Tran and Le v Packaging Logistics Pty Ltd
[2022] VMC 10
•4 May 2022
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
Case No. J12518447
| HANH TRAN | First Plaintiff |
| and | |
| HOI LE | Second Plaintiff |
| v | |
| PACKAGING LOGISTICS PTY LTD | Defendant |
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MAGISTRATE: | Magistrate T.W. Greenway |
WHERE HELD: | Melbourne Magistrates’ Court |
DATE OF HEARING: | 28 March 2022 – 1 April 2022 and 20 April 2022 |
DATE OF DECISION: | 4 May 2022 |
CASE MAY BE CITED AS: | Tran & Le v Packaging Logistics Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2022] VMC 10 |
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AUSTRALIAN CONSUMER LAW – Defective installation of bi-fold doors and window – Quantification of damages – Replacement or rectification works.
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APPEARANCES: | COUNSEL | SOLICITORS |
| For the Plaintiff | Mr J. Stavris | Kyard Business Law |
| For the Defendant | Mr B. Mason | Novatsis & Alexander Solicitors |
HIS HONOUR:
Ms Hang Minh Tran (Tran) is an owner builder[1] for a development overlooking the Maribyrnong River in Maribyrnong (Property). Mr Hoi Duc Le (Le) is her partner. As part of the development, Tran and Le would construct a two-storey house on the Property (House).
[1]Building Act 1993 Part 3, Division 3A.
On or around 6 August 2014, Tran and Le approached the Defendant, Packaging Logistics Pty Ltd trading as Austral Aluminium (Austral) to manufacture, supply and install various doors and windows for the House at a cost of $59,000. The products to be provided were:
(a) three large, fixed glass window panels facing a pool area (Pool Windows);
(b) bi-fold doors adjoining the pool windows (Corner Bi-Fold);
(c) sliding doors in the loungeroom and the bedroom downstairs (Downstairs Sliding Doors);
(d) bi-fold doors in the upstairs living area (BF-1); and
(e) sliding doors in the upstairs bedroom (Upstairs Sliding Door).
(collectively Works) (Sliding Doors[2])
[2]Downstairs Sliding Doors and Upstairs Sliding Door collectively.
Austral finished the Works in or around late February 2016. Payments totalling $43,600 were made to Austral. Tran and Le then objected to paying the final progress payment on the basis that the Works were defective and delivered late.
In early 2018, Austral commenced proceedings in the Magistrates’ Court against Le, claiming the final progress payment of $16,819 and other installation and other works totalling $6,855 carried out on a quantum meruit basis (First Proceeding).
On 15 June 2018, Le consented to judgment on Austral’s claim in the sum of $23,674. This amount was subsequently paid.
In this proceeding, Tran and Le now claim damages occasioned by the Works carried out by Austral.
To establish the defective nature of the Works, including whether they were fit for purpose, Tran and Le relied upon two expert witness reports. The first report was authored by James Campbell, building consultant (Campbell Report). The second was by Mr Michael Spencer (Spencer Report). Spencer’s particular area of expertise related to the design and manufacture of bi-fold doors and windows.
Le and Tran’s principal submission was that the Works required complete replacement. Damages of $90,464 were claimed, based upon a quotation of Pacific Shopfitters Pty Ltd dated 24 January 2020 (Pacific Shopfitters Quotation). In the alternative, damages for rectification were claimed for some of the Works.
Le and Tran also allege that the Works were not completed within a reasonable time in breach of s 62 of the Australian Consumer Law[3] and they have suffered loss. Their claim for lost rental on an investment property was not pressed.
[3]Competition and Consumer Act 2010 (Cth) Sch 2 (‘Australian Consumer Law’).
In its Defence, Austral disputes that it carried out the installation of all the Works. Austral contends that it was only engaged to install the Corner Bi-Fold and BF-1. The remaining Works, namely the Pool Windows, Downstairs Sliding Doors and the Upstairs Sliding Doors, were supply-only.
In relation to the Pool Windows, Austral says that it helped lift the windows into position, but that Le was ultimately responsible for the installation. Regarding the Sliding Doors, Austral contends that it assisted Le by attaching the sliding doors to fixing points that Le had made to the structure. Therefore, Austral submits that it was not responsible for any defects in these installations.
Secondly, Austral pleaded that Le had specifically requested that BF-1 be fabricated to oversized specifications. Austral maintains that, on or around 6 August 2014, Mr Mikhail Kochev (Kochev) director and production manager of Austral, told Le that the oversized BF-1 door frames were outside the scope of Capral’s[4] recommended and tested sizes. Having been informed of this, Austral submits that Le assumed the risk of the oversized doors by stating “it’s my problem, yours” or words to that effect. Le denies this.
[4]Capral, a supplier and distributor of aluminium extrusions.
Thirdly, Austral further asserts that Le gave specific instructions on how Austral should install the Corner Bi-Fold and BF-1. Austral says it followed those instructions and therefore cannot be liable for any resultant installation defects.
In the above circumstances, Austral submits that the Works, properly considered, were not defective and no fitness for purpose term can apply in the circumstances. It relied upon the expert report of Mr Simon Brownhill (Brownhill Report), building consultant.
Effect of the First Proceeding
On the first day of trial, Austral sought leave to file a Notice of Further Amended Defence[5] (Further Amended Defence). Originally, paragraphs [32] to [35] of the Further Amended Defence pleaded Anshun Estoppel, Issue Estoppel and Res Judicata by reason of the consent judgment in the First Proceeding.
[5]dated 3 February 2020.
Counsel for Le and Tran gave the following explanation of the First Proceeding:
There was a proceeding issued. My client was self-represented. She [sic] was self-represented when the complaint was issued. She [sic] filed a defence as a self-represented litigant. Then just before the hearing before Magistrate O’Callaghan, she [sic] is represented by my instructor. He is represented by my instructor. Consequently, there was an attempt to file a defence and counter claim. That was rejected and there was an order made at Court Book page 54. Essentially, consenting to a judgment in the amount of $23,674 plus interest of $3,925, costs of $16,259. At that hearing there was an indication by His Honour that the matter was not over and we then are back before you to determine the fitness for purpose of these doors and essentially our counterclaim.
Ultimately, Austral did not press paragraphs [32] - [35] and they were deleted from the Further Amended Defence. Leave was then granted.
In the above circumstances, the proceeding was conducted on the basis that Anshun estoppel, issue estoppel and res judicata were not issues for the Court’s consideration.
In its closing submissions[6], Austral sought to re-enliven the consent judgment. It submitted that, in this proceeding, Le and Tran were seeking to have the Court reconsider:
(a) the content of the parties’ contract such that it also included obligations to install the Pool Windows and Sliding Doors[7]; and
(b) its earlier findings as to the adequacy of the additional services Austral performed which were the subject of a quantum meruit.
[6]Dated 19 April 2022, [8] – [19].
[7]Pleaded in the First Proceeding as a supply only contract.
By reason of the consent judgment, Austral concluded that:
It is anticipated that, in response, the Plaintiffs will seek to characterise this submission as an attempt to reagitate the Defendant’s earlier plea that the Plaintiffs’ claims in this proceeding are precluded by the principle of res judicata, an Anshun estoppel or an issue estoppel. It is nothing of the sort. This submission is instead directed towards the effect of the Court’s orders in the First Proceeding, and the consequences those orders have for the proper disposition of certain issues which the Plaintiffs seek to pursue in this proceeding. In short, the Plaintiffs are bound by the consequences arising from the orders made in the First Proceeding.
I do not accept these submissions. I consider the two submissions advanced by Austral fall within the principles of issue estoppel and res judicata as described by the High Court in Tomlinson v Ramsey Food Processing[8] as follows:
The first is sometimes referred to as “cause of action estoppel”. Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment.
Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a “judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies”.[9]
[8](2015) 256 CLR 507.
[9]Tomlinson v Ramsey Food Processing (2015) 256 CLR 507, 22 - 26.
As stated above, issue estoppel and res judicata were not pleaded by Austral. In my opinion, Tran and Le would suffer prejudice if Austral were permitted to raise these matters as a defence in this proceeding. Such prejudice arises because Tran and Le participated in the proceeding on the bases of the assumptions set out at paragraph [16] above. They therefore gave no evidence about the circumstances of the First Proceeding or how the consent judgment came to be entered.
Both parties conducted the proceeding, including earlier interlocutory hearings, on the basis that the consent judgment was no impediment to Tran and Le’s claim for damages for defective works.
Further, I do not consider that the Court is recasting the parties’ contract or reconsidering its earlier findings as to the benefit of the services provided by Austral. The Amended Complaint in the First Proceeding pleaded that:
[9] Further the Defendant [Le] requested the Plaintiff [Austral] to change the size of the bi-fold doors and provide additional assistance to him in relation to the residential development beyond the contract.
[10] The Plaintiff changed the size of the bi-fold doors and provided the additional assistance requested by the Defendant and is accordingly entitled to reasonable remuneration for same on a quantum meruit basis.
PARTICULARS
Provision of - 1 jamb $200.00
- 10 stiles $2,000.00
- High tensile bolts and nuts $50.00
- Additional site measure $250.00
- Assistance with installation of windows
(3 men x 5 hours @ $65 per hour each) $975.00
- Assistance with installation of top hung
sliding doors
(4 men x 8 hours @ $65 per hour each) $2,080.00
- Assistance to fit laundry door
(2 men x 2 hours @ $65 per hour each) $260.00
- Readjusting bi-fold doors on 3 occasions
(2 men x 8 hours @ $65 per hour each) $1,040.00. [10]
[10]Amended Complaint in the First Proceeding dated 13 February 2018, Court Book (CB) 46.
The Amended Complaint acknowledged that Austral provided additional assistance to Le in relation to the ‘installation of windows’ and the ‘installation of top hung sliding doors’. Austral also claimed that it had readjusted the bi-fold doors on 3 occasions. No price was agreed for these works, and so Austral pleaded an entitlement to reasonable remuneration.
This quantum meruit claim was pleaded as a separate cause of action, distinct from the breach of contract for the ‘supply of the aluminium doors and windows’.
In my view, by the consent judgment, the Court determined that the hourly rate, and the hours worked by Austral, were reasonable. Whether the additional assistance produced defective works, or was not fit for purpose, involves separate considerations to Austral’s quantum meruit claim. For example, the Court must consider the applicable provisions of the Australian Consumer Law and any expert evidence filed by the parties.
Ordinarily, these issues would have been the subject of a claim and counterclaim in the First Proceeding. Instead, the issues between the parties have been split into two distinct proceedings and have been run separately.
Accordingly, I find the consent judgment does not prevent Le and Tran from making their claims in the current proceeding.
Formation of the Agreement and its Terms
Both parties accepted that an agreement was reached on or around 6 August 2014. However, they disagreed as to the precise terms of that agreement.
The parties’ communications commenced on 25 June 2014, when Tran emailed Austral requesting a quotation for various doors and windows. Enclosed with the email was a hand-drawn schedule[11]. In particular, the drawing included a ten-panel aluminium bi-fold door to be fabricated with a height of 3.15m (BF-1).
[11]CB 184-5.
On or around 27 June 2014, Peter Eleftheriadis of Austral responded to Tran and provided a quotation[12] and drawings, together with Austral’s terms and conditions (Terms and Conditions).[13] The price quoted was $68,310. Both the drawing and quotation included a ten-panel bi-fold door with a height of 2.895.
[12]CB 197.
[13]CB 188, 186 - 187, 189.
On 8 July 2014, Kochev emailed Tran with a revised quotation for $73,150.[14] This quotation included the following additions:
[14]CB 191.
425 series supply only – site glazed
900 series supply only – site glazed
Artisan – supply & install.[15]
[15]CB 192.
The reference to “Artisan” referred to BF-1 and the Corner Bi-Fold. The “425 series” included the Pool Window and the “900 series” referred to the Downstairs Sliding Door and the Upstairs Sliding Door.
On 9 July 2014, Kochev sent an email to Tran addressed to Le, enclosing a revised quotation for $67,100 (July Quotation).[16]
[16]CB 194, 197.
On 10 July 2014, there was an email exchange between Tran and Kochev regarding the July Quotation. Tran requested a price of $55,000 “for her client” and Kochev declined.[17] In the above context, I consider the objective meaning of the word ‘client’ was a reference to Le.
[17]CB 195.
Both parties agree that, on 6 August 2014, an agreement was concluded when a document headed Quotation 10067 dated 25 June 2014 (Quotation 10067) was signed by Le at Austral’s factory. Under Quotation 10067, the doors and windows were to be supplied for $59,000. They included:
(a) 3 x Heavy Duty Fix windows (the Pool Windows);
(b) 3 x 900 series sliding/stacker doors (the Sliding Doors);
(c) a ten panel Artisan bi-fold door 3150(h) x 10000(w) (BF-1); and
(d) the Corner Bi-Fold.[18]
[18]CB 199.
Signed Quotation 10067 also provided the following notation:
Supply only 40% deposit on order. Balance due on completion in factory.
H Duty windows – supply only
900 series doors supply only – site glazed
Bi folds supply and install.[19]
[19]Ibid.
Other windows were supplied under the Quotation 10067 but are not the subject of complaint.
Le’s evidence was as follows:
I accepted [Quotation 10067] by signing it at the Austral Aluminium office. While I was at the office, I told Kochev that Tran would make the payments and that I would be responsible for technical issues and onsite attendance. [Quotation 10067] was based upon dimensions I provided to Austral, but Kochev and I agreed to conduct further onsite measurement at the completion of the framing stage to confirm dimensions before production started. [20]
[20]CB 61, [5].
Le also gave evidence that Austral agreed to install the Pool Windows and both sets of sliding doors at the meeting on 6 August 2014. Le said this was agreed because of his lack of installation experience.
Tran gave evidence that she was not directly involved with the negotiations relating to Quotation 10067. She said those discussions took place between Kochev and Le.
In his evidence, Kochev accepted that Le had signed Quotation 10067 at Austral’s office. He went on to say:
I told [Le] that it would take 6-8 weeks to fabricate the goods and he said that he would let me know in advance when he needed them to be supplied and delivered. He also asked to pay the 40% deposit for the goods by instalments and I agreed because [Le] had not yet started building and the goods would not need to be fabricated for some time. [21]
[21]CB 67, [8].
Kochev gave evidence that there was no conversation regarding the installation of the Pool Windows, or both sets of sliding doors. If there had been, he said he would have included installation of those items as part of the quote.
On the question of installation, I consider the most reliable evidence is Quotation 10067. There is no reference to the installation of the Pool Windows and Sliding Doors on the document. Further, when the dimensions in Quotation 10067 were updated after the site measurement meeting in January 2015, there was also no reference to installation.
As to timing, no precise date for the delivery of the doors and windows was recorded by the parties in Quotation 10067. The earliest conversation regarding delivery was at a site measurement meeting in January 2015, approximately four months after the 6 August 2014 Agreement. Le’s evidence was that at that meeting Kochev told him delivery would occur in approximately two months.
At the foot of Quotation 10067, the following is recorded:
CONDITION OF SALE: The Customer has agreed to Conditions of Sale as printed overleaf and has accepted the responsibility that all details, including quantities, sizes and colour are correct. By signing this Quotation this quote becomes a Contract of Sale. The Customer agrees that any changes must be submitted in writing by the customer and agreed upon with Austral prior to any amendments being made to the work order. Packaging Logistics Pty Ltd Trading as Austral Aluminium Products as trustee for Kochev Family Trust ABN 12 148 079 456. [22]
[22]CB 199.
In my opinion, by signing[23] Quotation 10067 Le became bound by Austral’s Terms and Conditions enclosed to the 27 June 2014 email. The Terms and Conditions included, inter alia, the following provisions:
[23]Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 39 - 47.
(a) Deliveries are at all times subject to the availability of materials and no responsibility is accepted for loss deriving from late supply (clause 3);
(b) The Company accepts responsibility to supply windows as ordered and quoted for notwithstanding any reference to any particular site or property and the Company accepted no responsibility for the suitability of such windows whether by way of size, shape, patter, colour or number for compliance with architects or builders plans or specifications these being the sole responsibility of the Customer. Any variation deriving from the requirements of architects or builders plans or specifications shall be subject to the same provisions as set forth in condition 2 hereof and shall only be accepted when approved in writing signed by an authorised person on behalf of both the Company and the Customer with an agreed variation to the price (clause 5(b));
(c) No on-site work shall be performed by the Company unless otherwise specified and agreed upon (clause 6);
(d) All goods shown on order and/or invoice and manufactured by the Company are guaranteed against faulty materials and workmanship in manufacture and any claim in regard thereto is restricted absolutely to cost of replacement (clause 7);
(e) The Company shall be responsible only for any defect in the goods supplied and shall not be responsible for any consequential damages or for any repairs or rectification due to misuse or damage by others. In case of inherently defective goods, the Company’s liability shall cease on the Company making available an equivalent replacement item from the Company’s normal manufacturing premises and stocks (clause 9); and
(f) Any claims or complaints regarding shortages, workmanship or damage will not be recognised unless submitted in writing to the Company within seven (7) days from delivery of the goods (clause 12). [24]
[24]CB 189.
Save for clause 6, the Terms and Conditions do not contain any term applicable to the installation of goods manufactured by Austral. [25]
[25]Clause 6 of the Terms and Conditions makes plain that no on-site work shall be performed by Austral unless otherwise agreed upon.
The terms of a contract are those which the parties intended to include in the contract. The parties’ intention is derived from what a reasonable person would objectively infer from the words and conduct of the parties in connection with the particular agreement.
Considering the above matters, I find that the agreement, as at 6 August 2014, was:
(a) between Le and Austral, with Tran acting as Le’s agent;
(b) for Austral to supply the Pool Windows, the Downstairs Sliding Door and the Upstairs Sliding Door;
(c) for Austral to supply and install the Corner Bi-Fold and BF-1;
(d) that the exact dimensions of the doors and windows would be finalised at a site measurement meeting;
(e) for the doors and windows to be supplied within a reasonable time after the site measurements had been carried out; and
(f) to include the Terms and Conditions.
(6 August 2014 Agreement)
Additional Assistance to Install certain Works
In his evidence, Kochev accepted that Austral had assisted with the installation of the Pool Windows by screwing them into position and fitting the glass later. He said that Austral also helped install both sets of sliding doors by affixing the perimeter frame into the building and then inserting the panels. When asked why he provided the assistance he said:
There were a number of reasons. First to keep good customer relations, as it was becoming difficult for us to get paid. The other reason was that Le expressed that he did not have expertise to do it and I agreed to help him out.
No cost had been agreed between Le and Kochev for Austral performing this installation work. Therefore, as set out in Amended Complaint in the First Proceeding, Austral was entitled to a reasonable remuneration:
assistance with installation of windows
(3 men x 5 hours @ $65 per hour each) - $975.00
assistance with installation of top hung sliding doors
(4 men x 8 hours @ $65 per hour each) - $2,080. [26]
[26]Amended Complaint in the First Proceeding dated 13 February 2018, CB 46.
Additionally, the following series of emails referred to both the supply and installation of the Pool Windows and Sliding Doors.
On 27 August 2015, Le and Tran wrote to Kochev and Bill Kotsios (Kotsios) at Austral. In that email they said:
… I would like to express my extreme disappointment in the way how you are handling my order and to certain extend [sic] treating me as a customer. I believe it is time you let me know the real issue and the root cause of the delay. It has been more than 4 months over due on delivery date and yet you are still unable to fulfill the delivery date or provide a firm date on when the installation is going to be completed. This is beyond unacceptable in my opinion and you did not have the courtesy to return my calls. I therefore would like to make a formal request for you to delivery [sic] and complete frame installation of all the windows, sliding, bi fold etc… by Wednesday next week. If you are unable to delivery [sic] and install by the date, then I would like to cancel this order and obtain my deposit back. I can’t afford to delay my project any further.
Happy to discuss further if needed, but delivery & frame stage installation Wednesday next week is non negotiable. [27]
[27]CB 238.
(emphasis in original)
(emphasis added)
Tran wrote a follow up email to Kotsios on 28 August 2015:
… Further to our discussion earlier today. Please confirm the following:-
1. Please let me know when you will come to install the windows currently at the site. Please call Hoi… at least one day before coming to site.
2. Please provide a schedule of when you can deliver and install the sliding and bi-fold doors. Again, please let Hoi know what need to be done so that he can get it ready for you.
I would like confirmation of the above by the end of business today…[28]
(emphasis added)
[28]CB 238.
Kotsios responded to Tran on 29 August 2015. He wrote:
All this information has been provided to Hoi, but I am more than happy to repeat myself.
As discussed with the Hoi on many occasions we will offer only assistance by way of two people. Hoi will provide another person so that we can help Hoi lift the windows into position only.
Hoi will do the installation. Hoi must fit timber blocks as discussed and understood by Hoi in the window openings so that when we come to help him lift the windows in position they do not fall out on the outside and are in position as he requires them for his cladding.
Again as discussed with Hoi the sliding doors and bifold doors are being worked on as per your building requirement, because this is not a standard situation it requires R&D trial and error. Therefore we cannot pinpoint a day or time until we are satisfied that it will work for you and you will be happy with the end result. These door sizes are not normal and not within the manufacturer’s warranty sizes. Eg Bi-fold is over 10 meters wide and close to 3500 high. Capral only warrant to 3 meters high and note the extrusions are 6.5 meters long, so there has to be joins. Hoi must prepare his structure to accommodate our finished products so that we can install them for you. Hoi is aware of what is required and all this must be done prior to us coming to install the final product. We are happy to meet with Hoi as and if required by him to discuss any aspects and confirm on what is required for us to carry out these installations.
You have confirmation as much as we can give you but communication with Hoi may have answered all these questions you have. [29]
(emphasis added)
[29]CB 237.
Tran responded to Kotsios’ email on 31 August 2015:
Thanks for the email, I have spoken with Hoi and is acrossed [sic] where we are at currently. However, your email does not address questions we are seeking for.
Firstly, please confirm that your company will be on site on Wednesday (02/09/2015) to help with fitting of the windows currently at site. As discussed please provide around 35x metal plates, 25x 4mm, 15x 12mm spacers to install the 4 windows on ground floor.
Secondly, we want windows around pool area and sliding doors to be delivered/installed on Thursday 10/09/2015 and completed by 11/09/2015. [30]
[30]CB 236.
As is apparent from Tran’s email, the ‘windows around the pool area’ had not yet been delivered by 31 August 2015. I therefore find that Kochev’s reference in the 29 August[31] email to ‘help Hoi lift the windows into position only’ referred to windows other than the Pool Windows in the Quotation 10067.
[31]CB 237.
On 9 September 2015, Tran advised Kotsios that she was about to pay Austral’s last invoice. She wrote:
I am about to pay for the installation based on your confirmation with Hoi this late afternoon/evening that you had emailed the schedule to me. However, I have search [sic] all my emails and not seen the email from you with the schedule.
Therefore I ask you to urgently provide me with a delivery and installation schedule in writing. Without this schedule I am in no position to make any further payment. Again, all payments are pending on delivery schedule and commitment to meet these dates…[32]
[32]CB 236.
Kotsios replied to Tran’s email on 10 September 2015 and said:
… First part of agreement with Hoi, installation of windows already on site, delivered a couple of weeks ago, have already been installed as per agreement with Hoi.
Second part of delivery will be this morning as per request by Hoi.
We will be there this afternoon, not earlier, as requested by Hoi, to do whatever we can with what is left of the day, that is commence sub-sill installation and frame around the pool.
We are happy to do more if we can get an early start and to deliver all the product. Hoi is not available for us to do that starting early in the morning so we have to work with Hoi as to when he is available, his presence during installation is vital so that we can position as he requires.
If you want a minute by minute detail of what we are doing you will have to ask Hoi for that, I am happy to discuss that with Hoi and do what Hoi requires to do within the contract.
I don’t know what it is that you are seeking from me when you can talk to Hoi and he can give you all that information. Please understand we will work in with both of you as we are currently doing, it is vital that requirements for the installation that need to be prepared by Hoi are done prior to us arriving there as we have other commitments as well. I have told Hoi on a number of occasions that we have at least seven days of work there (full days) for us to do what we are obliged to do. Any additional work we do on site will only add to the time frame.
We are ready to get on with the job and we have been since last week, we will be there today as per Hoi request and we look forward to getting on with your job…[33]
[33]CB235.
(emphasis in original)
(emphasis added)
On the basis of the above evidence, I find that Austral and Le reached an agreement whereby Austral agreed to install the Pool Windows and both sets of Sliding Doors in exchange for a reasonable rate of remuneration.
I do not accept that Austral merely provided assistance to Le as he installed the Pool Windows and Sliding Doors. As acknowledged by Kochev, Le did not have the expertise to do so. This was part of the reason why Kochev agreed to ‘help Le out’.
Implied Terms
By the Complaint[34], Le asserts the following breaches of terms implied into the 6 August 2014 Agreement by the Australian Consumer Law:
[34]Amended Complaint dated 26 June 2019, CB 16.
(a) the Works (as goods) were not of acceptable quality[35] contrary to s 54;
(b) the Works (as services) were not rendered with due skill and care contrary to s 60; and
(c) the Works (as services) were not fit for their purpose, namely as doors and windows contrary to s 61. [36]
[35]Ibid, 12(b).
[36]Australian Consumer Law, s 61.
Technically, the consumer guarantees are not implied into a contract. Rather, they apply when the statutory preconditions are met. In Valve Corporation v Australian Competition and Consumer Commission[37], the Full Federal Court said as follows:
It is apparent on the face of Div 1 of Pt 3.2 that it adopts the mechanism of providing that certain consumer guarantees apply to certain transaction, in contrast to the mechanism (adopted by the predecessor provisions) of implying terms into a contract. The consumer’s guarantee provisions are therefore capable of application whether or not there is a contract.
[37][2017] FCAFC 224, 106.
Accordingly, the consumer guarantees are independent statutory obligations which give rise to a statutory cause of action.
It follows that the same warranties applied to Austral’s installation of the Pool Windows and Sliding Doors by operation of the Australian Consumer Law.
Austral agreed that the Australian Consumer Law applied to the 6 August 2014 Agreement. It acknowledged that the Works would be of acceptable quality and fit for the purpose for which they were supplied. Where services were provided, Austral also accepted that the supply and installation of the Works would be carried out with due care and skill and be fit for purpose.
However, Austral asserted that Le had expressly assumed responsibility for any loss, damage or liability arising by reason of the oversized measurements of BF-1 by operation of s 54(4) of the Australian Consumer Law.[38]
[38]Australian Consumer Law, s 54 (4).
Austral also relied upon s 61(3) of the Australian Consumer Law[39] as set out further below.
[39]Australian Consumer Law, s 61 (3).
Applicable Legal Principles – Australian Consumer Law
Le does not press the alleged breaches of the terms implied by operation of s 8 of the Domestic Building Contracts Act.[40]
Goods
[40]Domestic Building Contracts Act (1995), s 8.
First, the products supplied by Austral must be of acceptable quality.
Acceptable quality is defined by the Australian Consumer Law as follows:
Goods are of acceptable quality if they are as
(a) fit for all purposes for which goods of that kind are commonly supplied; and
(b) acceptable in appearance and finish; and
(c) free from defects; and
(d) safe; and
(e) durable.
as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).[41]
[41]Australian Consumer Law, s 54 (2).
The matters for the purposes of subsection (2) are:
(a) the nature of the goods; and
(b) the price of the goods (if relevant); and
(c) any statements made about the goods on any packaging or label on the goods; and
(d) any representation made about the goods by supplier or manufacturer of the goods; and
(e) any other relevant circumstances relating to the supply of the goods.[42]
[42]Australian Consumer Law, s 54 (3).
However, where the only reason why the goods are not of acceptable quality were drawn to the attention of the consumer prior to their purchase, the goods are taken to be of acceptable quality[43].
Services
[43]Australian Consumer Law, s 54 (4).
The installation services provided by Austral must also be rendered with due care and skill. [44]
[44]Australian Consumer Law, s 60.
Secondly, the installation services must be fit for purpose. Section 61(2) of the Australian Consumer Law provides:
(a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and
(b) the consumer makes known, expressly or by implication, to
(i) the supplier
the result that the consumer wishes the services to achieve;
there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result.[45]
[45]Australian Consumer Law, s 61 (2).
However, section 61(2) does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgement of the supplier[46].
Damages for Defective Building Works
[46]Australian Consumer Law, s 61 (3).
As stated above the principal relief advanced by Le was for breach of the consumer guarantees. In the Complaint, damages were claimed at common law and pursuant to s 236(1) of the Australian Consumer Law. [47]
[47]Australian Consumer Law, s 236 (1).
However, that section does not apply to breaches of the consumer guarantee provisions. [48] The appropriate statutory remedy is 267(4) of the ACL which states:
The consumer may, be action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. [49]
[48]Australian Consumer Law, s 15.
[49]Australian Consumer Law, s 267 (4); this is the same as Le and Tran’s claim for negligence at [26] to [30] of the Complaint
As Austral expressly pleaded that the Australian Consumer Law applied, I do not consider anything turns on Le’s purported reliance on s 236(1) and will apply s 267.
Alleged Defective Works
Pool Windows – Campbell [50]
[50]CB 71.
In his report, Campbell opined that the sill level of the Pool Windows was an area of concern. As there was no sub-sill or drainage, the bottom sills had the potential of holding/trapping water within the sill tube. He also said the dry glazing on the windows provided no protection from water splashing into the sill extrusions from the nearby swimming pool.
Next, Campbell identified that the window frames sit on the top of the pool hob, with no evidence of any sill flashing or membrane to prevent the passage of moisture under the sill and into the interior of the building. In his opinion, any reasonable window manufacturer/contractor would have considered whether flashing was present when installing the Pool Windows.
Campbell recommended the windows receive wet glazing and suitable flashing be installed. He did not express an opinion as to the quantum of rectification works, stating that ‘an estimate of the likely costs would be better served by either a qualified Quantity Surveyor or by competitive tender’.
Pool Windows – Spencer [51]
[51]CB 122.
Spencer agreed that the windows required wet glazing and that some form of flashing be installed to prevent water ingress under the sill. To flash the windows correctly, the window had to be removed and a folded-up sill tray be installed.
In addition, Spencer expressed concerns about the amount of flex in the glass. His opinion was that the glass coverage did not meet AS1288 as the 5mm coverage in the head and around 7mm in the jambs was insufficient.
Spencer recommended that small joint sealant be applied to the windows and some of the gaps required attention.
Spencer’s proposed scope of rectification works was as follows:
3 fixed lights
· remove glass and windows frames
· install a sub sill for flashing tray
· disassemble the frames where required and re seal the joints with joint sealant
· re install the frames and add drain holes in the glazing pockets and fix off as per the AGWA Fixing Guide
· flash the window as per NCC flashing guide
· test the glass to ensure it is A grade safety glass and add labels and motifs
· install glass to AS4666 standard with the correct glass cover and packers
· tank seal the glass (wet glaze the panels)
Estimate cost $1900 per light. [52]
[52]CB 147.
The cost for rectification works for the 3 Pool Windows was $5,700.
Pool Windows – Brownhill [53]
[53]CB 105.
Brownhill agreed that perimeter flashings were required. However, in his opinion, flashing formed part of the builder’s responsibility under the Building Code of Australia. He referred to the following comments made in the Campbell Report:
The Building Code of Australia Section F2.2.2 states that a building is to be constructed to provide resistance to moisture from the outside and moisture arising from the ground.
Section 2.2.2 of the Building Code of Australia states that a roof and external wall, (including openings around windows and doors), must avoid the penetration of water that could cause:
· Unhealthy or dangerous conditions or loss of amenity for the occupants; and
· Undue dampness or deterioration of building elements.
It will therefore be incumbent on the owner undertaking the building works to ensure the performance requirement of the Building Code in respect to the protection of the window and door openings & frame perimeter from water penetration by either installing perimeter flashing or suitable caulking during completion of external cladding and prior to the installation of waterproofing and tiling of the swimming pool and wall intersection.[54]
[54]CB 110.
Brownhill expressed his opinion thus:
Therefore, in my expert view, it is the builder’s responsibility to ensure the design requirements for the window frames in this pool area suit the intended conditions. Without specific architectural window frame detailing, it is the builder’s responsibility to provide the window manufacturer all the specific details required to construct the window frames for this area. It is my understanding Austral Aluminium Products was contracted to only manufacture and supply the windows for the project and were not contracted to provide an architectural design service for the manufacture of these frames.[55]
Pool Windows – Specific Instruction
[55]CB 110.
Kochev gave evidence that Le gave Austral a specific instruction regarding the installation of the Pool Windows. Le’s instruction was that he wanted to tile the area directly in front of the Pool Windows, and for the tiles to be slotted under the sill. Kochev’s evidence was that Le did not want a sub-sill as this meant that the plane of the windows would be staggered.
In cross-examination, Le agreed that he wanted the tiles to be slotted under the sill. However, his evidence was that he did not request the sub-sill to be removed. He stated that the tiles could run underneath the sub-sill.
Pool Windows – Determination
In my opinion, by agreeing to install the Pool Windows, Austral was required to carry out the installation with due care and skill and to ensure the windows were fit for purpose. I accept the evidence of Campbell and Spencer that these terms required the Pool Windows to be flashed appropriately and for a sub sill to be installed. These works were fundamental to the correct functioning of the Pool Windows by protecting them from water ingress.
Given the Pool Windows’ proximity to the swimming pool, I also accept Spencer and Campbell’s opinion that the windows ought to have been wet glazed.
It follows that I do not accept the flashing was the responsibility of Le/Tran, as an owner-builder in the circumstances of this case. As set out above, Kochev agreed to help Le as he did not possess the relevant expertise. This may be contrasted with Le installing the other windows included on the 6 August 2014 Quotation.[56]
[56]CB 198.
Further, I am not satisfied that Le’s instruction that the tiles to be slotted under the sill obviated the need for a sub-sill. No satisfactory explanation was provided by Austral as to why the tiles could not have been installed under a sub-sill.
Accordingly, I accept Spencer’s scope of rectification works above. I find the reasonable rectification cost for the Pool Windows is $5,700. Such rectification costs were reasonably foreseeable as a result of Austral’s failure to comply with s 61(2) of the Australian Consumer Law. [57]
[57]Australian Consumer Law, s 61 (2).
I do not accept Austral’s submission that Spencer’s quantum evidence was vague or failed to provide an explanation as to how it was calculated.
Austral elected not to lead any evidence as to the quantum of rectification works. It also did not seek to impugn Spencer’s quantum evidence in cross-examination.
In those circumstances, I consider the basis for the quantum was adequately set out in the Spencer Report and his evidence.
Corner Bi-Fold – Campbell [58]
[58]CB 75 – 76.
Campbell noted that the Corner Bi-fold was installed with no evidence of flashing or a seal under the sill to prevent the passage of moisture from the outside. There was also no flashing on the vertical mullions of the frames or the door head, as required by good installation practice.
Campbell also noted that the door panels were binding on the sills, causing abrasive damage. He measured a 3mm clearance.
Corner Bi-Fold – Spencer [59]
[59]CB 128 – 133.
Spencer noted several defects, including:
(a) missing weather seals causing large air gaps;
(b) the corner joints require sealing;
(c) the door needs adjustment, as it is not fit for purpose. The bifold would be very unlikely to pass AS2047 (2014) water performance standards, as there are no seals or up stand on the sill; and
(d) the end of the sub-sill tray must have an end cap installed to control the direction of the water and send it out the front, not the end and then into the house. [60]
[60]CB 128 – 133.
Spencer recommended that the doors should be removed, and the sill trays have end stops fitted, or at least sealed.
There was also no vertical flashing. Spencer opined that flashing could be installed when the door was removed to fix the sill tray.
Spencer also agreed that the door was binding. In his opinion, the hinges appeared to have dropped and the pivot pins were unwinding under the load of the doors. Spencer’s scope of rectification works was as follows:
The corner bifold can never comply with AS2047 as supplied for water and air performance. If you are ok with that then the product is fixable:
· remove the frame and panels;
· make 2 new sills this time with an upstand;
· properly install the sub-sill level and sealing the corner joint and fitting the end plates and seal;
· re install the frame and fix off as per the code and flash as per NCC code;
· test the glass to ensure it is A grade safety glass and add labels and motifs; and
· adjust the door and replace any missing seals
Estimated cost: $3,000. [61]
Corner Bi-Fold – Brownhill [62]
[61]CB 133.
[62]CB 112.
In Brownhill’s opinion, for the same reasons advanced in relation to the Pool Windows, the lack of flashing was not the fault of the window manufacturer. He stated that the waterproofing system applied to the underside of the door sills was usually the responsibility of the builder.
In relation to the Corner Bi-Fold panels binding, Brownhill agreed that the door could be rectified by adjustment.
Corner Bi-Fold – Determination
In my opinion, Austral was also responsible for flashing the Corner Bi-Fold. The 6 August 2014 Agreement always contemplated the supply and installation of the Corner Bi-Fold. By agreeing to install the Corner Bi-Fold, Austral was required to carry out the installation with due care and skill and to ensure the Corner Bi-Fold was fit for purpose. I accept that these terms required that the Corner Bi-Fold be flashed appropriately. Again, the flashing was fundamental to the correct functioning of the Corner Bi-Fold by protecting it from water ingress.
I consider that the Corner Bi-Fold, whilst being external, was substantially protected from the elements by the roofline of the House. I therefore am satisfied that Spencer’s scope of works would render the Corner Bi-Fold fit for its purpose in its location. Accordingly, I accept that the door can be rectified.
I also accept Spencer’s opinion that the hinges of the Corner Bi-Fold appeared to have dropped and the pivot pins were unwinding under the load of the doors. Brownhill did not disagree that the door could be rectified.
Accordingly, I find the reasonable rectification cost of the Corner Bi-Fold to be $3,000. Such rectification costs were reasonably foreseeable as a result of Austral’s failure to comply with s 61(2) of the Australian Consumer Law. [63]
[63]Australian Consumer Law, s 61 (2).
For the same reasons as set out in paragraph [99] to [101], I do not accept that Spencer’s rectification costs were vague or unsupported.
BF-1 Conversations
When considering whether BF-1, or its installation, was fit for purpose, Austral submitted that s 61(3) and s 54(4) of the Australian Consumer Law was engaged. Section 61(3) provides:
[section 61] does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier. [64]
[64]Australian Consumer Law, s 61 (3).
Section 54(4) provides:
If:
(a) goods supplied to a consumer are not of acceptable quality; and
(b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply;
the goods are taken to be of acceptable quality. [65]
[65]Australian Consumer Law, s 54(4).
Austral relied upon the following matters to engage s 61(3) and s 54(4).
Oversized specification
Austral submitted that in a conversation on or around 6 August 2014, Le had agreed to assume the responsibility for the oversized dimensions of BF-1.
Kochev said that the conversation occurred around the time the dimensions of BF-1 increased to 3150 mm. His evidence was that he told Le that the door was not suitable to be built at 3150 mm and that Austral could not warrant or guarantee the door. Le replied by saying “that is my responsibility, I want a quote for 3150” or words to that effect.
Le’s evidence was that he was aware at an early stage that the size of the door exceeded Capral’s specifications. His evidence was that because BF-1 was above 3m in height, Kochev told him that modifications were required to make it work. Le said that Kochev did not mention what modifications were required, but that the Capral specifications were conservative.
In his evidence, Le said there was no discussions regarding a warranty, or that he would be responsible for any damage or assume the liability caused by the larger dimensions of BF-1. His evidence was that he did not make any comment regarding liability and that Kochev told him BF-1 was outside of Capral’s specifications but would function.
I prefer Le’s evidence of this conversation. I found him to be a frank witness. Le acknowledged that he was aware that BF-1’s dimensions exceeded Capral’s specifications ‘at an early stage’. His evidence was that Kochev said that BF-1 would work, despite its size. This evidence was consistent with an email sent by Kochev on 29 August 2015, where he wrote:
Again as discussed with Hoi the sliding doors and bi-fold doors are being worked on as per your building requirement, because this is not a standard situation it requires R&D trial and error. Therefore we cannot pinpoint a day or time until we are satisfied that it will work for you and you will be happy with the end result. [66]
[66]CB 237.
It is apparent from this email that Austral acknowledged that the dimensions of BF-1 were not standard and were therefore keen to satisfy itself that BF-1 would work as intended.
Further, as set out below, the alleged defects in the installation of BF-1 identified by the Campbell and Spencer extend beyond the height of the door being outside Capral’s specifications.
Accordingly, I do not accept that the above circumstances made it unreasonable for Le to have relied upon Austral’s skill or judgment when installing BF-1 by virtue of the conversation about oversized specifications.
I also do not accept that BF-1 was of unacceptable quality. No expert criticised Austral’s fabrication of BF-1. I consider the alleged defects surrounding BF-1 related to its installation.
Instruction as to the Flat/Internal/Recessed Sill and a 3mm clearance for BF-1
Kochev
Kochev’s evidence was that, at a conversation at Austral’s factory, Le requested a flat sill for BF-1 as he wanted a seamless exit throughout the threshold of BF-1. Kochev said he read through the Capral technical manual with Le and they discussed the sill details. Kochev told Le that he did not recommend an internal sill as it would be impossible to seal BF-1 from the weather. This was because there was nothing for the door panels to close against. Le nonetheless told Kochev to proceed with the sill and put brushes underneath BF-1 as illustrated in the drawing in the Capral technical manual.
In relation to the installation, Kochev’s evidence was that BF-1 was installed with an initial clearance of 8mm. Le then instructed Kochev to reduce its lower clearance to 3mm. In response, Kochev said he told Le that lowering the clearance would make the doors impossible to open and close because of the uneven level of the floor. Le then said he did not believe the proposed brush weather seals were adequate. He therefore wanted a narrower clearance because he did not want draughts under the door from the nearby Maribyrnong River.
Kochev also gave evidence that the floor underneath BF-1 had a fall of 20 mm. His evidence was that he told Le that the 20 mm fall could cause the doors to bind at the highest point. When he informed Le of the level, Le instructed Kochev to follow the floor, otherwise the height of the sill for BF-1 would exceed the finished floor level on one side of the room. Kochev said he told Le to straighten the floor but Le declined due to the extra costs involved in doing so.
Kochev gave the following evidence:
I was being told a 3mm gap under the door was required by the builder. I continued with that thinking Le would see that it was not going to work and I would be ultimately instructed to put the door back. I was unable to get any agreement than to just do as I was told…
I continued doing the works I was asked to do, assuming that it would be put back. I felt I was not being listened to by my customer. I considered the best course was to continue with the request and later put it back where it should be.
Brownhill also gave evidence regarding the level of the floor as follows:
At the time of the onsite inspection, measurements were taken to establish the levelness of the upper floor. Using an automatic calibrated laser level, it was determined the floor level across the front of the bifold doors exceeded the acceptable tolerance of 10mm out of level for the width of the room pursuant to GS&T 2015[67] clause 14.08. The recorded measurement was 20 mm out of level for the width of the room. Using a 2-metre spirit level it was determined the door sill and floor surface on the right-hand side of the bifold door unit recorded horizontally level and provided a constantly equal height from the top of the floor to the top of the door sill.
Measurements were taken from the centre of the bifold door unit and extending towards the left-hand side of the unit. Floor surface measurements identified the horizontal levelness was out of level 15 mm within 2 metres and the door sill 5 mm out of level in 2 metres. The distance between the top of the floor surface and the top of the door sill is constant and provides the same margin as the right hand side of the bifold door unit.
[67]Victorian Building Authority (VBA) – Guide to Standards & Tolerances 2015.
The photographs attached the Brownhill Report[68] record that the:
[68]CB 115 – 117.
(a) floor was level on the right hand side;
(b) the sill was level on the right hand side;
(c) floor level was 6 mm out of level centre of the door frame;
(d) the door sill was 1.5 mm out of level at the centre of the doors;
(e) floor surface was 15 mm out of level within 2 m from left hand side of the doors; and
(f) door sill was 5 mm out of level within 2 m from the left hand side of the doors.
Finally, Kochev said that when BF-1 was first installed, the doors opened all the way. However, they were going to bind in the middle as the gap got smaller towards the high point.
Le
Le gave evidence that he had no discussion with Kochev about a recessed/internal sill. When the details of the sill were put to him in cross-examination, he denied requesting a recessed/internal sill or being shown the Capral technical manual. He said that whatever sill Austral decided upon, he wanted the internal floor to be flush with, or slightly below the sill level.
Le also denied that Kochev had informed him that a recessed/internal sill would leak air and water. Le’s evidence was that he asked Kochev whether BF-1 would have a weather strip underneath. He described the weather strip as a rubber seal with a brush attached.
When Kochev said no weather strip would be installed, Le said he requested that the clearance under BF-1 be lowered to the minimum standard, to reduce airflow into the room.
Regarding the floor level and the installation of BF-1, Le denied he instructed Kochev to ‘follow the floor’. He also gave evidence that there was no discussion about levelling the floor or that the 20 mm fall would make BF-1 bind at the highest point.
Le also gave evidence that after installation, BF-1 was ‘sitting on the sill’, with a 1 to 2 mm clearance. This caused BF-1 to scrape and damage the sill. After installation, Le contacted Austral to discuss BF-1. Kochev then told Le that he had specified too close a clearance and that the heavy window panel had come down. Le said this was the first time that Kochev mentioned the clearance.
Campbell measured the floor and found it to be within acceptable standards and tolerances. [69]
[69]CB 89.
Spencer gave the following evidence in relation to the sill and floor level:
From what I could measure the sill is not level but probably only 5 mm over the span of 10 meters possible 5 mm higher in the middle. I measure from the base plate the door is sitting on not the panel flooring which I agree is not flat but it has no impact on door issues.
Le’s evidence was that Austral agreed to return and re-adjust BF-1 and did so on approximately three occasions.
Determination
I prefer the evidence given by Le in relation to the above matters. I consider there was a degree of reconstruction in Kochev’s evidence in relation to BF-1.
First, Kochev alleges that Le requested that a weather strip/brush be put on BF-1 as per the internal sill set out in the Capral technical manual. Had Le requested the internal sill, it is likely that Austral would have also fitted the weather strip to provide at least some protection from the elements. However, the undisputed evidence was that Austral did not fit a weather strip to BF-1. [70]
[70]CB 135.
Secondly, I consider it improbable that Le accepted Kochev’s advice that ‘it would be impossible to seal BF-1’ because of its internal sill. Accepting this advice would mean that BF-1 was likely to leak air and water into the room. BF-1 is a major feature of the House. It is 10 metres wide and approximately 3.4 metres high. Given its proximity to the Maribyrnong River, I consider it implausible that Le agreed to proceed as alleged by Kochev.
I therefore find that there was no conversation between Le and Kochev about an internal/recessed sill and that the sill was selected by Austral.
I also do not accept that Le instructed Kochev to reduce the lower clearances on BF-1 to 3 mm.
First, on Kochev’s evidence, the purported reason given by Le for this instruction was that he wanted a lower clearance because of draughts from the Maribyrnong River and that the brush seals were inadequate. As stated above, there were no brush seals installed on BF-1. Accordingly, I do not accept the purported reason for lowering the clearance as evidenced by Kochev.
Secondly, I do not accept that the floor was significantly out of level at the centre of BF-1 and therefore would bind at that point. Both Spencer and Brownhill stated that the floor was 5 to 6 mm out of level in the middle of the frame. The highest point was recorded by Brownhill on the far left-hand side of BF-1.
Thirdly, I consider it improbable that Le proceeded against Kochev’s advice that lowering the clearance would make the doors impossible to open and close. By acting against such advice, Le would have rendered BF-1 inoperable and defeated the purpose of a major feature of the House. Such an outcome is inherently implausible.
I therefore find that Le did not instruct Kochev to lower the clearance to 3mm, or to follow the floor when installing BF-1.
BF-1 - Campbell
Campbell’s opinion was that BF-1 was not unsatisfactory and not fit for purpose. He identified the following defects:
(a) insufficient handles to make the doors easily operable had not been provided;
(b) day light was clearly visible between the fabricated mullions and transoms, with no evidence of suitable seal gusset between the joining members;
(c) the door sill in two section lengths failed to meet uniformly at the centre. In addition to the irregular height at the junction, a gap of in excess of 2mm wide existed where the sill did not meet together;
(d) the ends of the sub-sills were not stop ended;
(e) fixings were irregular, poorly fitted and varied in both lengths, gauge and manufacture;
(f) inappropriate cheap mild steel coach bolts had been used;
(g) the perimeter of the window/bi-fold door frame had no flashing or protection from water entry;
(h) the doors were binding and scratching the surface of the door sill, which mandated the sill’s replacement;
(i) there was a likelihood that the manufactured doors were too tall for the frame opening, leaving insufficient availability to adjust and provide appropriate clearance;
(j) the floor was checked for level and found to be within acceptable tolerances;
(k) the bottom sill of the door frame was out of level with significant humps which contributed to the door scraping and binding; and
(l) the irregular levels of the door sill were replicated in the door head. The door head was not level or straight. [71]
[71]CB 71 – 77.
Campbell had measured the clearance of BF-1 at its centre. Upon opening the doors, he noted a clearance of 8 mm on top, and 0 to 3 mm below.
BF-1 – Spencer [72]
[72]CB 133 – 138.
Spencer noted that BF-1 was 10% larger than Capral’s allowable size. Because of the oversized dimensions, BF-1 did not meet the AS2047 water performance levels and would likely encounter ongoing difficulties with water ingress and was therefore not fit for purpose.
A major issue identified by Spencer was the use of an internal/recessed sill for BF-1. Spencer quoted the following extract from the Artisan specification:
Vertical Arrangement 02 – Open Out Flat & Channel Sills
Important Note: This product when fabricated with a flat or channel sill is not water rated and does not conform to Australian Standard AS2047 and is intended for internal applications only or where the builder makes allowances to adequately shelter the product. [73]
[73]CB 135.
His evidence was that an internal/recessed sill should not have been used in that location.
Further, in Spencer’s opinion, the clearance required for BF-1 to work adequately was a total 16 mm (a combined clearance above and below). At a clearance of 8 mm, Spencer’s evidence was that the doors would continue to bind and could not be adjusted to make them functional.
Spencer concluded that:
I agree re-installation of the door would help but there will still be an ongoing issue of water entering the building as well as excessive air infiltration. There will also be the need for ongoing adjustments depending on the seal. At no point could you say these doors are fit for purpose.
Spencer measured the level of the floor. He stated:
From what I could measure the sill is not level but probably only 5 mm over the span of 10 meters possibly 5 mm higher in the middle. I measure from the base plate the door is sitting on, not the panel flooring which I agree is not flat but it has no impact on the door issues.
Spencer also agreed that the fixings used on BF-1 were deficient and that the sill tray had not been sealed, or end caps installed. He agreed with Campbell that BF-1 was not flashed correctly.
Spencer expressed concern over the large gap in the head and sill of BF-1. He said:
The 10 meter head has a large join in the middle. Due to liner expansion this will uncontrollably grow and shrink, this gap will allow wind and water to enter the building. It must be fixed. Just putting a sealant in the gap will not be sufficient.
In conclusion, Spencer did not consider BF-1 to be fit for purpose. In his opinion:
BF-1 needs a redesign to suit the application. The following issues need to be resolved: strength, water performance, air infiltration, installation and thermal expansion.
BF-1 – Brownhill [74]
[74]CB 114.
To a large extent, Brownhill’s Report was dependent upon assumptions/instructions provided to him by Austral.
First, Brownhill measured the floor level of the BF-1. He determined the floor was out of level 20 mm across the width of the building, from north side to south side. His evidence was that:
At the time of the onsite inspection, measurements were taken to establish the levelness of the upper floor. Using an automatic calibrated laser level, it was determined the floor level across the front of the bifold doors exceeded the acceptable tolerance of 10 mm out of level for the width of the room pursuant to GS&T 2015[75] clause 14.08. The recorded measurement was 20 mm out of level for the width of the room. Using a 2-metre spirit level it was determined the door sill and floor surface on the right-hand side of the bifold door unit recorded horizontally level and provided a constantly equal height from the top of the floor to the top of the door sill.
Measurements were taken from the centre of the bifold door unit and extending towards the left-hand side of the unit. Floor surface measurements identified the horizontal levelness was out of level 15 mm within 2 metres and the door sill 5 mm out of level in 2 metres. The distance between the top of the floor surface and the top of the door sill is constant and provides the same margin as the right hand side of the bifold door unit.
[75]Victorian Building Authority (VBA) – Guide to Standards & Tolerances 2015.
In Brownhill’s opinion, this created difficulties for installation:
…in that, it’s dependent upon the floor finish and the detail of how the floor and sill were meant to meet. If the floor is out of level, and the sill is placed in level, you’ll get an inconsistency at one end of the sill being higher than the finished floor level. The way that the (BF-1) frame was installed, it appears they were installed on the floor framing and then particle board flooring was installed up towards the base of the sill to allow for any floor thickness.
Brownhill expresses the following conclusion in his report:
From the information obtained at the time of the inspection, it was conveyed [sic] the installation instructions from the property owner required the door frame to be fitted to suit the floor level, which was complied with. [76]
[76]CB 114.
Secondly, Brownhill was also instructed that BF-1 had originally been installed with an 8mm clearance at its base. This clearance was then reduced at Le’s request. Brownhill says the following in his report:
A 3 mm consistent gap was requested by the owner, Hoi Le, despite protests from the window manufacturer stating otherwise. Due to the size and weight of each door panel, a maximum 3mm gap was not advisable. [77]
[77]Ibid.
When asked about whether a total clearance of 8 mm would enable BF-1 to be adjusted, Brownhill’s evidence was that he could not give any guarantees and that he did not know whether 8 mm was enough.
BF-1 Defects Determination
I accept the defects in BF-1 as outlined by Campbell and Spencer above.
In my opinion, the principal issues relate to the following matters:
(a) use of an internal sill in an external setting; and
(b) insufficient clearance resulting in BF-1 binding on the sill.
Both matters combined render BF-1 unfit for its purpose as a functioning and appropriately sealed bi-fold door. I consider that BF-1 and its sill are part of the same door system. Austral’s selection of an internal sill for use in an exposed and external location was plainly unsuitable and contrary to Capral’s specification. A different sill, designed for external use, should have been installed. As Spencer concluded, the use of the recessed/internal sill contributed to the ongoing issue of water entering the building as well as excessive air infiltration.
Further, I find that BF-1 was not installed with the required 16 mm total clearance. Due to this defect, I consider that the doors cannot be adequately adjusted. I am reinforced in my conclusion by the fact that Austral endeavoured to readjust BF-1 on three occasions over several months and spent considerable time doing so. Despite these attempts, BF-1 could not be made functional for any reasonable length of time. Brownhill’s evidence to the contrary was, at its highest, equivocal.
In these circumstances, BF-1 plainly does not operate as intended as the doors do not freely open. Rather they bind and cause damage to the sill when opened.
As the doors cannot be adjusted and the sill requires replacement, I consider the necessary and reasonable solution is for BF-1 to be replaced.
BF-1 – Quantification
To establish loss and damage, Le placed relied upon the Pacific Shopfitters Quotation. Due to its importance in this proceeding, I will set out the quotation in full:
We have much pleasure in Submitting our quotation for the works at the above-mentioned address.
Scope of Works
Remove existing windows and carry debris away. Supply and install new aluminium windows constructed in 100mm x 45mm Natural Anodised Coastal finish aluminium sections as per the following
First floor
3300 x 10,100mm = 1, 10 leaf bi-fold door
2820mm x 3190mm = 1, apartment style sliding door
Ground floor
2810mm x 4480mm = 1, apartment style sliding door
2810mm x 3850mm = 1, apartment style sliding door
2810mm x 3100mm x 1830mm = 1, corner 6 leaf bi-fold door
2530mm x 2450mm – 3, fied windows
2360mm x 1000mm = 1, single swinging door
Glazing:
Works to be glazed in Clear Double Glazed Units, all glazing to be in compliance with Australian Standard AS 1288-2006
For the cost of: $82,240 + GST
The project pricing is based on the scope of works described herein, any additional works or items not listed would be subject to variation. This quotation is submitted subject to our standard terms and conditions of sale contract. Upon acceptance of quotation a deposit of 40% will be required prior to commencement of works. [78]
[78]CB 269.
The reasonable cost to rectify defective building work is ordinarily a matter that requires expert assessment. An explanation for this general rule was helpfully set out by Senior Member Walker in Anderson & Anor v Wilkie [79] where the Tribunal said:
An expert will take into account reasonable charge-out rates, cost of materials, the likely time to be taken and so forth. That is an exercise only an expert can undertake, save in the most simple of cases, and this is not such a case. I have the advantage of the expert evidence of Mr Croucher, who has gone into detail as to the assessment of the reasonable cost of rectification of each defect that I have found. As against that, I have estimates provided by rectifying builders as to what they estimate they will charge. Even ignoring the fact that these are estimates, not assessments, what a rectifying Builder will charge is not necessarily the same as what the reasonable cost of rectification will be. Rather, it is an indication of what that particular Builder wants to do the work. Not every estimate or quotation is reasonable in the abstract sense. [80]
[79][2012] VCAT 432.
[80]Ibid, 20.
The nature of a quotation for building works was also described by the appeal division of the New South Wales Consumer and Trader Tribunal as follows:
A quotation from a supplier willing to rectify defects or complete incomplete work can, depending on the circumstances and the nature and content of the quotation, constitute evidence of the defects or incomplete work and of the amount required to remedy the defective work or complete any incomplete work. For example, if the person providing the quotation was suitably qualified or experienced, inspected the work, identified defects or incomplete work on that inspection, recorded his or her observations in the quotation and gave a price to rectify or complete the work, it is difficult to understand why that quotation would not provide evidence in support of a claim for defective or incomplete work. The weight to be given to the evidence would, of course, depend upon many factors. Nonetheless, it would be wrong to conclude that simply because an applicant relied only upon a quotation or quotations for the rectification or completion of work that there was no evidence to support the claim that the work was defective or incomplete. [81]
(emphasis added)
[81]Khan v Kang [2014] NSWCATAP 48, 50.
Austral submitted that the Court should place little to no weight on the Pacific Shopfitters Quotation as:
(a) the assumptions and methodology adopted were not apparent;
(b) there is no breakdown of individual items on the quotation; and
(c) the dimensions of the doors and windows (particularly BF-1) were different from those supplied by Austral.
In those circumstances, Austral submitted that Le had failed to establish loss and damage.
Austral also relied upon the fact that, in cross-examination, Samartsis objected to producing the working documents that evidenced his preparation of the quotation. The basis of the objection was that the documents were said to contain confidential information. Nonetheless, Austral submitted that the Court was not provided with sufficient information to assess the quantum set out in the Pacific Shopfitters Quotation.
In response, Le submitted the Pacific Shopfitters Quotation was not challenged in cross examination. Further, Kochev had accepted that Austral’s quotation were fair and reasonable. Le went on to submit:
[Kochev] did not provide any breakdowns of specific items in any of the above quotation nor did he prove any such breakdown knowing, since as early as late January 2020 that the replacement price provided by a competent window and door manufacturer was $82,240 plus GST in circumstances where he could have itemized his quotations and re-calculated the cost of replacement doors and windows in current terms. In circumstances where the Pacific Shop fitters quotation was not challenged and alternate pricing in current terms is not provided, this Honourable Court ought to accept the Pacific Shop fitters quote as fair and reasonable.
Le’s ultimate submission was as follows:
These proceedings were issued by complaint dated 25 September 2018 and included a claim for the greater of the refund of money paid or payable under the Contract and the cost of installing bi-fold doors that are fit for purpose and other costs including removal and replacement. The claim was accordingly unequivocal recission of the Contract. In the absence of any evidence by the Defendant of the cost of replacement of any one aspect of the Contract, the quotation of Pacific Shopfitters should be accepted as evidence of the cost of removal and replacement…
In the circumstances, I accept Austral’s submissions that Le has not established the quantum of damages in relation to BF-1.
As a starting point, the Court must do the best it can to make a reliable assessment of damages, where damages are difficult to assess, including where a party has failed to lead the best evidence of damages[82]. In Uszok v Henley Properties (NSW) Pty Ltd [83], Beazley JA observed that:
Where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy it provides for breach of contract, an award of damages… Such damages should not be nominal only, notwithstanding that the award may be difficult to assess. [84]
[82]Commonwealth of Australia v Amann Aviation Pty Ltd (1992) 174 CLR 64.
[83][2007] NSCA 31.
[84]Ibid, 135 (Beazley JA).
On the other hand, the case law also recognises that damages must be proved with a degree of precision which reflects the proof that is reasonable available. In Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd[85] the High Court said:
It may be that, in at least some cases, it is necessary or desirable to distinguish between a case where a plaintiff cannot adduce precise evidence of what has been lost and a case where, although apparently able to do so, the plaintiff has not adduced such evidence. In the former kind of case it may be that estimation, if not guesswork, may be necessary in assessing the damages to be allowed. References to mere difficulty in estimating damages not relieving a Court from the responsibility of estimating them as best it can may find their most apt application in cases of the former rather than the latter kind.[86]
[85](2003) 196 ALR 257.
[86]Ibid.
This proceeding was commenced in 2018. In my view, there was no impediment to Le gathering expert evidence as to the replacement cost of BF-1. Instead, the Court must consider the Pacific Shopfitters Quotation, which does not itemise the cost to replace the various doors and windows and has no working documents to calculate the relevant amounts. Rather, the quotation contains a global figure to replacement the entirety of the Works. Similarly, Quotation 10067 also does not provide an itemisation.
If the evidence called on behalf of a plaintiff fails to provide any rational foundation for a proper estimate of damages, the Court should decline to make one. [87] Similarly, where damages are susceptible of evidentiary proof, but there was an absence of raw material to which good sense may be applied, just does not dictate that a figure should be plucked out of the air. [88]
[87]Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275, 319 (Pincus J).
[88]Troulis v Vamboukakis [1998] NSWCA 237; JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237, 243.
Applying the above principles, I find that the Pacific Shopfitters Quotation does not provide any rational foundation to assess the damages in relation to BF-1.
Sliding Doors
Campbell
As a carpenter, Campbell considered the principal defect in relation to the Sliding Doors was the fixings. He said:
A multitude of fixing screws have been used in the fixing and installation, once again, it appears that whatever was at hand or laying about has been picked up and used, there was no uniformity in the gauge or length of the screw fixings…
Some screw heads were larger than the counter sunk hole would accommodate, other screws were of such a lesser gauge that the screw heads were on the verge of passing clean through the predrilled fixing point. An examination above the door head revealed the door head was secured by timber screws of varying lengths…
I… found that the majority of the defects found in the ground floor sliding door windows also exist in the upper bedroom sliding door.
During the expert conclave, Campbell expressed his conclusion on the fixings as follows:
it’s quite normal to nog out and provide for fixings. I didn’t find any reason why those noggins wouldn’t support the top of the window frame. What I found was a mismatch and irregularities in the fixings used. There was a range of cheap, small diameter bolts, cabinet type making screws of 6 - 8 gauge that were 75 mm long and other screws that were 100 mm long. In my mind, as a carpenter, provided the noggins were sufficiently fixed (and it would be unusual for every noggin to be defective) but the crux of what’s happening here is, that how the top of the window is fixed and supported, so that it can then support the weight of the doors is what the problem is. Because what’s happening is there’s just no strength in the fixings that have been applied, so therefore the weight is coming down. And you can adjust them up and adjust them up, but if that fixing is not firm and holding that in place, you’re going to be forever adjusting them.
Campbell also noted that the Sliding Doors were not appropriately flashed.
When asked whether the Sliding Doors could have been made to function appropriately, Campbell said:
They need stop ends putting on the sub-sill. The whole thing has to be taken out, the stop ends put in, sealed and drainage provided form the inside channel to take that water into the sub-sill. They could be made functional… And provided that you’ve got the adequate support at the top and there’s no movement in that, then the track at the top is sufficient to carry the weight of the doors and for them to slide freely.
Spencer
As a specialist window designer and manufacturer, Spencer identified that no interlocks had been fitted to the Sliding Doors and this was a defect. His evidence was that a Z interlock could be fitted to the Sliding Doors as follows:
You would have to remove the internal or external panel either or, (I think that has a removable head capping) so you would remove the external panel off the rail and screw on a Z interlock onto it… you’d have to take the door panel out, you cannot fit it onsite without taking the door panel out.
Spencer’s evidence was that there was no sill clearance and as a result, the doors were binding and unusable. However, in his opinion, the Sliding Doors were adjustable as follows:
That system will have a similar adjustment as a bi-fold, so there will be a roller up top with a thread coming down and there will be a nut in order to adjust it up.
Spencer agreed there was no flashing and that the fixings to the Sliding Doors had been poorly done.
When asked whether the Sliding Doors could have been made to function appropriately, Spencer’s evidence was that:
I would have thought you could make those sliding doors function. They would need to be removed. I’m not confident with the flashing detail in the sill even if you drilled the holes, I’m concerned that that water is still going to flow out the ends because it still requires end sealing, but you could make those doors fit for purpose.
Spencer also agreed that no ‘manifestation or labels’ were attached to the Sliding Doors.
Brownhill
Brownhill concurred with Campbell that the fixings should be uniform. He said it was a matter of placing fixings at their appropriate locations. He also agreed that the Sliding Doors could be made to function for the reasons advanced by Campbell.
Sliding Doors - Determination
In relation to the alleged defects of the Sliding Doors, all the experts agreed that:
(a) there were no interlocks installed on any of the Sliding Doors; and
(b) the Sliding Doors were binding and difficult to open, particularly the Upstairs Sliding Door.
However, as set out above, the experts also agreed that the Sliding Doors could be made fit for their purpose by a combination of adjustment, installation of interlocks, replacing the irregular fixings and providing adequate drainage and end-sealing the sills.
Accordingly, I find the Sliding Doors do not require replacement and could be rectified.
Sliding Doors - Quantification
Given my finding that the Sliding Doors could be rectified, for the same reasons as set out in paragraphs [174] to [187] above, I am not satisfied that the Pacific Shopfitters Quotation provides any rational foundation to assess the damages in relation to the Sliding Doors.
Certification
Le also submitted that the glass panels in the Works were not certified. In his report, Campbell said the following:
The origin and compliance of glass at this time is highly unlikely to be achievable at a viable cost or on which compliance certification will be provided without removing, discarding existing glass and replacement and refitting of compliant glass panels throughout.
For the reasons set out at paragraphs [174] to [187] above, the Court has no evidence of the cost to replace the glass panels in the Works. Therefore, damages for this defect also cannot be reasonably assessed.
Late Delivery of Works
Le also alleges that the Works were not completed within a reasonable time. [89]
[89]Contrary to s 62 of the Australian Consumer Law.
First, Austral submitted that cl 9 of its Terms and Conditions precluded any claim by Le to consequential loss. Clause 9 provided:
The Company shall be responsible only for any defect in the goods supplied and shall not be responsible for any consequential damages or for any repairs or rectification due to misuse or damage by others. In case of inherently defective goods, the Company’s liability shall cease on the Company making available an equivalent replacement item from the Company’s normal manufacturing premises and stocks. [90]
[90]CB 189.
However, on its proper construction, I do not consider cl 9 applied to any installation work carried out by Austral. Save for clause 6 [91], the Terms and Conditions do not contain any term applicable to the installation of goods manufactured by Austral. As I have found that Austral carried out installation work in relation to BF-1, the Corner Bi-Fold and the Sliding Doors, cl 9 is not engaged in the circumstances of this case.
[91] Clause 6 of the Terms and Conditions makes plain that no on-site work shall be performed
by Austral unless otherwise agreed upon.
Turning then to the question a ‘reasonable time’. In Sequel Drill & Blast Pty Ltd v Whitsunday Crushers Pty Ltd[92], Fraser JA set out the principles applicable as follows:
The question of what is a reasonable time is a question of fact. It is to be determined at the time when performance is alleged to be due and the relevant circumstances then existing must be taken into account. That is not to say, however, that a party is entitled to justify its delay by relying upon the materialisation of a risk which that party is contractually obliged to bear. The circumstances which are relevant in determining a reasonable time do not include those which were under the control of the party performing the services: as Connolly J held in Telina Developments Pty Ltd v Stay Enterprises Pty Ltd, the relevant considerations which govern the reasonable of the time must be determined as at the date of the contract. [93]
(citations omitted)
[92][2009] QCA 218.
[93]Sequel Drill & Blast Pty Ltd v Whitsunday Crushers Pty Ltd [2009] QCA 218, 17 (Fraser JA).
The earliest conversation regarding delivery of the Works was at a site measurement meeting in January 2015, approximately four months after the 6 August 2014 Agreement. Le’s evidence was that at that meeting Kochev told him delivery would occur in approximately two months.
Kochev’s evidence on delivery was as follows:
I told [Le] that it would take 6-8 weeks to fabricate the goods and he said that he would let me know in advance when he needed them to be supplied and delivered. He also asked to pay the 40% deposit for the goods by instalments and I agreed because [Le] had not yet started building and the goods would not need to be fabricated for some time.
I accept Kochev’s evidence on the question of delivery and that the ‘goods were not required’ for some time after August 2014.
Such a conclusion is consistent with the payments made by Le (and Tran as his agent). The payments were as follows:
(a) 8 August 2014 - $5,900 (10%);
(b) 23 September 2014 - $5,900 (10%);
(c) 16 December 2014 - $11,800 (20%); and
(d) 10 September 2015 - $20,000 (33.9%).
Usually, Austral required a 40% deposit with the balance payable on completion of the fabrication. In this case, the 40% deposit was paid by instalments and was completed on 16 December 2014.
Tran sent an email to Helen at Austral on 29 April 2015. She wrote:
… Hoi has been trying to get in touch with Mikal without any success. Mikal scheduled a meeting with Hoi at the site around 3 weeks ago. He did not turn up and did not call to say he was unable to come neither. Hoi called the office and left a message but no one called back. We are expecting delivery for the window in the next weeks, hence please call us back as a matter of urgency…[94]
[94]CB 228.
On 12 August 2015, Tran sent an email to Kochev and Kotsios:
Hello Bill,
As per discussion earlier, please find below the dimensions for the external aluminium door/frame and locks.
· Aluminium size 2360 (H) x 990(W).
Regarding delivery, please have all initial frame stage for windows and doors (including bi-fold and sliding) to start on 20/08/2015 and completed by 26/08/2015. Please note these dates are non-negotiable… [95]
[95]CB 226.
It is clear that the parties were in regular contact on and from August 2015. Assessing the parties conduct until late February 2016 objectively, it is apparent they divided payment of the remaining 60% as follows:
(a) $20,000 (34%) to be paid prior to Austral attending to carry out installation works; and
(b) $15,340 (26%) payable after the installation works were completed.
On 19 August 2015, Austral sent a progress invoice for $20,000. The parties then negotiated a ‘delivery and installation schedule’. On 9 September 2015, Tran wrote the following email to Austral:
I am about to pay for the installment based on your confirmation with [Le] this late afternoon/evening that you had emailed the schedule to me. However, I have search [sic] all my emails and not seen the email from you with the schedule.
Therefore I ask you to urgently provide me with a delivery and installation schedule in writing. Without this schedule I am in no position to make any further payment. Again, all payments are pending on delivery schedule and commitment to meet these dates. [96]
[96]CB 236.
After receiving confirmation of an installation schedule, Le paid the $20,000 on 10 September 2015. Tran wrote a further email to Kotsios on 11 September 2015:
I spoke with Hoi and we reluctantly agreed to the schedule below. We want things to move quicker, however we do understand you have other commitments, hence we are more than happy to work around it with you.
Hoi will make himself available and will be at site (as required) based on the dates below. If for whatever reasons, you are unable to be at site on certain day, please provide me with 24 hours notice and we would like for you to come at another day within that same week (or the following week if it falls on a Friday). Please understand that we are on a very tied [sic] schedule, hence we don’t want things to go longer than necessary.
In addition, for Thursday and Friday, Hoi will be at site at around 10 am and leaves at 2:15 pm. However, if you need him to be at site outside those hours, please let us know in advance so that we can make arrangement to suit you.
We truly hope all will progress quickly from now on so that we complete the works on time and for you to get paid and move on to your other commitments.[97]
(emphasis in original)
[97]CB 233.
On 21 September 2015, Tran wrote to Austral and asked whether the works would be completed by the first week of October:
I need your feedback, do you think we can complete the windows and doors installation by first week of October? I would like to schedule for the next stage of the project, however I need your job completed before I can move on.[98]
[98]CB 232.
On 22 September 2015, Austral confirmed[99] that this outcome was achievable:
Good Morning Hanna
We think this is achievable unfortunately Bill is off sick with the flue [sic], he definitely will not be available today. Please let Hoi know. [100]
[99]CB 231
[100]CB 231.
Accordingly, taking into account the above circumstances, I consider a reasonable time for completion of the Works was 8 October 2015, being 28 days after the $20,000 payment was received on 10 September 2015.
On 5 October 2015, Tran wrote to Kotios about the ongoing works:
I spoke with Hoi last night and it seems this job is still going. I do understand the challenges you are facing and your [sic] trying to get the job done. However, I believe extra effort is required as the completion date has been passed. Please do understand from our position that this project is very late and we can’t afford to have it drag on any longer. Please confirm by reply to this email when you can complete this job and I expect it to be by the end of this week at the latest [sic].[101]
(emphasis in original)
[101]CB 230.
On 10 November 2015, Hoi wrote to Kochev regarding the completion date for the works:
Further to our discussion on-site last week, I would like to emphasise again that we would like this job completed by the end of this month (Monday 30/11/2015). We would like all doors, windows, glazing and sealing done by that time. We are running way behind schedule for this job and as we are approaching Christmas break, we need the place locked up before then. Failure to complete this job by this date will incur penalties as per discussed.[102]
(emphasis in original)
[102]CB 246.
Between approximately 24 to 26 February 2016, Austral completed the last stage of the works by fitting the glass. Austral provided no explanation for the delay in completing the works.
Accordingly, I find that Austral breached s 62 of the Australian Consumer Law by failing to complete the Works by 8 October 2015.
Quantification – Breach of s 62
In the above circumstances, Le claims the following damages suffered as a result of Austral’s delay.
(a) additional land tax on the Property from 2015 to 2018:
(ii) 2015: $4,246.67;
(iii) 2016: $5,130.39;
(iv) 2017: $8,441.78; and
(v) 2018: $5,443.10
totalling $23,261.94.
(b) the cost of reviewing the Property’s building permit between 2016 and 2018:
(i) 2016: $220.00;
(ii) 2017: $440.00;
(iii) 2018: $550.00;
totalling $1,210.
(c) the premiums paid for building insurance between 2016 and 2018, totalling $4,143.49.
Austral submits that these categories of loss are not causally connected with the alleged breaches. It submits that Le and Tran could readily have completed the development in the intervening 6 years and no cogent reason had been advanced otherwise. In such circumstances, there was no evidence that Austral’s failure to complete caused the losses in question.
Regarding the additional liability for land tax, Austral submitted that:
the Plaintiffs’ claim disregards that land tax is not payable on a principal place of residence. That exemption can only be claimed in respect of one property at any one time. Le’s cross-examination confirmed that this exemption was received in respect of 42 Bridge Street, Kew while he owned that property. The principal place of residence exemption has since been received in respect of 27 Park Avenue, Knew. Le and Tran have therefore permissibly received the benefit of any principal place of residence exemption to which they are entitled. The fact they might not have been living at the Property makes no practical difference.
The Plaintiffs have also not put before the Court the necessary documentary evidence to establish whether the value of the principal place of residence exemption would have been greater had they been living at the Property.
Austral also submitted that the damages claimed were merely assertions, lacking documentary evidence. It submitted:
The Plaintiffs’ evidence on these categories of alleged loss merely consists of Tran’s assertions. It is not supported by any documentary evidence. It is therefore insufficient to warrant the Court making an award for damages amounting to thousands of dollars having regard to the requirements in Briginshaw v Briginshaw [103].
[103]Briginshaw v Briginshaw (1938) 60 CLR 336.
Le submitted that it was permissible for the Court to apportion extra costs incurred as a result of Austral’s delay.
I do not accept that Le has established any loss and damage arising from the breach of s 62 of the Australian Consumer Law. [104]
[104]Australian Consumer Law, s 62.
First, the expenses claimed relate to the development carried out by Tran as an owner-builder. Tran is also the registered proprietor of the Property. As I have found Le and Austral were the parties to the contract, I do not consider that Le has suffered the damages as claimed.
Secondly, I accept Austral’s primary submission that the breach did not cause the damages. These expenses relate to development costs (land tax) for the period of 2015 to 2018 (inclusive). No evidence was provided explaining why the development was not completed. I do not accept that Austral’s delay of four months resulted in the development extending into 2018 and beyond.
Further, the development works achieved the frame-stage, however significant work remained incomplete. In those circumstances, it is highly likely that an extension of the building permit and insurance would have been required in any event. Therefore, Austral’s breach did not cause Le to suffer the losses claimed.
Finally, I do not accept that the annual development costs are capable of apportionment on a monthly basis. The expenses are incurred annually and cannot be apportioned according to a delay of approximately 4 months.
Conclusion
In the above circumstances, I will order Austral pay Le the sum of $8,700.
I will direct the parties to confer as to the proposed form of order and will hear the parties on the question of interest and costs.
MAGISTRATE GREENWAY
4 May 2022
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