QUESTION TWO (15 marks)

Gold Design & Construction Pty Ltd is a licenced residential building company with Robert Gold as the sole director and sole shareholder. Gold Design & Construction Pty Ltd has been building residential homes in New South Wales for over 17 years. Mr Gold met the property owners Jodi and Steve Andrews on 20 November 2019 to discuss the demolition of Mr and Mrs Andrews' existing home and to build a duplex on the property. Mr Gold said to Mr and Mrs Andrews "leave everything to me I will obtain the approval for your two houses, build them for approximately $1.2 million and I guarantee you will be in your new house, with the second one ready to sell by Christmas 2020.

" Mr Gold and Mr and Mrs Andrews had several meetings to discuss their requirements which included, that all bedrooms must be large enough to take double beds, the garages would have to be oversized to fit Mr Andrews' two 1948 American Plymouth motor vehicles, and the second house would have to be sold to pay down most of the loan. Mr Gold said "no problem leave it all to me".

Mr and Mrs Andrews paid Mr Gold $7,000 as a deposit, and Mr Gold arranged for his office to prepare plans, copies of which were sent to Mr and Mrs Andrews. Mr and Mrs Andrews signed a consent for Gold Design & Construction Pty Ltd to lodge the development application with Blacktown Council.

The application was approved by Blacktown Council on 2ndFebruary, 2020, a copy of the approval was sent by Gold Design & Construction Pty Ltd to Mr and Mrs Andrews for their information, together with a HIA Residential Building Contract which had been completed. Some of the conditions in the contract were;

1. Construction time would be 10 months from commencement; 3

2. Contract price was $1,245,000;

3. Liquidated damages was $110 per week;

4. The plans approved by Blacktown Council were annexed to the contract;

5. A deposit of 15% was required.

Mr and Mrs Andrews signed the contract and returned it together with a cheque for $186,750 payable to Gold Design & Construction Pty Ltd on the 12th February, 2020.

Gold Design & Construction Pty Ltd obtained a construction certificate from Prestige Consultants Pty Ltd on the 28th of February, 2020 and commenced construction on 5th March, 2020. During constructions Mr and Mrs Andrews said to Mr Gold "We think it would be best if we put a gazebo at the rear of both these dwellings."

Mr Gold said "no problem, it will cost about $3,000". The progress of the work was very slow even though Mr and Mrs Andrews constantly phoned Mr Gold and by 31 December 2020 the property was not finished.

When the property was finished on 3rd March, 2021, Gold Design & Construction Pty Ltd submitted an invoice for $7,300 for the gazebos. Once Mr and Mrs Andrews took possession, they realised the garages were not the size as discussed nor were the bedrooms.

The major problem was when Mr and Mrs Andrews contacted Blacktown Council regarding subdivision so they could sell the second premises the Council officer advised, "no approval has been given for subdivision into two lots, and Blacktown Council's planning provisions prohibit a subdivision of this land due to the size of the land being under 700m".

Advise Mr and Mrs Andrews of the following:

1. Is the payment for the gazebos due to Gold Design & Construction Pty Ltd?

2. Can Mr and Mrs Andrews claim liquidated damages for delay in construction, and if so for what amount?

3. What claim do Mr and Mrs Andrews have in relation to the undersized garages and bedrooms?

4. What claims do Mr and Mrs Andrews have in relation to the fact that they are unable to subdivide their property?