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Blessed Sydney Constructions Pty Limited v Vasudevan

By May 21, 2018 No Comments
Commencing Proceedings

Mayweathers has recently successfully defended, respondent, Ms Vasantha Vasudevan (homeowner) in an appeal by the appellant, Blessed Sydney Constructions Pty Limited (builder) from a decision made on 14 December 2017 in the Home Building Consumer and Commercial Division of the Tribunal on a renewal application (HB17/13983) under cl 4 Sch 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).

The principal issue on appeal was whether the Tribunal could, on a renewal application, order the payment of money where there had been non-compliance with a previous order for specified home building work to be done “as per the written contract”. The Appeal Panel found, that on proper construction of cl 8(4) of Sch 4 to the NCAT Act, an order for the payment of a sum of money can be made in those circumstances. On that basis, the appeal was dismissed.

Findings of Interest

The following aspects of the judgment are likely to be of interest to homeowners and builders in home building claims:

  1. Clause 8 of Sch 4 is an additional, simple and practical method of enforcing and promoting timely compliance with the Tribunal’s orders.
  2. In the context of work orders made by the Tribunal for the performance of a contract, the cl. 8 of Sch 4 provides the Tribunal with the same powers that a court with equitable jurisdiction has to make alternative orders, including awards for damages where there has been non-compliance with an order for specific performance of the contract.
  3. The orders which the Tribunal can make under the Home Building Act 1989 (NSW) (HBA) are encapsulated in s. 48O which provides that in building claims, the Tribunal is empowered to make one or more of the orders it considers appropriate, including monetary orders and work orders.

Facts

The appellant was a builder who contracted in 2013 with the respondent, a homeowner, to carry out residential building work on the respondent’s home in Bella Vista, New South Wales.

A number of issues arose between the builder and home owner and the homeowner commenced proceedings HB15/31929 under the HBA on 1 May 2015 seeking a monetary order. On 20 February 2016, the builder commenced proceedings HB16/08659 seeking the payment of outstanding monies from the homeowner. Both proceedings were listed for hearing together on 16 March 2016. During the hearing, the parties were invited to partake in a conciliation where they reached an agreement that the builder return to the property to undertake the works, which was recorded in writing and signed by the parties (Conciliation Report). The Tribunal made orders (with an annexed Scott Schedule) to give effect to that agreement and the builder’s proceedings were withdrawn (16 March 2016 Orders).

On 16 March 2017, the homeowner commenced renewal proceedings because the builder had not complied with the 16 March 2016 Orders.

The renewal proceedings were heard on 30 October 2017 and the Tribunal made a decision on 14 December 2017, varying the Orders of the Tribunal made by consent on 16 March 2016 to the following:

“1. Respondent builder pay the applicant owner, on or before 11 February 2018, $83,243.05.

2. Respondent builder to pay applicant owner’s costs of the current proceedings HB17/13893 as agreed or assessed on the ordinary basis up to and including 5 November 2017 and on the indemnity basis on and from 1 December 2017.”

On 11 January 2018, the builder lodged a notice of appeal and an application for a stay of the decision. The operation of order 1 made on 14 December 2017 was stayed until further order of the Appeal Panel but order 2 was not stayed.

The Appeal

The builder originally made eight grounds of appeal. Five of those grounds of appeal were not separately pressed and at the start of the appeal hearing on 20 March 2017, the following grounds of appeal remained:

“1. The Tribunal erred in deciding that it could award [the homeowner] money and/or damages even though the contract had not been terminated.

  1. The tribunal erred in awarding [the homeowner] money and/or damages even though [the homeowner] did not assert that and there was not in fact, a contractual basis for this claim.

  1. The Tribunal erred in making an Order that it could not have made in light of Section 8(4) [sic] of the Civil and Administrative Tribunal Act – Schedule 4.”

Builder’s submissions

The builder relied on the relevant general law contractual principles, particularly those in Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 at [68] which stated that, subject to the terms of the particular building contract and the specific circumstances of that case, the owner is not entitled to damages for incomplete work under the building contract unless the contract is lawfully terminated for breach of repudiation by the builder. The builder alleged that the building contract had not been terminated when the proceedings were originally determined and the 16 March 2016 Orders were evidence of the fact that the contract remained in foot.

Homeowner’s submissions

The Appeal Panel made findings consistent with the homeowner’s submissions (discussed below).  Relevantly, the homeowner relied on Integrity Homes Pty Ltd v Staniland [2015] NSWCATAP 284 at [44] – [46] to argue that, in these circumstances, Brewarrina did not apply and contended that on the renewal application the Tribunal could make orders appropriate to do justice to address the non-compliance of the builder with the original work order. The homeowner also submitted that the builder did not, in the appeal, challenge the amount that the Tribunal awarded the homeowner in the orders made on 14 December 2017.

Findings

At [53], the Appeal Panel did not accept that the Tribunal on the renewal application did not have the authority to make an order for payment of money by way of damages. The orders that the Tribunal can make on renewal applications are not limited only to those that would have been appropriate in the circumstances as they were when the proceedings were originally determined. The Appeal Panel rejected the appeal to the extent it is based on ground 5 and the relevant elements of ground 1.

At [60], the Appeal Panel held that the building contract between the parties was terminated where the Tribunal made the order for the payment of money on 30 October 2017. In the first instance, on 16 March 2016 when the work orders were entered into, the building contract remained on foot. However, its terms were the terms of the original building contract as amended or modified by the 16 March 2016 agreement. The 16 March 2016 Orders were not complied with within the time stipulated by the Tribunal in the order.

At [68] the Appeal Panel held that the money order made by the Tribunal at first instance was one that the Tribunal could make. As a result, the Appeal Panel rejected ground 1 of the builder’s appeal.

In relation to the second ground, taking into consideration cl. 8(4)(a) Sch 4, the building contract, the subject of the 16 March 2016 Orders was terminated when the Tribunal made orders varying the original orders for non-compliance. The builder did not challenge the monetary orders made. As a result, the Appeal Panel rejected ground 2 of the builder’s appeal.

Orders made by the Appeal Panel

At [80], the Appeal Panel made the following Orders:

  1. The appeal is dismissed.
  2. Subject to order 3, the builder is to pay the homeowner’s costs of and incidental to the appeal as agreed or assessed.
  3. Order 2 ceases to have effect if either party files and serves an application for a different costs order on or before 8 May 2018.
  4. The stay of order 1, made on 14 December 2017 in proceedings HB 17/13983 is lifted.