Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Nazmul Nisha Khan v Shinwoo Kang and Sung Ju Lee trading as SK Floor Sanding [2014] NSWCATCD 237 Hearing dates: 18 November 2014 Decision date: 09 December 2014 Jurisdiction: Consumer and Commercial Division Before: D Goldstein, Senior Member Decision: For the reasons stated Shinwoo Kang and Sung Ju Lee must pay Nazmul Nisha Khan the sum of $4,400.00 with fourteen days of the date of this order. Any application for costs must be made within fourteen days of the date of this order. Catchwords: Defective work Legislation Cited: Civil and Administrative Tribunal Act 2013 Fair Trading Act 1987, Home Building Act 1989 Cases Cited: Nguyen v Cosmopolitan Homes [2008] NSWCA 246 Category: Principal judgment Parties: Nazmul Nisha Khan (applicant) Shinwoo Kang and Sung Ju Lee (respondent) Representation: The parties were not legally represented File Number(s): HB 14/09386 Publication restriction: Unrestricted reasons for decision 1. These proceedings were first heard in the Tribunal on 20 May 2014 when the application was dismissed. 2. The applicant appealed the Tribunal's decision. On 11 September 2014 the Appeal Panel of the Tribunal upheld the Appeal and set aside the order made by the Tribunal on 20 May 2014. The proceedings were remitted to the Consumer and Commercial Division of the Tribunal for rehearing. 3. These proceedings were re-heard in Parramatta on 18 November 2014. The parties were not legally represented. 4. The hearing was concluded at approximately 3.00 pm as the respondents had made arrangements to be elsewhere. 5. The applicant claims the sum of $3,600.00 from the respondents for alleged defective work carried out by them. In addition she claims the sum of $800.00 for timber excess timber purchased due to an allegedly inaccurate measurement she states was carried out by the respondents. The applicant also seeks an order that she does not have to pay the respondents $3,100.00. 6. On 6 August 2013 the respondents issued a quotation to the applicant for work to be carried out at 68 Spring Street Arncliffe (the 'residence'). 7. The quote was in relation to 183 square meters of flooring work to be performed. The respondents quoted labour to install battens, timber, coatings and to install timber to and coat 17 stairs. The amount quoted was $9,760.00. I accept that included in the work the respondents were to perform was sanding the timber flooring installed by them. 8. I am satisfied on the evidence, and it is not in dispute, that the applicant accepted the respondents' quotation thereby creating a contract between them for the respondents to perform the work the subject of the quotation and for the applicant to pay the respondents the amount quoted for the performance of the work. Jurisdiction of the Tribunal 1. Section 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).' 1. A '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.' 1. Further 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.' 1. Building goods or sevices 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.' 1. Residential 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.' 1. Section 18B of the Act provides that: '18B Warranties as to residential building work 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.' 1. Having regard to the provisions of the Act set out above, I find that the applicant's claim is a building claim for the purposes of the Act. I therefore have the jurisdiction under the Act to hear and determine her claim. I further find that the warranties referred to in section 18B above are implied into the contract that she had with the respondents, as referred to above. Evidence 1. At the hearing I admitted the following documents into evidence. 2. For the applicant the following documents were put into evidence: 1. Statutory Declaration of Shaleen Seth dated 9 September 2014; 2. Statutory Declaration of J.W.D Gregor dated 8 September 2014; 3. Statutory Declaration of N.N. Khan datyed 3 April 2014; 4. Complaint to Fair Trading 16 January 2014; 5. Quotation Abacus Flooring 25 March 2014; 6. Quotation Sydney Floor Sander 26 March 2014; 7. Quotation T Flooring 27 march 2014; 8. Bundle of photographs – 15 pages; 9. Invoices from Advanced Timber Hardware. 1. For the respondents the following documents were put into evidence: 1. Statutory Declaration of Dong Hee Lee dated 10 September 2014; 2. Statutory Declaration of Julierose Lee dated 10 September 2014; 3. Chronology 6 August 2013 to 8 January 2014 admitted as an aide memoir; 4. Statutory Declaration of Julierose Lee dated 26 March 2014; 5. Statutory Declaration of Dong Hee Lee dated 26 March 2014; 6. Bundle of photographs – 9 pages; 7. Copy of the original quotation 6 August 2013; 8. Technical data sheets; 9. Response to complaints. 1. The applicant's major complaint was that the respondent's work was not carried out in a proper manner. To put it another way the applicant was of the view that the respondent's work was faulty. 2. The applicant did not engage an expert to provide a report that the respondent's work was faulty. The applicant is obliged to establish her claim on the civil standard, that is on the balance of probabilities. The relevant principles in relation to discharging the burden of proof in civil cases were recently summarised by McDougall JA 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 nconsistent 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. The applicant has stated that the work carried out by the respondents contains a number of faults. It is also the case that the applicant was unhappy about the way the respondent performed the work, particularly as regards their attendance at the residence when required. However no claim is made in connection with that subject matter. 2. It should also be stated that for whatever reason, the relationship between the parties regarding the performance of the work became acrimonious and the work was not completed by the respondents. Each party states that the other is to blame for this state of affairs. Fortunately, it is not necessary that I resolve any of the factual material regarding these issues. 3. The faults regarding the quality of the work carried out that the applicant identifies are: 1. nail holes filled with putty that does not match the timber; 2. rips or gouges in the timber flooring; 3. some sanding of floors is unfinished; 4. the sanding that the respondents have performed has caused 'ripples' in the surface of the floor timbers; 5. the sealing of the floors in some areas is rough. The compliant seems to be that dust was left on the floor after sanding and was then coated over leaving a rough appearance; 6. the timber cladding to three stairs creaks; and wrong coating was used. 1. The respondent's evidence was that other trades made 'messes' on the newly laid flooring after sanding had been completed but before coating the floors. It is said that these messes were cement, glue and possible silicone. In any event the respondent's evidence was that their employees cleaned this mess up. 2. The respondent's evidence gives an account of what occurred at the residence and the events that led to their being excluded from finishing the work. That evidence is relevant to the applicant's claim to obtain an order that she does not have to pay the respondents $3,100.00. 3. The applicant's evidence from other flooring businesses is relied upon as evidence of defective work. The Abacus Flooring quote refers to 'Not proper colour of putty, un-finished sanding – visible ripples Rough surface – excessive dust.'. The quote from Sydney Floor Sanders is to a similar effect except is refers to the applicant's concerns with the issues I have referred to. The quote provided by T Flooring simply recites the work they have been asked to quote on. 4. The respondents document which is exhibit 10, Responding to Complaints' deals with the issues of workmanship raised by the applicant. 5. The issue is whether the applicant has established that the respondent's work was in breach of the statutory warranties referred to above, the important one being the that the work will be performed in a proper and workmanlike manner. 6. In their reasons for decision the Appeal Panel stated: '50. A quotation from a supplier willing to rectify defects or complete incomplete work can, depending on the circumstances and the nature and content of the quotation, constitute evidence of the defects or incomplete work and of the amount required to remedy the defective work or complete any incomplete work. For example, if the person providing the quotation was suitably qualified or experienced, inspected the work, identified defects or incomplete work on that inspection, recorded his or her observations in the quotation and gave a price to rectify or complete the work, it is difficult to understand why that quotation would not provide evidence in support of a claim for defective or incomplete work. The weight to be given to the evidence would, of course, depend upon many factors. Nonetheless, it would be wrong to conclude that simply because an applicant relied only upon a quotation or quotations for the rectification or completion of work that there was no evidence to support the claim that the work was defective or incomplete. 51. Of course, a quotation relied upon by a party may be inadequate for these purposes but, if this is to be the Tribunal's conclusion, the reasons for rejecting the quotation must be explained in the reasons for decision. Such an explanation does not have to be lengthy especially in a claim that has only a small monetary value, but some explanation is required. This is what s 62(3) entails when it requires findings of fact to be made referring to the evidence or other material on which those findings were based and when it requires the reasoning processes that led the Tribunal to its conclusions to be set out. 52. Even where a quotation is based upon assumptions as to defective or incomplete work and not the observations of the person giving the quotation, it still may be amount to evidence of an estimate of the cost of rectifying or completing the work and be relevant for that more limited purpose. Whether or not that evidence should be accepted would be a matter for the Tribunal to assess in all the circumstances of the case. 53. As to the implicit premise that in order to establish a claim for defective or incomplete work in a home building matter there must be a building inspection report by an independent builder to demonstrate any liability of the respondent, such a premise is wrong. Whilst a building inspection report by an independent builder may be very helpful in establishing liability, such a report is not always necessary in a case such as the present. To suggest that an applicant in a home building matter involving only a small monetary amount must engage an independent builder to provide a building inspection report before the applicant can succeed in his or her claim is also inconsistent with the principles set out in ss 36(1) and (4) which require the Tribunal to facilitate the just, quick and cheap resolution of the real issues in proceedings and to conduct proceedings so as to facilitate the resolution of the issues in such a way that the cost to the parties and the Tribunal is proportionate to the importance ' 1. Based on the evidence before the Tribunal to which I have referred to above, my decision is not an easy one. The applicant has referred to defects, she has obtained quotations two of which I find to be relevant. The respondents have replied to her complaints and their comments must be taken into account. 2. The applicant's evidence must satisfy the requirements stated in Nguyen v Cosmopolitan Homes 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; 1. Having regard to the evidence as a whole I am satisfied that the work performed by the respondent was not carried out in a proper and workmanlike manner in that 1. There were nail holes filled with putty that did not match the timber; 2. There were rips or gouges in the timber flooring; 3. some sanding of floors is unfinished; 4. the sanding that the respondents performed has left 'ripples' in the surface of the floor timbers; 5. the sealing of the floors in some areas is rough because dust was left on the floor after sanding and was then coated over leaving a rough appearance; 6. the timber cladding to three stairs creaks; and wrong coating was used. 1. As a result of these findings I will make an order in the applicant's favour for the amount claimed of $3,600.00 for rectification work as substantiated by the quotes that she has provided. Claim for $800.00 1. This claim is based on the facts asserted by the applicant that she purchased the timber for the respondents to install. Based on their quote which estimated 183 square metres, she purchased and paid for 180 square metres of jarrah timber for the respondents to install. The respondents' estimate of 183 square metres was made up of 168 square metres flooring + 8 square metres stairs + 7 square metres extra. 2. She claims that the respondents' measurement of the timber was incorrect with the result that she has paid for timber that she has no use for. 3. The applicant has attached measurements to her application which calculate that 122.55 square meters of timber was used. Her measurements also acknowledge that small cuttings of timber would have been disposed of during installation of the floors and stairs. I will call this element 'wastage'. I note that the respondents' quotation allows for 7 square meters for wastage. Their estimate or measurement of the work is therefore 176 square meters. 4. Exhibit I which is the invoice from the timber supplier establishes that the applicant paid $74.00 per square meter for the timber. 5. The applicant would only need to prove 11 square meters of excess timber to establish the monetary aspect of her claim. 6. The respondents have not dealt with this aspect of the claim in any specific way. However, in closing submissions the respondents referred me to the quotation from T Flooring which has a measurement of 157 square meters.. 7. I will accept that measurement of the area to be rectified. That figure establishes that the applicant in reliance on the respondents' quotation purchased more timber than required. I find that she should have ordered 157 + 7 (for wastage) square meters and in so doing over ordered 16 square meters. She has established her claim of $800.00 for over ordering timber. To the extent that she has established her claim in excess of the amount claimed, I note that the above calculation does not take into account the timber usage for the stairs, which would reduce the estimate. I also note that wastage is no doubt always a speculative estimate. 8. The respondents also submitted that one step is equal to one square metre of timber. There were 17 stairs in the contract work. This submission is at odds with the respondents' quote which states that 8 square metres had been measured or allowed for 17 stairs which works out to approximately one half square metre of wood per stair. I reject the submission that one step is equal to one square metre because of this inconsistency 9. Having regard to the fact that the measurements in connection with this issue are not precise, I am satisfied that the amount of $800.00 is a reasonable estimate of the cost of the applicant's over order. In addition I accept the applicant's evidence before the Tribunal that she has physical possession of the excess timber which is stored in her garage. 10. Finally, in connection with this item, I am satisfied that the applicant relied upon the respondents' quotation and their measurement of 183 square metres of timber when ordering 180 square meters of the jarrah timber. 11. I am also of the view that the respondents' quotation and their measurement of 183 square metres of timber to be used in the performance of the work was a representation as to a future matter and as a result of the representation being incorrect, the respondents were in breach of section 18 of the Australian Consumer Law. 12. The Australian Consumer Law was accepted as law in New South Wales by amendments made to the Fair Trading Act 1987 on 1 January 2011 and thereby applies to the facts relating to this application as referred to above in connection with over ordering of timber. 13. Pursuant to section 74(3) of the Fair Trading Act 'The Tribunal may decide the matter of whether a person has suffered loss or damage because of the conduct of another person that constitutes a local contravention or a contravention of Chapter 2 or 3 of the ACL if that matter arises in connection with another matter the subject of proceedings in the Tribunal. In deciding the matter of loss or damage, the Tribunal may award such sum, and make such ancillary orders, as it thinks fit.' 1. The applicant's over ordering of timber claim arises in connection with her defective work claim. I therefore have jurisdiction to award her $800.00 in connection with her claim pursuant to section 74(3). An order that the applicant does not have to pay the respondents $3,100.00 1. It is common ground that the applicant has not paid the respondents $3,100.00. She seeks an order under section 48A(c) of the Act that she be relieved from the payment of this balance. 2. The applicant must in establish in my view that there has been a failure of consideration to sustain a case that she be relieved from the obligation of paying the balance due of $3,100.00. 3. She has sought to do this by stating that the respondents did not complete the work, or did not complete work to the value of $3,100.00. 4. The respondents have brought a deal of evidence to rebut this proposition. I refer to the statutory declarations of Dong Hee Lee dated 26 March 2014 and Julierose Lee dated 26 March 2014. This evidence establishes to my mind that the work to be carried out by the respondents was substantially complete. 5. On this basis I decline to make the order sought by the applicant that she be relieved from the obligation of paying the balance due of $3,100.00. 6. This aspect of her claim is dismissed. Compensation for late completion 1. The applicant has not brought any evidence of the loss or expense that she has sustained by reason of an alleged late completion of work by the respondents. More importantly, the evidence does not establish with any precision that the respondents were in fact late. 2. There are many accusations of late completion by the applicant. However there is also evidence from the respondents that the way the applicant was organising work to be carried was the cause of the delay. There was also the issue of the timber supplier delivering incorrect timber in response to the applicant's order. This was a cause of delay and disruption. 3. The applicant has not called evidence to the civil standard, to establish that the respondents caused a delay to the completion of their work, and if they did what loss or damage she sustained. 4. This aspect of her claim is dismissed. Costs 1. Given that the parties appeared in person, I do not think that a costs order is justified or permitted under the Civil and Administrative Tribunal Act 2013. 2. However, if either party is minded to apply for a costs order they must do so within 21 days of the date of this decision. D Goldstein Senior Member Civil and Administrative Tribunal of New South Wales 9 December 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