2. The fixing of the contract period was contradictory. There was the normal term set out in the general conditions which gave a contract period of 187 days, these being calendar days: Item K of the appendix to the general conditions. Secondly, there was "Special Condition 3" which stated: "Completion date shall be no later than 30 June 2000." 1 July 2000 being the date upon the which the Goods and Services Tax came into force. These two project periods would only coincide on or before 30 June 2000 if the works were commenced on or before 25 December 1999.

3. It was common ground between the parties that the planning permit had not issued prior to the formation of the contract and work could not commence until the planning permit was issued.

4. This leads to the first factual issue between the parties. The builder maintained that the owner had assured him that the planning permit would be available prior to Christmas 1999 and this accounted for Special Condition 3. The owner maintained that at the time of the formation of the contract the builder agreed to undertake responsibility to ensure the issue of the planning permit prior to Christmas. Up until this time the owner maintained, and it could not be disputed, that the responsibility for arranging the issue of the planning permit had rested with the designer of the units, Jaeger Homes. When the planning permit did not issue by Christmas 1999 the builder accompanied the owner to the Council in January 1999 to try and expedite its issue. At all times prior to this the owner's representative to the Council had been Jaeger Homes, who prepared the design of the units and their documentation.

5. I do not accept that the builder undertook as part of the major domestic building contract the obligation of obtaining the planning permit. When the contract was signed it was only four days to Christmas. I do not consider that it is probable that builder would undertake to obtain the issue of a planning permit over which he had no previous control and the failure to obtain such issue would in all likelihood put him in a position where he could not perform his contractual obligations unless he had sufficient time to take over the liaison work with Council and to arrange the issue of the permit. This was clearly not the case in these circumstances. As a collollary to this finding and to make sense of the two different time constraints in the general conditions of contract I do consider that the contract was entered into on the basis that the planning permit would be issued before Christmas 1999 and that the obligation to ensure that the planning permit issued by this time rested with the owner or the owner's agent.

6. The planning permit did not issue until 7 March 2000, 187 calendar days from that time makes any completion well past 30 June 2000; therefore, Special Condition 3 could not be complied with by the time the planning permit issued. As I have found it was the owner's obligation to have the planning permit issued prior to Christmas 1999, this failure may well have been a repudiation of the contract by the owner; however, the builder by starting work in March 2000 accepted the owner's conduct and affirmed the contract. However, the validity of Special Condition 3 was dependent upon the issue of the planning permit prior to Christmas, as this did not occur I consider that Special Condition 3 after Christmas 1999 was void and the requirement as to time under the contract became the contract period of 187 calendar days at Item K of the appendix.

7. Soon after the contract was formed the parties agreed the builder should carry out the demolition for a sum of $6,800.00. There was an issue whether all of this money had been paid but it became subsumed into the contractual balance which is set out at the end of these reasons.

8. There was some dispute as to when work commenced.

9. The builder maintained that work had started on 27 March 2000 when the surveyor set out the building works to be constructed. The owners maintain it was 17 March when the builder commenced demolition. Not a great deal turns on this but it will be addressed later in the reasons when it does become pertinent.

10. The owner was obtaining his finance through Suburban Management Pty Ltd in two loans of approximately $116,000 and $400,000, the loans monies included the funds to purchase the subject site. Payment for the contract works was made by Suburban Management on each claim for a completed stage. The owner's representative, Mr Kogut, would endorse a stage claim and forward it to Suburban Management who would then assess that the work stage was complete and if satisfied pay the claim. The owner borrowed all of the funds except for $8,000 of the deposit. Mr Kogut gave evidence that he paid this sum in cash to the builder on the site. The builder maintains this sum was never paid and is still owing.

11. On 16 March 2000 the builder sent a letter to the owner informing it that the deposit of $13250 was still outstanding and requesting immediate payment of this sum so that work could continue. In subsequent progress claims for the base stage, frame stage and lock up stage there was no mention that $8,000 of the deposit remained unpaid; and, each claim was only for the value of the stage as set out in Method A of the general conditions. On the other hand Mr Kogut kept a comprehensive number of invoices and receipts for payments made involving works under and outside the contract and I would have expected him to request and keep a receipt for a cash payment given his care with accounts. The only evidence I have is the oral evidence from each party, this makes the difficult assessment as to whether the $8,000 was paid. Viewed overall, I do not accept that the $8,000.00 cash payment for the deposit was made. I do not accept that Mr Kogut would have paid the money without getting a receipt. Further to find otherwise would not be fair to Mr Wieczorek who was not cross-examined as to his evidence in chief regarding the lack of payment. On the balance of probabilities I find the cash payment of $8,000.00 was not made.

12. The date of 30 June 2000 passed without comment by the owner and both parties gave evidence that discussions were held as to the likely date for the completion of the units. On this basis alone I would find that the owner had accepted the builder's failure to complete by 30 June 2000, and in allowing the builder to continue the owner accepted that the completion date of 30 June 2000 could not be enforced. The frame stage was completed in August 2000.

13. The builder gave evidence that bricklayers were difficult to find at this time and bricklaying did not start until early August 2000 and it was completed within 3 weeks. The builder consider that once the brickwork was complete lock-up stage had been reached and made the lock up claim on 4 September 2000 in the sum of $92,750. Mr Kogut authorised Suburban Management to pay the claim. However, Suburban Management refused to make the payment as it did not regard that lock up stage had been reached on the basis that Unit 2 had not been secured against entry as the garage doors had not been installed and the internal stud walls between the house and the garage had not been constructed. The builder gave evidence that this delay in the lockup stage payment so severely crippled him financially that from this time he was unable to obtain material resources and labour so as to carry out the contract works diligently and effectively; and, he could only carry out the works as best he could, in his own words he could only keep "plugging on".

14. Thus it could be seen that whether Suburban Management was correct in denying payment for lockup stage at that time is fairly crucial in assessing which party failed in its obligations under this contract. The definition in the general conditions of contract of "lockup stage": "means when the homes external wall cladding and roof covering is fixed, the flooring is laid and external doors and external windows are fixed (even if those doors and windows are only temporary)". I do not consider this definition is ambiguous and to make a claim for lockup stage this is the degree to which the works have to be completed. On learning of Suburban Management's refusal to pay the lockup stage the builder decided not to install a temporary door across the garage opening for Unit 2 but to construct the permanent roller door. This meant that he had to complete the construction of the concrete slab in the garage to Unit 2 together with the ceiling plaster and the stud walls. All of this work took a further six weeks to complete and it was not until the middle of October that he received payment for the lockup stage. The builder gave evidence from the time he submitted the claim for lockup he had effectively run out of money and couldn't pay his suppliers.

15. However, the lockup stage payment did not appear to cure his financial problems as he gave evidence he had to stop work a number of times in November for approximately three days at a time due to a lack of money. The lack of money crippled his ability to work until the end of the year it was a financial struggle to keep the work progressing. It is obvious from this evidence that the builder was not able to progress the works at a pace or in a continuous fashion that would enable him to state and meet a time for completion.

16. At some time immediately prior to the lockup claim the parties had a discussion as to when the work on Unit 2 would be completed. This discussion arose because the Koguts had sold their residence in Mount Waverley and settlement was to take place on 16 October 2000 and the Koguts needed Unit 2 to be completed at that time so that they could move into this unit. It was Mr Kogut's evidence that the builder informed him that Unit 2 would be completed by late August 2000. The builder's evidence was that this conversation took place in August 2000 and he told the owner the unit would take approximately 2 months to complete. In his evidence the builder said that if lockup had been paid when the claim was made then Unit 2 would have been completed within the two months.

17. In his evidence the builder agreed that he had agreed to complete the work within six months of the commencement. He agreed he didn't make this time of completion. On 19 November 2000 the builder wrote to the owner informing it that the remaining fixing items were expected to be delivered within half a week and fixing would be completed one and half weeks after that. The builder's completion of both units was estimated to be 2 weeks from 19 November 2000, this did not eventuate. The letter did not set out a time for completion.

18. On 21 December 2000 the owners through their solicitor issued a notice under s41 of the Domestic Building Contracts Act ("the Act") terminating the major domestic building contract between the parties because the work had not been completed within one and half times the original contract period. There was a dispute as to when this notice was received by the builder, who gave evidence that he did not receive it until after Christmas 2000. The builder continued to work on fixing items after the receipt of the s41 notice. On 6 January 2001 the owners changed the locks and the builder left the site permanently.

19. At the stage the builder left the site he estimated in his evidence that the work required to complete the fixing stage was a significant amount of skirtings and architraves in Units 1 and 2. After fixing stage was complete then the completion of the works involved the fitting out stage which still need to be carried out. This involved the installation of all appliances, tiling, floor coverings, painting, etc. Therefore, when the builder left the site there was still a significant amount of work to be carried out.

20. The builder claims that the owner's s41 notice is invalid as it was served too early and that the owners changing of the locks and barring him from the site was a repudiation of their building contract which repudiation he accepted by forwarding a final account for work done on 12 January 2001.

21. On 24 December 2001 the owners filed an application in the Tribunal seeking damages from the builder for interest and GST incurred due to the builder's late completion, the claim was for $50,778, later increased to $59,271.01 in the Amended Points of Claim of 8 July 2002. The builder counterclaimed for money owing under the contract of $113,318.00, this included GST.

22. In the Amended Points of Claim of 8 July 2002 the owner's claims were:-

"(a) On the loan of about $116,000 the lost interest from 30 June 2000 to 16 October, amounting to $3,165.39.00;

(b) On the loan of about $400,000 interest incurred from 31 July 2000 to 1 July 2001 in the sum of $25,361.28; and,

(c) A refund of GST paid over from the period 1 July 2000 to 1 August 2001 in the sum of $8,471.62."

23. In a discussion at the hearing of 4 March 2003 the Counsel for the Applicant agreed that no interest could be sought until the contract was determined as such damage it would be covered by liquidated damages.

24. The owner submitted that the builder's failure to complete the works within the contract period meant that the sale of the units was delayed. Prima facie, I do not consider this submission has any merit as the owner was originally building the units for investment and resale and there was nothing to stop the sale of the units prior to them being built. Further, to fulfil the second limb of Hadley v Baxendale [1854] EngR 296; (1854) 9 Ex 341 at 354 the owner had to establish that it was either known or reasonably within the knowledge of the builder at the time of making the contract that the owner was taking out loans to purchase the land and to fund the construction. However, there was no evidence from the owner that at the time the contract was formed the builder was so aware either of the loans or their size. In these circumstances I will not consider it could be said that the loss of interest arose naturally from the builder's breach of the contract nor was such damage in the knowledge of the builder.

25. The builder submitted that any GST paid for the completion of the works by the owner could be claimed as an imputed credit on any sale of the units, and, as such would not be a loss to the owners. I agree with the builder's submission.

26. The major issue in this domestic building dispute is whether the owners termination of the domestic building contract was in accordance with the contract or allowed under the Domestic Building Contracts Act ("the Act")? If not, which party is responsible for the termination of the domestic building contract and was such termination legal?

27. The owner claimed that it had validly terminated the domestic building contract under Section 41 of the Act, which allows in part:-

"(1) A building owner may end a major domestic building contract if -

(i) the contract price rises by 15% or more after the contract was entered into; or

(ii) the contract has not been completed within one and a half times the period it was to have been completed by; and,

(b) the reason of the increase time of cost was something that could not have been reasonably foreseen by the builder on the date the contract was made.

(3) To end the contract, the building owner must give the building a signed notice stating the building owner is ending the contract under the section and giving details of why the contract is being ended."

28. The builder resisted the owners claim submitting that the notice under Section 41 of the Act was premature. Accepting for now the earlier date of commencement of 17 March 2000 and adopting an interpretation of the one and half times the period, it was to be completed by as being strictly the contractual period of construction ie. not including any extensions of time for various causes eg. weather, variations, owner induced delay, etc, the builder's assessment of the earliest date on which an effective Section 41 termination notice could be given was after 23 December 2000. I have checked this calculation and I consider it is accurate. The s41 notice is dated 20 December 2000. Mr Kogut gave evidence that he attended the site on 22 December 2000 and asked the builder if he had received a letter, the builder replied that he hadn't; so Mr Kogut rang his solicitor who said the s41 notice had been sent. Allowing for ordinary mail this would mean it had been received on 23 December 2000. However, the earlier date of completion was the date the builder commenced demolition and this was a variation to the contract. Work on the scope of the domestic building contract as formed did not commence until the set out commenced on 27 March 2000 and I consider this is the correct commencement time under the contract. Therefore, the s41 notice was served early under the earlier date and certainly under the date for commencement of the contract works; accordingly, it was not a valid termination of the contract between the parties.

29. I have no discretion to allow any shortening of the time; therefore, I find the Section 41 notice was not a valid termination of the domestic building contract.

30. Perhaps the service of the Section 41 notice could be regard as repudiatory behaviour by the owner; however, I am not asked to adjudicate on this as by the builder's own evidence he refused to accept the Section 41 notice as a valid termination and he continued to work throughout the Christmas - New Year period and into January 2001, therefore, the builder did not accept repudiation and the contract remained on foot; see Association of Professional Engineers, Scientists and Managers Australia (APESMA) v Skilled Engineering Pty Ltd (1994) 122 ALR 471 at 479.

31. On 6 January 2001 the owners, on the advice of their solicitor, entered the premises and changed the locks thereby refusing the builder any further access to the site. This means that the owner did not terminate the builder in accordance with the method set out in the terms of the general conditions of contract at Clause 21.

32. Normally, a failure by party to follow the contractually agreed procedure for termination is regarded as an act of repudiation: Eriksson v Whalley [1975] 1 NSWLR 897. However there can be circumstances where this does not always follow: Cox v Franz (1987) 6 ACLR 35. Whether the exception applies depends on the circumstances of the case.

33. In this case the domestic building contract was not completed and other than a plea of frustration or a valid termination under Section 41, the failure of that contract to be completed must rest with one of the parties, whose conduct can be regarded at law as repudiatory. When making an assessment as to which party's conduct is repudiatory, I consider the correct approach is to stand back so as to take in the whole picture of the performance of the contract and the actions of the parties. This assessment is to identify which party's failure to perform its contractual obligations led to and resulted in the breakdown in the performance of the contract and that failure, for whatever reason, resulted in the contract failing to be completed. In other words what party's actions or omissions can be seen as so crucial as to cause this contract to fail to reach completion in accordance with its terms.

34. In this case the failure by the builder to finish by the 30 June 2000, even if repudiatory, was affirmed by the owner in allowing the builder to continue and resetting a new time for the completion of the works. There was no evidence from either party that the owner failed to pay stage payments as and when they properly fell due and this included the lockup payment.

35. I accept that there are a number of discussions between the parties post 30 June 2000 as to when the builder would complete the works. This issue became particularly urgent when the owner told the builder that he had sold his current dwelling and needed to move into Unit 2. I accept that this discussion took place somewhere in August 2000. The builder informed the owner that Unit 2 would be finished in about 2 months, this discussion took place in late August 2000. Thus Unit 2 should have been finished in late October 2000; but by this date it still had not reached the completion of the fixing stage.

36. The crucial reason that the units and in particular Unit 2, failed to progress satisfactory to completion after 30 June 2000 was that the builder failed to construct the units continuously and to apply sufficient building resources to carry out the work. On the builder's own evidence this commenced in early September 2003 when he applied for the lockup stage payments. The owners loan provider, Suburban Management Pty Ltd, refused to make the lockup payment as it did not consider lockup, as defined in the domestic building contract, had been achieved and as discussed above this is correct.

37. "Repudiation is to be found in the conduct, whether verbal or other, of the party in default which conveys to other party that a party's inability to perform a contract or promise or his intention not to perform it or to fulfil it only in a manner substantially in consistent with his obligations and in no other way": Brennan J at page 647 of Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623 647.

38. As discussed above, from the time the builder made the claim for the lockup payment in early September 2000 until the end of 2000, he gave evidence it was a financial struggle to keep the work progressing but he kept "plugging along". The lockup payment was received on 6 October 2000. However, from the builder's evidence it was obvious that his ability to work continuously and diligently towards the completion of the works was fatally compromised. Therefore, on balance I consider it was the builder's actions that led to the breakdown of this contract and the failure of its completion, I consider overall that, the builder's actions demonstrated his inability to carry out the contract works in accordance with any of the contractual or implied obligations formed between himself and the owner as to the time for completion: see Carr v G A Berriman Pty Ltd [1953] HCA 31; (1953) 89 CLR 327. This finding does not depend on any deliberate intention by the builder to fail to carry out the work diligently, I accept it could have been forced on him by his strained financial circumstances. Therefore, I consider that the builder by his actions repudiated the domestic building contract.

39. I accept that the owners did not terminate the contract in accordance with the terms of the contract; however, they did accept the builder's repudiation and thereby put an end to the contract by locking the builder out of the site in early January 2001. Whilst this was not the contractual method for termination I consider it was a sound common law acceptance of repudiation and termination of the contract as the owners were accepting what was a common law repudiation of the domestic building contract by the builder via his failure to successfully and continuously carryout his obligations to build the units: see Cox v Franz (supra).

40. Thus, I consider the owner to be the innocent parties in the breakdown of this contract; and thereby, entitled to damages which under the normal principles would be the cost to complete and the cost to rectify assessed as the costs to the owner. Such costs are made up of the actual cost of carrying out the works which will be the cost to the builder together with an oncost that would reflect the owner engaging an independent building contractor to carryout the rectification work; such oncost would reflect all the risks inherent in an independent contractor taking on the completion of a failed contractor's work together with a margin for profit.

41. At the hearing the owner produced a large bundle of invoices which Mr Kogut attested was money it had spend on the project outside the payments to the builder and they reflected its costs to complete. Mr Kogut admitted in evidence that the invoices also contained costs for works that were not covered by the domestic building contract: Exhibit A27, a list of these invoices is Exhibit A26. Neither the invoices nor the lists of invoices had been previously discovered.

42. The invoices were not in any proper order and there was no clear description of the work, nor, whether such work was to complete the works within the scope of the domestic building contract. I ruled that I did not consider these invoices sufficiently clearly identified the costs to complete and I would not generally rely on these invoices except where the parties could establish to me that specific invoices accurately reflected specific items of the cost to complete. I consider that I was on safer ground by relying on the estimates of the expert witnesses for each party. The costs of each item of rectification were assessed in the reports of the building experts, Mr Burridge for the owner and Mr Hegarty for the builder.

43. There was no major dispute as to the areas of work remained to be completed when the builder was dismissed from the site, these areas were identified in the builder's witness statement; the only area not identified by the builder was the skirting to one unit, both experts recommended that this work needed to be completed.

44. I will assess the cost to complete on an item by item basis as identified by the builder and the two experts:

A. Painting: Mr Burridge's estimate is substantially more than Mr Hegarty's estimate of $8,817. The builder gave evidence that he had been through the owners invoices in Exhibit A27 and identified all invoices that related to painting. These amounted to a sum of $9,128 and the builder submitted that this was the cost that should be allowed for painting and not Mr Burridge's estimate. I am willing to allow this sum for this item as this type of work was clearly identified in the invoices.

B. Floor coverings: This comprises carpets and floor tiling. Mr Hegarty's areas of carpet are much smaller than Mr Burridge's and their areas of tiling are also different. From my quick assessment I consider Mr Burridge's areas correct. Both experts used the costs set out in the provisional cost amounts in the specification for carpet and tiling. Therefore, I will adopt Mr Burridge's estimate of $8,759.

C. Wall tiling: I could not understand how Mr Burridge estimated the cost of the wall tiling. I consider Mr Hegardy's costing is straightforward, particularly in the assessment of the amount of material required and I accept his estimate of $832.

D. Completion of landscaping: Mr Burridge did not estimate this item as the owner submitted what he claimed were his actual costs of establishing the landscaping. However, I could not be sure and do not accept that the owners costs actually reflect landscaping work that was required under the domestic building contract; nor could I understand how the owners costing was assessed. In these circumstances I accept Mr Hegarty's estimate of $2,202.

E. Supply of appliances: Mr Burridge agrees with Mr Hegarty's estimate of $5,855 but claims that this estimate did not take account of two ovens and two hot plates that the owner had previously purchased. Mr Hegarty gave evidence of how his estimate was made up and that the two ovens and two cook tops had been allowed in his assessment. I accept Mr Hegardy's evidence and I do not allow Mr Burridge's allowance for these items of an additional $3,200. I allow for this item $5,855.

F. Plumbing: Mr Burridge accepted Mr Hegarty's assessment for plumbing fittings of $1,470.00. Mr Hegarty had not allowed for the fit out as he had been instructed this had already been paid by the builder even though it had not been carried out by the plumber. As I consider that the cost assessment is the cost to the owner it is not relevant to this assessment that the builder may have paid the plumber for work not carried out, the cost of such work needs to be included in the owners cost to complete. Mr Burridge said he had allowed a $2,500.00 per unit to fit off the plumbing appliances. Based on an hourly rate for plumber at $42 which is in Mr Burridge's pricing calculation, this would mean that a plumber took 57 hours to fit off the plumbing fittings. I consider this time is too long and I would consider that half of that time would be more than adequate to allow for the plumbing fit off. Therefore I will allow $1200 per unit which will give an additional $2400 on the agreed supply of fittings of $1,470.

G. Electrical fit off: Both experts agree that it was done by the electrician for the sum of $2574.00, which had been paid by the owner.

H. Skirting in Unit 1: Mr Burridge gave evidence that he considered Mr Hegarty's allowance for the amount of work to be done was incorrect, although this item refers to skirting it included the hanging of all the doors in the units. I accept Mr Burridge's evidence that additional work was required. Mr Burridge had allowed two men for four days to carryout this work. I consider that this is excessive for two carpenters for 4 days to do the skirting and hang doors. Mr Hegarty allowed two men by one day. I consider this is too short and I consider that the most reasonable estimate is two men for two days at $35 per hour which gives an estimate of cost for this item of work of $1,120.00.

I. Cornice in garage: Mr Burridge gave evidence that there was incomplete plaster in both units and he allowed for this work together with the cornice in the garage at $1000 per unit. There was no other evidence other than what Mr Burridge addressed. In his submission Counsel for the builder took me to the invoices and established that all plaster work carried out in the list of invoices cost much less than $2000. Mr Hegarty estimated the cost to complete the plaster work and cornice in the garage at a $155. I will allow $560.

J. Cleanup: Both experts accepted that the estimate for cleanup was $1200.

45. The total for all items of work to complete is $35,540, to this has to be added the oncost to allow for the owner to contract with an independent contractor to carryout these items to complete. The oncost used by Mr Hegarty was 30%; however I consider that this is an underestimate. Mr Hegarty gave evidence that he did not consider that a builder would have much trouble taking over the work from the builder in this case and completing it. I don't consider that this would be the case, either generally or in this particular case. Generally, completing or rectifying builders are very wary of completing other builders' work and insist on a high risk margin for risk if they are to take on the work. In this case whilst there was not any real defects any completing builder is still wary of what they cannot see and what may turn up as they work through to completion. Further, I accept the builder's evidence that at this time tradesmen were scarce. Therefore, to provide a more reasonable assessment of risk in this case and to acknowledge the special conditions at the time with the dearth of labour I would allow a further 15% on top of Mr Hegarty's oncost of 30%. Adding 30% and 15% to the estimated cost of completion of $35,540 brings the total cost to complete to the owner of $53,132.30.

46. The contract sum, with the agreed variations and credits, amounts to $260,927.80 for the two units. Deducting the amount I accept as having been paid under the contract of $164,250, leaves a sum outstanding under the contract of $96,677.86 and by deducting the cost complete to the owner of $53,132.30 results in the balance owed by the owner to the builder of $43,543.50; and this is the sum I find that the owner must pay the builder.

47. The builder sought interest from the date the owner locked him out to the date of the hearing, assessed at the penalty interest rate.

48. Prima facie, I do not consider such a claim can be completely maintained. I have found that the contract was only terminated by the owner because of the builder's repudiation of it. Therefore, the builder should not be able to benefit from his own wrong doing: Cheall v APECCS [1983] 2 AC 180 at 189. I consider this reasoning to be akin to the "prevention principle" as enunciated in SMK Cabinets v Hili Modern Electrics Pty Ltd (1984) VR 191, that an owner who causes a delay cannot take advantage of such delay by charging the builder liquidated damages over the period of the delay.

49. It is my view that in the circumstances of this current proceeding the repudiating party is obviously not completely barred from obtaining a remedy such as interest, but it is only so entitled after allowing the innocent party an opportunity, in the face of the repudiating party's breach, to fully understand the situation and assess their final contractual obligations as a result of the repudiating party's breach. In the current proceedings, I consider the owners should be given sufficient time to accurately assess the cost to complete and, given the risks involved as discussed above, this would be after the completion work being carried out. In the absence of any precise evidence as to when this reasonably should have taken place, I take the date of the final certificate of occupancy as the date upon which the works would have finally been completed ie. 15 February 2001. This is the date from which interest will be assessed up to the date of hearing. I will allow interest in the sum of $11,445.41.

50. The builder made an application for his costs on the basis that under Section 109(3) of the Victorian Civil and Administrative Tribunal Act the applicants claim was shown to be untenable either as inappropriate or lacking in merit; whereas, the builder had won a substantial amount of money, therefore there was a big difference in the relative strengths of the cases. Secondly, the case was complex and its nature was that of an inter-parties commercial dispute for which costs were more commonly awarded.

51. The owner responded by saying that the builder had been found to be the party at the centre of the breaches which resulted in this dispute. The owner was not at fault but Counsel for the owner acknowledged that it did not have a strong claim. The owner submitted that the builder should not get its costs of contesting a counterclaim as it was found to be fundamentally at fault in repudiating the contract. The builder may be entitled to some small amount of costs for defending the weak claim put forward by the owner, but it was realised fairly early on that this claim was untenable and the majority of the time in the hearing was spent arguing about repudiation and the counter claim. On balance the owner submitted there should be no order as to costs.

52. Both parties submissions as to costs have some merit. The owner's claim did disappear and was untenable. Balancing that however, was my finding that the builder's central point of the counterclaim that the owners had repudiated the contract was unsound; and in fact, the builder was found to have repudiated the contract. Further, the amount of hearing time spent on the owners defective claim was very small compared to the time spent arguing the repudiation point. I consider both parties contributed to the length of this litigation; however, the owner was the least prepared which unnecessarily prolonged the hearing. Further, the nature of the case was an inter-parties commercial dispute for which costs are more normally awarded than for cases of administrative review.

53. On balance I consider that the owner should have realised its case was untenable before it was brought. It should have been aware of the likely costs of completion that it could seek or have put its claims for its actual costs of completion in some form of logical understandable order. Therefore, I will order that the owners pay the builders costs on a low scale to reflect the fact that neither party was clearly successful; I will order such costs to be assessed on County Court Scale B, to be agreed and in default of agreement to be fixed by the Principal Registrar in accordance with Section 111 of the Victorian Civil and Administrative Tribunal Act.