Bell v Pearce (Home Building) [2006] NSWCTTT 274 (19 May 2006)

CONSUMER, TRADER AND TENANCY TRIBUNAL

Home Building Division

Pursuant to Section 50 of the Consumer, Trader and Tenancy Tribunal Act 2001, orders published on 19 May 2006 are amended as follows:

ORDER

The Tribunal orders that:

1. The Owners Graham Phillip Bell and Narelle Joyce Bell are to pay Christopher James Pearce $37,669.99 immediately; and

2. The parties are to file and serve any submissions as to costs on or before 1 July 2006, for a determination of the award of costs on the papers.

REASONS FOR DECISION

APPLICATION

1. I gave reasons for decision on the applications for principal relief as long ago as 23 June 2005. I had heard evidence just over 3 months before then, but the decision had awaited the receipt of submissions by the parties. Some aspects of the case had been argued before one of my colleagues, and not before me. There were some other matters, such as interest, about which I had been given no submissions by either party. Accordingly, I directed that the parties calculate these amounts and that in default of their agreeing the sums, each had leave to seek a further short hearing to resolve outstanding questions.

2. There was then an application by the solicitor for the Builder to re-open the hearing to “reconsider” the aspect of termination of the contract, which I had covered in paragraphs 26 to 28 of the first decision. I refused that leave, giving reasons on 26 October 2005.

3. Given the relationship between the parties, they were unable to reach the agreement I had suggested in my first decision and so the resolution of these final questions fell to me. It was necessary to give some directions to prepare the matter for hearing these questions. I heard oral submissions on 28 April 2006, supplementing the written material previously exchanged. As before, I have been made aware of some without prejudice material between the parties; I have again ignored that in reaching my decision.

APPEARANCES

4. The amounts in dispute exceeded $25,000.00 and thus the parties were entitled to be represented. I understand that the previous Member gave the necessary leave some time ago. Mr Doyle appeared for the Builder pursuant to that leave, as he had done on some past occasions. The Owners continued to be unrepresented.

JURISDICTION

5. The proceedings arise from the construction by the Builder for the Owners of a pair of semis at “…” Nelson Bay. There is a claim by the Builder for a progress payment and by the Owners for damages for breach of warranty. The disputes are therefore home building disputes and the Tribunal has jurisdiction under rhe provisions of the Home Building Act 1989 s.48K. Neither party has suggested otherwise.

FINDINGS

6. Before the matter came to the Tribunal, there had been an adjudication by Victor Lin under the provisions of the Building and Construction Industry Security of Payment Act 1999, on an application by the Builder. It may well be that there was no jurisdiction for Mr Lin to make that adjudication (see s.7 of that Act), but that is not a question which I empowered to determine. While the determination stands, I must accept it as valid (see Brodyn Pty Limited v Davenport [2004] NSWCA 394) and also accept that the findings set out in that adjudication operate to create estoppels between the parties. In my first decision I found that the parties were therefore bound by the finding by Mr Lin that the contract was terminated on or about 29 March 2004.

7. Mr Doyle drew issue with that finding and asked that it be revisited. My decision of 26 October 2006 covered his request. As a part of his submissions now before me, Mr Doyle again submits that I should revisit my decision. For the reasons given on 26 October 2005, I decline to do so. Beyond the matters set out above, the evidence makes it clear that after that date the parties treated the contract as having reached its end. Mr Pearce did return to the site, but as project manager/carpenter, and not as a builder.

8. I do take into account as required by BCISP Act s.32 the evidence now before me that the adjudication sought by the Builder was dismissed because it was made out of time. Thus the sum is nil.

9. The first submission which Mr Doyle makes is that I should revisit my first decision under the provisions of the Consumer, Trader and Tenancy Tribunal Act 2001 s.50 (a slip rule provision) and reconsider the date upon which the Builder should have completed the works. His submission was that as there had been no final orders pronounced, this matter was not final and thus open to be revisited. The Owners opposed this and said that the Builder was bound by the findings previously made.

10. In my opinion, the proper approach to this matter is that I left the final calculations to the parties; they have failed to reach agreement on those figures. At the hearing before me on 22 March 2005, neither the Builder nor the Owners drew my attention to the provisions of Clause 9.1 of the contract and a deemed extension of time for completion for the 5 weeks’ industry break over Christmas. It was not an extension for which notice was required. Accordingly the claim for liquidated damages is reduced by $110.00 each day for the 22 working days by which the contract was extended pursuant to that clause. That reduces the number of days for which the Owners are entitled to liquidated damages to 85, and thus the sum will be adjusted to $9,350.00.

11. I consider that the Owners bear the burden of proof on the matters which have taken the bulk of the time. It is they who assert that they incurred costs in completion of works and rectification of defects. During the course of the hearing on 28 April 2006, Mr Doyle conceded that the Owners had paid $500.00 in cash for completion costs for which they had no receipts. The parties were also agreed on the final contract sum which needed to be adjusted, and the method of justification – issues about which the Builder would have borne the burden.

12. I now turn to examine the particular claims by the Owners, using the paragraph numbers in their submission of 17 March 2006. I start from the finding made earlier that after the termination of the contract the Builder went back and did further work (para 28). The matters in dispute on the Owners’ side are claims for completion of the works and are made under the provisions of Clause 36.4 of the contract. The parties are agreed with the mathematical calculation set out in the Owners’ submission of 17 March 2006, and I take that as the starting point.

13. The first of these items is the claim in paras 19 to 23 for work carried out by Mr Bell himself. It is claimed that using the Builder’s hourly rate this amount to $3,281.25 for the 87.5 hours involved. There are several problems with this claim. I do not know how many hours a competent builder would have taken to carry out this work. It may well have been less than the 87.5 hours taken by Mr Bell. It may have been less. There is nothing to assist me on the evidence. Mr Bell did not give any evidence that he had foregone other income in order to carry out the work. I do not propose to allow this claim.

14. Paras 24 to 28 deal with claims for defective work. Paras 14 to 18 deal with items claimed for completion costs beyond those set out above. The Builder has replied. The lists in the schedule are extensive, and many deal with very small amounts, some so low that I would have thought that the parties could agree upon them. They have not. I propose to deal with them in a brief manner, proportionate to the sums involved.

15. The total for the items covered above is $25,808.57.

16. The Owners claimed the cost of rectification of painting work carried out by a painter whom they had engaged as part of their completion work. I do not allow this; any claim which they have is against their contractor and not the Builder.

17. The Owners submit that they are entitled to the costs of retaining a lawyer whilst they were carrying out the completion work. They submit that a builder would normally carry such expenses as obtaining legal and accounting advice as a part of the contract price and that they therefore are entitled to the sum. The Builder’s submission is that the sum should form part of any costs order, and is not a cost of completion.

18. I accept the submission by the Builder. The costs were incurred not as builders but as dissatisfied owners. The appropriate place to consider these is in discussion as to costs. They are not allowable as a cost of completion.

19. The Owners also claim interest on the sums which they paid. The calculation is set out in their submission and for present purposes I accept the mathematics of the calculation as correct. I do not accept the principle. Their claim under Clause 36 of the contract is for cost of completion; the clause makes no provision for interest. Further, there is no evidence before me which would justify an award of interest on the principles set out in Hungerfords v Walker (1989) 171 CLR 125. I disallow the claim.

20. The mathematics of the claim may be summarised:

21. That leaves the question of costs. Mr Doyle submits that costs should follow the event. The Owners make no submissions as to costs. My present inclination is that I should order that each pay their own costs. My reasons for so doing are as follows. Each party has had some limited success in the decisions of 23 June 05 and today. The Builder failed in his application the subject of the decision of 26 October 05. The parties emerged fairly evenly balanced from the decision of Mr Isaac.

22. There may be some matters – eg offers of settlement in the form of Calderbank letters – of which I am not aware, but which may impact the question of costs. The parties may disagree with my present thoughts. They therefore have leave to file and serve submissions as to costs. I shall then decide this final question on the papers.

G J Durie

Senior Member

Consumer, Trader and Tenancy Tribunal

19 May 2006

(Amended 19 September 2006)