Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Yakov Zaknic v Kurmond Home Pty Limited [2014] NSWCATCD 257 Hearing dates: 13 November 2014 Decision date: 28 November 2014 Jurisdiction: Consumer and Commercial Division Before: G Meadows, Senior Member Decision: The respondent is to pay the applicant the sum of =SUM(ABOVE) $11,141.77 within 28 days of the date of these orders Legislation Cited: Civil & Administrative Tribunal Act 2013 Home Building Act 1989 Cases Cited: Bellgrove v Eldridge ; Brewarrina Shire Council v Beckhaus Civil Pty Ltd & Anor [2006] NSWCA 361 Category: Principal judgment Parties: Yakov Zaknic (applicant) Kurmond Homes Pty Ltd (respondent) Representation: Applicant in person Mr Williamson for the respondent File Number(s): HB 13/66990 Publication restriction: Nil reasons for decision The Claims 1. In these reasons I refer to Yakov Zaknic as "the owner", and to Kurmond Homes Pty Limited as "the builder". 2. The application was filed on 29 December 2013, listing a number of alleged defects and claiming the amount of $30,000.00. The claim was otherwise not itemised. On 3 April 2014 two Scott Schedules were filed, one being in relation to "defective workmanship or material claimed" and the other "where extras claimed". The former simply set out a number of alleged defects, each with an "estimate of loss", in the total amount of $25,500.00 and with some documentary attachments including plans, invoices and photographs, but otherwise without supporting submissions or proper costings. The second schedule was in the amount of $33,422.00, supported generally by tax invoices and including a claim of loss of rent in the sum of $28,152.00. It appears these schedules may have been prepared by the owner himself although no issue arises in that regard. 3. At the hearing, the owner's final claim was in relation to 14 items as follows: Item No. Item Loss 7.1 Internal Doors $1,058.00 The builder was to install the internal doors in accordance with the National Construction Code (ie former BCA) 7.2 Wall Tiling $11,588.00 The builder was to install the wall tiling in accordance with the contract documents 7.3 Timber floating floor $0.00 The builder was to install the timber floating floor in accordance with the contract documents 7.4 Hot Water System $0.00 The builder was to install the Hot Water Service in accordance with the contract documents. 7.5 Kerb & Gutter Lay backs $1,090.91 The builder was to install the driveway laybacks in accordance with the variation to contract documents. 7.6 Builders Waste $250.00 As per the contract documents, all builders debris is to be removed from site at the time of practical completion. 7.7 Under Ground Water Tank $226.00 The builder was to install the Under water tank in accordance with the contract documents. 7.8 Survey $0.00 The builder was to install the drainage system in accordance with the contract documents. 7.9 Ensuite $852.00 Shower Screen The builder was to install the shower screen to the ensuite in accordance with the contract documents. 7.10 Air Conditioning Duct $1,636.50 The builder was to install the Air Conditioning in accordance with the contract documents. 7.11 Powder Room Sink $1,440.50 The builder was to install the Powder room sink in accordance with the contract documents 7.12 Granny Flat Kitchen $0.00 The builder was to install the Kitchen in accordance with the contract documents 7.13 Bathroom Vanity $1,022.50 The builder was to install the Bathroom Vanity in accordance with the contract documents Subtotal $19,164.91 Builders Preliminaries @ 15% $2,874.74 Subtotal $22,039.65 Builders P&O @ 15% $3,305.94 Subtotal $25,345.59 GST @ 10% $2,534.56 Subtotal $27,880.15 Home Owners Warranty $500.00 Subtotal $28,380.15 7.14 Loss of Rent $28,152.00 Total $56,532.15 This claim was based on the owner's expert report and Scott schedule. The owner confirmed at the hearing that he sought the total as shown in the schedule above. Evidence 1. Both parties had well prepared evidence, properly filed and formatted. The owner relied upon the expert report and opinions of Mr Sim, the builder on Mr Worthington. 2. The Scott Schedule is reproduced as Attachment 1 below and sets out the opinions of the experts. As can be seen, a number of the items have been agreed. 3. At the hearing, the owner was self-represented, the builder was represented by Mr Williamson. The main purpose of the hearing was for the experts to be cross examined. In my view, the experts' opinions were quite clear from their respective reports and the Scott Schedule. With great respect to the parties, the cross-examination did not really assist the Tribunal. The owner attempted to vigorously cross examine Mr Worthington but many of the questions related to areas not within Mr Worthington's expertise (or the expertise of any professional building consultant with his qualifications and experience) or were in relation to legal issues not subject to expert opinions. Suffice it to say that in my opinion, neither Mr Worthington nor Mr Sim were forced to make any relevant concessions, but, by the same token, neither expert improved the probative or persuasive value of his opinions, again with great respect to the experts and the parties. 4. Following cross-examination of the experts, the parties gave oral submissions and the hearing was concluded. Consideration and Determination 1. For the sake of convenience and clarity I have set out my findings in relation to each item claimed by the owner in Attachment 2 below, arranged in the same format as the Scott Schedule. 2. There are some general findings and observations I wish to make as follows. 3. The main item, or rather the largest item in monetary terms, in the owner's claim is that for loss of rent. I consider this issue was relatively straightforward in legal terms, as set out in Attachment 2, but required careful calculation. 4. The other main issue in this matter, which affected a number of the individual items claimed, related to the reasonableness of the owner's claims. The builder referred to the well-known (at least to lawyers) case of Bellgrove v Eldridge a number of times in submissions. The owner made no submissions in response which I infer is the result of unfamiliarity. I consider it is necessary to set out my views in relation to the builder's submissions at some length. 5. In very brief terms, Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 concerns the principles to be applied in coming to a decision as to what rectification is reasonable and necessary in a claim of building defects. There are several important elements in this issue. 6. The High Court in Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 observed that the ordinary measure of damage is the cost of the building work which is required to achieve conformity with the building contract. Even if that work requires the demolition and reconstruction of the house, then, subject to one qualification, that is the appropriate measure of damage. 7. The qualification to which the High Court referred in Bellgrove was that "not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt". 8. In relation to the current application by Mr Zaknic,. I apply those principles as follows. Before doing so however, I wish to state my conclusion that in each case the work as built may (in some instances) not have been in exact conformity with the contract but in each case, the work as built was perfectly workmanlike, indeed to a high standard and resulted in works which were quite fit for purpose. 9. Later cases show that if it is alleged that the course of rectification proposed is unreasonable, then the "unreasonability" must be exceptional, such as "the proposed rectification is out of all proportion to the benefit to be obtained" as it was put in Brewarrina Shire Council v Beckhaus Civil Pty Ltd & Anor [2006] NSWCA 361. In this application, in relation to the tiling (item 7.2), the shower screen (item 7.9) and the vanity (item 7.11) I find that the proposed rectification is out of all proportion to the benefit to be obtained. 10. The respondent is to pay the applicant the sum of $11,141.77 within 28 days of the date of these orders. G Meadows Senior Member Civil and Administrative Tribunal of New South Wales 28 November 2014 Attachment One Item No. Item Comments Loss Comments Loss There are four doors within the main dwelling & the granny flat that have a clearance greater the 20mm. Because the gaps under the doors are greater than 20mm, I am of the opinion the builder is in breach of the Guide to Standards & Tolerances. The tolerance for the clearance between the underside of door and the finished floor level is 20mm. The doors have not been installed in a tradesmen like manner, because the builders tradespersons should have installed the doors within the tolerances, It is my opinion the builder is in breach of The Home Building Act, Part 2C Statutory Warranties. Works required; (i) Remove the four doors Labour 1man x 2hrs @ $56.50/hr = $113.00 (ii) Supply & Install a timber batten to the underside of the doors labour 1man x 2hrs @ $56.50/hr = $113.00 7.1 Internal Doors The builder was to install the internal doors in accordance with the National Construction Code (ie former BCA) Materials 40mm x 20mm pine = $8.00 $1,058.00 Refer item 4.01. , Disagree the Guide to Standards & Tolerances is only a "guide", it is not adopted by the Building Code of Australia $0.00 (iii) Fill & Sand the gap between the door & batten 1 man x 4hrs @ $56.50 = $226.00 (iv) Materials Builders Bog & Sandpaper = $40.00 Repaint all four doors, including door edges Labour 1 man x 6hrs @ $56.50 = $339.00 Materials Paint =$50.00 Labour to reinstall doors 1man x 2hrs @ $56.50 = $113.00 v. Clean work area and dispose of building debris 1 1 man x 1 hr @ $56.50 = $56.50 The contract documents state that the tiles are to be laid in a vertical pattern, however the tiles have been laid horizontally. It is my opinion that the builder is in breach of The Home Building Act because the builder has not completed the works as per the contract documents. It is my opinion the builder is responsible for the rectification of this issue. I found within the Bathrooms, Ensuite and Laundry of both the main dwelling & the granny flat had white wall tiles laid in a horizontal stack bond. Works required; (1) Remove & Store the shower screens x 3 Labour 2men x 3hrs @ $56.50/hr $339.00 (2) Remove & Store the PC items, Towel rails, Taps, Shower Rose, Toilets etc Labour 2men x 3hrs @ $56,50/hr = $339.00 (3) Remove & dispose of wall tiles with wall lining 2men x 16hrs @ 856.50 $1,808.00 (4) Supply & Install new wall linings Wall Tiling 2men x 16hrs @ $56.50 = $1,808.00 7.2 The builder was to install the wall tiling in accordance withthe contract documents Materials = $400.00 $11,588.00 Refer item 4.02 Disagree the bond of the tiles is open to interpretation. The current the bond does not cause any financial loss to the Applicant. . $0.00 (5) Supply & Install new water proofing membrane 1man x 8hrs @ $56.50 = $452.00 Materials = $300.00 (6) Supply & Install new wall tiling (To Be Laid Vertically) Labour 2men x 16hrs @ $56.50 = $1,808.00 Materials Say 50m2 @ $401m2 = $2,000.00 (7) Supply & Install paint to the walls Labour 2men x 8hrs @ $56.50/hr = $904.00 (8) Reinstate items 1 & 2 Labour 2men x 6hrs @ $56.50 = $678.00 (9) Remove all builders debris from site & provide a detailed clean 1 man x 8hrs x $56.50 = $452.00 (10) Skip bin 3m3 = $300.00 Timber floating floor The floating timber floor has been installed after the skirting has been installed with a scotia to the perimeter. 7.3 The builder was to install the timber floating floor in accordance with the contract documents The owner believes the builder should have installed the skirting above the floating floor. $0.00 Refer item 4.03 Agree $0.00 In my opinion the builder has installed the floating timber floors in accordance with the manufactures guidelines and the contract documents. The Hot Water System was installed as per the contract documents and installed after the handover period. 7.4 Hot Water System The Hot Water service went missing and the owner supplied & installed a new Hot Water Service. $0.00 Refer item 4.04 Agree $0.00 The builder was to install the Hot Water Service in accordance with the contract documents. In my opinion the home Owner should have had home & contents insurance to cover the loss. In my opinion the builder is not in breach of the contract. The owner at the time of the inspection said the builder would not supply & install the asphalt to the road surface to close the gap between the cut edge of the asphalt & the new concrete layback. And the Owner had to supply & Install the asphalt at his own expense. 7.5 Kerb & Gutter Lay backs It is my opinion the supply & installation of the new asphalt is part of the associated works with constructing a driveway layback, because of this it is my opinion the builder is in breach of the contract and therefore The Home Building Act. S1,090.91 Refer item 4.05 This work was not the responsibility of the builder as set out in the Willoughby Council Permit no FOOT 2012/129 page 5 Drawing SD105 Sheet 1 $0.00 The builder was to install the driveway laybacks in accordance with the variation to contract documents. Works required; Supply & Install new ashphalt as per Tax Invoice from A.C. Asphalting = $1,090.91 Builders Waste The Home Owner claims there was builders debris left on the property after practical completion. Refer item 4.06 7.6 As per the contract documents, all builders debris is to be removed from site at the time of practical completion. This is a matter for evidence and I am unable to comment to the extent or volume of builders waste on the property. $250.00 I am instructed the builder removed waste. $0.00 However it is my opinion if there was builders waste/debris left behind after handover, the builder is in breach of The Home Building Act and also the Guide to Standards & Tolerances. Agree this is a matter for evidence The lid to the underground water is unable to be opened. 7.7 Under Ground Water Tank It is my opinion that the builder should show the owner that there is access into the underground water tank, for the owner to service and maintain in the future. $226.00 Refer item 4.07 Disagree. The lid can be removed $0.00 The builder was to install the Under water tank in accordance with the contract documents. Works required; Labour 1 man x 4hrs @ $56.50 = $226.00 7.8 Survey The builder has not provided a Drainage survey as requested by the he PCA. $0.00 Agree $0.00 The builder was to install the drainage system in accordance with the contract documents. It is my opinion that it is very unusual for a PCA or Council require the as built for stormwater, however under the HIA Home Building Contract, if the builder is to do more or less work to comply with a requirement of a statutory or other authority the builder is entitled to ask for a variation to the original contract. The builder has installed two fixed panels & one hinged door. The contract drawing indicate one fixed panel & one hinged door. On drawing Sheet 4 & Sheet 11 indicate the shower frame having one fixed panel & one hinged door. In my opinion the builder is in breach of the contract because of the extra panel to the right hand side. Ensuite In my opinion the shower screen door is not fit for purpose being only 600mm in width does not allow for a person to walk clearly into the shower without walking in sideways into the shower. 7.9 Shower Screen The builder was to install the shower screen to the ensuite in accordance with the contract documents. Works required; $852.00 Refer item 4.09 Disagree. The door is shown as 600mm wide. The shower screen is fit for purpose and I am not aware of any loss suffered. $0.00 Remove the door & small fixed panel Labour 2men x 2hrs @ $56.50 = $226.00 Supply & install a new larger shower screen door Labour 2men x 2hrs @ $56.50 = $226.00 Materials New Glazed door panel approx 800mm wide x 2000m high = $400.00 There is a missing Air Conditioning Outlet to the Entry Foyer. In my opinion there should be an air conditioning outlet installed to the ceiling of the entry foyer to the main dwelling. In my opinion the builder is in breach of The Home Building Act because the contract drawings have not been followed. In my opinion it is the responsibility of the builder to rectify this issue. Works required; (11) Cut 2-3 holes approx. 500mm x 500mm in the ceiling of the garage & the entry foyer. Labour 2men x 2hrs x $56.50 = $226.00 (12) Extend the flexible duct from the garage to the entry. 7.10 Air Conditioning Duct Labour 2men x 1hr x $56.50 = $113.00 Material = $100.00 $1,636.50 Refer item 4.10 Disagree. The builder has installed an extra air conditioning outlet $0.00 The builder was to install the Air Conditioning in accordance with the contract documents. (13) Supply & Install a Air Conditioning Outlet Vent Labour 1 man x 1 hr x $56.50 = $56.50 Materials Air conditioning outlet = $150.00 (14) Patch the holes to the ceiling. Labour 1man x 4hrs @ $56.50 = $226.00 Materials = $50.00 (15) Repaint the ceiling to the Garage & the entire ground floor (as there is no room breaks to the ceiling) approx. 130m2 Labour 1man x 8hrs @ $56.50 = $452.00 Materials = $150.00 (16) Clean & remove debris from site (17) Labour 2 men x 1 hr @ S56.50/hr = $113.00 The vanity sink has not been installed to the centre of the vanity bench top as per the contract drawings. In my opinion the vanity bowl has not been installed to the centre of the vanity. In my opinion the vanity bowl should be approx. 130mm towards the left hand side. In my opinion the builder is in breach of The Home Building Act because the builder has not followed the contract plans. Works required; 1 Remove the tiled splash back to the vanity. Labour 2men x 2hrs @ $56.50/hr = $226.00 Remove the vanity bowl & Tapware for later use. 1 man x 1 hr @ $56.50/hr = $56.50 Powder Room Sink 3 Remove the stone vanity top and depose of off site 7.11 The builder was to install the Powder room sink in accordance with the contract documents 2men x 1hr @ $56.50/hr = $113.00 $1,440.50 Refer item 4.11 Disagree. The Vanity Bowl is acceptable & I am not aware of any loss suffered. $0.00 4 Supply & Install a new stone Vanity Top 2men x 2hrs @ $56.50/hr = $226.00 Material = $400.00 5 Reinstate the vanity bowl & Tapware 1man x 2hrs @ $56.50/hr = $113.00 6 Supply & Install new splash 1 man x 2hrs @ $56.50 = $113.00 Materials = $80.00 7 Clean & remove debris from site 1 man x 2hr @ $56.50 = $113.00 Granny Flat Kitchen The builder did not install a set of drawer units into the kitchen of the Granny Flat. 7.12 The builder was to install the Kitchen in accordance with the contract documents The contract drawings of the kitchen Granny Flat do not show any drawers. $0.00 Agree $0.00 In my opinion the builder is not in breach of the contract because the contract plans do not indicate any drawers to the Granny Flat kitchen The Plinth to the vanity within the bathroom is water damaged. In my opinion the edges of the plinth has not been sealed to prevent water damage. In my opinion the plinth may from time to time be subject to water from the bath during normal use of the bath. In my opinion the builder is in breach of The Home Building Act because the material used to construct the vanity plinth is not fit for purpose or installed in a workmanlike manner. Works required; (18) Remove splash back tiles Labour 2men x 1 hr @ $56.50/hr = $113.00 (19) Remove vanity bowls & tapware (20) 1 man x 1 hr @ $56.50 = $56.50 (21) Remove stone vanity top (22) 2men x .5hr @ $56.50 = $56.50 (23) Remove Vanity Bathroom Vanity (24) 2 men x .5hr @ $56.50 = $56.50 Refer item 4.13. The builder will replace the plinth at no charge to the owner. 7.13 The builder was to install the Bathroom Vanity in accordance with the contract documents (25) Remove & Supply & new plinth to the vanity $1,022.50 Removal of tiles is not required as the Vanity has been installed after the walls have been tiled. (26) 2 men x 2hr @ $56.50 = $226.00 Materials = $100.00 (27) Reinstate the vanity (28) 2 men x .5hr @ $56.50 = $56.50 (29) Reinstate the stone vanity top (30) 2 men x .5hr @ $56.50 = $56.50 (31) Reinstate the bowls & Tapware (32) 1 man x 1 hr @ $56.50 = $56.50 (33) Supply & Install new tiles to the splash back (34) 2 men x 1 hr @ $56.50/hr = $113.00 (35) Materials = $75.00 (36) Clean & remove debris from site (37) 1man x 1hr @ $56.50 = $56.50 Summary Sub Total $19,164.91 Builders Preliminaries @ 15% $2,874.74 SubTotal $22,039.65 Builders P&O @ 15% $3,305.94 Sub Total $25,345.59 GST @ 10% $2,534.56 Sub Total $27,880.15 Home Owners Warranty $500.00 Sub Total $28,380.15 7.14 Loss of rent due to late completion Contract indicates works to be completed in 34 weeks. Contract date was 16/11/2012. Disputed practical completion was 24/9/2013 (45.5 weeks). Date builder supplied certifications required to achieve occupation was 20/11/2013 (53.5 weeks). Builder claimed 32 days for Christmas shutdown period, plus 4 days for rain (5.2 weeks) Lost rent for (53.5-34-5.2) 13.8 weeks @ $2040 per week = $28152. Front page of current lease agreements shown at ATTACHMENTS "16A" and "16B". Building Contract clauses 1, 9 & 12 shown at ATTACHMENT "160". Builder's extension of time claims at ATTACHMENTS "16D" & "16E". $28,152.00 This is a matter for evidence Total $56,532.15 Attachment Two Item No. Item Finding Amount Allowed At the hearing there were two issues with this item: • the effect of the Guide to Standards & Tolerances; and 7.1 Internal Doors The builder was to install the internal doors in accordance with the National Construction Code (ie former BCA) • whether this item was defect apart from the Guide. $1,058.00 The Guide is merely a guide but in the absence of any statutory code, regulation or contractual provision (or any other provision governing this issue) the Guide suggests that a workmanlike builder would adopt the guides therein. In any event, I am satisfied on the photographic evidence and the evidence of the applicant that these are defects. I allow the amount claimed. 7.2 Wall Tiling I find that the homeowner selected the manner in which the tiles were to be laid, and that was, in relation to the rectangular tiles, the long edge was to be horizontal, the short edge vertical. The rectangular tiles were not laid in accordance with the contract. $0.00 The builder was to install the wall tiling in accordance with the contract documents The issue then is, as submitted by the respondent, is it reasonable to find that this defect should be rectified? This would require stripping the relevant bathroom to the walls, and rebuilding, at a projected cost of almost $12,000.00. For the reasons set out above in relation to the Bellgrove v Eldridge submissions, I find that it is not reasonable to rectify this defect. The tiles otherwise are installed in a workmanlike fashion, indeed in my opinion to a high standard, and are fully effective in their function. I do not allow this claim. 7.3 Timber floating floor Both experts agree this is not a defect. $0.00 The builder was to install the timber floating floor in accordance with the contract documents 7.4 Hot Water System Both experts agree the builder is not responsible for this item. $0.00 The builder was to install the Hot Water Service in accordance with the contract documents. 7.5 Kerb & Gutter Lay backs The evidence in regard to this item is somewhat unclear. It is alleged the builder, in constructing the kerb and gutter layback, excavated a portion of the roadway immediately adjacent to the new kerb and layback, and left it unfinished in the sense that the area was not refilled and smoothed and the asphalt relaid. $1,090.91 The builder was to install the driveway laybacks in accordance with the variation to contract documents. The builder suggests that on the basis of the documentary evidence provided, this was not a cost to the builder or the owner, because of the ambiguity of the evidence which may suggest the Council would accept responsibility for this minor piece of work. I do not agree with that submission. In my opinion the evidence suggests that the owner was to contact the Council who would decide if the work was to be done. The Council offices would make the decision, not do the work themselves. I allow this item based on the tax invoice provided. 7.6 Builders Waste I agree with the owner's expert that if concrete waste was left on site this would be a breach by the builder. However, the evidence suggests both that the builder did remove at least some of that waste on the basis of the affidavits provided by the builder, there was no waste left on site. The makers of the affidavits were not required for cross-examination and I accept their evidence but I note that is not the end of the matter. The owner has provided evidence, including a reference in the Certificate of Practical Completion, that further concreting was to be done. This related to the kerbing and guttering work and the owner alleges waste was left on the site after that work. The builder does not refer to this evidence. I allow the claim. $250.00 As per the contract documents, all builders debris is to be removed from site at the time of practical completion. 7.7 Under Ground Water Tank The evidence provided by Mr. Worthington for the builder clearly demonstrates there is access into the water tank (which is the only defect mentioned by Mr. Sim for the owner). Not allowed. $0.00 The builder was to install the Under water tank in accordance with the contract documents. 7.8 Survey Both experts agree there should be no allowance for this item. $0.00 The builder was to install the drainage system in accordance with the contract documents. Ensuite As explained by the owner in the hearing, this item refers to the original plans (about which there is no dispute) which show a fixed glass panel forming part of the "front" of the shower recess, and a hinged glass door forming the remainder of the front of the shower recess. As built, the builder has cut the fixed panel so that it is narrower than drawn, then installed the hinged door, then installed a further, narrower fixed panel on the other edge of the door and fixed to the tiled wall. There are thus two fixed panels, one on either edge of the door as compared to the drawings which show only one fixed panel. 7.9 Shower Screen The builder was to install the shower screen to the ensuite in accordance with the contract documents. Mr. Worthington for the builder suggested in cross-examination that the builder has reasonably altered these works as described and that the function of the door and front of the shower recess is fit for purpose and indeed is improved because the narrower "new" panel can be properly sealed against the tiled wall which, as always, will have some slight irregularities between tiles. $0.00 The owner criticised this work because, he suggested, the narrower fixed panel would allow more water to splash out of the shower recess into the rest of the room. He conceded he had no evidence for that submission which in any case appears to ignore the fact that there are now two fixed panels which may operate as well as one wider fixed panel in keeping water from splashing out. I do not allow this item as in my view the evidence suggests the current installation is fit for purpose and it would not be reasonable, pursuant again to the decision in Bellgrove v Eldridge, to allow the cost to remove a perfectly effective and competently installed door and fixed panels simply because the builder has installed the door in a different fashion to the drawings but in my opinion in a more effective fashion, as per Mr. Worthington's opinion. Air Conditioning Duct This is another item in which the evidence is rather unclear. Mr. Sim for the owner suggests that the builder omitted to instal one air conditioning outlet. Mr. Worthington states that an extra air conditioning outlet was installed (albeit at a later time). 7.10 The builder was to install the Air Conditioning in accordance with the contract documents. The evidence provided by the applicant suggests indeed that an extra outlet was installed although there were complaints about that work and the disturbance to a tenant. $0.00 In any case, the claim is that an extra outlet was to be installed and I find it was. I do not allow this claim. Powder Room Sink This item, similar to the rectangular tiling and the shower recess door, concerns a conceded failure by the builder to install the sink in the exact centre of the vanity surface (that is, midway along the length) but has installed it about 130mm off centre. The applicant claims this is 7.11 The builder was to install the Powder room sink in accordance with the contract documents The evidence of the builder's expert is that as installed the sink is unsymmetrical in relation to the cupboard doors underneath. The builder submits that what is unsymmetrical to one observer may be not unsymmetrical to another observer. $0.00 I have carefully viewed the photographic evidence in this regard. In my opinion the sink does not look defective or out of place or unsymmetrical. It sits naturally in relation to the cupboard doors beneath. Although the applicant suggested the lighting may be affected there is no evidence to this effect. The sink is otherwise quite fit for purpose. This is another item in which although it is conceded to be installed not as shown in the drawings, it would not be reasonable to order re-installation of a perfectly serviceable unit for that reason alone. 7.12 Granny Flat Kitchen Both experts agree there should be no allowance for this item. $0.00 The builder was to install the Kitchen in accordance with the contract documents 7.13 Bathroom Vanity It is agreed there is a defect in this item. The owner seeks an amount of $1,022.50 to replace the plinth, the builder offers to return and replace at no cost to the owner. $0.00 The builder was to install the Bathroom Vanity in accordance with the contract documents The owner's expert has allowed for the cost of removing and replacing tiles as part of the re-installation. The builder's expert suggests this is not required as the vanity was installed originally after the tiles were installed. He was not cross-examined on that point and I accept his evidence. In my opinion the most reasonable option and the only one I can decide on the evidence available is that the builder be ordered to return and replace the plinth at no cost to the owner at a mutually suitable time within 60 days of the date of these orders. This is the single biggest item in the owner's claim by a considerable margin. I have no doubt the owner had these two dwellings constructed for the purpose of renting them out. I accept the evidence of the two residential tenancy leases at face value, that is, that the two dwellings were leased for the periods and at the weekly rentals shown therein. The issue is brought by the owner as a contractual issue: the period of the contract is 34 weeks, the works were not completed within 34 weeks or within any extended period calculated by reference to agreed extension of time claims, and therefore the owner is entitled to damages for such extra time, in this case being rent foregone. However, just as the contract period of 34 weeks and the provisions for extensions of time to be claimed are contractual, so is the issue of damages. Clause 30 of the Contract states: Clause 30 Liquidated Damages 30.1 If the building works do not reach practical completion by the end of the contract period the owner is entitled to liquidated damages in the sum specified in Item 13 of Schedule 1 for each working day after the end of the contract period to and including the earlier of: (a) the date of practical completion; (b) the date this contract is ended; or' (c) the date the owner takes possession of the site or any part of the site. Item 13 of Schedule 1 "Particulars of Contract" is struck through and initialled in the copies of the Contract before me. As I noted above, I accept the owner had these dwellings constructed for the purpose of renting them out. It is not difficult to infer that Item 13 of Schedule 1 was struck through for that reason: the owner intended not to prevent a possible claim for loss of rent or rather to limit such a claim by inserting an amount in Item 13, in the possible circumstances of a delay in completion of the works. I find both parties agreed to this amendment of the contract. Therefore, the owner is entitled to bring a claim for damages as part of this application. I further note it was not disputed by the builder that this was a valid claim under the contract although the method of calculation and the probative value of the evidence was disputed (at least in submissions in regard to the latter). It remains to calculate the reasonable amount of such damages. 7.14 Loss of rent claim The owner starts by asserting a weekly loss of $2,040.00 based on the actual weekly rentals obtained from leases entered into on 03 January 2014 and 18 January 2014 respectively, on the assumption that similar leases and rentals could have been achieved at any time prior to those dates as soon as practical completion was reached. I interpret the owner's calculations and submissions in that way, as the owner commences calculating the delay from the date 34 weeks after the works commenced (being the contractual contract period, such date being defined as the date of practical completion in the Contract. $8,742.86 The owner then states that the period from the contract date of 16 November 2012 to the "disputed" date of practical completion, being 24 September 2013, is 45.5 weeks—but this period is not otherwise relevant to the calculations. The owner submits the relevant period is to the date the builder supplied certifications "required to achieve occupation", being 20 November 2013, which was 53.5 weeks. Completion of the works was therefore delayed by 19.5 weeks (being 53.5 weeks less 34 weeks). The builder claimed (and it appears the owner agrees was entitled to claim, under the contract) delays of 5.2 weeks which, subtracted from the actual delay of 19.5 weeks is 14.3 weeks (although the owner, or the owner's expert, it is not clear, calculated the resulting delay, using the same figures as those above, to be 13.8 weeks: see the scott schedule). On the owner's calculations, this amounts to a total of $2,040.00 x 13.8 = $28,152.00. On my calculations, this would be $2,040.00 x 14.3 = $29,172.00. The builder refutes this claim by submitting that the completion date was calculated by it to be 09 October 2013, that practical completion was achieved prior to that date (being 24 September 2013) and therefore there was no delay. Turning to consider the documentary evidence, I find as follows. It is necessary, as always, to determine what the contract actually provides. Clause 8 of the contract states that the builder is to commence the building works within 20 working days after the builder receives all necessary approvals etc. or the owner has satisfied all the requirements of Clause 4. That clause is the "Essential Matters" clause and in its terms does not apply to these proceedings. The evidence discloses that the owner was to demolish the existing building on the site and that the demolition was accomplished on 14 December 2012. That is the date the builder has nominated as the "start of contract" in its start/completion date calculation used to calculate the completion date of the contract (described as the "contact obligation date for completion") and the date of practical completion of the contract. The contract does not itself refer to the owner demolishing the existing building (or at least I was not taken to any such reference) but Clause 11, "Site Possession and Access" notes that the owner is to give the builder exclusive possession of the site to carry out the building works. In my opinion, that clause cannot be complied with until the owner has completed the demolition which did not occur until 14 December 2012 and therefore I accept that date as the start of the contract, not the date submitted by the owner, being 16 November 2012 (the date the contract was signed). Next, applying the 20 working days period to that date of 14 December 2012 to give the date the builder must commence the building works, the builder has calculated that date to be 11 January 2013 which I accept is correct. Clause 8.2 of the contact specifies that that date is the date the contract period commences. The next calculation is to apply the contract period of 34 weeks to the date the contract commences, which is 06 September 2013. The builder has claimed delays amounting to 24 working days, including 5 public holidays, 5 wet days and 14 days relating to the "industry shutdown" over the 2012/2013 Christmas period. I agree with the holidays and the wet days, but the shutdown days require further consideration. As I have noted, the contractual commencement date has been calculated to be 11 January 2013. 14 working days from and including that date is 04 February 2013 (allowing for the Australia Day public holidays). Clause 9.1(j) of the Contract specifies that the industry shutdown is reason to request an extension and that is "a 5 week period commencing on or about 22 December in each year". On my calculations, for the 2012/2013 year that period would commence on Monday 24 December 2012 and finish on 25 January 2013. The public holidays for Christmas and Boxing Day in 2012 should not be double counted in the industry shutdown period, in my opinion. On that basis, I calculate the number of working days between 11 January 2013 and the end of the shutdown period, not including 25 January 2013 which was a public holiday for Australia Day, is 9 and the new working year should have started on 28 January 2013. In my view, therefore, the builder is entitled to an extension of 9 days for the shutdown period, and a total of 18 days for that period, plus 5 wet days and 4 public holidays. Adding 18 working days to 06 September 2013 gives the date 02 October 2013. I find that is the contractual completion date. The next issue concerns the actual date of practical completion. The builder's "Contract Start/Completion Date" document (which I should note was prepared on 04 August 2014 and is not contemporaneous with the contract) shows the practical completion date to be 24 September 2013 and of course is not a calculated date but is the actual date on which the builder claimed the works had reached practical completion and a Notice to that effect was given to the owner. The owner states that practical completion should not be found to have occurred until the date the builder supplied certifications "required to achieve occupation", being 20 November 2013, as noted above. I do not agree with that submission. I find "practical completion" to be as defined in the contract: "practical completion" means when the building works are complete except for minor omissions and defects that do not prevent the building works from being reasonably capable of being used for their usual purpose;" In my view the dwellings are not capable of being used for their usual purpose without a hot water service. The evidence in that regard is not clear as to actual date the hot water service was ready to use. The owner's expert suggested it was installed on 01 November 2013 but was found to be "missing" (read "stolen") two days later. Both experts accept the builder was not responsible for that loss. I therefore find practical completion was not reached until 01 November 2013. The obligated completion date as calculated above was 02 October 2013, a delay therefore of 4.3 weeks. At a weekly loss of rent of $2.040.00, I calculate the total loss to be $8,742.86. Total $11,141.77 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: 26 March 2015