(a) carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the building contract;

(b) that all material to be supplied for use in the Works will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new;

(c) carried out in accordance with, and will comply with, all laws and legal requirements;

(d) carried out with reasonable care and skill; and

(e) the Works would result in a home that was suitable for occupation at the time the Works were completed ('Warranties').

1. The Owners have the burden of proof to satisfy the Tribunal on the balance of probabilities of the facts necessary to establish their claims. If the Owners are unable to prove their claims on the balance of probabilities, they must be dismissed.
2. The Owners claim that the Builder breached the Warranties in respect of numerous items of defective or non-compliant work. For the Owners to succeed, in respect of each of the defects alleged, they must demonstrate, among other things, that the Builder did not carry out the building works in a proper and workmanlike manner or with reasonable care and skill or did not comply with all laws and legal requirements.
3. The Owner must also prove the breach of the Warranties caused them to suffer loss and damage.

1. The central issue for determination is whether the Builder breached the Warranties, as set out in section 8 of the DBCA.
2. If the Builder breached the Warranties, the Builder is liable for the Owners' loss and damage caused by the breach, including damages in the nature of the cost to rectify the defective work.
3. As to what damages the Owners are entitled to recover, the 'ruling principle' is that, where a person suffers loss because of a breach of contract, that person is to be placed in the same position as if the building contract had been performed.[1]
4. In claims involving defective building work, this is usually assessed by determining the cost to rectify the defects, provided that the rectification work is: necessary to produce conformity with the terms of the contract; and a reasonable course to adopt in all the circumstances.[2]
5. In this case, the Owners claim they are entitled to the cost of rebuilding the home or the cost of substantial rectification work to their home.
6. In Clarendon Homes Vic Pty Ltd v Zalega,[3] Senior Member Walker summarised the principles that apply when considering whether proposed rectification work is reasonable:

In considering whether it would be unreasonable to award the cost of rectification, the Tribunal should consider all the circumstances of the case before it. The nature and significance of the breach should be looked at in terms of the bargain the parties had and the relative importance of the breach within the context of the contract as a whole. The decision in Ruxley[4] suggests that account can be taken of the following matters at least:

(i) Whether and to what extent the work, although not in conformity with the contract, is nonetheless serviceable;

(ii) Whether and to what extent the defect has affected the value of the work or the building as a whole;

(iii) The cost of rectification, the proportion that the breach bears to the cost of rectification and whether the cost of rectification would be wholly disproportionate to the real damage suffered by reason of it;

(iv) The likelihood that, if rectification cost is awarded, the sum so ordered will actually be spent on rectification. Obviously, a successful plaintiff can spend his damages as he sees fit but this may be a useful indicator of whether the amount sought is greater than the real loss suffered.

Quite obviously, this list is by no means exhaustive ...

1. In this case, the Builder has the burden of proving it would be unreasonable to award the cost of rectification claimed. In Clarendon Homes Vic Pty Ltd v Zalega, the Senior Member held:

As stated in Bellgrove, the question of reasonableness is one of fact. Mr Sedal submitted, correctly I think, that the Builder bears the onus of proof that it would be unreasonable to award the full rectification cost. That was the view taken by Rares J of the Federal Court in Tabcorp and I respectfully agree.[5]

1. In the Owners' Second Further Amended Points of Claim dated 24 December 2024 ('SFAPOC'), the Owners allege the Builder failed to properly construct the footings in several respects.
2. The Owners allege that there are defective footings causing slab subsidence, which do not conform with the Engineering Plans because of:

(a) omitted bored pier(s) by the Builder;

(b) bored piers being 400 mm diameter not 450 mm diameter as designed;

(c) bored piers not founded 900 mm into natural silty clay or 300 mm into rock as designed;

(d) the bottoms of the bored pier holes not being cleaned out and so they contained a relevantly large volume of soft material that compressed following full loading;

(e) edge beams inadequate in some locations around the slab;

(f) 2 m deep edge beam omitted by the Builder on downhill side of the house;

(g) insufficiently wide internal footing beams;

(h) missing internal footing beams; and

(i) internal footing beam cut short.

1. The Builder denies the claim and says there are no documented movement defects, the dwelling is performing satisfactorily and any signs of distress (to the extent there are signs of distress) do not constitute building defects in accordance with AS2870-2011 Residential slabs and footings [6] and the Guide to Standards and Tolerances.[7]
2. Whether there are building defects is the subject of expert evidence.
3. The Owners rely on four reports prepared by Alejandro Rodriguez a structural and geotechnical engineer from Structural Melbourne, dated 5 August 2019, 12 April 2022, 7 February 2023 and 16 December 2024.
4. The Builder relies on three reports prepared by Hugh O'Brien a structural engineer and building consultant from BSS Group, dated 10 December 2022, 26 November 2023 and 29 April 2025.
5. I consider each of the alleged categories of building defects below.

1. The Owners allege the following issues in relation to the bored piers:

(a) omitted bored pier(s);

(b) bored piers being 400 mm diameter, not 450 mm diameter as designed;

(c) bored piers not founded 900 mm into natural silty clay or 300 mm into rock as designed; and

(d) the bottoms of the bored pier holes not cleaned out and so they contained a relevantly large volume of soft material that compressed following full loading.

1. In support of these allegations regarding the bored piers, Mr Grech gave evidence, which can be summarised as follows:

(a) No bored pier inspection was conducted by the relevant building surveyor or his building inspector:

(b) Bored pier photos of bottoms of bored piers[8] show no clay, hence confirming piers are not founded 900 mm into natural soil being a clay base;

(c) The concretor and Builder refused to clean out the bottom of the bored pier holes;

(d) Builder offered a $13,000 discount at the end of the building work due to the fact he had not installed the footings as per plans;

(e) He raised the footings defects with the Builder who refused to return to the site to fix the defects.[9]

1. Mr Grech also gave evidence during the hearing regarding the bored piers, which can be summarised as follows:

(a) 35 to 40 cubic metres of soil was extracted from bored pier holes and spread around the slab area creating extra fill;

(b) he phoned the Builder and concretor about loose fill in bored piers but got no response;

(c) after the bored pier holes were drilled out, there was no clay anywhere on top of the site so no clay was extracted from the bored pier holes;

(d) bored pier auger was only 1.8 m long, being way too short;

(e) he did not get extra fill imported onto site after soil test or contract signed with the Builder on site;

(f) the relevant building surveyor or his building inspector did not come on site to inspect the bored pier holes;

(g) the garage floor has subsided considerably.

1. In relation to the allegation that the excavator auger used was approximately 400 mm diameter, in lieu of the 450 mm designated on the structural engineering drawings, Mr O'Brien gave evidence that:

(a) the hire invoice provided by the Builder shows a 450 mm diameter auger was hired for the building work; and

(b) during his December 2024 site inspection, he measured the diameter of the piers that were exposed and confirmed they were over 450 mm wide.

1. The experts, Mr O'Brien and Mr Rodriguez, agree that there is one location, at the southwest corner of the dwelling, where a bored pier cannot be located.
2. Whilst Mr O'Brien qualified that his investigation was limited, due to not wanting to risk damaging the stormwater and other services in this area, he accepted that the pier may be missing in that location.
3. Mr O'Brien also gave evidence that despite the missing pier, there is little to no building movement in this area. Mr O'Brien considers the engineering design to be conservative and the piers to be supplementary in their structural requirement because, if the importing and compaction of fill has been undertaken in accordance with the relevant Australian Standard and is therefore suitable for a residential slab without bored piers, the piers are supplementary. In his view, if the pier is missing, it should be replaced via conventional underpinning.
4. Mr Rodriguez agreed that an appropriate solution for an omitted bored pier is to underpin. However, he contends that, given his view about broader defective building work, rectification of the omitted bored pier in isolation is irrelevant.
5. Mr O'Brien acknowledges that the approved plans specified the 2 metre bored piers were to be founded 900 mm into clay or 300 mm into rock. Therefore, the piers not being deep enough or being placed in soft material is not in accordance with the plans. However, as there is no evidence of building movement, he does not recommend their reconstruction is necessary in this case.
6. Mr O'Brien gave evidence that the piers are supplementary in their structural requirement, and his inspection demonstrates that there are no instances of movement that is outside of the allowable tolerances. I consider this in more detail below.

1. The Owners allege the following issues in relation to edge beams:

(a) edge beams inadequate in some locations around the slab; and

(b) 2 m deep edge beam omitted on downhill side of the house.

1. The experts agreed that after Intrax (the project structural engineers) carried out soil testing and provided its structural design, fill was introduced to the site.
2. This fill was not taken into account in the design that was approved by the relevant building surveyor and the Builder relied on in carrying out the building work. Therefore, the Intrax design cannot be relied upon as reflecting what was actually built.
3. The experts also agree that the Owners and/or the Builder should then have reverted to Intrax to inquire as to whether the design needed to be changed to account for the introduction of the fill, which the experts understand did not happen.
4. Mr Rodriguez is of the opinion that the edge beams are inadequate because they were placed on uncontrolled fill and the edge beams were not built in accordance with the Intrax design for external beams with a deepened rebate.
5. Mr O'Brien considers there was no structural requirement for a deepened rebate on the downhill side of the house. He explained that the purpose of a deepened rebate is to allow for a sloping site and is done so that the brickwork can be extended down when the brickwork is lower than the extended level. However, since more fill had been imported onto the site after the design was completed, the deepened edge beam was no longer required. He agreed that the extra fill should have been updated on the engineering and working drawings to reflect the updated conditions. However, he maintains his view that the edge beams are structurally adequate and suitable, as they were constructed generally in accordance with the Intrax design typical details.
6. I accept Mr O'Brien's evidence that the edge beams are structurally adequate and suitable for the soil conditions.

1. The Owners allege the following issues in relation to internal footing beams:

(a) insufficiently wide internal footing beams;

(b) missing internal footing beams;

(c) internal footing beam cut short.

1. Mr Rodriguez's report dated 11 September 2024 documents his use of Ground Penetrating Radar ('GPR') to scan various areas of the floor slab and finding that narrow beams were identified. One of the beams was cored and found to be 95mm at the base, instead of the 110 mm required by AS2870-2011 Residential slabs and footings.
2. Mr O'Brien disagrees that there are narrow beams. He relies on the GPR scans conducted by Mr Shane Paulo of Concrete X-Ray, who provided an assessment of the ribs at the locations alleged to have been narrow and missing. Mr Paulo's assessment did not identify instances of consistently reduced width beams and confirmed there were no missing beams.
3. In relation to the core that was found to be less than 110 mm, Mr O'Brien considers this is likely to be a localised issue (not for the length of the beam) and it is likely due to the rotation of one of the central pods. He noted that this minor shifting or rotating of pods prior to concrete pours was not uncommon in this construction technique. He gave the example that, if one pad were rotated by 1 degree, it would lead to small areas of localised narrowing, of up to 20 mm, at the corners as well as localised widening at the opposing corners.
4. In any case, Mr O'Brien opined that, based on his calculations, the hypothetically narrow beams would not structurally fail, just experience more deflection.
5. Given the construction technique used in these slabs, I find it is unlikely that there was an intentional reduction in the width of the internal footing beams. I accept Mr O'Brien's rationale that:

To reduce the pod spacing over a length of beam would require the systematic and intentional modification or removal of the pod spacers in the construction prior to concrete placement - this would create more work and not provide any benefit to the workers or reduction in material (the concrete volume is still the same over the slab, as the adjacent beam is required to be wider to compensate over the grid), which in my experience has been typical rationale for a 'shortcut' in construction works.

1. I accept that any sections of beams that may be narrower than 110 mm are likely localised and due to the rotation of one of the central pods. I also accept Mr O'Brien's opinion that, whilst this is not considered a Deemed to Satisfy solution in accordance with the Building Code, a performance solution could be obtained to achieve compliance.
2. In view of Mr O'Brien's opinion, and the evidence of the performance of the footings to date, I accept that the internal footing beams do not require strengthening or modification to adequately perform.

Finding - the movement does not constitute a building defect

1. Mr Rodriguez gave evidence that there is slab subsidence and the footings do not conform with the engineering plans.
2. Mr O'Brien acknowledges that the building has experienced some minor movement, which he says is consistent with differential footing movement and some out of levels at the time of construction. However, he opines that the building movement and signs of distress (including cracking and separation) do not constitute building defects.
3. Both experts agree that the building has experienced some movement and the damage and deflection is not outside tolerances, as set by AS2870-2011 Residential slabs and footings and the Guide to Standard and Tolerances.
4. All internal cracking and separations of skirting boards and architraves do not exceed 1 mm and are therefore not defective, as per Clause 9.14 of the Guide to Standard and Tolerances.
5. In accordance with AS2870-2011 Residential slabs and footings, this type of slab is to perform within the acceptable limits of up to 30 mm of deflection across the slab or Δ (a) the building movement and deflection is presently within tolerance;

(b) there is evidence that most of the consolidation of newly placed fill material will have already been realised because:

(i) 80-90% of consolidation of newly placed material will have been realised at around 7 years;

(ii) the remaining 10-20% of consolidation will occur in the long term;

(c) given that the building work was completed in June 2019 and the building is now over 6 years old, only a small amount of movement will be seen in the future;

(d) this is supported by the observation that there has been very little further movement since the first reading taken by Mr O'Brien on 10 December 2022;

(e) the remaining 10-20% of consolidation and any resulting movement is expected to remain within the required tolerances; and

(f) any future movement may also be influenced by poor site drainage and the poorly executed excavation and backfilling of the piers to inspect them post construction, which is separate to the issues raised in this proceeding regarding construction of the footings.

1. Further, there is no evidence of any consequential damage, such as internal damage to the dwelling, or evidence which would be a consequence of slab movement or heave.
2. For the above reasons, I find the Owners have not proved the Builder breached any of the statutory warranties in relation to the alleged footings defects and, accordingly, the Builder is not liable for the Owners' loss and damage.

QUESTION 2 - RECIFICATION WORK AND COST OF RECTIFICATION WORK

1. Given that I have found the movement to the dwelling does not constitute a building defect, and there is no evidence of any consequential damage, I find there is no need or justification for rectification work, including demolition and reconstruction of the dwelling.
2. It appears from the expert evidence that the Builder failed to install a bored pier on the southwest-corner of the dwelling. However, I find on the evidence before us that the failure is not causative of any building movement or damage to the dwelling. Further, the Owners did not lead any evidence of the scope and cost of rectification work required, including retrofitting a bored pier.
3. Overall, and for the above reasons, I find that the Owners have failed to prove they have suffered any loss and damage by reason of the Builder's work.

1. In their SFAPOC, the Owners also claim the Builder failed to install adequate footings to support the internal central wall, on which the roof trusses are loaded.
2. The Owners allege the roof trusses are supported by an internal wall with no bored piers under the wall.
3. The structural design of the dwelling does not provide for bored piers under the internal stud wall in question, and it appears it was assumed by the design engineer that the roof trusses would span from the outside walls.
4. Mr O'Brien conceded that there was an oversight in the construction of the roof trusses that the design engineer should have been made aware of. However, he considers there is no requirement for bored piers to be under stud walls in accordance with AS2870-2011 Residential slabs and footings. Despite this, Mr O'Brien provided a finite element analysis of the deflection of the slab with the roof truss loadings to the rib with the various worst case load combinations. The analysis found that the deflection experienced was within the allowable limits. He gave evidence that, if the ribs were deflecting excessively or were structurally inadequate to resist the loads, there would be greater deflection.
5. In contrast, Mr Rodriguez's opinion is based on the fact that, because bored piers are not under the internal stud wall, it is defective building work. He did not complete a load analysis or reference any standard or allowable tolerances. Mr Rodriguez conceded that the impact of the roof truss movement, if it was not properly supported, would have been seen in the first two years of completion of the building work.
6. I find that, whilst the roof trusses are loading an internal wall that was not intended by the approved plans, there is no roof defect that requires rectification. I make this finding because:

(a) an assessment of the slab with the roof truss loadings to the rib with the various worst case load combinations, found that the deflection experienced was within the allowable limits;

(b) if the ribs were deflecting excessively or were structurally inadequate to resist the loads, there would be greater deflection;

(c) the dwelling is over 6 years old and there is no deflection being experienced by the load bearing wall not being built on bored piers; and

(d) the dwelling has experienced the impact of an internal wall (with no bored piers under the wall) supporting roof trusses and is performing.

QUESTION 4 - RECIFICATION WORK AND COST OF RECTIFICATION WORK

1. Given that I have found the construction of the roof and supporting internal wall does not constitute a building defect, and there is no evidence of any consequential damage, I find there is no need or justification for rectification work, including demolition and reconstruction of the dwelling.
2. On the basis of the above discussion in relation to the alleged roof defect, I find that the Owners have failed to prove they have suffered any loss and damage by reason of the Builder's work in respect of the roof.

1. For the above reasons, I find the applicants have not proved their claims against the Builder on the balance of probabilities.
2. I further find that the Owners have not proved that they have suffered any loss and damage.
3. I also find that the Builder has proved its counterclaim against the Owners and is entitled to the amount claimed.
4. Accordingly, I will make orders in respect of the applicants' claim and the respondent's counterclaim.
5. I will grant leave to the parties to address the Tribunal on the question of costs and interest.

1. [1] Lu v Metricon Homes Pty Ltd (Building and Property) [2021] VCAT 1359, [33], citing Robinson v Harman [1848] EngR 135; (1848) 1 Exch 850, 850; [1848] EngR 135; 154 ER 363, 365, cited with approval in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272, [13].
2. [2] Ibid [34], citing Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613, 617-18.

[3] (Domestic Building) [2010] VCAT 1202, [165](d).

[4] Ruxley Electronics and Construction Ltd v Forsyth [1994] 1 WLR 650.

[5] [2010] VCAT 1202, at [159].

[6] Standards Australia, AS 2870-2011 Residential slabs and footings, 2011.

[7] Victorian Building Authority, Guide to Standards and Tolerances, 30 March 2015. I note that the Guide to Standards and Tolerances is currently under review.

[9] Grech witness statement dated 16 October 2024, TB173 - 177 inclusive