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New South Wales
Civil and Administrative Tribunal
Case Title: Ultra Developments Pty Ltd v Alison Bennett
Medium Neutral Citation: [2014] NSWCATCD 61
Hearing Date(s): 4 December, 5 December and 6 December
2013
Decision Date: 1 May 2014
Division: Consumer and Commercial Division
Before: N Correy, Senior Member
Decision: 1 In matter no HB 11/51950 that the
homeowner pay to the builder the sum of
$88,174.00 on or before 31 May 2014.
2 In matter no HB 11/51950 that the
homeowner pay to the builder on or
before 31 May 2014 interest at the rate of
18 % per annum on the sum of
$45,442.00 from 1 August 2011 to the
date payment is received by the builder.
3 That the application of the homeowner in
matter no HB 11/57276 against both first
and second cross respondents be
dismissed.
4 That the builder’s submissions on costs
together with its full assessment of costs
and disbursements detailing all times
entries and charges schedules of
professional fees together with a
schedule of disbursements annexing
copies of all invoices in support be filed
with the registry and served on the
homeowner by 31 May 2014.
5 That the homeowners reply submissions
on costs be filed and served on the
builder by 4 July 2014.

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Legislation Cited: Home Building Act 1989
Home Building Regulation 2004
Cases Cited: Pavey and Matthews Pty Ltd v Paul [1987]
HCA 5
Wright v Foresight Constructions Pty Ltd
[2011] NSWCA 327;
Shepherd v Felt Textiles of Australia Ltd
[1931] HCA 21 ;
Botros v Freedom Pty Ltd QLD CA [1999]
unreported
Turner Corporation Ltd (Receiver Appointed)
v Austotel Pty Ltd [1994] NSWSC unreported
Category: Principal Judgment
Parties: Ultra Developments Pty Ltd (applicant / first
cross respondent)
Alison Bennett (respondent/ cross applicant)
Darian Percy (second cross respondent)
Representation
- Counsel: Justin Young of Counsel for the builder (Ultra
Developments Pty Ltd)
D A Lloyd of Counsel for the homeowner
(Alison Bennett)
File number(s): HB 11/51950 and HB 11/57276
REASONS FOR DECISION
APPLICATION
1. There are two applications before me which proceeded together with such
evidence heard forming the basis for my determination in both matters.
Firstly ,the application by Ultra Developments Pty Ltd (the builder), matter
number HB 11/51950 wherein the builder claims the sum of $158,507.41
in respect of amounts payable under the terms of its contract with the
homeowner dated 5 May 2010 as well as damages for alleged wrongful
termination by the homeowner of that contract plus interest and costs.
2. The homeowner’s cross application joins both the builder and the second
cross respondent, a director of the builder, Darian Percy (“DP”). Particulars

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of the homeowner’s claim are set out in her detailed Points of Claim dated
1 August 2012. Therein three areas of claim are set out against the builder
and DP. Firstly, a false, misleading and deceptive conduct claim in which it
was alleged essentially that the homeowner would not have undertaken
the works but for the alleged false and misleading statements of DP as to
the likely cost of the work. Secondly, a claim in respect of the alleged
overcapitalisation of the property based on the difference between the
contract price and the ultimate actual cost of carrying out the work, on the
basis that such loss was a consequence of the homeowner’s reliance on
representations which were false. Thirdly, a claim for defective
workmanship with respect to certain aspects of the work performed by the
builder under the contract. The total amount for defect rectification claimed
as set out in the Scott Schedule is $118,136.00.
JURISDICTION
3. This Tribunal derives its jurisdiction in this matter under the Home Building
Act 1989 (“HBA”). This dispute arises out of a contract to perform
residential building work involving additions to and renovations to an
existing premises. The amount in dispute in respect of such work is less
than the $500,000.00 limit of this Tribunal.
ISSUES
4. Whether the builder had the right under Clause 32 of the contract to
suspend the work?
5. Whether the suspension of the work by the builder amounted to a
repudiation of contract entitling the homeowner to terminate?
6. Whether non-payment of an invoice for costs incurred in respect of an oral
variation non-compliant with Clause 17 of the contract can constitute a
breach under Clause 33.2 (a) of the contract?
7. What is the proper contract adjustment reconciliation between the builder
and the homeowner in the circumstances of this contract ending?
8. Whether the list of outstanding works as at the date the builder ceased at
the site are determined to be defects or incomplete works?
FACTUAL SUMMARY
9. Towards the end of 2009 the builder was invited by the homeowner to
quote on the proposed alterations and additions to her home in Woodward
Street Orange. It is noted that the homeowner was also the owner of an
adjoining dwelling in Woodward Street from which she had been
conducting her chiropractic practice. From the evidence including the
photographs it seems that the subject premises is one of many fine
examples of older federation style homes that exist in the township.

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10. DP and the homeowner had met at the premises and discussed the project
at which time a set of plans were provided to the builder. DP forwarded the
plans to Wearflow Cost Consultant which company provided an estimate
of costs in December 2009.
11. Although the homeowner had been undertaking her own enquiries as to
the nature of fixtures and fittings that she wanted there was no form of
specification or schedule of finishes made available to the builder for the
purpose of quoting the project.
12. The builder provided an initial estimate of costs on 5 January 2010 and
following further communications a further revision in early February 2010
in the sum of $771,000.00 inclusive of GST. The builder by email dated 17
March 2010 submitted what is referred to as a final quote for the sum of
$728,500.00 inclusive of GST.
13. On 19 April 2010 Orange City Council approved the plans for the proposed
renovations of the subject premises.
14. On 24 April 2010 the builder forwarded the draft contract being a HIA
standard form with a contract price of $728,900.00. It is apparent from
email correspondence dated 29 April 2010 that there were further
discussions between DP and the homeowner on 28 April 2010 which
resulted in changes to allowances for PC and Provisional Sums but the
contract price was unchanged. The parties entered into the agreement on
5 May 2010 at the stated price on the contract of $728,900.00.
15. The project works commenced sometime shortly after the contract was
signed in May 2010.
16. Works continued throughout 2010 and 2011 up until around July 2011
when the issues that led to the project coming to a halt developed.
17. It is apparent from the uncontested evidence of the site foreman Steve
Grabham that because there was limited documentation such as a
specification or a finishes schedule that the homeowner was actively
involved in the decision making throughout the course of the works being
conducted. This was done through regular weekly meetings with
discussions taking place where the homeowner would indicate precisely
what she wanted. This was often done with her providing magazine
illustrations or video recordings of the type of outcomes she was trying to
achieve
18. The evidence indicates that the homeowner was clear in her mind as to
the level of finish and particular nature of detailing she wanted in order to
achieve an outcome that was sympathetic to the original style of building
and without appropriate documentation this would not have been possible
without her significant input. Grabham’s evidence suggests that the
outcomes often times were achieved as they carried out the work with

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fixtures being tacked in position temporarily before final approval was
obtained.
19. It is also relevant to note that the sequence of the works was adapted to
suit the requirements of the homeowner.
20. The homeowner also had input into the appointment of a number of the
subcontractors involved in the project. Some of them were removed from
the contract and taken over directly by her in respect to the control of those
contractors and the work for which they were responsible, from which one
can reasonably conclude that generally it could be stated that the
homeowner’s involvement with the project was very much “hands on”
along with the builder.
21. On 18 July 2011 the builder advised the homeowner that the forecast cost
to complete the works was $144,000.00 and at this time there was only
$31,000.00 remaining in the NAB loan facility which had been obtained to
fund the project on the basis that the banks portion represented around 80
percent of the build cost.
22. The builder had issued two progress claims on 19 July 2011 being invoice
numbers 750 and 751. The total outstanding under these two invoices was
about $78,000.00. The homeowner made a part payment of $20,000.00
towards those invoices in or around early August 2011.
23. On 1 August 2011 the homeowner presented a list of purported defective
/incomplete works and requested that these be rectified before the tiling
invoice, namely invoice 750 could be paid. This list had been prepared by
or at least with the assistance of her father in law Roger Karrasch.
24. At the request of NAB, following an inspection of the works by the bank
officer Brendan Tink (BT) on 27 July 2011, it was recommended that the
quantity surveyor Greg Sieb (the QS) be appointed to identify the progress
and quality of the works completed and to assess what works remained
outstanding. The QS carried out site inspection on 8 August 2011 and
produced his report dated 16 August 2011 which report is in evidence at
page 1513 of the joint bundle.
25. Also on 8 August 2011 the builder had its own building consultant Alec
Rendell attend the site to assess the works and provide a report.
26. On 9 August 2011 the builder emailed the homeowner advising of its
concerns regarding non-payment of invoices 750 and 751 within the period
required by the contract .It further advised that unless payment was
received by COB on the 10 August 2011 “we will reserve our rights to
suspend the works pursuant to Clause 32 of the contract at our discretion
and without further notice …”.
27. On 16 August 2011 the builder wrote to the homeowner advising that it
regarded the homeowners’ failure to pay the outstanding invoices as a

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substantial breach of the contract relying on the terms of Clause 15 and
notified suspension of further work effective immediately pursuant to
Clause 32.
28. On 2 September 2011 a letter was directed to the builder by the
homeowners’ solicitors Whitely Ironside and Shillington advising that
certain conduct of the builder as set out in the letter amounted to a
repudiation of the contract and that the homeowner accepted such a
repudiation and forbad the builder any further access to the subject
premises. It is noted that the conduct referred to as repudiatory did not
include the subsequently alleged wrongful suspension of the works.
THE BUILDERS LAY EVIDENCE
29. The evidence of DP is contained in his lengthy statement of 12 September
2012 the contents of which was adopted by him as true prior to cross
examination by Mr Lloyd.
30. In cross examination DP conceded that he did not follow the requirements
of Clause 17 of the contract as regards variations. He claimed that there
was an informal procedure in place and that if the homeowner agreed
either orally or by email to a variation that was enough. He said that the
detail related to the variations was provided in the spreadsheets which
were a summary of the projects costs up to their date of issue. So in effect
he conceded that the variation costs were only notified in writing
essentially after the variation works were completed.
31. DP was also questioned about the defects list which was provided by the
homeowner on 1 August 2011, but he did not change his view that apart
from a couple of items the entire list represented incomplete work that
would have been completed in the normal course of the project were the
builder not terminated and excluded from the site.
32. In relation to additional costs incurred in completing work out of sequence
which was done at the request of the homeowner DP conceded that she
was never advised that the “out of sequence” work would involve
additional cost.
33. Mr Lloyd cross examined DP at length and repeatedly in relation to the use
of the word “artificial” or “artificially” in various paragraphs of his statement
and also in his detailed letter dated 31 August 2011, in reference to the
reduction of the contract price to $728,900.00. Mr Lloyd was attacking
DP’s credibility in trying to establish that DP had actively facilitated the
loan arrangement between the homeowner and her bank when he knew
that the reduced price was artificial and set at that reduced level
specifically to “dupe the bank”. DP did not resile from his contention that
the word artificial was used by him in his statement only with the benefit of
hindsight. His evidence was clearly that at the time of the discussions with
the homeowner prior to the signing of the contract when there was a
request to reduce the contract sum on the basis that substantial reductions

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be made to PC and provisional cost allowances it was his belief that the
revised allowances were achievable. He confirmed his evidence that it was
the lavish spending by the homeowner to achieve the particular outcomes
which subsequently led to the overrun on the contract sum.
34. Mr Lloyd also attempted to discredit DP in relation to plumbing invoices
which purported to relate to 147 Woodward Street rather than the subject
premises. However DP simply indicated that such reference was
apparently a “typo” in his view as the plumber had done the work at the
subject premises.
35. The other lay witnesses statements relied upon by the builder namely that
of Janine Percy (“JP”) of 5 September 2012 and Steve Grabham dated 5
and 12 September 2012 were tendered as part of the evidentiary bundle
but these witnesses did not give oral evidence and were not required for
cross examination.
THE HOMEOWNERS LAY EVIDENCE
36. The three statements of the homeowner contained in volume 6 of the joint
bundle are relied upon in her case and she was called and averred to the
truth of those statements dated 23 May 2012 and 11 and 12 June 2012.
The homeowner was then cross examined in relation to her evidence.
37. The homeowner’s contention is that the contract price was fixed at
$728,900.00 and that there were no alterations to the plans on which the
builder had quoted. She contended that she did not think that the contract
price would go up as much as it did and that the ultimate cost if the builder
has to be paid all he is seeking would make it far too much.
38. Mr Young raised the issue of the kitchen which was subsequently
illustrated in the Country Home Ideas magazine tendered as B Exh 3. The
homeowner claims that the contract overrun of $35,000.00 on the kitchen
was because the builders allowance for it of $25,000.00 had been
inadequate. Mr Young sought to make the point that the lavishness of the
kitchen as illustrated reflected the extent of the spend on it which the
homeowner conceded was over $80,000.00 including the appliances.
39. The homeowner agreed that she had never insisted on strict compliance
with the contract provisions with respect to variations. She conceded that
she had accepted the spreadsheet arrangement whereby the builder had
provided details on the spend for variations after the event .She claimed
that prior to work being done amounts were never discussed and that she
was not told amounts.

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40. Mr Young raised the issue with the homeowner as to when financial
concerns first arose suggesting that her email of 19 June 2011 at page
885 was the first documented indication but her response was that there
were concerns with costs overruns earlier and she referred to Invoice 746
which was a provisional sum invoice dated 31 May 2011. Mr Young also
put to her in a number of questions the evidence of financial issues
discussed as set out in the statement of JP relating to a19 July 2011
meeting to which the homeowner indicated she had no recollection. She
conceded having some recollection concerning the tiling that was
discussed but when she was asked to look at the builder’s minute of the
meeting at page 889 she still said that she had no recall and stated “based
on the document it is unclear.”
41. Mr Young cross examined the homeowner further about email
correspondence between the parties at pages 913 to 926 trying to get a
concession from her that it was not the bank that was insisting on the list
(prepared by Roger Karrasch her father in law) of outstanding defects /
incomplete works, that was provided to the builder, but that it was the
homeowner herself insisting that such identified works be completed
before she could attend to payment of invoice 750 (the tiling Progress
Payment invoice). The homeowner’s responses to the line of questioning
were rather more obstructive and evasive than helpful with many of the
responses being a “no recall” answer. The conclusions that can
reasonably be drawn from the actual correspondence are discussed below
at 58.6, 58.7 and 58.8.
42. Mr Young further questioned the homeowner in relation documents
produced under summons to NAB. These documents were tendered by Mr
Young as B Exh 4. The homeowner however did not freely admit the
obvious conclusions that can be drawn from any literal interpretation of
such documents to which reference is made below at paragraph 58.7 and
58.8.
43. Questions were also put to her regarding the state of her finances around
this time but she denied an inability to pay, indicating that there was
money available but she just had to arrange for its release or otherwise to
shuffle money around. She denied categorically the proposition put to her
that at the time of the suspension of works in August 2011 “you (the
homeowner) did not have sufficient funds to pay both the builder and other
tradesmen that she might appoint directly to complete the work and when
the builder refused you access to the premises you got very upset and
decided that was the end”.
44. In answer to questions from myself regarding the discussions leading to
the reduction in the contract price from $786,000.00 to $728,000.00 the
homeowner indicated that this was done because she wanted the contract
price not to reflect the Reece plumbing quote for the bank as this amount
was being funded by her directly. She indicated there were toing and froing
discussions with figures prior to finalising this issue.

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THE EXPERT EVIDENCE
45. The reports of both Mr Dillon for the homeowner and Mr Rendell for the
builder are in evidence as is the Conclave report and the Scott Schedule
(“SS”) signed off by each of them following the conclave. Both experts
gave oral evidence together in joint session colloquially referred to as “hot
tubbing” and they were each questioned by opposing counsel.
46. In relation to the meaning of classification D as described by the conclave
member at Item 33 of the SS both experts agreed that it meant “there
would be a cost to complete those items so marked with a D to a finished
state” and that on the face of each item described from item 32 onwards in
the SS it could not be said without further investigation that any such items
were the subject of the contract or not.
47. Mr Dillon indicated that at the time of his inspection the work described in
the items from 32 onwards had been completed by others and that his
comments are based on the wording used in the various invoices in
respect of the subject work. For example if an invoice used words such as
“repair or fix” he would consider that a defect. Mr Rendell commented that
there were some limitations with regard to such a process but in answer to
a question from Mr Lloyd conceded that it would be reasonable to assume
that invoices had been prepared accurately and honestly.
48. In answer to Mr Young, Mr Rendell confirmed that he had inspected the
site and taken photos of the relevant items in August 2011 before Busy
Bee and others had done the rectification / completion work and Mr Dillon
conceded that he did not have this advantage having not seen the items
prior to such work.
49.1. Mr Dillon in answer to Mr Young’s question following an explanation as to
his understanding of the different concepts, that is “defective” or
“incomplete” work that based on his analysis of the term “incomplete” for
the purpose of the items so described he explained as follows:
49.2. “If we assume that a contract had continued to its end it would have given
the builder time to remedy anything you think was a defect, looked at on
that basis it could be considered a defect only after he had had that time”
The conclusion from this answer being that if the time was not afforded to
the builder the work would have to be regarded as incomplete.
50. Both experts were in agreement in relation to the method of determining
the labour rates to be used in costing the work in respect of any item and
each agreed that the higher rate would apply if it was other than the
contract builder performing the rectification but that the rate would be the
lower one where the contract builder was involved in performing it.

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51. As regards evidence given at the hearing by each of the experts with
reference to particular items in the SS this will be referred to where
relevant in the findings below in relation to quantum with respect to such
items.
52. Mr Lloyd cross examined Mr Rendell in relation to the contract
reconciliation document at page 31 of the bundle. It is noted that Mr Dillon
was not involved in this aspect as he had not reported in relation to the
reconciliation.
53. Mr Lloyd’s first challenge was in relation to the basis for the figure in
paragraph 4a of the reconciliation to which Rendell explained that he had
used the information identified in the table at section 2.3 of his report as
well as information from the builder. Mr Lloyd suggested the proper
approach was through relevant invoices issued and Rendell agreed there
were different ways this could be done properly.
54. Mr Lloyd highlighted a discrepancy with regard to the figure at paragraph
6a of the reconciliation which he asserted should have been 20% of
$45,000.00 being the difference between the figures in paragraphs 4a and
2a. Mr Rendell could not explain this discrepancy but thought that it also
included an allowance for a margin on the variations but in the witness box
was unable to reconcile the figures even on that basis.
55. Mr Lloyd also queried Mr Rendell in relation to the seemingly low figure
allowance for the cost to complete expressed in paragraph 9a having
regard to the builder’s suggested figure in the email of 18 July 2011
namely $144,000.00 and QS figure of $148,000.00. Mr Rendell explained
that the difference related to the higher figures including work done but not
yet invoiced whereas his figure in paragraph 9a of the reconciliation
related only to work not done.
56. In answer to Mr Young, Mr Rendell explained that there was substantial
work done which would have formed part of the final invoice amount yet to
be billed that is the last PP which was to be an amount of around
$36,000.00. He also indicated that the figure in his reconciliation that was
comparable to the figure of the builder and the QS figure was his figure in
paragraph 12 of the reconciliation namely $158,000.00.
57. Finally Mr Lloyd raised the issue of whether or not Mr Rendell had
accounted for the cost of the kitchen which was a cost that the builder had
credited back to the homeowner as this was to be work done and paid for
by her. Mr Rendell thought that this was an amount covered in paragraph
14b of the reconciliation under “joinery” but this was not satisfactorily
explained at the joint session on day 2 of the hearing. Mr Rendell was
recalled in relation to this point on day 3 and explained the position
indicating that the table on 101 of the bundle contained the figure of
$33,171.00 and this figure was brought to account under paragraph 18 of
the reconciliation as the difference between the that figure and the cost of
the joinery of $25,000.00. Mr Rendell noted the reference at page 101 to

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“Joinery allowance refers to progress payment for deduction” as being the
reference to the PP in respect of the tiling from which the kitchen
allowance was deducted.
FACTUAL ANALYSIS
58.1. The conclusions which can reasonably be drawn following scrutiny of all
the documentation including statements correspondence and other
relevant material and the oral testimony are as follows:
58.2. That each of the parties should have understood that the fixed price
amount stipulated in the contract could only be achieved if the spend on
PC items and Provisional Sums remained within the allowances stipulated
in the contract.
58.3. Both parties understood that the amount agreed as the fixed price sum
was agreed at that level more or less to suit the amount that it was known
the NAB had agreed to fund and the homeowner was aware that the cost
of the build should she choose to proceed with PC and Provisional Sum
allowances above those stipulated would involve an escalation in the build
cost which she personally would need to fund.
58.4. There was a certain level of informality in the manner in which the works
proceeded in so far as agreement along the way in achieving the specific
detail of the work having regard to the absence of any detailed
specification or schedule of finishes.
58.5. Satisfying the requirements of the homeowner as to that specific detail
required involved extra work by the builder some of which formed the basis
for variations which were equally subject to an informal agreed
arrangement not in accordance with the contract requirements as set out
in Clause 17. Some of the additional time required of the builder such as
that caused by agreeing to perform work out of sequence was never the
subject of any specific arrangement nor even disclosed during the builder’s
involvement in the works. However to attribute overruns in the contract
price as entirely attributable to the fault of the builder would require a
finding that the homeowner did not require the attention to detail and the
changes necessary to achieve it as contended by the builder. The
evidence does not support such a conclusion.
58.6. Whether financial concerns / issues arose for the homeowner in May, June
or July 2011 is not material. It is reasonable to assume that the
homeowner did have cash flow problems from the following evidence: the
tone of the letter from the homeowner’s husband dated 19 June 2011; the
assertions of JP at paragraphs 12 to 17 of her statement dated 5
September 2012; the detailed email from BT from NAB sent at 3.07pm on
29 July2011 which was corroboratory of the JP asserted statements
attributed to the homeowner particularly relating to bank interest and the
homeowner’s email to BT on 2 August 2011.

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58.7. The homeowner was advised by the NAB as evidenced by the various
documents contained in B Exh 4 that on 29 July 2011 as per the BT email
referred to above that it would be unable to pay Invoice 750 because it
would fully draw the loan. The reason was clearly not as contended by the
homeowner that NAB needed outstanding items completed before it would
advance that payment. It is clear that even if the builder had rectified the
list immediately on the 1 August 2011 when it was presented to him it
would have made no difference to the bank’s position regarding any further
advance at that time. NAB’s suggested way forward was to get a QS to
value existing and on completion works to assess the possible basis for
further funding to assist the homeowner.
58.8. Further in relation to the payment conditions asserted by the homeowner
in relation to invoice 750, her email to the builder at 1.48pm on 1 August
2011 makes assertions entirely inconsistent with the NAB’s position. BT’s
further email to the homeowner on 3 August 2011 clearly defines its
position as regards the homeowners outstanding items list dated 1 August
2011 wherein it stated that the bank “was not in a position to endorse” the
list when the homeowner had already advised the builder that the NAB had
required such works to be completed before it could meet the outstanding
PP.
58.9. On the challenge relating to the inclusion of the kitchen amount of
$25,000.00 in the Rendell reconciliation the further evidence on day 3 from
Mr Rendell establishes that it was excluded from the calculation as
explained at paragraph 57 above.
COUNSEL SUBMISSIONS
59.1. Mr Lloyd outlined the four issues needing to be determined as follows:
59.2. Did the builder have the right under Clause 32 of the contract to suspend
the work or whether the act of doing so amounted to a repudiation of the
contract.
59.3. What is the proper adjustment contract reconciliation that should be
applied between the parties.
59.4. Whether the homeowners claim succeeds and if so in what sum.
59.5. Costs in relation to the abandoned claims.
60.1. Mr Lloyd argues in relation to the first issue that the builder had no right
that it was permitted to exercise for non-payment of invoices 750 and 751.
He submits that invoice 751 was a claim for variations none of which had
been validly determined pursuant to Clause 17 of the contract. The basis
for this submission is found in Section 10(1) of the Home Building Act 1989
(HBA) and Part 1 of Schedule 2 of the Home Building Regulation 2004
(HBR), the relevant parts of which provisions are as follows:

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a) 60.2. HBA 10 Enforceability of contracts and other rights
(1) A person who contracts to do any residential building work, or any specialist
work, and who so contracts:
(b) under a contract to which the requirements of section 7 apply that is not in
writing or that does not have sufficient description of the work to which it relates
…., is not entitled to damages or to enforce any other remedy in respect of a
breach of the contract committed by any other party to the contract, and the
contract is unenforceable by the person who contracted to do the work. However,
the person is liable for damages and subject to any other remedy in respect of a
breach of the contract committed by the person.
60.3. HBR Schedule 2 Part 1 - Contracts to do residential building work
b) 1 Plans and specifications
(1) All plans and specifications for work to be done under this contract, including
any variations to those plans and specifications, are taken to form part of this
contract.
(2) Any agreement to vary this contract, or to vary the plans and specifications for
work to be done under this contract, must be in writing signed by or on behalf of
each party to this contract.
61. Mr Lloyd has submitted that since there was non-compliance with respect
to the variations in as much as there was no written agreement as required
by the above Regulation with respect to them the builder would not be
entitled to sue for them under the contract by virtue of Section 10(1)(b) of
the HBA. In support of his contentions he relies on the authority in the
decision of Wright v Foresight Constructions Pty Ltd [2011] NSWCA 327.
62. As regards invoice 750 Mr Lloyd submits that because there was a side
agreement conceded by DP that the PP’s could be split up into 11
payments rather than 6 as per the contract and there was no agreement in
the contract giving such a right then it must be inferred that the builder
must be relying on some oral agreement … Additionally he submits that
even the amount of invoice 750 had been orally agreed to be varied with
respect to the allowance for the kitchen. On that basis such oral
agreements would also be a variation not in writing which would render
invoice 750 liable to the same fate under Section 10(1)(b) of the HBA .
63. Alternatively Mr Lloyd argues that even if the latter argument regarding
invoice 750 was unsustainable since the builder’s suspension notice relied
on both invoices 750 and 751, the builder had no right to do so under the
written contract and Wright V Foresight Constructions he argues provides
that such was a wrongful exercise of a right that he did not have open to
him. Mr Lloyd the relies on the decision in Botros v Freedom Homes Pty
Ltd an unreported decision of the Queensland Court of Appeal which held
that “a contracting party is not entitled unilaterally to impose on the other
party the conditions of a kind for which there is no warrant of authority”. He
submits that the builder’s insistence on payment of both invoices was

14. - 14 -
without contractual authority or warrant and that is precisely what the
decision in Botros has vetoed.
64. Whilst the latter bases without more argued Mr Lloyd were sufficient to
establish justification for the termination of the contract he submitted that
there was a further anticipated breach namely that the price was going to
exceed that agreed in the contract significantly as advised by the builder in
its email of 18 July 2011. There being no justification for such an amount
over and above the contract price to be charged was submitted as entitling
the homeowner to treat same as a substantial anticipatory breach .
65. The final basis upon which Mr Lloyd relies as a ground for termination is
the number of defects identified in August 2011 most of which the builder
failed to recognise as defects. This is one of the grounds nominated in the
termination letter wherein it is asserted by the homeowner that elements of
the work were so defective that they required to be completely redone. The
failure to recognise such as defects given the support provided by Mr
Dillon with respect to them constituted a breach which Mr Lloyd argues
was also sufficient to ground the termination.
66. Mr Lloyd further submits that although the letter of termination of 2
September 2011 did not specify the grounds now relied upon the decision
in Shepherd v Felt Textiles of Australia Ltd [1931] HCA 21 provided a clear
well established authority for the proposition that a party will not be
restricted to the grounds nominated on the question of whether termination
was proper.
67. Mr Lloyd then moves onto the second issue and submits that the contract
reconciliation provided by the QS at page 1513 should be preferred to that
of Mr Rendell. He points to a number of issues with the Rendell
reconciliation which he suggests render it inconsistent with the QS report
and therefore submits that it should be rejected in its entirety. Mr Lloyd
presented his own version of the reconciliation based on the categories
and method adopted by Mr Rendell but with amendments to it based on
the QS figures and making changes to categories with respect those
issues the subject of challenge by him including the variations ( excluded
because of Section 10 HBA argument); the unexplained margin in
paragraph 6a of the Rendell version and the $25,000.00 for the kitchen the
evidence in relation to which from Mr Rendell he submits should be
rejected.
68. Mr Lloyd submits that his amended handwritten version of the
reconciliation should be accepted which adopting his figures results in a
substantial amount owing to the homeowner rather than the builder based
on the Rendell methodology and that Mr Rendell’s figure should be flatly
rejected .
69. The final issue dealt with by Mr Lloyd was with respect to the defects as
any costs submission was determined best postponed to subsequent to
the determination of the substantive matter. In relation to the defects Mr

15. - 15 -
Lloyd relies on the evidence of Mr Dillon as set out in detail in the
Conclave version of the SS. It is submitted that on the basis that the
repudiation issue is determined in the homeowner’s favour for the reasons
he has earlier outlined the proper figures that should be applied to any
assessment of the rectification costs is the higher costs as indicated by Mr
Dillon and that as from the date of repudiation by the builder once
established all items not complete should be assessed as defects. Apart
from the various concessions that were made during the hearing with
respect to various items in the SS which remain in dispute it is submitted
that the opinion of Mr Dillon should be preferred to that of Mr Rendell as to
whether or not the particular item is established as a defect.
THE BUILDERS SUBMISSIONS
70. Mr Young’s submission firstly addresses the proceeding generally with
respect to the evidence and the witness’s demeanour and credibility. It is
submitted both JP and Steve Grabham provided detailed statements and
were available witnesses but were not required for cross examination so
their evidence is uncontested. It should further be noted that that neither
the homeowner’s husband nor her father in law have given evidence.
71. It is submitted that DP was an open and honest witness who gave
evidence freely without any evasion or loss of memory in contrast to the
evidence of the homeowner who he asserts suffered from selective
memory loss and Mr Young submits that on the question of credit she
should not be believed except to the extent that her evidence is against
her.
72. Mr Young submits that what really happened is that the builder carried out
the works in accordance with the contract but that it ran over because the
contract itself contemplated that it would do so through PC’s, provisional
sums and agreed variations. When this occurred and the builder did not
get paid and it legally suspended the works and it was then terminated.
73.1. Mr Young has postulated two reasons for the homeowner refusing to pay
the outstanding amounts to the builder:
73.2. She ran out of money and could not pay.
73.3. Secondly, she had consistently certified to the bank in her progress claim
forms that there had been no changes to the contract price in
circumstances where there clearly had been. She had then attempted
unsuccessfully to get the bank to endorse her list of alleged defects as the
reason for non-payment.
74. Mr Young submits that the builder’s claim is a claim for general law
damages or alternatively in quantum meruit based upon the proposition
that there was an unlawful repudiation of the contract constituted by the
homeowner’s termination notice and her exclusion of the builder from the
site.

16. - 16 -
75. Dealing firstly with the grounds nominated in the homeowner’s termination
notice Mr Young notes the first ground was abandoned. The second and
third grounds relating to breaching implied terms of the contract and the
duty owed to the homeowner with regard to estimates in relation to
provisional sums were never raised during the proceedings.
76. As regards the final ground in the notice relating to an allegation that
certain elements of the work were so defective that they had to be redone
Mr Young says that even if the defects were established this ground is not
made out for the following reasons. Essentially he maintains that the
homeowner has not followed the provisions required by the contract for
dealing with defects which it should have done. Mr Young has not provided
specific detail as to those mechanisms in this contract. He Relies on the
authority in a decision of Turner Corporation (Receiver and manager
Apointed) v Austotel Pty Ltd NSWSC [1994] (unreported)…which held that
contractual provisions had to be followed and by analogy the provisions of
the contract herein must equally be applied.
77. Mr Lloyd then directs his attention to the main basis of the homeowner’s
alleged support for the termination which was argued at the hearing
namely the claim that the suspension by the builder was invalid because
neither invoice 750 or 751 were in fact due. He comments that the fact that
this was not specified as a ground in the actual notice of termination letter
dated 2 September 2011 implies that at the time those matters were not
considered by the homeowner to be repudiatory.
78. It is nevertheless asserted on behalf of the builder that the invoices were in
fact due and indeed that the homeowner had agreed to pay them but did
not do so only after financial issues arose and her bank refused to make
any further progress claim as it would have put the loan over the limit. He
argues further that the part payment of $20,000.00 which the homeowner
in her evidence conceded was a payment “in globo” relating to both
invoices constitutes an admission that they were due and payable.
79. Mr Young asserts that there can be no dispute that the tiling invoice i.e.
750 was due as it was one of the PP’s and the milestone had been
reached. He noted that the content of invoices 751 was related to both
variations and PC and provisional sum items. So on that basis he
highlighted the distinction noting that the Clause 17 requirements for
writing in the contract only related to variations and not PC’s and
provisional sums.
80. It is then further submitted by Mr Young that there was a course of conduct
in relation to the variations. The various spreadsheets that were provided
by the builder at regular intervals during the course of the works provided
the homeowner with a full understanding as to the nature of the variations
and the provisional sums. He argues that her evidence was very clear that
she understood that this was the way things had been done and no one
had any issue with it. Leaving aside the requirements of Section 10 HBA,

17. - 17 -
this process was not a basis for non-payment under the contract and
indeed he submitted that the homeowner was estopped from denying
payment for those invoices on the basis that the contract was not followed.
The fact that no objection to such a course of conduct had been raised
right up until after the termination was argued as further support for an
estoppel against the homeowner.
81. In relation to the homeowner’s submission with regard to s 10 HBA and the
support for the argument claimed to be derived from the decision in Wright
v Foresight Constructions Pty Ltd, Mr Young argues that the fact that the
variations were not in compliance with Clause 17 does not make the
contract unenforceable and that the decision in Wright v Foresight does
not say that a builder is not entitled to be paid for a variation that is not in
writing in compliance with the contract provisions. Even if the authority
does support the narrow position put by Mr Lloyd, Mr Young submits that
“it does not say that the failure to pay a variation cannot be relied upon as
a ground of default even if that variation is not in writing”.
82. However Mr Young further argues that irrespective whether the variations
are enforceable under the contract by reason of Section 10 HBA that does
not affect the builder’s rights under a quantum meruit He relies on the
authority in Pavey and Matthews Pty Ltd v Paul [1987] HCA 5.. in support
of a submission that if there is a basis for quantum meruit it is necessary to
have regard to the rights of the parties in the circumstances of the contract
to identify the amount that is fair and reasonable to pay and determine
what is payable as if the contract had been in writing and had not fallen
fowl of Section 10.
83. Mr Young finally addresses the challenge made by Mr Lloyd to the report
and evidence of Mr Rendell. Firstly responding to the suggestion that the
Rendell report was only responding to Mr Dillon’s defects report he says
that is simply not so and Mr Rendell confirmed this in giving evidence. Mr
Young also refers to the confirmation of the brief at 6.2 and the heading on
the reconciliation page itself at page 31 of the bundle as confirmation.
84. As regards Mr Lloyds assertion that the cost to complete in paragraph 9 of
the reconciliation ought not be accepted having regard to the QS figure Mr
Young relies on Mr Rendells explanation in evidence that at the time of the
QS inspection and the builder’s email of 18 July 2011, there was work that
was done but not invoiced and that the figure his reconciliation that was
the true comparable one was the final reconciliation figure at paragraph
12.
85. Mr Young indicated in relation to the QS report that it was admitted as a
business record and it did not comply with the expert witness code, but
that the decision not to cross examine the QS was made because it was
not felt necessary and that the builder embraced the QS report. He then
refers to the various aspects of the QS report which illustrate the difference
in methodology with that of the Rendell reconciliation. In particular he
notes the base cost to complete figure of $78,000.00 is simply the final

18. - 18 -
progress payment figure not an actual measure of the completed works or
works not completed.
APPLICATION OF LEGAL PRINCIPLES TO THE FACTS
86. The central issue for determination in this matter is whether the
suspension of the works by the builder was legally valid having regard to
its validity being dependent on invoices 750 and 751 being properly
outstanding. If the suspension notice is determined to be valid then the
purported termination by the homeowner must be invalid in that the
repudiation asserted to support the termination was not established on that
ground. This also assumes of course that none of the other grounds
argued to support it are established. Conversely if the suspension could
not be supported because the subject invoices cannot be regarded as
outstanding then the suspension by the builder would be wrongful as not
compliant with Clause 32 and pursuant to Clause 33 of the contract would
constitute a repudiation upon which the homeowner’s termination notice
would be properly supported .
87. The main contention of the homeowner is that invoice 751 related to
variations which were not properly constituted in accordance with the strict
terms of Clause 17 of the contract. More than half of the amount claimed in
invoice 751 related to provisional sums to which the Clause 17
requirements of writing do not apply but the homeowner’s contention
makes no submission regarding the provisional sums component.
88. There is no evidence to support the variations the subject of invoice 751
being compliant with the requirements of Clause 17 of the contract. On
that basis they are clearly caught by abovementioned provisions of the
HBA and HBR , the effect of which being that the builder “is not entitled to
damages or to enforce any other remedy” with respect to such variations
which are in breach of the contract .What has been contended for the
homeowner is that at least impliedly that the suspension of the work for
non-payment of the invoices constitutes an attempt to enforce payment
and such should presumably fall within the meaning of the words of
Section 10(1)(a) “to enforce any other remedy”.
89. The homeowner’s submission seeks to rely on the decision of Wright v
Foresight Constructions referenced above as authority for the proposition
that the builder has no right at all to be paid for work done pursuant to an
oral or non-compliant variation and makes no distinction between the
enforcement of a payment and the entitlement to a payment. It is clear as
pointed out by Mr Young in his submission that Pavey and Matthews Pty
Ltd v Paul [1987] HCA 5 gives an entitlement to payment under an
informal contract “for the fair value of the work…”
90. There has been no submission by either counsel on the meaning of the
words “is not entitled to damages or to enforce any other remedy” but in
context these words seemingly are suggestive of engagement in some
legal process to enforce a payment. The decision in Wright v Foresight

19. - 19 -
Constructions does not go as far as establishing authority to say that a
builder must continue with project works where he has an entitlement to a
payment, even though there may be no basis to sue for recovery of it
under the contract but it may nonetheless have a right as expressed under
Pavey and Matthews principles. I am not satisfied that suspension of
works amounts to “enforcement of any other remedy” within the meaning
of Section 10(1) of the HBA. Mr Lloyd has attempted in his submissions to
expand the ambit of these words in suggesting the builder is “not entitled
to exercise any right or remedy under the contract …” but that expanded
.meaning he seeks to impose cannot be sustained on a constructive view
of the meaning of the precise words of this provision.
91. It has also been contended that the fact that the builder relied on both
invoices 750 and 751 together in support of the suspension and that if one
invoice fails the validity test the other must also fail with it because there
was no warrant of authority to impose such a condition in respect of the
two invoices and pursuant to the Botros decision that conduct would be
held to be repudiatory. Whilst the reasoning in the Botros decision is not
disputed it does not go as far as to establish that if two invoices are relied
upon as a basis for a payment, one of which is valid and the other not, that
further reliance on the valid invoice is precluded. The latter reasoning
assumes that Mr Lloyd’s contention is not established as to invoice 750
being rendered invalid because of an oral agreement to vary the amount of
the relevant PP. On the latter point the contract clearly defines in Clause
1.1 that the term “variation” means, changes and the like to the “building
works” which is also defined as meaning “the building works to be carried
out completed and handed over”. The latter description of a variation does
not encompass such an oral change to the payment terms or amounts so
as to render such a varied PP claim as was constituted by invoice 750
subject to be rendered invalid by Section 10(1) of the HBA.
92. As to the second ground contended on behalf of the homeowner to
support the termination, namely that the builder’s advice on 18 July 2011
that the contract sum was going to be substantially exceeded and this
provided evidence of an anticipatory breach of the contract, this could only
be sustained if the homeowner could establish what she contracted for
was specifically defined at the outset and she was being required to pay
an increased amount on the fixed price for precisely that which was
specifically defined at the outset. The evidence falls far short of
establishing this position and therefore this second ground does not satisfy
the required standard of proof.
93. The third ground relied upon at the hearing which was also specified in the
termination notice related to the alleged defects which existed prior to the
termination being such as they required much of the work to be completely
redone. Assuming the contract remained on foot and clearly at the relevant
time it had only been suspended by the builder on the basis of the alleged
non-payment, the homeowner’s remedy to rectify defects was to follow the
mechanisms set out in the contract .The decision in Austotel relied upon
by the builder provides authority for its contention on this issue. The

20. - 20 -
evidence does not establish that the homeowner followed any formal
procedure that would satisfy the contractual requirements and accordingly
this ground for termination also cannot succeed.
94. The contention on behalf the homeowner that termination of a contract can
as a matter of law be justified on any ground available to it whether or not
such a ground may have been specified at the time of termination is not
disputed and it is accepted that the decision in the Felt Textiles case
earlier mentioned supports this position. However that contention can only
assist the homeowner if such previously unspecified grounds can be
established as providing the legal basis required for the termination. In
determining the matter the Tribunal has therefore considered and rejected
all grounds upon which the homeowner has sought to rely to support the
basis for the termination.
DECISION ON LIABILITY
95. The decision in this matter has involved an analysis of evidence which has
been conflicting in many instances. It is worth noting that Mr Young’s
summary at the outset of his submissions, referenced at paragraph 71
above, as to what should be concluded from the demeanour of parties to
this dispute with respect to their credibility has some degree of persuasive
force and I find that summary to be a reasonably accurate assessment of
the position .I find that the inescapable view that is formed by close
scrutiny of the B Exh 4 documents is that the homeowner did mislead the
builder deliberately presumably with a view to buying time in order to sort
out her cash flow problems which the evidence suggests existed even if
only on a timing basis. The evidence supports the conclusion that there
was a prior agreement to pay the outstanding invoices 750 and 751. It is
not necessary to determine the precise reason for the homeowner’s
change of mind, nor whether the prior agreement created an estoppel with
respect to them being claimable.
96. Having regard to the reasoning outlined in paragraphs 87 to 91 above
wherein the contentions of the homeowner have been rejected in so far as
the invalidity of the invoices is concerned, I find that they were outstanding
and due to be paid even though less than half of the amount of invoice 751
relating to the variations could not have been the subject of any recovery
action by the builder because of the HBA and HBR provisions. The builder
nevertheless had an entitlement to be paid those amounts pursuant to the
contract or otherwise with respect to the variations component. I find that
the entitlement to a payment and a right to enforce a payment are not
synonymous and that the suspension of the works by the builder because
payments were outstanding to him was an action he could validly take
under the contract, notwithstanding that he may have had no right to
pursue recovery other than under quantum meruit. It must follow that the
homeowners reliance on the suspension as a repudiation by the builder in
such circumstances must fail. I find that homeowners conduct in purporting
to terminate on that basis and subsequently excluding the builder from the
site amounted to a breach of the contract on her part and the builder is

21. - 21 -
entitled to the relief claimed by it to the extent that it has been reasonably
established as is set out under Quantum below. The builder’s claim under
quantum meruit in respect to all the variations has not been not been
sufficiently articulated with respect to enabling this Tribunal to determine
on the basis of evidence that the amounts claimed equate to the “fair value
of the work” in accordance with Pavey and Matthews principles. Therefore
I am not satisfied that the builder has established an entitlement to the
required standard of proof to all of the variations claimed on the basis of a
quantum meruit and propose to find an entitlement only in respect invoices
715, 717 and 726 which have been conceded by the homeowner. The
builder’s rights in respect to recovery of all other variations are precluded
by the HBA and HBR provisions earlier outlined.
97. It further follows that the cross application of the homeowner seeking
damages from the builder for breach of contract must fail. The rights
between the parties in so far as assessment of damages are concerned
should have regard to the state of the works at the time the builder was
wrongfully excluded from the site noting that much of what is claimed at
that time by the homeowner to have been defective could not be so
regarded if the contract were still in force and the builder was still on site.
QUANTUM
98. The builders case is that the its proper measure of damage should be
based Mr Rendell’s contract reconciliation at page 31 of the bundle which
determines an allowance of $158,000.00 in its favour. I am satisfied that
the methodology of the reconciliation is appropriate, however there were
challenges by Mr Lloyd to a number of the components some of which
have not been satisfactorily explained so as to properly satisfy the onus of
proof in respect of the entitlement.
99. Mr Lloyd has submitted that his own hand written reconciliation tendered,
which adopts the same methodology as Mr Rendell’s, in support of his
submissions is a more accurate reflection of what a proper contract
adjustment should be as at the relevant date. In his document he has
essentially adopted the figures contained at 1521 of the bundle in the QS
report.
100. The conclusion I have reached in relation to the QS figures is that they are
merely mathematical calculations of the differences between the payments
made and amounts left to be paid under the contract based upon the
information obtained in the builder’s project cost summary spreadsheets
and do not reflect the actual value of the work performed or work left to
complete at the date the builder left site. At page 1515 of the bundle the
QS reports that “a detailed estimate or costs analysis has not been
completed by this office”. At page 1519 the report indicates in relation to
variations the following statement: “The Appendix to this report attempts to
summarise the anticipated final costs based on these changes, which
broadly includes” …”. The latter remarks are suggestive of the QS report
only seeking to provide an indicative figure for the bank. From close

22. - 22 -
scrutiny of the document itself by way of example referring to item a on
page 1521 of the bundle, the $78,840.00 figure noted is simply derived
from subtracting the actual payments made from the adjusted contract
value which is supportive of the conclusion I have reached.
101. Mr Rendell in his evidence specifically addressed the issue and confirmed
that he had assessed the actual value of the work left to complete and I
accept his evidence in preference to the QS figures. The weight that I have
afforded to the QS report and the information it contained is less having
regard to its admission as a business record as distinct from an expert
report in compliance with the code of conduct. The onus was on the
homeowner relying on this record to establish its efficacy. The builder
simply accepted it for what it portrayed which as indicated was something
quite different to the Rendell reconciliation in terms of figures and the fact
that Mr Young made the decision that there was no advantage to be
obtained from cross examining the QS cannot reflect adversely on the
builder which was not seeking to rely on the QS report. However I do find
that the QS report has been a useful account to provide a perspective on
the Rendell reconciliation and it has been given consideration on that
basis.
102.1. I have reached the decision in relation to final figure after making a number
of adjustments to the Rendell reconciliation as follows:
102.2. The margin allowance in item 6a could not be explained satisfactorily by
Mr Rendell at the hearing. I have allowed the margin on the difference
between item 4a and 2a at $8,901.00 plus an amount of $4,636.00 for the
margin on the conceded quantum meruit with respect to the variations.
102.3. The allowance in item 6c is reduced to $23,184.00 for the reasons stated
above at paragraph 96 above.
102.4. The total addition for paragraph 6 is therefore reduced from $101,042.00
to $48,465.00.
102.5. The allowance in item 9a is the Rendell estimate of the costs to complete
the works as identified by the builder. The builder as reported by the QS
indicated that some minor additional costs could be expected and a
contingency amount was allowed in the QS summary on that basis. I
propose to include one contingency figure of $10,000.00 under this item
on that basis. The total at item 9a is thus $16,714.00.
102.6. The last item in item 9c is amended to the figure of $15,383.00 having
regard to the rectification costs determined as appropriate.as set out in the
SS which is explained in the paragraphs following under the heading of
“The Rectification Costs”. The total of paragraph 9 is therefore $32,097.00.
103. The final figure is therefore calculated as follows in accordance with the
Rendell reconciliation numbered paragraphs:

23. - 23 -
Paragraph 5 $773,405.00
Paragraph 6 $ 48,465.00
Paragraph 7 $821,870.00
Minus Paragraph 9 $ 32,097.00
Minus Paragraph 11 $701,599.00
Balance Payable $ 88,174.00
THE RECTIFICATION COSTS
104. The conclave report and the attached SS in evidence has been reviewed
in detail having regard to the evidence in relation to it from both experts as
discussed above. Of the approximately 80 items in the SS the homeowner
has withdrawn or conceded as incomplete work 28 of them. The builder
argues in relation to the majority of the items particularly those above item
33 in the SS that this was all essentially incomplete rather than defective
work or was otherwise not part of the builder’s scope of works. Mr Dillon
conceded some disadvantage in relation to those items having regard to
the fact that all that work above item 33 had already been carried out by
others at the time of his inspection and he made his assessment based on
the information set out in the quotes and invoices from the relevant
contractors. Having attempted to conduct the same exercise myself in
relation to the documentation illustrates the pitfalls with this approach.
105. I have formed the view in relation to all items 33 and above that it mostly
relates to completion work for which the builder would have been
responsible as part of his contract and in respect of which it may have
already received substantial payment. However all of the subtrade
documentation does disclose some small element of work that is
suggestive of repair rather than completion and I have allowed a figure of
10 % of the total claimed as defective namely $6,910.00.
106. As regards the items from 1 to 26 having regard to the evidence in relation
to the particular items I have concluded that the homeowner has
entitlements as regards the following items but noting that the figure
allowed is on the basis of the cost to the builder rather than another
contractor performing the work having regard to the finding that the
homeowner’s termination was wrongful . The items and allowances are as
follows:
Item 1 $ 225.00
Item 3 $1,209.00
Item 4 $2,572.00
Item 8 $ 122.00
Item 18 $ 785.00
Item 22 $2,500.00
Item 23 $1,034.00
Item 26 $ 26.00
Total $8,473.00

24. - 24 -
107. In relation to item 22 since no estimate was provided by the builder I have
allowed a cost on the basis that it would cost the builder considerably less
to rectify this problem than another contractor I find however that even
though this is suggested to be an aesthetic matter with no functional
significance in a home of this quality the homeowner was entitled to have
the consistency of panelling she had requested.
108. Any items that have not been specifically mentioned in 1 to 26 were either
not pressed, accepted by the homeowner as incomplete and therefore
having no entitlement having regard to the finding on liability with respect
to wrongful termination or simply rejected on the basis that the evidence
did not satisfy the onus to establish them as defects.
109. The total allowance for rectification works in respect of all items is
$15,383.00 being the sum of the figures in paragraphs 105 and 106
above.
INTEREST
110. The builder presses a claim for interest at the rate of 18 % pursuant to
Clause 16.1 of the contract. Clause 16.1 states: “The builder may charge
the owner interest at the rate stated in item 10 of Schedule 1 (in this case
18%) from the day on which an amount falls due to be paid up to and
including the day the amount is paid.”
111. The interest can only run on that basis with respect to the outstanding
invoices and only on amounts that were actually due. The component of
the outstanding invoices that relate to amounts which could only be due on
the basis of a quantum meruit including the conceded amount which has
been accounted for in the reconciliation cannot attract interest pursuant to
the terms of the contract.
112. The amount due and outstanding on invoices 750 and 751 excluding any
amount for variations is $65,442.00 from which has to be deducted the
sum of $20,000.00 which was paid towards those invoices.

25. - 25 -
The builder is therefore entitled to interest at the schedule rate on
$45,442.00 from 1 August 2011 to date until payment which represents
approximately $22,500.00 up to the date of this determination.
N Correy
Senior Member
Civil and Administrative Tribunal of New South Wales
1 May 2014
I hereby certify that this is a true and accurate record of the reasons for
decision of the New South Wales Civil and Administrative Tribunal.
Registrar
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