It follows that the assessment of the sum due from the owner to the builder on the basis that the owner's repudiation of the contract was accepted by the builder cannot stand. The orders of the tribunal must be set aside and the proceeding remitted to the Tribunal for a further hearing and determination in accordance with these reasons...[4]

1. By a Minute of Proposed Consent Orders, the parties agreed that the remitted proceeding, insofar as it related to the question of damages, was to be determined solely by written submissions without the need for a hearing or further evidence. Consequently, orders were made by the Tribunal that, pursuant to s 100(2) of the Victorian Civil and Administrative Tribunal Act 1998, the proceeding, as it related to the question of damages, was to be determined 'on the papers' without any physical appearance by the parties or their representatives or witnesses. In accordance with that order, written submissions were filed by both parties to which I have regard. In addition to those submissions, I have had regard to the evidence given in the hearing before the Tribunal and in particular, the expert reports of Mr Johnson, the building consultant engaged by the Builder and Mr Rosier, the quantity surveyor engaged by the Owners. Both of these experts gave evidence, principally in the form of their written reports, as to the cost of completing the building works ('the Works').

1. The Owners claim $169,622.29, made up as follows:
   • (a) $130,131.05, being the costs of rectification and completion;
   • (b) Interest in the amount of $34,491.24; and
   • (c) Loss of amenity in the amount of $5,000.
2. The amount claimed for the cost of rectification and completion ($130,131.05) is made up as follows:

1. As indicated above, the Owners claim is premised on a finding that the Contract was lawfully terminated by them pursuant to clause 20 of the Contract. That clause states, in part:

20.4 If the Owner terminates this contract in accordance with this Clause 20, the Owner may then engage another builder to complete the Works; and:

• if the reasonable cost to complete the Works exceeds the unpaid balance of the Contract Price, then the excess amount shall be a debt due and payable by the Builder to the Owner; OR
• if the reasonable cost to complete the Works is less than the unpaid balance of the Contract Price, then the remaining amount of the unpaid balance shall be a debt due and payable by the Owner to the Builder.

1. The amount claimed by the Owners for the cost of rectification and completion is said to have been calculated in accordance with the formula set out under Clause 20.4 of the Contract.
2. The Builder disputes the amount claimed by the Owners in respect of the cost of completion. In addition, it also disputes that the Owners have any entitlement to interest or compensation for loss of amenity.
3. In that regard, the evidence of Mr Johnson, as to the cost of completion, differs from that of Mr Rosier. Mr Johnson assessed the cost of an alternative builder completing the Works to be $222,203.98.[7] By comparison, Mr Rosier assessed the cost of completion to be $286,664.58, being a difference of $64,460.06. Otherwise, the Builder does not dispute the Owners' contention that the unpaid contract price is $224,000. Therefore, if Mr Johnson's cost estimate was accepted, the cost of rectification and completion would be $289,670.45, leaving a cost overrun of $65,670.45, compared with the original Contract price. Although not expressly stated in the closing submissions filed by the Builder, it would appear that this amount of cost overrun is conceded.
4. This is despite the fact that in the Builder's written submissions dated 3 November 2016, the Builder states that the Owners were under a duty to mitigate their losses in regard to both defects and completion costs and have failed to do so. It is not clear to me whether this submission is advanced in order to impugn any entitlement under Clause 20.4 of the Contract or whether the submission is directed towards the Owners' claim for interest and loss of amenity. In essence, the submission is left hanging as it is not tied to the Owners' claim for the cost overrun in order to rectify and complete the Works.
5. In my view, the correct approach, having regard to the findings made by the Supreme Court in the appeal proceeding, is to adopt the formula set out in Clause 20.4 of the Contract in order to calculate any entitlement for cost overrun. This would entail assessing the cost of completion based upon what an alternative builder would charge, rather than based upon what it would have cost the Builder to complete the Works, less any amount left to be paid under the Contract. That is the approach that I will adopt in assessing the Owners' claim for damages for the cost of completion.

Objection to Mr Johnson's expert opinion evidence

1. The Owners submit that the cost estimates of Mr Rosier should be preferred over those of Mr Johnson. Indeed, the Owners go one step further and argue that the failure by Mr Johnson to produce his rates spreadsheet during the course of the Tribunal hearing renders his reports inadmissible as they fail the proof of assumption rule because the assumption (the rates spreadsheet) was not put in to evidence.[8]
2. This same objection to Mr Johnson's evidence was raised in closing submissions following the conclusion of the hearing before the Tribunal. After considering that submission, I did not accept that proposition. In my Reasons, I stated:
   1. ... During cross-examination, Mr Johnson was criticised for adopting certain rates which he said were derived from his own rates spreadsheet. He said the rates spreadsheet was data that he had recorded on his computer, based on his previous experience in costing projects. The rates spreadsheet was not discovered, nor was it produced during the course of the hearing. Mr Reid [counsel for the Owners] submitted that in those circumstances, Mr Johnson's opinion evidence was not transparent and the Owners were therefore denied the opportunity to analyse and test those rates under cross examination. Mr Reid submitted that Mr Johnson's evidence on quantum should therefore be excluded.
   2. I do not accept that proposition. I note that Mr Rosier also gave evidence that some of the rates adopted by him were derived through his own experience in costing similar building projects or quantities of work, rather than from sourcing rates through the use of publications such as Cordells or Rawlinsons. In my view, each of these two expert witnesses have the expertise, experience and qualifications to form an opinion as to what are the prevailing rates for various quantities of building work. In any event, many of the prices adopted in Mr Johnson's report stem from either invoices or quotations, which he annexed to his report.
   3. Mr Johnson was extensively cross-examined on his cost estimates, including the rates he adopted. In my view, ample opportunity was given to the Owners to adequately deal with this aspect of his evidence. Moreover I do not consider it appropriate to raise an objection in closing submissions; in circumstances when no objection was raised at the time Mr Johnson gave his evidence.
3. The above extract of my Reasons was not the subject of the appeal proceedings, nor was any finding made by the Supreme Court that this aspect of my determination was erroneous. Accordingly, I find that it is not open for the Owners to re-agitate this objection, given that it has already been determined in the earlier proceeding. Even if it was open to re-agitate this issue, I reiterate what I said in my Reasons in answer to this submission. Therefore, Mr Johnson's expert opinion is to be considered alongside Mr Rosier's expert opinion, in determining the reasonable cost of an alternative builder completing the Works.

1. The difference between the cost estimates of each expert is summarised in the following table:

1. Regrettably, very little narrative is set out in each of the consultants' respective reports concerning the cost of completion. This makes it difficult to determine which price is to be accepted where the two consultants differ in their opinion. This is particularly so given that both experts presented as credible, experienced and well-qualified to express an opinion as to the reasonable cost of completion. In some cases, and having regard to s 53 of the Domestic Building Contracts Act 1995, I have taken a midway point between two differing prices or labour time, given that no evidence was at hand to guide me as to which opinion should be accepted over the other.

1. Given the disparity between the two experts' opinions, it is appropriate to examine each category of completion work identified by the experts. In so doing, I have referred to each category of work identified in Mr Rosier's expert report and have sought to correlate those categories with corresponding quantities of work priced by Mr Johnson in his report. Further, I note that Mr Johnson added a further 5% to his aggregate cost of building, which he attributed to an increase in the cost of building due to the expiration of time. In those circumstances, I consider it appropriate to add 5% to each category of building work priced by Mr Johnson, so as to better achieve a like-for-like comparison.

1. The major difference between the two experts relates to the amount of time each have allocated to carry out what is remaining to be undertaken in respect of the installation of the roof tiles. Mr Rosier has allocated 16 hours at $65 per hour, compared with Mr Johnson having allocated eight hours at $60 per hour. There is no evidence as to how the experts formed their respective opinions as to the likely time to complete this work. In those circumstances, and having regard to there being very little work left to be undertaken in respect of this aspect of the Works, I find that the likely time to complete the roof tiling is the midway point between what each expert has estimated. I will allow 12 hours at $65 per hour, making a total of $780 in respect of this quantity of work.
2. I have allowed the higher rate of $65 per hour because Mr Johnson added a further 5% to his aggregate cost of building, which he attributed to price increases. Therefore, if that 5% were taken into account, his 'adjusted' hourly rate for labour is approximately commensurate with the rate adopted by Mr Rosier.

1. Given that the amount claimed is less than the amount estimated by Mr Johnson, I will allow the Owners' claim in full. Therefore, I will allow $2,495 in respect of this quantity of work.

1. Mr Rosier has combined pre-plaster carpentry work with the carpentry work associated with Fixing stage. On the other hand, Mr Johnson has separated carpentry work into two discrete quantities of work. If the quantities of work in Mr Rosier's costing are isolated to provide a like-for-like comparison, his estimate for carpentry work associated with Fixing stage is $10,340 compared to Mr Johnson's estimate of $10,837.05.
2. Moreover, when one looks at the two consultants' costings for pre-plaster carpentry, there is very little difference save and except for the category of work described as Sundry carpentry-straighten frames, construct bulkheads over wardrobes and cupboards. In that regard, Mr Johnson has allowed 40 hours at $60 per hour (plus 5% for cost increases), whereas Mr Rosier has allowed 80 hours at $65 per hour. Regrettably, neither expert has provided any narrative as to what work is actually required. Given that Mr Johnson added 5% for cost increases to his overall costings, I accept Mr Rosier's evidence that the rate should be $65 per hour. However, it is difficult to justify that the work will take 80 hours in circumstances where no explanation is given as to why Mr Rosier believes this work will take twice the time estimated by Mr Johnson.
3. Doing the best that I can with the evidence before me, I find that the reasonable period to be allowed is midway between what the two experts have opined; namely, 60 hours ($3,900).
4. The remaining aspect of work under the category of pre-plaster carpentry is the supply and hanging of the external laundry door. In that regard, Mr Rosier has estimated that work to cost $465, compared to Mr Johnson's higher estimate of $472.50. Therefore, I will allow the full amount claimed of $465.
5. Accordingly, I will allow $14,705 in respect of carpentry work.[18]

1. Each of the experts have priced the same quantities of work under the heading Electrical or Electrical Services. However, slightly higher rates have been adopted by Mr Rosier, both for the cost of materials and fittings and, presumably, the cost of labour. Again, there is no explanation as to how the particular rates or prices were derived.
2. Doing the best I can with the evidence before me, I will adopt a midway point between the two cost estimates and allow $10,420.93 in respect of the electrical work.

1. The rates which have been adopted by both experts in relation to materials and labour are similar. However, Mr Rosier has also priced a number of plumbing fixtures and fittings in the amount of $4,915, which have not been costed or form part of Mr Johnson's cost estimate. This largely explains the disparity between the two cost estimates.
2. There appears to have been some confusion between the parties as to whether the Contract requires the Builder to supply the plumbing fixtures and fittings, other than the laundry trough, toilet suite, bidet, shower base and bath, all of which have been included in Mr Johnson's costing. However, other fixtures such as the vanity basins, kitchen sink and various taps and mixers have not been included in Mr Johnson's costing.
3. This confusion is highlighted by reference to a letter dated 15 November 2011 from the Owners to the Builder wherein they requested the Builder to confirm whether:
   1. Builder is to supply all cabinets and plumbing fittings except the kitchen cabinets, bathroom and vanity.
4. By correspondence dated 17 November 2011, the Builder responded as follows:

12. Builder is to supply all cabinets and plumbing fittings except the kitchen, bathroom and vanity

1. It appears that this correspondence did not fully clarify what was to be undertaken by the Builder under the Contract. Consequently, a meeting took place between the parties on 30 November 2011, in the presence of the Owners' building consultant, Mr Cheong. Minutes of what was agreed between the parties were prepared and signed and also produced to the Tribunal during the course of the hearing. Those minutes state, in part:

The Builder advises fittings and fixtures were not allowed in the Contract, but labour to fit is included. Signed and agreed.

1. The First Respondent gave evidence that the notation, in the extract of the minutes cited above, constitutes what was agreed between the parties. In particular, the First Respondent stated in his Witness Statement in Reply dated 22 April 2014 that:
   1. The above documents and minutes [which include the 30 November 2011 minutes] accurately reflect my understanding of the matters discussed and agreed at the various meetings we had with George [the Builder].
2. Therefore, and having regard to the First Respondent's evidence and the documents referenced above, I find that the vanity basins, kitchen sink and various taps and mixers were not included in the Contract. Consequently, the amount of $4,915 allocated to that quantity of work by Mr Rosier is disallowed.
3. Apart from the amount allocated for vanity basins, kitchen sink and various taps and mixers, the balance of the work priced by each expert is comparable, with a difference of only $423 between the two cost estimates. Taking a midway point between the two cost estimates, I will allow $10,861.50 in respect of this quantity of work.

1. The amounts priced by each expert is comparable with little difference between the two. Taking a midway point between the two cost estimates, I will allow $2,214.94 in respect of this quantity of work.

1. The major difference between the two cost estimates relates to the amount priced for the supply, hanging, stopping and sanding of plasterboard sheets to the walls and ceilings. For example, Mr Rosier priced the cost of supplying, hanging, stopping and sanding plasterboard sheets to the walls at $11,660 compared to Mr Johnson's price of $9,397.50. The disparity between the two cost estimates results from different rates being applied by each consultant. For example, Mr Johnson applied a rate of $17.85 per square metre for the plasterboard walls, compared to a rate of $22 per square metre adopted by Mr Rosier for the same work and materials. Similarly, different rates have been adopted by each consultant for supplying and fixing plasterboard to the ceilings.
2. Regrettably, no evidence was given as to why one rate is to be adopted over the other. This conflict in the evidence is further complicated by the fact that each expert presented as credible and knowledgeable with the requisite expertise to be able to reasonably price the completion work.
3. In those circumstances, I am left with little option but to again take a midway point between the two cost estimates. Therefore, I will allow $19,902.55 in respect of this component of work.

1. It appears that each expert has priced the same quantity of work, although there are differences in quantum. In relation to the joinery, Mr Rosier has provided an aggregate costing for each of the cupboards and built-in robes. In particular, he allocated $1,800 in respect of Linen cupboard 1 and doors, $800 in respect of Linen cupboard 3 and doors, et cetera. By contrast, Mr Johnson has priced this component of work by reference to labour and materials. For example, he has allowed 32 hours for a carpenter at $60 per hour to construct the wardrobes and built-in robes (plus 5%). He then separately priced the materials required in order to construct that joinery.
2. I prefer Mr Johnson's cost estimate in respect of this component of work. This is because his pricing has a higher level of detail, which reinforces my view that his price estimate is likely to be more accurate than the global estimate provided by Mr Rosier.
3. Consequently, I will allow $3,846.68 in respect of this component of work.

1. The major difference between the two price estimates relates to the cost associated with waterproofing. Mr Rosier has priced this component of the work at $1,375, compared with $525, priced by Mr Johnson.
2. In my view, the cost estimate provided by Mr Rosier is to be preferred over that provided by Mr Johnson. Mr Rosier has allocated a price by reference to square metreage for both the floors and walls, whereas Mr Johnson has simply provided a global estimate of $525. Having regard to greater detail provided by Mr Rosier, I find that $1,375 represents a reasonable estimate of the cost to waterproof the wet areas.
3. Both experts have adopted a rate of $85 per square metre for materials and labour, although Mr Rosier has also included an additional $500 for caulking. In my view, it is appropriate to make allowance for caulking.
4. Consequently, I accept Mr Rosier's costing in relation to this element of work and will allow $4,850.

1. The major difference between the two experts concerns the rendering of the interior garage walls. Mr Rosier has allowed $2,475 in respect of this work, whereas Mr Johnson has made no allowance for that work to be undertaken.
2. The Contract documents, which comprise the Standard Inclusion List, architectural plans and building contract do not specify that the interior garage walls are to be rendered or simply left as face brickwork. However, other exterior walls are noted on the plans as being rendered.
3. In my view, the failure to specify rendering to the interior garage walls, in circumstances where the architectural plans expressly specify that other walls were to be rendered, indicates that the interior of the garage was not required to be rendered. Had the parties intended to render the interior of the garage, then that could have been noted on the architectural plans, in the same way as other brick walls were specified to be rendered or not. My finding is reinforced by what is stated in the Standard Inclusion List; namely, that the render was to be as per plan.
4. Therefore, I find that $2,475 is to be deducted from the cost estimate of Mr Rosier, such that the reasonable cost of rendering is $13,050. I will allow this amount.

1. This component of the completion work comprises two elements; namely, the supply and laying of carpet and the supply and laying of timber parquetry to non-carpeted areas of the dwelling. Both experts have estimated that the cost of supplying and laying carpet is $2,250 (although Mr Johnson adds a further 5% to his aggregate costings for cost increases). However, their assessment of the cost of supplying and laying timber parquetry differs. Mr Rosier has estimated this work to be $16,335, compared to Mr Johnson's estimate of $12,600.
2. Mr Rosier's estimate is based on an area of 99 square meters. However, Mr Johnson has based his estimate on an area of 80 square metres. Neither expert has provided any explanation as to why there is a difference in the area assessed. Moreover, Mr Rosier has adopted a rate of $125 per square metre, compared to Mr Johnson's rate of $115.50 per square metre. In relation to sanding and polishing the parquetry floor, each expert has adopted the same base rate of $40 per square metre, although Mr Rosier has applied that rate over a larger area and Mr Johnson has added a further 5% for price increases.
3. Having regard to the floor plan tendered in evidence, I have measured the area of the Kitchen, Living/Meals area, Entry, Lounge and the small hallway leading from the garage to the Entry to be approximately 83 square metres. Allowing for some wastage, I find that 90 square metres is the area upon which to assess the cost of supplying and laying timber parquetry to the dwelling.
4. I further find that the reasonable rate to be adopted for supplying and laying parquetry is midway between the rates adopted by each of the experts; namely, $120.25 per square metre. Therefore, I will allow $10,822.50 in respect of the supply and laying of parquetry and $3,600 for sanding and polishing that parquetry floor once laid.
5. Consequently, I find that the reasonable amount to be allowed in respect of floor finishes is $16,672.50. This includes $2,250 for the supply and laying of carpet.

1. There is very little difference between what each of the experts have estimated to be the cost of painting the Works. Each has applied the same base rate of $75 per square metre, although Mr Rosier has based his assessment on 211 square metres, compared with 200 square metres being the area assessed by Mr Johnson.
2. Neither expert has provided any explanation as to why there is a difference in the amount of area assessed by them. In my view, it is reasonable to infer that Mr Rosier has been more pedantic in measuring the painted area, given the odd square metreage adopted by him. Conversely, I find it is reasonable to infer that Mr Johnson has rounded off the area to be painted, given that it is unlikely that the painted area would measure exactly 200 square metres. For that reason, I accept Mr Rosier's evidence as to the reasonable cost of painting.
3. Therefore, I will allow $15,825 in respect of this aspect of the completion work.

1. Mr Johnson has assessed the cost of glazing the shower screens to be $1,860 (plus 5% uplift for cost increases), compared with Mr Rosier's costing $1,250. Mr Johnson's estimate is higher because he has also included the supply and fixing of mirrors with polished edges, which have not been costed or form part of Mr Rosier's cost estimate under this priced quantity of work.
2. Given that the Owners' claim for completion costs is based upon Mr Rosier's costing and no separate or additional claim is made for the supply and fixing of mirrors, I find that this component of work is not to be assessed as part this component of the Works. In forming that view, I presume that the supply and fixing of mirrors has been included in other quantities of work priced by Mr Rosier, although not specifically mentioned.[19]
3. Consequently, I accept Mr Rosier's evidence as to the reasonable cost of glazing and will allow $1,250 in respect of this element of work.

1. There is a significant difference between the two experts as to the cost of metalwork. Mr Johnson has assessed the cost of metalwork to be $19,350 (plus 5% for price increases), compared to Mr Rosier's estimate of $7,500. The difference between the two costings largely relates to the inclusion by Mr Johnson of an item which he refers to as Balance of payment for windows in the amount of $14,500. No allowance has been made by Mr Rosier for this expenditure under the heading of Metalwork, although Mr Rosier costed Windows as a separate quantity of work, in the amount of $2,070.
2. Given that the Owners' claim for completion costs is based upon Mr Rosier's costing and no separate claim is made for the Balance of payment for windows, I find that this amount is not to be included in the cost of the Owners having to complete the Works.
3. The other difference between the two experts relates to an allowance for sundry bathroom fittings and fixing, which has not been specifically priced by Mr Johnson. However, I note that Mr Johnson has allowed for the supply and fixing of mirrors, which has not been specifically mentioned in Mr Rosier's cost estimate. Consequently, I find that the expression sundry bathroom fittings and fixing is wide enough to comprise the supply and fixing of mirrors. Accordingly, I will allow this aspect of Mr Rosier's costing in the amount of $750.
4. The remaining difference between the two experts relates to the supply and installation of two garage doors. Mr Rosier has costed this work to be $5,250, compared with Mr Johnson's costing of $3,517.50. Again, there is no explanation as to why such a difference exists. Doing the best I can on the evidence before me, I find that the reasonable cost of supplying and installing the two garage doors is a midway point between the two costing estimates, in the amount of $4,383.75.
5. Therefore, I find that the total amount to be allowed for Metalwork is $6,633.75. This includes the supply and installation of a wrought iron feature to be installed on top of the roof tower, which both experts have costed at $1,500 (excluding Mr Johnson's uplift for cost increases).

1. Mr Rosier has allowed $11,200 for the supply of stone bench tops to kitchen cupboards and vanities. Mr Johnson has made no allowance for any stone bench tops.
2. It is unclear why Mr Rosier has costed stone bench tops to the kitchen and vanities, given that the kitchen joinery and bathroom vanities were removed from the scope of the Works.
3. In particular, the removal of these components of work is confirmed in the Owners' correspondence dated 15 November 2011 to the Builder, where they stated, in part:

We require your response in writing by 4 PM on 17 November 2011 to 1-18 following:

1. Builder is to supply all cabinets and plumbing fittings except the kitchen cabinets, bathroom and vanity.
2. By correspondence dated 17 November 2011, the Builder responded as follows:

We respond to your letter dated 15th November which we have received on the 16th November 2011.

12. Builder is to supply all cabinets and plumbing fittings except the kitchen, bathroom and vanity

1. In my view, there is no evidence to suggest that the bench tops over the kitchen cabinets or vanity units formed part of the scope of the Works under the Contract. Accordingly, Mr Johnson was correct in not including any allowance for that work as part of his cost estimate to complete the Works.
2. Consequently, I find that this component of Mr Rosier's cost estimate is disallowed.

1. Mr Rosier has estimated that the cost to supply and install ducted air-conditioning, incorporating gas-fired heating and electric split system cooling, to be $13,125, compared with Mr Johnson's cost estimate of $10,050 (plus 5% for cost increases). There is no explanation as to why there is a $2,572.50 difference between what the experts have estimated.
2. Doing the best I can on the evidence before me, I find that the reasonable cost of supplying and installing the requisite heating and air-conditioning is a midway point between each of the two cost estimates, in the amount of $11,838.75.

1. The external works have been costed by Mr Rosier to be $4,930, compared with Mr Johnson's estimate of $5,049.98.
2. Therefore, I will allow the full amount claimed in the amount of $4,930.

1. As indicated above, Mr Johnson has allowed $14,500 for what he describes as Allow to Pay Balance of Account Due for Supply and Glazing of Windows. The Owners do not claim this amount, either as part of the cost estimate prepared by Mr Rosier or otherwise. However, the Owners' claim $2,070, being Mr Rosier's cost estimate to glaze timber windows. Given that the parties agreed to vary the scope of the works to substitute timber windows for aluminium windows, it is unclear which particular windows require glazing.[20]
2. Nevertheless, apart from what is stated under the heading of Metalwork in Mr Johnson's report, he has not given any evidence as to whether further expenditure is to be incurred for the glazing of windows. Accordingly, Mr Rosier's cost estimate is uncontested. Consequently, I find that the reasonable amount to be allowed for the cost of glazing windows is $2,070.

1. The consultants have adopted a different approach when assessing the cost of preliminaries, builder's margin, contingency and any uplift in their cost estimates due to the expiration of time. Mr Rosier has added 15% to the raw cost of building for Preliminaries and supervision. He then added a further 10% to allow for Contingencies and a further 25% representing Margin.
2. Mr Johnson has not applied a fixed percentage uplift for Preliminaries but has costed that expense by reference to various sub-quantities of work, which he has separately priced. The total he has assessed for Preliminaries is $8,125 (plus 5% for cost increases). This represents approximately 5.8% of his estimate of the raw building costs. In relation to Builder's Margin, he has applied a fixed percentage uplift of 30%. This comprises an allowance for supervision, administration and profit. To that amount, he has also added an allowance for cost increases of 5% (effectively making builder's margin 31.5%).
3. Therefore, if Mr Johnson's allowance for preliminaries is converted into a percentage uplift (approximately 5.8% of the raw costs of building), there is very little difference between the two experts in terms of overall mark-up (40% compared with 40.8%), save and except that Mr Rosier has also added a further uplift of 10% for contingency, which is absent from Mr Johnson's costing and Mr Johnson has added 5% for cost increases.
4. However, each expert has applied this mark-up differently. This affects their final costing amounts. In particular (and ignoring contingency so that like can be compared with like), Mr Rosier adds margin of 25% on the aggregate figure of the raw costs of building plus 15% for preliminaries/supervision. By contrast, Mr Johnson adds margin of 30% on the aggregate figure of raw costs, which already includes preliminaries and then a further 5% for cost increases on that sum.
5. The difficulty with Mr Rosier's costing is that he has grouped together preliminaries and supervision. Therefore, I am unable to identify how much he has allocated for preliminaries and how much is allocated for supervision. This makes it difficult to reconcile with Mr Johnson's mark-up. Mr Rosier's approach is further complicated by the fact that he has applied the same percentage figure uplift of 15 % for preliminaries and supervision to his costing for rectification work and his costing for completion work. On the other hand, Mr Johnson has specifically costed each element of preliminaries to arrive at a fixed price for that component of work, insofar as it related to the completion works. In my view, that methodology is more accurate.
6. In relation to any further percentage uplift for contingency, I note that Mr Johnson has made no allowance, compared to Mr Rosier who has added 10%. However, I note that Mr Rosier has applied a flat rate of 10% for contingency to both rectification and completion work.
7. In my view, a lesser percentage uplift for contingency should be added to the cost of completing the Works than what is added to the cost of rectifying the Works. This is because the cost estimates for completion are based upon the work being undertaken after rectification work has been completed. This means that the completing builder will assume control over a superstructure that is free of defects, and at a point where Lock-up stage is at or near completion. The new builder is given a fresh start to complete the works, with much of the structural work having already been done. In that sense, many unforeseen factors, such as difficulties which might arise during excavation or construction of the footings or foundations are no longer present. Similarly, inclement weather no longer poses the same threat of disruption to the Works as would otherwise be the case with the Works being open to the elements. Therefore, the risks normally associated with constructing a building from the ground up is lower and, in my view, reinforces my finding that a lower percentage uplift for contingency should be adopted.
8. Therefore, I will allow a percentage uplift of 5% for contingency, to be applied to the raw cost of completing the Works, which includes the cost of preliminaries as a fixed price of $8,531.25 (rather than as a percentage of building cost). To that amount, builder's margin of 30%, which incorporates supervision, administration and profit, is to be added before GST is calculated on the aggregate sum. Apart from the treatment of supervision and preliminaries, this methodology accords with Mr Rosier's methodology.

1. Having regard to my findings set out above, I conclude that the reasonable cost of another builder completing the Works is, calculated as follows:

1. The Owners also claim $34,491.24,[21] in the form of additional interest paid on a loan used to finance the Works, as a result of the Works not being completed within the time specified under the Contract. The First Respondent gave evidence that he has incurred additional interest on a loan amounting to $30,894.04:
   1. To fund the purchase of the land (which at the time of purchase had an existing house) at Lymington Street, we took out an interest only loan with the ANZ bank ...

1. As stated in my earlier witness statement, it was our intention to move into the house at Lymington Street and retire. Once we were able to move into the house at Leamington Street, we were going to sell the Ballan Street property and use the money to pay off our loans.
2. In accordance with the contract, our house at Lymington Street should have been built by 7 August 2012. By reason of the house not being finished on time, we have not been able to sell the Ballan Street property and pay off the ANZ loan. We have therefore incurred additional interest on the ANZ loan from August 2012 that we would not have otherwise incurred. I refer to the following bank statements (see RDD 101, 105 & 106):

(a) a bank statement for the ANZ loan for the period 24 August 2012 to 22 February 2013, which showed that during this period I incurred interest in the sum of $12,070.37;

(b) a bank statement for the ANZ loan for the period 22 February 2013 to 23 August 2013, which shows that during this period I incurred interest in the sum of $10,430.16; and

(c) a bank statement for the ANZ loan for the period 23 August 2013 to 24 February 2014, which shows that during this period I incurred interest in the sum of $8,393.51.[22]

1. The Builder submits that any claim for delay costs and interest should be rejected. It contends that the Owners elected to terminate the Contract when there were still three months left to run on the original construction period and where other options were available to them. In the Builder's closing written submissions, it further states:
   1. The Owners were under a duty to mitigate their losses in regard to both defects and completion costs and they have failed to do so. This duty existed regardless of whether or not it was found that the Owners were justified in terminating the Contract. Notably, at the time of the Tribunal Hearing in late April to early May 2014, the Owners had taken no steps to continue the Works beyond the stage reached by the Builder (prior to the contract termination in early May 2012).

1. Having elected to terminate the Contract on 4 May 2012 the Owners were under a duty to mitigate their losses. As discussed above, they had done nothing further to progress the building works by the time of the hearing, some two years after contract termination... [23]
2. In Tuncel v Renown Plate Co Pty Ltd,[24] the Full Court of the Supreme Court of Victoria considered the question of mitigation in the context of a tortious claim for damages resulting from an injury suffered in an industrial accident. The Court stated:

The word "mitigation" is used in various ways as the author of Mayne and McGregor on Damages 12th ed. (1963), at par. 144, was at pains to point out. He, however, formulated in three rules the result of the authorities on "mitigation" as that word should be used in the context of the facts of this case and, in our opinion, those rules accurately state the relevant law in a convenient form, viz: -

"(1) The first and most important rule is that the plaintiff must take all reasonable steps to mitigate the loss to him consequent upon the defendant's wrong and cannot recover damages for any such loss which he could thus have avoided but has failed, through unreasonable action or inaction, to avoid. Put shortly, the plaintiff cannot recover for avoidable loss.

"(2) the second rule is the corollary of the first and is that where the plaintiff does take reasonable steps to mitigate the loss to him consequent upon the defendant's wrong he can recover for loss incurred in so doing; this is so even although the resulting damage is in the event greater than it would have been had the mitigating steps not been taken. Put shortly, the plaintiff can recover for loss incurred in reasonable attempts to avoid loss.

"(3) the third rule is that where the plaintiff does take steps to mitigate the loss to him consequent upon the defendant's wrong and the steps are successful, the defendant is entitled to the benefit accruing from the plaintiff's action and is liable only for the loss is lessened; this is so even although the plaintiff would not have been debarred under the first rule form [sic] recovering the whole loss, which would have accrued in the absence of his successful mitigating steps, by the first rule. Put shortly, the plaintiff cannot recover for avoided loss." [25]

1. The principle of mitigation is equally applicable to actions in contract. Although I accept that the threshold that the Owners must cross is not particularly high,[26] I consider that it was incumbent upon them to act expeditiously in securing another builder to repair and complete the Works, following termination of the Contract.
2. During the course of the hearing, Mr Vito Munafo, building consultant from Northpoint Building Surveyors Pty Ltd, was called to evidence. Mr Munafo was not the original private building consultant retained to oversee the Works. He was engaged by the Owners after the original private building surveyor's retainer was terminated, following the Owner's successful application to the Building Commission to terminate his services.
3. Mr Munafo said that he was engaged by the Owners on 24 September 2012, initially to act as the relevant building surveyor for rectification and completion of the Works. He said that the Owners nominated themselves to undertake that work after they received a Certificate of Consent from the Building Commission, pursuant to s 25 of the Building Act 1993, authorising them to complete construction of the Works as owner-builders.
4. He said that the building permit for completion of the Works was, however, subsequently cancelled and replaced with an application for a building permit to construct a new dwelling, which he said contemplated demolition of the existing Works, including the slab. This was because the proposed new dwelling was a different design and much smaller than the original design under the Contract.
5. Having regard to that evidence, it is understandable why there is no evidence before me to indicate that the Owners have attempted to secure another builder to repair and complete the Works or have experienced any difficulties in that regard. In that sense, it ill-behoves the Owners to claim holding costs for a period extending to more than 18 months from the date that the Works were due to be completed, in circumstances where they have done nothing to progress the Works during that time or demonstrated an intention to do so. This is particularly so where they held $224,000, which would otherwise have been paid to the Builder under the Contract had the Works been completed in accordance with its terms.
6. Although I accept that the onus of proof in relation to mitigation is on the Builder, I consider it reasonable to infer that steps could have been taken to progress the Works.
7. In my view, the Owners' claim for holding costs (in the form of additional interest paid on their financing loan) should be reduced so that it is limited to a reasonable period, following the date for completion of the Works. This period should take into consideration how long it would reasonably take to either secure another builder to rectify and complete the Works or sufficient time for them to commence rectification and completion of the Works as owner-builders.
8. According to the Owners, the Works should have been completed on 7 August 2012. It is common ground that the Contract was terminated on 4 May 2012. Therefore, 96 days remained under the original Contract period.
9. However, there is no evidence before me as to how much lead time would be required in order to secure a new builder (if applicable) or how much time is required in order to complete the Works. Nevertheless, the Contract provides some guidance as to the likely period in which to complete the Works. In particular, the Contract provided for a construction period of 180 days, excluding any delays. The Works were almost at Lock-up stage, although a substantial part of the brick cladding was to be removed and rebuilt as part of the remedial work. According to the Contract, 65 per cent of the Contract price was payable upon completion of the Lock-up stage. If the value of the progress claims was taken as being roughly commensurate with the amount of work undertaken, then approximately two thirds of the Works has been completed by the end of Lock-up stage, leaving one third of the Works remaining. If the time taken to complete the Works was proportionally commensurate with the stages of work completed, approximately 60 calendar days is required in order to complete Fixing stage and Completion stage.[27] In addition, both experts opined that the rectification work would take somewhere between 6 to 8 weeks complete. With that in mind, I find that the reasonable period to allow for rectification and completion to be 120 days.
10. Further, I find that commencement of the rectification and completion works was able to begin within 14 days from the date Mr Munafo was appointed by the Owners; namely, 8 October 2012.[28] To that, I add the revised construction period of a further 120 days, making 5 February 2013 the new date for completion of the Works. In those circumstances, rectification and completion of the Works would be 184 days late, compared to the original completion date of 7 August 2012.
11. According to the First Respondent, he paid $12,070.37 interest during 24 August 2012 until 22 February 2013, a period of 183 days, which approximates the period of delay before rectification and completion work can be completed. Therefore, I find the $12,070.37 represents a reasonable amount to be allowed for additional holding costs, by reason of any delay occasioned by the Builder's repudiation of the Contract.

1. The Owners also claim loss of amenity. In their written submissions they state:
   1. Finally, the owners have been denied the use and enjoyment of their home. Lack of use is lack of amenity. They seek damages for loss of amenity in the sum of $5000.00.
2. The Owners referred to two authorities in support of their claim for loss of amenity. The first is a decision of this Tribunal in Anderson & Anor v Wilkie.[29] In that case, Senior Member Walker helpfully set out the relevant principles relating to this head of damage:
   1. It has been held that substantial physical inconvenience and discomfort caused by a breach of contract will entitle the party to damages (see Burke v Lunn [1976] VR 276 at 285-286; Clarke v Housing Guarantee Fund Limited (1998) 13 VAR 19 at p. 21-22.) Loss of amenity generally is also recognised as a head of damages (see for example Ruxley Electronics and Construction Limited v Forsyth [1995] 3 All ER 268. I was also referred to Wilshee v Westcourt Limited [2009] WASCA 87 to a similar effect.
   2. However, damages for personal injury are not recoverable (Domestic Building Contracts Act 1995 s 54 (2)) nor are damages for disappointment, hurt feelings or damage of any other kind that was not reasonably foreseeable at the time the contract was made.
   3. In the present case, the Owners claim damages for having lived in a wet house for 2 ½ years. That is a loss of amenity which is compensable. They will also face the inconvenience of having to move out while repairs are effected. However, Ms Dougherty's claims for headaches said to have been caused by having to work long hours to pay for the House and lack of sleep and stress resulting from both the defects themselves and this dispute are not compensable. In so far as any such claims amount to damages for personal injury, it is barred by s 54 (2). Otherwise, I do not believe that it is reasonably foreseeable.
3. Anderson & Anor v Wilkie, together with the authorities cited therein, are distinguishable from the present case. Here, there is no evidence directed at this head of damage. In particular, there is no evidence of the Owners having to live in intolerable or unpleasant conditions. Similarly, it is unlikely that the Owners will face the inconvenience of having to move out while repairs are effected, given that no occupancy permit was ever issued in respect of the Works.
4. In fact, the evidence of the First Respondent is that the Owners were to continue to reside in their Ballan Street property until such time as the Works were completed, following which they were going to sell the Ballan Street property and use that money to pay off their loans.
5. In those circumstances, I find that this head of damage is not proven.

1. Having regard to my findings set out above, I determine the Owners' claim in the amount of $82,079.93, calculated as follows:

1. Consequently, I will order that the Builder to pay the Owners $82,079.93.

[1] Australian Dream Homes Pty Ltd v Stojanovski [2014] VCAT 975.

[2] Stojanovski v Australian Dream Homes Pty Ltd [2015] VSC 404.

[3] Australian Dream Homes Pty Ltd v Stojanovski [2016] VSCA 133.

[4] Stojanovski v Australian Dream Homes Pty Ltd [2015] VSC 404 at [75]- [76].