Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Nouh v Sigma Group Industries Pty Ltd [2021] NSWCATCD 21 Hearing dates: 30 June 2021 Date of orders: 30 June 2021 Decision date: 30 June 2021 Jurisdiction: Consumer and Commercial Division Before: D Goldstein, Senior Member Decision: 1. Sigma Group Industries Pty Ltd must pay Usama Nouh the sum of $77,962.50 immediately. 2. Sigma Group Industries Pty Ltd must pay Usama Nouh's costs of the proceedings on the ordinary basis, such costs if not agreed to be assessed in accordance with the Legal Profession Uniform Law Application Act 2014. Catchwords: BUILDING and CONSTRUCTION – Defects – No issue of principle Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Home Building Act 1989 (NSW) Legal Profession Uniform Law Application Act 2014 (NSW) Category: Principal judgment Parties: Usama Nouh (Applicant) Sigma Group Industries Pty Ltd (Respondent) Representation: Solicitors: N. A. Lawyers (Applicant) File Number(s): HB 20/34366 Publication restriction: Nil REASONS FOR DECISION 1. The application in these proceedings was filed on 21 August 2020. An order was sought for the payment of $75,000.00 arising from the breach of Home Building Act 1989 (NSW) statutory warranties which caused water ingress into the applicant's residence. 2. Orders were made on 8 October 2024 for the filing of Points of Claim, Points of Defence, Scott Schedules, expert reports and witness statements. 3. On 3 December 2020 procedural directions were made extending the time for compliance with the 8 October 2020 orders. Further orders were made on 18 February and on 14 May 2021 extending the time for compliance with the 8 October 2020 procedural orders. 4. The 14 May 2021 orders made by the Tribunal stated that the respondent was 'to file and serve his evidence WITH PAGE NUMBERS by 28 May 2021'. 5. It was also stated 'Respondent again urged to get legal advice. If he does and his lawyer needs an extension of time for example so he can find expert evidence which he presently does not seek to obtain, the lawyer should request that as soon as possible.' 1. Points of Claim were finally filed by the applicant on 12 May 2021 which claimed $77,962.50 as damages for breach of Home Building Act statutory warranties. 2. The respondent did not file Points of Defence as ordered by the Tribunal. 3. The applicant's evidence filed in response to the orders made by the Tribunal was in the form of a document said to be an affidavit which was filed in the Tribunal on 12 April and which contained numerous annexures. 4. The parties were advised on 20 May 2021 that there would be a contested hearing by telephone which would take to place today, 30 June 2021. 5. At the hearing of the affidavit of the applicant was tended by his solicitor and I marked it exhibit A. 6. The respondent stated that he wished to rely upon his letter to the Tribunal dated 31 January 2021 which was marked exhibit 1. That document was again filed in the Tribunal on 31 January 2021 together with a letter from the respondent to the New South Wales Department of Fair Trading dated 3 August 2020 in which the respondent informed the Department of Fair Trading that it was surrendering it's builders contract license number 176082C. A copy of that contractor license was also attached. Those documents will form part of exhibit 1. 7. Although the applicant's affidavit was not witnessed or sworn, I will accept it together with the annexures to it. 8. The applicant's evidence which has not been denied or contradicted by the respondent and which I accept is: * He and his wife are the registered owners of the residential property the subject of these proceedings; * they purchased the property from Mr and Mrs Scoufis on 20 December 2014 and took possession of the residential property on 13 April 2015; * after taking possession there were water leaks to the residence in the following areas, the living room ceiling above the kitchen, the living room ceiling from the corners, the front door ceiling, the rear pergola ceiling and the garage; * there was also smoke coming from the light switch near the front door; * a complaint was immediately made to Mr John Scoufis about the water ingress and he attended the residence with a waterproofer who carried out sealing work to the front balcony, the top of the front door ceiling, and the back Veranda; * in October 2015 water leaked into the ceilings of the living room the rear pergola, front veranda and the garage; * in November 2015 water was seen to be leaking into the downstairs laundry and the rear outdoor area; * a complaint was made to Mr Scoufis and he attended the residence with a plumber who carried out some repairs; * Sometime in 2016 Mr Scoufis attended the residence and undertook repairs to the bathroom however water continued to leak through the bathroom floor into the bottom laundry; * in January 2017 water continued to leak into the entry door causing the electricity point to short circuit; * further repairs were carried out by Mr Scoufis in July 2017. Despite that the water leaks continued until March 2018; * in February 2018 the front Veranda and rear pergola ceilings were cracked and sagging severely from water damage; * in March 2018 parts of the front veranda ceiling started to collapse; * in July 2019 after repairs carried out by Mr Scoufis water leaks resumed causing damage to the living room front veranda and rear pergola ceilings 1. The applicant arranged for a report to be prepared by Multibuild Constructions Pty Ltd which is annexed to his statement. The author of the report Mr Machlouche stated that * He had carried out a visual inspection of the property to determine the cause of damage; * the damage to the property is due to severe water ingress into the property from the roof; * he has made an assessment of the rectification costs based on his visual inspection of the residence; * the previous attempts to repair the damage have failed due to a lack of experience of the persons carrying out the previous repairs; * The source of damage is due to water ingress from the roof into the residence; * applying a waterproof membrane to affected areas will not solve the problem; * the flat roof has an incorrect profile; * the box gutter over over flashing is leaking due to using incorrect material; * apron flashings used are for the incorrect roof profile; * the two story downpipe spreader has been incorrectly installed; * the lower flat tile roof has excessive waving and it should be level; * the gutter bracket is leaking; * the top roof skylight is due is leaking due to incorrect installation; * The garage ceiling has mould due to a water leak from the from roof and front veranda; * the front downpipe spreader is incorrectly installed; and * the living room and laundry ceilings are leaking as well as the rear pergola ceilings; 1. Mr Machlouche prepared a Scott schedule in which he assesses the cost of remedial work necessary to repair the defects to the residence in the sum of $77,962.50. 2. I accept Mr Machlouche's report and scott schedule on the basis that it has not been contradicted by the respondent who has had ample opportunities as from 12 April 2021 to obtain expert evidence to contradict it. I also accept Mr Machlouche's evidence, despite the fact that it does not conform with the Tribunal's Expert Code of Conduct. 3. In these proceedings in which the Tribunal has made numerous efforts to have the parties comply with Tribunal orders for the provision of evidence and where the parties' evidence is far from addressing all the issues that might ordinarily be dealt with, despite the applicant being assisted by a solicitor, I propose to proceed in accordance with s38(4) of the Civil and Administrative Tribunal Act 2013 (NSW) which states: 'The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.' 1. I also find that the parties particularly the respondent are bound by the way in which they have conducted these proceedings especially having regard to the numerous extensions made to the Tribunal procedural time table and the opportunities they have had to file evidence and Points of Defence. 2. The applicant via his Points of Claim which have not been denied by the respondent relies upon the following facts, among others: * The applicant and his wife purchased the property the subject of the proceedings from Mary Scoufis and John Scoufis; * The property was built on behalf of Mr and Mrs Scoufis by the respondent; and * Mr and Mrs Scoufis are directors and shareholders of the respondent. 1. Because the respondent has not denied the above facts, I accept them as being correct. 2. The applicant relies upon section 18D(1) of the Home Building Act 1989 (NSW) which states as follows: 'A person who is a successor in title to a person entitled to the benefit of a statutory warranty under this Act is entitled to the same rights as the person's predecessor in title in respect of the statutory warranty.' 1. Based on the facts which I have referred to above, I find that the applicant is a successor in title to Mr and Mrs Scoufis who would be entitled to the benefit of the statutory warranties contained in s18B(1) of the Home Building Act and that as a result of 18D(1) the applicant is entitled to the same rights as Mr and Mrs Scoufis in connection with the s18B(1) statutory warranties. 2. I find that Mr Machlouche's evidence establishes that the respondent was in breach of the s18B(1) statutory warranties, most notably the warranty by the respondent that: 'the work will be done with due care and skill' 1. I also accept Mr Machlouche's un-contradicted evidence that the cost of the necessary remedial work as detailed in his scott schedule is $77,962.50. 2. As regards the evidence which the respondent seeks to rely upon, I find that the matters referred to in its 31 January 2021 letter do not serve as an effective defence to the applicant's claim. To the extent that the respondent's letter might suggest that the applicant has not contacted it since May 2015 and has failed to mitigate his damage by not asking the respondent to rectify defective work, the applicant's affidavit provides sufficient evidence to contradict such a suggestion. In any event the 31 January 2021 letter establishes that the respondent was carrying out repairs in 2019. The evidence of Mr Machlouche is that the respondent's repair efforts were ineffective, which I accept. 3. I also accept the applicant's allegation in his Points of Claim that the defects of which he complains are 'major defects' as defined in the Home Building Act. 4. Based on the Reasons set out above I will find for the applicant in the sum of $77,962.50. 5. The applicant also seeks his costs of the proceedings. I find that Rule 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) applies to the applicant's costs application and that I do not need to find the existence of special circumstances in order to make a costs order. I find that the applicant is the successful party to the proceedings and there is no conduct on his part which would disentitle him to a costs order in his favour. 6. I will make an order that the respondent must pay the applicant's costs of the proceedings on the ordinary basis such costs if not agreed to be assessed in accordance with the Legal Profession Uniform Law Application Act 2014 (NSW). 7. Finally, I find that the preferred outcome as referred to in s 48MA of the Home Building Act is not appropriate. The respondent is not licensed and importantly its efforts to rectify the defects at the residence have not been successful. I have no confidence that the respondent is capable of organising the necessary licensed tradesmen to carry out effective remedial work, when it has been unable to do that in the past. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 August 2021