Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Robert Symes and Kim Louise Filmer v Mick Fabar Constructions Pty Ltd [2014] NSWCATCD 229 Hearing dates: 25 October 2013, 4 and 5 February 2014 Decision date: 25 November 2014 Jurisdiction: Consumer and Commercial Division Before: D Goldstein, Senior Member Decision: Mick Fabar Constructions Pty Ltd must pay Robert Symes and Kim Louise Filmer the sum of $99,304.71 within 14 days of the date of this order. Either party is at liberty to make a costs application in these proceedings. Any costs application pursuant to section 53 of the Consumer, Trader and Tenancy Tribunal Act 2001 or regulation 20 of the Consumer, Trader and Tenancy Tribunal Regulation 2009 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 The costs respondent will have 21 days after the date of receipt of the costs application referred to above, to lodge in the Tribunal and serve on the costs applicant the submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon The cost applicant will have 14 days after the date of receipt of the cost respondent's submissions to lodge in the Tribunal and serve on the costs respondent the submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon The Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal Catchwords: Assessment of damages, unreasonableness and exceptional circumstances Legislation Cited: Environmental Planning and Assessment Act 1979 Home Building Act 1989 Cases Cited: Bellgrove v Eldridge (1954) 90 C.L.R. 613, Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184, Fink v Fink (1946) 74 C.L.R. 127, Nguyen v Cosmopolitan Homes [2008] NSWCA 246, Owners Corp SP 75700 v Skyton Developments Pty Ltd and Andrews (Home Building) [2013] NSWCTTT 475 (20 September 2013), Radford v De Froberville [1977] 1 WLR 1262, Robinson v Harman (1848) 1 Ex Rep 850, Tabcorp Holdings Pty Limited v Bowen Investments Pty Ltd [2009] HCA 12 February 2009, Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253, Zhang v United Auctions (Home Building) [2013] NSWCTTT 6 (9 January 2013). Category: Principal judgment Parties: Applicants: Robert Symes and Kim Louise Filmer Respondent: Mick Fabar Constructions Pty Ltd Representation: Counsel Ms M. Fraser for the applicants Mr Carpenter, solicitor, for the respondent: Solicitors: Baldock Stacy and Niven for the applicants Blackwell Short for the respondent File Number(s): HB 10/44392 Publication restriction: Unrestricted reasons for decision 1. These proceedings were commenced in the Tribunal in 2010. Unfortunately, the parties have been in a protracted dispute for a number of years. 2. The dispute arises out of a contract entered into by the parties on the ninth day of July 2008 whereby in consideration of the payment of $559,909.30 plus GST by the applicants, the respondent agreed to build a new house (the 'residence') in accordance with the plans and specifications referred to in the contract, subject to the terms, conditions and covenants contained therein. 3. The works were constructed on the applicants property situate at 4619 Dean Drive Orange (the 'premises') 4. In these reasons for decision, I will refer to the applicants as the owners and to the respondent as the builder. 5. The owners' application originally sought the sum of $36,874.90 from the builder. However over time, the amount in issue increased as did the complexity of the issues in dispute. 6. In 2011 a lengthy Scott schedule was prepared consisting of 53 items which claimed a total of $251,275.67. 7. A conclave of the parties' experts was held on 5 June 2013. Unfortunately some controversy was attached to the conclave. The conclave outcomes did not directly come into effect in the proceedings. 8. A Tribunal sponsored mediation took place on 24 July 2013. The parties agreed that in accordance with work orders made by the Tribunal pursuant to the Home Building Act 1989 (the 'Act') the builder would attend to certain works with the exception of items 29, 30, 31 and 35 of the Scott Schedule. These items concern three separate items of work. 9. The hearing which took place on 25 October 2013 and 4 and 5 February 2014 concerned itself with only those items. 10. Items 29 and 31 of the Scott Schedule concerned a pergola constructed by the builder as part of the works. Item 30 of the Scott Schedule related to Paint – Internal trims. Item 35 of the Scott Schedule related to Water storage tanks. 11. At the hearing both parties were legally represented. In accordance with the Tribunal's directions, lengthy written submissions have been filed and served. 12. It should also be stated that before the hearing on 25 October 2013 the parties filed written submissions in support of their respective cases. 13. On 25 October 2013, I inspected the premises in the company of the parties' legal representatives and the experts. Jurisdiction 1. In these proceedings there is no dispute that the owners' claim in respect of the items of work referred to above was a building claim for the purposes of the Act and that the Tribunal has the jurisdiction to determine the claim. The Contract 1. Since the owners' case is for defective work, it follows that their cause of action will be based either on breach of contract or breach of the statutory warranties contained in section 18B of the Act. 2. The contract was a BC4 Contract published by the Master Builders Association. The contract did not refer to a specification. Schedule 3 to the contract which related to the documents detailing the works referred to drawings 01 and 02 being floor plans and elevations prepared by the builder. 3. Clause 1 (b) of the contract set out the statutory warranties referred to in section 18B of the Act. Clause 1(c) stated that the works would comply with the Building Code of Australia (BCA) to the extent required under the Environmental Planning and Assessment Act 1979. Clause 1(c) also stated that the works would comply with the conditions of a development consent and any construction certificate. 4. A Notice of Determination of Development Application dated 10 July 2008 was issued to the respondent naming the owners as the 'Owner' in respect of the premises, subject to certain conditions. Condition 3 required all building work to be carried out in accordance with the BCA. 5. The builder was as a result obliged to build the works in accordance with, among other things, the provisions of the BCA. The Evidence 1. The owners gave evidence as did the following experts in their cause: 1. Mr Broune; 2. Mr Finnane; 1. The builder also gave evidence as did the following experts in its cause: 1. Mr Percy; 2. Mr Roe. 1. The parties prepared a four volume bundle which was tendered and referred to during the hearing. The owners' claim 1. The owners' claim as a result of the reduction in the scope of the dispute was for $65,363.45. 2. The amount claimed for Items 29 and 31, pergola cracks, warping and painting is $30,413.45. The amount claimed for Item 30, paint – internal trims is $4,250.00.The amount claimed for water storage tanks is $32,316.00. 3. I will deal with each of these claims in turn. In doing so, I will consider first whether the builder is in breach of the contract as regards the matters raised by the owners. Items 29 and 31 - the Pergola – amount claimed $30,413.45 1. I inspected the Pergola. I accept the owners' submission that the Pergola is a major feature of the residence. It is constructed on two external verandahs on the northern and eastern side the residence. 2. The owners' experts state that in their opinion the builder has constructed the pergola in a way which is deficient in a number of respects. The owners then state because of these deficiencies the builder has breached the contract and the statutory warranties referred to in section 18B of the Act. 3. The builder's solicitor has conceded in paragraph 56 of his final submissions that the builder accepts failures to seal end cuts of slats of the pergola and the rebates into the supporting beams. It is also stated that the builder's expert agrees that these matters constitute defects. The builder's expert Mr Percy stated in his report dated 16 November 2012 that 'The builder is considered liable for this item but not the rectification method proposed by Finnane'. Bundle Volume 4, page 870. 4. The owners' experts state that in their opinion there are numerous deficiencies in the construction of the pergola. They are referred to in the owners' written submissions and are: 1. Bowed timber slats; 2. Cracked and uneven paintwork; 3. Split timbers; 4. Damp and untreated cut surfaces; 5. Exposed nail and screw holes; and 6. Inadequately painted surfaces. 1. The deficiencies referred to above are not contested by the builder's expert. 2. The dispute between the parties regarding the pergola is not whether the builder's work was carried out in breach of the contract. Rather, the dispute seems to be about the rectification methodology. 3. I note that there are no pleadings in these proceedings and the builder does not formally state in its final submissions as a separate matter that there has been a failure by the owners to mitigate damage. There is however evidence and submissions that could be interpreted to be supporting such a submission. I will deal with such a submission if it is put in connection with this or any other defect item. 4. Given that the builder does not, in its submissions, resile from the statement by its expert, that 'The builder is considered liable for this item but not the rectification method proposed by Finnane', I will find that it is conceded by the builder that it has breached the contract in connection with item 31 of the scott schedule. 5. The question of the rectification of the pergola and the associated cost remains to be determined. I will deal with that issue separately. Painting – internal trims amount claimed $4,250.00 1. For the owners to be successful on this item, they will of course need to establish that a term of the contract has been breached, rather than they are dissatisfied or unhappy about the appearance of the painted finish of the internal trims. 2. The owners' reference in submissions to Bellgrove v Eldridge (1954) 90 C.L.R. 613 and rooms being finished in colours different to that specified does not relate to this item. The dispute is not about non-conformance with the specification. 3. In relation to this item, the owners state their case is based on a failure to perform the work in a proper and workmanlike manner. I note that the specification that the owners refer to in the course of their submissions, which is referred to in the construction certificate, does not assist their case and is not relied upon. The only evidence that the owners refer to is Mr Finnane's evidence that gloss or enamel paint should be applied with a brush rather than spray painted. There is also relevant evidence from Mr Finnane at paragraph 166 of his report dated 9 August 2011 which was the subject of questions from me at pages 51 -53 of the transcript on 5 February 2014, which were answered by Mr Finnane. 4. As regards spray painting the internal trims, I accept the owners' submission that the builder's letter dated 16 February 2010 is sufficient evidence that the builder acknowledged that the work was unsatisfactory. Moreover I accept that if Mr Finnane has referred to the spray painting of the internal trims in his report that he has formed an opinion based in his inspection of the relevant work that the paint finish has been applied by spray paint. 5. The builder's submissions suggest that since I inspected the residence, I am able to make a judgement based on the appearance of the paintwork. The purpose of the site visit was to enable me to appreciate and understand the locations of disputed items and the physical characteristics of work items in dispute. I am not in a position to make decisions on disputed issues based on my own appreciation of technical building matters. I am required to reach decisions based on evidence and the application of relevant law. 6. In my view the first issue is whether or not there has been a breach of clause 1(b)(i) of the contract. Mr Finnane's evidence is that there has been a breach of the contract. 7. At page 30 of his 16 November 2012 report Mr Percy refers to paragraph 166 of Mr Finnane's report dated 9 August 2011. However he does not deal with Mr Finnane's comments in a direct way. Mr Percy states that Mr Finnane makes a 'broad statement given that there is no evidence provided to validate this statement'. Mr Percy has not appreciated that Mr Finnae's statement of opinion is evidence in connection with this item. 8. Mr Percy has not given any evidence to contradict Mr Finnane's evidence that this item of work has not been carried out in a proper and workmanlike manner. 9. Having regard to the analysis of the evidence set out in the preceding paragraphs, I accept Mr Finnane's evidence that the work carried out by the builder in connection with the painting of internal trims was not carried out in a proper and workmanlike manner. As a result, I find that the builder was in breach of contract, clause 1(b), by spray painting internal trims rather than painting them with a brush. Water Tanks Item 35 – amount in issue $32,316. 1. The two tanks in question are shown on drawing 01 as being underneath a timber deck facing east upon which the pergola has been constructed. They are noted as 'Rainwater Tanks beneath Deck – Location to be confirmed with Owner'. The drawing is a contract document. 2. There are three issues relating to the water tanks. They are: 1. Excavation of the water tank area; 2. Water tank in –ground embedment; and 3. Water tank area drainage. Excavation of water tank area 1. In his report dated 18 July 2011, Volume 2, Mr Broune for the owners stated the issue to be that excavation of the land to fit the tanks beneath the timber deck was carried out in such a way 'to create excessively steep slopes in the ground surrounding the water tanks.' In addition Mr Broune stated that the slopes had 'an inadequate level of stability against erosion and collapse.' He has stated that part of the slope has collapsed with loose earth accumulating at the base of the excavation next to the northern water tank. 2. Mr Broune has set out what he states are the relevant provisions of the BCA in connection with the excavation for the water tanks. 3. Mr Broune's reasoning is set out in paragraph 22 of his report and leads to a conclusion in paragraph 22.5.8 of his report that 'the water tank area excavation is defective and that this arises from the failure of the builder to carry out the earthworks surrounding the water tanks in accordance with the relevant requirements of the BCA' 4. Mr Broune goes on to state what he considers will be the consequences of the matters stated in his report, if rectification is not carried out. A rectification solution is set out in Mr Broune's report. 5. Importantly, the consequences referred to by Mr Broune are that there will be erosion around the water tanks at a greater rate than would otherwise be expected, the embankments would have an unacceptably high chance of collapse due to instability and that there was an unacceptably high chance of damage being caused to the premises above the water tank area. 6. Mr Percy's evidence in connection with this item suffers from assuming an advocate's role on behalf of the builder. I do not propose to reject Mr Percy's evidence on this basis. I propose instead to separate the areas of advocacy from Mr Percy's opinion evidence on the issue. 7. I will reject Mr Percy's comments on: 1. Retaining walls being excluded from the contract; 2. Retaining walls being 'optional extras'; and 3. Whether or not the rectification work proposed by Mr Broune is unreasonable. 1. Mr Percy does agree with paragraph 22.7.1 of Mr Broune's report which is his conclusion regarding rectification, namely that 'To satisfy the requirements of the BCA in regard to the stability of the embankments surrounding the water tank area, it will be necessary to rectify the slopes and protect the embankments.' 2. In my view, given that Mr Percy has agreed with the conclusion at paragraph 22.7.1 of Mr Broune's report and with paragraph 22.5.6 of Mr Broune's report which Mr Percy has paraphrased as 'the unprotected embankment surrounding the water tanks is greater than that allowed within the BCA', the builder has admitted a breach of contract in connection with the item, excavation around water tank area. 3. The breach is of clause 1 of the contract. In particular, clause 1(c)(i)(c) that the work would comply with the conditions of development consent, namely condition 3 of Notice of Determination of Development Application dated 10 July 2008 ,D08/13736 which required all building work to be carried out in accordance with the BCA. Water tank in ground embedment 1. Mr Broun's evidence in connection with this item relates to the fact that in his opinion the water tanks are embedded in the ground deeper than the maximum specified by the manufacturer. 2. For reasons which are clearly and logically expressed, and based on measurements that he took, Mr Broune concludes that the water tanks are embedded in the ground by up to 0.45 meters (maximum) deeper than the depth specified by the manufacturer. 3. The reasons to support this conclusion are contained in paragraphs 23.3.2 – 23.4.3 of Mr Broune's report. The main basis for the conclusion is that the depth of embedment can be gauged at the water outlet which is exposed near the base of the tank. Mr Broune measured the depth of embedment of the tanks below ground to vary from 1.1 metres to 1.5 meters. Mr Broune stated his methodology in carrying out this measurement. 4. Mr Broune concluded that the maximum embedment depth of the water tanks as stated in the manufacturer's specifications was 1.05 meters, but the tanks were excavated to a depth of between 1.1 and 1.5 metres. 5. Mr Broune states that based on the observations as set out in his report in his opinion the result of this 'over-embedment', as I will describe it, is that without rectification, the walls of the tanks may be damaged or collapse when subjected to horizontal loads of retained earth when the tank is empty. 6. Mr Percy's evidence in connection with this item is that he has been instructed by the builder that the area for the water tanks was prepared in accordance with manufacturer's installation instructions. Mr Percy also relies upon a photo from one of the owner's statement. 7. So far as the photograph which is reproduced in Mr Percy's report is concerned, as well as the relevant photographs in exhibits B and D I am unable to draw the conclusions that Mr Percy states flow from the photograph, such as the tank being bedded on a sand material, the depth of the excavation and the dimension of the gap between the tank wall and the surrounding soil. The reason for my inability to draw the conclusions referred to is that the photograph is not specific enough, so far as measurements and dimensions are concerned to induce, in my mind an actual persuasion that the matters referred to by Mr Percy are ascertainable from the photograph, or did in fact exist at the relevant time. 8. I have had regard to the builder's evidence where he states that the ground area was properly prepared and drained and the tanks bedded in before construction in accordance with the manufacturer's recommendations, which are annexed to his statement. I accept that the builder's evidence on this point is a sincere and honest expression of his belief. However, there is not a sufficient amount of detail to this evidence for it to have high persuasive value. The builder does not state, for example, that he was personally involved in this work and as part of that process he was at pains to ensure that each and every detail of the manufacturer's recommendations was considered and implemented. He does not explain at all, how this particular aspect of the works was carried out. 9. Overall, I prefer the evidence of Mr Broune to the builder's evidence. The reason for that finding is the fact that Mr Broune has examined the matter in a methodical and logical way, taking precise measurements and making observations about the 'as built' position of the tanks. He has set out and analysed the manufacturer's installation guide carefully and drawn the appropriate conclusions from it. The builder's evidence lacks this precision. It does not contain sufficient detail or weight to persuade me that it is to be preferred to Mr Broune's evidence. 10. The builder's solicitors submissions at paragraphs 183 – 187 are under the heading 'Water Tank in ground embedment'. However the submissions go to the drainage issue which is considered later in these reasons. Mr Percy also adds that the excessive embedment of the water tanks appears to be a result of the 'filling for the extensive landscaping' allegedly undertaken by the owners. This evidence is also unpersuasive. 11. On the basis of the evidence before the Tribunal, I accept Mr Broune's evidence in preference to the builder's. As stated above, the photograph attached to Mr Percy's report is not accepted by me as establishing the matters that Mr Percy would have it establish. 12. It follows that the builder has breached the contract, clause 1(b), in failing to embed the water tanks in compliance with the manufacturer's installation instructions. In particular I find that if work is not performed in accordance with manufacturer's installation instructions, there will be a failure to comply with clause 1(b)(i) of the contract. 13. I also accept Mr Broune's evidence regarding the potential consequences of such a failure. Drainage 1. Mr Broune's evidence in connection with this item is at paragraph 24 of his report dated 18 July 2011. He claims that the builder has allowed insufficient allowance for water draining away from the water tanks. 2. Mr Broune states that one area where inadequate provision for drainage exists is behind the water tanks. He states that the ground in this area is dished, allowing for rainwater to collect, as evidenced by saturated ground and shrinkage cracks in the soil. 3. Mr Broune also points out that on the northern and southern side of the tanks the ground bears against the water tanks preventing water flowing out of the area behind the tanks. 4. Mr Broune's evidence is, as stated at paragraph 24.7.1 of his report, that stormwater that flows or falls into the area behind the water tanks is unable to drain away for the reasons expressed above. Mr Broune also states that the area where water ponds is the location of footings which support the steel columns supporting the timber deck above the water tanks. 5. Mr Broune has extracted what he considers to be relevant sections of the BCA and AS/NZ3500.3.2003 in his report. 6. In my view the references to the Part 2.2.1 of the BCA are not relevant to the issue of drainage. The extracted BCA provisions relate to surface water from storms having an average recurrence interval of 20 and 100 years. I find that these provisions are not relevant as Mr Broune refers to 'stormwater that flows or falls into the area behind the water tanks'. He makes no distinction between normal stormwater and surface water from storms having an average recurrence interval of 20 and/or 100 years. 7. The references in P2.2.1(c) of the BCA as extracted by Mr Broune require a drainage system for the disposal of surface water to an appropriate outfall and the avoidance of water entry into a building and water damaging a building. 8. The reference to paragraph 5.3.3.3 in AS/NZ3500.3.2003 is relevant as it specifically refers to 'landscaping around and under buildings should be graded to prevent ponding and permit drainage to the outside of buildings.' 9. Mr Broune also makes the point that only one of the two rain water tanks (the northern tank) has an overflow outlet and that there is a connecting pipe between the two tanks. 10. In my view Mr Broune has failed to establish that there is any requirement for each tank to have an overflow outlet. Nor has it been established that there is a prohibition on a connecting pipe between the two tanks. Mr Broune states that only one overflow pipe is in his opinion inadequate. He states that when the southern tank fills first it will overflow until the northern tank fills. In my view this evidence is speculative and also not logical. If the southern tank fills before the northern tank, the connecting pipe would logically operate to transfer excess water from the southern tank to the northern tank. 11. In any event the point of Mr Broune's evidence is that the ground around the tanks has not been graded adequately to allow water to flow away. 12. I find that Mr Broune's evidence provides a basis for a conclusion that the builder has failed to comply with paragraph 5.3.3.3 in AS/NZ3500.3.2003 as regards grading to prevent ponding and permit drainage to the outer edge of the under verandah area around the water tanks. In addition his evidence provides a basis for a conclusion that the builder has failed to comply with P2.2.1(c) of the BCA regarding the provision of a drainage system for the disposal of surface water to an appropriate outfall. 13. As regards AS/NZ3500, the specification which is referred to in the Construction Certificate states 'All works shall be carried out in accordance with Australian Standards of the Building Code of Australia'. I interpret this passage to be saying 'All works shall be carried out in accordance with Australian Standards and the Building Code of Australia'. 14. I am not persuaded that the matters that Mr Broune has identified will cause water entry into the premises or water to damage the premises in breach of P2.2.1(c) of the BCA. 15. Mr Percy addresses this issue at paragraphs xv and xvi of his 16 November 2011 report. He does not actually address the points raised by Mr Broune. Instead he refers to advice from the builder that the land sloped away from the water tanks from west to east. 16. He also states that an inspection on 17 July 2012 revealed extensive landscaping 'effectively creating a dam around the water tanks'. 17. The builder's evidence about this is contained in paragraph 72 of his 23 October 2012 statement. The builder states that the relevant area had been altered with gardens and limited the ability of stormwater to drain away. Ms Filmer deals with this issue in paragraph 72 of her affidavit dated 24 January 2013. Her evidence is that she and her husband 'planted a half dozen or so bottle brush and placed some mulch around them'. The evidence of the builder does not persuade me that the trees planted by the owners constituted a garden that limited the ability of stormwater to drain away. 18. The builder's evidence overlooks the fact that Mr Broune's evidence is that the areas behind the tanks are dish shaped and the northern and southern sides of the water tanks restrict the ability of water to drain away from the area behind the tanks. 19. I have referred to the photograph at page 125 of Ms Filmer's affidavit, as referred to by the builder. I have not found it to be of any assistance or evidentiary value. 20. Having regard to the evidence before the Tribunal on this issue, I prefer Mr Broune's evidence. He has examined the relevant areas and commented on the physical attributes of the area around the water tanks. In comparison the builder's evidence is made up of unsubstantiated assertions. I find that its probative value is slight and does not address the matters asserted by Mr Broune. As Mr Percy's opinion is based on the builder's evidence, it can rise no higher than the builder's. 21. It follows from my preference of Mr Broune's evidence that the owners have established that the builder, in the failing to allow adequate drainage away from the area behind the water tanks, has breached the provisions of the contract, in particular clause 1 (c)(i)(a) and (c). Work Order 1. It follows from my findings that the owners have been successful in establishing breaches of contract by the builder in connection with the items of work discussed above. 2. The builder seeks an order that will permit it to attend to the rectification of the defects. Section 48O(1)(c) of the Act provides that: 'In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate: (c) an order that a party to the proceedings: (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or (ii) do or perform, or refrain from doing or performing, any specified act, matter or thing.' 1. The power to make a work order is therefore discretionary. 2. The owners submit that on the basis of the evidence the Tribunal could not be satisfied that the builder would properly perform work the subject of a work order, and on that basis should not make a work order. The fact that a builder has in the past carried out work in breach of section 18B of the Act does not establish that a builder would not, in the future, perform work the subject of a work order in a proper manner. If that were to be so, there would be no point to Section 48O(1)(c) of the Act where there has been a breach of contract regarding quality of work, or an implied warranty under section 18B of the Act. 3. The builder's submissions are for a work order to be made. 4. At the commencement of these reasons, I referred to the fact that a Tribunal sponsored mediation took place on 24 July 2013. The parties agreed at that time to work orders made by the Tribunal pursuant to the Act which required the builder to attend to certain items of work referred to in the owners' scott schedule. 5. The owners have sought to renew the proceedings in connection with a number of items which were the subject of the work order. 6. The builder submits that I should not make assumptions against making a work order in these proceedings based on the renewal proceedings. Be that as it may, I am entitled to take the renewal application into account when considering whether or not to make a work order. 7. While I have not assumed that any work performed by the builder under a work order would be unsatisfactory, I have had regard to the possibility that making a work order would have the potential, in these proceedings, to lead to further disputation between the parties which in my view would be undesirable, costly and counter-productive. 8. The builder has also submitted that the conduct of the owners should be taken into account in my consideration of making a work order. I cannot see that as a relevant consideration. A work order is not a punitive measure to be imposed on a party whose conduct is submitted to be wanting. 9. The discretion given to me to order a work order is in my view to be exercised when that would be an appropriate means of bringing finality to a dispute between owner and builder. When there is a degree of animosity between the parties, evidenced in this case by their preparedness to engage in lengthy litigation, and renewal proceedings connected with prior work orders, one of the requirements for a successful work order, which in my view is the ability of the parties to co-operate to some degree to allow the successful completion of the work, is lacking. 10. Having regard to what I see as the parties inability to co-operate and to the fact that previous work orders in these proceedings have not finally resolved disputes and since the making of a work order has a reasonable probability of producing further disputation, rather than bringing about finality to disputed items, I have decided not to make a work order. Assessment of damage 1. The next issue to be determined is the assessment of the damages flowing from the breaches of contract which I have found. The damages flowing from the breaches will depend upon how rectification is carried out. 2. The starting point in the consideration of assessment of damages and rectification methodology is the High Court cases of Bellgrove v Eldridge (1954) 90 C.L.R. 613 and Tabcorp Holdings Pty Limited v Bowen Investments Pty Ltd [2009] HCA 12 February 2009. 3. The case of Bellgrove v Eldridge establishes that where there are defects caused by a breach of a contractual obligation, the damages to be awarded are the costs of rectification, provided the works to be carried out are both necessary under the contract, and reasonable. Otherwise, damages are to be assessed on the diminution in value of the property in question. In this case damages based on diminution in value do not seem to me to be relevant. Nor is there any evidence of diminution. 4. In Bellgrove v Eldridge at p.617, the High Court stated: 'the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specification which formed part of it, and her damage is the loss which she has sustained by the failure of the builder to perform his obligations to her'. and 'her loss can prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building on her land which is substantially in accordance with the contract' 1. In Bellgrove v Elridge the High Court also stated in connection with cost of rectification: 'Subject to a qualification to which we shall refer presently the rule is, we think, correctly stated in Building Contracts, 7th ed. (1946), p. 343. "The measure of the damages recoverable by the building Hudson on owner for the breach of a building contract is, it is submitted, the difference between the contract price of the work or building contracted for and the cost of making the work or building conform to the contract, with the addition, in most cases, of the amount of profits or earnings lost by the breach".' 1. The qualification referred to by the High Court was: 'The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt.' 1. In Tabcorp Holdings Pty Limited v Bowen Investments Pty Limited the High Court discussed reasonableness as referred to in Bellgrove v Eldridge. The Court stated: 'The example which the Court' (in Bellgrove v Eldridge ) 'gave of unreasonableness was the following [26]: "No one would doubt that where pursuant to a building contract calling for the erection of a house with cement rendered external walls of second-hand bricks, the builder has constructed the walls of new bricks of first quality the owner would not be entitled to the cost of demolishing the walls and re-erecting them in second-hand bricks." That tends to indicate that the test of "unreasonableness" is only to be satisfied by fairly exceptional circumstances.' 1. An example of such exceptional circumstances was stated in Tabcorp to be closely aligned with a party 'merely using a technical breach to secure an uncovenanted profit' as referred to by Oliver J. in Radford v De Froberville [1977] 1 WLR 1262 at 1270 2. I would state at this point that having regard to the authorities cited, the preferred position is that the owners are entitled to the cost of rectification. This appears to be common ground. The difference between the parties is often the rectification methodology. 3. The builder referred me to the Tribunal case of Zhang v United Auctions (Home Building) [2013] NSWCTTT 6 (9 January 2013) which in turn refers to the decision of the New South wales Court of Appeal in Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184. 4. The builder has cited paragraph 229 of Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd which states: 'Whilst I accept that a possibility that rectification work will not be carried out does not preclude a claim for damages: Bellgrove v Eldridge supra at 620, and that unreasonableness will only be established in exceptional circumstances: Tabcorp Holdings Ltd supra at [17], in the present case the carrying out of the work would be unreasonable in the sense described by Giles JA in Westpoint Management Ltd v Chocolate Factory Apartments Ltd supra (McColl and Campbell JJA agreeing). His Honour dealt with the issue in the following manner (at [59]-[61]): "[59]Relevance of the plaintiff's intention to carry out the rectification work to reasonableness is accepted in, for example, Chitty on Contracts, 29th ed, at 20-016, and Hudson's Building and Engineering Contracts, 11th ed at 8-138. It appears to have been accepted in De Cesare v Deluxe Motors Pty Ltd - indeed, sale of the building may have relevance through whether or not the rectification work will be carried out. If truly going to reasonableness, I do not think consideration of whether or not the plaintiff will carry out the rectification work is inconsistent with Bellgrove v Eldridge, since the regard to it is part of arriving at the plaintiff's compensable loss. Once there is compensable loss, the court is not concerned with the plaintiff's use of the compensation. [60]But the plaintiff's intention to carry out the rectification work, it seems to me, is not of significance in itself. The plaintiff may intend to carry out rectification work which is not necessary and reasonable, or may intend not to carry out rectification work which is necessary and reasonable. The significance will lie in why the plaintiff intends or does not intend to carry out the rectification work, for the light it sheds on whether the rectification is necessary and reasonable. Putting the same point not in terms of intention, but of whether or not the plaintiff will carry out the rectification work, whether the plaintiff will do so has significance for the same reason, and not through the bald question of whether or not the plaintiff will carry out the rectification work. That question is immaterial, see Bellgrove v Eldridge. [61]So if supervening events mean that the rectification work can not be carried out, it can hardly be found that the rectification work is reasonable in order to achieve the contractual objective: achievement of the contractual objective is no longer relevant. If sale of the property to a contented purchaser means that the plaintiff did not think and the purchaser does not think the rectification work needs to be carried out, it may well be found to be unreasonable to carry out, the rectification work. An intention not to carry out the rectification work will not of itself make carrying out the work unreasonable, but it may be evidentiary of unreasonableness; if the reason for the intention is that the property is perfectly functional and aesthetically pleasing despite the non-complying work, for example, it may well be found that rectification is out of all proportion to achievement of the contractual objective or to the benefit to be thereby obtained." [emphasis added] 1. The builder's solicitor seeks to place reliance on the emphasised segment of the above passage on the basis that where 'defects or breaches are minor, with no functional relevance and little aesthetic loss, except to the most fastidious of owners e.g. a minor burn mark on a bench top or a small stain on a carpet.' to apply what was said in Tabcorp uncritically would result in economic waste. 2. It follows from the builder's submission referred to in the preceding paragraph that it seeks to characterise one of the owners preferred rectification options as unreasonable, and to submit that its expert's rectification option ought to be accepted by the Tribunal. 3. I reject the submission. 4. The extract from Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd to which the builder refers relates to fact sets which are different to those that apply in these proceedings. Here, there is no suggestion on the evidence that the rectification work will not be carried out. There is also no suggestion that the owners intend to sell the residence and not carry out rectification work. There is also no suggestion of supervening events, affecting the carrying out of rectification work. 5. In Owners Corp SP 75700 v Skyton Developments Pty Ltd and Andrews (Home Building) [2013] NSWCTTT 475 (20 September 2013) at paragraph 81, I stated: 'Before considering the question of which of the competing repair methodologies are to be preferred, I would point out that damages for the breach of an implied warranty under section 18 B(a) of the Act are a once and for all remedy. The owner is not entitled to re-apply to the Tribunal if a rectification methodology is, for whatever reason, ineffective. I have kept this principle in mind when considering the competing rectification methods.' 1. The builder also seeks to tie the Tribunals function in making orders to the 'guiding principle' referred to in section 36 of the Civil and Administrative Tribunal Act 2013. 2. That section provides: 'The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: (a) exercises any power given to it by this Act or the procedural rules, or (b) interprets any provision of this Act or the procedural rules.' 1. In my view the guiding principle has no part to play in the Tribunal's discretion in making final orders and in particular whether to order demolition and rebuilding or some less expensive rectification methodology. I would also point out that the Tribunal's jurisdiction to make orders in these proceedings is derived under section 48O of the Act which states that: '1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate: (a) an order that one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, (b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings, (c) an order that a party to the proceedings: (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or (ii) do or perform, or refrain from doing or performing, any specified act, matter or thing.' Burden of proof 1. The builder's solicitor states that the owners bear the onus of proof in connection with rectification methodology. I agree. The relevant principles in relation to discharging the burden of proof in civil cases were recently summarised by McDougall J. in the New South Wales Court of Appeal in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [55] as follows: 1. A finding that a fact exists (or existed) requires that the evidence induce, in the mind of the fact-finder, an actual persuasion that the fact does (or at the relevant time did) exist; 2. where on the whole of the evidence such a feeling of actual persuasion is induced, so that the fact-finder finds that the probabilities of the fact's existence are greater than the possibilities of its non-existence, the burden of proof on the balance of probabilities may be satisfied; 3. where circumstantial evidence is relied upon, it is not in general necessary that all reasonable hypotheses consistent with the non-existence of a fact, or inconsistent with its existence, be excluded before the fact can be found; and 4. a rational choice between competing hypotheses, informed by a sense of actual persuasion in favour of the choice made, will support a finding, on the balance of probabilities, as to the existence of the fact in issue. 1. I will have regard to these principles when considering the evidence in connection with the defect items in issue and making a decision about the evidence that will be accepted and preferred in connection with rectification methodology. Pergola 1. The parties have been unable to agree on the appropriate rectification to be carried out in connection with the pergola. 2. The issue raised by the builder is whether the owners' preferred rectification method of demolition and rebuilding of the pergola, costed at $30,413.45 by Mr Finnane and $20,355.92 by Mr Percy, was appropriate as opposed to the rectification methodology proposed by Mr Percy which is costed at $3,302.12. Mr Percy's rectification methodology is limited to installing folded colourbond flashings to cover pergola beams which run perpendicular to the residence and then to install threaded rods to what is described as 'beams'. 3. Mr Broune on behalf of the owners provided an extensive examination of the pergola and the instances in which he stated, in his opinion, the construction of that structure breached the BCA and the requirements and recommendations of various bodies. At paragraph 27.12.2 of his report he sets out his rectification methodology. 4. Mr Finnane on behalf of the owners provided a costing report. He estimated the cost of removing the pergola in its entirety and replacing it at $30,413.45 5. I note that the difference in costing between the parties is $10,057.53, on Mr Broune's rectification methodology, yet the parties have been unable to resolve this issue and have had their solicitors produce approximately 27 pages of submissions on this item. 6. The admitted breaches of contract in connection with the pergola are not in my view, minor. There are also the defects identified by the owners' experts which are not contradicted by Mr Percy. These defects have in my view functional relevance and there is aesthetic loss, if that is a relevant consideration. I should state that in my view the concept of aesthetic loss is not in itself a useful indicia. The builder's breaches of contract as regards the pergola cannot be trivialised by comparing them with 'a minor burn mark on a bench top or a small stain on a carpet' as the builder's solicitor seeks to do. 7. In my view I am not confronted with a stark choice between two potential rectification options, one of which is 'unreasonable' and therefore unacceptable and the other which is reasonable. 8. In my view, both rectification options may be described as reasonable. Or to put it another way, the owners' rectification option which requires the most work to be carried out is not, in my view, exceptional, having regard to the defects in the pergola which are both alleged and admitted to exist. There is, in my view, nothing exceptional in a building owner wishing to have building defects which are not trivial or miniscule in nature, put right. 9. If the owner were to be successful in achieving the outcome which it presses for, that result would not be analogous with the example given in Bellgrove v Eldridge of replacing new bricks with second hand bricks. Nor could such an outcome be characterised as the owners using a technical breach to secure an uncovenanted profit, as referred to in Radford v De Froberville. 10. In these circumstances, the most appropriate rectification option is in my view to be chosen according to the standard or conventional formula for assessing damages, and bearing in mind that the award of damages is a once and for all remedy. 11. One starts with the formulation as stated in Robinson v Harman (1848) 1 Ex Rep 850: 'the rule of the common law is, that where a party sustains loss by reason of a breach of contract, he is, so far as money can do it to be placed in the same situation, with respect to damages, as if the contract had been performed'. 1. The relevant principles and extracts from Bellgrove v Elridge have been stated and extracted above. In connection with the issue under consideration here, namely which rectification option is to be preferred and the costs associated with that option, the relevant principles are that the owners were entitled to have the pergola constructed in accordance with the contract. This includes in a proper and workmanlike manner, and in accordance with the drawings if they are relevant. Further, their damages are to be in an amount required to rectify the defects complained of. 2. Mr Broune's rectification methodology is to remove and dispose of the timber slats and beams and replace the same. His methodology is to retain the timber posts. This means rebuilding and repainting the pergola in a proper and workmanlike manner, using galvanised nails, screws and steel fixings. This method will give the owners a pergola constructed in conformity with the contract. 3. It is necessary to consider Mr Percy's rectification methodology to ascertain whether it will give the owners an equivalent of a pergola which is constructed substantially in accordance with the contract. 4. Mr Percy's rectification methodology is set out at pages 31 and 32 of his 16 November 2012 report. At this section of his report Mr Percy goes beyond providing expert opinion on building issues and takes up a role as an advocate for the builder in connection with mitigation issues. To the extent that Mr Percy strays into the area of advocacy, I will ignore those parts of his report; e.g. the last two sentences of paragraph 31 i. 5. So far as rectification goes, Mr Percy's methodology is to install folded colourbond flashings to cover pergola beams which run perpendicular to the residence and then to install threaded rods to what is described as 'beams'. This work is costed by Mr Percy at $3,302.12. 6. In my view, Mr Percy's rectification methodology does not to give the owners what they contracted to receive, namely a pergola constructed in accordance with the contract. It seems to me that Mr Percy's rectification methodology is to provide a repair solution. As Mr Percy states his rectification method is to provide protection of the timber. This is not a rectification option which addresses the defects which are conceded, by the builder in his submissions, namely failures to seal end cuts of slats of the pergola and the rebates into the supporting beams. 7. Mr Percy also suggests the installation of threaded rods to straighten the bowed timber slats. This is also what appears to me to be an attempt to address an existing defect in the pergola, identified by the owners' expert as bowed timber slats. 8. Mr Broune responds to Mr Percy in his report of 15 February 2013. He disagrees with Mr Percy's opinion and states that in his opinion the: 1. stability of the timber in the pergola has been compromised, as evidenced by the bowed timber slats; 2. durability of the timber has been compromised due to defective paint coating; and 3. serviceability of the timber has been compromised. 1. At paragraph 143 (1-6) of his report dated 18 February 2013, Mr Finnane makes a number of comments regarding Mr Percy's rectification proposals. I do not intend to repeat those comments in these reasons. However, in my view those comments are well made and persuasive. I accept Mr Finnane's evidence in connection with Mr Percy's rectification proposals. I am not persuaded that Mr Percy's rectification solution will provide the owners with a pergola which is substantially in accordance with the contract. Having regard to Mr Finnane's comments, Mr Percy's rectification solution is in my view an inexpensive repair option with doubtful prospects of providing a medium or long term solution to the defects to which I have referred. 2. The owners rectification solution will in my view give the owners an equivalent of a pergola which is constructed substantially in accordance with the contract. The reason for this is that the owners' rectification option is, apart from maintaining the posts, to replace the pergola with new timbers constructed in a way that will not breach the contract. 3. Having regard to the parties' submissions and to the experts' evidence concerning the competing rectification methodologies. I prefer the owners' evidence and submissions as regards the rectification and, it follows, the rectification approach of the demolition and rebuilding of the pergola. 4. Having decided that the owners rectification methodology is to be preferred, the next issue is which costing is to be preferred, Mr Finnane's or Mr Percy's. 5. There are numerous differences in the costing of the experts, but as stated above the difference between them is $10,057.53. 6. Mr Finnane has broken down the rectification cost into 4 items. Mr Percy's comments on these items are found in his supplementary scott schedule dated 7 March 2013. 7. The owners' submissions state that the major difference between the experts is the cost of materials and in particular timber. Mr Finnane's estimate for the cost of materials is in the sum of $14,166.60. Mr Percy's estimate for the cost of materials is in the sum of $8,247.40.00. The estimates are based on the same quantities, however the rates are different. Mr Finnane relies on a quote from Kent Hardware a copy of which was not attached either to his original report or to the copy in the bundle. Mr Percy relied on a quote from Orange Hardware, a copy of which was also not attached either to his original report or to the copy in the bundle. 8. The reports of the experts in connection with the rectification costs fit the predictable pattern of each being at the end of a cost spectrum. The builder submits that Mr Percy's estimate should be accepted on the basis of his knowledge of the building industry and his knowledge of rates for local subcontractors and suppliers. 9. The owners' submissions state that the evidence of Mr Finnane at the hearing was that the costs of labour had risen by about $10.00 per hour. I accept this evidence. I have referred to my decision in Owners Corp SP 75700 v Skyton Developments Pty Ltd and Andrews to the effect that damages are a once and for all remedy. I would add that the owners are not entitled to re-apply to the Tribunal if the damages awarded are not adequate to have the rectification work completed. Given that some time has elapsed between the dates of the experts' reports, the dates of the hearing, the date of these reasons for decision, and the fact that labour costs have increased, I will take a conservative approach to the assessment of damages. There is also the factor that Mr Percy's estimate based on his own local experience, leading to lower costings, may not be capable of being replicated by all remedial contractors. 10. For the reasons expressed above, but subject to the following paragraph, I prefer Mr Finnane's estimate of the costs of rectification of the pergola which is in the sum of $30,413.45. 11. The builder's solicitor has pointed out that in his evidence Mr Broune states that the posts are to be maintained, while Mr Finnane has costed the replacement of the posts. I have had regard to paragraph 182 of Mr Finnane's report dated 9 August 2011 which contains a break-up of his costing. Under the heading 'Timber supply' he has allowed $1,033.50 for posts. Under the heading 'Carpentry' he has allowed $795.00 for posts, and under the heading 'Painting' he has allowed $210.94 for posts. All told Mr Finnane has allowed $2,039.44 for the posts. 12. Since I have found in favour of Mr Broune's rectification methodology which calls for the retention of the timber posts, it follows in my view that I should deduct $2,039.44 from Mr Finnane's assessment on account of the posts. 13. The builder's solicitor has made submissions about a number of matters that might be described as going to mitigation. I have had regard to the builder's witness statement dated 23 October 2012. Annexure 9 to his statement is a letter dated 9 April 2009 which states that practical completion was achieved on 9 April 2009. Defects and unfinished work are listed and include 'front sun smart pergola'. The builder was therefore obliged to rectify this defect. The defect rectification period extended to at least 16 February 2010 according to the builder's evidence. He states in paragraph 47 of his statement that on 17 February 2010 he was asked not to return to site by the owners. The evidence referred to above indicates that for a period of approximately 11 months the builder was free to attend at the premises to attend to defect rectification. 14. The builder's submissions refer to clause 25(a)(i) of the contract, which requires the owners to maintain works from the date of practical completion. It is submitted that the deterioration and cracking of the timber is due to the final coat not being applied and the lack of maintenance by the owners. 15. The failure to apply the final coat of paint to the pergola was I find the builder's obligation. As the evidence as referred to above discloses, there were approximately 11 months between practical completion and the date when the builder was refused access to site. 16. In my view the builder had ample opportunity to return to site to attend to defect rectification. Overall, I am not satisfied on the evidence that the owners' actions prevented the builder from attending to whatever rectification work was required in connection with the pergola. The builder itself stated in its practical completion letter of letter of 9 April 2009 that the front sun smart pergola was either a defect or unfinished work. 17. I also find that based on Mr Broune's evidence and the builder's admissions regarding defects that the extent of the defects in the pergola made it impractical for the owners to carry out maintenance to a structure that was in serious need of rectification work. 18. I have considered the builder's submission on mitigation and the associated evidence. In my view for the reasons expressed above, there is no substance to the builder's assertion that the owners' rights are affected by a failure on their part to allow the builder access to site to rectify the pergola or to maintain the structure after 17 February 2010. 19. For the reasons stated above, the owners will be entitled to an order in their favour for $28,374.01 in connection with this item ($30,413.45 - $2,039.44). Paint – Internal Trims 1. On the question of assessment of damage, Mr Finnane's estimate of rectification cost is $4,250.00. Mr Percy has estimated the cost at $2,050.00. 2. For the reasons expressed above in connection with Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd, I do not accept the builder's submissions that the owners should not recover since the paint finish is functional. I would add that in my view, Giles JA in the passage quoted from Westpoint Management Ltd v Chocolate Factory Apartments Ltd was discussing a different state of affairs to the facts at issue in this case, namely the situation where there was no intention to carry out rectification work or where there is a supervening event. Functionality was raised in that context, not in the context where a building owner was intending to carry out rectification work. Giles JA was not in my view discussing functionality in that more straightforward context. 3. In my view it is not unreasonable for the owners to seek the repainting of internal trims. To repeat what I have said above, such a finding would not be analogous with the example given in Bellgrove v Elridge of replacing new bricks with second hand bricks. Nor could such an outcome be characterised as the owners using a technical breach to secure an uncovenanted profit, as referred to in Radford v De Froberville 4. The difference between the experts on the quantum issue, is one of the estimation of the hours involved. Mr Finnane estimates 80 hours work being involved. Mr Percy estimates 36 hours involved. Neither party has obtained a quote for the work. Mr Percy in his supplementary scott schedule of 7 March 2013 points out that Mr Finnane's estimate is equivalent to a 'qualified painter for 2 weeks full time'. 5. Apart from the estimates referred to there is little detail to the rectification work. 6. I prefer Mr Percy's estimate and accept his evidence that to estimate that a qualified painter would carry out the necessary work in two weeks is an over estimation. 7. The owners will be entitled to an order in their favour for $2,050.00 in connection with this item. Water Storage Tanks 1. Mr Percy disagrees with Mr Broune as to the rectification proposed. Therefore the competing positions of the experts again relate to rectification methodology. 2. There are three components of this item. 3. Mr Broune's rectification solution is set out in paragraph 27.17 of his report. Briefly, its main feature is to provide a concrete reinforced retaining wall to retain the embankment. I do not propose to repeat the rectification methodology in these reasons. 4. In relation to this issue, Mr Percy's solution to the agreed need to 'rectify the slopes and protect the embankments' is to regrade the batter of the slope behind the water tanks. To achieve this solution would, however, require the water tanks to be relocated to the east by 2 metres. 5. In my view it is necessary to have regard to the fact that damages are to be based on the 'the cost of making the work or building conform to the contract', subject to the work undertaken being necessary to produce conformity. In considering this extract and the qualification about necessity, I have kept in mind that the relevant breach of contract was the builder's failure to excavate the ground in readiness for the tanks in accordance with the relevant provisions of the BCA. The owners are therefore entitled to recover as damages the cost of making this work conform to the contract. 6. The builder's rectification option of re-grading the batter of the slope behind the water tanks, complies with the extracts set out above. However, in so far as it requires the rainwater tanks to be to be relocated to the east by 2 metres to allow the re-grading of the batter of the slope and to be left in that position, it goes beyond making the work conform to the contract and in effect delivers a solution which is different to the contractual requirement. 7. The owners refer to this point at paragraph 98 of their written submissions. 8. I have come to the conclusion that the owners' rectification methodology will produce a result that will comply with the contract. I also find that the owners' rectification methodology is not unreasonable, in the sense of not being an exceptional rectification solution. 9. The builder's rectification methodology will not have that effect. It produces a result which was not contemplated by the contract. The end result does not comply with contractual drawing 01. 10. I have rejected the builder's preferred rectification methodology of moving the tanks. It follows that I prefer the owners' expert's rectification methodology. 11. That methodology has been costed by Mr Finnane in paragraphs 210 – 202 of his 9 August 2011 report. Paragraph 202 sets out Mr Finnane's detailed costing break up to reach a total of $29,700.00 12. I note that the builder's expert Mr Percy has in his Supplementary Scott Schedule dated 7 March 2013 at item 35 on page 29 costed Mr Broune's rectification methodology at $18,433.65. 13. The difference between the parties was therefore $11,266.35. I note that the parties seem to prefer prolonged litigation, with all associated cost rather than negotiating a resolution of the difference of position in the sum mentioned. 14. On 21 January 2014 Mr Finnane prepared a supplementary report. Paragraphs 31 through to 49 of that report were not objected to by the builder's solicitor. I note that paragraphs 31 through to 39 relate to Mr Percy's comments in his Supplementary Scott Schedule dated 7 March 2013 and provide a re-costing of Mr Broune's rectification solution to produce a new total of $32,316.00. 15. There is a difference between the costings in that Mr Finnane has based his costing based on estimates of the hours involved in carrying out various items of work. Mr Percy has proceeded on a combination of quantities and estimated hours. He has assessed the quantities involved and costed the quantities based on Rawlinsons. 16. Mr Percy has also commented that Mr Finnane's costs appear to be excessive. Mr Finnane comments that in his opinion Mr Percy's costs to be under stated. 17. Both Mr Finnane and Mr Percy have made careful assessments of the work required to be carried out. I accept Mr Finnane's evidence that the work will be carried out in restricted circumstances, being under the verandah. I accept that working conditions would be difficult. 18. I have referred above to my statement in another case 'that damages for the breach of an implied warranty under section 18 B(a) of the Act are a once and for all remedy. The owner is not entitled to re-apply to the Tribunal if a rectification methodology is, for whatever reason, ineffective'. To that I would add an owner is not entitled to re-apply to the Tribunal if a rectification methodology is, for whatever reason more expensive than originally anticipated. 19. In my view this will justify the Tribunal taking a conservative view of damages to be awarded, especially if the evidentiary basis for the award of damages is a careful and considered analysis of the tasks to be carried out and the time likely to be involved in the performance of those tasks. 20. Despite these comments I have given careful consideration to the builder's submissions. 21. The builder's submissions refer to the fact that Mr Percy is an experienced builder who still carries out building work and that Mr Finnane has not engaged in actual building for some time. I do not consider that this point in itself, while it may be correct, to be of such weight as to cause me to prefer Mr Percy's evidence to Mr Finnane's. 22. The submissions also point out that Mr Finnane's estimate of hours are in four or eight hour blocks, as Mr Finnane has worked on the basis that if a task will only take, say two hours tradesmen will not attend and charge for two hours, but will charge in either half or full day segments. Transcript has been referred to which illustrates this evidence. The builder's submissions state that Mr Finnane's estimate of hours does not account for work carried out by a subcontractor for a contractor. There is no evidence cited or that I am aware of to support this submission. As a result, I reject the submission. 23. There is also the issue of blocks being moved from the truck disembarkation point to the work site. Mr Finnane states that blocks will be moved by hand, whereas Mr Percy states that his experience is that in Orange the brick supplier would provide a fork lift at no cost to move the blocks. I prefer Mr Percy's evidence in connection with this item. Mr Finnane agreed that it was not unusual for this type of an arrangement to take place and that it is not uncommon. 24. The context of this issue is item 6 to Mr Percy's assessment which is for a blocklayer to lay blocks for the retaining wall. He estimates that there are 200 blocks to be laid at the rate of $3.27 per block, leading to a total cost of $654.00. Mr Finnane prices this item as 'Blocklayer to lay blocks-2 men x 24 hrs' at $65.00 per hour leading to a total of $3,120.00. This equates to 2 men each working an eight hour day for three days to lay the blocks. It appears from Mr Finnane's evidence that he has allowed for the moving of the blocks from the truck drop off point to the work site in his $3,120.00 estimate. As I have found, it is likely that the blocks will be moved to the work site via an all-terrain fork lift by persons employed by the block supplier. 25. Having regard to all of the evidence on this point, I accept Mr Finnane's evidence that Mr Percy's labour rate of $3.27 for the laying of a block is too low, for the reasons expressed by Mr Finnane, namely that such rate does not reflect a small confined job. I have taken into account that it will not be necessary manually to move the blocks from the truck drop off point to the work site. However there is no evidence before the Tribunal about how Mr Finnane's estimate ought to be decreased if I accepted Mr Percy's evidence regarding the blocks being moved from the disembarkation point to the worksite by the supplier's employees. Or to put it another way, Mr Finnane's estimate does not allow as a separate item, the cost of moving the blocks. 26. In these circumstances, I will allow the lesser amount of $2,640.00 put forward in Mr Finnane's original estimate for item iv 'Blocklayer to lay blocks- 2 men x 24hrs'. This will reduce Mr Finnane's 21 January 2014 assessment. I have done this to decrease the amount allowed for this item due to the block movement issue referred to. In assessing damages where there is no precise evidence on a particular issue, the Tribunal must nonetheless do the best that it can in the circumstances to deal with the issue. Fink v Fink (1946) 74 C.L.R. 127. 27. Another disagreement between the experts is the question of concrete placement and who would be responsible for it. Mr Percy is of the view that the concrete pump operator would place the concrete. Mr Finnane is of the view that the concrete pump operator would not do this work and two men would be required to do this work. Mr Finnane states that the concrete pump operator would be occupied in managing the concrete line which he estimates will be 40 meters long. I accept Mr Finnane's evidence on this point. 28. The point is made in the builder's case that a retaining wall behind the water tanks was never part of the builder's contractual obligations. It is also said on behalf of the builder that if a retaining wall is to be constructed behind the water tanks, the cost should be met by the owners. In so far as Mr Percy makes these points in his report, I regard that as Mr Percy improperly acting as an advocate for the builder. Contractual and legal issues form no part of his expertise. In so far as the same points are raised by the builder's solicitors, in my view the point is misplaced. 29. The proposal for the retaining wall arises as a result of the builder's breach of contract in connection with BCA requirements regarding the stability of the embankments surrounding the water tank area. I have found that Mr Percy has agreed with the conclusion at paragraph 22.7.1 of Mr Broune's report and with paragraph 22.5.6 of Mr Broune's report and that as a result the builder has admitted this breach of the contract. 30. The cost of the retaining wall forms part of the damages that flow from the builder's breach. As stated in Bellgrove and Eldridge, the measure of the damages recoverable by the owners is the cost of making the work or building conform to the contract. 31. Having regard to the reasons above, I have assessed the owners' damages under this head of claim in the sum of $31,836 which is explained as $32,316.00 - $3,120.00 = $29,196.00 + $2,640.00 =$31,836.00. The amount of the final order in favour of the owners 1. For the reasons set out above I have found that the owners are entitled to the sum of $64,299.45 which is made up as follows: 1. Pergola $28,374.01; 2. Painting $2,050.00;and 3. Water Tanks $31,836.00. 1. There is also the issue of whether preliminaries, overheads and profit are to be added to the sum of $62,260.01 found in the owners favour. 2. The owners counsel made submissions about preliminaries, Builder's margin and GST in which the expert's evidence was referred to. The builder's solicitor dealt with the issue in reply. I prefer the owners' submissions. 3. Mr Finnane deals with this in paragraph 290 of his report dated 9 August 2011 and in paragraph 259 of his report dated 18 February 2013. Counsel for the owners also refers to page 23 of Mr Finnane's report of 21 January 2014, paragraph 47 where he states that in his opinion 16% is an appropriate amount to allow for preliminaries. There is no evidence to contradict this. I will therefore allow preliminaries at 16%. 4. Mr Finnane's report of 21 January 2014, paragraph 48 deals with margin for overhead and profit where he confirmed his opinion as expressed in his 9 August 2011 report that 25% is an appropriate amount to allow for overhead and profit. I accept this evidence in preference to Mr Percy's as I accept the owners reply submissions on the point and will therefore allow overhead and profit at 25%. 5. I will also make an allowance for GST. 6. The total amount to be found in the owners' favour is therefore: Costs 1. Either party is at liberty to make a costs application in these proceedings. 2. Any costs application pursuant to section 53 of the Consumer, Trader and Tenancy Tribunal Act 2001 or regulation 20 of the Consumer, Trader and Tenancy Tribunal Regulation 2009 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. 3. The costs respondent will have 21 days after the date of receipt of the costs application referred to above, to lodge in the Tribunal and serve on the costs applicant the submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon. 4. The cost applicant will have 14 days after the date of receipt of the cost respondent's submissions to lodge in the Tribunal and serve on the costs respondent the submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon. 5. The 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 25 November 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: 12 February 2015