District Court New South Wales

• Medium Neutral Citation: Kanatlarovski v Vasilkov [2013] NSWDC 185
• Hearing dates: 11 and 13 December 2012
• Decision date: 16 July 2013
• Before: Olsson SC DCJ

Decision

Verdict and judgment for the plaintiff in the sum of $30,838.75.

• Catchwords: BREACH OF CONTRACT - s 32AA Home Building Act 1989 - whether contract made in contravention is void and unenforceable
• Legislation Cited: Competition and Consumer Act 2010 (Cth); Fair Trading Act 1987; Home Building Act 1989; Home Building (Amendment) Act 2004; Pharmacy Act 1964; Trade Practices Act 1974
• Cases Cited: Archbolds (Freightage) Ltd v S. Spanglett Ltd (1961) 1 QB 374; Bellgrove v Eldridge (1954) 90 CLR 613; Chappuis v Filo [1990] 19 NSWLR 490; Redwood Anti-Ageing Pty Ltd v Knowles [2013] NSWSC 10 May 2013; Ruxley Electronics and Construction Ltd v Forsyth [1995] 3 All ER 268; St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267; Ventura v Svira [1961] WAR 63; Yango Pastoral Company Pty Ltd v First Chicago (1978) 139 CLR 410
• Texts Cited: Statutory Interpretation: The Meaning of Meaning", the Honourable Michael Kirby AC CMG, [2011] MelbULawRw 3
• Category: Principal judgment
• Parties: Peter Kanatlarovski (Plaintiff); Dzrave Vasilkov (Defendant)
• Representation: R Jefferis (Plaintiff); S Robertson (Defendant); Church & Grace (Plaintiff); Redmond Hale Simpson (Defendant)
• File Number(s): 2011/317161

Judgment

Nature of proceedings

1 The plaintiff moved on an Amended Statement of Claim filed in court (pursuant to a grant of leave) on 13 December 2012.

2 As a result of those amendments, I granted leave to the defendant to file an Amended Defence. A Further Amended Defence was filed in court on the same day. However, since that time, the Defendant gave further consideration to the amendments to the Statement of Claim and sought leave to file a Further Amended Defence. I granted that leave and a Second Further Amended Defence was served and received by me in Chambers. I formally grant leave for that pleading to be filed.

3 The plaintiff's claim relates to the construction of a concrete slab on land owned by himself and his wife at 105 Simmat Avenue, Condell Park.

4 The plaintiff alleged that the defendant, who constructed the slab, was in breach of contract in that the slab was defective in a number of respects and also that the defendant engaged in misleading, deceptive and unconscionable conduct arising from representations made by him as to his skill, ability and experience in concreting works.

5 He also alleged that the defendant misrepresented that he held an appropriate contractor's licence that authorized him to do the work and that the work would be completed in accordance with the approved plans. He alleged that the slab was defective in terms of the depth of concrete used, that it had inadequate reinforcement, the piers were incorrectly located, there were incorrect step downs and slab ends, that the structure of the slab was unsound and that it was not reasonably fit to be used.

6 The plaintiff also alleged that the defendant was in breach of the statutory warranties contained in the Home Building Act 1989 (the Act) and was negligent in his construction of the slab.

7 The Second Further Amended Defence relies on seven grounds:-

(1) Section 32AA(1) of the Home Building Act, which, it is said, expressly prohibited the making of the agreement thus rendering it illegal, void and/or unenforceable.

(2) The particulars of the work carried out in breach of the statutory warranties are vague and embarrassing and are not capable of establishing a cause of action.

(3) The misleading and deceptive conduct claim does not plead a cause of action and ought to be dismissed.

(4) The jurisdiction of the court for a claim of unconscionability is not enlivened.

(5) In any event, the alleged representations that underpin the misleading, deceptive and unconscionability claims are denied.

(6) s.18B of the Home Building Act (the statutory warranties) do not create a cause of action that is independent of the contract.

(7) In addition, or in the alternative, the defendant pleaded a set-off, being the consideration for the contract that was agreed but not paid.

Plaintiff's evidence

8 The plaintiff swore two affidavits and was cross-examined.

9 Mr Kanatlarovski said that on or about 13 April 2010 he and his wife purchased land at 105 Simmat Avenue, Condell Park with the intention of building a home for themselves and their family. He said that he had never before been involved in the construction of a house.

10 Prior to the commencement of any work on the site, he obtained Development Consent from Bankstown City Council on or about 7 September 2010 and an Owner Builder Permit from Fair Trading New South Wales dated 16 September 2010.

11 In the course of preparation for the construction works he obtained a structural design for a concrete slab from an engineer by the name of Mr Nikolai Koloff. It was dated 26 October 2010. Mr Kanatlarovski said that he had never constructed or been responsible for constructing a concrete slab nor did he know how to prepare or use concrete.

12 The plaintiff said that in late October and early November 2010 he obtained four written quotations for the construction of the concrete slab. The quotations were not in evidence but the plaintiff said that he had obtained a quote from someone called Andrew for $31,000.00. Andrew said "$31,000.00 is a rough price. It includes the cost of me hiring machines and other people to help me out."

13 The plaintiff said that he obtained a quotation from Angele Paceskoski ABN 92 390 284 293 in the amount of $42,000.00. The plaintiff also said he obtained a quotation from Speedy Formwork Pty Ltd ABN 71 143 111 219 for $52,000.00. He was concerned to save costs and sought a further quotation from the defendant.

14 The plaintiff said that he was introduced to the defendant by his mother-in-law who was a friend of the defendant's wife.

15 In October 2010 he attended the defendant's property and he said they had a conversation in which he said words to the effect, "I heard you do concreting work. I am an owner builder. I have already gotten a few quotes so I can compare prices. Can you give me a quote for you to build a concrete slab for me?"

16 The defendant said, "If you give me the plans I can look at the plans and come up with a quote for you." The plaintiff said, "Do you have lasers and all the equipment needed to build a slab?" The defendant said, "I've got all that. I've got a backhoe. I can even do the excavation, drilling and forming up myself. I'll do it all included in the one price." The plaintiff said, "Where is your backhoe?" The defendant said, "It is on another job in Padstow. I'll have to drive it over and I might have to leave it on your property." The plaintiff said, "Do you understand all the requirements?" The defendant said, "I've got all those things covered." The plaintiff said, "What exactly would you be charging me for?" The defendant said, "I charge five hundred dollars labour per day, plus I will oversee all the work on site."

17 The plaintiff then gave the defendant the plans and said, "Have you ever done this before?" The defendant said, "I can do this. I have done it a few times before. It shouldn't be too hard. I will consider the plans and come up with a quote."

18 The plaintiff said that he formed the opinion the defendant was an experienced concreter and backhoe operator who appeared to own his own machinery. He said he understood that fact both from what the defendant said and from observations that he made when he attended the defendant's property.

19 The plaintiff said that on 1 November 2010 the defendant gave him a written quotation for $31,400.00 for the concreting works plus a further amount of $1,600.00 as a contingency for additional soil removal if required.

20 The plaintiff said that he remembered that it displayed an Australian Business Number, a licence number and some insurance details for the defendant. Mr Kanatlarovski's brother in law, Mr Hrisikovski, confirmed in an affidavit that he had seen the quotation although he could not remember any details about what it contained. He was not required for cross-examination.

21 The plaintiff said he did not retain a copy of the quotation, but nevertheless he made some diary notes about. The diary notes were in evidence.

22 The plaintiff said that on or about 8 November 2010 he decided he would engage the defendant to do the work because he believed that his price was reasonable compared to the other quotes he had obtained, that he was an experienced and licensed concreter and that he would save costs as he operated his own machinery for digging, drilling and excavating. He also formed the view that the other quotations he had received were unreasonably expensive and the other parties were less experienced and less professional.

23 The plaintiff said he had a conversation on about the same day with the defendant in which he said, "Mate, you got the job." The defendant said, "Thank you. I hope I can give as good a job as I have given previous customers." The plaintiff said, "I hope you can." The defendant said, "I will try and give you the best job I can. I am very experienced. I have been doing this for about thirty years."

24 The plaintiff said they discussed payment and he asked whether he could pay by instalments and the defendant said, "Yes, you can pay me in stages. The first payment can be on the commencement of pier work. The second can be made when I order the steel frames, waffle pods and foam for the formwork for the slab. The third payment can be made before the commencement of pouring the concrete for the slab, and the fourth payment can be made after completion of the slab."

25 The plaintiff said, "That is reasonable. I agree. I will pay before each stage to help fund the concreting work. If you need any more money just let me know." The defendant said, "No, I shouldn't need any more money. I will try to keep to the quoted price."

26 The defendant commenced the construction work on or about 27 November 2010.

27 On or about 10 December 2010, the plaintiff visited the defendant who was working on a property at 4 Panorama Parade Padstow in order to pay him an instalment. He said that he observed Mr Vasilkov to be working on the construction of a concrete slab. He said he was pouring concrete for the piers and did not appear to be taking instruction from anyone.

28 On 11 December the defendant said to the plaintiff, "I need another two thousand dollars. I underquoted myself for the cost of removing dirt. Please pay me an extra two thousand dollars."

29 The plaintiff apparently agreed to the additional $2000.00 and thus the contract sum, adjusted, was $35,000.00.

30 Mr Kanatlarovski said that between 10 December 2010 and 5 January 2011 he paid $25,000.00 in three instalments - one of $5,000.00 and two of $10,000.00 each.

31 The plaintiff said that on or about 17 December 2010 he attended the property with the defendant. He said he observed piers poking out of the ground. Some of the waffles were at angles. He said, "I observed the defendant cutting away and shaving the foam away in some parts."

32 He said that he said to the defendant, "Should the foam be sitting on the piers like that? The waffles look very uneven." The defendant said, "It's all good. It will come down to the level it should be on." The plaintiff said, "Is this the finished level?" The defendant said, "No, I still need to complete the formwork and there are just a few things left I need to do." The plaintiff said, "What about the side of the slab where the brickwork will sit? The formwork looks wrong." The defendant said, "It's okay. The brickies will sort it out when bricking up. It's all good. Don't panic. It will all be sorted out at the pour."

33 I should point out at this stage that the references to 'waffle' and 'foam' are references to a type of slab construction ('waffle pod') that involves concrete being poured onto a series of foam boxes or pods, set out in a grid pattern.

34 On 17 December 2010 the plaintiff was present at the site with the private certifier who came to inspect the reinforcement for the slab. Later in the afternoon and before the defendant left the property, the plaintiff said to him, "I'm still worried about the formwork." The defendant said, "You have nothing to worry about. Leave it to me on the pour."

35 The plaintiff tendered some diary notes which tended to support the evidence that he gave about the conversations on those days.

36 On 24 December 2010 the plaintiff visited the property and saw some long cracks in the slab and saw that some of the steel reinforcement was sticking out.

37 The plaintiff said that on 27 December he visited the property and measured the rebate in the slab. He said it measured 90mm when it should have measured 150mm according to the plans. Similarly, he measured the step down to the garage area which recorded a measurement of 50mm when the plans showed 170mm.

38 The plaintiff said that he visited the property on 5 January 2011 and made further observations about the cracks and the steel reinforcement in the concrete slab and took some photographs. He said he telephoned the defendant and said, "I can see cracks and there is steel poking up out of the slab. I am worried about this." The defendant said, "The guys helping me with the pour must have stepped on the steel which popped up when the concrete was poured. Cracking is a normal thing. Don't worry. The slab was built according to the engineer's plans."

39 The plaintiff took photographs on or about the same day. They were in evidence.

40 The plaintiff said that on or about 12 January the defendant spoke to him by telephone and said that he wanted to be paid. The plaintiff said, "I can't pay you. I'm on holidays." The plaintiff also said, "I want you to sign an agreement to show that you take full responsibility for the workmanship and quality of the concrete slab you constructed." The defendant said, "No. I will not sign anything until you pay the full amount due."

41 Worried about the quality of the work, Mr Kanatlarovski did not pay any further money.

42 On or about 19 January 2011 Mr Kanatlarovski obtained some core samples of the concrete slab. The core sample disclosed that the slab was thinner than 85mm in a number of areas, contrary to the plans. He also measured the step down from the main house area to the garage. The step down measured 50mm whereas the plans prescribed 150mm.

43 The plaintiff and the defendant had a meeting on site on 22 January 2011. The plaintiff said that the defendant said, "I don't know what happened. I don't know how this happened. I must have made a mistake. I don't know how this went horribly wrong here. Don't worry, I'll fix it." He also said that the defendant said, "I'll call up my insurance on Monday morning and get them to fix this. If they won't pay for it I'll fix it myself." He also said, "I will contact the engineer and get his recommendations."

44 Nothing happened and on 28 January the plaintiff telephoned the defendant and asked him for his surname and licence number. The defendant said, "My surname is Vasilkov. I'll call you back with my licence number details. My licence number is in my wallet and I'm not close to my wallet."

45 The plaintiff contacted the Department of Fair Trading on 28 January. The parties agreed that the defendant does not and did not have a licence issued by the Department of Fair Trading as a concreter. His only licence was as a backhoe operator and earthmover.

46 Mr Kanatlarovski said that he telephoned the defendant again on 28 January and asked him once more for his licence number. The defendant said, "I still don't have my wallet. I left it at home." The plaintiff said, "That's not good enough." The defendant said, "I don't have to give it to you anyway." Mr Kanatlarovski said that he said something else, then heard the defendant laughing as he said, "I've lost money as well. I want the ten thousand dollars you owe me. The people I owe money to are not happy people. I can send them over to your place." The plaintiff said, "What you owe to other people is not my problem. You're asking for money when you're not even licensed." The defendant said, "I've done the job. I want the money. One way or another I will get my money off you." The plaintiff said, "Is that a threat?" The defendant said, "Take it however you want." The plaintiff said that he heard the defendant laugh again.

47 Mr Kanatlarovski's diary note for 28 January broadly confirms the content of the conversation.

48 The plaintiff said that the private certifier refused to certify the slab and the design engineer advised that the slab should be removed and replaced. The design engineer's report was in evidence. It said, inter alia,

"In mid January 2011 after the concrete was pored [sic] the owner of the above property, Mr Peter Kanatlarovski called me and expressed concern that some of the reinforcement was still exposed, some structural cracks occurred along the concrete surface. I instructed him to drill some core holes on various placed along the garage floor and main floor [sic]. The results were as follows:-

Garage floor

· 2 holes indicated a thickness of 43mm

· third hole on a beam between waffle pods at 270mm

Main floor

· 2 holes indicated a thickness of 43mm

· 2 holes indicated a thickness of 65mm

· 2 holes indicated a thickness of 70mm

On 20 January 2011 I inspected the property and certified that the above thickness measurements are correct and do not comply with current Australian Standards: AS3600-2001- concrete structures code, and AS3700-2001 - masonry structures. Some of the reinforcement was exposed (no min of 30mm cover).

Recommendations:

Since the topping of the floor slab is not an option (refer to Bankstown Council's Town Planner, Mr Alan Ho's, approval condition) the only option is to remove the entire concrete works, replace the plumbing, erect new slab as per approved structural drawings."

49 The private certifier was also of the opinion that the slab could not be topped or thickened. In a letter dated 3 February 2011 he said, "I must bring to your attention that your DA Application was particularly a hard DA to comply with, due to the fact in which we had to maintain strict setbacks and relative finished floor levels, which were enforced by Bankstown City Council, in order not to overshadow neighbouring properties. I clearly remember that we were 'just' able to comply. I strongly recommend that topping up the concrete slab will not be a sound solution as it will raise the finish floor level and hence not comply with Council's strict DA conditions (bearing in mind that the concrete slab was supposably [sic] poured to the correct levels). Another concern, I have is that the step down from the ground floor slab to the garage slab is not to approve DA or CC plans. [sic]"

50 The plaintiff said that despite several requests over the period 18 December 2010 to 27 January 2012 to the defendant to rectify the concrete slab, he did not do so and the slab remained in an unusable state for more than a year.

51 On 27 January 2012 the plaintiff's solicitors informed the defendant's solicitors that he intended to remove the concrete slab and starting on 6 February the concrete slab was cut up into pieces by heavy machinery.

52 The plaintiff said that the pieces were removed by him from the property and dumped in a recycling facility.

53 The plaintiff said that he carried out the majority of the removal of the concrete works either on his own or with the help of family and friends in order to save costs. He said that work took approximately two months to complete and he incurred costs and expenses associated with it. He said his costs totalled $80,534.28, the majority of which related to the machine hire for the removal of the concrete and foam and the removal of dirt and piers and replacement of the plumbing work.

54 The plaintiff prepared a schedule of his losses. He was cross-examined at length about it. He conceded that with respect to his claim for Water Rates and Council Rates and mortgage repayments, he would have had to pay for them irrespective of whether the slab was defective or not. With respect to the engineer's costs he said that it was for the creation of the new drawings and inspection of the new slab and to ensure that it complied with the new drawing. The date of the invoice did not match the date at which the plaintiff said the replacement slab was poured and he was not able to explain why a new drawing was necessary. This aspect of his evidence as to rectification costs was unsatisfactory.

55 Part of Mr Kanatlarovski's claim for damages included the replacement of plumbing and stormwater lines that had been damaged and removed in the course of the demolition of the defective slab. He was cross-examined about this aspect of his claim in some detail. It was put to him that the stormwater piping was not installed until after the slab was found to be defective and after he had started to dig around it. The plaintiff said that all of the stormwater pipes around the house had been placed but when he started to dig along the edge of the slab in order to install the stormwater pipe nearest the fence he noticed that the concrete actually got thinner and this observation led to him organising some core drills to check the thickness of the slab.

56 The plaintiff was adamant that the balance of the storm water piping had been installed before he realised the slab was defective. It was put to him that there was no reason why the plumbing under the soil and the trenches could not have been left in situ, but the plaintiff said once he started to pull up the slab the plastic and the copper pipes came with it and he said "we could not save the plumbing - that's all I can say."

57 The plaintiff was cross-examined about the removal of the slab. He said that an acquaintance with a concreting business cut it up for him with a saw then he scraped the foam away from the concrete and then hired somebody to take it all away. In order to make sense of this evidence it is necessary to know that when concrete is poured onto the foam waffle, the foam adheres to the concrete.

58 It was put to Mr Kanatlarovski that scaping the foam from the concrete was an inefficient way of disposing of the slab. He answered that at first, he had taken a load of concrete (to which the foam was still adhered) to the tip but the cost of $1,000.00 to dump 5 tonnes was too much for him. He said; "I didn't have the money to do that" and that he discovered that the cheapest and simplest way to get rid of it was to flip the sections over, scrape the foam off, recycle the foam and recycle the concrete. He said the tipping cost for recycling was considerably cheaper.

59 In respect of his claim for an excavator, It was put to him that he did not have an excavator running on site for 9 hours a day for 9 days. The plaintiff said that he did and he was using its bucket to scrape the foam from the concrete.

60 Mr Kanatlarovski did not lead any evidence on the cost of replacing the actual slab.

Mr Beard's Evidence

61 Mr Beard gave evidence for the plaintiff.

62 He was an expert retained to assess whether construction was carried out in accordance with the design of the slab. He confirmed the defects in the slab that had been recorded by the plaintiff.

63 He was of the view that, although it was possible for additional reinforcement and additional concrete to be added to the slab in order to overcome its deficiencies, there were so many defects that it was preferable to remove and replace the slab.

64 He was cross-examined carefully about the manner in which the plaintiff had removed the slab and whether or not certain expenses were necessarily incurred. He was generally of the view that the slab had to be cut up and removed, but he thought it might have been possible to reuse the survey marks without having to obtain a new survey.

65 He was more circumspect about the plumbing works.

66 The defendant advocated very strongly that it was unnecessary for the plumbing and drainage pipes to be removed when the slab was pulled up. Mr Beard said this was a difficult matter and it depended on the damage that resulted to the drainage work in the process of the slab being pulled up. He said that it was not an exact science and that, although the drainage was usually 300mm under the soil, generally speaking, unless the slab was removed with great care and skill it may not be possible to salvage the plumbing. He said "you would do your best to keep it, but you might lose some of it."

Other evidence for the plaintiff

67 The plaintiff read affidavits from Michael Townsend and Mr Danyiel Meti. Mr Townsend said that on 22 January 2011 he was present on site with the plaintiff and defendant and Mr Meti when he heard the defendant say more than once words to the effect, "It's my fault, I'll fix it", "I'll get it fixed up one way or another", "I'll look after you" or "Whatever needs doing, I'll put it all on my insurance."

68 Mr Meti said that he was also present at the site meeting and heard the defendant say, several times, words to the effect, "If there is any problem with the slab I will guarantee to fix it for you. I will do whatever I can to fix It," and, "I am fully covered and if there are any problems I will get insurance to fix any damages caused."

69 Neither Mr Townsend nor Mr Meti were required for cross-examination.

Defendant's Evidence

70 The defendant said that he held an excavator's licence and not a concreter's licence and that he had told the plaintiff that he did not have a licence to do concreting. He said to the plaintiff, "I know how to do the job but do not hold a concreter's licence," and, "I would rather you get someone else to do the concreting work," although he said that he could do the excavation and the piering for the job.

71 He said that the plaintiff said, "No, I'm looking for someone who can do everything and I was told you could do it."

72 He said the plaintiff also said, "I do not care whether you have a licence or not as long as you can do the job and as long as the price is right. I'm going to get some other quotes then I'll compare the prices and whichever quote is the cheapest will get the job. Work out a price for me for everything including the supply and fix the slab work and we'll take it from there. I've got a private certifier that I've engaged to certify the works at each step".

73 The defendant said that he replied, "That is good".

74 Mr Vasilkov did not give any further evidence in chief about how or why he came to agree to do the works but it is obvious that he agreed, because he in fact carried out the work.

75 In cross-examination the defendant emphasised that he was experienced and licensed with respect to excavating but not concreting and that what he had proposed to the plaintiff was that he would merely assist the form-workers and concreters. He said that he had little or no experience in form-working and concreting.

76 He denied that he had been carrying out the work of a concreter on the site at Padstow (which the plaintiff had visited) and said that he had merely been providing labour for an owner-builder.

77 He was asked about the complaints that the plaintiff raised about the slab and he agreed that he was asked about the defects but said he could not remember what he said because he was "so much under duress that I don't remember any conversation afterwards". He was asked whether he said, "I take full responsibility" and he said, "I don't recollect. I could have said anything under duress to get myself out of there. I got scared. There were two other people. It was an enclosed area. I blanked out."

78 He denied that the plaintiff ever asked him for his licence number. Specifically, he denied that the plaintiff had telephoned him and asked him for particulars of his licence.

79 He denied that he had insisted on being paid.

Assessment of witnesses

80 Both Mr Kanatlarovski and Mr Vasilkov impressed me as quietly spoken and sincere but their accounts of the circumstances in which the contract was entered varied considerably.

81 Mr Kanatlarovski said, in essence, that Mr Vasilkov said that he could do the whole job and was experienced in excavating, form-working and concreting. He said that his quotation contained a licence number and ABN and something about insurance. These factors, coupled with actually seeing the defendant's equipment including backhoe and drills, satisfied him that he was appropriately qualified to do the job. His view was confirmed when he visited Mr Vasilkov at a site in Padstow where he saw him apparently performing the work of a concreter.

82 On the other hand, Mr Vasilkov said that he told Mr Kanatlarovski that he was not a licensed concreter, that he was an excavator by trade and could help other form-workers and concreters do the work but would prefer not to do the work himself.

Who is to be believed?

83 There were some inconsistencies in the plaintiff's evidence and he admitted in cross-examination that some of his diary entries were not recorded contemporaneously but were filled in after the event but I am not persuaded that they alter the plaintiff's credibility.

84 After much consideration, generally I prefer the evidence of the plaintiff where it conflicts with that of the defendant. There are several reasons for this: First and foremost, I have difficulty in accepting the defendant's version of the conversation that gave rise to his production of a quotation for the work. It will be remembered that he said that the plaintiff said to him "I'm going to get some other quotes and then I will compare prices". [emphasis added]. This is completely at odds with the plaintiff's evidence that he had already obtained three quotations and that he was dissatisfied with them for various reasons and turned to the defendant on the suggestion of his mother-in-law.

85 The quotations themselves were not in evidence but the plaintiff was able to give considerable detail about their content and the circumstances in which he obtained them. Moreover, in his first affidavit, he mentioned the names of two firms (and the ABN of one of them) who provided quotes. In doing so, he must have realized that those firms could have been contacted and the information checked. I think it more probable than not that the plaintiff was truthful when he said that he had obtained three quotations before he approached the defendant. That being the case, it is hardly likely that he would have said to the defendant that he was going to get some other quotes.

86 The second reason that I prefer the plaintiff's evidence is that his conduct up to the point of contracting with the defendant was careful, cautious and methodical. He obtained an owner- builder permit. He obtained home warranty insurance even though, as an owner-builder, it was not essential. He obtained all the relevant drawings, details and approvals for the work before he embarked on the process of obtaining quotations. He retained a private certifier. He obtained written quotations for aspects of the work and he scrutinized them. He made assessments about the people who provided the quotes. Plainly, he was concerned to keep his costs to a minimum but the impression I formed was that it was unlikely that he would have compromised on the quality of the work merely in order to save costs. I think it most unlikely that had the defendant told him that he was not licensed to do concreting and would prefer that he get someone else to do it, that the plaintiff would have nevertheless engaged him, particularly when his quote was on par with at least two of the other quotes he had received.

87 Thirdly, the defendant's version of the conversation lacks credibility. He did not explain how or why it was that he agreed to do the work. His evidence of the conversation was contained in his affidavit. After the plaintiff allegedly said that he did not care whether the defendant was licensed to do the job and that he had engaged a private certifier, the defendant merely records that he said, "That is good". He did not depose to the actual terms of the agreement. He did not explain why he agreed to do the work when (as he agreed in cross-examination) he was inexperienced in formworking and concreting.

88 I prefer the evidence of Mr Kanatlarovski when he said that at a meeting with Mr Vasilkov about the defects in the slab, Mr Vasilkov accepted responsibility and agreed to fix any defects. Quite apart from the fact that Mr Kanatlarovski read affidavits from two witnesses (Mr Townsend and Mr Meti) whose evidence was unchallenged, Mr Vasilkov's answers in cross-examination were not convincing. He agreed that he had said that he would accept responsibility for the defects but only because he was scared and frightened of the plaintiff and his friends.

89 I found this evidence hard to accept. Firstly, Mr Vasilkov was an experienced man who ran his own business as an excavator. He did not seem to me to be a man who was easily intimidated. But even if that were the case, he voluntarily attended the meeting with the plaintiff and it was on the building site. Had he felt intimidated, he could easily have left the scene.

90 Similarly, I prefer the evidence of Mr Kanatlarovski when he said that he asked Mr Vasilkov for details of his licence and insurance on or about 28 January and that Mr Vasilkov prevaricated and ultimately did not provide him with either. Mr Vasilkov denied that the plaintiff asked him for his licence number or insurance details (because on his version, the plaintiff knew that he did not have a concreter's licence). I prefer Mr Kanatlarovski's evidence generally for the reasons set out above but also because there is a diary entry that broadly equates to the evidence that he gave in the witness box. Whilst the plaintiff conceded in cross-examination that he had made some additional notes in the diary well after the events that were there recorded, he said (and I accept) that they were matters he had subsequently remembered and not matters that he had fabricated.

Findings of fact

91 I make the following findings:

92 Mr Kanatlarovski wished to build a new house on a block of land owned by himself and his wife. In order to keep the costs down he proposed to build the house using an owner-builder permit and he obtained a permit in order to do so. He obtained written quotations for various aspects of the work.

93 Mr Kanatlarovski asked Mr Vasilkov to provide a quotation for the construction of the concrete piers and slab for the house and Mr Vasilkov provided a quotation to do so for a figure which was amended but which crystallized in the price of $35,000.00. Mr Kanatlarovski accepted the price and the parties agreed that the work would be carried out. The scope of work was defined by the development consent and approved structural drawings.

94 The defendant did not tell the plaintiff that he was not licensed to do concreting work and by his conduct, led the plaintiff to believe that he was both licensed and experienced in form-work and concreting.

95 I find that there was a contract struck on or about 8 November 2010 to do residential building work.

96 Mr Vasilkov carried out the work that was proposed by the contract. He formed up the piers and slab, laid the reinforcement and waffle pods and poured the slab. I find that the work was performed by the defendant.

97 The plaintiff paid the sum of $25,000.00 to the defendant for the work and refused to pay the balance of the contract sum.

98 The work was defective in that it did not comply with the engineer's design nor was it good and workmanlike. Neither the engineer nor the private certifier were prepared to certify it for the purposes of construction. It required removal and replacement.

99 The plaintiff incurred significant cost in removing the defective slab and in replacing it.

Discussion as to liability

100 The main thrust of the defendant's case rests on liability and in particular, the operation of s. 32AA of the Home Building Act 1989 (the Act). There were four limbs to the defendant's argument:

(a) Ex turpi causa non oritur actio;

(b) Expressio unius est exclusio alterius;

(c) Generalia specialibus non derogant; and

(d) Leges posteriores priores contrarias abrogant.

101 In essence, the defendant said that, properly construed, section 32AA(1) of the Act not only prohibits the making of certain contracts but that contracts entered into in contravention of the section are void and unenforceable.

102 Section 32AA(1) provides:-

"(1) The holder of an owner builder permit must not contract with another person for that person to do any residential building work (or any part of the work) for the holder unless the person is the holder of a contractor licence to do work of that kind.

Maximum penalty 200 penalty units

(2) The holder of an owner builder permit is not guilty of an offence under this section if the holder establishes that the holder did all that could reasonably be required to prevent the contravention of this section."

103 It was not in contention that the defendant did not hold a contractor licence to do work of the kind that he carried out.

104 The defendant relied on the dicta of Jacobs J in Yango Pastoral Company Pty Ltd v First Chicago (1978) 139 CLR 410 when he said (at 430):

"When a statute expressly prohibits the making of a particular contract, a contract made in breach of the prohibition will be illegal, void and unenforceable, unless the statute otherwise provides either expressly or by implication from its language."

105 His Honour went on to say:

"Where a statute makes it an offence to make a particular contract or to make it in defined circumstances, that will be construed as an implied prohibition of the making of the contract unless the statutory provision is merely in aid of the revenue."

106 However, that is not the end of the matter. At 413, Gibbs ACJ said:

"There are four main ways in which the enforceability of a contract may be affected by a statutory provision which renders particular conduct unlawful: (1) The contract may be to do something which the statute forbids; (2) The contract may be one which the statute expressly or impliedly prohibits; (3) The contract, although lawful on its face, may be made in order to effect a purpose which the statute renders unlawful; or (4) The contract, although lawful according to its own terms, may be performed in a manner which the statute prohibits."

107 In the present case, the contract was not to do something which the statute forbids. Rather it was the making of the contract which the statute expressly prohibits: that is, for an owner builder to contract with another person for the performance of work which that other person is not licensed to perform.

108 Gibbs ACJ said (at 413):

"It is often said that a contract expressly or impliedly prohibited by statute is void and unenforceable. That statement is true as a general rule, but for complete accuracy it needs qualification, because it is possible for a statute in terms to prohibit a contract and yet to provide, expressly or impliedly, that the contract will be valid and enforceable. However, cases are likely to be rare in which a statute prohibits a contract but nevertheless reveals an intention that it shall be valid and enforceable, and in most cases it is sufficient to say, as has been said in many cases of authority, that the test is whether the contract is prohibited by the statute. Where a statute imposes a penalty upon the making or performance of a contract, it is a question of construction whether the statute intends to prohibit the contract in this sense, that is, to render it void and unenforceable, or whether it intends only that the penalty for which it provides shall be inflicted if the contract is made or performed." [ emphasis added]

109 The question whether a statute, on its proper construction, intends to vitiate a contract made in breach of its provisions, is one which must be determined in accordance with the ordinary principles that govern the construction of statutes: St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267 at 286; Yango per Gibbs ACJ at 413.

110 Regard must be had to the language used and the scope and purpose of the statute: Archbolds (Freightage) Ltd v S. Spanglett Ltd (1961) 1 QB 374 at 390.

111 One consideration is the object of the legislation. Whether the statute was passed for the protection of the public is an important, although not the only, consideration. The statute is to be construed in the ordinary way: one must have regard to all relevant considerations and no single consideration, however important, is conclusive: St John Shipping Corporation, per Devlin J at 287.

112 Generally, statutory interpretation requires an analysis of text, context and purpose: "Statutory Interpretation: The Meaning of Meaning", the Honourable Michael Kirby AC CMG, [2011] MelbULawRw 3.

Text

113 The Home Building Act 1989 is generally regarded as legislation that has two principal purposes - the protection of the consumers of residential building services and the licensing and regulation of contractors in the residential building sector.

114 Section 32AA was inserted into the Act by the Home Building (Amendment) Act 2004. The Explanatory Note accompanying the Bill provides that:

"Schedule 4 [7] inserts proposed section 32AA into the Principal Act to make it an offence for the holder of an owner-builder permit to contract with another person to do residential building work for the holder if the person does not hold a licence to do work of that kind."

115 In the Second Reading Speech, Minister Reba Meagher said of the proposed section:

"As well as raising the existing maximum penalties for breaches of the Act, certain new offences will be created. ....The bill makes it an offence punishable by a penalty of 200 penalty units for individuals and 1,000 penalty units for corporations for a licence holder or owner-builder to contract with an unlicensed person to do work that requires a licence. This is intended to bring to an end the situation where builders use unlicensed persons as subcontractors. This proposal will support existing licensees and improve the quality of construction." [emphasis added].

116 The text itself is silent as to the contractual consequences for the contracting parties. If the section were to be interpreted simply and only as creating an offence, with no contractual consequences, it would satisfy the objectives stated by the Minister. It would act as a deterrent to builders and owner-builders using unlicensed persons as subcontractors. In turn, it might readily be seen that this deterrent would advance the prospects of licensed subcontractors to obtain work.

117 In terms of text alone, the stated objectives and purpose of the amendment would be achieved.

118 The Act does not define an owner-builder other than to say it is a person who does owner-builder work. Owner-builder work means residential building work:

(a) the reasonable market cost of the labour and materials involved in which exceeds the prescribed amount, and

(b) that relates to a single dwelling-house or a dual occupancy:

(i) that may not be carried out on the land concerned except with development consent under Part 4 of the Environmental Planning and Assessment Act 1979 , or

(ii) that is complying development within the meaning of that Act.

119 s.31, which deals with the issue of owner-builder permits, is more informative. An application for an owner-builder permit must be refused if the Director General is not satisfied (relevantly) that the applicant owns the land whether or not with another individual or individuals, that the single dwelling house or one of the dwellings comprising the dual occupancy will be occupied as the residence or principal residence of the applicant when the work is completed and, absent special circumstances, the applicant was not, within the previous five years, issued with another owner-builder permit.

120 The limitation on the permit being issued for a single dwelling or dual occupancy on land owned by the applicant, only once in a five year period, supports a reasonable inference that the legislative expectation, if not intention, is that owner-builders will mainly be individuals or couples who wish to build their own home.

Context

121 s.32AA was inserted into Part 3, Division 3 of the Act. Part 3 is headed "Licences and Certificates" and provides the criteria for the application for, the issue of, and the conditions upon which licences and certificates to perform residential building work may be granted, as well as circumstances in which the same may be suspended or cancelled.

122 Division 3 relates to the issue of owner-builder permits.

123 By way of contrast, Part 2 is headed "Regulation of Residential Building Work and Specialist Work". Division 1, headed "Contracting for work", provides the criteria for contracts for residential building work, including the requirement for the person performing the work to hold an appropriate licence, for the contract to be in writing, dated, signed by the parties and to sufficiently describe the works to be performed and so on, and it provides the consequences for persons who enter into contracts that do not fulfil the conditions set out therein.

124 The contextual comparison of Parts 2 and 3 raises a conundrum since Part 2 contains an important provision (s.10) regulating the consequences of entering into a contract in contravention of the Part that is absent in Part 3.

125 s.4(2) in Part 2 corresponds to s.32AA except that it refers to the holder of a contractor licence and provides that such a person, who has contracted to do any residential building work, must not contract with another person for that person to do the work for the holder unless that person is the holder of a contractor licence to do work of that kind.

126 Had it been the intention of the legislature for contracts between owner-builders and unlicensed subcontractors to be subject to the same considerations and limitations as contracts between builders and unlicensed subcontractors, it would have been a simple matter to insert the words 'or owner-builder' into s.4(2). The fact that s.32AA is contained within the provisions dealing with the issue of licences rather than the regulation of contracts tends to suggest that the legislature did not intend the section to affect the rights of parties to such a contract. It tends to suggest that the intention was only to create a deterrent by way of the threat of a substantial fine.

Purpose

127 As has already been seen, the stated purpose of s.32AA was to discourage owner-builders from using unlicensed subcontractors and thereby to improve the prospects of licensed subcontractors and improve the quality of construction. There is nothing in the 2nd Reading Speech or Explanatory Notes that suggest any other purpose or that any other consequence was intended.

128 However, the Reading Speech and Explanatory Notes are not entirely determinative of the matter.

129 The question of which party suffers a detriment if the statute is construed in a particular way is also relevant. It would not be a rational result, for example, if the party whom Parliament intended to protect, was in fact prejudiced by the way in which the statute was construed.

130 In the present case, the owner-builder engaged an unlicensed subcontractor. He paid the subcontractor a substantial sum of money for work that was defective and not fit for purpose. If the contract was void and unenforceable, the owner-builder would be significantly prejudiced: he could neither recover the money he had paid the subcontractor nor sue for the cost of rectification of the works or diminution in value of his property. On the other hand, the unlicensed subcontractor stands to benefit from his unlawful and defective work.

131 Mason J in Yango addressed this point. His Honour said:

"It is not rational to suppose that the Parliament intended to inflict such dire consequences on innocent depositors. Nor is it rational to suppose that the Parliament intended to advantage innocent borrowers whilst penalizing innocent depositors....I therefore conclude that the purpose of the Act is adequately served by the imposition of the very heavy penalty which is prescribed for a contravention of s.8 and that it does not prohibit and thereby invalidate contracts and transactions entered into in the course of carrying on banking business in breach of the section."

132 His Honour continued:

"Here the party seeking to enforce the contract is not the innocent party but the party in breach of a statutory prohibition, the contract being made in the course of the carrying on of a business which in the circumstances was prohibited.....the question is whether the court will not do so and that its refusal so to do is dictated by the principle ex turpi causa non oritur actio or by the more specific rule that the court will not enforce the contract at the suit of a party who has entered into a contract with the object of committing an illegal act."

133 His Honour said that the effect of relieving the defendants from their contractual obligation to repay money to the plaintiff would not be confined to the substantial detriment resulting to the plaintiff but would provide a windfall gain to the defendants. His Honour also observed however that it would be a curious thing if the offender was to be punished twice, civilly as well as criminally. His Honour said:

"...in the present case Parliament has provided a penalty which is a measure of the deterrent which it intends to operate in respect of non-compliance with s.8. In this case it is not for the court to hold that further consequences should flow, consequences which in financial terms could well far exceed the prescribed penalty and could even conceivably lead the plaintiff to insolvency.."

134 The general question of whether or not a statute that makes something an offence also makes a contract void or unenforceable was recently considered by Justice White in Redwood Anti-Ageing Pty Ltd v Knowles [2013] NSWSC 10 May 2013. His Honour was there considering s. 25(1) of the Pharmacy Act 1964, a section which has been the subject of considerable judicial review. It is in significantly different terms from the section presently under consideration (creating a prohibition on a non pharmacist having a pecuniary interest in a pharmacy) but His Honour's comments nevertheless have relevance. It was argued that since the criminal penalty provided by the section was a measure of the deterrence that Parliament intended to provide and that it was relatively low (a fine of $550), it would be out of all proportion for a contract to be deprived of effect simply because it was made in contravention of the section. His Honour did not agree, saying that the better conclusion was that Parliament intended that transactions entered into in contravention of the section would be prohibited and unenforceable and for that reason saw little use in imposing an additional substantial penalty.

135 Pausing there, the converse argument might be applied in the present case. The penalty for an individual for contravention of s.32AA is significant - 200 penalty units, which presently translates to $22,000.00 and it is the owner-builder who is liable under the section.

136 Justice White also cited the dicta of Kirby P (as he then was) in Chappuis v Filo [1990] 19 NSWLR 490, another s.25 Pharmacy Act case. At 502, Kirby P said:

"It is unthinkable that Parliament should have provided as it did in s.25, have attached to breach of that section penalties and consequences of professional discipline and yet have envisaged that a contract designed to flout the section should be given force and effect by a court of law. I cannot accept that this was Parliament's intention."

137 It is recognized that none of the cases here cited consider legislation that is in identical terms to that of the Home Building Act but the general principles identified and discussed highlight the different interpretations that may be applied, informed as they are by a range of policy and other considerations.

138 I do not think that Parliament intended that s.32AA have the effect that any contract entered in contravention of it is void and unenforceable. My reasons are as follows:

(i) The position of the section in the statute. S.32AA is located in the Part that deals with the issue of owner-builder permits. It could easily have been inserted into Part 2 which is prescriptive of lawful contracts and which creates civil and quasi criminal penalties for contracts that are not compliant. It is difficult to conclude that the positioning of the section was anything other than deliberate;

(ii) The wording of the section is silent as to the civil consequences of a contract entered in contravention of its terms;

(iii) The penalty provided for contravention of the section is high and is a measure of the level of deterrence intended by the legislature. It seems unlikely to me that Parliament intended to impose a high penalty on owner-builders (who might, for the reasons suggested above, be presumed to be, for the most part, individuals or couples who wish to save costs by building their own home) as well as impose a civil penalty, the effect of which is that they could not sue for damages for defective or incomplete works;

(iv) In any event, the purpose of the section is to discourage the use of unlicensed subcontractors. It would be a perverse result if the unlicensed party were able to benefit as a result of the contract being unenforceable. In the present case, that would mean that not only would the unlicensed defendant retain the sum of $25,000 for work which, as it turned out, was of no value, but he would avoid having to recompense the plaintiff for his defective work;

(v) S.32AA(2) provides a complete defence to a contravention. It is possible that a plaintiff's civil case might be dismissed on the basis that the contract apparently in contravention of the section was void, yet the same plaintiff might succeed in defending a prosecution brought under the section. The possibility of conflicting results tends to support the view that the section was not intended to render a contract void.

139 Therefore, it is my view that a contravention of s.32AA does not render the contract void and unenforceable as a matter of common law interpretation and principle.

140 That is not the end of the matter, however. The defendant points to s.10(1)(c) of the Act and contends that s. 32AA is "any other provision of this Act" and that therefore the plaintiff is not entitled to damages or to enforce any other remedy in respect of the 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.

141 s. 10 is in the following terms:

(1) A person who contracts to do any residential building work, or any specialist work, and who so contracts:

(a) in contravention of section 4 (Unlicensed contracting), or

(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 (not being a contract entered into in the circumstances described in section 6 (2)), or

(c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph,

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.

(4) This section does not affect the liability of the person for an offence against a provision of or made under this or any other Act.

142 The plaintiff argued that subsection (c) is to be read to mean that for any other section of the Act or regulation to be subject to s.10, it has to have been prescribed. There is no evidence that any other section or regulation has been prescribed for the purposes of s.10.

143 The language of the subsection is infelicitous but I am inclined not to agree with the plaintiff's interpretation. It is more likely that the subsection is intended to mean that for the contravention of any regulation to be subject to the section, it needs to have been prescribed.

144 However, for the reasons that follow, it is unnecessary to decide the question.

145 As I have already noted, s.32AA (2) provides a complete defence to prosecution under the section. If the owner-builder did all that could reasonably be required to prevent the contravention of the section, he is not guilty of an offence.

146 In order for s.10 to be enlivened, there has to have been a contravention of a relevant section.

147 In my view, the plaintiff did all that could reasonably be required to prevent a contravention of the section and, had he been prosecuted under the section, the defence would have been available to him.

148 My reasons are these:

(i) I have found that Mr Kanatlarovski was a careful and methodical person. He approached the building of his own home with care. I accept that he obtained quotations from persons that he believed to be appropriately licensed under the Act. I accept that he thought - on reasonable grounds - that Mr Vasilkov was licensed to do the work.

(ii) The reasonable grounds are that Mr Vasilkov provided a quotation that included a licence number. Although that quotation was not in evidence, I have no doubt that it included a licence number since he was, in fact, licensed.

(iii) He had an ABN number. Mr Vasilkov said that he was experienced and could do the work. He had his own equipment including a backhoe and other earthwork paraphernalia. He was seen to be working on a site doing form-work and concreting.

(iv) It will be remembered that Mr Kanatlarovski telephoned the defendant twice, asking for his licence details after it became apparent that the work was defective.

(v) The plaintiff was not experienced in building matters. He was impressed by what the defendant said, by his equipment and by the work he saw him performing.

(vi) The only other thing the plaintiff could have done (to ensure there was no breach of the section) would have been to check the defendant's licence number with the Office of Fair Trading. Such a check would have revealed that he held an excavator's licence.

(vii) I do not think it unreasonable that the plaintiff did not undertake such a check. There was nothing to alert his suspicions. He was introduced to the defendant by way of a family connection. The defendant's quotation appeared to be regular. In their conversations, they seem to have established a rapport. The plaintiff saw the defendant at work and saw his equipment.

149 Accordingly, I am satisfied that there is sufficient evidence to raise a successful defence had there been a prosecution under s.32AA. It follows that there has not been a contravention of s.32AA by virtue of the operation of subsection (2) and therefore, the provisions of Part 2 of the Act (s.10 in particular) are not enlivened.

150 There is no bar to the plaintiff pursuing the defendant for breach of contract.

Other defences to the Statement of Claim

151 As a result of my findings with respect to contract, it may be unnecessary to decide the other matters raised in defence of the proceedings but for greater caution, I will do so.

Misleading and deceptive conduct and unconscionable conduct

152 Paragraphs 11 to 20 inclusive of the Amended Statement of Claim plead misleading and deceptive conduct and unconscionable conduct. It cites ss.42 and 43 of the Fair Trading Act 1987 and/or schedule 2 ss.18 and 21 of the Competition and Consumer Act 2010 (Cth).

153 s.42 of the Fair Trading Act (and its equivalent in s.52 of the Trade Practices Act 1974) - the relevant provisions of which are now found in the Competition and Consumer Act 2010 - permit the courts generally to intervene by a variety of non-monetary orders, in the chain of events leading from the occurrence of misleading and deceptive conduct to loss caused by that conduct. Losses caused by the conduct are found in other provisions of the legislation (notably the former s.44(1) Fair Trading Act or s.80 ff of the Trade Practices Act).

154 The present pleading does not seek a remedy for the alleged breaches of the legislation. Specifically, it does not plead loss and damage nor the chain of causation by which it might have been said to arise.

155 The pleading in paragraphs 11 to 20 does not disclose a cause of action and should be dismissed.

Breach of statutory warranties/Negligence [sic]

156 Paragraphs 21 to 24 of the Amended Statement of Claim refer to the statutory warranties contained within s.18B of the Home Building Act.

157 It is alleged in paragraph 22 that the warranties are incorporated as implied terms into every building contract by virtue of s.18B. So far as that pleading goes, it is uncontroversial: s.18B says as much.

158 It is then alleged (in paragraph 23) that in breach of the warranties, the work was defective in various respects. That much, also, is uncontroversial.

159 Paragraph 24 then simply pleads that the plaintiff claims for loss and damages suffered "due to the breach of the statutory warranties, misleading and deceptive conduct and/or unconscionable conduct of the defendant".

160 No reference is made to negligence other than in the heading in the pleading.

161 The pleading does not disclose the chain of events said to lead to the loss and damage and does not, for that matter, identify or provide any details of the loss or damage.

162 Counsel for the plaintiff argued that the statutory warranties contained in s.18B gave rise to a cause of action that was separate and distinct from contract. This argument arose in the course of discussion concerning the invalidity of the contract in the context of s.32AA.

163 There is nothing in the wording of s.18B that suggests that it gives rise to a cause of action which is separate and distinct from the contract. In fact, by its very terms, it incorporates terms into the contract for residential building work. I do not think that the plaintiff's submission can be correct.

164 However, since I have found that the contract itself is not void and unenforceable, I have considered the alleged breaches of the terms implied by s.18B in the course of the breach of contract argument.

Findings as to liability

165 I find that the defendant breached the terms of his contract with the plaintiff in that he constructed the concrete slab. He was in breach of the term that the work was to be carried out in a proper and workmanlike manner and in accordance with the plans and specifications, a term which would have been implied at common law but is specifically incorporated into the contract by virtue of s.18B(a) and was not fit for its purpose, namely to support the construction of a residence, contrary to the term implied by virtue of s.18B(b) of the Act.

166 I accept the opinion of the engineer Mr Koloff and I accept that, for the reasons given by him and the certifier, the concrete slab required replacement rather than rectification. Mr Beard was of a similar opinion and I similarly accept his evidence.

Damages

167 The damages sought by the plaintiff were as follows:

(i)	reimbursement of the payment made to the defendant	$25,000.00
(ii)	tip and recycling expenses Brandown Pty Ltd	$900.00*
(iii)	tip and recycling expenses Gow Street Recycling	$1959.25*
(iv)	tip and recycling expenses SITA Environmental	$1380.00*
(v)	Bin bags for removing foam	$23.80*
(vi)	tip and recycling expenses IS Recycling Pty Ltd	$660.00*
(vii)	tip and recycling expenses Bing Recycling Centre	$650.76*

Solutions

(viii)	Machinery hire for demolition of slab	$12,320.00*
(ix)	Removal of dirt and piers	$2310.00*
(x)	Machinery hire for removal dirt and drilling of piers	$1856.25*
(xi)	Engineer	$2200.00
(xii)	Certifier	$880.00*
(xiii)	Surveying	$770.00
(xiv)	Plumbing	$13585.00
(xv)	Water rates and charges (587 days)	$481.34
(xvi)	Council rates (587 days)	$1978.19
(xvii)	Interest on home loan	$9609.82
(xviii)	construction insurance Taggart Group (430 days)	$2666.00* (2438.69)
(xix)	Portable toilet hire (217 days)	$1304.17* (1105.00)
Total		$80,534.58

168 Those items marked with an asterisk were conceded by the defendant. Item (xviii) was agreed in principle, but the defendant disagreed with quantum and argued that on a pro rata basis (taking into account the other works that were being carried out at the site) the proper figure should be $2,438.69.

169 The plaintiff conceded a number of items during cross-examination. He agreed that the water rates (xv), council rates (xvi) and interest on his home loan (xvii) were costs that he would have had to pay irrespective of when the work was completed and irrespective of the defendant's breaches of contract.

170 Therefore, the items that remain for consideration are as follows: (i), (xi), (xiii), (xiv), (xviii) and (xix).

(i) Payment to defendant

171 The proper measure of damages for breach of contract is the difference between the contract price of the works and the cost of making the work conform to the contract. However this general rule is subject to the qualification that the undertaking of the work necessary to produce conformity must be a reasonable course to adopt: Bellgrove v Eldridge (1954) 90 CLR 613.

172 The diminution in value of the premises is commonly accepted as an alternative measure of damages where rectification is not appropriate for one reason or another: Ruxley Electronics and Construction Ltd v Forsyth [1995] 3 All ER 268.

173 The defendant said the plaintiff could not recover, in contract, the sum that had been paid to the defendant. That must be correct. I do not think that the plaintiff can recover the sum of $25,000.00 as damages for breach of contract.

(xi) The engineer's invoice

174 Mr Kanatlarovski said in his second affidavit that he engaged a Mr Farah, engineer, in April or May 2012 to inspect the replacement floor slab. Mr Farah's invoice is dated 23 May 2012 and expresses itself to be for $2,200.00 for 'structural design and certificates'.

175 The plaintiff was cross-examined about this at some length and it was plain that he was confused about the work that was done and how he had originally described it. Earlier in his evidence he had said that it was for 're-inspection' but that does not match the words on the document itself.

176 Firstly, I accept that Mr Farah was engaged in 2012 and issued an invoice to the plaintiff for $2,200.00 which he paid.

177 Secondly, I accept that an engineer's certificate was required for the forming up, reinforcement and pouring of the new slab. It may be that, being a new engineer on the job, Mr Farah prepared his own design and charged the plaintiff for it. The plaintiff said that Mr Koloff (his original engineer) was busy and could not do the job. However there was no cogent evidence as to whether a new design was required and, if so, why it was required. The evidence is simply unsatisfactory and I am not persuaded that it was incurred as a necessary incident of the rectification work. I reject the claim for $2,200.00.

(xiii) the Surveyor's invoice

178 Mr Kanatlarovski gave evidence that he engaged a project manager to help him complete the project. The project manager engaged a surveyor (Orion Surveying), whose fees were paid by Mr Kanatlarovski. The fees were $770.00 for boundary fix, initial peg-out and sketch.

179 I do not consider it unreasonable for a subsequent builder (or the plaintiff himself) to consider that it was appropriate to obtain a fresh survey. Given the plethora of defects in the work undertaken by the defendant, I regard it as most prudent and I allow it.

(xiv) the plumbing

180 The plaintiff claimed for the cost of replacing a lot of stormwater and drainage work. He said that he had installed much of the plumbing before he realized the full extent of the defects in the slab. He was cross-examined at length about it. He said - and I accept - that most of the stormwater lines had been installed under and around the slab and that it was only when he was laying the lines between the slab and fence line (the last part to be installed) that his attention was drawn to the discrepancies in the thickness of the slab at its edge.

181 He also said that when he demolished the slab, in the course of pulling the concrete up and separating it from the reinforcement and foam from the waffle pod, the plumbing pipes were damaged.

182 He was not shaken in cross-examination and I formed the view that he was truthful.

183 Mr Beard was asked about it in cross-examination and he conceded that care would have to be taken not to damage drainage lines during demolition and that it was possible that the work could not be saved or salvaged.

184 It seems to me more probable than not that the drainage lines were damaged during demolition and required rectification. Quite apart from the evidence referred to above, it was my view of the plaintiff (as I have expressed earlier in these reasons) that he was a careful person and particularly mindful of cost. I find it difficult to accept that he would have pulled out drainage lines if he could possibly have saved them.

185 I allow the sum of $13,585.00.

(xviii) Construction Insurance

186 I find the defendant's submissions on this item to be more persuasive than that of the plaintiff. It is difficult to see how the plaintiff arrived at the sum of $2,666.00 whereas the defendant, who accepts that the delay in completing the works necessitated an extension of the insurance policy, cites the certificate of insurance that appears at page 76 of the exhibit that contains the invoices. The invoice for the period 21 March 2012 to 21 March 2013 is $2,438.69. I allow that figure.

(xix) portable WC hire

187 There were several invoices in evidence relating to the hire of the portable toilet. The works as a whole required a portable toilet to be on site. The delay occasioned to the works by the defective slab would, I accept, have necessitated an extension of time for the hire of the toilet. I do not understand how the plaintiff calculates the sum claimed. The reference to the number of days' hire may be derived from the report of a quantity surveyor that was not admitted into evidence. It is safer, in my view, to refer to the actual invoices.

188 Adopting the reasoning of the defendant in respect of the construction insurance claim above, I refer to the actual invoices for the hire of the toilet. For the period 10 February 2012 to 9 August 2012, the invoiced charges were $1,105.00 and I allow that figure.

Unpaid contract sum

189 A proprietor who seeks to recover the cost of properly completing the works must give credit for any unpaid balance of the contract price: Ventura v Svira [1961] WAR 63 and it is appropriate therefore that the sum of $10,000.00 (being the unpaid balance of the contract sum) is deducted from the plaintiff's damages.

Summary

190 A summary of my findings of the costs associated with demolition and removal of the old slab is set out below:-

Tip and recycling expenses Browndown Pty Ltd	$900.00
Tip and recycling expenses Gow Street recycling	$1,959.25
Tip and recycling expenses SITA Environmental	$1,380.00
Bin bags for removing foam	$23.80
Tip and recycling expenses IS Recycling Pty Ltd	$660.00
Tip and recycling expenses Bing Recycling Centre	$650.76
Machinery hire for demolition of slab	$12,320.00
Removal of dirt and piers	$2,310.00
Machinery hire for removal of dirt and drilling of piers	$1,856.25
Certifier	$880.00
Surveying	$770.00
Plumbing	$13,585.00
Construction insurance Taggart Group	$2,438.69
Portable toilet hire	$1,105.00
TOTAL	$40,838.75

191 There will be a verdict and judgment for the plaintiff in the sum $30,838.75 which comprises $40,838.75 (costs associated with demolition and removal of the old concrete slab plus associated costs) less $10,000.00 (being the outstanding contract sum).

192 The exhibits be returned.

193 Listed on 18 July 2013 at 2.00 pm for costs argument.

Decision last updated: 16 October 2013