The document summarizes a court case between James Fordham and Dewsash Pty Ltd regarding a disputed home building contract. Key points: - Fordham sued Dewsash for damages related to issues with the home's slab. Dewsash counter-sued for unpaid invoices. - The original tribunal ruled partially in favor of both parties. Fordham appealed and the court found errors in the tribunal's reasoning. It remanded the case back to the tribunal. - At the new tribunal hearing, issues considered included whether Dewsash breached the contract terms, if the contract was validly terminated, and what damages were owed. - The tribunal found Dewsash

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Fordham v SP & H Hobson (Dewsash) (Home Building)
[2013] NSWCTTT 590 (20 November 2013)
CONSUMER, TRADER AND TENANCY TRIBUNAL
Home Building Division
APPLICATION NOS: HB12/43117 and HB12/43122
APPLICANT/CROSS-
RESPONDENT:
Mr James Arthur Fordham
RESPONDENT/CROSS-
APPLICANT:
Dewsash Pty Ltd t/as SP & W Hobson (Dewsash)
APPLICATIONS: For payment of money
HEARING: 14 & 15 October 2013
APPEARANCES: Mr Young of Counsel for Mr Fordham
Mr Shepherd of Counsel for Dewsash
LEGISLATION: Home Building Act 1989 [the Act]
Consumer Trader and Tenancy Tribunal Act 2001
(the CTTT Act)
ORDERS
1. Dewsash Pty Ltd t/as SP & W Hobson is to pay James Arthur Fordham
the sum of $82,010.05 by 16 December 2013.
2. If the parties are unable to reach an agreement on costs, they are to
exchange and file submissions in relation to the issue by 23 December
2013, specifying in their respective submissions whether they consent
to the issue of costs being determined on the papers.
REASONS FOR DECISION
BACKGROUND

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1. These applications were heard after Taylor SC DCJ allowed in part Mr
Fordham’s appeal to the District Court of New South Wales against
orders made by the Tribunal on 17 March 2011 in HB 09/25483 (Mr
Fordhams’s original application) and HB 10/21874 (Dewsash’s original
cross-application). On Mr Fordham’s application the Tribunal had
ordered that Dewsash was to pay Mr Fordham $8,000.00 immediately.
On Dewsash’s application the Tribunal ordered that Mr Fordham was to
pay Dewsash $7,000.00 immediately and that Mr Fordham was to pay
Dewsash’s costs as agreed or assessed. The latter order was stayed
for 21 days for the parties to make submissions on costs and was
affirmed by an order made on 21 April 2011.
2. On 27 July 2012 Taylor SC DCJ set aside the Tribunal orders and
remitted the matter to the Tribunal for rehearing in accordance with his
reasons. (See Fordham v Dewsash Pty Ltd t/as S.P & W Hobson
[2012] NSWDC 109).
3. The dispute in these matters concerns a contract between the parties
entered into on 25 June 2002 for the building of a house on Mr
Fordham’s land. The contract price was $187,986.75 with no deposit
and a schedule of progress payments, the first of which was
$50,000.00 to be paid when the slab and underfloor plumbing were
complete. In April 2003, before the slab was poured, Dewsash gave Mr
Fordham invoices totalling $36,000.00, of which Mr Fordham paid
$29,000.00.
4. After the slab was poured in May 2003, a dispute arose concerning the
adequacy of the slab and expert reports were ultimately obtained. After
some time, Dewsash’s expert Mr Simpson and Mr Fordham’s expert Mr
Noonan agreed on a rectification procedure involving the pouring of a
topping slab to provide some stiffening of the structure and to allow for
a shower set down. Dewash did not undertake this work. Ultimately, Mr
Fordham had the slab demolished.
5. Mr Fordham’s application is for damages in the form of completion and
rectification costs. Dewsash’s cross application is for payment of
$7000.00, being the balance of the claimed cost of work undertaken
and the difference between the $36,000.00 invoiced to Mr Fordham
and the $29,000.00 paid by him.

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ORIGINAL PROCEEDINGS
6. In the original proceedings the Tribunal, with the consent of the parties,
dealt only with the issue of liability and that part of the quantum which
dealt with the costs of the slab. The balance of the quantum was to be
dealt with at a later stage.
7. In his decision in relation to Mr Fordham’s appeal to the District Court,
Taylor SC DCJ summarised the Tribunal’s consideration of the issues
and its findings as follows:
“8. The Tribunal member determined that the matter required him to determine
three issues:
(a) Was the slab as built a breach of the building contract;
(b) Did the plaintiff [that is, Mr Fordham] mitigate his loss if there was a breach;
and
(c) Which party had the right to terminate the contract.
9. In the course of dealing with these three issues, the Tribunal member made
findings which can be summarized as follows:
(i) Contrary to the defendant’s [that is, Dewsash’s] contention, there was no
agreement prior to 28 April 2003 (when the invoices were supplied) that $36,000
was payable upon the pouring of the main slab with the veranda slab to be
poured separately.
(ii) On about 28 April 2003 the contract was varied by agreement (or by the
plaintiff allowing the defendant to imagine that he had agreed) so that a further
amount of $7,000 (in addition to the $29,000 paid on that day) was to be paid on
completion of the slab.
(iii) The refusal by the plaintiff to pay the additional $7000 indicated an
unwillingness by the plaintiff to be bound by the contract as agreed and
empowered the builder to stop work.
(iv) This variation of the contract was an informal variation, such that the builder
could not assert a right to payment under the contract but was entitled to rely on a
quantum meruit.
(v) The plaintiff was estopped from disputing that the value of the slab was an
additional $7,000 in addition to the $29,000 already paid.
(vi) The builder was entitled to succeed on the cross-claim for $7,000.
(vii) There is an argument that the slab satisfied the contractual requirements, but
because other aspects of the case are fatal to the plaintiff’s claim the question of
breach of contract need not be decided.
(viii) The compromise reached between the experts about a topping slab was
binding on the parties and governed their rights and responsibilities.
(ix) The need to strengthen the slab was a consequence of the way the builder
constructed the slab and so the builder must bear the cost of the extra works.

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(x) The only evidence of the value of the extra works was Mr Simpson’s estimate
of $8,000, which was accepted.
(xi) Were there a breach of contract by the builder, the plaintiff had a duty to take
all reasonable steps to mitigate his loss, by selecting the cheapest solutions
reasonably available.
(xii) The plaintiff’s expert, Mr Noonan, withdrew his approval to the slab topping
even though he had agreed previously. It was possible that he had succumbed to
pressure from the plaintiff, and as a result, little weight could be given to Mr
Noonan in measuring reasonableness. Mr Simpson seemed ready, willing and
able to certify the slab topping, and his evidence was preferred to Mr Noonan’s.
(xiii) The plaintiff unreasonably refused to proceed with the topping slab and
failed to mitigate his loss, which would otherwise be $8,000.
(xiv) The plaintiff should pay the defendant’s costs.”
THE APPEAL
8. Mr Fordham appealed the Tribunal’s decision on thirteen grounds,
asserting the following errors, which are set out in the Court’s decision
as follows:
“1. The finding that there was an agreement for the Plaintiff to pay $36,000 on
completion of the slab.
2. The finding that the Defendant is entitled to a quantum meruit.
3. The finding that the Plaintiff is estopped from asserting that the value of the
work related to the completion of the slab was other than $7,000.
4. The finding that the Defendant was entitled to stop work until $7,000 was paid.
5. The Tribunal failed to make any finding as to the Plaintiff’s claim for breach of
contract.
6. The finding without evidence that Mr Simpson would have certified the slab as
built and will certify the slab as augmented.
7. The finding that there was a compromise agreement binding on the parties.
8. The finding without evidence that Mr Noonan resiled from his previous opinion
offered.
9. The finding without evidence that Mr Simpson had designed the topping slab
and was ready, willing and able to certify it.
10. The finding without evidence that the Plaintiff’s entitlement to a quantum of
loss of $8,000.
11. The finding that the Plaintiff had failed to mitigate his loss.
12. The finding without evidence that the Plaintiff’s claim demolition and
reconstruction was (as pleaded) $91,000 in round figures.
13. The Tribunal treated the hearing as a final hearing when it was a hearing on
liability and part of quantum only. “

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9. The Court found grounds 1, 2, 3, 4 and 5 established. The effect of this
is that findings (ii) to (vii) of the Tribunal’s findings as set out above
were found to be in error. Grounds 6 and 9 were rejected, as it was
accepted that there was evidence on which the Tribunal could conclude
that Mr Simpson had designed the slab and was willing to certify it as
built. Ground 7 was also rejected on the basis that there was sufficient
evidence to enable a finding that a compromise agreement was
reached in relation to the pouring of a topping slab.
10. In relation to Ground 8, the Court found that it was not open to the
Tribunal to attribute to Mr Noonan the motivation that he had changed
his mind about the topping slab because Mr Fordham’s solicitors had
encouraged him to do so. In relation to Ground 10, the Court found that
there was some evidence that the topping slab may cost $8,000.00 and
the fact that a finding of a cost of $9,000.00 or $10,000.00 may sit more
comfortably with the evidence was not sufficient to allow a finding that
the cost of $8,000.00 as found by the Tribunal had no evidentiary
basis. In relation to Ground 11, the Court found that there was a basis
for the Tribunal to find that by not installing a topping slab Mr Fordham
had failed to mitigate any loss to which he was entitled. The Court
therefore did not reject this finding.
11. In relation to Ground 12, the Court found that the Tribunal’s decision on
costs did not miscarry because of a failure to recognise that the claim
(as then articulated) was for approximately $58,000.00 rather than
$91,000.00. However, His Honour noted that the decision on costs was
affected by findings of the Tribunal rejected under appeal Grounds 1-5,
and the Tribunal would accordingly need to revisit the question of
costs.
12. In relation to Ground 13, the Court found that the proposal of the
parties to separate the cost of the slab from the amount of damages
suffered by Mr Fordham was misconceived and that the Tribunal
needed to determine whether there was a breach of contract in order to
determine whether Mr Fordham was entitled to an award of $8,000.00
on the primary claim, which would have an effect on the appropriate
costs.
13. The Court allowed the appeal, set aside the orders of the Tribunal,
remitted the matter to the Tribunal for a rehearing in accordance with
the Court’s reasons pursuant to subsections 67(3)(b) and (4) of the
CTTT Act and ordered that the costs of the appeal be costs of the
proceedings in the Tribunal.
CURRENT PROCEEDINGS
14. Subsequent to the orders made in relation to Mr Fordham’s appeal,
both proceedings were initially listed for directions on 23 October 2012

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and for further directions on 30 November 2012, 5 April 2013 and 3
June 2013. The matters were heard on 14 and 15 October 2013.
ISSUES
15. The issues to be determined in these proceedings are:
(a) Was there a breach of the contract?
(b) If so, was the contract validly terminated or was a repudiation of the
contract validly accepted?
(c) If the contract was validly terminated, what is the proper
assessment of damages?
(d) Is Dewsash entitled to a payment of $7,000.00 on a contractual,
quantum meruit or some other basis?
(e) What order should be made in relation to costs?
EVIDENCE AND SUBMISSIONS
16. The evidence before the Tribunal in the current proceedings includes
Volumes 1 to 3 of the Appeal Book, which the parties agreed
represents the evidence which was before the Tribunal in the original
proceedings and on which they rely.
17. In addition, Mr Fordham provided:
 A statement dated 7 March 2013, with attachments;
 Reports dated 13 March 2013 and 13 June 2013 by Mr Seib of
GJ Seib Pty Ltd, with attachments, which are in relation to
estimated building completion costs;
 A report dated 12 March 2013 by Mr Noonan of Barnson Pty Ltd,
with attachments, which is in relation to costs of slab rectification
and replacement.
18. Documents tendered during the hearing and marked as exhibits are:
 A1: A letter dated 5 December 2012 from Mr Fordham’s solicitor,
Blackwell Short Lawyers to Dewsash’s solicitor, Creagh Lisle
Solicitors, stating that Mr Fordham accepts a repudiation of the
contract by Dewsash, without prejudice to Mr Fordham’s
assertion that the contract had been validly terminated by letter
dated 4 August 2008 or that he had accepted Dewsash’s
repudiation by the commencement of the proceedings;
 A2: A copy of Dewsash’s Points of Defence dated 6 October
2009, which were not in the Appeal Book;
 A3: A statement dated 14 April 2010 by Mr Noonan and

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 A4: An email dated 15 October 2013 (that is, the second day of
hearing) from Mr Seib to Mr Fordham’s solicitor, revising the
estimated cost to complete from $171,350 to $165,110 in 2013
terms or $157,680 in 2009 terms.
19. Counsel for Mr Fordham also provided written submissions in relation
to the scope of the current proceedings, the issues to be decided,
liability and damages.
20. Dewsash did not provide any additional evidence. Written submissions
in relation to the scope of the current proceedings, the issues to be
decided, liability and damaged were provided, together with a
chronology.
21. At the end of the hearing, the parties were given an opportunity to
make written submissions in relation to whether costs associated with
rectifying external plumbing and the septic tank could be included in the
completion costs. The Tribunal received a written submission from Mr
Fordham’s legal representative on 22 October 2013. No submission
was made by or on behalf of Dewsash.
JURISDICTION
22. I have first considered whether the Tribunal has jurisdiction to deal with
each of the applications.
23. Subject to findings made below in relation to the plumbing and septic
tank issues, I find that the Tribunal has jurisdiction to deal with Mr
Fordham’s claim pursuant to section 48K(7) of the Act, as it was in
force on 28 May 2009, the date on which Mr Fordham’s original
application was lodged.
24. I am not satisfied that the Tribunal has jurisdiction to deal with
Dewsash’s cross application. This is because of the operation of
subsection 48K(8) of the Act, the current wording of which is the same
as was in force on 4 April 2010, the date of Dewsash’s original
application. The effect of subsection 48K(8) is that the Tribunal does
not have jurisdiction to deal with an application brought by a supplier of
building services if the date on which the claim was lodged is more
than three years after the date on which the contract was entered into.
Although I have dismissed Dewsash’s application, its entitlement to a
credit for the value of the building work undertake is reflected in the
orders made in favour of Mr Fordham.
FINDINGS AND REASONS
Was there a breach of the contract?

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25. It is not in dispute that the parties entered into a building contract on 25
June 2002. The contract price was $187,986.75. Warranties under
clause 38 of the contract included warranties that the building works
would be performed in a proper and workmanlike manner and in
accordance with the plans and specifications, and that the works would
be done with due diligence and within the time stipulated in the contract
or if no time stipulated, within a reasonable time. These warranties and
others included in clause 36 reflect the statutory warranties set out in
section 18B of the Act.
26. Clause 33 of the contract allows a notice to be given if a party is in
substantial breach. The notice must state details of the breach and
advise that if the breach is not remedied within 10 working days, the
party giving notice is entitled to end the contract. If the breach is not
remedied within 10 working days, a notice of termination may be given.
27. Mr Fordham’s Points of Claim allege that Dewsash breached the
contract by:
 Building a defective slab in that vegetation was in three locations
under the slab, settlement of the slab from 1mm to 9mm had
occurred in several locations, the slab had risen 2mm to 4mm at
15 locations and 8mm to 9mm at three locations, there had been
no provision for wet area set downs and inappropriate tie rods
had rusted;
 Failing to rectify the slab;
 Ceasing to work on the site and
 Abandoning the site.

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28. Dewsash essentially argues that the defects in the slab were minor and
capable of rectification and that any defects did not constitute a
substantial breach justifying termination of the contract under clause
33. Dewsash further argues that it was prevented from carrying out the
building works.
29. Regardless of whether the slab as built constitutes a substantial breach
of the contract, in the original proceedings the Tribunal found that the
compromise solution concerning the slab which was reached by the
parties’ experts was binding upon them and governed their rights and
responsibilities. The Court upheld this finding on appeal. I am therefore
bound by this finding.
30. I am also bound by the Court’s findings in relation to Grounds 1- 5 of
the appeal. Specifically, I am bound by the finding that there was no
evidence to support a finding that Mr Fordham had agreed to pay
$7,000.00 to Dewsash on completion of the pouring of the main slab
and that Dewsash was empowered to stop work until $7,000 was paid.
31. In the original proceedings, the Tribunal found that Dewsash did not
undertake pouring of the topping slab because Mr Fordham did not pay
$7,000.00. The Tribunal stated [at page 5]:
“I think it is fair to say that the sticking point was the disagreement over the
outstanding $7,000.00. Mr Hobson [that is, Dewsash’s director] insisted on it and
Mr Fordham agreed to pay it. It seems clear to me that, if they had agreed on that
point, the work would have recommenced on the basis of the compromise plan
agreed on by the engineers.”
32. This conclusion was not disturbed on appeal and is supported by
documents included in the Appeal Book, including a letter dated 29
April 2008 sent by Dewsash’s then solicitor to Mr Fordham’s then
solicitor, offering to attend to the rectification work, with payment of
$7,000.00 to be made upon the work being signed off by Mr Simpson.
33. The consequence of the Tribunal’s finding concerning this issue in the
original proceedings and the Court’s findings in relation to Grounds 1 -
5, is that Dewsash could not refuse to undertake the agreed
rectification work because Mr Fordham had not paid $7,000.00. I am
not satisfied that there is any other reason for Dewsash did not
undertake the agreed rectification work of pouring the topping slab
which, as found by the Tribunal in the original proceedings, was an
agreement binding on the parties. Specifically, I am not satisfied that
Dewsash was prevented or inhibited from pouring a topping slab.
Rather, I find that Dewsash did not undertake this work because Mr
Fordham did not pay $7,000.00 to which Dewsash had no entitlement.
34. I am satisfied that the failure to pour the topping slab constitutes a
breach which entitled Mr Fordham to issue a notice under clause 33 of
the contract. I am satisfied that the failure to undertake this rectification

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work after it had been agreed on by the parties constitutes a substantial
breach of the contract.
Was the contract validly terminated or was a repudiation of the contracted
validly accepted?
35. I find that Mr Fordham was entitled to terminate the contract pursuant
to clause 33 when Dewsash failed to remedy the breach by pouring the
topping slab. I find that the notice dated 4 August 2008 is a valid
termination notice for substantial breach.
36. I am further satisfied that at the time the contract was terminated,
Dewsash was in repudiatory breach of the contract, in that it had
ceased work because of Mr Fordham’s non-payment of $7,000.00 to
which Dewsash was not entitled. I am satisfied that the commencement
of the original proceedings for damages represents a valid acceptance
by Mr Fordham of Dewsash’s repudiation of the contract.
What is the proper assessment of damages?
37. I am satisfied that Mr Fordham has suffered loss arising from
Dewsash’s breach of contract. I find that the measure of damages for
Mr Fordham’s loss is to be calculated as:
(a) The cost of completion (made up of what Mr Fordham has paid
to build the house so far and, as the building works are not yet
complete, an estimate of what he has yet to pay to complete the
works) plus
(b) The slab rectification cost less
(c) What the house would have cost if Dewsash had completed the
works; that is, the original cost.
38. This is subject to Mr Fordham’s obligation to mitigate his loss. I will deal
with mitigation in relation to slab rectification below. However, an issue
concerning mitigation which arises squarely from the facts in this matter
is the delay in completing the building works. As noted above, the
pouring of the slab occurred in 2003. The agreement to pour a topping
slab was reached in late 2007 and early 2008. Neither party appears to
have been in any particular hurry to reach a final settlement of the slab
issue until then. The contract was terminated in August 2008 after
Dewsash was given an opportunity to undertake the agreed slab
rectification work. Mr Fordham then commenced proceedings in May
2009. This was well within the limitation period. Since that time,
Dewsash commenced its own proceedings and time has elapsed in the
prosecution of both matters.
39. In his statement dated 7 March 2013, Mr Fordham states that the delay
in completing the building works was because the expense associated

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with litigation means that he can only proceed with the building when
other funds become available and because as an owner builder he
often had to wait for tradesmen who are otherwise engaged by their
regular builders. Under cross-examination, Mr Fordham indicated that
other reasons he had difficulty getting contractors are that the building
site is out of town and that the contractors are aware of his dispute with
Dewsash.
40. Overall, I am not satisfied that the delay in completing the building
works represents a failure by Mr Fordham to mitigate any loss arising
from Dewsash’s breach. Subject to findings in relation to slab
rectification, I am not satisfied that Mr Fordham has otherwise failed to
mitigate loss arising from Dewsash’s breach. Further, I am satisfied that
damages should be assessed as at the date of the decision – that is, in
2013 terms – and not in 2009 terms.
41. In relation to damages, Mr Fordham relies on his statement and reports
by Mr Seib of GJ Seib Pty Ltd in this regard. As far as Mr Seib’s
evidence is concerned, I am satisfied that his reports (supplemented by
Exhibit A4, being an email Mr Seib sent to Mr Fordham’s solicitor
subsequent to giving oral evidence) constitute the best evidence of the
actual and estimated completion costs. I am satisfied that Mr Seib’s
evidence can be accepted as expert evidence in the field of quantity
surveying.
42. I have considered each of the factors relevant to the assessment of
damages in turn.
Completion costs:
43. This comprises two sums: actual costs to date (not including the slab,
but including external plumbing and septic tank rectification work) and
estimated costs to complete.

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44. I find that in accordance with Appendix H of Mr Seib’s report dated 13
March 2013, the actual costs incurred by Mr Fordham amount to
$222,276.80. While this differs from Mr Fordham’s estimate in his 7
March 2013 statement [at para 47], Mr Fordham’s estimate does not
include bricks or windows which he supplied and does include some
modifications to the original plan for which Dewsash has no
responsibility.
45. As noted above, part of the actual costs incurred relate to the cost of
new external sewer drainage and repair of the septic tank. According to
Mr Fordham’s statement, this work was required by Council and was
necessitated by defective work being undertaken by Dewsash. The
invoices attached to Mr Fordham’s 7 March 2013 statement (at 23, 24
and 25) indicate that Mr Fordham paid $12,100.00 for this work,
although only $12,000.00 has been included in the actual costs total
prepared by Mr Seib.
46. I find that the work required to rectify the septic tank and external
plumbing was undertaken to rectify defective work, rather than work
required to complete incomplete work. My finding in this regard is
supported by paragraphs 26 to 34 of Mr Fordham’s statement of 7
March 2013 and relevant attachments to the statement. I am satisfied
on the material provided that the external plumbing work undertaken by
Dewsash was not undertaken in a proper and workmanlike manner in
breach of the statutory warranty set out in section 18B(a) of the Act. I
am further satisfied that the cost to rectify that work is reasonable. The
claim in relation to the external plumbing was included in the
documentation attached to Mr Fordham’s original application. I am
satisfied that the cost of rectifying the external plumbing can be
considered as part of the damages in these proceedings.
47. However, the issue with the septic tank was discovered, according to
Mr Fordham’s 7 March 2013 statement, in December 2010. This was
after the original proceedings had been heard. By this time it was too
late to amend the application to include a claim in respect of the septic
tank. I am not satisfied that the application can now be amended to
seek damages in respect of defects with the septic tank. Whether Mr
Fordham can lodge a fresh application in respect of the septic tank
depends on whether the statutory warranty period in respect of the
work has expired and on whether section 18E(2) of the Act applies.
48. As I am not satisfied that the cost of septic tank rectification work can
be considered as part of this application, I have deducted $8,700 (the
sum specified in an invoice dated 11 December 2012 which is
attachment 25 to Mr Fordham’s 7 March 2013 statement) from Mr
Seib’s calculation of actual costs incurred by Mr Fordham, resulting in
the actual cost figure being reduced to $213,576.80.
49. I find that in accordance with Item A of Appendix K of Mr Seib’s report
dated 13 March 2013 (as adjusted following Mr Seib’s email of 15

13. 13
October 2013), the estimated cost to complete the building works in
2013 terms are $165,110.00. I am satisfied that this is a reasonable
estimate to complete a building in accordance with the contract and
original plans. I am also satisfied that in electing to proceed as an
owner builder, Mr Fordham’s costs are less than they would be if he
had engaged another builder.
50. Overall, I find that the total cost to complete is $378,686.80.
Slab rectification cost:
51. As noted above, after termination of the contract, Mr Fordham did not
proceed with the compromise solution. Rather, he demolished and
reinstalled the slab. In accordance with the Court’s finding concerning
Ground 8 of the Appeal, it is not open to me to find that Mr Fordham’s
engineer Mr Noonan resiled from his support for the compromise plan
because he had been encouraged to change his mind by Mr Fordham’s
solicitors. The Court stated that it would be a matter for the Tribunal to
decide whether it made the same finding in circumstances where it was
not entitled to reject Mr Noonan’s revised view on the basis of the
alleged possibility that Mr Noonan had succumbed to pressure from Mr
Fordham.
52. Mr Noonan’s letter dated 11 June 2008 to Mr Fordham’s solicitor
indicates that he resiled from his previous support for the topping slab
solution because of a concern for the liability of a new builder on the
project and because the cost of rectification may not be significantly
less than that of a new slab. Significantly, as noted in the Court’s
decision on appeal, Mr Noonan’s reasons for changing his mind about
the topping slab “were not relevantly technical” in that he did not find
that the topping slab would be defective or inappropriate.
53. I am satisfied that the topping slab was a reasonable rectification
procedure, as it had been agreed on between the parties’ experts. The
issue of liability for a new builder did not arise, as Mr Fordham
proceeded as an owner builder after termination of the contract. I am
satisfied that it was open to him to have a topping slab installed. In the
original proceedings, the Tribunal found that in not installing the topping
slab, Mr Fordham failed to mitigate his loss. The Court rejected Ground
11 of the Appeal, which challenged this finding. Accordingly, I find that
in electing not to proceed with the reasonable rectification procedure
which had been previously agreed to by Mr Noonan, Mr Fordham failed
to mitigate his loss.
54. Ground 10 of the Appeal challenged the Tribunal’s finding in the
original proceedings that the cost of rectification of the slab was
$8,000.00. The Court rejected this ground of appeal, finding that the
fact that a finding of $9,000.00 or $10,000.00 may have sat more
comfortably with the evidence given during the hearing was not
sufficient to allow the Court to find that the cost of $8,000.00 for the

14. 14
topping slab as found by the Tribunal had no evidentiary basis. In these
circumstances, having found that the topping slab was a reasonable
rectification procedure and that in not installing it, Mr Fordham had
failed to mitigate his loss, I am bound to apply the finding in relation to
cost that the Tribunal made previously; that is, that the slab rectification
cost is $8,000.00.
Original cost:
55. Mr Seib calculated the total original cost of the building as $304,676.75,
being the sum of the contract price of $187,986.75 and the estimated
cost of exclusions. I accept Mr Seib’s calculation in this regard, as I am
satisfied that the estimated cost of exclusions is reasonable.
Conclusion in relation to damages:
56. I have found the Dewsash committed a breach of contract in not
carrying out the compromise agreement. I have further found that the
contract was properly terminated. I find that Mr Fordham has
established an entitlement to damages in the sum of $82,010.05, being
the sum of the completion cost (including the cost of external plumbing
rectification but not including the cost of septic tank rectification) and
the slab rectification cost, less the original cost.
Is Dewsash entitled to a payment of $7,000 on a contractual, quantum meruit
or some other basis?
57. While I have dismissed Dewsash’s cross application for the reasons set
out above under the heading of “Jurisdiction”, the full value of the work
undertaken by Dewsash is accounted for in the assessment of
damages, under the heading of the original cost.
What order should be made in relation to costs?
58. Mr Fordham has been substantially successful, meaning that in general
terms he would be entitled to a costs order in his favour. However, as
advised at the hearing, the issue of costs remains open for further
submissions. The parties are encouraged to resolve the issue through
settlement discussions. If the issue is settled, the Tribunal will make an
order for costs by consent in chambers. If the parties cannot agree on
costs, they are to comply with order 2 above.
Kim Rosser
Senior Member
Consumer, Trader and Tenancy Tribunal
20 November 2013