[2025] VCAT 704
General information, not legal advice.
Victorian Civil and Administrative Tribunal
2025-08-07
Mr J
Original judgment source is linked above.
Application seeking leave to amend Points of Claim and to file and serve further expert reports; relevant considerations; factors identified in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175.
CODEHQ Pty Ltd ACN: 072 393 741 (formerly Nicholson Wright Pty Ltd (ACN 072 393 741)
Carter v Tarastar Pty Ltd (Building and Property) [2025] VCAT 704
The second and third respondents noted the applicant's application was filed a number of months ago and at a time close to 10 years after the occupancy permit for the property was issued, that it fails to specify any details about the claim against the respondents and no points of claim accompanied the application. They are concerned if the applicants do not properly plead and particularise their claim within a short period, they will not be in a position to properly investigate and consider if they should join any further parties to the proceeding before any time limit expires under s24 of the Wrongs Act 1958...
The only defect for which it is alleged our clients are liable is set out in paragraph 24 of the POC as follows:
A competent relevant building surveyor, acting with reasonable care:
(a) would have known that stamped drawing A-1.5 Rev 8 depicted a step-down from the internal floor of Unit 9 to the Unit 9 balcony terrace of 100mm;
(b) would, on carrying out a final inspection of the Works, have noticed that the balcony terrace was approximately the same level as the internal floor of Unit 9 (Step-Down Defect), hence the Works failed to comply with the Stage 2 Building Permit;
(c) accordingly, pursuant to section 37A of the Building Act 1993 (Vic), would have issued a direction to fix the Step-Down Defect.
In Points of Claim dated 9 September 2022 (POC), the Applicants allege at paragraph 24(b) that a competent building surveyor, acting with reasonable care:
"would, on carrying out a final inspection of the Works, have noticed that the balcony terrace was approximately the same level as the internal floor of Unit 9 (Step-Down Defect), hence the Works failed to comply with the Stage 2 Building Permit"
The alleged Step-Down Defect is the only defect pleaded as against our clients.
So that our clients may consider their position as to whether further parties should be joined to the proceeding, please confirm:
7.1 that your client is the relevant builder for the purposes of the relevant works conducted at the Applicants premises;
7.2 whether any subcontractors were engaged by your client who may be relevant to the alleged Step-Down Defect; and
7.3 whether your client is aware of any other parties whose services may be relevant to the alleged Step-Down Defect.
(a) Points of Defence; and
(b) Notice claiming contribution from the builder pursuant to s 23B of the Wrongs Act.
As noted earlier, 25 February 2023 was the last day by which the surveyor could bring a contribution claim under s 23B of the Wrongs Act.
(a) by 30 June 2023, the applicants must file and serve any further expert reports upon which they intend to rely;
(b) by 14 July 2023 the applicants must file and serve any application for leave to file and serve amended Points of Claim;
(c) the proceeding was listed for further directions hearing on 3 August 2023, at which time any application for leave to file and serve amended Points of Claim would be heard, and further orders made for the conduct of the proceeding.
The date by which the applicants must file and serve their application for leave to file amended points of claim, is extended to 31 August 2023. The applicants must file and serve any affidavit in support and submissions of not more than 3 pages.
By 29 September 2023 the respondents must file and serve their responses to the applicants' application together with affidavits in support and submissions of not more than 3 pages.
This proceeding together with related proceeding BP1959/2021 is listed for a further directions hearing on 8 December 2023 at 9:30am (allow 2 hours) at which time the Tribunal will hear the applicants' application and further orders will be made for the future conduct of the proceeding_._
Mr and Mrs Carter are not proposing to amend their Points of Claim and once the expert report of Mr Wilson is filed, their expert evidence that they will rely upon will be filed and served.
(1) At any time, the Tribunal may order that any document in a proceeding be amended.
(2) An order under subsection (1) may be made on the application of a party or on the Tribunal's own initiative.
The Tribunal may give directions at any time in a proceeding and do whatever is necessary for the expeditious or fair hearing and determination of a proceeding.
The Tribunal must act fairly and according to the substantial merits of the case in all proceedings.
(a) whether there will be a substantial delay caused by the amendment;
(b) the extent of any wasted costs;
(c) whether there is an irreparable element of unfair prejudice caused by the amendment;
(d) concerns of case management arising from the stage in the proceeding when the amendment is sought;
(e) whether the grant of the amendment will lessen public confidence in the judicial system; and
(f) whether satisfactory explanation has been given for seeking the amendment at the stage when it is sought.
An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend...
A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.
During the course of the applicants considering the s.75 application, it was decided that the Applicants wanted to obtain further expert evidence to address the liability of the Second and Third respondents.
(a) is and at all material times has been incorporated under the Corporations Act 2001 (Cth) and able to be sued;
(b) was, until about 14 November 2021, known as Nicholson Wright Pty Ltd, and thereafter has been known as CODEHQ Pty Ltd.
(a) a registered building practitioner in the category of:
except for a 3-month period of suspension between 20 May and 20 August 2013, and a further period of suspension in 2015 - 2017 (as to which see Victorian Building Authority v Tsaganas [2017] VSCA 248); and
(b) a director and/or employee of the Second Respondent.
(a) incorporated under section 28(1)(a) of the Subdivision Act 1988 (Vic) by registration of Plan of Subdivision PS636725G (Plan of Subdivision);
(b) able to be sued under section 28(2) of the Subdivision Act 1988 (Vic);
(c) the registered owner of the common property at 15 Well Street, Brighton (more particularly described in the Plan of Subdivision), as nominee of the owners for the time being of the lots at 15 Well Street, Brighton.
The Applicants do not know the identity of the other contracting party/parties, or whether the Contract was in writing, oral or to be implied. The insurance certificate in the Vendor's Statement (defined in paragraph 15 below) refers to the Builder, states that the "Building Owner / Beneficiary" was Ashlyn Dale Pty Ltd and Hallinan Holdings Pty Ltd, and states that the contract date was 3 June 2010. Further particulars will be provided after discovery.
(a) the Builder warranted that the work would be carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract (section 8(a));
(b) the Builder warranted that all materials to be supplied by the builder for use in the work would be good and suitable for the purpose for which they are used (section 8(b));
(c) the Builder warranted that the work would be carried out in accordance with, and would comply with, all laws and legal requirements including, without limiting the generality of this warranty, the Building Act 1993 and the regulations made under that Act (section 8(c));
(d) the Builder warranted that the work would be carried out with reasonable care and skill (section 8(d));
(e) the Builder warranted that the home would be suitable for occupation at the time the work was completed (section 8(e));
(f) the Builder warranted that the work and any material used in carrying out the work would be reasonably fit for the purpose of constructing a residential building or would be of such a nature and quality that they might reasonably be expected to achieve that result (section 8(f)).
The Applicants do not know the identity of the other contracting party/parties, or whether the contract was in writing, oral or to be implied. Further particulars will be provided after discovery.
The Applicants do not hold a copy of the Stage 1 Building Permit. Further particulars may be provided after discovery.
Stamped as part of the Stage 1 Building Permit was drawing A-1.5 Rev 3, which relevantly depicted a step-down from the internal floor of Unit 9 to the Unit 9 balcony terrace of 150mm.
The Stage 2 Building Permit was in writing and addressed to the "Owner" (described as "Jonathan Hallinan") and the "Agent" (described as "Brayshaw Architects").
The Stage 2 Building Permit relevantly provided that there was to be a mandatory inspection on "Completion of works", and that an occupancy permit would be required.
Stamped as part of the Stage 2 Building Permit was drawing A-1.5 Rev 8, which relevantly depicted a step-down from the internal floor of Unit 9 to the Unit 9 balcony terrace of 100mm.
The Occupancy Permit (defined in paragraph 14 below) recorded the following inspections:
The Applicants became owners of 9/15 Well Street
The contract of sale, and the associated Vendor's Statement dated 30 November 2016 (Vendor's Statement), were in writing.
(a) water ingress caused by defective works in respect of the Unit 9 terrace balcony (Balcony Defects); and
(b) water ingress caused by defective works in respect of the common property roof above Unit 9 (Roof Defects).
In respect of the Balcony Defects, the Applicants rely on the following reports:
(ii) Section 1.2 Internal Dampness - Lounge (pages 7 - 10);
(iii) Section 1.3 Loose Tiles and Efflorescence - Balcony (pages 11 - 14); and
(iv) Section 2.2 Flashing to Balcony Doors (page 28);
Mr Eldridge also made recommendations as to the scope of rectification (page 5).
(i) items 7 - 10 and 16 re rising damp, water penetration and water leaking (pages 11 - 15 and 23); and
(ii) items 14 - 15 re tiles and grout (pages 19 - 21);
(i) the tile clad deck is showing signs of water damage, with efflorescence observed within the tile grout;
(ii) drummy tiles throughout deck area indicates deteriorating tile connection/deck membrane;
(iii) ponding to deck area indicates insufficient grade on the deck.
(iv) grated drain points to the deck undersized; and
(v) tile deck is approximately the same level as the internal floor which is noncompliant to NCC-2019.
Mr Clark also made recommendations as to the scope of rectification (page 8).
(i) The terrace leaks causing dampness and deterioration to the Applicants' property;
(ii) The terrace waterproofing does not comply with AS4654.2;
(iii) There is efflorescence in the mortar joints of the terrace tiling and the terrace tiling is damaged;
(iv) The bathroom and ensuite waterproofing is allowing water to penetrate behind the tile linings causing dampness and a loss of amenity and is not compliant with AS3740;
(v) A roof leak has caused irreparable damage to the gas fireplace;
(vi) The extraction fan to the master bedroom ensuite is not fit for purpose; and
(vii) The heater flues located which discharge flue gasses near the terrace do not comply with AS5601.1.
(i) The performance requirement of the BCA has not been satisfied at the doors onto the balcony;
(ii) The failure to have a waterproofed freeboard or a waterproofed step-down to prevent water penetrating the building at the doorsills is a defect; and
(iii) The architectural drawings do not detail any step-down between the internal floor and the balcony floor.
In respect of the Roof Defects, the Applicants rely on the following reports:
(i) Section 1.5 Water Stain to Powder Room Ceiling (pages 17 - 18); and
(ii) Section 2.1 Lagging to Pipes on Roof (page 27);
(iii) Section 2.2 Flashing to Balcony Doors (page 28);
Mr Eldridge also made recommendations as to the scope of rectification (page 5).
(ii) tray flashing joints (over Unit 9) (item 12 on page 6);
(iii) box gutter sump 1 overflow device (over Unit 9) (item 13 on page 7);
(iv) parapet and barge cappings and flashings (item 14 on pages 7 - 8);
(v) plant area roof drainage and overflow (item 15 on pages 8 - 9);
(vi) joints between intersecting roof sheets and flashings (item 16 on page 9);
(vii) box gutter sump 2 overflow device (item 17 on page 10);
(viii) box gutter changes of direction (item 18 on page 10);
(ix) box gutter sump 3 and 4 overflow devices (item 19 on page 11);
(xi) box gutter sump 5 overflow device (over Unit 9) (item 21 on page 12);
(xii) roof sheet turn down treatment (item 22 on page 12);
(xiii) roof sheet turn up treatment (item 23 on page 13);
(xiv) sarking to box gutters (item 24 on page 13);
(xv) capping turn down substandard (item 25 on page 14);
(xvi) box gutter depth substandard (item 26 on page 14);
(xvii) joints between intersecting flashings (item 26 on page 15);
(xviii) substandard cuts in capping to match profile of roof sheets (item 27 on page 15).
Mr Wenning also made recommendations as to the scope of rectification (item 29 on page 16).
Further, in respect of Unit 9 Mr Wenning opined (item 30 on page 16):
"We have been asked to identify and report the source, cause
and rectification of the water leak into Unit 9 Powder Room.
It is likely that the underlying cause of water entry is lack of turn-
up at the upper end of roof sheets under the ridge capping, and
inadequate laps, fixings and sealant in joints between flashings
(i) roof drainage appears to be non-compliant to AS3500; and
(ii) staining to the ceiling in areas indicates leakage of the roof/roof drainage,
Mr Clark also made recommendations as to the scope of rectification (page 8).
Further particulars may be provided. following expert evidence (which the Tribunal has ordered the Applicants to deliver by 4 November 2022).
(a) the work was not carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract (section 8(a));
(b) all materials supplied by the builder for use in the work were not good and suitable for the purpose for which they were used (section 8(b));
(c) the work was not carried out in accordance with, and did not comply with, all laws and legal requirements including, without limiting the generality of this warranty, the Building Act 1993 and the regulations made under that Act (section 8(c));
(d) the work was not carried out with reasonable care and skill (section 8(d));
(e) the home was not suitable for occupation at the time the work was completed (section 8(e));
(f) the work and any material used in carrying out the work was not reasonably fit for the purpose of constructing a residential building or was not of such a nature and quality that they might reasonably be expected to achieve that result (section 8(f)).
Cost of rectification of the defects and consequential damage caused thereby.
The Applicants rely on the expert report of Built Assess dated 30 October 2023.
In his report dated 27 November 2017, Mr Clinton Eldridge (of Buildcheck) estimated the cost of his scope of rectification work to be $186,500.
Further particulars may be provided following expert evidence. (which the Tribunal has ordered the Applicants to deliver by 4 November 2022).
The claim against Mr Tsaganas and the Second Respondent
See Moorabool Shire Council & Anor v Taitapanui (2006) 14 VR 55; [2006] VSCA 30.
More particularly, the aforesaid duty arose at law because:
(i) the subsequent owner/s of land at 15 Well Street, Brighton, would have an interest in both the land and in the Works;
(ii) the purchase of the land and the Works by a subsequent owner would be a very significant investment;
(iii) the subsequent owner/s of the land, including the Applicants, would rely upon the building surveying services having been performed with reasonable care and skill, in entering an agreement to purchase the land and in paying a significant price for the land and the Works; and
(iv) if Mr Tsaganas and/or the Second Respondent failed to take reasonable care in conducting the building surveying services, the Applicants could suffer significant economic loss and/or damage to the Works due to defects in the Works.
(i) the Applicants had no right to vet or veto the appointment of Mr Tsaganas and/or the Second Respondent as the provider of building surveying services;
(ii) the Applicants had no contractual relationship with Mr Tsgaanas and/or the Second Respondent;
(iii) the Applicants had no ability to oversee the work of Mr Tsaganas and/or the Second Respondent or assess the competence of Mr Tsaganas and/or the Second Respondent in the course of it performing its role as the provider of building surveying services for the Works; and
(iv) the Applicants did not have the building qualifications or expertise to independently assess the building surveying services or the Works;
The Applicants refer to and rely on the particulars under paragraph 13 above.
(a) would have known that stamped drawing A-1.5 Rev 8 depicted a step-down from the internal floor of Unit 9 to the Unit 9 balcony terrace of 100mm;
(b) would, on carrying out a final inspection of the Works, have noticed that the balcony terrace was approximately the same level as the internal floor of Unit 9 (Step-Down Defect), hence the Works failed to comply with the Stage 2 Building Permit;
(c) accordingly, pursuant to section 37A of the Building Act 1993 (Vic), would have issued a direction to fix the Step-Down Defect;
(d) would not have issued the occupancy permit while the Step-Down Defect existed.
(a) did not notice the Step-Down Defect at or before final inspection;
(b) did not issue a direction to fix the Step-Down Defect;
(c) instead, issued the Occupancy Permit in circumstances where it should have been refused (or, alternatively, issued with conditions in respect of the rectification of the Step-Down Defect).
The Applicants refer to the matters in paragraphs 22 to 25 above.
The Applicants rely on the report of Built Assess dated 30 October 2023.
The Applicants also rely on the report of Accord Building Consultants dated 13 March 2025 which opines that a relevant building surveyor:
(a) Would have identified that the stage 2 building permit drawings did not meet the requirements of the Building Act, Building Regulations, Building Code of Australia and Australian Standards with regard to:
(b) Would have identified that the building permit endorsed architectural drawings did not provide a reasonable description or details regarding the waterproofing of the external walls or terraces/balconies at the Applicants' property;
(c) Would have identified that the building permit endorsed architectural drawings do not provide adequate design details of the terrace drainage to confirm how compliance with AS 3500.3-2003 has been achieved;
(d) Would have identified that the building permit endorsed architectural drawings do not provide a reasonable description of how to waterproof the external walls and terraces/balconies of the Applicants' property;
(e) Would, upon carrying out the final inspection, identified the following defects:
Further particulars may be provided following expert evidence. (which the Tribunal has ordered the Applicants to deliver by 4 November 2022).
The Applicants refer to and repeat the particulars under paragraph 20 above. in respect of the cost of rectification of the Step-Down Defect and consequential damage caused thereby.
(b) the chattels, fixtures, fittings and services related to the common property or its enjoyment.
The Applicants refer to and repeat paragraph 18(b) above, and the particulars thereunder, in respect of the Roof Defects.
The Applicants refer to and repeat the particulars under paragraph 20 above in respect of the cost of rectification of the Step-Down Defect and consequential damage caused thereby.
Domestic Building Dispute Resolution Victoria (DBDRV)
As against Mr Tsaganas (Third Respondent) and the Second Respondent:
................................................................
Carter
Tarastar Pty Ltd
(2009) 239 CLR 175
(2006) 14 VR 55