Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Barber v Wilson [2017] NSWCATCD 49 Hearing dates: 21 April 2017 Decision date: 27 June 2017 Jurisdiction: Consumer and Commercial Division Before: Francesco Corsaro, SC, Senior Member Decision: 1. The Tribunal orders that the respondent, Emma Kathryn Wilson is to immediately pay the applicant. Franca Barber, the sum of $6,227.40 for the respondent's breach of the statutory warranties under section 18B(1) of the Home Building Act, 1989 (NSW) Catchwords: Building Claim – breach of statutory warranties – claim by successor in title to developer Legislation Cited: Home Building Act 1989 (NSW) Category: Principal judgment Parties: Franca Barber (Applicant) Emma Kathryn Wilson (Respondent) Representation: The applicant in person The respondent in person File Number(s): HB 16/23720 Publication restriction: Unrestricted reasons for decision INTRODUCTION 1. This application arises out of the construction and sale of a newly constructed townhouse (the Townhouse) in a residential strata development in Croydon Park, a suburb of Sydney (the Complex). The address of the Townhouse is in the Tribunal's files. As there is no need to give the address to properly understand what I have determined, for privacy reasons the determination deliberately omits any reference to the precise location of the Townhouse. 2. The applicant, Ms Barber, purchased the Townhouse from the respondent, Ms Wilson, in December 2013. Ms Wilson was the developer of the Complex. It is common ground that Ms Wilson engaged a builder, Eye Constructions Pty Ltd (the Builder), to build the Complex for her. I have no doubt that Ms Wilson sold the Townhouse to Ms Barber intending that the Builder would carry out the works properly, so that Ms Barber would acquire it in good order, and free of defects. 3. Ms Barber's original application claimed compensation against both the Builder and Ms Wilson. The application referred to the amount of compensation as $15,000 for defective and incomplete works. As it turned out, Ms Barber eventually settled with the Builder, on terms that are set out in a handwritten document dated 28 February 2017, which Ms Barber provided to me at the hearing. Because of that settlement: 1. Ms Barber withdrew her application against the Builder, and the Tribunal dismissed the claims against the Builder, leaving the current claim against Ms Wilson on foot; and. 2. the claims against Ms Wilson were reduced. 1. At the hearing, Ms Barber confirmed that her claim for compensation against Ms Wilson was for $7,725.40, made up as follows: 1. the cost of repairing leaks in the Townhouse roof - $1375; 2. the cost of repairing a leaking and faulty tap - $200; 3. the cost of repairing a colour bond fence - $550; 4. the cost of grouting and repairing stained tiles - $4652.40; and 5. the cost of installing the exhaust fan in the Townhouse ensuite - $200 PROCEDURAL HISTORY 1. I now set out the procedural history of the application. I have extracted this from the information which is apparent on the documents that form the Tribunal's files on this application. 2. Ms Barber lodged her application with the Tribunal on 19 May 2016. The application, as filed, contains no details of the respondents against which the claims were intended. Ms Barber later nominated the respondents as Mr David Said, a director and the nominated supervisor of the Builder, and Ms Wilson. 3. Ms Barber's claims were not the only claims which the Tribunal had before it associated with the construction of the Complex, and in which Ms Wilson and the Builder were named as respondents. There were other related applications: 1. an application against Ms Wilson and the Builder lodged by the owners corporation of the residential strata scheme – the Owners Strata Plan SP 89868, Ms Barber and two other lot owners, the owner of townhouse 2, Mr Branislav Mitkovic and the owner of townhouse 1, Quan Do (HB16/03661); and 2. an application against Ms Wilson and the Builder lodged by Mr Branislav Mitkovic relating to the alleged defects and deficiencies in townhouse 2 (HB16/32615). 1. The Tribunal's first listing of the present application before the Tribunal was on 7 July 2016. The application was adjourned because Ms Barber was unavailable and the further listing date was on 15 July 2016. On that occasion, the Tribunal made orders to progress the matter to hearing. 2. On Ms Barber's application, and with Mr Said's consent, on 15 September 2016, the Tribunal substituted the Builder's name for Mr Said. 3. The Tribunal originally fixed the application for hearing date on 14 October 2016, with the matter to be heard with the associated applications by the Owners Corporation and Mr Mitkovic. Ms Wilson maintained that she moved home, and as a result did not receive Ms Barber's documentary material as was not ready to proceed on the hearing date. The Tribunal had to adjourn the original hearing date to another time. 4. Meanwhile, on 14 November 2016, Ms Barber informed the Tribunal that she and the Builder had settled, and gave notice that she wished to withdraw her application against the Builder. On that basis, the Tribunal dismissed Ms Barber's application against the Builder on 23 November 2016. The Tribunal's orders that day confirmed that Ms Barber's application against Ms Wilson was to remain on foot. 5. There were further difficulties in Ms Wilson receiving Ms Barber's documents. In 24 November 2016, Ms Barber notified the Tribunal that she had been unsuccessful in attempting to serve her documents on Ms Wilson by mail, and that the documents had been returned marked 'return to sender'. 6. On 8 December 2016, the Tribunal served the standard notices informing Ms Barber and Ms Rossetti that the application was listed hearing date on 31 January 2017. Ms Wilson notified the Tribunal that as she had not received Ms Barber documents, she was not able to proceed, and asked that the Tribunal adjourn the hearing again. An urgent telephone direction hearing with the parties on 27 January 2017 resolved this issue, and on Ms Wilson's application, the hearing date was adjourned. 7. I heard the application on 28 April 2017. Ms Barber and Ms Rossetti both appeared in person before me on that occasion. Both gave sworn oral evidence at the hearing. Ms Barber relied on a bundle of documents that she had filed with the Tribunal, in accordance with the Tribunal's earlier procedural orders (the Application Bundle). Ms Wilson relied on a bundle of documents that she had provided to the Tribunal on 18 April 2017, in accordance with the Tribunal's earlier procedural orders (the Response Bundle). 8. At the end of the hearing, I indicated that I would reserve my decision to consider the issues, and to provide the parties with my written determination. JURISDICTION 1. There was no objection taken to the Tribunal's jurisdiction to hear and determine the application. 2. The Tribunal has jurisdiction to determine a 'building claim' as set out in section 48K of HBA. 48A of the Home Building Act 1989 (NSW) (the HBA). Defines a 'building claim' as a claim for: 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 2 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 and services, but not include a claim that the regulations not to be a building claim. 1. Section 48A also defines "building goods and services" 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, otherwise does, that work, or (b) supplied in any circumstances prescribed by the regulations to the person who contracts to do that work. 1. Neither Ms Barber nor Ms Wilson made any submissions on whether the contract for the sale of the Townhouse was either "a supply of building goods or services", and whether I should regard the contract as "collateral to a contract for the supply of building goods and services". 2. However, I must be satisfied that I have the jurisdiction to deal with the issues as presented to the Tribunal on the basis that the Tribunal had a "building claim" by Ms Barber. 3. Ms Barber's application was associated with the other associated claims where Ms Wilson faced allegations as to her obligations as developer to comply with the statutory warranties under Part 2C of the Home Building Act, 1989 (NSW) (the HBA), and involving similar allegations of defective work in the Builder's construction of the Complex. Accordingly, although Ms Barber's present application largely involved considerations as to the provisions of the contract for sale of the property, and she based her submissions to the Tribunal on her perception that it was sufficient to show a breach the sale Contract to succeed in obtaining compensation, in reality the claim by Ms Barber was a claim for compensation by her against the developer from whom she purchased her property due to the presence of defects and omissions in the Builder's work, and I have proceeded to deal with the application on that basis, within the statutory jurisdiction of the Tribunal. 4. As I have found, Ms Wilson engaged the Builder to undertake the construction of the Complex, which is as described in the Building Inspection Report of Mr Garry Christy dated 14 April 2015 (the Christy Report) in the Application Bundle. This describes the work of the Builder as involving the construction of a 'multi-storey townhouse complex with underground parking'. 5. The Christy Report refers and discusses the various building defects and omissions in the Builder's work, and in some instances, refers to the breach of specific standards and provisions of the requirements of the Building Code of Australia. Mr Christy's expertise is apparent on the face of the Christy Report, and accordingly I accept the Christy Report as evidence by an expert as to the nature and extent of the Builder's defects and omissions in the construction of the Complex. 6. The Christy Report identifies that the Complex had at least four separate townhouses. Ms Wilson did not dispute that she was the developer of the Complex, and I am satisfied within the meaning of section 3A of the HBA, and based on the Christy Report, I am satisfied that for the purposes of subsection (2) "residential building work" was being done in a building or residential development where four proposed dwellings were to be initially be owned by Ms Wilson, and accordingly, I am satisfied that Ms Wilson was a developer within the meaning of the HBA. 7. At the time of the Development, section18C of the HBA said: 18C warranties as to work by others (1) A person who is the immediate successor in title to an owner builder, a holder of a contractor licence, a former holder or a developer who has done residential building work on the land is entitled to the benefit of the statutory warranties as if the owner builder, holder, former holder or developer were required to hold a contract licence and had done the work under a contract with that successor in title to do the work. (2) For the purposes of this section, residential building work done on behalf of a developer is taken to have been done by the developer. 1. Section18D of the HBA said: 18D Extension of Statutory Warranties (1) A person who is the immediate successor in title to an owner builder, a holder of a contractor licence, a former holder or a developer who has done residential building work on the land is entitled to the benefit of the statutory warranties as if the owner builder, holder, former holder or developer were required to hold a contract licence and had done the work under a contract with that successor in title to do the work. 1. Section 18B of the Act details the warranties which apply to residential building works in the following terms: 18B warranties as to residential building work (1) the following warranties by the holder of a contractor license or a person required to hold a contractor license before entering into a contract, are implied in every contract to do residential building work; (a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract; (b) a warranty that all material 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) 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 building, the work will result to the extent of the work conducted, in a building that is reasonably fit for occupation as a dwelling. (f) a warranty that the work and any materials used doing the work, will be reasonably fit for a specified purpose or result, if the person from whom the work is done expressly makes known to the holder of the contractor, licenser or person required to hold a contract license 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 holders or persons skill and judgement. 1. Ms Barber was a successor in title within the meaning of sectionm18C of the Act, and although Ms Barber addressed her claim against Ms Wilson on the basis of the special conditions of the contract for sale of the Townhouse, I was satisfied, and find that it is appropriate to with Ms Wilson's liability for the defective and incomplete works which are the subject of the application by reference if I am satisfied that Ms Barber has established that the defects and incomplete works result from a breach of the Part 2C warranties in the HBA. 2. I find that I have jurisdiction to determine the application against Ms Wilson, based on the material that both parties placed before me, and based on their oral evidence to me at the hearing. FINDINGS 1. Based on Response Bundle, and Ms Wilson's oral evidence at the hearing, there appears to be no real issue between Ms Barber and Ms Rossetti concerning most, if not all, of the essential facts. 2. Having considered the documentary evidence of Ms Wilson, her oral evidence and her submissions at the hearing, her defence to Ms Barber's application is based on demonstrating that she did all that she reasonably could to ensure the Builder did the work properly, and that the Builder attended to the defects and omissions which are the subject of Ms Barber's complaints. I accept that Ms Wilson did what she could to require the Builder to carry out the work properly, and to attend to make good any defect or deficiency in the Townhouse. However, the effect of section 18C of the HBA is to make a developer liable for any breaches by the builder of the warranties implied by section 18B of the HBA, irrespective of the developer's efforts in forcing compliance from the builder. The fact that a developer prompts or urges a builder to do the work properly, or instructs the builder to take prompt remedial action does not relieve a developer of the liability that section 18C of the HBA imposes, by deeming the developer to have done the work which was, in fact, not properly carried out by the builder. 3. There is no expert opinion to contradict the views expressed by Mr Christy in the Christy Report, and I am satisfied that Mr Christy has properly considered and reported on the defects and deficiencies in the Development, and in the Townhouse. 4. As at the date of the hearing, Ms Barber's claim related to the cost of making good the following items: Leaks in the Townhouse roof 1. Page 15 of the Christy Report expressed the opinion that the flashing to the roof of the Townhouse does not comply with the performance requirements of Part P2.2.2 of the Building Code of Australia (the BCA) because it does not prevent water from getting into the ceiling and walls and to run down the walls of the Townhouse. Based on that evidence I am satisfied that: 1. the Builder did not comply with the statutory warranties in section 18B of the HBA; 2. Ms Barber has the benefit of those warranties as a successor in title to Ms Wilson as a developer; and 3. Ms Wilson is deemed to be liable for the Builder's failure to do this work properly. Accordingly, I find that Ms Barber is entitled to compensation for the costs of rectifying that defect in the construction of the Townhouse roof. 1. Ms Wilson took no issue with Ms Barber's standing to claim compensation for the costs associated with the leaks in the Townhouse roof. As there was no suggestion from Ms Wilson that the area of defective work was common property or was the property of any other lot owner in the Complex, and Ms Wilson made no submission that Ms Barber had no legal entitlement to claim for compensation to make good deficiencies in common property, I find that: 1. Ms Barber has standing and is entitled to claim for the loss and damage sustained by leaks in the Townhouse roof and ceiling; and 2. Ms Barber has established a breach of the section 18B statutory warranties because the Builder did not properly carry out the roofing works in the Townhouse roof and ceilings. 1. The Application Documents included a copy of a quote from SRV Roofing to make good the leaking Townhouse roof and flashing at a cost of $1375 inclusive of GST. There was no challenge to this invoice. Ms Wilson did not have any contrary, or alternative evidence of the rectification costs. I am satisfied that Ms Barber has established an entitlement to compensation from Ms Wilson for the amount claimed. Leaking and faulty tap 1. The Christy Report makes no reference to the flick mixers in the kitchen and laundry that Ms Barber says that she paid to replace. 2. The Application Bundle does include a copy of an invoice from Peter Kingsley Plumbing Pty Ltd (PKP). I have taken that into account. I find that the mixers were replaced as Ms Barber claims, and that she paid an amount of $200 in cash to PKP for the work. 3. It is for Ms Barber to prove a breach of the HBA statutory warranties for this item. I am not satisfied on the evidence before me that Ms Barber has established to my satisfaction that the flick mixers as supplied were defective, and that the reason for the work done related to a breach of statutory warranty, rather than for some other reason. 4. I find that Ms Barber has not established a claim for compensation against Ms Wilson for the replacement of the mixer taps. The Colourbond Panel 1. The application refers to 'addition repair colour bond fence', which Ms Barber claims she has paid for. 2. Item 2.03 on page 10 of the Christy Report states that one of the colour bond panels of the fence at the rear of townhouse 2 had damage which Mr Christy believes was due to the Builder's failure properly protect the fence during construction of the Complex. According to Mr Christy, the damaged sheeting required replacement. 3. From Ms Barber's particulars of the claim, Ms Barber maintains that she had paid $500 to repair colour bond fencing, but the material that she relies on in support of this claim takes the matter no further: 1. the evidence does not establish the colour bond fencing which is the subject of the application. If it is the same fencing as described on page 10 of the Christy Report, then presumably it cannot be a fence in the rear of townhouse number 2, as the description of the defect on page 10 of the Christy Report states; 2. even if I were minded to simply ignore Mr Christy's description, and to assume that the fence shown on page 10 of the Christy Report is the item in question, and has some physical relationship to the Townhouse such as a dividing fence, then there is nothing to substantiate the cost of $550.00 that Ms Barber maintains she paid, and how that amount was calculated. The Application Bundle contains no document which allows me to reconcile what the claimed amount of $550.00 was for, and to marry that amount to any quotation or invoice for the work. The supporting quotations refer to colour bond, but only in the context of a missing grill to the mechanical exhaust for the Complex's underground carparking. The Applicant Documents included a copy of a quote from Mikes Hire a Handyman Property Maintenance dated 2 February 2015 for the cost of supplying and fixing a colour bond 'steel grill' in the amount of $1,3200. However, this appears to relate to the mechanical ventilation unit illustrated on page 14 of the Christy Report, not colour bond fencing for Townhouse 3. 1. In all the circumstances, Ms Barber has not established to my satisfaction the amount of the claim, or what the alleged payment made by Ms Barber was for. Grouting and Repair of the Tiling 1. Page 8 of the Christy Report refers to staining of the tiled floors of Townhouse 3, and that the Builder installed the tiling by leaving residual films and stains on the surface. Mr Christy sets out on page 9 of the Christy Report why he considers that the Builder was responsible, and I accept his opinion on this issue. Ms Wilson did not contest this opinion, and offered no evidence to the contrary. 2. Based on the Christy Report, I am satisfied that: 1. the Builder did not comply with the statutory warranties in section 18B(1)(a) of the HBA; 2. Ms Barber has the benefit of those warranties as a successor in title to Ms Wilson as a developer; and 3. Ms Wilson is deemed to be liable for the Builder's failure to do this work properly. 4. Accordingly, I find that Ms Barber is entitled to compensation for the costs of rectifying the defective installation of the tiling by the Builder. 1. As for the other defects which are the subject of the application, Ms Wilson took no issue with Ms Barber's standing to claim compensation for the costs associated with making goo the defects to the tiling. As there was no suggestion from Ms Wilson that the tiling was common property, rather than lot property, and Ms Wilson made no submission that Ms Barber was not entitled to claim for compensation to make good deficiencies in common property, I am satisfied that Ms Barber has standing and is entitled to claim for the loss and damage sustained by having to make good the staining referred to in the Christy Report. 2. The Applicant Documents includes a copy of a quote from TileTech Solutions, for the cost of having to clean, re-grout and seal the tiles in the main areas and bathrooms of the Townhouse. When there was no challenge to the nature, extent or quantification of the repair costs to repair the tiling defects to which the Christy Report refers, I find that the work referred to in the Tech Tile Solutions quotation is reasonably required. The Tech Tile Solutions Report, coupled with the evidence in the Christy Report, satisfies me that the tiling works were not properly carried out by the Builder, and that it is appropriate to award Ms Barber compensation in the amount of $4652.40 for making good the tiling defects. Townhouse ensuite exhaust fan 1. The Response Bundle refers to communications between Ms Barber and Ms Wilson on defects lists provided by Ms Barber. The defects list included a list of defects sent to Ms Wilson on 11 March 2015. Item 1 in that list relates to the cost of having to install an ensuite fan which the Builder failed to install. 2. I am satisfied that the building contract included this scope of work, and the Builder's failure to do what the building contract required was a breach of the section 18B(1) (d) of the HBA statutory warranties in the Builder failing to complete what Ms Wilson had contracted the Builder to do. The communications passing between Ms Wilson and the Builder are relevant to my finding. 3. Accordingly, I am satisfied that Ms Barber has established an entitlement to compensation against Ms Wilson in the amount of $200 for the cost of installing the fan in the ensuite of the Townhouse. F Corsaro Senior Member Civil and Administrative Tribunal of New South Wales 27 June 2017 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: 25 August 2017