Matthew Hissey and Karlie Barlow v Adam Milne [2014] NSWCATCD 6

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Matthew Hissey and Karlie Barlow v Adam Milne [2014] NSWCATCD 6 Hearing dates: 21 November 2013 Decision date: 09 January 2014 Jurisdiction: Consumer and Commercial Division Before: J McMillan, General Member Decision: 1. The application is dismissed Legislation Cited: Home Building Act 1974 Category: Principal judgment Parties: Matthew Hissey and Karlie Barlow (Applicant) Adam Milne (Respondent) File Number(s): HB 13/30640

reasons for decision 1The applicants purchased a parcel of land with the purposes of erecting on it a residential building. The land is rectangular in shape and the eastern boundary is the common boundary with Casurina Way. It has a length of about 23 metres. The northern boundary has length of about 38 metres. Running parallel to the northern boundary is a council easement for sewerage purposes that was said to be 3 metres wide. 2The applicants engaged the services of the respondent for the purpose of providing plans and specifications for residential building to erect on the land. The restraints paced on the design were that the dwelling was to be centred on the land so that it was possible to walk down either side. Discussions were held between the parties for about two months. More than one design was put forward and changes were made. The plan that was settled on showed the carport of the proposed dwelling encroaching upon the sewerage easement. The applicants then, at the direction of the respondent, paid $2,500.00 on 22 February 2013 into the account of Milne constructions Pty Ltd of which the respondent is a director. 3A contract (the contract) drafted by the New South Wales Master Builders Association was made between the parties on 4 April 2013. That provided for the erection of the dwelling in accordance with the attached plans and specifications. The plan of the residence and attached to the contract was the one described above. 4On 15 April 2013 the applicants paid a deposit of $13,023.82 as called for in the contract. This money was paid into the account of the respondent. 5On 13 May 2013 the applicant received a phone call from the respondent's wife and requested a meeting with them. The reason for calling the meeting was the council staff had been escorted from their offices by police. The applicant claims that the respondent had lost his contacts in the council and a permit to build over the easement could not be obtained. The applicant further claims that the alternate plans had been submitted to Council and done so without consent. The alternate plans were not acceptable to the applicant and they were not the ones on which their finance was approved. Another alternate was emailed to the applicant the following day and this was not acceptable either. 6On 15 May 2013 the applicant contacted the council by telephone and was advised that there was no development plans or other documents on its file. The applicant believed that he was being mislead by the respondent and believed that he could not build for them what they wanted and the respondent would be released from the contract. The applicants forwarded an email to the respondent releasing him from the contract effective immediately but subject to all monies paid being refunded plus an additional $3,000.00 compensation for the inconvenience of possibly reselling the land. The applicant further claims that had they been advised by the respondent that building over an easement required careful consideration they may not have settled on the land. 7A further meeting was held between the parties and alternate proposals were explored. The applicants held their position that the proposal was not what their finance was based on and were not acceptable to them. The applicants pressed for the return of their money and withdrawing the claim for compensation. The meeting ended with acrimony with the applicants off to seek legal advice and the respondent threatening to take legal action. 8The applicant lodged this application with the Tribunal on 6 June 2013. 9The respondent did not deny he had advised the applicants that it was permissible to build over or straddle an easement but claimed to have added that any plans would be subject to council approval. There were a number of documents in which respondent claims that the plans required council approval. 10The respondent argued that all times he was in contact with the council attempting to obtain approval for the proposal. The respondent claims the floor plan remained the same but the site plan "has been required to slightly change to accommodate the easement". This is done to meet council requirements. 11After the meeting of 15 May 2013 the respondent issued a suspension of works notice that included a statement of intention to terminate the contract on the grounds that the applicants had failed; to pay the deposit within seven days, to provide proof of ownership of the land and their capacity to meet the contract price within 10 days of signing the contract and the applicants have directed the respondent not to proceed with the works. The respondent received a reply from the applicants' solicitor the following day stating that the respondent was not licensed to carry out the work and therefore in breach of the contract. Demand was also made for the return of the money paid. 12A further letter was forwarded to the applicants by the respondent on 16 May 2013 stating that work was suspended and that the contract was in dispute in respect of the applicants not agreeing to the proposed changes due to the presence of the easement, the request for compensation and the applicants declining dispute resolution under the terms of the contract. The letter repeated the grounds previously stated in the statement of intention to terminate the contract. The respondent further stated in the letter that he was "at all times ready, willing and able to proceed with the works". The letter concluded that work would remain suspended until the matters were resolved. 13At the hearing of the matter the respondent tendered a letter from the council dated 18 September 2013 that stated, inter alia, the terms under which council would approve footings in the easement. The respondent confirmed that he is able to comply with these conditions. In simple terms it allows for the structure to be cantilevered out over the easement. 14The applicant claimed that the respondent did not hold the relevant licence to carry out the work in the contract. A perusal of the records of the Office of Fair Trading show that the respondent held a licence as a builder for the period 19 August 2008 to 18 August 2008. There are conditions attached that show he was only licensed for contracts not requiring home warranty insurance for the periods 19 august 2008 to 31 December 2008 and 30 June 2009 to 31 March 2013. At the date of signing the contract the respondent was licensed to carry out the work contracted. 15The parties generally agree to the chronology of events leading up to the signing of the contract. The evidence before the Tribunal satisfies that the respondent advised the applicants that council approval was required in order to build over or straddle a sewer easement. The references to this are found in para 7 of the applicant's statement to the Tribunal. 16While the respondent claims the floor plan remained the same the wording in his statement suggest the site has changed. The view of the Tribunal is that it is the siting of the dwelling on the land that is altered and not the site itself. 17The applicants claim that the respondent cannot erect the house on the land as per the plans and specifications in the contract. Any structure to be erected on the land is subject to council approval and council has provided the requirements necessary to erect the building and the respondent states that he can construct the dwelling in accordance with these. 18The council in determining an application for the erection of a dwelling makes that decision as a function of government. It is the view of the Tribunal that it is prudent to explore with council its requirements for building or straddling an easement prior to lodging any application. The respondent now has the requirements of the council and can build the dwelling in the plans and specifications attached to the contract. 19The Tribunal is also satisfied the respondent has at all times been willing to carry out his obligations under the contract. 20In regard to the status of the respondents licence a perusal of the records of the Office of Fair Trading show the respondent is licenced to carry out building work. The restriction on the licence as to work not involving home owners warranty insurance ended on 31 March 3013. The respondent obtained home owners warranty insurance for the works which was issued on 15 April 2013. 21The Tribunal finds the applicants seeking to withdraw from the contract did so prematurely as there was no determination by the council to reject the proposal, the council had advised the respondent of its requirements necessary to straddle the easement and the respondent at all times is willing to carry out the terms of the contract. For these reasons the application is dismissed.