1. By 27 May 2024 at 4.00 pm, the parties must file with the Tribunal (by email to the President's Chambers at chambers.woodward@courts.vic.gov.au) the form of orders they propose should be made following these findings, including in relation to interest.
2. There is liberty to apply on the question of costs. The parties' attention is drawn to s109(1) of the Victorian Civil and Administrative Tribunal Act 1998. Any application for costs should be made by 27 May 2024 at 4.00 pm by way of written submissions (limited to 5 pages) and affidavits, filed with the Tribunal (by email to the President's Chambers chambers.woodward@courts.vic.gov.au). Further orders will be made for the filing of responsive material and any application will then be decided on the papers.

1. On 5 May 2017, the applicant (the builder) and Amal Dib (Mrs Dib) and Sarkis Dib (Mr Dib) (together the owners) signed a Master Builders Association HC6 Contract (Contract) for the construction of a three-storey house at 5 Eaglemont Crescent, Eaglemont (the house), for a contract price of $1,600,000. At the same time, the parties signed a further contract (collateral contract) pursuant to which the owners agreed to pay an additional $110,000 above the contract price, payable in payments of $10,000 each coinciding with progress payments under the Contract.
2. The builder asserts that it satisfactorily completed the base, ground, first, and second floor frame stages of the house and alleges the owners breached the Contract by refusing to pay progress payments under the Contract for the first and second floor frame stages. The builder says it validly terminated the Contract in response to this alleged breach by the owners and claims $729,112.03 in damages, comprising the unpaid progress payments, variations, delay claims and interest. It alternatively claims that the owners are liable to make restitution to the builder on a quantum meruit basis in the sum of $365,746.78.
3. The owners allege that the base, ground, first and second floor frame stages were defective and incomplete in breach of the Contract, and the progress payments on those stages had not fallen due. The owners further claim that the builder is not entitled to any variation payments and that the cash instalment sums are not enforceable under collateral contract, as they are inconsistent with s40 of the Domestic Building Contracts Act 1995 (Vic) (DBCA). The owners' counterclaim for damages, comprising the cost of defect rectification in the sum of $240,234, liquidated damages in the sum of $3,285.71, interest, and costs.
4. For the reasons below, I have determined that:
   1. completion of a stage of the building work does not require perfection, but does require that the works be free from non-trivial defects and material non-conforming or incomplete work;
   2. the giving of an approval of a stage by the registered building surveyor is not determinative of the issue of completion of that stage;
   3. due to the existence of substantial defects in the works, the builder had failed to complete the base stage and the frame stages of the house;
   4. the builder is entitled to 61 days of delay, giving rise to liquidated damages payable to the builder of $4,361.50;
   5. the builder is entitled to be paid the footings variation claim pursuant to s38(6)(b) of the DBCA in the sum of $21,190.02, but fails on the pool variation claim;
   6. the collateral contract is void and the builder is not entitled to any amounts unpaid under that contract;
   7. the builder validly terminated the Contract by notice dated 24 September 2018;
   8. the builder's quantum meruit claim should be assessed at nil;
   9. the damages payable by the builder to the owners for defective works are assessed at a total of $113,918.53; and
   10. the builder's claim for loss of profit and the owners' claim for rent costs both fail.
5. Thus, there is a net sum of $88,367.01 payable by the builder to the owners. I will ask the parties to check my arithmetic and hear them further on the form of orders, costs and interest.

1. In the period from around early 2016 to early 2017, the owners provided the builder's sole director Musa Rifat with details of the works they were proposing to carry out, including plans, drawings, and specifications from Concept 2 Completion Pty Ltd architects (the architects). In February 2017, Mr Rifat and the builder's project manager Nick Petrovski prepared a quote for the owners for the construction of the house in the sum of $2,188,482.
2. Mr Rifat's evidence was that this quote was provided to the owners shortly before a meeting in February 2017 at the owners' restaurant in Lower Plenty attended by Mr Rifat, Mr Petrovski, and the owners. The owners do not recall receiving a written quote and said the quote provided to them that day was verbal. Mr Rifat's evidence was that at the meeting, the owners said they could not afford the quote so they together discussed ways of reducing the price, including reducing the scope of works and the owners granting the builder a right to use the owners' neighbouring lot at 7 Eaglemont Crescent (the adjoining land).
3. It seems the parties met again on 3 April 2017 to discuss a revised price and specifications list. Later that day, Mr Petrovski emailed the owner attaching a 'specs list' and updated 'total contract price' of $1,712,500. The email invited the owners to provide feedback on the specifications list. Mr Rifat's evidence was that the proposed reduced price was achieved by allowing the builder the use of the adjoining land and the exclusion of various items shown in the specifications list as 'excluded'.
4. When the Contract and collateral contract were signed on 5 May 2017, the agreed total price was $1,710,000 (that is $2,500 less than the 3 April quote), with $1,600,000 payable under the Contract and $110,000 payable under the collateral contract. The parties have two conflicting versions of how this came about. Mrs Dib says in substance that at the meeting on 3 April 2017, Mr Rifat said words to the effect that 'I will do it for $1.71, but I want $110 in cash. Tradies love cash and it's cheaper to use cash when you hire them'.
5. Mr Rifat's evidence was that at the time the contract was to be signed the agreed contract price was $1.6 million, but the owners requested there be alterations to the scope of works which resulted in the contract price being increased to $1.71 million. He said that as the contract had already been drafted, the parties had come to a separate agreement in the sum of $110,000, and the owners insisted that they preferred to pay the $110,000 in cash from money received from their restaurants. Mr Petrovski gave evidence to similar effect.
6. Although little of substance turns on this, I prefer the evidence of Mrs Dib. The version offered by Mr Rifat and Mr Petrovski is not supported by the contemporaneous documents and, most notably, Mr Petrovski's email of 3 April 2017. This shows that the price reduction to (approximately) $1.71 million was arrived at by 3 April 2017, long before the signing of the contract on 5 May 2017.
7. Further, there is nothing to support Mr Rifat's evidence that by 5 May 2017 the negotiated price had somehow fallen to $1.6 million, and was then increased back up to $1.71 million during a discussion on the day of signing to allow for alleged variations. In my view, this account of what occurred is unlikely.
8. Mrs Dib's evidence was that the signing of the contract on 5 May 2017 occurred at the owners' restaurant, when Mr Rifat attended there for dinner with his family, Mr Petrovski and Mr Petrovski's fiancé. Mrs Dib said that the collateral agreement was signed at around the same time; Mr Rifat said that occurred on about 1 August 2017, when the owners paid $30,000, being the first instalment owing under the side agreement. The side agreement is dated 5 May 2017.
9. Mrs Dib said that during the meeting at the restaurant, Mr Rifat said words to the effect of 'you can go on site when you want and speak to whoever's there'. Mr Rifat and Mr Petrovski both deny this was said, adding that it would be contrary to occupational health and safety requirements to have unauthorised people on site.
10. On 5 July 2017, the registered building surveyor (RBS) Mr Michael Flanagan of Metro Building Surveyors (MBS) issued the building permit for the works. On 6 July 2017, the builder issued invoice no. 201715 in the sum of $80,000 for the deposit stage claim. This was paid by the owners, in four instalments of $20,000 concluding on 16 July 2017.
11. Construction of the house commenced on about 19 July 2017. In around late July 2017, the engineer engaged by the owners (Mr Tedesco), attended the site during excavations and noted that the weathered rock was deeper than had been anticipated by the soil test. Mr Tedesco instructed the builder to excavate deeper foundations to ensure that the perimeter foundation was established on the weathered rock.
12. Mr Rifat said that he relayed Mr Tedesco's instructions to Mr and Mrs Dib onsite in mid to late August 2017. Mrs Dib's evidence is that she and Mr Dib were on site on about 11 August 2017 when Mr Rifat pointed out that 'we need to go deeper' and told them that there would be a variation for that.
13. Mr Rifat's evidence was that sometime in mid to late September 2017, Mr Dib contacted him and requested variation works in respect of the swimming pool, which included excavating the proposed pool area and construction of the necessary footings.
14. Mrs Dib accepts that there was some discussion of this, but said there was no agreement. She said that Mr Rifat tried to persuade them to build the shell of the pool, but they told Mr Rifat to leave it, and they were never asked to sign a variation. Her evidence was that she later became aware that the builder had 'illegally built a footing in the location of the pool', which had to be rectified by the pool contractor at an additional cost of $12,500.
15. Mr Rifat's evidence was that the builder completed the ground floor frame stage on about 10 October 2017 and, on about that date, issued a $160,000 progress claim for that work, as well as a payment claim for the fourth $10,000 cash payment. The $160,000 was later paid by the owners' financier.
16. On 11 October 2017, the builder issued Invoice No. 201719CV for $21,190.02 to the owners for the excavation variation cost. Mr Rifat said he was onsite with the owners when they received the invoice. According to Mr Rifat, the owners indicated they were dissatisfied with the amount being charged and felt that it was 'too much'.
17. He said that he explained to the owners that the engineer had instructed the builder to dig deeper so the footings were on weathered rock and it was critical for a house of this size that the perimeter foundations were on the same stable ground. This required considerable additional excavation.
18. Mrs Dib's evidence was that she was surprised and distressed by the invoice. She said she had not been advised previously that the variation would be so expensive or that an area greater than a few metres had to be excavated to a greater depth. Mr Dib said he also was distressed by the invoice. He said that in a later conversation, Mr Rifat stated that the soil report was incorrect and that the owners should sue the person who prepared it.
19. Mr Dib added that, in late 2017 or early 2018, he received a phone call from Lino Sanelli, a concreting contractor employed by the builder. Mr Dib's evidence was that Mr Sanelli stated 'Mussa [sic] is saying he won't pay me because you won't pay him' and that the excavation variation cost was 'just over' $9,000, rather than the requested $21,190.02.
20. Both Mr Rifat and Mr Petrovski assert that on 13 October 2017 the builder issued notices of delay and extension of time claim which referenced delays in the carrying out of steel work production and erection. The builder claims that this was due to a conflicting design between the engineering and working drawings in relation to the step down into the powder room. The plans had to be amended and approved by the engineer and architect before steel fabrication could begin. The delay period claimed under this notice was 15 working days.
21. Mr Petrovski's oral evidence was that he posted the notices by ordinary mail to the address for service stated in the Contract. The owners say that they never received the notices. While they accept that they had left the address shown as the address for service of notices in the Contract in early 2018 (and gave no evidence about arranging for mail to be forwarded to their current address), they note that Mr Petrovski would generally email or hand documents to them. Whether the owners were validly served with relevant notices allegedly posted by Mr Petrovski is an issue in the proceeding as discussed further below.
22. On 20 October 2017, the builder issued Invoice No. 201720CV in the sum of $12,500 for the pool works variation due 27 October 2017.
23. On 31 October 2017, the owners paid the third cash payment instalment of $10,000. At about the same time, Mrs Dib requested a record of the payments rendered thus far. Mr Rifat supplied a marked-up copy of the side agreement on which he had been recording the dates on which the cash instalment payments were rendered. This showed cash payments of $30,000 on 1 August, $10,000 on 6 September and $10,000 on 31 October 2017. Mrs Dib agrees that the document correctly recorded the cash payments made to that date.
24. On 29 January 2018, Mr Rifat, Mr Petrovski and the owners met at a café near the site. Both parties identify this meeting as the point where their relationship began to sour. According to Mr Rifat, Mr Dib accused him of fabricating or overcharging for the excavation variation cost and Mr Rifat denied the allegation.
25. Mrs Dib agreed that Mr Dib said in effect that the owners knew the excavation and concreting cost had been inflated and that the builder creating unsubstantiated variations would damage their relationship. Mr Rifat later sent a text message to the owners summarising the circumstances of delays and the background to the excavation variation, the pool works variation and the reasons for the delay in steel fabrication.
26. The events that followed this meeting are only peripherally relevant to the matters I must decide in this proceeding, except to the extent they are discussed in more detail in my analysis of the issues below. I therefore provide only a brief summary of those events, as follows:

1. on 7 March 2018, WorkSafe attended the site due to a complaint by an unidentified third party; 2. on 8 March 2018, Mr Petrovski sent the owners an email requesting that the owners refrain from attending the site without accompanying or requesting prior access from the builder; 3. on 13 March 2018, the builder issued an invoice for the first-floor frame stage progress claim in the sum of $160,000; 4. on 22 March 2018, Mr John Taouk, a site supervisor for the builder, informed Mr Rifat that the owners had attended the site to carry out an inspection with Mr Ken Ryan; 5. on 17 April 2018, Mrs Dib emailed Mr Rifat attaching a preliminary report from Mr Ryan and instructing the builder to cease the works immediately; 6. the preliminary report alleged that the first-floor frame stage had not been completed; 7. in response to the report, the builder withdrew the first-floor frame stage payment claim and stated that they remained ready and willing to perform the works and comply with all their obligations under the Contract; 8. on 20 April 2018, the builder emailed the owners expressing that there would be substantial delays as a result of the stop works order and alleging that the owners had failed to provide any reason for the order; 9. Mrs Dib replied to the email stating that the builder had breached the Contract and the that the owners had filed a complaint with Domestic Building Dispute Resolution Victoria (DBDRV); 10. on 30 April 2018, the builder issued a notice of delay and extension of time claim (12 working days) as a result of the delay caused by the stop works order; 11. on 30 April 2018, the builder received an email from the owners stating that the owners would not make any further payments until the lock up stage had been achieved, that the owners would not meet with the builder, and that the owners would be proceeding with the DBDRV application; 12. on 8 May 2018, the builder issued a third notice of delay and extension of time claim (15 working days), due to the delays arising from the excavation variation cost; 13. on 22 May 2018, the builder issued a fourth notice of delay and extension of time claim (14 working days), due to the delays arising from the excavation variation cost; 14. on 28 May 2018, the builder issued a fifth notice of delay and extension of time claim (5 working days) caused by the steelwork variation; 15. on 18 June 2018, the RBS attended the site to inspect the steel reinforcement for the stairs and approved it; 16. on 22 June 2018, the RBS attended the site again to inspect the slab for the carport and subsequently approved it; 17. on 13 July 2018, the RBS attended the Site and issued a written direction to fix building work in respect of the frame stages; 18. on 20 July 2018, the RBS conducted a follow-up inspection, noting fewer issues that needed fixing; 19. on 27 July 2018, the RBS returned to the site and reinspected the frame stage and approved it, shortly after which that builder issued progress claims for the first and second floor frame stages (for, respectively $160,000 and $154,800) and for two sums of $10,000 each under the collateral contract; 20. on 3 August 2018, the owners attended the site with Mr Ryan, who undertook an inspection of the works; 21. on 8 August 2018, the builder issued a notice of intention to terminate the Contract;

1. on 15 August 2018, the builder issued a notice of suspension of works under the Contract; and

1. on 24 September 2019, the builder issued a notice of termination of the Contract.

Did the builder complete the base, ground, first, and second floor frame stages?**

What is the test to be applied in determining completion?

1. It is not in dispute that the parties departed from the progress payments fixed by s40 of the DBCA and instead adopted "Method B", and did so validly. The Progress Payment schedule adopted by the Contract under Method B relevantly provided for progress payments as follows:

If Stage is NOT the same as a Stage defined in this Contract or Section 40 (1) of the Domestic Building Contracts Act 1995, what does Stage mean?

Name of Stage or Description of Stage of Works if different from Method A

1. The applicable definitions in clause 1.0 of the Contract are (emphasis in original):

"Base Stage - means...For a home with a suspended concrete slab floor, when the concrete footings are poured;"

"Completion - means when the Works to be carried out under the Contract:

have been completed in accordance with the Plans and Specifications; AND

if a building permit was issued for the Works, the Owner is given an Occupancy Permit, if required, or in any other case, a copy of the certificate of final inspection."

"Frame Stage - means when the home's frame is completed and approved by the building surveyor."

1. I note that the Contract definition of "Frame Stage" (as set out above) essentially replicates the definition of that term in the DBCA. Notably, both refer to the frame being completed and approved by the RBS**.**
2. The builder submits that Cardona v Brown[1] (Cardona) is not authority for the proposition that the existence of defects is relevant to effective and satisfactory completion under the Contract. Rather, the test for determination of 'completion' of the various stages is to be determined by reference to the 'objective intention of the parties ascertained through a proper construction of the relevant contract'.
3. The builder argues that the term cannot be construed as requiring there to be no 'non-trivial defects' with respect to the works the subject of the relevant stage because:

(a) the term 'defects' is not used in the progress payment table;

(b) the Contract provides for a 180-day defects liability period upon 'Completion' of the works and requires the builder to rectify defects in that period and this militates against a construction of the Contract that the existence of defects precludes completion;

(c) a defect in an early stage would have the effect that all subsequent stages are incomplete until that defect is rectified, and there is no basis in the Contract to find that this was the objective intention of the parties.

1. The owners accept that: ''Completion' of building work does not require perfection, only 'effective and satisfactory completion' that allows for some 'trivial failures, or failures borne of impracticalities'' (citing Cardona). They submit that ascertaining 'triviality' involves considering proven defects and incomplete works as a whole, rather than considering each item individually. They further argue that completion is not determined by reference to 'structural adequacy', regardless of the extent of non-compliant performance. They say the central question is whether there is compliance with the Contract.
2. The Court of Appeal in Cardona was primarily concerned with the effect of the sequencing of stages under s40 of the DBCA, finding that a progress payment claim for a later stage cannot be made until each earlier stage is complete. However, the court's findings in relation to when a stage is complete are (with respect) clearly correct. It held in this regard as follows:

"It is necessary for there to be 'effective and satisfactory completion of the required stage ... [as] a condition of any instalment payment' [citing Hudson's Building and Engineering Contracts (Sweet and Maxwell, 12th ed, 2010), para 30-76] and while trivial failures, or failures borne of impracticalities, do not preclude effective and satisfactory completion, it is noteworthy that the dispute in relation to the trusses was not resolved until the first day of the hearing before VCAT. That resolution involved work being done on the trusses to strengthen them in accordance with the recommendations of a consultant engineer. The 'final approval' was not given until Mr Kidd undertook a personal inspection on 13 March 2007."[2]

1. As both parties accept, this issue is ultimately a question of construction of the Contract. I agree with the owners that terms such as 'defect' and 'incomplete works' are not legal terms of art, such that their omission from the progress payment table in the Contract somehow renders them irrelevant to determining whether a stage is complete.
2. In my view, the nature and extent of any defects or incomplete works must be part of any assessment of whether a particular stage can be objectively described as 'complete'. As Cardona makes clear, whether completion of a particular stage has occurred will be a matter of degree.
3. In particular, there will be some failures (which may comprise both defects and non-conforming or incomplete works) that are so minor that a stage can reasonably be described as complete, despite those failures. This might include items such as a missing screw from a door hinge, a small area of incomplete rendering or a faulty window mechanism.
4. At the other end of the scale, a defect or item of incomplete work may be so integral to the structure or design of a particular stage, that the stage cannot be objectively viewed as complete until it is rectified or incorporated. For example, a missing door or external window, the wrong colour render, or a missing or defective footing. It also follows from Cardona, that failure to complete an earlier stage, precludes a finding that a later stage is complete.
5. It would be dangerous to attempt to categorise particular defects or incomplete works that might be said to be material to completion, and those which are not (beyond providing a few examples). Each case will turn on its own facts, both as to the terms of the contract (including plans and specifications) and the nature of the defect or incomplete work.
6. Subject to that, it seems to me that a structural defect will almost always preclude a finding that a stage comprising that structure is complete. But I agree with the owners that it does not follow that structural adequacy equates to completion. I also agree with the owners that an accumulation of defects, each of which may in isolation be trivial or immaterial, can together preclude a conclusion that a stage is complete.
7. In my view, the 180-day defects liability period provided for in the Contract does not support a contrary conclusion. A defects liability period is directed to the rectification of defects or incomplete work that are overlooked when a stage payment is sought and paid. This may be because they are trivial (as contemplated by Cardona) or because they are not apparent to the owner or building surveyor at the time of payment.
8. If a defect or item of incomplete work is material to completion of a stage and is known to the building surveyor or owner, the building surveyor should withhold approval and the owner should withhold payment until the defect or incomplete works is rectified. The parties can of course agree otherwise, but a builder cannot insist on payment if a material element of a particular stage is incomplete or defective.
9. In this case, the omission of the reinforcing steel from the brick piers as discussed further below provides a good example. It is an item of incomplete work or defect that is clearly not trivial, and is probably integral to the structure of the relevant stage. However, the evidence is that neither the building surveyor nor the owners were aware of the omission at the time of the base stage or ground floor frame stage approval and payment. There can be no doubt that had either been aware of the omission, the approval and payment would not have been forthcoming until the omission was corrected, or a substitute reinforcing (as ultimately occurred) was agreed to and approved.
10. On the other hand, had the Contract remained on foot and the omission not detected until shortly after 'Completion' within the meaning of the Contract, it would clearly have been susceptible to rectification by the builder during the defects liability period (and possibly thereafter).

Is the RBS frame stage approval dated 27 July 2018 determinative of the issue?

1. The builder submits that the completion of the base, first, and second floor frame stages is evidenced by the frame stage approval of the RBS dated 27 July 2018. The builder submits that:

"Mr Flanagan, as the RBS and issuer of the building permit for the works, was best placed to assess whether the frame stage was complete. The statutory function of the RBS includes determining frame stage completion. If the surveyor believes that the building works fail to comply, then the surveyor may issue a direction to the builder to fix the building work.

The RBS caused the frame stage works to be inspected by his employee Scott Howes (a registered building inspector unlimited) on four occasions between 13 and 27 July 2018, with Mr Howes giving directions to fix building works on each occasion except the last.

Mr Flanagan gave evidence that Mr Howes was extremely conscientious and would have conducted the inspections diligently.

The RBS himself inspected the works in January 2019 and was satisfied that they were at frame stage, and he was the only surveyor to give evidence.

Mr Flanagan's evidence was that a surveyor must be satisfied that the works 'substantially comply' with the building permit and regulations. He gave evidence that: 'You may not necessarily, in every case, get to the point where you're counting nails or checking bolts or looking at washers'."

(a) Cardona recognises that completion and approval by the building surveyor are two different concepts,[3] which will not always coincide and should not be conflated.

(b) The Contract expressly provides that a frame stage means when the house's frame is completed and approved by the building surveyor (emphasis added). If only approval is required, the words "completed and" have no work to do.

(c) The DBCA notes this inspection because it is something that must occur as part of all domestic building work in any event. While approval and completion usually would align, in some cases, they will not.

(d) Mr Flanagan's evidence is unreliable because he did not personally inspect the works leading up to the 27 July 2018 approval and Mr Howes' was not called to give evidence.

1. Nothing of substance turns on the reliability of Mr Flanagan's evidence on this issue. I am nevertheless satisfied that the inspections and directions for further work were given and the first and second frame stage works were approved on 27 July 2018. However, essentially for the reasons stated in the owners' submissions, it does not follow from this that the stages were complete.
2. In my judgment, on its proper construction, the Contract clearly requires that completion of a stage sufficient to enliven a payment obligation has two discrete elements, namely, completion of the relevant works and RBS approval. This follows from the inclusion of the words "and completed" in the definition of "Frame Stage".
3. As the owners submit, if only approval were required, those words would have no work to do. To my mind, that construction is reinforced by the related definition of 'Completion' set out above, which concerns the completion of all of the 'Works'. It also plainly has two elements, namely, completion of works in accordance with the plans and specifications 'AND' the issue of an occupancy permit or final inspection certificate.
4. Accordingly, while completion and approval will usually align, this is not necessarily the case. If there is evidence that a particular stage is objectively incomplete, the giving of an approval will not make it otherwise. I agree with the owners that this conclusion is also supported by the discussion in Cardona.[4]

1. It does not appear to be in dispute that the ground plumbing stage was complete. It also does not appear to be in dispute that the brick piers that were the subject of the expert report by Environmental Location Solutions (ELS) dated 23 May 2019, were part of the base stage. In any event, this was the expert evidence of Mr Thomas Grounds in his report dated 24 July 2022 discussed below, and the builder did not adduce evidence to the contrary. I accept Mr Grounds' evidence on this issue.
2. In my view, the failure by the builder to incorporate adequate reinforcement into these columns as discussed in my analysis of the expert evidence and the damages claims below, was a substantial defect, the effect of which was that the base stage was not completed by the builder. It follows as discussed in Cardona that each of the frame stages was also incomplete.
3. Although it is unnecessary for me to so find, I am also satisfied that the structural steel defects discussed in my analysis below were non-trivial defects that preclude a finding that any of the frame stages were complete. It is also arguable based on the report by Mr Grounds (but less clear) that these defects were part of the base stage. A combination of the inadequate reinforcing combined with the structural steel defects leaves no doubt that the builder had failed to complete any of the frame stages.

Is either party entitled to liquidated damages under the Contract?

1. In paragraph 9 of its points of claim, the builder alleges that it issued a total of six notices of delay, as set out in the table in its points of claim. It no longer presses the last of these six. It claims a total of $4,361.50 for the first five items in the table. This issue turns on whether the notices were served in accordance with the Contract.
2. The owners deny receiving any of the notices, and the evidence is that the owners left their address as stated in the Contract in about January 2018, before four of the five relevant notices were served.
3. In his witness statement, Mr Petrovski refers only to the builder having 'issued' the notices of delay, and gives no details of how any posting or other service of the notices actually occurred. In his oral evidence, Mr Petrovski said in effect that the notices were served by pre-paid post on the owners' address in the Contract and he personally walked the notices to the mailbox. Service by pre-paid post is a valid method of service under the Contract, as is email.
4. The owners say that I should not accept Mr Petrovski's evidence of posting. They submit in effect that:

(a) an earlier notice pre-dating those relied on by the builder differs from the later notices, in that it refers to service by both email and to a postal address;

(b) Mr Petrovski's explanation for not sending later notices by email (being that doing so was not "fruitful") is not credible - the parties engaged in substantial email correspondence throughout the period of the Contract and, at the time of the first notice relied on by the builder, the relationship between the parties was cordial;

(c) it is improbable that the builder would send the notices and not mention to the owners at any stage in their numerous meetings that a delay event had occurred, and an extension was required; and

(d) Mr Petrovski's evidence was generally unreliable.

1. There is some force in the owners' submissions. It does seem surprising given the volume of emails between the parties, that the builder chose another form of service for the notices of delay. However, service by pre-paid post on the address for the owner stated in the Contract was clearly good service and there is little value in speculating about the builder's motivation for choosing this method.
2. Further, there was no evidence that the owners formally notified the builder of a change of address. The only question is whether I am willing to accept Mr Petrovski's evidence of posting.
3. I accept that there were some minor inconsistencies in Mr Petrovski's evidence, but I considered him generally to be a witness of truth. I am prepared to accept on balance that he did post the notices by pre-paid post as he asserted. I am therefore satisfied that the builder has made out its claim for 61 days of delay, giving rise to liquidated damages payable to the builder in the sum of $4,361.50.
4. Having found that the builder is entitled to 61 days of delay, it follows (as the owners appear to concede), that the owner's claim for liquidated damages must fail.

What entitlement does the builder have to payment of the variation claims?

1. The builder claims the sum of $21,190.02 as a variation for additional excavation and concrete and steel works in relation to the footings for the house. The builder relies primarily on special condition 11 of the Contract, as follows:

"If for any reason the whatsoever the Building Surveyor, Council, Engineer or Architect/Draftperson alters the plans, drawings, specifications, and/or any other aspect of the works in any way from the said documents enclosed with this contract, then these works constitute additional works not included with the Contract Scope of Works and will be charged to the Owner as a variation to the Contract."

1. The architect's plans specified that 'all footings shall be founded upon highly weathered rock' and it is not in dispute that the soil report provided to the builder identified the depth at which the weathered rock was located was 0.6 - 0.8 metres. It is also not in dispute that, once the excavation commenced, it became apparent that in some areas the weathered rock was at a depth of 1.8m. The owners' engineer Mr Tedesco therefore instructed the builder to excavate deeper to ensure that the footings were founded on weathered rock.
2. The builder submits that the engineer altered the drawings within the meaning of special condition 11 and the builder incurred $21,190.02 in engaging its subcontractor to carry out the additional excavation and concreting. It says the builder is entitled to recover that sum because:

(a) it submitted a variation invoice dated 24 August 2017 that provided the notice as required by s38(3)(a) of the DBCA (and, I interpolate, clause 13.1 of the Contract, which is in similar terms); or

(b) alternatively, the builder is entitled by s38(6)(b) to recover the sum because:

"The Builder performed those works which the parties agreed were variation works...The Owners have retained the benefit of those works, and do not allege that the excavation works were in any way incomplete or defective, and so it would not be unfair to the Owners for the Builder to recover the money. That being so, were the Builder to be precluded from recovering that sum, the Builder would suffer significant or exceptional hardship because it would be out of pocket some $21,190.02."

1. The owners resist the variation claim on various bases, as follows:
   1. The concrete variation is not a variation as defined in the DBCA, but a provisional sum allowance and the builder has failed to supply evidence of the provisional sum cost as required by s23 of the DBCA or disclosed the original invoicing for the concreting, to establish an excess above the provisional sum.
   2. The builder's reliance on special condition 11 of the Contract is misplaced - that special condition is clearly void under s132 of the DBCA because it seeks to contract out of the variation provisions in s38 of the DBCA.
   3. In any event, the invoice relied on by the builder and the supporting invoices from the subcontractor, are insufficient to establish that the additional work exceeded the contract allowance in special condition 8.64 of the Contract.
2. The owners did not seem to press the first of these grounds in oral submissions, after the builder refuted the suggestion that it had conceded that the claim was a provisional sum allowance and not a variation. In relation to the second ground, I do not agree that special condition 11 seeks to contract out of the variation provisions of the DBCA.
3. In my view, special condition 11 merely identifies a condition for a variation. It does not oust s38 of the DBCA (or clause 13.1 of the Contract), which continues to prescribe the process that must be followed before a variation that may arise pursuant to special condition 11 can be claimed.
4. Although the builder has submitted that the variation invoice complied with s38 of the DBCA, this submission is misconceived. Among other things, the builder failed to give notice of the variation as required under s38(3) and (as a consequence) gave effect to the variation before being given a signed request for variation by the owners under s38(5)(a).
5. Thus the only basis on which the builder can now claim the variation is under its alternative submission, namely, pursuant to the 'exceptional circumstances' exception in s38(6)(b) of the DBCA. This provides in effect that a builder is entitled to recover money in respect of a variation if VCAT is satisfied that:
   1. there are exceptional circumstances or that the builder would suffer a significant or exceptional hardship by its failure to comply with the notice requirements in s38; and
   2. it would not be unfair to the building owner for the builder to recover the money.
6. The construction of s38(6)(b) of the DBCA was recently discussed by the Court of Appeal (Niall, Sifris and Walker JJA) in Jolin Nominees Pty Ltd v Daniel Investments (Aust) Pty Ltd [2022] VSCA 209. The Court of Appeal agreed with the associate judge hearing the appeal on a question of law from VCAT, that s38(6)(b)(i) should be interpreted broadly and that 'hardship' is not concerned with difficulties faced by the builder in complying with the notification requirements, but rather the consequences to the builder of the strict enforcement of these requirements. The associate judge also held that the financial position of the builder, and the profit margin on the contract are matters that can be taken into account when determining whether the builder would suffer exceptional hardship.
7. The Court of Appeal further held that:

"That exception [to the stringent terms of s38 (which, in broad terms, protects consumers) in s38(6)(b) (which provides some limited protection to builders)] is designed to protect the builder only in cases of 'significant or exceptional hardship'. This is a high bar, particularly given that the builder is also required to establish that it would not be unfair to the owner for the builder to recover the money. The circumstances in which the exception in s 38(6)(b) operates, and the satisfaction required by VCAT, is not inconsistent with the consumer protection purpose of the legislation. Rather, the exception provides a balance between the protection of the owner and the protection of the builder."[5]

1. In my judgment, the builder has cleared the high bar set by s38(6)(b) of the DBCA in respect of this claim, but only just. My reasons are these:
   1. The sum is not insubstantial in the context of the total payments made to the builder under the Contract, and represents a payment made by the builder to a subcontractor. Accordingly, the builder is out of pocket for the entire sum.
   2. It is not in dispute that the additional work involved excavation and concreting substantially in excess of what had been contemplated based on the soil test report arranged by the owners.
   3. Thus the need for the additional work arose from deficiencies in a report provided by the owners to the builder and the work was directed to be done by the engineer acting on behalf of the owners.
   4. The additional work was essential to ensure the structural integrity of the house, and needed to be done quickly, to avoid undue delay in commencing above ground construction.
   5. Mrs Dib gave evidence that on 11 August 2017 (almost two weeks before the builder issued the variation invoice), the owners were on site and Mr Rifat pointed out an area of the excavations and said 'we need to go deeper' and 'that's going to be a variation because of that'.
   6. As submitted by the builder, the owners have retained the benefit of those works, and do not allege that the works were in any way incomplete or defective.
2. I am satisfied on balance that the factors in (a) and (b) above establish significant hardship and the remaining factors amount to exceptional circumstances. These latter factors also establish no unfairness to the owners.
3. On the adequacy of the evidence of the cost of the additional works, this too is borderline. Certainly, the builder could have provided additional documents (including, for example, all concreting invoices and truck dockets) that may have enabled a reconciliation of what was claimed in the variation invoice, against the allowances in the Contract.
4. However, it was open to the owners to pursue these either as part of discovery or by calling for them during the hearing. In the absence of contrary evidence, I am prepared to take the variation invoice and the associated invoices from the subcontractor Tocco Developments Pty Ltd at face value.
5. I do not consider Mr Rifat's evidence in cross-examination concerning the concrete allowances under the Contract and relied on in the owners' closing submissions, as contrary to what is stated and claimed in the variation invoice and associated sub-contractor invoices. There is no evidence that the invoice is otherwise false or confected.
6. I therefore accept the builder's footings variation claim in the sum of $21,190.02. I note in passing that the owners' unpleaded claim for a refund of the 'balance' of the concrete allowance must be rejected. The incomplete evidence of total concrete supplied relative to allowances precludes any finding of overcharging as alleged.

1. The builder relies on Mr Rifat's evidence to submit that Mr Rifat and Mr Dib came to an oral agreement that the builder would excavate the proposed pool area and construct the necessary pool footings. Mr Dib denies that any such agreement was reached. The builder argues that Mr Rifat's evidence should be preferred.
2. The builder accepts that the pool variation did not comply with s38(3) of the DBCA, so to recover the $12,500 claimed it must satisfy VCAT of the matters in s38(6)(b). It submits that it would suffer significant or exceptional hardship because it carried out the works at its own cost and the builder is a small family-owned business. It says that no unfairness will be visited on the owners, because they received the benefit of the works.
3. In my view, the builder falls short of the high bar set by the exception in s38(6)(b) of the DBCA in respect of the pool variation, for the following reasons:
   1. I agree with the owners that the builder was not under any pressure to proceed with the variation and had ample opportunity to comply with s38 of the DBCA.
   2. In contrast to the instructions from the engineer and evidence of Mrs Dib in relation to the footings variation, the evidence that the owners (or anyone acting on their behalf) requested or were aware of the pool variation work, is equivocal at best.
   3. I am not willing to find that either Mr Rifat or the owners were untruthful in their evidence on the topic, and thus the most likely explanation for their conflicting versions is that there was a misunderstanding over whether the works were agreed.
   4. The consequences of this uncertainty must fall squarely on the builder - it had the statutory obligation and the opportunity to give prior notice and its failure to do so, or to make any contemporaneous written record of the alleged instruction or agreement, is problematic.
   5. I accept the owners' evidence that the company that ultimately installed the pool had to (in effect) duplicate the footings work by the builder, because the builder had not supplied any engineering drawings or certification as to the extent or quality of the builder's footings.
   6. I therefore cannot be satisfied that the are exceptional circumstances or that the builder would suffer a significant hardship.
   7. Further, and in any event, by reason of the matters referred to in (c), (d) and (e) above, in my view it would be unfair to the owner for the builder to recover the $12,500.

Is the builder entitled to both the paid and unpaid amounts under the collateral agreement?

1. Section 40 of the DBCA relevantly provides as follows:

"(2) A builder must not demand or recover or retain under a major domestic building contract of a type listed in column 1 of the Table more than the percentage of the contract price listed in column 2 at the completion of a stage referred to in column 3.

(3) In the case of a major domestic building contract that is not listed in the Table, a builder must not demand or receive any amount or instalment that is not directly related to the progress of the building work being carried out under the contract.

(4) Subsections (2) and (3) do not apply if the parties to a contract agree that it is not to apply and do so in the manner set out in the regulations."

1. The builder submits that the owners are liable under the collateral contract for the $10,000 payable on each of the three frame stages of the build - totalling $30,000. It says that the collateral contract is not void by operation of s40 of the DBCA, because by item 23.2 of the appendix to the Contract and the schedule under that item, the parties agreed to opt out of s40 of the DBCA pursuant to s40(4).
2. In relation to the owners' late submission that s40 also operates to render the builder liable to refund the $50,000 already paid by the owners under the collateral contract, the builder submits that Stephens v Cameron (2012) 65 VR 117 (Stephens v Cameron) precludes a finding to this effect. It argues that s40(2) is a penal provision that does not create a statutory right of recovery (Stephens v Cameron at [80]-[95]).
3. In response to the owners' supplementary written submissions which in effect sought to distinguish Stephens v Cameron, by relying on VCAT's ability to make tailored orders pursuant to s53 of the DBCA, the builder argues that the owners have not made any submissions as to why it would be fair to order a refund of the payments. It says the evidence suggests that it would in fact be unfair to do so, because there is no dispute that:
   1. the builder carried out the works under the collateral contract;
   2. the owners accepted the benefit of those works; and
   3. the owners freely entered into the collateral contract.
4. The owners note that Form 2 of the-then applicable Domestic Building Contracts Regulation 2007 (DBCR) provided for the form in which the parties may agree that ss 40(2)-(3) of the DBCA do not apply, being that adopted in the "Method B" section of the Contract, set out above.
5. The owners submit that what follows from this is that all payments agreed at the date of execution of the Contract to be for the contract works must be contained in a Form 2 table. There is no provision in the DBCA mandated contractual regime for other payments, for the same matters, to be found in a collateral contract. I agree.
6. The effect of the builder's contrary submission seems to be that once the parties 'opt out' of the payment regime under the table in s40(2), their capacity to enter into alternative payment arrangements is at large. In my view, this is contrary both to the plain words of s40(4) and to the broader consumer protection purpose of the DBCA.
7. Section 40(4) provides that ss 40(2) and (3) do not apply if the parties to a contract agree that it is not to apply and do so in the manner set out in the regulations, namely, Form 2 of the then applicable DBCR.
8. Thus, the alternative payment regime agreed in the manner set out in the regulations (being, in this case, "Method B" comprising the table in item 23.2 of the Contract), substitutes for the s40(2) table. It does not open the door to collateral agreements and additional progress payment tables that are clearly outside what is contemplated by the DBCR. I agree with the owners that on a proper construction, the provisions contemplate a single alternative and self-contained payment table or other scheme.
9. Further, accepting the builder's submission would expose homeowners to the very kind of exploitation the DBCA was enacted to prevent, and defeat the protective purpose of the DBCA exemplified by provisions such as ss 38[6] and 40. This would be a startling result, akin to that discussed in Stephens v Cameron.[7]
10. Accordingly, in my view, the collateral contract is void and the builder is not entitled to claim any further payments under that contract, regardless of whether the stages for those payments were reached. I would add that it is clear from the decision of the Court of Appeal in Stephens v Cameron that the builder is also precluded from pursuing a quantum meruit claim that seeks to recover the very payment for work done that the statute forbids.[8]
11. In relation to the owners' claim to recover the $50,000 paid by them under the collateral contract, both parties accept that Stephens v Cameron stands as binding authority for the proposition that s40(2) of the DBCA does not create an independent cause of action to recover payments already made. That leaves the owners' argument that VCAT should make an order pursuant to DBCA s53.
12. There can be no doubt that s53 is sufficiently broad to encompass an order to the effect sought by the owners, and the builder does not contend otherwise. Thus the only question is whether such an order is fair. In my view, such an order would not be fair, essentially for the reasons stated by the builder (but noting my different finding in relation to the builder's quantum meruit claim below).

1. The $50,000 payment under the collateral agreement was for the deposit, ground plumbing and base stages, and I accept that the work done by the builder in relation to those stage effectively exhausted the amount of that payment. The owner's willingness to make those payments (as distinct from the later payments) reinforces that view. I therefore agree that the builder carried out the work covered by those payments and the owners retained the benefit of the payments (subject to the defect claims discussed below).
2. As discussed above, there are two versions of the circumstances in which the collateral contract was proposed and agreed, and I prefer Mrs Dib's version. However, on either version, there is no suggestion that the owners were in any doubt about the effect of the collateral agreement and had agreed to a total price of $1,710,000, which included the $110,000 payable under the collateral contract. The owners are not unsophisticated in matters of business.

Did the builder validly terminate the contract by its notice of 24 September 2018 or otherwise?

1. It is convenient to set out the relevant parts of the builder's submissions on this issue in full, as follows:

"On 8 August 2018 and 29 August 2018, the Builder sent to the Owners a Notice of Intention to Terminate the Contract. On 24 September 2018, the Builder terminated the Contract. The Owners do not submit that the Builder did not comply with the notice requirements of the Contract with respect to termination.

The dispute between the parties is whether the Builder validly terminated in accordance with cl 22.2, or alternatively, at common law, on the basis of the grounds set out in the Notice of Intention to Terminate and Notice of Termination. The Tribunal ought to be comfortably satisfied that the Builder validly terminated the Contract.

First, clauses 22.1 and 22.2 confer a right on the Builder to terminate if the Owners were "unable" or "unwilling" to make a payment required by the Contract; or were late in making payments as required under the contract; or refused to comply with the Contract, and failed to remedy any such breach within 14 days of notice.

The Owners further expressed an unwillingness to render payments for the progress stages generally (not just the frame stages) upon completion of that stage or as and when such progress claims fell due and payable. On 30 April 2018, prior to the Builder issuing the first and second floor frame stage progress claims, Mrs Dib emailed the Builder stating: "...There will be no more payment until lock up stage...". At the time that email was sent, the Builder had only issued progress claims for the first 4 stages (Deposit, Ground Plumbing Stage, Base Stage and Frame Stage Ground Floor). There were to be 3 further stages before the lock-up stage was reached, and $160,000 payable upon completion of each of those stages (totalling $480,000).

1. I have omitted from the extract above references to the owners' failure to pay the progress payments alleged due for the first and second floor frame stages, because of my finding above that those stages were not complete. Those payments were therefore not due at the time the notices were sent.
2. I also disregard the builder's reliance on the owner's alleged 'obstructing, interfering and/or hindering the carrying out of the Works'. I am not persuaded that the owners' frequent attendances on site obstructed, interfered with or hindered the carrying out of the works as alleged.
3. In any event, there is no evidence of any further alleged breaches of this nature after the builder served its notices of intention to terminate and I note that all of the instances relied on in the notice of termination dated 24 September 2018 pre-date the notices of intention to terminate. Thus, I cannot be satisfied that there was a failure to remedy that breach.
4. However, the reliance on the ground in clause 22.1 that the owner 'indicated to the Builder that the owner is ...unwilling to make any payment required under this Contract' is in a different category.
5. The descriptions of the relevant breach in the notices of intention to terminate are not as clear as they could be. However, I am satisfied that they encompass the owners' asserted intention not to make any further payments beyond the date when they might otherwise become due. In particular, the notices refer expressly to the owners purporting to withhold payments pending the receipt of an expert's report.
6. Further, I accept the builder's submission that the owners' assertion that they would not make any further payments until the lock up stage, evinces an intention to be bound only on substantially different terms to those contained in the Contract. It essentially amounts to the owners saying that three payments totalling $480,000 would be withheld until the lock up stage payment (a further $160,000) became due.
7. I do not accept Mrs Dib's evidence that the assertion in the 30 April 2018 email was a bluff. In my view, this evidence was either a recent reconstruction or recent invention. The email making the relevant assertions is set out in full in her witness statement, without any suggestion that its contents did not reflect her intention at the time, or other qualification. She also makes an assertion to similar effect in an email to the builder dated 7 May 2018.
8. The evidence of the email being a bluff is also contradicted by Mr Dib's evidence. When asked about an email sent to him on 16 August 2018 (around the time the notices of intention to terminate were sent), he accepted that he had said to the builder the owners would not be making any further payments, as he believed the payments made to date were sufficient.
9. The owners made only brief submissions on this issue, which distil to assertions that:
   1. the builder's termination argument is based on it allegedly completing the first and second floor frame stages, which were never reached; and
   2. the builder's entitlement to termination requires that the builder not be in substantial breach.
10. As to the first of these submissions, as stated above, I am satisfied that the builder had grounds for termination other than the owner's failure to pay for the first and second floor frame stages.
11. As to the second, while there were defects and incomplete works, the dispute in relation to those defects and the builder's competing claims for payment, was ongoing at the time the builder terminated the Contract. I am unable to find that the builder's conduct in relation to those matters amounted to a substantial breach of the Contract at any time before the dispute was overtaken by the builder's termination of the Contract.
12. I am therefore satisfied that the builder validly terminated the Contract by notice dated 24 September 2018. This termination took effect well before the owners took any steps that might be said to have evinced an intention to terminate based on any breaches by the builder, as listed in their solicitor's letter to the builder dated 29 August 2018 (or otherwise).

Is the builder entitled to any payments on a quantum meruit basis?

1. The builder submits that if I find (as I do) that it is not contractually entitled to the unpaid frame stage payments, it should recover $365,746.78 on a quantum meruit basis. It says this represents the reasonable value of the work performed to the date of termination, after deducting the $610,000 paid by the owners. It says the sum is calculated by reference to the invoices rendered by the builder, including for the two variations, which invoices "represent the reasonable cost to the Builder of the work performed", including a builder's margin of 15%.
2. The owners submit that any amounts owing to the builder on a quantum meruit basis must be calculated after judgment, when the builder has led full evidence concerning its terms of settlement with the building surveyor, which covers the same damage claimed in this proceeding.
3. VCAT's power in domestic building disputes to order recovery based the equitable principle of quantum meruit derives from s53(2)(b)(iii) of the DBCA, which provides that VCAT may order the payment of a sum of money by way of restitution. This provision also serves as a useful reminder that the principle enlivens an obligation to pay fair and just compensation for a benefit which has been accepted,[9] not the cost.
4. Thus, contrary to the builder's submission, the focus is directed not towards the costs incurred by the builder, but to the benefit to the owners for which the builder is entitled to be reimbursed. It probably also follows from this that any recovery by the builder from the RBS is irrelevant to the calculation of the builder's quantum meruit claim. However, given the view I have reached on the value of that claim below, it is not necessary for me to reach a concluded view on this.
5. The correct approach to calculating that benefit is discussed in Mann v Paterson Constructions Pty Ltd[10] (Mann v Paterson) in which the High Court held as follows (citations omitted):[11]

"Equally, where the claim is founded on an obligation to pay for services rendered under a contract which is unenforceable, it has been held that '[o]rdinarily' the measure of restitution 'will correspond to the fair value of the benefit provided (eg remuneration calculated at a reasonable rate for work actually done or the fair market value of material supplied)'. Prices stated in the contract are regarded as relevant, but they remain 'evidence only, on the question of amount'. That approach is informed by a legal concern that direct application of the contract price would risk incoherence with the policy of the law rendering the contract unenforceable, although this will always require consideration of that policy."

1. Quantifying a builder's entitlement to a quantum meruit is not a precise exercise. However, it is not simply a matter of plucking a figure out of the air.[12] Further, the quantification exercise in this case must have regard to the defects in the builder's work. The presence of defective building work is a relevant factor in assessing the 'benefit' to the owner of that work, where the defects render the work to be less beneficial. Accordingly, in assessing a quantum meruit, it is appropriate to take into account any costs reasonably incurred (or to be incurred) by an owner in abating defective work carried out by a contractor.[13]
2. As noted above, the parties provided very limited assistance in determining how I should approach the calculation of the builder's quantum meruit claim. The builder in substance submits that I should simply adopt the value of its unpaid invoices. I am unwilling to do that because:
   1. as Mann v Paterson makes clear, these are relevant but not decisive to the quantification process;
   2. in this case, given the round and equal amounts of the relevant progress payments, I am not satisfied that these represented a genuine estimate of the work contemplated by each stage; and
   3. the nature and extent of the defects in the base stage and each of the frame stages discussed below also undermines any presumption that the invoiced amounts represent the value to the owners of the work.
3. The owners suggest that the appropriate course is to defer a decision on the quantum meruit claim until after the other issues are resolved and the parties can make further submissions, including in relation to the relevance (if any) of the $100,000 recovered by the builder from the RBS (noting also the builder's assertion that this barely covered the costs of its proceeding against the RBS). I am also unwilling to do this. In my view, it is important to minimise any further delay and bring finality to this proceeding.
4. I therefore propose to finally determine the builder's quantum meruit claim doing the best I can based on the evidence I have. Further, the orders I will make as a consequence of that determination, also represent what I consider to be fair orders to resolve this dispute, noting that VCAT's power to make these orders are a species of the broader power in s53(1) of the DBCA to make any orders it considers fair to resolve a domestic building dispute. In making the orders in relation to the builder's quantum meruit claim, I should therefore be taken to be exercising my broader power under that section.
5. In determining what order I consider fair, I have not overlooked my finding that it was the builder who validly terminated the Contract. This should not be seen as signifying that the builder was in any sense the 'innocent party' in relation to the ending of the Contract. At the time of the builder's termination, the owners had serious concerns about the quality of the builders' workmanship, and the expert evidence establishes that those concern were largely justified. Had the builder not terminated when it did, it is likely that the owners would not have been far behind.
6. Against this background, in my view the benefit to the owners of the works undertaken by the builder and not paid for at the time of Contract termination is nil, on the basis that:
   1. the original Contract price was $1,710,000;
   2. there should be deducted from this both the $610,000 paid by the owners and the $30,000 claimed but not paid under the collateral agreement, which the builder is not entitled to recover on a quantum meruit basis, leaving $1,070,000;
   3. the contract price under the owner's replacement contract with their new builder Marbuilt Pty Ltd (Marbuilt) (not including the costs of rectifying defects and variations) was $1,040,000;
   4. the works for which the builder is seeking payment included a number of substantial defects as discussed below, and although the owners will recover what I have assessed as the cost of rectifying those defects, the delay and unrecoverable costs suffered by the owners as a result of the builder's defective work would comfortably equate to the $30,000 difference in the amounts in (b) and (c) above.
7. It follows from my findings above that, if the owners could otherwise establish any entitlement to be repaid the progress payments for the base and ground floor stages (which is far from clear), I would be satisfied that they had received a benefit from the works equivalent to the value of those progress payments (including the $50,000 in payments under the collateral contract). Thus, those sums would be payable to the builder under its quantum meruit claim.

1. The builder provided reports and evidence from two experts, Trevor Jeffrey and Douglas Turnbull. Mr Jeffrey is a quantity surveyor, project manager and building practitioner and consultant. He is the principle of Construction & Asset Management Consultants, and has been providing consulting and expert witness services since August 2020. He has had various roles in the building industry since 1976.
2. Mr Jeffrey provided a total of four reports, dated respectively 24 September 2018, 6 November 2019, 29 March 2021 and 11 July 2022. His substantive report is the one dated 29 March 2021 and he issued a revised version of this report dated 11 July 2022 (in addition to the supplementary report also dated that day).
3. Mr Turnbull is a consulting structural engineer with 40 years of experience in that profession. Mr Turnbull produced a single report dated 14 April 2020 (ATB 200-227), following an inspection of the house on 18 March 2020 in the company of Mr Jeffrey and Mr Rifat.
4. The owners provided expert reports and evidence from three sources, Ken Ryan, Beattie Consulting Engineers Pty Ltd and ELS. Mr Ryan has been a building consultant specialising in the inspection of buildings and structure and defect assessment since 2011. He has been in the building industry in some form since 1966. He is a registered builder, unlimited domestic and a licenced building inspector with the Victorian Building Authority (VBA). In his 58 years in the industry, he has built or managed the construction of over 10,000 houses, as well as doing rectification and renovation works.
5. Mr Ryan prepared a total of five reports under the instructions of the owners. His first report is dated 25 March 2018 (OTB79-97) and was provided while the Contract was still on foot, primarily to inform the owners' ongoing discussions with the builder about defects and incomplete work. Mr Ryan's second report is dated 6 August 2018 and was prepared following a further inspection on 3 August 2018. In the report, Mr Ryan notes that he had been advised that MBS had approved the frame stage, and the report comprises his assessment of the defects and incomplete works at that time.
6. Mr Ryan's substantive report prepared for the purposes of this proceeding is dated 24 October 2019. He prepared a supplementary report dated 12 July 2022, primarily for the purpose of attaching a Scott schedule. A short time later Mr Ryan provided a one-page note titled 'Structural summary of costs clarification' dated 18 July 2022 (OTB 98).
7. The evidence established that the reports by Beattie Consulting were largely prepared by Mr Grounds, under the supervision of the principle of Beattie Consulting, Andrew Beattie. Mr Beattie also accompanied Mr Grounds on their first inspection on 29 October 2018 and both gave evidence. Mr Beattie is a consulting structural and civil engineer with a Bachelor of Engineering and other relevant qualifications and 27 years of experience in the industry. Mr Grounds is also a structural engineer.
8. Beattie Consulting prepared an initial structural inspection report dated 5 December 2018 (OTB160-163), and then a report entitled "Structural Defect Report" dated 18 June 2019 (OTB164-171). Mr Grounds later prepared a supplementary report to the 18 June 2019 report, comprising a table dated 24 July 2022 that categorised the 53 items listed in the earlier reports by reference to the various stages under the Contract (OTB287-283).
9. Mr Beattie explained in his evidence that he is the director of Beattie Consulting Engineers and Mr Grounds is an employee of his firm. They conducted the inspection of the works together. Mr Grounds prepared the report and Mr Beattie signed off on the structural report dated 18 June. Mr Grounds added that both he and Mr Beattie were present for the first inspection in relation to the report dated 29 October 2018, but for the report dated 2 May 2019, Mr Grounds conducted the inspection on his own.
10. The experts named above gave evidence concurrently, in two groups. The first group comprised all of the experts (Beattie, Grounds, Turnbull, Jeffrey and Ryan), but was primarily concerned with the structural engineering evidence (Beattie, Grounds and Turnbull), with Mr Jeffrey and Mr Ryan making only occasional contributions. The second group comprised Mr Jeffrey and Mr Ryan, dealing primarily with building defects and incomplete work and associated costings.
11. To my observation, all of these experts were appropriately qualified and had considerable relevant experience. They made appropriate concessions and generally avoided advocating on behalf of their respective clients, although their reports (and therefore their evidence) tended to view their own client's position less critically, in a way that is typical of reports of this kind. Their evidence was helpful, as far as it went.

1. ELS produced a report dated 23 May 2019 providing results of a high-resolution radar scan of four brick columns and a section of wall, to identify the presence of any reinforcement bars. Its findings were that:

"In the column towards the North West (Column 1) no reinforcements were observed during the high-resolution concrete scanning. In the other 3 columns towards the North East (Column 2, 3 and 4), reinforcement was observed but only to approx. 1.6 m above the ground level. In the wall (photo 2) reinforcement was observed only in the top half of wall. No reinforcement was observed in the 2nd half down to the ground level."

1. Evidence in relation to the ELS report was given by Dr Ragat Taneja. Dr Taneja said that he was no longer employed by ELS. He also said that he did not do the work on site, which was done by ELS's site technicians and he could not comment on their competencies or what they did. They reported their findings to Dr Taneja and he put the findings into the report.
2. The builder submits that the failure by the owners to call any of the technicians deprived it of the opportunity to test any of the opinions contained in the ELS report, and it would therefore be unfair to the builder for me to afford weight to the ELS report.
3. Despite Dr Taneja's equivocation in relation to the report, I have no reason to doubt that it accurately records the findings of the equipment used on site. Further, it is unlikely that having any one or more of the technicians that attended on site give evidence, would have added materially to the quality of the evidence.
4. In particular, it is wrong to talk of the technicians having 'opinions' that the builder could have tested. What the report demonstrates is that the role of the technicians was essentially to record where they deployed the equipment and their observations of the images generated by the equipment. All of this is set out in the ELS report, by a combination of photographs, narrative descriptions of where the equipment was deployed and records of observations from the images generated by the equipment.
5. Accordingly, as I see it, there is no point at which the technicians undertook any qualitative assessment that might be usefully tested in cross-examination. At most, they might have been asked about how and where they used the equipment and whether it appeared to be functioning correctly. However, in my view, these matters are adequately covered in the report, and I am not persuaded that the failure to call the technicians justifies excluding the ELS report.[14]
6. I am also not persuaded that there are other reasons for excluding the findings in the ELS report. Notably, Dr Taneja adequately responded to the suggestion in cross-examination that findings might have been affected by the clay bricks. It was clear that the reference in the report to the absorption of radar waves by clay, related to the water content of clay layers underground, not dried out clay bricks.
7. Finally, there was no direct evidence that contradicted the ELS findings. Mr Rifat's evidence that he saw reinforcing going into some of the columns was unconvincing. And even if he did, this could be the reinforcing detected by ELS up to 1.6 metres in three of the columns. More importantly, the builder did not call the subcontractor who actually constructed the affected columns and wall, and who would have been in the best position to confirm whether or not the specified reinforcing was included.

How is the amount of loss and damage to be assessed?

1. The owners' claims for loss and damage depend on them first establishing that particular defects or incomplete work were not in conformity with the Contract and thus gave rise to a breach of the Contract. The 'ruling principle' with respect to damages at common law for breach of contract is that a party who has sustained a loss is to be placed in the same situation, so far as money can do it, as if the contract had been performed.[15]
2. In the context of defective building work occasioning loss in breach of a contractual warranty such as that provided in s8(b) of the DBCA, the measure of damages is not limited to diminution in value, but extends to the costs of rectification of the defective work, so as to give the promisee the equivalent of a building which is substantially in accordance with the contract.[16] That general rule is subject to the qualification that the undertaking of the work necessary to produce conformity must be a reasonable course to adopt.
3. These principles are largely derived from the decision of the High Court in Bellgrove v Eldridge.[17] However, in the more recent decision of Tabcorp Holdings Ltd v Bowen Investments Pty Ltd[18] (Tabcorp), the High Court emphasised that the starting point is the innocent party's strict contractual entitlement and that the 'reasonableness qualification' has limits. The court observed that:

"The Tenant's submission rested on a loose principle of 'reasonableness' which would radically undercut the bargain which the innocent party had contracted for and make it very difficult to determine in any particular case on what basis damages would be assessed. That principle should not be accepted".[19]

1. In his report dated 14 April 2020, Mr Turnbull states (at 10.5 and 10.6) as follows:

"On only one item does Beattie express concerns of structural inadequacy, being the support of the ground floor steel beam FB10. Except for this item Beattie lists items of non-compliance with the documents, but does not offer an opinion as to whether such non-compliance also constitutes 'structural inadequacy.' In his summary on Page 3, Beattie states 'The defects identified will require rectifiction [sic] by the Builder and / or approval from the project design engineer that the build structure is structurally sound.'

It is my opinion that many of the Items 1-53 listed by Beattie were items for which 'standard details' shown on the MTO drawings were referenced, and related to arrangements which if checked by the project design engineers for the particular details would have been found to be structurally satisfactory. This includes details where 8mm plates were adopted instead of 10mm plates, M16 bolts instead of M20 bolts, and welding on one side of a connection instead of both sides."

1. In closing submissions, the owners argued in effect that it is wrong to suggest that the builder can elect to depart from the plans and specifications, providing that that the result was 'structurally satisfactory'. They submitted that to do so is a breach of the implied warranty in s8(a) of the DBCA and ignores the builder's obligation to do work that was apt to conform with the plans as specifications under the Contract, as discussed in Tabcorp.
2. I agree. The decision in Tabcorp reinforces that a party's contractual bargain is paramount, and the test of unreasonableness is only to be satisfied by fairly exceptional circumstances,[20] such as those in Ruxley Electronics & Construction Ltd v Forsyth (Ruxley).[21] In that case, the House of Lords held that the cost of reconstruction of an entire swimming pool that was less that the contracted depth, but still perfectly safe to dive into, was 'wholly disproportionate' to the disadvantage of having a marginally shallower pool, and it 'would therefore be unreasonable to carry out the works'.[22]
3. But it is notable that the High Court in Tabcorp appeared to have reservations about the application of the 'reasonableness principle' even on the facts in Ruxley. It held:

"The result at which their Lordships arrived [in Ruxley] is on one view inconsistent with [the principles in Radford v De Froberville [1977] 1 WLR 1262 at 1270], but for present purposes it is sufficient to say that the facts of Ruxley Electronics & Construction v Forsyth, which their Lordships evidently saw as quite exceptional, are plainly distinguishable from those of the present appeal."[23]

1. Applying those principles, I reject the proposition implicit in Mr Turnbull's assessment extracted above, that the owners were not entitled to insist on steel plates, bolts, welding and the like as specified in the Contract, if what the builder used instead was shown to be 'structurally sufficient'.
2. It is neither a requirement under the Contract (absent a variation) nor reasonable, for the owners to arrange retrospectively for the project design engineers to assess disconformities with the Contract specifications for structural adequacy. If the builder wished to depart materially from the specifications under the Contract, the process for doing so was to seek a variation, not (to paraphrase Tabcorp) to arrogantly impose a form of economic rationalism on the unwilling owners.[24]
3. Similarly, it is no defence to defects or disconformities in the works for the builders to assert that they were undertaken in advance of any of the stages for which the builder was seeking payment. If the owners incurred additional costs in rectifying the builder's works or bringing them into conformity with the Contract, they are entitled to claim those costs as part of their damages.
4. The builder's submission to the contrary[25] is unsupported by authority and is unsustainable. Taken to its logical conclusion, it would allow a builder to depart from its contractual warranties with impunity, providing that the Contract ended before an owner's obligation to pay for those particular works had crystallised.
5. Subject to agreed variations, the builder was obliged to perform all works undertaken by it in accordance with the Contract, regardless of what stage the works fell into. The "Method B" staging under the Contract is a mechanism for scheduling progress payments, not a basis for compartmentalising contractual compliance.
6. This analysis is reinforced by the builder's alternative quantum meruit claim. It is nonsensical to assert that the builder can claim payment for the value of work performed, while disregarding defects or non-conformities in that work.
7. However, the discussion above does not apply to incomplete works (as distinct from defective or non-conforming works), that would in the ordinary course of the build be completed in a later stage. If the evidence establishes that a particular item of work was incomplete because it would ordinarily be completed at, for example, the lock-up stage (being a stage that had not been reached before Contract termination), the builder cannot be held accountable for the cost of completing that work.
8. Thus, the owners' damages for defects, non-conforming and incomplete work are to be assessed as the reasonable cost of bringing the built form of the house as at the date of Contract termination, substantially into conformity with the plans and specifications under the Contract. And 'substantially' in this context does not equate to 'structural sufficiency'. It means into the form the owners contracted for, unless there are exceptional circumstances.
9. Exceptional circumstances would include where the cost of rectification is wholly disproportionate to the disadvantage occasioned by the non-conforming works. Even then, the owners would still be entitled to damages assessed as the diminution of value of the non-conforming structure. However, I am satisfied that none of the rectification works undertaken by the owners attract the 'exceptional circumstances' qualification.
10. I am satisfied that I should assess the owner's damages for defects and non-conforming works by reference to the items as listed in the schedule headed "Costs Scott Schedule - Issued 17 February 2023 by the Applicant", and I do so as follows:

• 1.01 Alterations to architectural drawings. I am satisfied for the reasons above that the alterations were required. Further, I agree with Mr Ryan that alterations to the architectural drawings were necessitated by the builder's non-conforming works, so the cost of these are properly part of the owner's damages, notwithstanding that the owners were responsible for providing the architectural drawings. However, it is difficult to assess with any precision that cost of the drawing alterations, and I will therefore assess this item as the mid-point between the two estimates: $3,125
  • 1.02 Building permit fees. I accept Mr Ryan's evidence that building permit fees would be incurred at least in relation to the redesign of the structural columns necessitated by the builder's failure to incorporate adequate steel reinforcing into those columns. Mr Jeffrey has not provided an estimate for this fee, so I accept that provided by Mr Ryan: $3,000
  • 1.03 Sewer rectification works. I agree with Mr Jeffrey's observations in relation to this item. Further, Mr Ryan effectively (and rightly) conceded in cross-examination that any sewer rectification works were not the builder's responsibility: $0.00

Total assessed: $6,125, plus 5% contingency ($306.25) equals $6,431.25, plus 15% margin ($964.59) equals $7295.94, plus 10% GST ($729.59) equals: $8,125.53.

Item 2.0 Brick pier and retaining wall rectification works

Although the experts disagreed on some aspects of whether the brick piers and walls conformed to the architectural drawings, the costs assessed related only to the works necessitated by the failure by the builder to install adequate concrete reinforcing, which essentially required the manufacture and installation of additional concrete (in respect of the retaining wall) and steel frames (in respect of the piers). For the reasons above, and contrary to Mr Jeffrey's opinion, I am satisfied that the owners should be compensated for the cost of this work. Mr Jeffrey accepted that Mr Ryan's pricing for this work was reasonable.

In my view, Mr Ryan's evidence on this defect is to be preferred. Mr Ryan fully analyses the specification and identifies that proper drainage of the relevant areas required adequate falls in the substrate and the installation of box gutters consistently with the falls, which had not been provided by the builder. Mr Jeffrey's evidence was that this was not a defect because falls were normally provided by a screed, and the time for the installation of this had not arrived before termination. However, Mr Jeffrey did not address the fact that the Contract plans and specifications did not provide for screed. Further, I accept Mr Ryan's evidence in cross-examination, to the effect that the weight of the screed rendered this an unsuitable mechanism for creating fall. Mr Jeffrey provided an estimate for the cost of screed, but not for the cost of reconstructing the terrace floors. I therefore accept the estimate provided by Mr Ryan.

Item 4.0 Kitchen dining and living floor levels

In my view, Mr Ryan's evidence on this item is again to be preferred. Mr Jeffrey asserts that he did not observe the defect and that, in any event, it would be part of standard building practice to correct the floor finish at a later stage of the construction. However, the substance of Mr Ryan's evidence was that the 'as built' levels were outside allowable tolerances, and therefore the owner should not be obliged to cover the cost of bring the levels back in to tolerance. Further, it is clear from the expert reports that Mr Ryan's inspection and testing to identify the defect was extensive, whereas Mr Jeffrey simply states that 'I did not observe the existence of this purported defect', without disclosing what (if any) testing he did to support the observation. Having accepted Mr Ryan's evidence in relation to the need for this work to bring the floors into conformity with the Contract, I will also accept his estimate of the cost of doing so. I note in any event that Mr Jeffrey's estimate 'should it be proven that the floor level is out of tolerances and the builder is responsible for rectification within the "Frame Stage"', was only marginally lower.

Item 5.0 Defective carport piers and retaining wall

My findings in relation to Item 2.0 above apply equally to this item.

My findings in relation to Item 4.0 apply equally to this item.

The individual items of alleged incomplete, non-conforming or defective work under this item description are diverse and numerous. I accept that some of these as identified in Mr Ryan's earlier reports were later rectified by the builder (for example, installing or tightening hoop iron straps) and others were (consistently with Mr Jeffrey's report) work that was incomplete at frame stage, but would ordinarily have been completed at a later stage (for example, waterproofing). However, ultimately Mr Ryan limits his cost assessment to the structural steel rectification works identified in the Beattie Consulting report date 18 June 2019, and his assessment of cost relies on an invoice rendered by the new builder for that work totalling $16,500, including GST.

Mr Ryan was cross-examined on his assessment that this amount was reasonable, having regard to the nature and extent of the work involved in rectifying defects in the steel work, and his extensive experience in these matters. I found Mr Ryan's evidence on this issue to be persuasive and am satisfied that his assessment should be accepted. In my view, Mr Jeffrey's more guarded approach of only accepting the Castanga Steel invoices did not adequately account for all of the logistical and ancillary work that would have been required to facilitate the welding by Castanga Steel, as discussed in Mr Ryan's reports and evidence. Mr Jeffrey's approach of not accounting for this in the absence of full scope of works, did not make sufficient allowance for the evidence constituted by the Marbuilt invoice, the supporting evidence as to what work this comprised[26] and the capacity of experienced experts to express an opinion about the reasonableness of the cost.

These are in a similar category to the items in Item 7.0 above, and given the sums involved, do not justify closer analysis. I accept Mr Ryan's assessment.

I agree with Mr Jeffrey that there is insufficient support in Mr Ryan's reports for this item for me to accept Mr Ryan's assessment and it was not the subject of oral evidence.

The evidence establishes that there was a colour variation in the mortar used in these walls, and that rendering of these walls was undertaken to rectify this defect. Mr Jeffrey's evidence that rendering would normally be undertaken as part of the lock-up stage overlooks the fact that the rendering was necessitated by the defective work. However, I accept Mr Jeffrey's evidence that the damage should be assessed as the cost of the rendering.

Items 12.0 and 13.0 Rectify damaged concrete paving and soil removal

I accept the evidence of Mr Jeffrey in relation to these items and Mr Ryan again conceded in cross-examination (in effect) that these were not items that would fall for rectification by the builder at any stage before the Contract was terminated.

Mr Ryan's evidence on these items was to the effect that the Contract (by way of the engineering drawings) specified 'TecBeams' and, while the builder installed these for the areas supporting the first-floor terrace, it used a different product ('SmartJoists') for the remaining areas. Mr Ryan assessed the cost to the owners of this non-conforming product as the difference in price between TecBeams and SmartJoists ($7,107).

Mr Jeffrey's evidence was that the SmartJoists were not non-conforming because builder had the right under the special condition 12 of the Contract to replace items of a similar standard when specified materials are not available within the required timeframe, and that the SmartJoists were equivalent. The evidence concerning the unavailability of the TecBeams product and thus the engagement of special condition 12 of the Contract, is mixed. On the one hand, it seems at least some of the TecBeams product was available and was used for the first-floor and none of the contemporaneous emails refer to the TecBeams being unavailable. On the other hand, it was not put to either Mr Petrovski or Mr Rifat that TecBeams could have been supplied to the other areas, but the builder nevertheless elected to install the SmartJoists as part of (for example) a cost reduction exercise.

On balance, I am not prepared to find that the use of the SmartJoists was a cost-reduction exercise. It follows that I agree with Mr Jeffrey that special condition 12 was engaged in the case of this item and the SmartJoists were therefore not a non-conforming product.

1. Based on the analysis above, I assess the total damages payable by the builder to the owners for defective and non-conforming work as $113,918.53.
2. There was something of a disconnect between the evidence in relation to the owners' loss and damage for defects, and the particulars and submissions on this subject. The evidence of the experts in both their reports and their oral evidence as discussed above, was extensive. However, in written submissions and, to some extent, oral submissions, the owners focus instead on the deed of variation between the owners and Marbuilt dated 30 April 2020 (deed of variation).
3. The deed of variation purports to constitute a variation to the owners' contract with Marbuilt, to cover the cost of Marbuilt rectifying defects in the works existing at the time Marbuilt took over the build. The owners submit that the $251,850 payable by them under deed of variation (after deducting $11,616 for the concrete cross over) therefore reflects their actual loss and damage.
4. I reject this submission essentially for the reasons submitted by the builder. In particular:
   1. it is clear that the deed of variation includes variations for items that were never part of the Contract with the builder;
   2. it is impossible to discern from the deed of variation how much has been allocated to each defect or non-conforming work, and thus exclude items (such as those discussed above) that I have found were not compensable; and
   3. no evidence was adduced from Marbuilt or other party to verify the calculations underpinning the deed of variation;
5. However, I do not accept the builder's submission to the effect that I can therefore ignore the expert evidence on costs, because the owners' case on the quantum stands or falls on the evidence constituted by the deed of variation. In my view, the owners did not disclaim reliance on the expert evidence of cost in support of their damages claim, and I am satisfied that this evidence provides a more than sufficient basis for assessing their damages.

What entitlement does the builder have to compensation for loss of profit?

1. The builder submits that, had it not terminated the Contract by reason of the owners' breaches, it would have profited on the completion of the works in the sum of $114,780. This sum is based on a 15% builder's margin, which the builder notes Mr Ryan considered a reasonable margin.
2. The owners argue that the builder has not discharged its burden of showing that the project was profitable. They say this involves more than nominating a percentage of the Contract price. They further argue that:
   1. the Contract was not a cost-plus contract, so the prospect of a profit depended entirely on the builder's estimates of costs, which the evidence suggested were not reliable;
   2. at the time of the works, the difficulties confronting builders in Victoria in completing works for less than the contract price, were notorious;
   3. there was no evidence that the builder was tracking its estimated cost against actual costs at the time of Contract termination; and
   4. the nature and extent of the defects was such that the cost to the builder of rectification was likely to absorb any profit.
3. In my view, the owners' submissions should be accepted. On the basis of my calculation of the cost of the defects alone, it is likely that any profit the builder might otherwise have made would have dissipated in covering the costs of rectification. To this can be added the value of the pool variation, which I have found was not recoverable.

What entitlement do the owners have to compensation for rental expenses?

1. My finding above that the Contract was validly terminated by the builder and not the owners, essentially disposes of this claim. To the extent that the owners submit that they were nevertheless entitled to claim rental expenses as part of their loss and damage for the defects, I reject that claim.
2. The extra time that may have been taken in engaging Marbuilt as a new builder and the additional time required by that builder to complete the works is not evidence of any delay in completion that may have been caused by the defects.
3. Among other things, contrary to the owners' submissions, the two contracts did not ultimately involve the same works, having regard to the variations for (for example) hydronic heating under the Marbuilt contract. In any event, there was no evidence as to other factors that may have affected the time allowed under the Marbuilt contract, such as how many workers they had on site.
4. In my view, for the owners to succeed on this claim, it would have been necessary for them to adduce evidence that:
   1. additional out-of-scope works were required to rectify each of the defects, and the nature and extent of those works; and
   2. those works would have added to the overall time to complete, and could not have been undertaken while the in-scope works were continuing.
5. While I accept that it is likely that such evidence could have been adduced, I am not prepared to speculate about the length of any delay that might have thereby been established. The owners' claim for rental cost must be rejected.

[1] [2012] VSCA 174

[5] Jolin Nominees Pty Ltd v Daniel Investments (Aust) Pty Ltd [2022] VSCA 209 at [49]

[6] Jolin Nominees Pty Ltd v Daniel Investments (Aust) Pty Ltd [2022] VSCA 209 at [48]

[8] At [96], per Kyrou, McLeish and Niall JA

[9] Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 at 256

[10] [2019] HCA 32

[12] Julian Bailey, Construction Law (3rd edition, LPP) at [6.213]

[14] Noting for this purpose that the Tribunal is not bound by the rules of evidence: s98(1)(a) of the VCAT Act

[15] Robinson v Harman [1848] EngR 135; (1848) 1 Exch 850, 855; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272, 286 [13]

[16] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272, 287 [15]; Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613, 617

[17] [1954] HCA 36; (1954) 90 CLR 613

[18] [2009] HCA 8; (2009) 236 CLR 272

[25] Builder's written submissions at [81]

[26] Notably the schedule at page 749 of the owners' tribunal book