Turner, J.C. v Hudy Pty Ltd

[1988] FCA 333

CATCHWORDS

TRADE PRACTICES - Contract for the erection of a dwelling

hour. - Alloged representation by builder that it waa feasible to orect a houso of a particular design upon the land	-
Quantification of damages.
CONTRACT L A W - Contract to eroct house	in accordance with a
particular design - Quantification of damage.	for breach.

SECRET COlVlISSION - Couiaaion roceived by agent of applicant from first respondont - Recoverability.

Trade Practicoa Act 1974	as.52, 82.
NSW G.217 Of 1987

JILL CERISTINZ =Il v EUDU PTY LIMITED trading as HENDRIKS C

m	L ORS
Wilco. J Sydnoy 8 July 1988

i

IN THE PEDBRAL COURT OF AUSTRALIA ) )

NEW SO- WALES DISTRICT REGISTRY 1 NO. NSW G.217 Of 1987

1

GENERAL DIVISION 1

BETWEEN:  JILL CHRISTINE TURNER
Applicant

AND:	W D U PTY LIHITCD trading as
HENDRIKS C ROBERTS First Respondent
HOHE BUILDERS CORP01UTION
?IF NSW PTY LIMITED
Second Respondent

AND BETWEEN:	HUDU PTY LIHITED trading as RENDRIKS L ROBERTS
Cromr-Claimant

AND:  JILL CHRISTINE TURNER
Crosr-Respondent

C O M : UILCOX J

PLACE:	SYDNEY
DATE :	8 JULY 1988

HINUTES OF ORDER

THE COURT ORDERS THAT:

1. Judgment be entered in favour of Jill Christine

Turner againrt Hudu Pty Limited in the principal

proceeding in the sum of twenty-eight thousand nine
hundred and twenty-two dollars and seventy-seven
centr ($28,922.77).

2.         Judgment be entered in favour of Hudu Pty Limited

againrt Jill Chrirtine Turner in the cross-claim in

the rum of twenty-one thourand one hundred and

twenty-three dollarr and three centr ($21,123.03).

3.         The amount of the judgment entered under order 2 be rat off againrt the amount of the judgment entered under order 1, leaving a net balance of reven

thourand reven hundred and ninety-nine dollarr and seventy-four centr ($7,799.74) payable to Jill
Chrirtine Turner by Eudu Pty Limited.
4.	Judgment b . entered in favour of Jill Chrirtine
Turner againrt Eome Builders Corporation Pty Limited

in the rum of one thourand seven hundred and

ninety-rix dollarr and forty cents ($1,796.40).

5. The rerpondentr, Hudu Pty Limited and Home Builders

Corporation Limited, pay to Jill Christine Turner her

cortr of there proceeding. provided that, as between

themrelver, the raid respondents shall bear the
burden of the costs so ordered to be paid in the
proportions Budu Pty Limited 909 and Home Builders
Corporation Limited 101 and each of the said
rerpondmtr rhall indemnify the other in relation to
cortr paid to Jill Chrirtine Turner in accordance
with those proportions.

Note:  Settlement and entry of orders ir dealt with in Order
36 of the ?ederal Court Ruler.

IN THE ?.D- COURT OF AUSTRALIA 1 1

NEW SOUTH WALES DISTRICT REGISTRY	1	No. NSW G.217	of 1987
1
GENERAL DIVISION	1

BETWEEN:  JILL CHRISTINE TURNER
Applicant

AND:	HUDU PTY LIMITED trading as WENDRIIS L ROBERTS
Firat Reapondent
HOME BUILDERS CORPORATION
ar NSW PTY LIMITED
Second Respondent

AND BETWEEN:	HUDU PTY LIMITED trading	as
HENDRIKS i ROBERTS Crosa-Claimant

AND:  JILL CHRISTINE TURNER
Croaa-Reapondent

CO" : WILCOX J

PLACE:	SYDNEY
DATX :	8 JULY 1988

REASONS FOR JUDGMENT

There is before the Court a single principal

proceeding in which separate claims are	made against each of
two rerpondentr:	Budu Pty Limited, a builder carrying on
burinerr in the Gorford district under the title Hendriks	L
Roberts, and Wore Builders Corporation	of NSW Pty Limited, a
company which, in 1985, carried on businerr as an agent	for

builders.	The two claimr are linked	in that they both arise
out of a decirion	by the applicant, Jill Chrirtine Turner,	to

have a dwelling houre erected upon a vacant allotment owned	by
her at Terrigal, on the New South Wales Central	Coast. The

evidence in each utter overlaps, to some extent, and each

clair ir founded -- at h a r t in part -- on r.52 of the Trade

Practicer Act 1974. But each has to be conridered separately.

Hr Turner'r land is known am lot 43, Duncan Street,

Terrigal.	The allotunt ham a werterly aspect. In ita natural
condition, the land sloped,	at a relatively steep but even
grade, from Duncan Street to the rear boundary.	NO doubt

beCaU8e o f the rlope o f the land, Hr Turner had always had in rind that, when rho conrtructed a houre upon the allotment,

rhe would wish to have a rplit level building.

In about Hay 1985, Hs Turner contacted Mr Paul

Wilron, a principal of a building company known as TRK

Constructions Pty Limited.	She gave to Mr Wilson a sketch
which rho had prepared rhowing a floor plan	for a
three-bedroom rplit level home.	Mr Wilson forwarded to MS
Turner a letter dated 25 May 1985 quoting the	sum of $42,652

an a price for the erection of a house in accordance with the

sketch plan.	The quotation was to include all drafting,
engineoring, council and W U K V O ~	fees.

Hisr Turner did not act on this quotation

immediately. Early in October 1985, apparently at the

suggertion of an officer of her building society, she
contacted a Hr Paul Kolly, an employee of Home Builders

Corporation. During the course of her initial telephone converration, rho sought information as to the nature of his

organisation. According to tho evidonce of MW Turner, HK

Kolly informod hor "that the Corporation acted on behalf of the consumer, looking out for their interests really in the

building game, protecting them really from the pitfallr that

can b	.	associatod with tho indurtry and they can really act as
a modiator bot-on	that porson and the buildor and against	any

unfair advantago on tho builder's	behalf and jurt generally
ovorsoo negotiations and just mako sure everything	was above
board and fair snd honost".	Hr Kolly told MS Turner that rho
would not havo to	pay any money, that the corporation offered

a fro. sorvico to tho public. Apparently MW Turner told Hr

Kelly that sho alroady had a quotation and Hr Kelly told her
that h	.

would "ark around their builderr for a comparable figuro on tho soloctod plan" in order to protect her

interertr. Following thin conversation MS Turner sent to Hr Kelly a copy of tho quotation pKOpaKOd	by Hr Wilron and the
sketch plan upon which	it was based.
On 12 October 1985 MS Turner visited Mr Kelly at the officer of Home Builders Corporation.	She was accompanied by
her rirtor, Anne Gorvin, and a friend, Aurt Seeback.	MC Rally
informod IIr Turnor that he	had investigated Mr Wilron and had

found that he war unreliable and not trustworthy, that his
last project war incomplete due to a lack of funds and that he
war in dirpute with a client. Plc Kelly exprerred the opinion
that nr wilron war “a bad rirk and unreliable” and suggested
to nr Turnor that she would be better off with ono of the
builderr on their lirt rather than taking an unnecessary bad

rirk.

According to the evidonce given before m by Mr

Wilron, non.	of thir war true. Dorpite Mr Aelly’r denial, I
accept tho evidonce	of Mr Turner, which is corroborated by MS
Gorvin and I r 8ooback, that he did rpoak dirparagingly of	MC
Wilron.	It ir difficult to ercapo the conclurion that he did

ro for tho purporo of steering	nr Turner in the direction	of
one of hi.	cliont buildorr and theroby enabling	hi. company to

earn a conirrion.

During tho courre of thir dirCurSiOn, the party was

joinod by llr Hark Eickr, Managing Director of Hudu.	Mr Hickr
had already boon fucnirhed with a copy of the plan prepared	by

nr Turner and thoro war then a goneral discurrion regarding

the floor plan layout and alro the lighting of the building.

During tho courre	of the discurrion a reference was	made by MS
Turner to the propored siting of the	house.	She informed M r

Hickr that the land war a sloping rite and that she had always

wanted to have a split level home.	According to MS Turner,
she went on to say that she wanted the house "to	sit on top of
the land".	MS Turner says that Mr Hicks responded to this by

saying "that will b . right, yes, fine" and waved his hand. So

far as MS Turner is aware, MC Hicks had not then seen the

land.

The reoting endod upon the baria that Mr Hicks would

propare a quotation. On 16 October 1985, Hudu submitted to	MS
Turner a quotation in the rum of $41,950.	The quotation
includod a referonco	to certain additional options.
Apparontly Ms Turner discursed there options with	Mr Kelly.

Some of tho optionr were adopted and a revised tender in the

rum of $44,970 war sub8itted by Hudu on 25 October. This

tendor includod a provision that the plan and specification

would b. prep8rod by Eudu "barod upon sketch	sub8itted". As
roquortod, M8 Turnor paid a deposit of $1,000 on 29	October.

On the ram0 day, Eudu signod a lotter addreared to Home

Buildorr Corporation proriming to pay that co8pany a

couisaion of $1,796.40 aa couirsion on the agreement between

Eudu and IIr Turnor.	$500 war paid forthwith, the balance
lator. At no rtage was M# Turner informed that Home Builders Corporation would rook, or that it was paid, any commission
from Eudu.	Eor boliof war that Home Builders Corporation
provided a fceo rervice	at government expense.

During November 1985, a plan and specification was

propared for aublirrion to the local council, Gosford City Council. The plan war prepared by a draftswoman, employed by

Hudu, upon the instructions of Mr Hicks.	According to MS
iiickr, he inrpected the site	before the plan was prepared but,
to hi8 knowledge, the draftswoman	did not do so. He says that

. h rpocifically instructed the draftrwoman ot to show any

excavation in thir pl8n. The plan shows a layout

rubrtantially similar to that on the rketch plan prepared by

M6 Turner.	As enviragod by her, the building has two
differont levelr.	Tho front level conrirtr of an entry porch,
adjoining tho carport	at tho left hand ride of the building, a

lounge room and the main bedroom. The only entry to the front

of the hour. ir from the carport. ringle atop from the carport into the entry The floor plan shows a

porch, although

the rite elevation indicator three steps in thir position.

Tho floor levol of the remainder of the houre, as

depicted in tho	plan, ir half a metre higher than that of the
lower level.	Accerr to thir highor level ir gained by four
rtepr from the loungo	to tho dining room and also by two steps

from a m u l l corridor outrido tho u i n bodroom to a corridor

leading part tho bathroom tow8rdr the two rear bedroonr.

Tho plan containr two ride elevations and a

crorr-roction rhowing tho split. In each of thoro drawings

thoro ir a bold line which, it is agreod, reprerents the

ground lovel. mrthormore, it is agreed that the form of the

lino is that habitually used to indicate natural ground level,

ar dirtinct from excavated ground	level. Except in the
position of the carport, the line slopes across the site	n a
manner conrirtent with its being intended to indicate

l .

natural fall. The drawings, particularly the cross-section, clearly indicate that the building is intended to stand free of the ground, except in the carport area.

There is no reference on the plan to any excavation

of the nit., oxcept for a notation on the site plan: "cut and

fill to carport area only".	The area, the subject of this
notation, in cronn-hatched and it corresponds with the area	of
the carport an n h o m on the floor plan.

Two noten inncribed on the plan ought to be

mentioned. In the information column on the right hand side

of the plan there in a note:  "Ground levels are approximate

only". Amongnt the notes immediately adjoining the floor plan

is a noto:	"The 'nplit' in thin renidence may differ to that
nhown.	Builder will detOrBin0 'nplit' on nite according to

falln in land..

Tho council approved the plan and specification,

apparently in either late Novomber or Decomber. On 20

Docembor 1985, Eudu wroto to In Turner encloning a copy of the

proponed contract and the council'n stamped plans and

npecification. The letter nuggented that Ms Turner consult

her nolicitor or tho building nociety and that, when the

docunntn ware approvod, rho make an arrangement	for an
appointment at which the contract could be nigned. It	in not

clear whether HI Turner obtained any advice regarding the

contract documents.	Rowever, she did in fact attend a meeting
at the office of audu	on 1 February 1986, when the contract On 26 February 1986, Hudu wrote to Hs Turner a letter

was nigned.

which contained a report made by Slater, Jessop h Armstrong

Pty Limited, consulting engineers. The report referred to an

inspection which had taken place on 12 February and the

results obtained from a test bore sunk on the property. The

engineers expremsod the view "that the strata found 500-

below surface is suitable to carry the proposed loading".	The
report went on to specify	the footings and piers which would

be required on the site. Reference was made to the necessity to make special provision for the foundations in the vicinity

of the building upon the adjoining allotment to the north,	lot
42. That building had been constructed in an excavation made to the allotment.	The covering letter from Eudu informed MS
Turner that t h e m would be an additional cost of	$470 for the

footings and piers and that she had the option of determining

the contract if she was unwilling or unable to meet this

additional cost.	H8 Turner accepted the extra expense.
Some timo in late February or early narch, the site was substantially excavatod.	The excavation involved the

whole of the land upon which the dwelling wam intended to be

conrtructod and it h8d the effect of flattening out the site

so that it thon conformod, broadly at least, with the shape of

the land as shown on the approved plan.	A further effect of
the excavation was to lower the level	of the rear wall of the
building, as compared with its position	if it had been erected

upon the natural ground level, by 1.3 to 1.5 metres; the

difference being explained by a slight cross-fall. In the way

._

in which the excavation was finished, there	was left a steep
batter at the rear of the house.	The top of the batter
extends above the top of the windows	in the back wall of the
houre, a6 it ir now constructed.

?allowing the excavation, the construction of the

building proceeded rapidly. There was contact between MS

Turner and Eudu during the course of construction. A number

of letter.	were exchanged regarding minor building details
and, according to	Mr Turner, she spoke to MC Hicks upon a
couple of occarionr.	Eowever, although MS Turner inspected

the rito fro8 tire to time, rhe did not make any comment or

complaint regarding the excavation.

By letter dated 3 April 1986, Eudu wrote to Mr Turner

informing hoc that the council required her to retain the side

of the excavated area and that the council would not pass the

preriror for habitation unlerr thin work war	done. Hudu
quoted a cost of $1,500 for a retaining wall.	This wall war

to b . erected upon the comon boundary of lot 43 and lot 44.

Lot 4 4 adjoined to the south and contained a houae erected

upon the unexcavated allotrent. The letter went on: "Due to

the oxt ta C08t8 that would be caured to you by rtopping the

work. and awaiting your reply and the extra cortr that would

be caured by not doing the footing	at thi6 stage we are
continuing and pouring the	footing". Mr Turner was asked to
rerpond accepting one of two alternatives:	to have Hudu carry

out the footing for the retaining work only, at a cost of

$700, or to carry out both the footing and the retaining wall

itself, at a cost of $1,500. On 13 May 1986 MS Turner wrote

to Hudu about a number of matters. In this letter she stated:

"I also advise that I formally accept the cost of $1,500 for

tho retaining wall to be conrtructed along the ride of the

houso". Thereafter Hudu constructed the retaining wall.

The house coached the rtagc of substantial completion

at the beginning of AUgurt 1986. On 7 August Hudu wrote to MS

Turnor onclosing an account for extra8 amounting to $7,851.24.

Tho lotter requested payment of thir amount together with the

supply of a lettor of ratirfaction to enable Hudu to receive

from tho building socioty the balance of the original contract

sum. Although this rum war not rpecified in the letter, agreod betwoon the parties that the balance then owing on the	it is
original contract sum war $8,555.	This amount is rtill
outstanding.

Hs Turner did not accedo to tho requests contained in

tho lottot of 7 August.	8ho had, in the meantiro, taken rtepr
to invostigato tho position rogarding excavation.	She
rotainod a survoyor, J R nortonron Pty Limited.	On 11 July
1986 that company furnished a	report to H8 Turner of a survey

m8do by Ir Hortonsen of the land. The report contained the

co-nt that tho natural fall of the land ir much steeper than

was indicated on tho building plan.	MC Mortensen attached to
tho report a photocopy of the two ride elevationr shown	on the

building plan on which he marked in red the natural fall of

the land prior to excavation. As already mentioned, this

rhows that, at the rear, the building was 1.3 to 1.5 metres

lower than it would have been if erected on the natural	ground
level. The report also contained some photographs upon which the natural ground level was	marked in red.

At about this time MS Turner also consulted Mr Norton

G King, a building conrultant.	Hr King inspected the plan and
specification and the building	and he advised that the
building had not been erected in accordance with the plans,	a
a result of which extra expenrer	had been, and would be,
incurred.	Thereafter H8 Turner declined to make any further
payments to Eudu.	There was correrpondence between the
partier, and their solicitors, regarding access	to the

building for inspection purposes -- Hudu taking the position
that papent was required before possermion would be given to

11s Turner -- regarding certain incomplete and defective items

and in relation to the possible resolution of the	dispute. On
19 January 1987 the solicitors	for HI Turner suggested a

meeting to rem whether a settlement could be reached but

Eudu#r rolicitorr rerponded by demanding payment of the	full
amount of the claim beforehand.	On 20 February the
applicant’s rolicitorr forwarded a copy of	Hr King’s report,
with other documents, and again suggested a conference	to

explore rettlement.	There was no positive response and, on 25
Harch 1987, the rolicitorr again wrote.	Thir letter contained
the following paragraph:

“We confirm earlier correrpondence to you that

our client ir paying rent in the vicinity of
$120.00 per week whilrt the property remains
incomplete and we also confirm the actions of
your client some time ago in changing the
locks on the property to ensure that it
retained control of the site. The rent being
paid for alternative accommodation by our
client forms part of her claim as she is also
having to pay her mortgage payments to the
building society in respect of her loan on the
property and obviously the longer it takes for
tho suggested conference to be held the more
difficult it will become to reach a settlement
in view of our client's claim increasing at
the rate of approximately $120.00 per week."

The response to this approach was a letter of 23 April 1987 in

which the solicitors for Budu, on behalf of their client,

threatened to commence proceedings	for the amount claimed to
be owing.	But, beforo they did so and on 20 May 1987, the

presont procreding was commenced.

Tho claim u d o by 11s Turner against Hudu is put in a

number of ways.	As I have said, reliance is placed upon 8.52
of the Trade Pcacticos	Act, the argument being that Mr Hicks'

responsm to 11s Turner's intimation that she wanted the house "to sit on top of tho land" constituted a representation as to

the fe8sibility of tho plan she had proposed	for the site. I
have difficulty in seeing th8t there	was such a representation

but I do not think th8t it is necessary to reach a concluded opinion upon th8t uttor because I am of the opinion that MS

Turner is entitled to succeed upon	at least one of her
altermtivo cl8i.s:	bre8ch of contract. There is no

jurisdiction81 problom about the utter being disposed of on

this b8sis. Hudu expressly concedes that tho s.52 claim was

made -- bona fide and I am of the view that this concession is

properly made.	The daugos available to MS Turner upon her
contract claim are not less generous than those which would	be
recoverable under 8.02 of the Trade Practices Act	for a breach
of s.52.

The contract claim made by MS Turner is pleaded in a

number of wayr but it include. the simple claim that Hudu

failed to execute the works properly, that is in accordance

with the agreed planr and rpccifications. I think that this

care is made out.

There is no doubt that the building, as erected, departs from the agreed plan.	The plan rhowr no rite
excavation, other than to the	carport area, whereas it is a
feature of the building as erected	that substantial excavation

har taken place. But Hudu say. that the discrepancy between

the agreed plan and the building am erected doer not

constitute a breach of contract becaure there war a prior

underrtanding between Mm Turner and Mr Hicks that the site

would be excavated to	the extent necesrary to accommodate	the
plan.	Mr Turner denier that any	much agreement was made.

I have no heritation evidence upon thir quertion.	in accepting MS Turner's
According to MC Hicks, he had

reveral meeting. with Mm Turner before the contract was

signed. On each of there occarionr, he say., at least one

perron other than M8 Turner war prerent: either MC Kelly, MS

Gorvin or Ilr Seeback.	According to him, on at least one
occarion there war conriderable dircurrion about	the

suitability of the	rite during which he	"told her quite
plainly the plan did	not suit the block.	MS Turner was quite

adamant that war the plan rho wanted.	I was quite sure,
adamant, that it did not suit".	On that occasion, he said,
there was much talk regarding stepr, etc.	None of this was

.-

put to any of the three people who, according to M C Hicks,

might have been present.	The alleged conversation related to
a matter at the heart of this case: it	is inconceivable that,
armed with instructions upon tho	matter, counsel for Hudu

would have failed to put questions to these witnesses about

the conversation.	It is true that Mr Kelly was an
unsatisfactory witness, who claimed not to	recall many
important matters, but this was a conversation	of some moment.

It is a180 true that MC Kelly claimed himself to have warned

Hs Turner about the unsuitability of the plan -- a claim which

was also not put to Ha Gorvin or Mr Seeback and which I do not

believe -- but that is a different subject matter from the

allegod conversation betwoen MC Ricks and Hs Turner.

Rowever, there is an even better reason than the conduct of this cas. for rojoctiag Hr Ricks' evidence

regarding an agreement for excavation: the form of the plans

tho~solver. These plans wero drawn under the direct

suporvision of Hr Ricks, at a t i u later than the alleged

conversation with HI	Turner when it was agreed that the whole
of tho building site would have to	be excavated. Yet there is

no hint of bulk excavation upon the plan. The plan clearly

SUggO8tr that the building will be erected upon the existing

slop., savo for some cut and fill in the carport. To erect the h o u in an excavation, to a different fall, would be to

depart from the plans in a significant manner;	as is
indicated by the perceived need	to construct retaining walls
to hold firm the excavation.	Acceptance of Mr Hicks' evidence
would involve the attribution	to him of an intention to
mislead the local council upon	a material question and to

commit an offence by erecting the building in a manner

inconsistent with the plan:	see Local Government Act (NSW)
1919 8.306.	What motive would there be for such behaviour,
agreement having already been	reached with MS Turner upon the

need for excavation? Why not show the excavation upon the

plan?

The point goes further than the mere absence from the

plan of any reference to	excavation.	The plan clearly
suggests that the house is to b	.	fitted to the natural fall of

the land, not that the land is to be moulded to the

constraints of tho house plan. I have already quoted the plan

not. regarding adjustrent of the "split" shown on the plan.

No adjustmont would be necessary if the site was to be shaped before building comncod. The site could b. levellod to the

exigencies of the plan.	Turtherrore, the adjustment was to be
made "on site according to falls in land". Mr	Hicks expressly
agrood in his ovidenco that the words "falls in	land" were a

reforence to tho natural fall of the land. But what would be

the relevanco of that fall upon an excavated site?

A furthor pointer to the truth, in my opinion, is

provided by the engineer's report regarding footing. and

piers. It will b . recalled that this report referred to a

strata 500mm below surface which	was suitable to carry the
proposed building.	The engineer's report proceeded upon the
basis that this strata would	be used, and Hudu made its demand
for extra money for the footings and piers upon this	basis.

Yet excavation in the manner said to have been agreed would,

at leant, have substantially interfered with this strata.	The
engineerr would have had to re-asress the position.	I think

that the roport maker cloar that they did not envisage
excavation; yet an experienced builder would realise the

necersity of discloring to the engineers the intention to

excavate in asking	the8 to	advise upon the necessary footing6
and pierr.

I think that the truth is that insufficient attention

war given by Eudu to tho problems of this rite.	I do not
accept that MC Rick.	inspected the rite before the plan war

drawn. Rad h . done ro h . would have been alerted to the fact

that tho floor plan proporod	by nr Turner was not, without
adjurtunt, ruitable for the rite.	Re would have proposed

romo .~.nQ.ntr. Ead H8 Turnor proved unrearonable h . would

havo had the option of	declining the job. But I think that
Eudu committed itself to the contract without realising	that
thoro war a problor and, whon nr Eickr and/or MC Bendrikr
found that thoro	war a proble8, it war decided to resolve the
problor by excavating the rite.	Excavation war, of course,
ono porriblo rolution.	But it war the prerogative of MS

Turnor, not of Budu, to decide how to resolve the matter. The

company war not jurtified in unilaterally departing from its

contractual obligation and	in delivering to her at the end of
the project a building which, bocaure	of its position, is
materially different from	that required by the plan.

In reaching the above conclusions I do not overlook

the submission made	by counsel for Hudu that MS Turner's
failure to complain to the company of the making	of the

excavation until August, when the final payment was due, indicates that she had earlier agreed to the excavation.

Under some circumstances a failure to complain affords

powerful evidence that a particular event is in accordance
with the prior consent of the person who might otherwise be

expocted to complain. But in this case there is no middle

ground. It is not as if Hudu's case was that there was an

oral variation of the agreement after the plan war drawn. Mr

Hicks' evidence is that all this war agreed before the plan

was drawn; and, for the reasons indicated, that evidence is

simply not crediblo.

Noreover, in asrossing Is Turnor's silonco to Hudu,

it is relevant to note that, in early July, she had arranged

an inspoction and survey	by Mr Mortensen. She was clearly
disratisfied bofore August.	Although I find it a little
surprising that she said nothing	to MC Hicks immediately upon

discovering the excavation, it is understandable that she

would wish to havo the situation expertly assessed before
taking it up with Hudu. It	is not as if an earlier comment
could s a w the situation.	From her point of view the damage

was done when she first discovered the excavation.

I am satisfied, from the evidence of Hr Klng, that a

direct consequence of the incorrect siting of the building
will be tho necessity to perform the following additional

work:

Work already carried out by Hudu

S S

Retaining	wall	1500.00
Removo oxcavated

matorial	429.00
Rock excavation	270.50

Extra access o t 349.00
2548.50

margin 20% plus 509.70 3058.20

Work yet to be performed

Extension of southern

rotalnlng	wall	1280.00
Removal of excavatod

matorial at front	630.00
Rolnstatount of ground 3780.00	5690.00

8748.20

I do not allow tho sum of $478.00 claimed for footlngs and

plorr. A. I havo lndlcatod, I am of the opinion that the

enginoors' vlow was that this cost would	be incurred if the
house was bullt upon the unexcavated	site.

To this sum must be addod any diminution in value occarionod by the fact that, even after those works are

carriod out, the building will	be sited lower than envisaged
by tho plans.	Notwithstanding the evidence of Mr A T Starkey,
a qualified valuer called on behalf of Hudu,	I am satisfied
that there will be a loss of value.	With every respect to M C

Starkey, I think that he has neither fully appreciated the effect of the change nor adequately investigated local market

conditionr. I profer the evidence of Rrs G A Everson, an experienced valuer who has investigated sales	in the immediate
area. Rrs Evorron expressed the view that the house, as constructed in the excavation,	would be worth about $9,000
lerr than if it had been erected at the correct level.	I
appreciate that it would not have been possible	to build upon

the unexcavatod site a home which exactly followed the agreed

plan. Some modification, even if only to increase the number of internal rtairs, would certainly have been	required.
Whether auch a modification	would have increaaed or decreased

the cort of the building was not explored at the trial and I

do not think that I rhould make any arsumption about hat

uttor, one w8y of tho othor. I therefore accept the figure

of $9,000 1088 of value without making any adjurtment for any raving achievod or extra expenro incurred, as a result of any nocerrary dorign modificationr.

nrr Evorron also exprerred the view that the house

now boro a "rtigma", reaulting from its lengthy period of

non-occup8tion, which might excite purchaser resistance.	She
thought that an additional $1,000 should	be allowed to
compensate for tho stigma.	Bowever, this argument assumes

that the relevant date, for consideration of any loss of value

conroquential upon the breach of contract, is mid-1988. I do

not think that this is correct. The relevant date is that upon which the house might have been sold by Hs Turner, had

she wirhed to extricate herself	from her predicament by sale.
For rearonr which I will	indicate, I put this time at 31 July

1987. I am not ratirfied that the delay till that day was

ruch as to attract any financially significant stigma.

In addition to the above, RI Turner maker two claims:

for the coat of completing and rectifying variour items and

for rent. She alro claim8 interert upon any balance payable

to her.	An to the firrt item, I am relieved from attempting
to quantify the coat of attending to the list	of minor items
identified by nr King by the fact that the partier	have
renribly reached an agreement,	reduced to a written

undertaking given to the Court, an to what will be done.

Should there be any breach of that undertaking,	Ha Turner will
have an appropriate remedy.	I can deal with damage8 upon the
barir that thin work will	be done without coat to R8 Turner.

It in only fair to liudu to ray that it reemr that Hudu was alwayr willing to attend to any legitimate complaint8 about

there utter8 and that it would probably have done	no long
ago, but for the larger dirpute between the	partier.

The claim for rent in founded upon the circumrtance

that Sudu ha8 declined to give porserrion of the house to H6

Turner until it received the moneys claimed	by it from her.
The company arguer that	it in entitled to take this attitude
by virtue of c1.27(g) of the contract between the	parties.
That rub-claure readr:

. 21.

"(g) upon payment by the Owner of all monies

due to the Builder, the Builder shall at

the request of the Owner make available

the keys to the Works and upon acceptance

thereof the Owner shall be deemed to have

entered into actual possession thereof

and to have acknowledged that the works

have been completed	in accordance with
this Agreement whereupon	the Builder

shall be relieved and discharged from all
rerponsibility hereunder save for any
liability under the Defects Liability

Period. Upon acceptance of the keys as

aforesaid the Works shall in all respects

be at the mole risk of the Owner."

It is clear that the amount claimed by Hudu for the balance of purchare price and for extras, being the sum	of
$16,406.24, is due to the company;	subject to any offset
againrt moneys payable by Hudu to MS Turner.	If, upon

balance, 11s Turner owes money to Eludu, Hudu is justified in

the stand which it took regarding the delivery of possession.

If, upon the	other hand, no money is owing to Hudu, Hudu is
not justified in keeping	Ms Turner out of posscrsion of the
premises.	In this eventuality, part of the damage suffered by

her is the burden of rent payments during such period as was

reasonably required to allow her to resolve the matter and	to
obtain pOrme88iOn.

I have assessed the total loss sustained by MS

Turner, being for extra costs of $8.740.20	and for loss of
value of $9,000.00, at $17,748.20.	In an account made up in
August 1986 there should have been deducted the amount due	to

Hudu, $16,406.24, leaving a balance of $1,341.96 due to MS
Turner. It followr that c1.27(g) did not operate to entitle
Hudu to deny posression to M8 Turner and that a rental

allowance ought to be made. But	I do not think that it would
be fair to allow rent up to the present time.	By August 1986,
when notice of practical completion was given,	R8 Turner was
aware of tho f8ct and oxtent of the excav8tion.	She already

had obtained advice from Hr Rortcnsen. She received M C Ring's advice in early Soptomber. Although I appreciate and applaud

her desire to settle the dispute	by negotiations, far too much
timo was 8llowod to	p8ss before the proceeding was commenced
in this Court.	And tho matter was not theroafter prosecuted

with notable expodition. I think that it is reasonable to say th8t, with tho benefit of a "flying start" in August 1986 and

treating tho matter with the urgency it desorved, the

applicant and her advisors ought to have been able to secure

resolution of tho matter -- if necessary by judgment in this

Court -- by the end of July 1987.	Rent to that day, and that
d8y only, should be 8llowed.

The rent paid by MS Turner was $70 por week for the

poriod 9 August 1986 to 28 Novorbor 1986, a period of 16

moks. This figure amounts to $1,120.00. During the period

of 35 weeks from 18 November 1986 to 31 July 1987 she paid

rent of $120 por m o k -- a total of $4,200. The total rent
a l l a d should therefore b	. $5,320.

Both parties claim pro-judgment interest on the

moneys due to thorn. E8ch is entitled to such interest, but

the effect of the set-off is that interest will only be

actually paid upon the net balance. In calculating interest I adopt tho rate of 151 per annum, being a reasonable reflection

. 23.

of the cost of money during this period. However, interest on

the rent should be allowed only from the end of the rent

period, 31 July 1987.

In the result, there will be judgment for MS Turner

against Hudu in the principal proceeding in the sum of

$28922.77, made up as follows:

$

Extra costs incurred	8748.20
Loss of value	9000.00
Loss of rent	5320.00
Interest at 15% pa on	$17,748.20
from 7 August 1986 to date	5102.60
Interest at 15% pa on $5320.00
from 31 July 1987 to date	751.97 28922.77

There will be a judgment in the cross-claim in favour of Hudu

in the sum of $21,123.03, calculated as follows:

$

Amount due on cross-clair 16406.24

Interest on that sum at 15% pa

from 7 August 1986 to date 4716 .l9
21123.03

The net amount payable to the applicant is the sum of

$28,922.77 less $21,123.03, that is $7,799.74.

I turn now to the second claim of the applicant,

against Home Builders Corporation.	This claim is brought only
under 8.52 of the Trade Practices Act,	he alleged

misrepresentation being that Home Builders Corporation provided independent advice to consumers in the building

industry, that is potential building owners. It is clear that

it did not do so. On the contrary the company was in the

businoss of soliciting business on behalf of builders.	The
conduct of the company towards	MS Turner was deceptive and it

amounted to a clear breach of 6.52 .

Tho only real question about the claim against Home

Buildors Corporation is whothor MS Turner suffered any loss as a rosult of that company'r conduct. Home Builders Corporation

did not appoar at tho trial, and I have therefore not	had the
benefit of any submissions on its bohalf.	However, having
regard to cortain evidonce given	by MC Hicks, I think that the
proper finding is that the effsct of the payment	of the
commission was to	increase the price charged by Hudu to MS

Turner. nr Hicks said that Rudu paid a commission calculated at 4% of tho contract prico and that this cost reprosented

part of tho company's overhoad oxponses. He agreed that, in

arriving at its tondor price, Eudu calculated its direct costs

and addod a margin and that	tho margin incorporatos "a11
overheads".	It follows, as ono would expect, that this

particular outgoing found its way, at least indirectly, into

tho prico chargod by Rudu to MS Turner.	MC Hicks said that
Rudu paid a commission calculated at 4% of the contract price
and that this cost ropresented part of the company's	overhead
expensos. R	.
agreed that, in arriving at its tender price, Hudu calculated it8 direct costs and added a margin	and that
the margin incorporates "all overheads".	It follows, as one

would expect, that this particular outgoing found its way, at

least indirectly, into the price charged by Hudu to MS Turner.

In that way she was occasioned loss by reason of the misrepresentation. She would not have been in the position of

indiroctly paying commission had she been told the true

position. Tho reason is that, according to evidence given by her which I accept, she would not have knowingly become

involved in any transaction where a commission was	being paid.
In my view the amount of the	payment is recoverable by her.
There is, of course, a goneral principle that a principal is entitled to recover from an agent the	value of

any socrot commission, or other benefit, obtained by the agent in dorogation of tho agent's duty to the principal. The claim

was not pleaded in this way but,	had it been, MS Turner would
have been able to rely upon that principle.	The result would
have been the same.
There should be judgmont in favour of the applicant against Rome Building Corporation in the	sum of $1,776.40, the
amount of tho	couission paymont.

As botwoon tho applicant and the two respondents,

corts should follow tho event; that is, MS Turner should be

entitlod to recover hor costs against either respondent. But,
as botwoon tho two rorpondents, there should	be an

apportionment, made on a time	basis.	The claim against Hudu
occupied the overwhelming majority	of the hearing time	so

that, as between the two respondents, Hudu should	bear 90% of
the applicant's costs.
I certify the twenty-five (25)

preceding pages to be a true copy of
the Rearonr for Judgment of

hi8 Eonour Jurtice Wilcox.

Associate:

Date :

Counsel for the Applicant

and Crosr-Rerpondent:	Mr I D Falukner with
Hiss J C Gibson
Solicitors for the Applicant
and Crorr-Reapondent	Glarron, Gemmrll L McGi 11
Counsel for the Pirrt Respondent
and Crors-Claimant:	Mr N F Prancey
Solicitors for the ?irst Respondent
and Cross-Claimant:	nccarthy Writer L Ryan
No apparance by the Second Respondent
Date(s) of hearing:	14, 15, 16 and 17 June