Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Marcello Capone and Nicole Masson v Richard Lambert [2014] NSWCATCD 124 Hearing dates: 14, 15 November and 10 December 2013 Decision date: 16 July 2014 Before: D Goldstein, Senior Member Decision: 1 For the reasons provided, the respondent must pay the applicants the sum of $65,716.57 within 21 days of the date of this decision. 2 The parties are at liberty to make a costs application in these proceedings. 3 Any costs application pursuant to section 60 of the Civil and Administrative Tribunal Act 2013 or rule 38 of the Civil and Administrative Tribunal Rules 2014 must be lodged in the Tribunal and served on the costs respondent within 21 days of the date of this decision either attaching or referring to the documents relied upon in support of the application. 4 The costs respondent will have 21 days after the date it receives the costs application referred to lodge in the Tribunal and serve on the costs applicant its submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon. 5 The cost applicant will have 14 days after the date it receives the cost respondent's submissions to lodge in the Tribunal and serve on the costs respondent its submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon. 6 The Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal Catchwords: Presumption of regularity, statutory warranties, compliance with conditions of development consent, causation. Legislation Cited: Civil and Administrative Tribunal Act 2013, Civil and Administrative Tribunal Rules 2014, Environmental Planning & Assessment Act 1979 Cases Cited: Alexander and Others v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310, Allianz v Waterbrook [2009] NSWCA 224, Hill v Woollahara Municipal Council and Ors [2003] NSWCA 106, 127 LGERA, Minister for Natural Resources v. NSW Aboriginal Land Council (1987) 9 NSWLR 154. Texts Cited: Cross on Evidence, Contract Law in Australia, Fifth Edition. Category: Principal judgment Parties: Marcello Capone and Nicole Masson (applicants) Richard Lambert (respondent) Representation: Mr G Jensen appeared for the applicants Mr G Carolan appeared for the respondent Harris Wheeler for the applicants Roberts Legal for the respondent File Number(s): HB 12/48071 Publication restriction: Unrestricted reasons for decision APPLICATION 1This application was commenced in September 2012. The applicants claimed the sum of $43,648.00 against the respondent for breach of statutory warranties. 2In these reasons I will refer to the applicants as the owners and to the respondent as the builder. 3The owners filed Further Amended Points of Claim in the Tribunal on 14 August 2013. Among other things, the owners amended the amount claimed to $95,968.00. 4By way of background, it is common ground that this application relates to a residence at XXXX Floraville (the 'property'). 5The builder was previously the owner of the property and in the capacity of an owner builder carried out renovations and additions to the property (the 'works'). It is common ground that at all material times, the builder was the holder of an owner builder permit in connection with the works. 6The works were carried out in 2008 and 2009. 7In November 2009 the builder sold the property to parties who I will call the 'purchasers' (their identity is immaterial). In December 2011 the owners purchased the property from the purchasers. 8This application concerns water ingress to the property and in particular to the garage of the property. The owners state that they observed water ingress to the property in or about February 2012 and on a number of occasions after that date and that as a result they have sustained loss and damage. 9The owners claim that the water ingress to the property arises as a result of the builder's failure to carry out the works in a proper and workmanlike manner and his failure to construct a retaining wall on the south western side of the property in respect of a battered slope in breach of the terms, conditions and prescriptions contained in the local authorities' Development Consent D/A 1756/2007 and Construction Certificate No CC/1558/2007. 10The builder has filed Points of Defence in the proceedings. He has admitted liability in the sum of $2,422.97 which is exclusive of builder's margin and GST. This admission is in respect of the existing surface of the south side of the garage of the premises. The admission of liability relates to specific work identified in paragraph 11 of the Points of Defence. 11Apart from the admission referred to, the builder states that a build-up of leaf mulch and tree debris and a lack of maintenance on the part of the owners is the cause of the water ingress the subject of this application. 12This application was heard over three days, on 14 and 15 November and on 10 December 2013. I conducted a view of the property on 15 November 2013. JURISDICTION 13Section 48K (1) of the Home Building Act 1989 ( the 'Act') provides that: (1) The Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 (or any other higher or lower figure prescribed by the regulations). 14A 'building claim' is defined in section 48A of the Act as follows: 'building claim means a claim for: (a) the payment of a specified sum of money, or (b) the supply of specified services, or (c) relief from payment of a specified sum of money, or (d) the delivery, return or replacement of specified goods or goods of a specified description, or (e) a combination of two or more of the remedies referred to in paragraphs (a)-(d), that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services, but does not include a claim that the regulations declare not to be a building claim.' 15Further in connection with the meaning of the expression 'building claim', section 48A(2) of the Act states that : a building claim includes the following: (a) an appeal against a decision of an insurer under a contract of insurance required to be entered into under this Act, (b) a claim for compensation for loss arising from a breach of a statutory warranty implied under Part 2C. 16Building goods or services are defined in section 48A of the Act to mean: goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services: (a) supplied by the person who contracts to do, or otherwise does, that work, or (b) supplied in any circumstances prescribed by the regulations to the person who contracts to do that work. 17Residential building work is defined by the Act in section 3 to mean: any work involved in, or involved in co-ordinating or supervising any work involved in: (a) the construction of a dwelling, or (b) the making of alterations or additions to a dwelling, or (c) the repairing, renovation, decoration or protective treatment of a dwelling. 18Section 18B of the Act provides for the implication of the following warranties ("statutory warranties") in the following terms: The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work: (a) a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract, (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new, (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time, (e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling, (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment. 19Section 18C(1) of the Act provides that so far as is relevant that: A person who is the immediate successor in title to an owner-builder, ....is entitled to the benefit of the statutory warranties as if the owner-builder,.... were required to hold a contractor licence and had done the work under a contract with that successor in title to do the work. 20Section 18D(1) of the Act provides that: 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. 21The purchasers being the immediate successors in title to the builder are entitled to the benefit of the statutory warranties in section 18B of the Act. The owners in turn are pursuant to section 18D(1) of the Act entitled to those same rights. I find that the works carried out by the builder was residential work as defined by the Act and that the owners' claim is a building claim as referred to in the Act. There is no dispute that I have the jurisdiction under the Act to hear and determine the owners' building claim. ISSUES 22The major issue in these proceeds is whether the builder was in breach of statutory warranties in constructing the garage, which formed part of the works, other than in respect of the work which he has admitted liability for, namely in respect of the existing surface drainage to the south side of the garage of the premises as identified in paragraphs 5 and 11 of the Points of Defence. 23Part of the issue identified above is the question of whether, as contended for by the builder, the water ingress that is the basis of this application arises because of the build-up of leaf mulch and tree debris and a lack of maintenance on the part of the owners. 24In their Further Amended Points of Claim at paragraph 8, the owners state that there was a failure by the builder to carry the works in a proper and workmanlike manner. I take this allegation to be based on a breach of section 18 B(a) of the Act. They provided the following particulars: (a)Failure to ensure adequate drainage away from the dwelling; (b)Failure to install cut-off drains at embankments around the dwelling; (c)Failure to install dish drains to enable proper drainage away from the dwelling; (d)Failure to ensure any or any adequate grading of the site to enable drainage of surface water away from the property; and (e)Failure to install any or any adequate retaining walls on the property to prevent water ingress. 25The owners' Further Amended Points of Claim at paragraph 9 raises a new issue, namely that the builder did not construct a retaining wall on the south western side of the property in respect of a battered slope in breach of the terms, conditions and prescriptions contained in the local authorities Development Consent D/A 1756/2007 and Construction Certificate No CC/1558/2007. Paragraph 9 of the Further Amended Points of Claim does not state what cause of action arises from the matters pleaded, if proved. However, paragraph 10 of the Further Amended Points of Claim states generally that the builder is in breach of the statutory warranties contained in section 18B of the Act. 26I take the allegation pleaded in paragraph 9 of the Further Amended Points of Claim to be based on a breach of section 18 B(c) of the Act 27In the course of the proceedings a live issue that emerged was whether the builder or any of his workers, contractors or tradesmen had put a 'cut' into the battered slope/embankment on the south western side of the property to accommodate the construction of the garage which formed part of the works. The owners were alleging that the builder was responsible for the cut. The builder denied that he or his workers, contractors or tradesmen were responsible for the cut. The implication being that the cut had been made by other persons before the builder purchased the property. 28During my inspection of the property it was plain to me that a cut had been made to the embankment on the south western side of the property to accommodate the construction of the garage. At that time, the question was who was responsible for the cut. 29I understood the owners' case during the course of the hearing to be that in order to construct the garage, which formed part of the works, it was necessary for the builder to excavate into the battered slope / earth embankment on the south west side of the premises in order to prepare the ground for the garage and in so doing failed to comply with the statutory warranties referred to above. The builder's evidence was that he did not cut into the bank. He called tradesmen who were engaged to perform various parts of the works. Their evidence was that they did not see any activity indicating a cut being put into the bank. While that evidence may have been correct and accepted by me, it does not conclusively establish that the builder did not at any time put the cut into the bank. The builder did not go so far as to state that when he acquired the property it already had the cut into the bank. This would have been the only explanation for the bank being cut to accommodate the southern side of the garage, if the builder is to be believed that he or contractors engaged by him were not responsible for the cut. 30This position was repeated in the owners written submissions. However, in his final oral submission the owners' counsel stated that it didn't matter who did the work of putting the cut into the bank. 31On the basis of this statement, it will not be necessary for me to make a finding about whether or not the builder was responsible for putting the cut into the south west battered slope / earth embankment. 32However I do find that the southern embankment of the property was excavated to accommodate the southern wall of the garage. 33It is useful to state at the outset that from a quantum point of view, the most significant issue is whether the builder should be liable for damages to allow the owners to construct a retaining wall to retain part of the southern embankment of the property on which the premises are constructed. 34The owners' case is based on the fact that the garage of the premises has flooded on a number of occasions since they purchased the premises. In order to recover the amount claimed the owners must prove on the balance of probabilities that the damage complained of was caused by a breach of one or more of the statutory warranties. As was stated by Ipp JA at paragraph 71 in Allianz v Waterbrook [2009] NSWCA 224 : "The point remains that Waterbrook must prove that it sustained loss and that, whatever loss it suffered, there was an appropriate causal connection between its loss and the breaches of the statutory warranties: cf Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310 at 330 A-B and 331 B-C per Mahoney JA and 349E per McHugh JA." 35The evidence in the proceedings raises a number of possible causes for the flooding of the garage. Those possible causes are: (a)rain water flows into the garage from the eastern side of the premises because the driveway in front of the garage 'falls' back into the garage, when it ought to 'fall' away from the garage entrance; (b)the builder failed to carry out the drainage element of the works in a proper and workmanlike manner; (c)the builder failed to construct retaining walls; (d)the owners have failed to maintain the gutters and downpipes of the garage roof; and (e)the owners failed to maintain the southern side of the garage in a proper manner including allowing an agricultural drainage line on the southern side of the garage to become non-functional. 36In addition the builder submits that a presumption of regularity operates in his favour by virtue of the fact that he applied for and obtained an occupation certificate from the relevant council. The presumption that the builder seeks to invoke is that all conditions attached to the Notice of Development consent were satisfied by him. 37The builder also submits that because the owners obtained a pre-inspection report, they should be taken to have purchased the property with full knowledge of the defects that they now complain of. This knowledge is submitted to preclude the owners from recovery in relation to those defects. OWNER'S EVIDENCE 38The owners' evidence was as follows: (a)Exhibit A - Applicant's hearing bundle; (b)Exhibit B - documents from Lake Macquarie Council; (c)Exhibit C - Slope Conversion worksheet; (d)Exhibit D - Australian Building Codes B and Part 3.1.1; (e)Exhibit E - Figure 3.1 of AS 2870 - 1996 (f)Exhibit F - letters dated 24 September 2001 from Holmes Henderson Savage; (g)Exhibit G - Bundle of Document produced by Henderson - Civil Engineers Pty Ltd; (h)Exhibit - H Bundle of documents produced by Mr Lambert; and (i)Exhibit I - 2012 version of Australian Building Codes Board. RESPONDENT'S EVIDENCE 39The builder's evidence was: (a)Exhibit 1 - .statement of Richard Lambert undated; (b)Exhibit 2 - affidavit of Richard Lambert sworn 10 July 2013; (c)Exhibit 3 - statement of Richard Lambert dated 26 August 2013; (d)Exhibit 4 - expert report of Denis Barnett dated 18 January 2013; (e)Exhibit 5 - expert report of Denis Barnett dated 22 May 2013; (f)Exhibit 6 - statement of Scott Mc Gufferty dated 10 April 2013; (g)Exhibit 7 - Statements of Rex Henderson; (h)Exhibit 8 - .statement of Richard Poole; (i)Exhibit 9 - statement of John Henderson; (j)Exhibit 10 - statement of Tim Glasson; (k)Exhibit 11 - Affordable Property Inspection Report dated 4 November 2011; (l)Exhibit 12 - bundle of 4 roof photographs; (m)Exhibit 13 - View from bank; (n)Exhibit 14 - photograph of agricultural line; (o)Exhibit 15 - Towndrow plans - approved 8 sheets; (p)Exhibit 16 - Henderson tax invoice 5 September 2007. DA/1756/2007 40First I will deal with the issue raised by the owners in paragraph 9 of the Further Amended Points of Claim. The issue of the retaining wall and the treatment of the embankment on the south side of the property was a significant issue relating to water ingress to the garage of the premises. It received great deal of attention at the hearing. This issue has its genesis in DA/1756/2007. 41It is common ground, on the basis of the owners' Further Amended Points of Claim and the builder's Points of Defence, that on or about 2 November 2007 the builder obtained DA/1756/2007 for the works and that on 19 May 2009 an occupation certificate was issued under section 109(1) (c) and 109H of the Environmental Planning and Assessment Act 1979. 42As stated above, the owners amended their claim to include the allegation that the builder did not construct a retaining wall on the south western side of the property in respect of a battered slope in breach of the terms, conditions and prescriptions contained in the local authorities Development Consent D/A 1756/2007 ('Notice of Determination') and Construction Certificate No CC/1558/2007. As I have said, I understand the owners' case to be that this failure, if proved, supports a claim that there has been a breach of the implied statutory warranty contained section 18B(c) of the Act, namely that the work would be done by the builder to comply with the law. 43The builder in his final written submissions at paragraph 13 states that 'there was no reference on the approved plans to the requirement to construct an engineered retaining wall on the embankment at the southern side of the house or the garage extension.' 44In my view it is necessary to have regard to the Notice of Determination to ascertain its requirements. The builder in his outline of submissions concedes the following matters in connection with the Notice of Determination: (a)That it approved the plans identified as P06-07 - the 'Towndrow' Plans; (b)Clause 6 required that stormwater should be disposed through a piped system to the satisfaction of the Principal Certifying Authority in accordance with AS 3500; (c)Clause 7 stipulated that 'Wherever the soil conditions so require, a retaining wall or other approved methods of preventing movement of the soil shall be provided and adequate provision made for drainage'; (d)Each approved Towndrow Plan bore the notation 'Maximum unretained soil batter slope 2H:1V. Existing batter slopes greater than 1m must be inspected and approved by suitably qualified engineer. Qualified geotechnical engineer must assess all founding conditions prior to construction.' 45I find that Towndrow plans DA00, DA01,DA04 and DA05, each of which has the reference P06-07, bear the notation referred to in sub -paragraph (d) above. I also find that the Notice of Determination contained a condition that the work to which it referred was to be carried out in accordance with the Building Code of Australia. 46It is true that the Notice of Determination contains no unconditional requirement for a retaining wall on the embankment at the southern side of the house or the garage extension. However, having regard to the wording of clause 7 of the Notice of Determination as set out above, there was clearly a requirement for a retaining wall or another approved method of preventing movement of the soil 'Wherever the soil conditions so require'. 47While the builder's submission that 'there was no reference on the approved plans to the requirement to construct an engineered retaining wall on the embankment at the southern side of the house or the garage extension.' is strictly correct, the submission nonetheless fails to address clause 7 of the Notice of Determination and the endorsements on the Towndrow plans. 48In my view the conditions to the Notice of Determination required three things in relation to the southern embankment. First, it stipulated that the maximum un-retained soil batter slope was to be 2H:1V. Secondly, it required existing batter slopes greater than 1m to be inspected and approved by a suitably qualified engineer. Thirdly, it stated that wherever the soil conditions required, a retaining wall or other approved method of preventing movement of the soil was to be provided and adequate provision made for drainage. 49The first of the issues referred to in the preceding paragraph is in my view a mandatory requirement. In relation to the second and third issues, an engineer was to inspect batter slopes greater than 1m and in addition also to consider whether soil conditions required a retaining wall. 50I also find that the handwritten notations on the Towndrow Plans formed part of the Notice of Determination. I do not think that this finding will be controversial since the builder has stated in his Outline of Submissions that the endorsed notes on the Towndrow Plans appeared to have been added by the local council during the course of consent, as contemplated by clause 2(ii) of the Notice of determination. 51Finally in connection with the Notice of Determination, the owners' counsel proceeded on the basis that the Notice of Determination included by reference a specification dated May 2007 prepared in connection with the premises by Towndrow Pty Ltd. There was no reference in the conditions of the Notice of Determination to this specification. In my view and I so find, condition 2(a) does not incorporate Towndrow Pty Ltd specification dated May 2007 because that document is not stamped "Development Consent No. 1756/2007'. PRESUMPTION OF REGULARITY 52The builder raised the issue of the presumption of regularity in his final written submissions. It was not raised in the Points of Defence. The submission by the builder at paragraph 36 of counsel's submissions is that the owners have not demonstrated any reason to 'challenge the presumption of regularity that would otherwise attend upon the issue of the Certificate of Inspection by the Council and the issue of the Certificate of Occupation'. 53The effect of the builder's submission on the presumption of regularity, if accepted, would be that the occupation certificate was, in the context of these proceedings, conclusive evidence of the satisfaction of the conditions to the Notice of Determination. 54The case of Hill v Woollahara Municipal Council and Ors [2003] NSWCA 106, 127 LGERA was relied upon in support of this submission. 55At paragraphs 50 and 51 of his judgement, Hodgson JA, with whom Ipp JA and Davies AJA agreed, stated: "The cases of Ligon 302 and Zhang are authority for the proposition that, where a body such as a local council is required by a statute to address a question posed by that statute or by an instrument referred to by the statute, it must address that very question. If it does not do so, it will be in breach of the statute, even though it may have adverted to the topic of the question. However, when a court comes to consider whether or not such a breach has occurred, the court will have regard to the presumption of regularity. This presumption was relevantly stated as follows by McHugh JA in Minister for Natural Resources v. NSW Aboriginal Land Council (1987) 9 NSWLR 154 at 164 at follows: 'Where a public official or authority purports to exercise a power or to do an act in the course of his or its duties, a presumption arises that all conditions necessary to the exercise of that power or the doing of that act have been fulfilled'. See also Morris v. Kanssen [1946] AC 459 at 475; Western Stores Ltd. v. Orange City Council [1971] 2 NSWLR 36 at 46-7." 56The builder's statement which is exhibit 1 contains at annexure F an inspection report dated 2 June 2008 which concerns itself with stormwater drainage connection lines on the southern side of the premises, stating that work is satisfactory. An Occupation Certificate dated 19 May 2009 provided under section 109C(1) (c) and 109 H of the Environmental Planning & Assessment Act 1979 is at annexure G to the statement. 57Sections 109C(1) (c) and 109 H of the Environmental Planning & Assessment Act 1979 (as at 19 May 2009) stated, so far as is relevant, that: (1)The following certificates (known collectively as Part 4A certificates) may be issued for the purposes of this Part: (c) an occupation certificate, being a certificate that authorises: (i) the occupation and use of a new building, or (ii) a change of building use for an existing building,' 109H Restrictions on issue of occupation certificates (1) There are two kinds of occupation certificates, as follows: (a) an interim occupation certificate that authorises a person to commence occupation or use of a partially completed new building, or to commence a new use of part of a building resulting from a change of building use for an existing building, (b) a final occupation certificate that authorises a person to commence occupation or use of a new building, or to commence a new use of a building resulting from a change of building use for an existing building. It is not necessary for an interim occupation certificate to be issued before a final occupation certificate is issued with respect to the same building. (2) An occupation certificate must not be issued unless any preconditions to the issue of the certificate that are specified in a development consent or complying development certificate have been met. (3) [deleted for the purpose of this citation as being not relevant] (4) [deleted for the purpose of this citation as being not relevant] (5) A final occupation certificate must not be issued to authorise a person to commence occupation or use of a new building unless: (a) a development consent or complying development certificate is in force with respect to the building, and (b) in the case of a building erected pursuant to a development consent but not a complying development certificate, a construction certificate has been issued with respect to the plans and specifications for the building, and (c) the building is suitable for occupation or use in accordance with its classification under the Building Code of Australia, and (d) such other matters as are required by the regulations to be complied with before such a certificate may be issued have been complied with. (6) A final occupation certificate must not be issued to authorise a person to commence a new use of a building resulting from a change of building use for an existing building unless: (a) a development consent or complying development certificate is in force with respect to the change of building use, and (b) the building is suitable for occupation or use in accordance with its classification under the Building Code of Australia, and (c) such other matters as are required by the regulations to be complied with before such a certificate may be issued have been complied with. (7) In this section: new building includes an altered portion of, or an extension to, an existing building.' 58The builder places reliance in his submissions on section 109 H(2) of the Environmental Planning & Assessment Act stating that inspections had been carried out under section 109E of the Environmental Planning & Assessment Act. The builder's submission is therefore that by reason of the issue of the Occupation Certificate dated 19 May 2009, the presumption of regularity as referred to above operates to import a presumption that the preconditions to the issue of the occupation certificate that are specified in the Development Consent have been met. 59On or about 2 November 2007 the builder obtained DA/1756/2007 for the works. A copy of the Notice of Determination is annexure C to the builder's undated statement which is exhibit 1. There are 15 conditions to the Notice of Determination. 60Having regard to the reasons expressed above under the heading 'DA/1756/2007', I find that the three issues referred to were pre-conditions to the issue of an occupation certificate, being contained in conditions 2(b)(ii) and 7 of the Notice of Determination. Those issues were, as stated, first, that the maximum un-retained soil batter slope was to be 2H:1V. Secondly, existing batter slopes greater than 1m were to be inspected and approved by a suitably qualified engineer. Thirdly, wherever the soil conditions required, a retaining wall or other approved method of preventing movement of the soil was to be provided and adequate provision made for drainage. 61The builder's position is that it is presumed that the preconditions to the Development Consent as referred to have been met meaning, for the purposes of these proceedings, that the retained slope batter was 2H:1V, that existing batter slopes were inspected and approved and that the soil conditions did not require a retaining wall to be provided with adequate provision for drainage. 62I have not been referred to any authority which deals with the question of whether the presumption referred to may be rebutted. However the answer to that question may be found in Minister for Natural Resources v. NSW Aboriginal Land Council (1987) 9 NSWLR 154 at 164 where McHugh JA refers to a quote from Broom's Legal Maxims which concludes by stating that 'everything is presumed to be rightly and duly performed until the contrary is shown'. Further, Cross on Evidence at paragraph 1175 makes it clear that a presumption of regularity is not irrebuttable. 63Based on the content of the preceding paragraph, I will proceed on the basis that the presumption of regularity is rebuttable. 64The builder's reliance on the presumption of regularity was not raised until final submissions. As stated above, the builder submits that the owners have not demonstrated any reason to 'challenge the presumption of regularity that would otherwise attend upon the issue of the Certificate of Inspection by the Council and the issue of the Certificate of Occupation'. The owners' counsel was, in my view, because the point was raised at closing, unable to consider this issue and to make any considered reply regarding the challenge referred to. 65I will approach this issue on the basis that there is evidence before the Tribunal which bears upon the presumptions that the builder would have made in his favour. I will therefore deal with the evidence which is before the Tribunal on the three issues which I have identified above. WERE THE CONDITIONS OF THE NOTICE OF DETERMINATION COMPLIED WITH? 66The builder states that because of the presumption of regularity it is to be presumed in his favour that he complied with the conditions of the Notice of Determination and as a result will not be in breach of the statutory warranty to comply with the requirements of the law. The other side of that coin is the owners' allegation that the builder is in breach of the conditions of the Development Consent and their reliance upon the evidence in support. 67The owners in their written submissions state that the Towndrow Plans noted that the south side of the garage would be excavated into an embankment and that an engineer was required to design a retaining wall out of concrete blocks - pursuant to engineers design and detail. 68The Towndrow Plans do not contain a notation to this effect. The builder's submission as referred to above, states that the Towndrow plans contains no such requirement or reference. I agree. The owners' submission is therefore rejected. 69The owners have obtained a report from Mr Tony Dockrill of Izzat. Mr Dockrill is an experienced engineer. He prepared a report dated 10 May 2013 which is in evidence as part of exhibit A. Mr Dockrill's status as an expert was not challenged. I accept him as a witness capable of providing opinion evidence. In paragraph 3 of his report he expresses the opinions that 'the drainage of the property has not been carried out in a fit and proper workmanlike manner'. He also states that 'the erosion of the exposed embankment, the formation of tension cracks in the embankment and the high risk of collapse is a direct result of inadequate drainage' and 'due to the embankment being constructed with a slope far steeper than acceptable limits, the embankment has a high risk of collapse.' 70In paragraph 3.3.2 on page 11 of his report Mr Dockrill refers to the Towndrow Plans and the notations on them which are referred to above. He states that in his opinion that the hand written notations which are on the Towndrow Plans have not been complied with. He states that 'the maximum unretained batter height that I measured is 2.657m which is significantly higher than the 1m limit.' I take it that Mr Dockrill is referring to the notation on the Towndrow Plans that 'Existing batter slopes greater than 1m must be inspected and approved by suitably qualified engineer'. In any event, I accept Mr Dockrill's evidence regarding unretained batter height. 71Mr Dockrill also states that 'The maximum unretained soil batter slope measured was 61° which is significantly higher than the 2h:1v (26.6°). I take it that Mr Dockrill is referring to the notation on the Towndrow Plans that 'Maximum unretained soil batter slope 2H:1V'. I accept Mr Dockrill's evidence regarding the batter slope. 72In section 4 of his report, Mr Dockrill identifies and describes the rectification works which he states are required to address: (a)inadequate drainage at the garage entry; (b)inadequate drainage at the laundry entry; (c)access along the southern side of the dwelling; and (d)the unstable embankment 'resulting from the disregard to the council conditions as noted in' paragraph 3.3.2 of his report. 73In my view Mr Dockrill's report contains evidence capable of sustaining the view that the builder breached the Notice of Development in at least two material respects. First, that the embankment on the southern side of the property was steeper than the permissible maximum unretained slope batter of 2H:1V and secondly, higher than the permissible height of 1 metre without approval by a suitably qualified engineer. Both of these matters arise as stipulated by the hand written notations on the 'Towndrow' Plans which are conceded by the builder to form part of the Notice of Determination. 74The owners also relied upon a report from engineers Barker Harle dated 19 April 2012 prepared by Mr Storr. Barker Harle had previously prepared an engineering report for the builder to assist him in his application for development consent. That report was dated 25 June 2007. It is highly likely that the hand written notations on the Towndrow Plans were taken from the Barker Harle 25 June 2007 report. 75The Barker Harle 19 April 2012 report states that the embankment was at an angle of 'approximately 60 degrees' and thereby corroborates Mr Dockrill's evidence on that issue. The report further offers the opinion that that development of the property has not been carried out in accordance with the recommendations contained in the Barker Harle 25 June 2007 report. 76Mr Storr's recommendations in the Barker Harle 19 April 2012 report were to the effect that the embankment adjacent to the garage area and to the south be retained by the construction of a reinforced block retaining wall with suitable drainage, described in detail in the report. 77The Barker Harle 25 June 2007 report, in its entirety, was not referred to or incorporated into the Notice of Determination. As such I do not consider that document to have any significance in connection with the statutory approval process relating to the construction of the works. 78The builder relied upon the engineering reports of Mr Rex Henderson of Henderson Civil Engineering Pty Ltd, dated 8 May 2013, 7 May 2012 and 23 November 2012 which are exhibit 7. Mr Henderson was the engineer retained by the builder to provide engineering services when the works were carried out. Mr Henderson states that no request was made to him to design a retaining wall on the southern side of the premises, and as a result no design was provided. 79Mr Henderson states in his report of 8 May 2013 that when the works were being carried out, it was considered that the construction of a formal retaining wall was unnecessary and was not recommended by him. The reason for this view was stated to be the 'fact that the embankment had remained stable for such a long period of time.' 80Mr Henderson's opinion was that the flooding of the garage that the owners complained of was the result of a lack of maintenance of drains The drains identified by Mr Henderson were an open dish drain on the top of the embankment on a neighbouring property and an open earth drain at the toe of the embankment on the southern side of the premises grading in a westerly direction. Mr Henderson also stated that when he inspected the premises on 20 April 2012 he observed that roof gutters were blocked by leaves and debris. 81Mr Denis Barnett also provided expert reports on behalf of the builder. He prepared a report dated 18 January 2013 which is exhibit 4 and a supplementary report dated 22 May 2013 which is exhibit 5. I have formed the view that Mr Barnett's reports are not relevant to the three issues relevant to the Notice of Determination as referred to in paragraph 43. 82In connection with the first matter identified as arising out of the Notice of Determination namely that the maximum un-retained soil batter slope was to be 2H:1V, Mr Henderson's reports indicate to me that the builder, in breach of the Notice of Determination, did not deal with this issue at all. Mr Henderson, the engineer who was engaged by the builder in connection with the execution of the works does not address this issue in his evidence. 83In connection with the second matter identified as arising out of the Notice of Determination namely that existing batter slopes greater than 1m were to be inspected and approved by a suitably qualified engineer, the evidence does not indicate that this issue was given specific consideration. 84In my view Mr Henderson did not take the issue of batter slope height into account as part of his opinion as expressed in his 23 November 2012 report, that the earth embankment on the southern side of the residence was stable and not in danger of collapse. The owners' counsel submitted that Mr Henderson conceded that in connection with this issue, he provided a retrospective certification when the issue 'blew up'. I have examined my notes of the hearing and have regard to the recording of the hearing. I have found no such statement by Mr Henderson. 85After reading Mr Henderson's reports and hearing his evidence before the Tribunal, I have come to the conclusion that he did not give the hand written notations on the Towndrow drawings much, if any, consideration at all. 86In connection with the third matter identified as arising out of the Notice of Determination, namely the requirement of the Notice of Determination that 'Wherever the soil conditions so require, a retaining wall or other approved methods of preventing movement of the soil shall be provided and adequate provision made for drainage', the evidence on behalf of the builder, being that from Mr Henderson was that as regards the southern side of the premises he considered that the construction of a formal retaining wall was unnecessary because of the 'fact that the embankment had remained stable for such a long period of time'. When being cross examined Mr Henderson was clear that he made the decision that there was no requirement for a retaining wall. 87I find that this evidence establishes that the builder had his engineer consider the southern embankment. The engineer, Mr Henderson formed the view that the soil conditions did not require a retaining wall. Because of that evidence I find that the builder was not in breach of clause 7 of the Notice of Determination. 88It follows from the reasons set out above that I have found that the builder was in breach of the Notice of Determination in that he failed to comply with its requirement that the maximum un-retained soil batter slope was to be 2H:1V. It also follows that the builder did not comply with the requirement that the batter slopes greater than 1m were to be inspected and approved by a suitably qualified engineer. Finally, as stated, the builder did comply with clause 7 of the Notice of Determination. 89In connection with the findings above, there is no presumption in the builder's favour that the issue of the occupation certificate establishes that the maximum un-retained soil batter slope was in fact 2H:1V, or that batter slopes greater than 1m were inspected and approved by a suitably qualified engineer. 90The result of these findings leads to the conclusion that the builder was in breach of the statutory warranty implied by section 18B(c) of the Act, namely that the work would be done in accordance and in compliance with the law. 91While the reasons above deal with the builder's compliance with the Notice of Determination, the fact that the builder did not comply with two conditions does not necessarily mean that he will be liable for damages. For the owners' allegation in paragraph 9 of the Further Amended Points of Claim to entitle them to damages they must still establish that the lack of a retaining wall has caused the garage to flood. The statement of Ipp JA in Allianz v Waterbrook referred to at paragraph 34 above, that there must be an appropriate causal connection between the owners loss and the breaches of the statutory warranties, is a reminder of the need to identify the causal connection between the breaches I have found and the damage sustained. I deal with this issue later in these reasons. 92Having dealt with the owners' allegation regarding the builder's breach of the Notice of Determination as raised in paragraph 9 of the Further Amended Points of Claim, I will consider the other of the owners' claims as set out in paragraph 8 of the Further Amended Points of Claim that there was a failure to carry out work in a good and workmanlike manner. FAILURE TO CARRY OUT THE WORKS IN A GOOD AND PROPER MANNER 93The first item of this claim is that there was a failure by the builder to ensure adequate drainage away from the dwelling. 94The second item of this claim is that there was a failure to install cut-off drains at embankments around the dwelling. 95The third item of this claim is that there was a failure to install dish drains to enable proper drainage away from the dwelling. 96The fourth item of this claim is that there was a failure to ensure any or any adequate grading of the site to enable drainage of surface water away from the property. 97The fifth item of this claim is that there was a failure to install any or any adequate retaining walls on the property to prevent water ingress. 98I have already dealt with the owners' allegations about the failure to install retaining walls in breach of the Notice of Determination. 99Three of the complaints made by the owners relate to drainage issues. I will now consider the owners' case in connection with drainage issues which is that the builder failed to carry out this work in a proper and workmanlike manner, the instances of which are reproduced in the preceding paragraphs. 100However before I go to the detail of that, I will consider the builder's Allianz Australia Insurance Ltd v Waterbrook point which cuts across the defective drainage work issue. ALLIANZ AUSTRALIA INSURANCE LTD v WATERBROOK at YOWIE BAY PTY LTD 101The builder has cited the above case in support of the proposition raised in final submissions that the owners are not entitled to recover the amount claimed because the pre inspection report that they obtained before purchasing the property disclosed drainage issues. 102Before I consider this submission, it is worth noting what was said at paragraph 22 of these reasons, namely that the builder has admitted liability in respect of the existing surface drainage to the south side of the garage of the premises as identified in paragraphs 9 and 11 of the Points of Defence. It is possible that the builder's position in its points of defence is inconsistent with its final submissions. In considering whether or not to accept the builder's final submission on this point, I have taken into account whether the builder making this submission has caused procedural unfairness to the owners because this was not an issue raised on the pleadings. In my view this did not cause the owners procedural unfairness or disadvantage. My reasons for coming to this conclusion are that the facts relating to this issue are limited. First, there is the factual issue of whether or not a pre inspection report existed. The owners are not in my view prejudiced by the fact that the pre inspection report was produced in the proceedings. They commissioned it and cannot be said to have been denied the opportunity to consider it, at some point in time. Secondly, the fact is that Mr Capone was cross examined on the pre-inspection report without objection. What arises as a result of the pre inspection report and Mr Capone's cross examination leads to a purely legal issue for decision. Finally, because of the limited factual matters relating to this issue, I would have, if an application had been made, granted leave to amend the defence to allow the builder to raise the Allianz Australia Insurance Ltd v Waterbrook issue. 103If it is contended that the builder's failure to raise the Allianz Australia Insurance Ltd v Waterbrook issue has had a costs impact, I will deal with that in the course of dealing with costs submissions. 104A report by Affordable Inspections dated 4 November 2011 (the 'report') which is in evidence as exhibit 11 was carried out on behalf of the owners before they completed the purchase of the property. 105In the section of the report on page 17 dealing with the garage, the report notes in connection with internal walls 'Evidence of lateral damp was noted. This may be the result of a cavity bridge, plumbing leak or other undetected moisture source or defect. This situation should be further investigated and rectified.' 106In the section of the report dealing with the 'Site' on page 18 comments are made about 'Drainage - Surface Water'. The report states 'The drainage at the left side of the property appears inadequate. As a result, evidence suggests that surface water has been ponding. Poor site drainage can create unstable foundations that may have an adverse structural effect over time. Rectification is required. Drains should be installed to divert seepage and surface runoff water away from the house. The drains should be connected to the existing stormwater drainage system.' 107In Allianz v Waterbrook [2009] NSWCA 224, Ipp JA, with whom Hodgson JA agreed, after considering the position of a successor in title who purchased property with knowledge of its defects and whether such a purchaser could nonetheless recover loss or damage associated with such defects stated: "110 In my opinion, applying the same reasoning, a successor in title who acquires a building in full knowledge of its defects, suffers no loss from the existence of those defects. In those circumstances, the builder's breach of statutory warranty could not be said to have diminished the successor's assets, nor increased its liabilities. Any adverse impact to the successor's financial position, and any loss to the successor, would result from the successor knowingly and deliberately paying more for the building than it was worth. The loss would be caused by the successor's own decision to purchase at the agreed price. 111 The observations in [110] are predicated on the "full knowledge" of the defects being not only knowledge of the existence of the defects but also knowledge of their significance. A party may know of the existence of defects (because they are patent), but may not appreciate - even acting reasonably - that major expenditure would be required to remedy them. 112 The remarks in [110] are made generally. I repeat that question 2 is couched in terms that bear no reference to any facts, agreed or otherwise. I proceed to consider how the principles of causation bear on the matters raised by the question. 113 Causation in contract is to be determined by commonsense principles: Alexander v Cambridge Credit Corporation Ltd at 358 per McHugh JA. I have explained why I do not regard the relevant legislation as providing for any different meaning to "loss" as would be attributed to the term according to the general law. Applying those principles, should it be found that Waterbrook acquired the Village in full knowledge of the defects that exist, I would conclude that Waterbrook would fail to establish causation and legal responsibility for its loss. In such circumstances, Waterbrook's knowing and deliberate act in acquiring the Village would constitute a new and independent cause of harm." 108The male applicant, Mr Capone stated in cross examination that he read the Affordable Inspections report and the section on page 3, which was a summary, but repeated the comments from page 18 as referred to above, about drainage and surface water, suggesting that a licensed builder and plumber be called to make an evaluation and carry out work to rectify the issues identified. Mr Capone also stated that he read page 17 of the report and the reference to lateral damp in the internal walls in relation to the garage, but the owners did not have time. I presume that Mr Capone meant that he did not have the time to look into that issue or to do anything about it before settlement. 109In cross examination about drainage and surface water as referred to on page 8 of the report Mr Capone was insistent that he accompanied the building inspector and that he was shown ponding of water on the western side of the property, behind the laundry which is on the right hand side of the property. 110Nonetheless Mr Capone agreed that page 3 of the report referred to the left hand side of the property around the garage area. 111Mr Capone agreed that the owners took the report into account with the price of the property, as far as they could. 112In re-examination, Mr Capone identified the left hand photograph at the bottom right of page 18 as being behind the laundry of the premises. Mr Capone also stated that he read page 19 of the report which stated that the general adequacy of the site drainage was not included in a Standard Property Inspection Report. Mr Capone also stated that he read the paragraph on page 20 about retaining walls, which paragraph is in effect, a disclaimer. 113The decision of Ipp JA in Allianz v Waterbrook as referred to above will be of relevance if the evidence establishes that the owners acquired the property in full knowledge of its defects both as to their existence and their significance. 114The drainage defects that the owners allege are failures to: (a)ensure adequate drainage away from the dwelling; (b)install cutoff drains at embankments around the dwelling; and (c)install dish drains to enable proper drainage away from the dwelling; 115The report does not deal with issues such as cut-off drains or dish drains. It does however deal with drainage at the left hand side of the premises which is where the garage is situated. The report states in connection with this area, 'Drains should be installed to divert seepage and surface runoff water away from the house.' In my view the reference to drains should be taken to encompass drains of various forms such as dish drains, cut-off drains or grate drains. 116Mr Capone' evidence gave the impression that he was more focussed on the right hand side of the premises during the inspection that took place before the report was prepared. Nonetheless he was given a copy of the report which makes a clear recommendation about the garage area of the premises. 117The only aspect of these proceedings that relates to the garage area, as opposed to the area behind the garage, the southern embankment, is the issue of the water ponding in front of the garage because the ground surface rises 123mm over the first 3 metres from the front edge of the garage slab as referred to by Mr Dockrill in his 10 May 2013 report where he states that the 'Surface falls towards the garage'. 118Having regard to the report and Mr Capone's evidence about his consideration and understanding of it, I find that by reason of the report and Mr Capone's reading of it, the owners acquired the property in full knowledge of the drainage issues at the left hand side of the property. 119The owners claim for a failure by the builder to ensure adequate drainage away from the dwelling in their Further Amended Points of Claim. Having regard to the decision of the Court of Appeal in Allianz v Waterbrook ,I find that any loss or damage claimed by the owners for the provision of adequate drainage away from the left hand side of the property was not caused by the builder's breach of a statutory warranty, but was caused by the owners' decision to purchase the property for an amount more than what it was worth. In that regard, Mr Capone stated that he took the report into account so far as the price was concerned. 120For these reasons I find that the owners cannot recover against the builder for a failure by the builder to ensure adequate drainage away from the premises. The fact that the report contains disclaimers which the owners may have read does not cause me to change this view. If disclaimers in property inspection reports could be relied upon in cases by successors in title against predecessors in title under the Act, the principles stated by Ipp JA in Allianz v Waterbrook would be defeated which can hardly have been the intention of the Court of Appeal in that case. 121The report in dealing with the garage stated in connection with internal walls, 'Evidence of lateral damp was noted.' The greater part of the owners' claims relate to the garage itself and that by reason of water ingress to the garage from the southern side it is necessary to construct retaining walls. I am of the view that the evidence of Mr Capone and the section of the report on page 17 which comments on the Internal Walls Condition of the Garage does not establish that the owners acquired the property in full knowledge that the absence of retaining walls was causing water ingress damage to the garage of the premises. 122As a result I find that what was said By Ipp JA in Allianz v Waterbrook, as referred to above prevents the owners from proceeding with their claims relating to failures by the builder to: (a)ensure adequate drainage away from the left hand or garage side of the dwelling; (b)install cutoff drains at embankments around the left hand or garage side of dwelling; and (c)install dish drains to enable proper drainage away from the left hand or garage side of dwelling, but does not prevent the owners from maintaining their claim about retaining walls in relation to which, findings have been made. BALANCE OF THE OWNERS' CLAIMS 123Having regard to the finding above based on the content of the report and was said by the Court of Appeal in Allianz v Waterbrook, the owners' claim that the builder failed to ensure any or any adequate grading of the site to enable drainage of surface water away from the property remains for consideration. In this regard I do not regard an alleged failure to grade to come within the scope of what was said at page 18 of the report about 'Drainage - Surface Water'. 124Mr Dockrill refers to this issue at paragraph 2.8 of his report dated 10 May 2013. His evidence is that he has taken levels at the entrance of the garage and that his investigations disclose that the ground rises approximately 123mm 'over the first three metres from the front edge of the garage slab'. This gives rise to the probability that if rainwater pools it will flow back into the garage when it ought to flow away from the garage. 125There is no evidence on behalf of the builder to contradict Mr Dockrill on this issue. I accept Mr Dockrill's evidence in connection with the levels at the entrance of the garage and that if rain water pools at the front of the garage it will flow back into the garage. 126I will therefore make a finding in favour of the owners that the builder was in breach of section 18B(a) of the Act in constructing the garage and such that the surface in front of the garage was not constructed in a proper and workmanlike manner in that it 'fell' back toward the entrance of the garage when it ought to have 'fallen' away from the garage entrance. NEW HEAD OF CLAIM - FOOTINGS 127In his final submissions the owners' counsel submitted that the builder 'constructed a footing on the south garage wall that was 500mm deep' when it should have been '800mm under the terms of the Development Consent'. 128This issue is not pleaded in the owners' Further Amended Points of Claim. The owners' experts do not refer to such an issue. In addition, the owners do not seek relief in connection with this allegation. I would also add that this issue was developed in cross examination by the owners' counsel. There is no expert evidence to suggest that the depth of the footing under the south garage wall has an effect on the issues raised by the owners in their Further Amended Points of Claim. 129I have not been asked to rule on this issue and accordingly I make no findings in connection with it . CAUSAL CONNECTION 130At paragraph 35 of these reasons I set out what I considered to be the possible causes of the flooding of the garage which is the basis of the owners' case in these proceedings. 131The learned authors of 'Contract Law in Australia', Fifth Edition at paragraph 35-21 state the position as follows when there are multiple causes of loss: "Difficulties of causation may arise where the plaintiff's loss or damage occurs partly as a result of the defendant's breach and partly as a result of some other factor. Nevertheless, if there are concurrent causes it is sufficient that one of these is the defendant's breach. In cases where one factor has more relevance than others it is sufficient for the defendant's breach to be the 'decisive' or 'dominant' cause.....Thus most formulations of causation now accept that it is sufficient for the breach to be a cause of the loss or damage." 132The case of Alexander and Others v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310 is authority for the above proposition. McHugh JA stated at page 358: "...to establish a causal connection between a breach of contract and the damage which the plaintiff has suffered, he needs only to show that the breach was a cause of the loss. This is to be decided by the application of commonsense principles. In general, the application of the "but for" test will be sufficient to prove the necessary causal connection. But that test is only a guide. The ultimate question is whether, as a matter of commonsense, the relevant act or omission was a cause." 133Glass JA at page 315, paragraph 4, states the same thing. 134My findings above are that the builder was in breach of two of the matters required by the Notice of Determination. First, that the maximum un-retained soil batter slope was to be 2H:1V. Secondly, existing batter slopes greater than 1m were to be inspected and approved by a suitably qualified engineer. 135Had the builder complied with the requirement that that the maximum un-retained soil batter slope was to be 2H:1V, in my view on the evidence before the Tribunal, a retaining wall with associated drainage would have been built to retain a soil batter slope of 61°. 136I find on the evidence of Mr Dockrill and Mr Storr that if a retaining wall had been built to retain the southern slope of the premises, with associated drainage, water drainage on the southern side of the garage would have been managed so that water ingress of the garage from that southern side would have been prevented. 137There are other possible causes for the water ingress to the garage. At paragraph 35 (a) of these reasons I described a possible cause of the flooding of the garage to be that rain water flows into the garage from the eastern side of the premises because the driveway in front of the garage 'falls' back into the garage, when it ought to 'fall' away from the garage entrance. 138I have found in the owners' favour in connection with this cause of water ingress into the garage. 139A further cause of water entering the garage is as described by Mr Barnett in his supplementary report dated 22 May 2013. Mr Barnett states that an agricultural drainage system as positioned at the rear of the garage south wall is 'humped', that is rises out of the ground for a short distance and would prevent or block water flow through the drainage system taking water away from the rear of the garage. Mr Barnett goes on to say that the effect would be that the agricultural drainage system would not be effective during heavy rain storms and would 'tend to overflow allowing stormwater to pool and enter or seep into the garage.' I accept this evidence. 140The builder's evidence in relation to this issue is contained in his affidavit of 10 July 2013 in paragraphs 6 - 11. The builder's evidence is that he installed an agricultural line down the southern wall of the garage and across the front of the garage where it was connected to a stormwater line. The builder refers to a City of Lake Macquarie inspection report dated 2 June 2008 which concerns itself with stormwater drainage connection lines on the southern side of the premises. I also accept this evidence. 141Counsel for the builder in his submissions deals with this issue and points out that the owners' expert Mr Dockrill has failed to address this issue. I accept these submissions, and in particular the submission at paragraph 29. However the issue of the 'humped' agricultural drainage line does not persuade me that this cause is the sole or predominant cause of the water entry into the garage being a cause for which the builder is not responsible. 142Yet a further cause of water entry into the garage is leaf litter on the garage roof and in garage gutters. This is a maintenance issue. The evidence indicates that while leaf litter on the garage and roof may have been a factor in the flooding of the garage, it would not have been the sole cause of flooding. In any event Mr Capone's evidence was that he did attend to cleaning the roof gutters. As with the 'humped' agricultural drainage line I am not persuaded that this cause is the sole or predominant cause of the water entry into the garage being a cause for which the owner is responsible. In addition Mr Henderson has stated that the owners are responsible for the flooding of the garage because of a lack of maintenance of drains. In so far as Mr Henderson refers to an open dish drain on the top of the embankment on on a neighbouring property, I find that such criticism is unwarranted. In my view the owners were under no obligation to maintain a dish drain on an adjoining neighbour's property. In so far as Mr Henderson refers to an open earth drain at the toe of the embankment on the southern side of the premises, as referred to in paragraph 80 of these reasons, the evidence before the Tribunal is clear, in my view, that there was no such earth drain at the toe of the embankment as referred to by Mr Henderson. 143I have found that the builder was in breach of the statutory warranties contained in section 18B of the Act in two respects. First, he failed to comply with two requirements of the Notice of Determination as found above and in so doing left the soil batter slope immediately behind the garage un-retained. Secondly, I have found that he was responsible for the fact that the entrance to the garage fell back into the garage when that surface should have fell away from the garage entrance thereby letting rain water flow back into the garage during periods of heavy rain. 144I also find that these breaches of the statutory warranties have caused the flooding of the garage, which in turn has caused the owners the loss of which they complain. These breaches are not necessarily the sole or dominant causes of the loss. However in conformity with McHugh JA's statement as referred to earlier I am completely satisfied that these breaches are a cause of the flooding of the garage. 145As a result of my findings the owners are entitled to an award of damages. DAMAGES 146The owners rely on a report by Mr Haslam of Northcroft dated 10 May 2013 which assessed costs for retaining walls, drainage and consequential loss. Mr Haslam also prepared a supplementary report dated 24 May 2013. 147I accept Mr Haslam as a quantity surveyor, with substantial experience in the building industry. There was no challenge to his standing as an expert. 148At paragraph 2.3.2 of his report Mr Haslam states that he undertook a measurement of the scope of work from the design documentation provided by Mr Dockrill and from site measurements undertaken during his site inspection. 149Mr Dockrill's 10 May 2013 report at paragraph 4 sets out the rectification works that he says are required. They are shown on his drawing C-02 attached to his report. Drawing C-01 to Mr Dockrill's report indicates that a retaining wall is to be built to retain the southern embankment opposite the entire length of the premises, including the southern wall of the garage. Mr Dockrill designs this retaining wall as being in two parts, retaining wall type 1 and retaining wall type 2. 150Mr Haslam's report dated 10 May 2013 contains a total costs assessment of $95,968.00 inclusive of GST. 151Mr Barnett gave evidence on behalf of the builder of the cost to construct a retaining wall approximately 10 metres in length. There was no challenge to his standing as an expert. Mr Barnett prepared a report dated 18 January 2013 which was exhibit 4 in which he estimated the cost of the retaining wall to be $10,691.95, excluding GST, preliminaries and margin. I regard Mr Barnett's estimate to be simplistic. 152Mr Haslam's supplementary report dated 24 May 2013 responds to Mr Barnett's report. Mr Haslam assesses the cost of constructing a retaining wall, on the basis of the builder's scope of work, plus rectification of consequential damage with allowances for overheads, margins and GST at $47,772.00. 153During the course of the hearing I raised questions about the necessity for a retaining wall to be constructed to retain the southern embankment opposite the entire length of the premises, including the southern wall of the garage, rather than only opposite the southern wall of the garage. 154During final submissions the owners handed up a document titled Retaining Wall Volumes. This document assessed retaining wall works to be $50,364.00, consequential damage works to be $4,027.56 giving a total of $54, 391.56 to which preliminaries, and overhead and margin of 15% was to be added with GST to be added to the total. 155Orders were made to allow the builder to respond to this document. The owner was given a right of reply. Both parties filed and served submissions in accordance with these orders. 156The major item of disagreement between the parties is the length of the retaining wall. The owners' experts contend that a 20 metre retaining wall is required. The builder's expert contends that a 10 metre retaining wall is required. 157The basis for the owners' position is retaining wall type 1 on drawing C-01 to Mr Dockrill's report and the retaining wall shown on the Barker Harle drawing 20257. The owners conceded in their submissions dated 19 December 2013 that the walls depicted in both drawings are of a total length of 20 metres. The retaining type 1 does not run the full length of the southern boundary of the property. However it does extend in either direction past the ends of the southern wall of the garage. 158Mr Barnett's report comments briefly on the issue of retaining walls. Mr Barnett is not an engineer. Mr Barnett has, as explained above, prepared a costing based on a 10 metre retaining wall. 159If the relevant expert had produced cogent reasons to justify the length of the retaining walls referred to in their reports or drawings, the Tribunal would be in a position to analyse the reasoning to justify the wall of the length the expert says is appropriate. 160Unfortunately, there is no such reasoning in Mr Dockrill's reports. His drawing C-O1 refers to walls type 1 and 2, yet his report, so far as I can ascertain, does not discuss the reasoning behind the design lengths of the two walls and in particular retaining wall type 1. There is no explanation in Mr Barnett's report about why he has concluded that a retaining wall 10 metres in length would be adequate or sufficient if the Tribunal were to find in the owners' favour. Mr Henderson in his reports which are in exhibit 7 does not offer an opinion about the appropriate length of a retaining wall, if an order was to be made by the Tribunal in favour of the owners on the retaining wall issue. Mr Storr in his report dated 19 April 2012 makes a recommendation that 'the embankment adjacent to the garage area and to the south be retained by the provision of a reinforced masonry block wall'. 161Mt Storr's drawing 20275 dated 18 June 2012 was obviously provided after the date of his report. It shows a retaining wall adjacent to the garage area and extending both to the right and left of the garage. The developed elevation on drawing 20275 shows the wall stepping down, presumably at the exterior edges of the garage and including a return of 0.600 metres. 162The decision that I must make despite the absence of reasoning about the length of retaining walls, is whether I prefer the owners' or the builder's evidence. I have decided that the owners' evidence which is that of Mr Dockrill in connection with the type 1 wall, which is almost identical to Mr Storr's design, is to be preferred. The reason for coming to this decision is that both Mr Dockrill and Mr Storr are engineers whereas Mr Barnett does not possess that qualification. As submitted by the owners counsel, Mr Barnett has not provided design drawings in relation to the wall that he has costed. In my view it is appropriate to act on the evidence of experienced engineers in connection with the issue of the appropriate length of the retaining wall. 163The next issue to be decided in connection with damages is the costing of the retaining wall that is to be preferred. I have set out above the competing reports as regards costing. I prefer the costing carried out by Mr Haslam to Mr Barnett's costing. At paragraph 9 of the owners' counsel's submissions a number of matters conceded by Mr Barnett were set out. I accept that those matters conceded by Mr Barnett make it unsafe to accept his cost assessment as regards retaining walls. There is also the fact of Mr Haslam's comments on Mr Barnett's report dated 24 May 2014 as contained in section 4 of his report e.g. paragraphs 4.3.5, 4.3.6, 4.3.7 and in paragraph 7.1.7 of his Conclusion, all of which I accept. 164As stated, during final submissions the owners handed up a document titled Retaining Wall Volumes. This document valued retaining wall works at $50,364.00, consequential damage works at $4,027.56 giving a total of $54,391.56 to which preliminaries, overhead and margin of 15% was to be added, with GST to be added to the total. 165The Retaining Wall Volumes document is based on the calculations in Mr Haslam's 10 May 2013 report. The amount claimed for a number of items has been reduced to 71.8% of the amount originally claimed. The reduction was made to reflect an assessment, in the case excavation and other marked items, of the work associated with a retaining wall type 1 of 20 metres. 166The builder has made submissions about the owners' Retaining Wall Volumes. The builder's submissions relate to items 10 and 12 of the Retaining Wall Volumes document, which items relate to excavation. The builder criticizes the figure of 71.8% and states that in some cases it ought properly be reduced to 54%. This would have the effect of reducing the damages total. 167In their reply submissions the owners concede the builder's criticism, but state that the correct percentage is 61.3%. The owners' state that the quantities for excavation ought to be ascertained by footing dimension, and state that the footing dimension for type 1 walls are wider than the footing dimension for type 2 walls. The Dockrill drawing CO-1 establishes that the type 1 wall footing dimension is 1.17m x .150 as submitted by the owners. 168I accept that the owners should recover 61.3% of items 10 and 12 of the Retaining Wall Volumes document as summited by their counsel. 169The builder in his submissions next attacks items 13, 32, 33 and 34 on the basis that these items have no correlation to wall areas. The owners have reduced the recovery percentage for these items to 71.8%. I reject the builder's criticism. The cost estimate has been amended to reduce these items on the basis that the only work that they relate to is retaining wall type 1. This in effect reduces the quantities for this work which, in my view, is a proper basis for estimating the cost of work. 170Next, the builder next attacks items 1, 2, 3, 4, 5, 6, 21, 24 and 26 on the basis that it is not clear which of these items would be required as the plans would require substantial amendment for a shorter wall. The builder does not address what changes would or may be required. Plan CO-1 most clearly identifies wall type 1 and importantly provides a detailed section of retaining wall type 1. The plan is revision C which the plan notes has been re-issued for pricing. However it seems to me that the plan may require amendment, at least in connection with drainage. 171The owners' response states that all items and the services that are referred to would be required apart from the sewer services in items 2 and 5. I will delete items 2 and 5 from the Retaining Wall Volumes document, when recalculating the totals. 172In considering the builder's submissions on items 1, 2, 3, 4, 5, 6, 21, 24 and 26, I have come to the conclusion that items 1, 3, 4, and 6 relate to the totality of the 37 metres retaining wall length, rather than a retaining wall of 20 metres in length. Accordingly I find that owners' recovery in connection with these items should be reduced to 71.8%. 173I have made the necessary adjustments to the Retaining Wall Volumes document. 174In considering the issue of damages I am conscious of the fact that the parties were not in a position to consider this issue and make submissions after they had the opportunity of considering these reasons for decisions. With the benefit of hindsight, it may have been the best course to have considered damages after findings on liability were made. In particular, it is not clear how the quantum evidence can accommodate my findings that the owners are precluded from making claims concerning drainage at the left hand, garage side, of the premises. It is also not clear which items in the owners' quantum evidence relate to the issue of the grading of the site to enable drainage of surface water away from the garage entrance. I will address these concerns in paragraphs 175 - 181. 175So far as drainage is concerned, I note that at item 17 of the Retaining Wall Volumes document, a concrete dish drain is claimed for. The claim is for 74 metres of dish drain at $37.00 per metre. The results of my findings are that a 20 metre retaining wall is allowed for with associated drainage. I note in drawing C-01 that dish drains are shown at the top and bottom of the retaining wall. It follows that retaining wall type 1 will require dish drains of 40 metres. The drawing also shows the dish drains extending to the west side of the property to connect with the drainage as depicted on that side of the premises. In that case the 17 metre dish drain at the foot of the wall will be required, but the 17 metre dish drain depicted at the top of retaining wall type 2 will not be required. As a result, I will reduce item 17 to $2,109.00 (57 metres x $37.00). 176Also in connection with drainage, Mr Haslam states at 2.3.2 of his report that he measured the scope of work from design documentation provided by Mr Dockrill. 177Mr Dockrill's drawing C-01 refers to the following work to be carried out to the left hand or garage side of the premises: (a)150 mm PVC pipe connected to end of inline pit; (b)Inline pit; (c)Corner connections; and (d)New 'reln storm masta class B grated drain along front edge of existing garage'. 178As a result of my findings under the Allianz v Waterbrook heading, the owners are precluded from claiming and recovering for this work. There needs to be adjustments to the Retaining Wall Volumes document to ensure that these costs are removed from the amount to be found in the owner's favour. 179In connection with the 150 mm PVC pipe, I note that drawing C-01 specifies 150 mm PVC pipe in two locations. I estimate that 25% of the allowance of 17 metres in item 26 relates to the left hand or garage side of the premises. I will therefore reduce item 26 to $459.00. 180In connection with the Inline pit, I will delete item 21 which is for that item. 181In connection with New 'reln storm masta class B grated drain along front edge of existing garage' I will delete item 20 which is for that item and also item 18 which relates to that item. 182The owners also claim for consequential damage which relates to the cost of rectifying water ingress damage to the garage. They claim $4,027.56 for the necessary work which is calculated by Mr Haslam in 11 items in his report under the heading 'Consequential Damage'. Mr Capone at paragraph 16 of his 7 November 2012 statement describes the damage to the internal linings of the garage. He annexes a quote dated 5 November 2012 where a builder provides a quote in the sum of $4000.00 to carry out repair work. I accept Mr Capone's evidence describing the damage to the internal linings of the garage. I also accept that such damage arises by reason of the breaches of the statutory warranties that I have referred to. 183Mr Barnett has dealt with this subject on page 11 of his 18 January 2013 report under the heading 'Rectification'. He allows for cleaning of plasterboard and application of two coats of acrylic paint to plasterboard. The total he allows for these items is $375.00. 184I prefer the evidence of Mr Haslam to Mr Barnett's evidence on the subject of the rectification of the internal linings of the garage. Mr Haslam's cost breakdown is more thorough and is supported by the quotation which is at annexure L of Mr Capone's statement. 185I will therefore find in the owners favour in the sum of $4,027.56 as the cost of the rectification of the internal linings of the garage. 186The total cost of constructing the retaining wall, including associated stormwater and consequential damage as discussed above is therefore $65,716.57 representing a base cost of $47,227.15 plus preliminaries of 10%, plus overhead and margin of 15% on the base cost and preliminaries, with GST of 10% added. 187The damages may be broken down as follows: Retaining walls excluding, stormwater $41,207.59 Stormwater $1,992.00 Consequential damage $4,027.56 Total $47,227.15 COSTS 188The parties are at liberty to make a costs application in these proceedings. 189Any costs application pursuant to section 60 of the Civil and Administrative Tribunal Act 2013 or rule 38 of the Civil and Administrative Tribunal Rules 2014 must be lodged in the Tribunal and served on the costs respondent within 21 days of the date of this order either attaching or referring to the documents relied upon in support of the application. 190The costs respondent will have 21 days after the date it receives the costs application referred to lodge in the Tribunal and serve on the costs applicant its submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon. 191The cost applicant will have 14 days after the date it receives the cost respondent's submissions to lodge in the Tribunal and serve on the costs respondent its submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon. 192The Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal D Goldstein Senior Member Civil and Administrative Tribunal of New South Wales 16 July 2014 ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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 September 2014