[2024] VCAT 106
General information, not legal advice.
Victorian Civil and Administrative Tribunal
2024-02-19
Original judgment source is linked above.
Claim by the current building owner of a house against the owner builder of the house in respect of alleged defects - sub-sections 137C(1)(a) - (c) and 137(2) of the Building Act 1993 -election by the parties to confine the dispute to the identification of defects and the quantification of the building owner's damages based on expert reports and quotes obtained by the parties, without the authors giving evidence orally - sections 97, 98, and 102 of the Victorian Civil and Administrative Tribunal Act 1998 - Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125.
Burton v Mizzi (Building and Property) [2024] VCAT 106
Liability under section 137C of the Building Act 1993 (Vic) is in issue
The parties relied on experts' reports but did not call the experts to give evidence orally
Judged from a commercial viewpoint, the plaintiff sustains an economic loss if [their] damages are not paid promptly, just as [they] sustain such a loss when [their] debt is not paid on the due date. The loss may arise in the form of the investment cost of being deprived of money which could have been invested at interest or used to reduce an existing indebtedness. Or the loss may arise in the form of the borrowing cost, i.e., interest payable on borrowed money or interest forgone because an existing investment is realised or reduced ... Opportunity cost, more so than incurred expense, is a plainly foreseeable loss because, according to common understanding, it represents the market price of obtaining money. [Emphasis added]
Quote by Stardust Constructions 10 February 2020. Figures include GST
Quote by Ground Up Excavations 18 November 2022. Figures in the quote are stated as excluding GST but in this column they are shown as including GST
No control joint between the driveway and the house
Cut a control joint and repair damaged concrete $1,800.00
Defect denied "as a result of insufficient evidence" (page 24)
Mr Edwards' commentary and speculation on conveyancing is not within his area of expertise and is irrelevant.
Mr Edwards acknowledges that the roof tiles are chipped.
Poor quality touch ups of paint around windows and doors, and masking tape left on some surfaces in the property
Areas of over painting, and also of a failure to paint, are conceded . Claims that there are gaps between some internal fixing materials are denied on the bases that they are less than the 1 and 2mm referred to in the Guide to Standards and Tolerances and because of the age of the house. These are opinions which Mr Edwards is entitled to express as they are within his expertise.
Mr Edwards' commentary and speculation on conveyancing, made in the context of gaps in plaster which exceed the 1mm referred to in the Guide to Standards and Tolerances, is not within his area of expertise and is irrelevant.
' Price based on minimum call out fee' and with scaffolding included. $800.00 ex GST / $880.00 inc GST
I cannot accept the proposition that all of the necessary work to repair the defects in the painting could be done for a mere call out fee. Ground Up does not make an allowance for preparation, supply of groundcovers, or clean up.
Of the two quotes I must accept that of Stardust Constructions.
Over-flashing which is required in the portico had not been installed [item 11 also concerns the portico]
The omission of pressure over-flashings to the front portico soaker flashings is conceded to be a defect , but the rest of the roof flashings to the front portico are not defective
In various locations, flashing fell towards the house rather than away from the house
The fall towards the metal fascia on the house is 0.5°, and there is no evidence of rust or corrosion to the flashing as a result of the gradient and it was not observed to be holding water. Mr Edwards expresses this point in the negative - "There is insufficient evidence that the garage boundary wall flashing is not functioning properly" Defect denied
The existence of this defect is conceded (pages 13 and 24)
Mr Edwards' commentary and speculation on conveyancing is not within his area of expertise and is irrelevant.
Ground Up's quote is based on the minimum call out fee for a cleaner, and includes the cost of a neutral wash. I consider that removing smears of mortar requires more, and that it would be overly optimistic to think that a cleaner could do the whole task for just the callout fee.
No articulation joints between some windows and doors, and brick walls
Replace for windows and to stacker doors and create articulation joints $10,280.00
Valley irons damaged when roof tiles were installed
Mr Edwards says there is one small area in a valley in the right side of the portico which has a "non-corroded scuff", which is consistent with having been caused when the tiles were installed, but which has not caused any problems. Defect denied.
Page 17 of Mr Jamieson's report contains photograph of three areas in which valley irons have been damaged. This contradicts Mr Edwards' assertion that there was only one affected area.
I prefer Mr Jamieson's photographic evidence to Mr Edwards' description.
As Ground Up did not quote this item I take the quantum to be agreed at $2,675.00.
Powdercoat finish to a doorframe has been damaged, and an attempted repair on site has not succeeded
Mr Edwards describes this as a "scuff" as distinct from damage, and notes that Ms Burton has owned the house since 2016.
I consider Mr Edward's evidence to be the more logical. The photographs are consistent with the door frame being scuffed by one or more people walking through the door.
I am not persuaded that Ms Burton has proven that the section 137C warranty was beached by Mr Mizzi.
Mr Edwards says this allegation is very imprecise, with not even the location of the cracks having been identified. He concludes that there is no evidence of defective work. Defect denied.
I am not persuaded that Ms Burton has proven that the section 137C warranty was beached by Mr Mizzi.
In the portico, there are some holes in the roof which are large enough to allow birds to get into the roof space
Mr Edwards says there is a "small gap" between the ends of the portico eave soffits and the main roof, but that the objective of the relevant building code is to safeguard occupants from infection; and that there is no evidence that anyone has become infected as a direct result of birds entering the roof space
There should not be a gap. Therefore, this is a defect. Mr Edwards' advocacy exceeds his role and is to be disregarded.
Ground Up has not costed the rectification of this item, and I take the Stardust Constructions' quote to be agreed.
11A* [* Due to a typographical error by Mr Jamieson, there are two items numbered 11]
The bottom of the sliding laundry door has been damaged by nails protruding from the adjacent room
Mr Edwards says the nail damage has been repaired but that the necessary remedial painting has not been performed, which amounts to a defect
Necessary painting is conceded to have been omitted.
Ground Up has not costed the rectification of this item, and I take the Stardust Constructions' quote to be agreed.
In the bathroom, the vanity mixer tap is loose and requires adjustment
Defect denied, as Mr Edwards says the mixer is not loose
As a matter of logic I find that if the mixer is loose, it is more likely than not to have become so through usage over time and that Ms Burton has not proven that a s137C warranty has been breached.
The front door is out of plumb by 4mm over a length of 2m
Mr Edwards shows to my satisfaction that there is no defect here, within the Guide to Standards and Tolerances
There is no waterstop where the bathroom floor meets the passage
On pages 18 and 19 of his report Mr Edwards says he could only comment properly in respect of this alleged defect by carrying out destructive work, which he has not done.
Mr Edwards, and this Mr Mizzi, has not denied this item. I accept Mr Jamieson's opinion in those circumstances
In the ensuite and the bathroom, the showers have been completed without a hob, so that the shower does not finish at least 5mm above the floor thereby necessitating installation of a waterstop
On page 19, at paragraph 16.3, Mr Edwards conceded that water stop angles had not been installed at the perimeter of the showers. He then asserts that because the waterproofing is working, there is no defect. Mr Edwards does not say how he reached the conclusion that the waterproofing is working.
On page 24 Mr Edwards appears to say that the defect is denied "as a result of insufficient evidence" of its cause (page 24)
Mr Edwards conceded that water stop angles had not been installed at the perimeter of the showers. His other comments are mere advocacy.
Both showers, in the ensuite and the bathroom, are 'walk in' showers as distinct from having a shower base, and neither of them has an adequate fall of 1mm per 100mm
Mr Edwards uses a different device to measure the fall, and says it is between a minimum of 11mm and a maximum of 28mm in 1 metre, all of which are above the required standard of 10mm in 1 metre
I accept Mr Edwards' as the more accurate measure and so I dismiss this item.
None of the toilets have been properly secured to the floor. They are held down with silicone.
Mr Edwards says he could only comment properly in respect of this alleged defect by carrying out destructive work, which he has not done.
Defect denied "as a result of insufficient evidence" of its cause (page 24)
Mr Jamieson positively stated that he had observed that the toilet pans were not screwed to the floor.
I accept Mr Jamieson's positive evidence in preference to Mr Edwards' explanation of why he could not give evidence.
The rear of the bath has not been sealed with a flexible sealant.
Replace the bath with a 'back to wall' freestanding bath, $3,570.00
NOTE though: Ms Burton's hiring of Ferraro Plumbing to repair the leak in the bath at a cost of $544.50 supersedes Stardust Constructions' quote
Mr Edwards said that when he inspected the bath, the silicone around it had been cut and that Ms Burton said that her plumber had done that. However on page 4 of his report Mr Edwards said that Ms Burton had taken no part in his inspection.
On balance I am not satisfied that Ms Burton made any concession or admission to Mr Edwards.
I am satisfied that Ms Burton acted appropriately when engaging Ferraro Plumbing to repair the leak in the bath. Why would she engage a plumber if it were unnecessary? I find that Ferraro's charge of $544.50 dictates the assessment of the quantum of this item.
In the ensuite bathroom, the grout between the tiles in the shower is rough and thus not applied properly.
Defect denied "as a result of insufficient evidence" of its cause (page 24)
Mr Edwards' comment on this item is simply quibbling. Mr Mizzi was the owner builder of the house. Mr Jamieson describes, and then displays in photographs, defective grout. I find that there is sufficient evidence that Mr Mizzi is responsible for this defective grout.
In the ensuite bathroom, some tiles are too close together, and the grout lines are inconsistent
Replace tiles at shower screens. Remove and replace all floor tiles in bathroom, ensuite and laundry, $6,075.00
Defect denied "as a result of insufficient evidence" of its cause (page 24)
Similarly to item 19, in the face of photographs of the shower showing that grout lines are not consistent, Mr Edwards quibbles that he can't discern the location. I reject Mr Edwards' evidence in this respect.
Ground Up did not quote in respect of this item (which was quoted by Stardust Constructions to include items 14, 15, 16, 19 and 20).
The pedestrian access doorframe, between the garage and the house,has not been installed with full perimeter door seals
Before me are the two quotes, which objectively do not say how the respective figures have been calculated even though there are more words on Ground Up's quote.
The supply and fitting of a door seal is needed. This is a straight forward item of work, which could be performed by a contractor who was on site attending to other items.
The tops and bottoms of all external doors and all internal wet areas have not been sealed
One of the bedroom doors rubs on the floor carpet, showing that it is too big and needs to be cut down
Defect denied on the basis that it was not raised until years after the purchase of the house. The implication is that this is a maintenance item to be borne by Ms Burton as the homeowner
This is not a maintenance item. It is a defect which Ms Burton might have attended to earlier, but that is not the same thing. Had Ms Burton been claiming the cost of replacing the carpet, she might have been faced with an argument that she had not mitigated her damage. But she is not making such a claim.
The timber floors are out of level, and are not within the acceptable allowance of 4mm over 2 m.
Take up the flooring, grind the concrete slab, and relay the flooring $5,620.00
Stardust Constructions does not state how it assessed its cost of $5,620.00. Ground Up does explain how it costed the work at $3,905.00 inc GST, including the use of a self levelling screed.
In these circumstances I must prefer Ground Up's quote.
[1] In paragraphs A, B and C of the prayer for relief in her Points of Claim dated 3 March 2022, Ms Burton claimed $46,658.00, interest, and "Any other order the Tribunal deems fit". As it is common knowledge that building costs increase over time - even putting aside the well-publicised inflation experienced in Australia since the Covid 19 pandemic - I consider that paragraph C put Mr Mizzi on notice that Ms Burton would update the quantum of her claim. In addition, had Ms Burton spent the $46,658.00 in rectifying the defects, the claim for interest on that sum would have increased the claim above $46,658.00. Mr Mizzi was on notice from the outset that more than $46,658.00 was claimed.
[2] Ms Burton's legal practitioner wrote a letter of demand to Mr Mizzi, and clearly played a significant role in the preparation of her Points of Claim, but did not act for her in the proceeding.
[3] Section 98(1)(b) of the Victorian Civil and Administrative Act 1998 (Vic).
[4] Section 98(1)(c) of the Victorian Civil and Administrative Act 1998 (Vic).
[5] Section 98(1)(d) of the Victorian Civil and Administrative Act 1998 (Vic), which says "The Tribunal must ..."
[6] Section 97 of the Victorian Civil and Administrative Act 1998 (Vic).
[7] Section 102(1)(a) & (b) of the Victorian Civil and Administrative Act 1998 (Vic) requires the Tribunal to give the parties a "reasonable opportunity" to call or give evidence and to examine, cross-examine or re-examine witnesses. It is up to the parties to decide whether to take the opportunities. I did not refuse to allow the parties to cross-examine their opponent's experts; the parties waived their right to do so.
[10] [1989] HCA 8; (1989) 171 CLR 125 at 143.
Burton
Mizzi
(1989) 171 CLR 125