Tony Aceti and Kerri Aceti v Irene Woods and Leonard Hugh Woods and Country Lane Garden Centre Pty Ltd

[2014] NSWCATCD 214

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Tony Aceti and Kerri Aceti v Irene Woods and Leonard Hugh Woods and Country Lane Garden Centre Pty Ltd [2014] NSWCATCD 214
Hearing dates:	22 May 2014
Decision date:	28 October 2014
Jurisdiction:	Consumer and Commercial Division
Before:	D Goldstein, Senior Member
Decision:	1 The first and second respondents must pay the applicants the sum of $18,531.25 within 14 days of the date of this order. 2 Either party is at liberty to make a costs application in these proceedings. 3 Any costs application pursuant to section 53 of the Consumer, Trader and Tenancy Tribunal Act 2001 or regulation 20 of the Consumer, Trader and Tenancy Tribunal Regulation 2009 must be lodged in the Tribunal and served on the costs respondent within 21 days of the date of this order either attaching or referring to the documents relied upon in support of the application 4 The costs respondent will have 21 days after the date of receipt of the costs application referred to above, to lodge in the Tribunal and serve on the costs applicant the submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon 5 The cost applicant will have 14 days after the date of receipt of the cost respondent’s submissions to lodge in the Tribunal and serve on the costs respondent the submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon 6 The Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal
Legislation Cited:	Home Building Act 1989, Home Building Regulation 2004, Limitation Act 1969.
Cases Cited:	Bryan and Maloney (1995) 182 CLR 609, Nguyen v Cosmopolitan Homes [2008] NSWCA 246
Category:	Principal judgment
Parties:	Tony Aceti and Kerri Aceti (applicants) Irene Woods and Leonard Hugh Woods (first and second respondents) Country Lane Garden Centre Pty Ltd (third respondent)
Representation:	RURAL LAW with Peter Long for the applicants The respondents were not legally represented
File Number(s):	HB 13/52011
Publication restriction:	Unrestricted

REASONS FOR DECISION

1. These proceedings were commenced on 4 October 2013.

2. These proceedings arise out of an agreement whereby it is alleged that the respondents or one of them would construct a Parterre garden for the applicants and would provide materials, shrubs and services in so doing. The Parterre garden was to be constructed at the applicants’ premises at ‘Wyaralong’ 1842 Manilla Road Tamworth (the ‘premises’).

3. The applicants who I will refer to as the owners filed points of claim as ordered on 29 November 2013.

4. The owners allege breach of contract, negligence and misleading and deceptive conduct against the respondents.

5. It is relevant to note, as it will become clear, that in the contractual aspect of their points of claim the owners do not refer to the implied warranties referred to in section 18B of the Home Building Act, 1989. In their points of claim the owners’ state that it was an implied term of the agreement alleged that the first and second respondents would provide the services contracted for in a proper and workmanlike manner. This is denied by the respondents.

6. A Scott schedule filed and served on behalf of the owners detailed the damages claimed by them, which total the sum of $73,961.00.

7. The respondents’ position is that there was a contract between the owners and the respondent, Country Lane Garden Centre Pty Ltd (‘Country Lane’). They state that the first respondent is a director of Country Lane and that the second respondent is an employee of Country Lane. The respondents deny a breach of contract and state that the damage the owners complain of arose out of events which occurred without their knowledge or involvement.

8. The hearing of these proceedings took place on 22 May 2014. The owners were legally represented at the hearing. The respondents were not legally represented. The respondent Mrs Irene Woods represented all respondents.

9. The parties have lodged written submissions is support of their respective cases. I do not intend to deal with each and every submission made by the parties as that would make these Reasons for Decision unnecessarily long.

Jurisdiction of the Tribunal

10. Section 48K (1) of the Home Building Act 1989 (the ‘Act’) provides that :

‘(1)  The Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 (or any other higher or lower figure prescribed by the regulations).’

11. A ‘building claim’ is defined in section 48A of the Act as follows :

‘building claim means a claim for:

(a)  the payment of a specified sum of money, or

(b)  the supply of specified services, or

(c)  relief from payment of a specified sum of money, or

(d)  the delivery, return or replacement of specified goods or goods of a specified description, or

(e)  a combination of two or more of the remedies referred to in paragraphs (a)–(d),

that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services, but does not include a claim that the regulations declare not to be a building claim.’

12. Further in connection with the meaning of the expression ‘building claim’, section 48A(2) of the Act states that :

‘a building claim includes the following:

(a)  an appeal against a decision of an insurer under a contract of insurance required to be entered into under this Act,

(b) a claim for compensation for loss arising from a breach of a statutory warranty implied under Part 2C.’

13. Building goods or services are defined in section 48A of the Act to mean:

‘goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services:

(a)  supplied by the person who contracts to do, or otherwise does, that work, or

(b)  supplied in any circumstances prescribed by the regulations to the person who contracts to do that work.’

14. Residential building work is defined by the Act in section 3 to mean:

‘any work involved in, or involved in co-ordinating or supervising any work involved in:

(a)  the construction of a dwelling, or

(b)  the making of alterations or additions to a dwelling, or

(c)  the repairing, renovation, decoration or protective treatment of a dwelling.’

15. Regulation 5 of the Home Building Regulation 2004 identifies certain structures and improvements which form part of a dwelling when constructed for use in conjunction with a dwelling.

16. The owners submit that the work that the respondents carried out is included in the categories or descriptions of work referred to in Regulation 5 of the Home Building Regulation 2004.

17. The respondents do not agree that the work that was carried out is residential building work and further mount a challenge to the jurisdiction of the Tribunal.

Jurisdictional Challenge

18. I will deal with the jurisdictional challenge first.

19. The respondents rely upon section 48K (3) of the Act. That section provides as follows:

‘The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that have been supplied to or for the claimant if the date on which the claim was lodged is more than 3 years after the date on which the supply was made (or, if made in instalments, the date on which the supply was last made)’. (emphasis added)

20. In considering the respondents’ submission based on section 48K(3) of the Act, it is necessary in my view to have regard to section 48K(7) of the Act. That section provides that:

‘The Tribunal does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E).’ (emphasis added)

21. The issue is, in my view, whether the owners’ claim is a building claim relating to building goods or services, or a building claim in respect of a breach of a statutory warranty implied under Part 2C of the Act. Part 2C of the Act deals with statutory warranties.

22. At paragraph 5 of their points of claim the owners relied upon an implied term in identical language (in part) to that in section 18B(a) of the Act, namely that work would be carried out ‘in a proper and workmanlike manner’.

23. In their final written submissions the owners place reliance on the implied warranties set out in section 18B of the Act. In particular, the warranties at section 18B(a), (b) and (d) of the Act are relied upon by the owners.

24. In my view and I so find, the owners’ building claim in these proceedings arises under section 18B of the Act and is therefore subject to section 48K(7) of the Act, not section 48K(3) as submitted by the respondents.

25. The issue is therefore whether the owner’s building claim was lodged after the end of the period within which proceedings for a breach of the statutory warranty are to be commenced (as provided by section 18E of the Act).

26. Section 18E of the Act deals with the time within which a building claim must be commenced in relation to a breach of a statutory warranty.

27. The first question to be decided is which version of section 18E of the Act is applicable to these proceedings.

28. Section 13 of the Home Building Amendment Act 2011 (the ‘Amending Act’) amended section 18E of the Act by, among other things, amending the warranty period to be 6 years for a breach of an implied warranty resulting in a structural defect and 2 years in any other case.

29. Before the Amending Act took effect, the position was that there was a warranty period of 7 years commencing from the completion of the relevant work.

30. The Amending Act was assented to on 25 October 2011 and was proclaimed on 1 February 2012.

31. Section 13 of the Amending Act commenced on 1 February 2012 with the result that absent anything else in the Amending Act, the warranty period as amended applied to these proceedings, given that this application was filed in the Tribunal on 4 October 2013.

32. However, section 109 of the Amending Act provides:

‘The amendment made to section 18E by the amending Act does

not apply in respect of a contract for residential building work

entered into before the commencement of the amendment.’

33. The owners in their points of claim at paragraph 4 allege that the agreement which is the subject of these proceedings was entered into in or about June 2009. In the respondents’ point of defence, this paragraph is denied by Irene Woods and Leonard Hugh Woods as being applicable to them. It is not denied by Country Lane and in my view, therefore admitted by it.

34. Mrs Wood’s statement which is exhibit 3 confirms that the original meeting with Mr Aceti took place in or about May 2009.

35. I find on the basis of the points of claim and the points of defence and the statement of Mrs Woods, that the agreement the subject of these proceedings was entered into in the period between May and June 2009. Section 109 of the Amending Act therefore applies.

36. Having found that the Amending Act does not apply to section 18E of the Act, it is appropriate to set out the version of section 18E of the Act that does apply to these proceedings, which is as follows:

‘(1)  Proceedings for a breach of a statutory warranty must be commenced within 7 years after:

(a)  the completion of the work to which it relates, or

(b)  if the work is not completed:

(i)  the date for completion of the work specified or determined in accordance with the contract, or

(ii)  if there is no such date, the date of the contract.’

37. Given that the contract was entered into between May and June 2009, the fact that the contractual work was not completed (which is common ground) and that these proceedings were commenced on 4 October 2013, I find that the proceedings are not time barred by section 18E of the Act as referred to in the preceding paragraph, and have been brought well within time.

38. The respondents also submit that these proceedings are time barred by the effect of the Limitation Act 1969. There is no detail to this submission. Since, as the owners’ submission state, a six year time limit applies under the Limitation Act, I can see no basis for this submission, which is rejected.

39. I reject the respondents’ submissions that these proceedings are time barred, either under the provisions of the Act or the provisions of the Limitation Act.

Evidence

40. At this point of these reasons it is convenient to list the evidence tendered in the proceedings The evidence tendered on behalf of the owners was:

1. Letter from Robert Cruickshank dated 10 December 2013;

2. Undated statement of Antonio Aceti together with exhibit ‘AA-1’ thereto;

3. Report of Scott Edwards dated March 2010;

4. Report of Scott Edwards dated 24 October 2014;

5. Report of Scott Edwards dated 14 January 2014; and

6. Photograph of block wall –exhibit G.

41. The evidence tendered on behalf of the respondents was:

1. Statutory declaration of Mr Leonard Woods dated 23 January 2014;

2. Statement of Lincoln Woods dated 29 January 2014; and

3. Statutory declaration and exhibits thereto of Mrs Irene Woods dated 23 January 2014.

The parties to the contract

42. The owners allege that they entered into a contract with the first and second respondents. The first and second respondents allege that the owners entered into a contract with the third respondent.

43. In order to ascertain who the owners contracted with it will be necessary to consider the evidence of the initial meetings between the parties.

44. In considering this evidence I will bear in mind the fact that Mr Woods holds no office with Country Lane and he is only an employee of the company. Mrs Woods is the sole director and secretary of Country Lane.

45. Whoever contracted with the owners, the evidence is clear to me that the contracting procedures were very informal, or perhaps more accurately, lax. There was no written contract, there were no sketches or plans prepared that were given to the owners. There was not even a quotation that could have set out the most basic elements of what work was to be done by the counter party to the owners and how much the owners were to pay for the work, plants and materials to be supplied. It is often the case that the party performing the work will prepare this documentation. Section 7 of the Act sets out the requirements as to what should have happened in this agreement between the parties. It is common ground that section 7 of the Act was not complied with.

46. It is also common ground that the owners met the first and second respondents at the premises in or about June 2009 and an arrangement was made that more information would be provided by the first and second respondents about the nature of the work to be carried out.

47. Mrs Woods’ evidence is that at the original meeting with the owners she told them that she had a gardening business ‘conducted as a company at Walcha whereby we did gardening and mowing for clients’. Mr Woods also gave evidence of this meeting. He states that Mrs Woods ‘explained that she now had a gardening/lawn mowing business in Walcha’. Mr Woods evidence indicates that the company was not mentioned at the original meeting.

48. Mr Woods’ evidence is that he and his wife left the meeting and prepared some sketches and then returned to meet the owners to discuss the sketches and the first and second respondent’s ideas about the proposed work. I accept this evidence as it is confirmed by Mr Acetis’ evidence and Mrs Woods’ evidence.

49. Mr Woods states that at this second meeting Mrs Woods stated that ‘her company had Workers Compensation and Public Risk insurance.’

50. Mr Aceti’s evidence does not address Mrs Woods’ suggestion that she had referred to her gardening business ‘conducted as a company at Walcha’ or that she mentioned her company having certain insurances. Having regard to the evidence of the parties and the informal way in which the first meeting occurred, I do not accept Mrs Woods evidence that she did in fact refer to her gardening business ‘conducted as a company’. I find this element of her statement to be self-serving and I am not persuaded she actually stated those words. Mr Woods does not confirm that these words were spoken.

51. I do however accept that at some point, Mrs Woods referred to certain insurances being held by her company. However that does not have the effect that that Mrs Woods told the owners and the owners understood or should have understood that Country Lane would be the contracting party and responsible for carrying out all of the work at the premises.

52. On the evidence available, I find that there was an agreement that the first and second respondents would carry out a scope of work (which is difficult to define) for the owners, at the owners’ request, and that the owners would pay the first and second respondents for the work carried out. I accept Mr Woods’ evidence that the work was to be paid for on an hourly basis.

53. The agreement that the parties entered into was clearly unsatisfactory in a number of respects. However, the respondents make no claim for payment against the owners so it is not necessary to ascertain what was agreed regarding payment.

54. The owners’ only claim against the first and second respondents is in relation to the way the work was carried out.

Did the work carried out by the respondents form part of a dwelling or was it constructed for use in conjunction with a dwelling?

55. The contract that the parties entered into was not reduced to writing. Mr Aceti described the work he wanted to be carried out as ‘a Mediterranean style garden …….. with paving, low walls, trees, shrubs, paths etc’. The specific nature or descriptions of the work carried out has not been precisely described by the parties to these proceedings. In addition, despite the wishes of the parties, I was unable to conduct a view of the premises. A view of the premises would have been of considerable assistance in understanding the nature, location and configuration of the various elements of the work carried out.

56. The difficulty in obtaining an understanding of the location and configuration of the various elements of the work carried out was not assisted by the fact that the parties did not think it appropriate or useful to prepare a site plan indicating and describing the work that was done. There was however a sketch in Mr Edwards’ second report.

57. The term ‘dwelling’ is defined in section 3(1) of the Act as follows:

‘dwelling means a building or portion of a building that is designed, constructed or adapted for use as a dwelling (such as a detached or semi-detached house, transportable house, terrace or town house, duplex, villa-home, strata or company title home unit or residential flat).It includes any swimming pool or spa constructed for use in conjunction with a dwelling and such additional structures and improvements as are declared by the regulations to form part of a dwelling.It does not include buildings or portions of buildings declared by the regulations to be excluded from this definition.’

58. Regulation 5 of the Home Building Regulation 2004 provides:

‘For the purposes of the definition of dwelling in section 3 (1) of the Act, the following structures and improvements are declared to form part of a dwelling when constructed for use in conjunction with a dwelling:

(a)  parts of a building containing more than one dwelling (whether or not the building is also used for non-residential purposes), being stairways, passageways, rooms, and the like, that are used in common by the occupants of those dwellings, together with any pipes, wires, cables or ducts that are not for the exclusive enjoyment of any one dwelling,

(b)  parts of a building containing one dwelling only (where the building is also used for non-residential purposes), being stairways, passageways and the like which provide access to that dwelling,

(c)  if non-residential parts of a building containing one or more dwellings give support or access to the residential part—the structural elements of the non-residential parts giving such support or access,

(d)  cupboards, vanity units and the like fixed to a dwelling,

(e)  detached garages and carports,

(f)  detached decks, porches, verandahs, pergolas and the like,

(g)  cabanas and non-habitable shelters,

(h)  detached workshops, sheds and other outbuildings (but not jetties, slipways, pontoons or boat ramps and any structures ancillary to these exceptions),

(i)  concrete tennis courts and the like,

(j)  driveways, paths and other paving,

(k)  retaining walls,

(l)  agricultural drainage designed or constructed to divert water away from the footings of a dwelling or a retaining wall,

(m)  fences and gates,

(n)  ornamental ponds and water features, and other structural ornamentation, the construction or installation of which requires development consent.’

59. The owners submit that the work that was the subject of the agreement between the parties is described by sub paragraphs (f), (g), (j) (k) and (m) of regulation 5.

60. The respondents deny that the walls they built were retaining walls. They state the walls they constructed were free standing walls that did not retain anything.

61. The owners’ claim which is for defective work is described in their expert’s reports.

62. Mr Edwards raises two issues in his March 2010 report, large cement pavers and straight and semi-circular cement block dwarf walls. In this report Mr Edwards’ evidence goes to workmanship issues.

63. The respondents do not say that the large cement pavers claim relates to work outside regulation 5, as referred to above. In any event, I find that the large cement pavers were laid on concrete slabs and form pathways in the grounds of the premises. As a result the work in this category comes within regulation 5(j) of the Home Building Regulation and therefore within the definition of a dwelling for the purposes of section 3 of the Act.

64. As regards the semi-circular cement block dwarf walls, Mr Edwards refers to cement block dwarf walls laid on cement strip footings in connection with this heading. A dwarf wall will ordinarily mean a low wall. The photographs in this section of Mr Edwards report show low cement block walls. Mr Edwards refers to a circular garden bed at the front of the landscaped area. I assume that he means a dwarf wall on the circular structure to which he refers. The photographs of this circular garden bed show that the wall encloses a garden bed.

65. The respondents in their submissions state that a retaining wall was never constructed. They refer to a dictionary definition of a retaining wall which is ‘a structure designed and constructed to resist lateral pressure of soil when there is a desired change in ground elevation that exceeds the angle of repose of the soil’. The source of this definition is not stated. The photographs to Mr Edwards report do not establish that the walls retain any lateral pressure of soil or that there is ground elevation which causes a lateral pressure of soil.

66. The respondents submit that free standing walls were constructed. They rely on one of Mr Edwards’ reports where he refers to free standing walls and free standing block walls.

67. Regulation 5 of the Home Building Regulation provides that retaining walls will form part of a dwelling when constructed for use in conjunction with a dwelling. Walls which are not retaining walls, but which might be constructed on land surrounding a dwelling will not form part of a dwelling for the purposes of the Act. Such walls will therefore not come within the definition of a building claim under the Act which the Tribunal has the jurisdiction to determine.

68. The owners address this issue in paragraph 8 of their reply submissions. They state that the walls were intended to be retaining walls had they been constructed properly. There is no evidence cited in support of that proposition. However, the owners’ solicitors state that ‘due to what flows in the paragraphs below, no more need be said on that point.’ With respect this is an unhelpful submission. If the following paragraphs bear upon the issue they ought to have been specifically identified. I have read the submissions and can find no relevant paragraph which addresses the retaining walls. The paragraphs that follow relate to work that the owners say was carried out by the respondents. I have dealt with that point later in these reasons. However, the issue is not what work was carried out by the respondent. The issue is whether the work which is the basis of the owners’ claim comes within Regulation 5 of the Home Building Regulation.

69. The onus is on the owners to establish that the dwarf walls referred to in Mr Edwards’ report come within the definition of a dwelling as referred to in the Act. The relevant principles in relation to discharging the burden of proof in civil cases were recently summarised by McDougall J. in the New South Wales Court of Appeal in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [55] as follows:

1. A finding that a fact exists (or existed) requires that the evidence induce, in the mind of the fact-finder, an actual persuasion that the fact does (or at the relevant time did) exist;

2. where on the whole of the evidence such a feeling of actual persuasion is induced, so that the fact-finder finds that the probabilities of the fact’s existence are greater than the possibilities of its non-existence, the burden of proof on the balance of probabilities may be satisfied;

3. where circumstantial evidence is relied upon, it is not in general necessary that all reasonable hypotheses consistent with the non-existence of a fact, or inconsistent with its existence, be excluded before the fact can be found; and

4. a rational choice between competing hypotheses, informed by a sense of actual persuasion in favour of the choice made, will support a finding, on the balance of probabilities, as to the existence of the fact in issue.

70. In my view whether a wall is a retaining wall or not is a question of fact. It may be necessary for expert opinion to be adduced to resolve that factual matter. The onus is on the owners to establish by evidence, an actual persuasion in my mind that the walls referred to under the heading ‘Straight and semi-circular cement block dwarf walls’ in Mr Edwards’ March 2010 report, are retaining walls. Mr Edwards does not address the matter in his March 2010 report. His report addresses deficiencies in the construction of these walls. He does not give any evidence that these walls were intended to be retaining walls had they been constructed properly, a submission made by the owners’ solicitors which is, I find, unsupported by evidence. Mr Edwards’ later reports do not address this issue. Those reports concern themselves with rectification costs.

71. There is in fact no evidence on behalf of the owners that describes the nature of the straight and semi-circular cement block dwarf walls constructed at the premises and asserts that these walls are in fact retaining walls.

72. Having regard to the evidence and the parties submissions, I am not persuaded that the straight and semi-circular cement block dwarf walls

are retaining walls. I prefer the respondents’ submissions. In my view the owners have not discharged the onus of establishing that these walls are retaining walls. On the basis of the evidence and the parties’ submissions, I find that the walls are not retaining walls.

73. I therefore find that the work that the first and second respondents carried out in connection with dwarf walls as referred to in Mr Edwards’ first report was not work that comes within the Act. I have no jurisdiction to make orders in connection with that work or those walls.

74. The owners’ application in connection with straight and semi-circular cement block dwarf walls is dismissed.

75. The owner’s solicitors have submitted that the work carried out by the first and second respondents was work described by sub paragraphs (f), (g), (j) (k) and (m) of regulation 5. Be that as it may, the relevant issue is what category of work does the work the subject of the owners’ claim come within.

76. The owners’ expert has given evidence that the defective work carried out related to large cement pavers and straight and semi-circular cement block dwarf walls. I have made findings about whether these items of work come within sub paragraphs (j) and (k) of regulation 5.

77. There is no evidence on behalf of the owners that the work the subject of their claim for which damages are sought, relates to detached decks, porches, verandahs, pergolas and the like – sub-paragraph (f), cabanas and non-habitable shelters - sub-paragraph (g) or fences and gates – sub-paragraph (m).

The owners’ claim

78. The owners rely upon the reports of Mr Scott Edwards which are exhibits D and E in these proceedings in order to establish their loss and damage.

79. I have found that the Act applies to the agreement between the parties, in connection with the large cement pavers claim. It follows in my opinion that section 18B of the Act applies to the work carried out by the first and second respondent at the premises at the request of the owners.

80. Section 18B of the Act provides that:

‘The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work:

(a)  a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract,

(b)  a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new,

(c)  a warranty that the work will be done in accordance with, and will comply with, this or any other law,

(d)  a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time,

(e)  a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling,

(f)  a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder’s or person’s skill and judgment.’

81. The first report prepared by Mr Edwards is dated March 2010. It was attached to the application. The second report is dated 24 October 2013. The total amount referred to in Mr Edwards 24 October 2013 report is $73,960.00 which is claimed by the owners. Mr Edwards report dated 14 January 2014 attaches a Scott schedule which breaks up the applicants’ claim into 23 items totalling $73,960.00. The Scott schedule does not cross reference the individual items to Mr Edwards first report and appears to do no more than put Mr Edwards 24 October 2013 report into the form of a Scott schedule.

82. I accept Mr Edwards as an appropriately experienced building consultant able to give expert opinion in the Tribunal. He has acknowledged the Chairperson’s Directions in relation to the Expert Witness Code of Conduct which is attached to his second report.

83. Mr Edwards raises two issues in his March 2010 report, large cement pavers and straight and semi-circular cement block dwarf walls. In this report Mr Edwards’ evidence goes to workmanship issues. This evidence is therefore relevant to establishing a breach of section 18B(a) or 18B(b) of the Act, as set out above.

84. Mr Edwards’ 24 January 2014 Scott schedule contains Mr Edwards’ comments as ‘Works not to a tradesmanlike standard.’, and ‘Materials not installed to manufacturers recommendations.’

85. I will deal with the first issue raised in Mr Edwards’ Mach 2010 report.

Large cement pavers

86. These large cement pavers are laid on concrete slabs. I have found that these pavers form pathways in the grounds of the residence and that the work in this category comes with regulation 5(j) of the Home Building Regulation and therefore within the definition of a dwelling for the purposes of section 3 of the Act.

87. Mr Edwards’ evidence in his March 2010 report is that these pavers as laid suffer from the following deficiencies:

1. there is evidence of cracking in the concrete slabs underneath the pavers in two areas;

2. while the outside pavers near the edge of the concrete have been glued down the other pavers are loose;

3. the pavers undulate and step up and down;

4. the cutting of pavers in the circular area towards the driveway is haphazard;

5. where pavers lead onto a circular garden bed at the front of the residence, the edge of the concrete Is not supported down to the block wall footing;

6. in a number of areas the concrete foundation to the pavers does not extend to the edge of the pavers or extends out past the edge of the pavers; and

7. where the new paving meets the front steps to the residence the pavers are out of level by 20mm from left to right.

88. At page 10 of his March 2010 report Mr Edwards’ sets out his conclusions as regards foundations and pavers. Mr Edwards’ evidence is that on inspection the concrete slabs or foundations (‘footings’) for the large cement pavers were not reinforced and the cracking in the footings as was observed would have not occurred had the footings been reinforced by steel mesh. Mr Edwards states that the instances of the footings not projecting to the edge of pavers, and beyond the edge of pavers is attributable to poor set out. In connection with the circular garden bed at the front of the residence, Mr Edwards states that the footings at this location have no structural support and can be expected to move.

89. The respondents did not engage an expert to respond to Mr Edwards’ evidence. Mr Leonard Woods gave evidence of fact relating to how the work was carried out. He states that Mr Aceti insisted that footings be put under the pavers. He also states that the paver width was changed by the applicants and this caused the pavers to be 100mm wider than the footing. He states that he didn’t consider this to be a problem as material could be placed under the overhang. He also refers to an issue with paver levels, although his statutory declaration does not explain the facts clearly. Finally, Mr Woods states that there was reo mesh in the footings.

90. The owners deal with the issue of reo mesh in the footings in their written submissions at paragraph 41, where it is stated that the evidence on behalf of the respondents was that hinge joint fencing wire was used as reinforcing in the footings. Mr Edwards’ evidence about this was that hinge joint fencing wire was not suitable for reinforcing the footings. The owners’ solicitor’s submissions also make the point that exhibit L of Irene Woods statutory declaration establishes that Country Lane purchased ‘H Joint’ fencing wire. I accept that submission and do not accept Mrs Woods’ statement that reinforcement mesh was used in the footings. Exhibit L to her statutory declaration contradicts that statement. Also, as she was not involved in the carrying out of the work, I do not accept that she would have personal knowledge of what type of reinforcement was laid in the footings.

91. In their written submissions at paragraph 26, the respondents agree that hinge joint mesh was used in the footings. However, it is submitted that Mr Edwards stated in evidence that the use of hinge joint mesh was adequate. There was no written transcript of the hearing. If the respondents obtained a recording of the hearing, some reference to the hearing would confirm this important evidence. Mr Edwards stated in his evidence in chief that fencing wire was not reinforcement for a strip footing or a slab. I find that Mr Edwards did not state in his evidence that the use of hinge joint mesh was adequate. To the contrary he stated that fencing wire was not reinforcement for a strip footing. I accept paragraph 31 of the owners’ submissions in reply.

92. Further, if as alleged by the respondents, they were told by a supplier that hinge joint mesh was adequate, that does not absolve them from responsibility if that advice was wrong. The respondents did not call the witness who allegedly told them that hinge joint mesh was adequate as reinforcement.

93. Having regard to all of the evidence and the lengthy written submissions from the parties, I accept Mr Edwards’ evidence in connection with the matters set out in paragraph 87.

94. I find that the evidence of Mr Edwards lays the necessary evidential foundation that the first and second respondents carried out work in breach of section 18B of the Act, primarily section 18B(a). I find that the first and second respondents were in breach of section 18B (a) of the Act by reason of using incorrect or inadequate reinforcement on the footings upon which the large pavers were laid. In my view, the fact that the footings were inadequately constructed justifies the remedial work proposed by Mr Edwards which is, in part, the subject of the owners’ claim.

Rectification costs

95. In his report dated 24 October 2013 Mr Edwards sets out his cost estimates to demolish and rebuild ‘front yard landscaping works to an acceptable standard’ at the premises. His cost estimate is in 27 items which total $73,960.00 inclusive of overhead and profit and GST. The cost estimate is split between ‘Demolition’ and ‘Rebuild’.

96. This report does not separately cost the large cement pavers claim and the straight and semi-circular cement block dwarf walls claim.

97. I have already found that the alleged defective dwarf walls do not come within the definition of dwelling in the Act and that I have no jurisdiction to make orders in connection with that work.

98. I will therefore delete items 1, 3, 4, 6, 50% of item 7, 50% of item 9, 16, and 18 from the calculation to be made in favour of the owners.

99. Mr Edwards has referred to a front circular platform in his report. Mr Lincoln Woods states in his evidence that he helped the second respondent remove the platform in June 2010. The first respondent in her evidence states that front circular platform was removed in June 2010 as part of an arrangement with Mr Aceti.

100. Mr Aceti in his statement refers to attempts to resolve the differences between the parties. He states that an agreement was reached in 2010, but states that the first and second respondents never performed any of the work that they had agreed to do.

101. I accept the evidence of Mrs Woods and Mr Lincoln Woods that the round section of the parterre garden was dismantled by them. As part of that process they removed rubble and raked the area clean.

102. Mr Edwards admitted in cross examination that he was not aware of the fact of the removal of the round section of the parterre garden when he prepared his 24 October 2013 report. The consequence of the removal of the round section of the parterre garden is that various items in the 24 October 2013 report cannot be maintained.

103. During the course of the hearing, I requested the representatives of the parties to discuss issues in an attempt to resolve contentious issues and to agree figures as figures. That was not successful. However it led to the applicants amending their scott schedule, a copy of which was attached to their solicitor’s submissions (‘the May 2014 scott schedule’). Concessions were made in that certain items claimed, decreased in amount. The respondents attached a Scott schedule to their submissions. No concessions were made.

95. I will now refer to the May 2014 Scott schedule to reflect the findings referred to above.

96. The consequence of the removal of the round section of the parterre garden is that items 10, 11, 12, 13, 17 and 18 of the May 2014 Scott schedule cannot be maintained.

97. For the reasons given above, the only items of cost in the May 2014 Scott schedule which correspond to the large concrete pavers claim are items, 2, 5, 50% of item 7, 50% of item 8, 9, and 14.

98. The scope of work in Mr Edwards’ 24 October 2013 report has been substantially decreased by reason of my findings set out above. As a consequence I will reduce items 19, 20 and 21 of the May 2014 Scott schedule by 50% respectively. I have reduced items 7 and 8 on the same basis.

99. I accept Mr Edwards’ figure of 25% for overheads and profit. It is un-contradicted. Mr Edwards total cost of $73,960.00 is said to be inclusive of GST. I assume that all items are therefore GST inclusive.

100. The amount found in the applicants favour is $18,531.25 calculated as follows:

101. I will make an order that the first and second respondents are jointly and severally liable to pay to the owners the sum of $18,531.25 immediately.

102. Evidence was given at the hearing regarding an allegation that the respondents left a tap running at the residence after they had ceased work with the result that the owners suffered loss and damage. Neither the owners’ application or points of claim raise this as an issue to be determined in the proceedings. In addition, the owners written submissions do not address the matter. As a result I make no finding in connection with this un-pleaded issue.

The claim in tort

112. The owners state in submissions that Country Lane owed them a duty of care and are liable to them in negligence. The owners’ principal submission is that they entered into a contract with the first and second respondents. They then state that the first and second respondents subcontracted the works to Country Lane and that Country Lane owed a duty of care to them in carrying out the sub–contracted works.

113. The position of the respondents is different. They state that the contracting parties were the owners and Country Lane. Mrs Woods is said to be a director of Country Lane and Mr Woods is said to be an employee.

114. The respondents do not concede that Country Lane was subcontracted to the first and second respondents.

115. The owners’ case in negligence does not establish that there was in fact a subcontract in existence with Country Lane as the sub-contractor.

116. The case of Bryan and Maloney (1995) 182 CLR 609 concerned a duty of care owed by a builder to a successor in title of residential property. It does not stand as authority for the general proposition that sub-contractors owe a duty of care to those who contract with the head contractor.

117. The owners have been unable to cite any case where a sub-contractor has been found liable in tort to property owners.

118. The current principles of negligence in Australia require some element of vulnerability on the part of the owners having regard to the relevant facts. Ordinarily, owners who contract with builders enjoy the position that if the builder sub-contracts various parts of the works, the builder will be liable to the owners for any act or omission of the sub-contractors which places the builder in breach of contract with the owners. This element in my view mitigates against the owners being vulnerable in the sense of being unable to protect themselves against a sub-contractor’s lack of care when performing the relevant work. They will always have recourse against the builder, in this case the first and second respondents, in connection with such lack of care/breach of contract.

119. There are in my view no special circumstances in this case which show that the owners were vulnerable, or in a position of vulnerability, so far a County Lane is concerned.

120. Having regard to the fact that there is no evidence of a sub-contract, the fact that I find that the owners were not in a position of vulnerability as regards the sub-contractor, if a sub-contract did in fact exist, the lack of special circumstances and the fact that the owners have not been able to cite a case that establishes that sub-contractors owe a duty of care to a property owner, I am of the view that they have failed to establish that the third respondent owed them a duty of care.

121. The owners case in negligence fails and must be dismissed.

Misleading and deceptive conduct

122. The owners do not press this aspect of their claim in submissions.

123. In any event, I am not persuaded that the representations alleged by the owners in paragraph 8 of Mr Aceti’s statement were in fact made by the first and second respondents.

124. I dismiss the owners claim for misleading and deceptive conduct.

Costs

125. Either party is at liberty to make a costs application in these proceedings.

126. Any costs application pursuant to section 53 of the Consumer, Trader and Tenancy TribunalAct 2001 or regulation 20 of the Consumer, Trader and Tenancy TribunalRegulation 2009 must be lodged in the Tribunal and served on the costs respondent within 21 days of the date of this order either attaching or referring to the documents relied upon in support of the application.

127. The costs respondent will have 21 days after the date of receipt of the costs application referred to above, to lodge in the Tribunal and serve on the costs applicant the submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.

128. The cost applicant will have 14 days after the date of receipt of the cost respondent’s submissions to lodge in the Tribunal and serve on the costs respondent the submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon.

129. The Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal

D Goldstein

Senior Member

Civil and Administrative Tribunal of New South Wales

28 October 2014

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

Registrar

Decision last updated: 05 February 2015