Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Withers v Alexander [2016] NSWCATCD 28 Hearing dates: 20 November 2015 and 16 February 2016 Decision date: 13 April 2016 Jurisdiction: Consumer and Commercial Division Before: K Ross, General Member Decision: The respondent is to pay the applicants the sum of $2,836.27, on or before 13 May 2016. Catchwords: Incomplete work, defective work Legislation Cited: Home Building Act 1989 Category: Principal judgment Parties: Ron Withers and Sue Withers (applicants) William Glen Alexander (respondent) Representation: Both parties appeared in person File Number(s): HB 15/45761 Publication restriction: Unrestricted reasons for decision The application 1. The applicants claim a refund from the respondent of the sum of $8,000.00 which they paid to him for work on their bathroom. The applicants allege that the respondent did not hold the correct license, and breached the Home Building Act 1998 by failing to provide a contract which complied with the Act, failing to advise of cooling off provisions, demanding a deposit of greater that 10% of the price, and failing to carry out the work in a proper and workmanlike manner. The applicants claim a refund of the sum of $8,000.00 paid to the respondent. 2. The respondent opposes the orders sought. The proceedings 1. The respondent's expert did not appear at the hearing on 20 November 2015. To facilitate the progression of the matter, the Tribunal asked the applicant's expert to telephone the respondent's expert and report as to whether the differences between them could be narrowed. The applicant's expert did so, and gave evidence of what he said transpired in that conversation. The Tribunal heard the evidence and reserved its decision. A short time after the hearing the Tribunal received a letter from the respondent's expert alleging that his conversation with the Tribunal had been misrepresented. The Tribunal directed the experts to confer and file with the Tribunal a short report, indicating the areas of agreement and difference between them. No such report was filed. The Tribunal also directed that the parties and experts appear before the Tribunal to resolve the issue. The respondent's expert did not appear as directed. 2. Both parties have provided additional documentation to the Tribunal since the hearing on 20 November 2015. At the hearing on 26 February 2016, the applicant's expert and the applicants' son began to strenuously challenge the respondent. The matter had not been listed for such a purpose. In the absence of an appearance by the respondent's expert, the Member determined that the hearing should be brought to a conclusion. The Tribunal does not intend to take into account any of the documents supplied to the Tribunal since the November hearing, with the exception of the emails which cast some light on the failure of the experts to provide the joint report ordered. Applicant's evidence 1. The applicants rely upon evidence by each of the home owners, and an expert report from Stuart Muir of Lake Macquarie Building Inspections, who attended both hearings and was available for cross examination. The applicants were represented at the hearing by their son. 2. The applicants gave evidence that they had engaged the respondent to carry out a renovation of their ensuite bathroom. They requested that he supply a quotation in writing and a contract. Before engaging him, they made enquiries of the Department of Fair Trading. They were satisfied that "there was no mark against (his) name". When the respondent arrived, he supplied a written quote which they signed. The applicants asked for a contract but the respondent told them that this was the way he always does it. They paid him a deposit of $5,000.00 as requested. The work began immediately. The respondent and his son demolished the ensuite, removing the vanity, shower, toilet and tiles and removing the lower half of the wall sheeting. The respondent then demanded a further payment of $3,000.00. The applicants say that they were concerned about the quality of the work, and suggested that a payment of $1,800.00 would be appropriate. The respondent demanded $3,000.00, and after seeking advice from the Department of Fair Trading, the applicants paid the sum requested. 3. At this point the applicant's son became involved. He advised the respondent that all future contact should be with him. He wrote to the respondent demanding certain information, which the respondent declined to provide. The respondent then advised that he was terminating the contract. 4. The applicants engaged Stuart Muir of Lake Macquarie Building Inspections to provide a building report. The report stated that there were defects in the waterproofing, and in the affixing of the wall sheets. The applicants lodged a complaint with Fair Trading. The issues raised by the applicants' expert will be addressed in the discussion of the Scott Schedule below. 5. The applicants have become aware that the wall sheeting removed from the bathroom contained asbestos, which was not handled correctly by the respondent. 6. The applicants say that they kept a record of the times worked by the respondent, and dispute the amount of time which he claims to have worked. Respondent's evidence 1. The respondent gave evidence and relied upon a report of Peter Shepherd of Pink Slip Building Reports. Mr Shepherd did not attend either of the hearings. 2. The respondent gave evidence that he entered into an agreement with the applicants, documented by a signed quotation. He said that he performed work pursuant to that agreement. He denies that he did work outside of his license conditions. He said that before he commenced work, he was assured by the applicants that there was no asbestos in the home. He said that when he left the job, he intended to return to complete the waterproofing on the following Monday, but he received a series of text messages from the applicant's son Justin. They were abusive and demanding. Justin demanded that all contact be between him and the respondent, and told the respondent that he was not to return to the site "prior to talking to me regarding several findings". One message stated "I won't lie I'm pretty pissed off over this", and another "this looks like small claims court to me." The respondent sought advice and determined that he would terminate the contract, which he proceeded to do. 3. The respondent said that it was the applicant who asked him to replace some of the wall sheets in the bathroom and he agreed to do so. He is concerned that both he and his son have been exposed to asbestos dust during the work. 4. He denies that the work he did was defective. He says that it was incomplete, and would have been completed had the applicants' son not interfered in the contract. He offered to return to carry out the rectification work recommended by the applicants' expert, but his offer was declined. 5. The respondent's expert addresses each of the applicants' expert's claims. This evidence will be set out below in the discussion of the Scott Schedule. Decision Termination of the agreement 1. The evidence discloses that the respondent terminated the agreement, having received a number of calls and text messages from the applicants' son, and having been told by him not to return to the site: "Have tomorrow off buddy" and "Do not go to Whitby Street tomorrow under any circumstances. We need to get a building inspector in." Whilst the denial of access to the site, had it been permanent, would have entitled the respondent to terminate the agreement, it did not entitle him to do so immediately. He ought to have given notice of an intention to terminate if he was not allowed back on site. The Tribunal is not satisfied that the respondent was entitled to terminate the agreement immediately. 2. However the respondent's termination of the agreement was accepted by the applicants, who have declined offers by the respondent to return to complete the rectification works. Breaches of Home Building Act 1998 1. The applicants point to a number of breaches by the respondent of the Home Building Act 1998. In respect of each alleged breach: Unlicensed contracting 1. The applicants allege that the respondent was not licensed to undertake the work on the bathroom. It is not disputed that the respondent holds a license for wall and floor tiling. That license entitles the respondent to do the following (See Schedule 4 to Home Building Regulation 2014): Work involved in the affixing of tiles for functional or decorative use on internal or external surfaces of buildings. For the purposes of the describing the category of wall and floor tiling, "tile" means a thin plate of regular or irregular shape made from fired clay, moulded concrete, ceramics or natural material or other similar manufactured material. Examples of works and materials within the category of wall and floor tiling include the following:(a) tiles made from cork, linoleum, rubber or thermoplastics,(b) waterproofing of wet areas in preparation for the laying of tiles,(c) mosaics,(d) preparation and minor repair (but not renewal or replacement) and insertion of expansion joints to surfaces prior to tiling. 1. A kitchen, bathroom and laundry renovation license would entitle the holder to do the following: Work involved in the installation, refurbishment, restoration and on-site repairs of or to a kitchen, bathroom or laundry, other than work affecting any internal or external load bearing component of the building that is essential to the stability of the building or any part of it, including things such as foundations, floors, walls, roof, columns and beams. Specialist work that is an integral part of an overall contract to carry out kitchen, bathroom and laundry renovation work. Note: Specialist work within this category is subject to clauses 15 and 16 of this Regulation, which require specialist work to be subcontracted to the holder of a contractor licence in the relevant category of specialist work, and appropriately supervised by the holder of an endorsed contractor licence or supervisor certificate in the relevant category of specialist work. 1. It follows that the respondent was licensed to undertake repairs to the bathroom walls, but was not licensed to undertake demolition, renewal or replacement of the lining sheets. He was licensed to undertake the waterproofing, and install the tiles. Failure to enter into a small works contract 1. The applicants allege that the respondent failed to enter into a small works contract as required by s7AAA of the Act which provides as follows: 7AAA Form of contracts (small jobs) (1) This section applies to a contract only if the contract is not one to which section 7 applies and the contract price exceeds the prescribed amount or (if the contract price is not known) the reasonable market cost of the labour and materials involved exceeds the prescribed amount. The "prescribed amount" is the amount prescribed by the regulations for the purposes of this section and is inclusive of GST. (2) A contract must be in writing and be dated and signed by or on behalf of each of the parties to it. (3) A contract must contain: (a) the names of the parties, including the name of the holder of the contractor licence shown on the contractor licence, and (b) the number of the contractor licence, and (c) a description of the work to which the contract relates, and (d) any plans and specifications for the work, and (e) the contract price if known. (4) The contract must comply with any requirements prescribed by the regulations for the purposes of a contract to which this section applies. (5) This section does not apply to: (a) a contract that is made between parties who each hold a contractor licence and is for work that each party's contractor licence authorises the party to contract to do, or (b) a contract to do specialist work that is not also residential building work. Note: The exception in paragraph (a) applies to a subcontracting arrangement between licensees, and to a contract between licensees for work to be done on premises that one of the licensees owns. 1. The prescribed amount at the time this agreement was entered into was $5,000.00. The requirements referred to in (4) are specified in the Regulations: For the purposes of section 7AAA (4) of the Act, a contract to which section 7AAA of the Act applies that is entered into on or after 1 March 2015 must include a copy of the Consumer Building Guide published by the Office of Finance and Services in February 2015. 1. The Tribunal accepts the respondent's evidence that he provided the applicants with the Consumer Fact Sheet as required. Otherwise, the respondent relies upon the quotation as evidence of his compliance with the contract requirements. The quotation is dated, and has been signed by both parties. It contains the names of the parties, and a description of the work. It also contains the price for the work. However, the Tribunal notes that the license number of the contractor is missing. To this extent the Tribunal finds that the respondent's quotation does not satisfy all of the small contract requirements. 2. The applicants also complain that they had not been advised of their cooling off rights. However, those rights apply only to contracts over $20,000.00. Failure to identify asbestos and deal with it appropriately 1. The respondent says that Mr Withers told him that there was no asbestos in the bathroom. Mr Withers denies that he did so. 2. The Tribunal accepts the respondent's evidence in respect of this issue. There was no incentive for the respondent to ignore the possibility of asbestos being present bearing in mind that any consequential costs would be borne by the applicants, whilst the risk of contamination would be disproportionately borne by the respondent and his son. The Tribunal accepts that the respondent relied upon Mr Wither's advice in this regard. Defective work 1. The applicants allege that the work completed by the respondent is defective. The respondent disputes that it is, and says that it is incomplete. 2. The Tribunal had directed, on 9 October 2015, that unless the experts filed a joint report, they were to attend the hearing for cross examination. Despite this direction the respondent's expert did not appear the hearing in November 2015. As neither party was legally represented, and the respondent indicated that he did not know that his expert was required, the Tribunal asked the applicant's expert to telephone the respondent's expert to explore whether an agreement could be reached between the experts. The applicant's expert did so, and gave sworn evidence that agreement had been reached in respect of the quantum of each claim, whilst the respondent's expert maintained his assertion that some of the items were incomplete work and not defective in the circumstances of the case. The Tribunal proceeded with the hearing on this basis. After the hearing the respondent's expert wrote to the Tribunal and stated that he believed that his conversation with the applicant's expert had been misrepresented to the Tribunal. As this was a serious allegation, the Tribunal directed that the experts confer, and file with the Tribunal a joint report setting out the areas of agreement and difference. In addition the Tribunal directed both experts to attend a hearing convened for the sole purpose of resolving this issue. 3. Despite the Tribunal's direction, the experts were unable to agree to meet or to confer, and no joint report was provided to the Tribunal. In addition, Mr Shepherd failed to appear at the hearing as directed by the Tribunal. The respondent advised the Tribunal that he could not afford to pay Mr Shepherd to attend. However the obligation which both experts owe is an obligation to cooperate with the Tribunal. The Expert's Code of Conduct includes the following: 14. An expert witness must abide by any direction given by the Tribunal. and also: 20. An expert witness must abide by any direction of the Tribunal: (a) to confer with any other expert witness; (b) to endeavour to reach agreement on any matters in issue; (c) to prepare a joint report, specifying matters agreed and matters not agreed and any reasons for any disagreement; and (d) to base any joint report on specified facts or assumptions of fact. 1. The failure of Mr Shepherd to attend the hearing which had been convened in response to the concerns which he raised about the evidence given by Mr Muir is a breach of the Code of Conduct. In addition the failure of the respondent to make Mr Shepherd available for cross examination at the November hearing means that the weight which the Tribunal can give to Mr Shepherd's evidence is reduced. 2. On the other hand Mr Muir's intervention in the hearing in February, during which he engaged in vigorous challenging of the respondent, placed him in a position where he acted as an advocate for his client, and placed some doubt upon his adherence to his obligations under the Code of Conduct. 3. The Tribunal will accordingly proceed to examine the evidence of each of the experts as set out in his report, taking into account the Tribunal's concerns set out above. 4. In respect of each item in the Scott Schedule: No bond breaker was noted at the incomplete end of the wall/floor junction - $297.00 incl GST 1. Mr Muir states that he did not observe any bond breaker, and challenged the respondent about what tape had been used and the appropriateness of the use of that material. The respondent stated that he had used a tape which was approved for use with the Ardex waterproofing system. The respondent's expert concurred with the respondent's claim. 2. The applicant has the onus of proving that the system used will not achieve the object stated. Whilst further material from the manufacturer was sent to the Tribunal after the November hearing, the Tribunal has had no regard to that material which was filed after the conclusion of the hearing of the evidence. The February hearing was for the sole purpose of confirming whether or not the views of the respondent's expert had been misrepresented, and not for the purpose of admitting or considering further evidence. 3. The Tribunal is not satisfied that the applicants have proven that the system engaged by the respondent was inappropriate. Waterstop is not sealed to the floor and waterproofed, and it appears that the damaged angle is to be reused - $77.00 incl GST 1. The respondent gave evidence that he had not completed the waterproofing when the applicants' son asked him not to return to site. The text messages between the respondent and the applicant's son show a dispute about the size of the angle proposed, confirming that the respondent did indeed intend to complete this work. The drainage control flange in the shower recess should be installed inside the waste pipe - $198.00 incl GST 1. The applicants' expert does not identify the basis on which the drainage control flange should be installed inside the waste pipe. The respondent and the respondent's expert both state that the flange will be effective as is. The Tribunal cannot be satisfied that this is defective work. Incorrectly installed drainage flange to the main floor waste $253.00 1. The respondent's expert accepts that this requires adjustment. His calculation of the cost appears to be incomplete. The Tribunal accepts the applicants' expert calculation of $253.00. The penetrations in the shower area were not sealed - $77.00 incl GST 1. The respondent accepts that the penetrations had not been sealed and says that this work was incomplete. It is preferable that the drainage control flange is rebated into the substrate - $165.00 1. This is expressed by the applicant's expert as a preference. He does not identify it as a defect, and the Tribunal is not satisfied that it is. The fibre cement wall sheeting is not fastened correctly, butt joined nor taped and set - $77.00 1. The respondent's expert concurs with the applicant's expert that this work needs to be rectified. The Tribunal accepts that it does. The applicant claims $77.00 which is less than the allowance made by the respondent's expert, and is allowed as claimed. Inspection and report fees - $770.00 1. The Scott Schedule is a list of allegedly defective work, and the cost of rectifying that work. Inspection and report fees are costs of the proceedings, and claimable as such. Section 60 of the Civil and Administrative Tribunal Act 2013 provides that each party is to pay his or her own costs of the proceedings, unless there are exceptional circumstances warranting a departure from that principle. There is no evidence before the Tribunal of any exceptional circumstances such as to warrant an order in respect of costs. Summary – Scott Schedule 1. The Tribunal finds that the following works are incomplete: 1. Waterstop is not sealed to the floor and waterproofed, and it appears that the damaged angle is to be reused - $77.00 incl GST. 2. The penetrations in the shower area were not sealed - $77.00 incl GST. 1. The Tribunal finds that the following works are defective: 1. Incorrectly installed drainage flange to the main floor waste $253.00. 2. The fibre cement wall sheeting is not fastened correctly, butt joined nor taped and set - $77.00. Value of work completed 1. The applicant's expert calculates that the Respondent has been overpaid for the work completed. He calculates that the reasonable cost of the works to date would be $4,699.20. However, he provides no detail as to why he has allowed labour at $50.00 per person per hour. He estimates that the job would take 4 days for one man, and 2 days for a second man, and conceded during the hearing that he would allow an additional day. He did not differentiate the labour rates. 2. The respondent's expert adopts the respondent's calculations and accepts that the sum of $8,000.00 paid has been justified by the respondent. He provides no independent opinion in respect of this aspect of the matter. During cross examination the respondent conceded that he had worked on the site for 6 1/2 days, not 8 as he had initially claimed. In addition, his son had not worked on one of those days, meaning that his son was on site for 5 ½ days. Allowing 6.125 hours per day, as claimed by the respondent, @ $75.00 per hour, the respondent's labour amounted to $2,986.00, his son $1,347.50 (at $40.00 per hour), a total of $4,333.50. He had paid for the plumber $350.00, and claimed materials worth $1,667.73 (including the skip bin). These amounts total $6,351.23. 3. The Tribunal accepts the time the respondent claims he spent on the job, and will allow the hours spent by the respondent himself. The Tribunal accepts that the rate claimed by the respondent is reasonable, and will allow the 6.5 days claimed @ 6.125 hours per day. However the Tribunal does not accept that the respondent's son was required for all of the time claimed, and accepts the applicant's expert's opinion that 2 men would have been required on 2 days only. The allowance for the respondent's son is $490.00. The Tribunal accordingly calculates that the value of the labour for which the applicants have had a benefit amounts to $3,476.00. 4. The applicant's expert does not provide any evidence in respect of many of the items of materials claimed by the respondent. The allowance for the skip bin exceeds the charge made by the respondent. No allowance has been made for a builders margin, which the applicant's expert allows at 20%. For these reasons, the Tribunal accepts the respondent's calculation of the expenses incurred and prefers it to the incomplete calculation by the applicants' expert. 5. Accordingly the Tribunal is satisfied that the applicants have had the benefit of labour ($3,476.00), plumbing $350.00 and materials $1,667.73, making a total of $5,493.73. They have paid the respondent $8,000.00. They are entitled to a refund of $2,506.27. They are also entitled to compensation for the defective work ($330.00). They are not entitled to compensation for the works which are incomplete. 6. The Tribunal has considered whether a work order should be made, but observed during the hearing that there is a great deal of antagonism between the parties. A work order would not be appropriate in these circumstances. 7. The Tribunal orders accordingly. Orders 1. The respondent is to pay the applicants the sum of $2,836.27, on or before 13 May 2016. K Ross General Member Civil and Administrative Tribunal of New South Wales 13 April 2016 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: 03 June 2016