023
Catchwords: CIVIL DISPUTE – claim for compensation for delays in the maintenance of the apartment balcony – completion date – alleged damages in relation to loss of income from Airbnb rental – breaches of the Australian Consumer Law claim – general breach of contract claim – negligence claim – application dismissed
Legislation cited: Australian Consumer Law s 3, 60, 61, 62, 18, 29, 20, 21
Competition and Consumer Act 2010 Schedule 2
Civil Law (Wrongs) Act 2002 Chapter 4, s 42

Cases cited:Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36
Donoghue v Stevenson [1932] AC 562
Marks v CCH Australia Ltd [1999] 3 VR 513
Smith v Owners-Strata Plan 3004 [2022] NSWSC 1599
Sullivan v Moody [2001] HCA 59
Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107
Winter v Nemeth [2018] NSWCA 236
Winterton Constructions Pty Ltd v Hambros Australia Ltd [1991] FCA 171

Tribunal:Member W Hawkins

Date of Orders:  17 May 2024
Date of Reasons for Decision:      17 May 2024
Date of Publication:   28 May 2024
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 713/2023

BETWEEN:

GREGORY MICHAEL THOMAS
Applicant

AND:

RELIANCE BUILDING SERVICES (AUST) PTY LTD
Respondent

TRIBUNAL:Member W Hawkins

DATE:17 May 2024

CORRECTED ORDER

The Tribunal orders that:

The applicant’s application is dismissed.

…………………………..

Member W Hawkins

REASONS FOR DECISION

Introduction

In an application dated 4 July 2023, the applicant claimed damages against The Owners-Units Plan Number 1430 (the Owners Corporation); the strata managers Bright and Duggan Pty Ltd (Bright and Duggan or the strata managers); and Reliance Building Services (Aust) Pty Ltd (Reliance or the respondent). The applicant quantified the amount as $9,000 together with a filing fee of $176 amounting to $9,176 plus statutory interest from 23 February 2023.[1] Orders were subsequently made naming additional respondents and later removing various respondents, leaving Reliance as the only respondent.[2]
[1] Application dated 4 July 2023
[2] See Orders dated 6 November 2023
The applicant is the owner of a unit in an apartment complex (the Apartments or the property) at Kaleen in the ACT. The applicant operates part of the unit as an Airbnb listing.
On 27 April 2022, the Executive Committee of the Owners Corporation agreed to obtain ongoing assessments, quotes, and work of the Apartment balconies with Mr Paul Room appointed as the Executive Committee lead.[3] Bright and Duggan thereafter liaised with the applicant and other affected apartment owners as well as the respondent. By 30 September 2022, the Owners Corporation appointed a project manager, Peak Consulting Pty Ltd (Peak Consulting), to undertake the coordination, instruction and oversight of the project, including engaging the respondent to work on the project.[4] Peak Consulting entered into an agreement with the respondent for the respondent to perform waterproofing maintenance upon several balconies of the Apartments, including the applicant’s.[5]
[3] Exhibit A8: Applicant’s bundle of documents, annexure N
[4] Attachment to application for interim or other orders dated 8 August 2023, letter from Bright and Duggan dated 4 August 2023
[5] Respondent’s timeline filed 20 November 2023, pages 1-2
Originally, work was to commence in about November 2022, but for various reasons, work did not commence until about 22 February 2023.[6] Prior to this, on about 10 February 2023, the applicant was informed by Paul Room that all personal items had to be removed from his balcony to avoid delaying the work.[7]
[6] Respondent’s timeline filed 20 November 2023, page 2
[7] Exhibit A8: Applicant’s bundle of documents, annexure R
The applicant moved his balcony possessions (including furniture) into his apartment’s living room and shut down his Airbnb listing.[8] The applicant had been informed that the work should be completed in a maximum of two weeks.[9] The applicant alleges that the work impacted upon the use of his unit’s balcony and living room, and that these spaces had been a key feature of his Airbnb listing and for which he had received favorable reviews.[10]
[8] Exhibit A5: Applicant’s witness statement at [4]-[8]
[9] Exhibit A8: Applicant’s bundle of documents, annexure A
[10] Exhibit A8: Applicant’s bundle of documents, annexures B and C
Unfortunately, delays in the completion of the work meant he could not reactivate his Airbnb listing which he argued resulted in lost income. Work commenced on the balcony on 22 February 2023, and although it was due to be completed by about 8 March 2023, it was not actually completed until about mid-September 2023. The actual completion date was not clear to the applicant notwithstanding his communications with various entities including the Executive Committee. The completion date was important to the applicant, as it meant he could then reinstate his balcony possessions and reactivate his Airbnb listing.[11] The respondent argued that the work was done by 1 May 2023, and although some further rectification work was needed, it was “fit for purpose” or could be used as a balcony (and the balcony possessions reinstated) from that date. If there had been a delay, then the delay was due to factors beyond its control, such as weather conditions and/or the actions of others including the Owners Corporation.[12] It was noted that proceedings against the Owners Corporation were resolved on about 29 October 2023 upon a compromised and on a “without admission” basis, including the condition that any further remediation work, including storage of personal items from the applicant’s balcony, would be at no cost to the applicant.
[11] Exhibit A3: Applicant’s timeline, pages 2-10
[12] Exhibit R1: Respondent’s timeline, annexure B
The applicant claimed that there were breaches of the Australian Consumer Law (ACL), in particular, the section 60 guarantee as to due care and skill; the section 61 guarantee as to fitness for a particular purpose; and the section 62 guarantee as to reasonable time for supply. The applicant also claimed more generally that the respondent had engaged in “unconscionable conduct” and relied upon sections 18, 29, 20, and 21 of the ACL.[13] In the alternative, the applicant claimed a general contractual breach by the respondent and finally, that the respondent had owed him a duty of care and that the respondent had been in breach of its duty due to its negligence, and as a result he suffered loss. This final claim was made pursuant to Chapter 4 of the Civil Law (Wrongs) Act 2002 (Wrongs Act).[14] The applicant particularized his claim as approximately $70 per day on and from 16 March 2023 to 15 September 2023 and calculated this to be $17,150.[15]
[13] Exhibit A6: Applicant’s submissions dated 2 November 2023 at [1]
[14] Applicant’s final submissions dated 31 January 2024, page 8
[15] Applicant’s witness statement dated 29 October 2023; Written submission, page 6
The respondent denied the claim, arguing that the ACL did not apply as there was no contractual relationship between the applicant and the respondent. Any agreement that had been entered into was between the Peak Consulting or the Owners Corporation and the respondent, and this agreement was not between the applicant and the respondent.[16]
[16] Exhibit R2: Respondent’s interim application dated 21 November 2023
The matter was heard by me on 14 December 2023. The applicant was self-represented. Peter Leary (Leary), a director of the respondent and with an authority to act on its behalf appeared for the respondent. Both parties appeared in person. At the conclusion of the hearing, I reserved my decision and made directions for the filing of submissions including any submissions in reply. Those submissions have been filed.

Applicant’s evidence

The applicant relied upon several documents, including statements from himself, from Martin Kennedy, another apartment owner at the Apartments, and from Cecilia Brennan, a close friend of the applicant and a fellow host on Airbnb. Only the applicant was called as a witness and was cross examined. It is not proposed to separately identify the documents considered by me for these reasons, but to separately refer to them where relevant. Cecilia Brennan’s evidence primarily related to Airbnb reviews and their consequences for the host. Martin Kennedy’s evidence largely concerned the circumstances in which he had received the Inspection Record/Clearance certificate during October 2023. He also confirmed that Peter Leary is a director of Peak Consulting.[17]
[17] Exhibit A7: Martin Kennedy’s witness statement dated 23 November 2023 at [2]
In essence, the applicant’s evidence was as follows:
(a)He operated an Airbnb listing at the property which heavily featured his balcony and the property had received positive reviews.[18]
(b)On 10 February 2023, in separate emails from the strata manager and from Paul Room, he was informed that remedial work was to be done on several balconies, including his own, and that the respondent required access to the entire surface of the balcony and all personal items had to be removed by 22 February 2023. As a result, on 22 February 2023, he shut down his listing and stored his personal items from the balcony in his living room as he believed maintaining the listing whilst the work was being undertaken was “incompatible”.[19]
(c)On 21 February 2023, the respondent advised him by email that depending upon the weather, “they” should be “out of his hair” in “under two weeks max.”[20]
(d)On 1 May 2023, the respondent informed him by email that apart from the completion of some external painting, work was completed and that his possessions could be reinstated on the balcony.[21]
(e)On 8 May 2023, Paul Room informed him by email that, following an inspection by Peak Consulting, there were defects in his balcony requiring rectification. On 31 May 2023, he received the respondent’s defect report and a request to meet onsite.[22]
(f)Unfortunately, no further work commenced until late June 2023. On 2 July 2023, the applicant emailed the respondent, the strata managers, Peak Consulting, Paul Room, and others, asking whether the balcony work had been completed.[23] Paul Room and the strata managers informed him that further work needed to be done, and he then informed the respondent and other relevant entities that he was losing income as a result of not being able to have the Airbnb listing and that the work needed to be completed as soon as possible.[24]
(g)On 4 July 2023, he emailed the respondent (and others) and informed them that he had only agreed to the work being done on the basis that it would take two weeks, and even allowing for an additional week, it was now 111 days overdue and was costing him money, and that he wanted compensation.[25]
(h)The applicant alleged that the respondent was negligent in the performance of the work and particularly the adherence to the instructions pertaining to the length of time for the work to be done, and more importantly, the application of the waterproofing sealant which had to be redone.
(i)On 4 July 2023, the respondent emailed him and advised him that the work was completed. However, he did not receive any formal confirmation until 13 October 2023, when he received the Inspection Record/Clearance Certificate dated 24 July 2023 (he alleged that the completion of the work had not been communicated to him earlier).[26]
(j) Notwithstanding the foregoing, he alleged that, as at the time of making his statement, the defects had not been rectified.[27]
[18] Exhibit A5: Applicant’s witness statement dated 29 October 2023 at [4]-[5]
[19] Exhibit A5: Applicant’s witness statement dated 29 October 2023 at [6]-[8] and Exhibit A3: Applicant’s timeline, page 2
[20] Exhibit A8: Applicant’s bundle of documents with index, annexure A
[21] Exhibit A3: Applicant’s timeline, page 3-4 and Exhibit A8: Applicant’s bundle of documents with index, annexure ZJ
[22] Exhibit A3: Applicant’s Timeline, page 5 and Exhibit A8: Applicant’s bundle of documents with index, annexures F and G
[23] Exhibit A5: Applicant’s witness statement dated 29 October 2023 at [12]-[13 and Exhibit A3: Applicant’s timeline, pages 4-6
[24] Exhibit A3: Applicant’s timeline, page 7
[25] Exhibit A3: Applicant’s timeline, page 7
[26] Exhibit A5: Applicant’s statement dated 29 October 2023 at [14]-[17] and Exhibit A8: Applicant’s bundle of documents with index, annexure K
[27] Exhibit A5: Applicant’s witness statement dated 29 October 2023 at [18]
In cross examination, the applicant said:
(a)He had lived at the property since November 2018. It was his residence for “official purposes”, but he often lived elsewhere. He did not rent out the whole apartment. Normally, he rented out only the balcony, living room and a bathroom. The kitchen was shared.
(b)He reported his income to the Australian Taxation Office but was not sure where it was recorded in his taxation returns. He provided a record of his Airbnb earnings for 2023 which he said was $13,453 and that this represented an occupancy rate of 45%.[28]
[28] Applicant’s evidence at the hearing and Exhibit A12
(c)He did not know if there was an Airbnb policy in place at the Apartments, but he did not think so.
(d)He had been a super host on Airbnb for this calendar year. He had a record of booking requests and could provide it.
(e)When asked about whether he had landlord insurance or if there was a policy with Airbnb that he might be eligible to claim upon, he said that insurance came with the Airbnb listing, and other insurers offered cover as well. He was not sure whether the rental loss that he alleged in his application was claimable.
(f)That from about March or April 2022, at the annual general meeting of the Owners Corporation, he was elected to the Executive Committee of the Owners Corporation.
(g)He originally reactivated the Airbnb listing on 16 March 2023, then closed it again, and there was an occupancy or booking between February and May 2023, and this was a result of the limited window when the listing was reactivated. He had communications with the guests and informed them of the problem and, particularly, that they could not use the balcony, but they continued with the booking and paid the usual rent.
(h)He did not inform the respondent of the potential loss of income before the remedial work was done, but he did inform the Executive Committee of the Owners Corporation.
(i)He informed the respondent that he was going to reinstate his personal possessions on the balcony by email on 11 September 2023, but did not receive a reply.
(j)The respondent should have made enquiries about him concerning any impacts upon him.
(k)He had not asked the respondent for a schedule of work that was being done on his balcony.
(l)A claim against the Owners Corporation was resolved on a ‘no admission’ of liability basis.

Respondent’s evidence

The respondent relied upon several documents but did not file any witness statements. The respondent filed a timeline and documents reporting the weather data for March, April, and May 2023. The documents suggested that some delay was due to the Owners Corporation’s delay in selecting tiles, and at other times, waiting upon a scissor lift to access the work area, or due to weather. The initial membrane application took place from 14 March 2023 to 17 March 2023. Thereafter, the respondent argued that delay due to waiting upon the body corporate for file selection was about 22 days; delay due to scissor lift availability about 35 days; and delay due to weather about 26 days.[29]

Applicant’s submissions dated 29 October 2023

[29] Exhibit R1: Respondent’s timeline, annexures B, C and F

The applicant originally filed submissions on 29 October 2023. In those submissions the applicant:
(a)Argued that he was a consumer for the purposes of the ACL.[30]
(b)Submitted that the respondent was in breach of ACL section 60 (the guarantee as to due care and skill) and relied upon a document of Peak Consulting which necessitated corrective work which was not done until June 2023.[31] He also argued that there had been a failure to reinstall the sill tiles. The alleged failure was due to the respondent not following the manufacturer's instructions.[32]
(c)Contended that the respondent was in breach of ACL section 61 (the guarantee as to fitness for a particular purpose), alleging that because Peak had not provided an inspection record, the relevant insurance could not be obtained. He also argued that the membrane was likely to fail as it was not of the appropriate standard.[33]
(d)Stated that the respondent was in breach of ACL section 62 (the guarantee as to reasonable time for supply) as it had been indicated that the work should take two to three weeks, whereas it had gone well beyond that period and the work was still not complete.[34]
(e)Advanced that the respondent was in breach of ACL section 21 or had engaged in unconscionable conduct in connection with the supply of services in that they had made false and misleading representations upon which he had relied and as a result he had suffered loss. The representations alleged included predictions about the future; delivery of information and the respondent’s ‘silence’ or non-response to enquiries by him. In part, he relied upon his submissions in relation to the alleged breach of section 62 of the ACL, and to the fact that the respondent had not indicated that the work was “prototypical” and therefore prone to delay. Similarly, he relied upon the alleged respondent’s “silence” and argued that the respondent had failed to respond to his enquiries.[35]
(f)Finally, the applicant submitted that the respondent had engaged in unconscionable conduct by taking advantage of its superior bargaining power relative to him by not acting in good faith.

Applicant’s submissions subsequent to the hearing

[30] Exhibit A6: Applicant’s submissions dated 2 November 2023
[31] Exhibit A8: Applicant’s bundle of documents with index, annexure G
[32] Exhibit A6: Applicant’s submissions dated 2 November 2023 at [7]-[9]
[33] Exhibit A6: Applicant’s submissions dated 2 November 2023 at [11]
[34] Exhibit A6: Applicant’s submissions dated 2 November 2023 at [13]
[35] Exhibit A6: Applicant’s submissions dated 2 November 2023 at [15]-[17]

Pursuant to my directions at the conclusion of the hearing, the applicant filed further submissions. In these submissions, the applicant argued that:
(a)In relation to the damage, the Airbnb rate was a variable rate of between $77 and $70 per night for the relevant period. He contended that $70 per night was an appropriate rate to calculate his loss.[36]
(b)He largely repeated his earlier submissions made in relation to the claims pursuant to the ACL.[37]
(c)He claimed in contract and/or in negligence as an alternative to the ACL claim. The essence of the contractual claim was that even though he was not an actual party to the original contract entered into between the respondent and the Owners Corporation (or Peak Consulting on their behalf), he was a beneficiary of the contract, or in other words, the Owners Corporation held the contract in trust for him.[38] In support of his argument, he relied upon Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (Trident).[39] He then went further and argued that a contract between him and the respondent could also be made out.[40]
(d)He asserted that he and the respondent “intended to create legal relations”, and as a consequence, the respondent owed him a duty of care. The respondent was in breach of its duty when negligent if not false representations were made that the work could be done in two weeks.[41]
(e)Regarding the completion certification, he referred to various communications that he had received and made submissions relating to metadata as to when the certification may have been provided.[42] Given there was no expert evidence filed in relation to metadata and it was not explored at the hearing, any arguments advanced by the applicant in his submissions regarding the same have not been considered by me. It is also not clear how the metadata might have assisted the applicant’s claim given the particular issues in the matter.

Respondent’s submissions filed 21 November 2023

[36] Applicant’s final submissions dated 31 January 2024, page 1
[37] Applicant’s final submissions dated 31 January 2024, pages 2-3
[38] Applicant’s final submissions dated 31 January 2024, pages 1-3
[39] (1988) 165 CLR 107
[40] Applicant’s final submissions dated 31 January 2024, page 5
[41] Applicant’s final submissions dated 31 January 2024, page 5
[42] Applicant’s final submissions dated 31 January 2024, page 7

The respondent did not originally file submissions, but in support of their interim application dated 21 November 2023 to be removed from the proceedings, they set out the grounds that they relied upon. In this decision and reasons, I have regarded those grounds as the respondent’s submissions in the substantive proceedings. In essence, the respondent argued that the ACL did not apply specifically because the applicant did not order, procure, or pay for the services provided by the respondent to the Owners Corporation. The work was not of a domestic nature and was performed on common property for the benefit of the Owners Corporation and not for the applicant. In short, the applicant’s claim did not satisfy the legal criteria of a consumer claim.[43]

Respondent’s submissions subsequent to the hearing

[43] Exhibit R2: Respondent’s interim application dated 21 November 2023, pages 2-3

Pursuant to my directions at the conclusion of the hearing, the respondent filed further submissions (final submissions). In these submissions, the respondent argued that:
(a)The applicant and the respondent were not in a contractual relationship. The respondent was engaged by the Owners Corporation to remedy building defects or provide services on the common property of the Apartments. The applicant owned a unit in the Apartments and the services were not provided to him but to the Owners Corporation.[44] A responsibility of the Owners Corporation includes the arranging of maintenance of the common property; insurance of the common property, and to communicate with unit owners any relevant information, including upcoming projects.[45]
(b)The applicant was unable to show the existence of a contract between himself and the respondent and as a result the applicant has no standing to sue the respondent in contract.[46]
(c)The applicant’s claim for damages was submitted several months after the work was completed and the clearances given, and at no time prior to the completion of the work did the applicant notify the respondent that they were seeking damages.
(d)If the applicant was to succeed (which was not conceded), the applicant had not adequately provided documentary support of any financial loss.[47] Further, any alleged loss by the applicant might be claimable under a policy of landlord insurance. The applicant has brought (and resolved) a claim against the Owners Corporation.[48] The applicant did not reinstate the balcony possessions when advised to and although the applicant has claimed loss for the full period, the alleged loss did not consider the period in which the unit was rented.[49]
(e)Following the decision of Smith v Owners-Strata Plan 3004,[50] although it might be reasonably foreseeable that the owner of a rented unit might lose some rent due to the failure of an Owners Corporation to undertake repairs to the common property, the owner still had an obligation to mitigate their loss and rent the property if appropriate. The applicant had failed to do so.[51]

Applicant’s submissions in reply

[44] Respondent’s final submissions dated 13 February 2024, page 1
[45] Respondent’s final submissions dated 13 February 2024, pages 1-2
[46] Respondent’s final submissions dated 13 February 2024, page 3
[47] Respondent’s final submissions dated 13 February 2024, page 5
[48] Respondent’s final submissions dated 13 February 2024, page 5
[49] Respondent’s final submissions dated 13 February 2024, page 6
[50] [2022] NSWSC 1599
[51] Respondent’s final submissions dated 13 February 2024, page 6

Pursuant to my directions at the conclusion of the hearing, the applicant filed submissions in reply. In these submissions, the applicant argued as follows:
(a)The balcony of his unit was owned by him and was not part of the common property of the Apartments.[52]
(b)Contrary to the respondent’s submission, there was a contract between him and the respondent.[53]
(c)He rejected the respondent’s submission that he did not advise the respondent that delays outside the expected time frame for the work was causing financial damage to him.[54]

Consideration and findings

[52] Applicant’s submissions in reply dated 28 February 2024 at [2]
[53] Applicant’s submissions in reply dated 28 February 2024 at [3]-[6]
[54] Applicant’s submissions in reply dated 28 February 2024 at [7]

The ACL is a body of Commonwealth, State and Territory statute law, covering, among other things, the supply of goods and services in trade or commerce to a consumer. The ACL arises from Commonwealth law, namely Schedule 2 to the Competition and Consumer Act 2010 (the Commonwealth Act). The Commonwealth Act applies the ACL to corporations reflecting the Commonwealth’s constitutional powers. The States and Territories extends the ACL within their own jurisdictions.
Most matters in which it is alleged that there are breaches of consumer guarantees relate to direct transactions or agreements made between a consumer and the supplier of the goods or services. A “consumer” is defined by section 3 of the ACL, and the applicant would appear to ordinarily satisfy the definition of a consumer, bearing in mind the cost of the service and that the services were of a kind ordinarily acquired for personal, domestic, or household use or consumption. However, even if the applicant might be regarded as a consumer, it does not automatically mean that the consumer guarantees apply to the services provided by the respondent, thereby enabling a possible cause of action by the applicant for an alleged breach of the ACL guarantees. The respondent has argued that the ACL does not apply as there was no direct contractual relationship between the applicant and the respondent. As an alternative to the ACL claim, the applicant argued that even though he may not have been an actual party to the contract between the respondent and the body corporate, he was a beneficiary of it, and in effect the Owners Corporation held the contract in trust for him. If this was so, then he alleged that there is a basis in law for the ACL to apply.
Before Trident, the doctrine of privity of contract meant that only the parties to a contract are bound by it, and a person who is not a party to a contract (a “third party”) cannot enforce it. In Trident, the majority of the High Court held that the doctrine of privity of contract should not apply to insurance contracts.[55]
[55] Trident; see Mason C.J., and Wilson J. at [32]-[35]; Toohey J. at [17]-[29]
Although there has been some speculation that the law would develop and that third parties might be allowed to enforce a contract beyond insurance contracts, the law has not generally done so. In his minority opinion, Justice Deane in Trident held that an express trust had arisen which displaced the doctrine of privity of contract.[56] There have been a number of cases since Trident where litigants have attempted to use Justice Deane’s trust analysis to enforce contracts on behalf of third parties, but generally the argument has not been successful.[57] This failure is arguably largely in part to the elements or requirements of a trust, and particularly a clear intention to create a trust by the language of the parties, and in doing so, courts may look to the nature of the transaction and the circumstances, including commercial necessity, in order to infer or impute intention.[58] In my view, bearing in mind the nature of the arrangement between the Owners Corporation and the respondent and there being no documents to support the contrary, there could have been no intention by either the Owners Corporation or the respondent to create the trust that the applicant suggests was created for his benefit.
[56] Trident at [18]-[19]
[57] See Winterton Constructions Pty Ltd v Hambros Australia Ltd [1991] FCA 171 and Marks v CCH Australia Ltd [1999] 3 VR 513
[58] Trident; see Mason C.J. and Wilson J. at [25]
As an alternative argument, the applicant argued that there was a contract between himself and the respondent. If there had been a contract, then the alleged breaches of the ACL’s implied terms might again arise. The requirements for the formation of a contract are well settled. The respondent has made general submissions with regards to the same. The essential elements of a contract are an offer by one party and its acceptance by the other; the intention of the parties to create legal relations; valuable consideration (unless the promise is made by deed); legal capacity of the parties to act; a genuine consent by the parties; and legality of the objects of the agreement. The intention needs to be objectively ascertainable.[59]
[59] Winter v Nemeth [2018] NSWCA 236 at [7]
Many of the cases involve an examination as to whether the parties to an alleged agreement intended to enter into a legal relationship. The applicant asserts that there was an offer by the respondent to restore his balcony and that this was accepted by him on the basis that the work would take two weeks. With respect to the applicant, that is a mischaracterization of what occurred. The contract or agreement was between the Owners’ Corporation and Peak Consulting, and Peak Consulting engaged the respondent to perform the rectification work on a number of balconies at the Apartments, including the applicant’s balcony. At most, the applicant is a third-party beneficiary of that agreement and nothing more. To perform the work, the applicant’s possessions had to be moved from the balcony and he was no doubt inconvenienced and suffered some financial loss as a result of the pausing of his Airbnb listing. The Owners Corporation ultimately paid for the work, not the applicant. Apart from that, there was no intention by the parties to enter into legal relations. For these reasons, the applicant’s claim based upon an alleged contractual relationship with the respondent also fails.
The remaining claim of the applicant is based upon negligence. To succeed in a negligence claim, the applicant must establish that the respondent owed a duty of care to him; that there is an appropriate standard of care expected in the circumstances and that this standard has been breached by the respondent; and finally, that the resulting damage was a foreseeable consequence of the breach.[60] Litigants in the ACT also have regard to the Wrongs Act and particularly Chapter 4 Negligence.
[60] See Donoghue v Stevenson [1932] AC 562
The respondent in performing the work on the applicant’s balcony owed a duty of care to the applicant. However, owing a duty of care is not sufficient to alone give rise to a cause of action. The respondent must in some way be in breach of their duty of care to the applicant and that the applicant’s damage was a foreseeable consequence and not too remote.
Section 42 of the Wrongs Act provides:
Standard of care
For deciding whether a person (the defendant) was negligent, the standard of care required of the defendant is that of a reasonable person in the defendant’s position who was in possession of all the information that the defendant either had, or ought reasonably to have had, at the time of the incident out of which the harm arose.
The applicant alleges that the respondent was negligent in the performance of the work, and particularly, in the application of the waterproofing sealant which had to be redone. The Inspection Record dated 8 May 2023 confirms that the membrane finish was inconsistent, had inadequate coverage, and was not in accordance with the manufacturer’s instructions, and as a result, had to be rectified.[61]
[61] Exhibit A8: Applicant’s bundle of documents with index, annexure G
The applicant also relied upon various communications that informed him that his personal items had to be moved from his balcony by 22 February 2023, and the respondent’s evidence was that work was completed by 1 May 2023 (but some minor work was still to be done). When Peak Consulting inspected the applicant’s balcony, they identified defects. It would appear that the Inspection Record/Clearance Certificate was not given or at least until about 24 July 2023 (being the date of the document). Unfortunately, the applicant was not made aware of the completion until 13 October 2023. Notwithstanding the alleged completion, the applicant submits that defects have still not been rectified.
I accept the findings contained in the Peak Consulting report and find that the work by the respondent, or at least the rectification relating to the membrane, was deficient as it was not in accordance with the manufacturer’s instructions, and this has led to delay in the work being completed on the applicant’s balcony.
If the respondent’s arguments for some of the delays are accepted, the delays beyond the respondent’s control were about 79 days to the end of May 2023. These delays were not challenged by the applicant, and I accept the respondent’s evidence on this point. It would mean, however, that bearing in mind tile selection and the installation of the tiles, the earliest the work could have been completed was about by the end of March 2023. The respondent dealt with the rectification over the first week of May 2023 and they say it was completed by 2 May 2023. This suggests that the earliest the applicant could have reinstated his possessions and use the balcony was from about 3 May 2023. On the respondent’s own timeline, taking into account the rectification, the earliest date would have been about 20 June 2023. Unfortunately, this was not communicated to the applicant until about 13 October 2023. The applicant had however reinstated his possessions on the balcony on 15 September 2023 and reopened his Airbnb bookings on the same date.
I therefore find that there was some delay caused by the respondent but that there were other reasons beyond their control contributing to the delay as well, at least from March to May 2023.
The next issue to determine is whether or not the applicant’s alleged loss was a foreseeable consequence of any breach of duty by the respondent, or if it was too remote.
In Sullivan v Moody,[62] the High Court said,
A defendant will only be liable, in negligence, for failure to take reasonable care to prevent a certain kind of foreseeable harm to a plaintiff, in circumstances where the law imposes a duty to take such care.[63]
[62] [2001] HCA 59
[63] [2001] HCA 59 at [42]
There is a complexity of interrelationships between the Owners Corporation; the Executive Committee of the Owners Corporation; the strata manager; the applicant (as an apartment owner); and the respondent (as a contractor engaged by Peak Consulting on behalf of the Owners Corporation).
A difficulty for the applicant is that his claim for compensation is a claim for pure economic loss. Australian courts have regarded negligence claims for “pure economic loss”, in which the claimant has lost money but not been physically injured, as different to other kinds of negligence claims. This may have been because courts have been concerned that allowing such claims could expose respondents to indeterminate liability.
Although it is now established that Australian courts will allow claims for pure economic loss, the circumstances are limited. The legal basis for distinguishing between those claims in which pure economic loss will be allowed, and those claims that will not be allowed have not yet been fully clarified. A significant factor in the decisions may be that courts take the view that economic interests are best protected by the law of contract.[64]
[64] See Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36 at [121]
In Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (Brookfield), the High Court held that Brookfield Multiplex Ltd, the builder of a strata titled apartment complex, did not owe a duty of care to the Owners Corporation to avoid causing it economic loss resulting from latent defects in the common property.[65] Chief Justice French said that the interaction of the contractual and statutory frameworks are antithetical to the proposition that Brookfield Multiplex Ltd owed a duty of care to the Owners Corporation Strata Plan 61288.[66]
[65] Brookfield at [36]; [58]; [150] and [184]
[66] Brookfield at [34]
In my view, the reasoning in Brookfield may be applied here. The applicant (as an apartment owner) has a legal relationship and hence mutual legal obligations with the Owners Corporation. The Owners Corporation engaged Peak Consulting who in turn entered into the relationship with the respondent and in my view, as a result, there is no duty of care owed to the applicant by the respondent. It therefore follows that the applicant’s damage is too remote and as a consequence is not recoverable.
However, if I am incorrect on the foregoing and the applicant’s loss is not too remote and he is entitled to claim for his economic loss, then it would be necessary for me to determine what his economic loss would be.
The applicant has claimed a rate of $70 per night on and from 16 March 2023. Although the applicant alleges the rate is variable, he offered little in the way of past rental information and financial documentation, including tax returns, in support of the alleged loss. The applicant’s claim is based upon a 100% occupancy rate which was not supported by the evidence.
A further issue arises as to what steps, if any, the applicant may have taken to mitigate his alleged loss. It is understandable that as personal items had to be removed from the balcony that they might be stored inside the apartment as the applicant had done. The applicant was mindful that this would impact his renting of part of the unit on Airbnb. If the period was becoming longer than he expected, it is reasonable to expect that the applicant may have at least explored storing his balcony possessions somewhere else, or even off-site, such as in a storage facility. Storing the personal items off-site may have resulted in him incurring additional costs, but those costs could have been offset by him being able to rent the apartment albeit at a lower rent to take into account the guest’s inability to use the balcony as a result of the work being performed. Indeed, the applicant conceded that he had rented the property whilst the work was being done and had been able to secure his usual rate. The applicant did not request a schedule of work from the respondent. If he had done so, then a schedule might have enabled him to avoid listing the property during those times that work was being done on his balcony by the respondent.
In the absence of detailed past and present rental information and financial records, it is not possible to accept the applicant’s claimed loss, or to even determine his actual loss in the event that he was successful.
It was also not clear to me the basis upon which the applicant resolved his claim with the Owners Corporation and to a lesser extent whether he can claim under a policy of insurance. An award in favour of the applicant in this claim notwithstanding the earlier settlement and the possible insurance claim may suggest that there might need to be some set off or deduction in his damages, otherwise there remains the possibility of the applicant being doubly compensated in respect of his alleged loss. However, given how I have decided the application, it is not necessary for me to consider that aspect further.

Conclusion

For the reasons set out above, the applicant’s claim against the respondent fails, and the application is dismissed.

………………………………..

Member W Hawkins

Date(s) of hearing:	14 December 2023
Applicant:	In person
Respondent:	Peter Leary, Authorised Representative

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Amendment

21 May 2024

Date of orders on the cover page corrected to 17 May 2024