Homeowners bringing a claim in relation to defective residential building work have the onus of proving:-
- The work or service was unsatisfactory (“Breach”);
- The steps necessary to remedy the Breach (“the method of rectification”); and,
- That the method of rectification has sufficient certainty to enable an order to be made.
Once those criteria are met s48O of the Home Building Act 1989 empowers the Tribunal to order:-
- Payment of money by one party to the other;
- That a specified amount of money is not payable; or,
- That particular work/service be performed.
In Vadasz v Charas Constructions Pty Ltd the applicant, Mr Vadasz, purchased a property with a new dwelling built by Charas Constructions (“the Builder”). Mr Vadasz was not happy with aspects of the Builder’s work and initially complained to Fair Trading. The Fair Trading Officer who visited the property wrote two Reports and issued two Rectification Orders.
Mr Vadasz remained unsatisfied and on 8 July 2018 issued proceedings in the Tribunal claiming incomplete or defective work and $30,000.00 for rectification work. In accordance with the Tribunal’s Timetable Mr Vadasz served evidence that included the two Reports from the Fair Trading Officer. The Builder did not comply with the Tribunal’s Timetable but did attempt to serve new evidence at the hearing, including an Expert Report and an Affidavit. After hearing arguments from both sides the Tribunal declined to accept the new evidence, citing considerable prejudice to Mr Vadasz.
After the hearing in late 2018 the Tribunal made its decision on 17 July 2019 accepting that Breach had occurred and that the claimed items of work were either incomplete or defective. However, it did not accept Mr Vadasz’s evidence about the reasonable cost to rectify the Breach. For instance, the Tribunal accepted that there was rusting in the carport but not that rusting had compromised the structural integrity. Mr Vadasz had provided a quote to replace the carport but the Tribunal ordered that the rust be cleaned and treated with a rust inhibitor. The Tribunal made similar findings for each element of defective work.
The effect of s48MA of the Home Building Act is that the Tribunal prefers to order work be performed rather than the payment of money. Therefore under s48 O(1)(c)(i) the Tribunal ordered rectification of the accepted defects within twenty one (21) days.
Homeowners do not always want a work order because of a concern that the Tradesperson might make matters worse. However, this case demonstrates that the Tribunal prefers to make work orders and would require compelling reasons to order payment of money.
Both parties would have benefitted from legal advice at an early stage to ensure that they complied with the Tribunal Timetable and that the evidence presented was sufficient to support the case they were making. In the end the evidence of Mr Vadasz did not go far enough to enable the Tribunal to order a payment and the Builder was not allowed to rely on key evidence because key deadlines were missed.
As an alternative, parties to this type of dispute often achieve similar outcomes through mediation. In this case a mediation would probably have occurred at around the time Mr Vadasz commenced the Tribunal proceedings, July 2018. The parties could have controlled the process and been able to negotiate an outcome that suited them. Any agreement would have been implemented according to an agreed timeframe instead of having to wait twelve (12) months for the Tribunal’s decision.
Disputes are often unpleasant and generally both sides would prefer to be able to move forward as quickly and painlessly as possible. Mediation enables each side to a dispute to work together to achieve a resolution whilst minimising delay, stress, and uncertainty that inevitably comes with the litigation process. If mediation is not completely successful formal litigation can still be considered to resolve any remaining issues.