Hyndman v Hurtob Homes Pty Ltd

[2014] VCAT 380

Victorian Civil and Administrative Tribunal|2014-04-04

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Court

Victorian Civil and Administrative Tribunal

Decision date

2014-04-04

Source

Original judgment source is linked above.

Judgment (74 paragraphs)

[1]

The Applicant Mrs Hyndman and the estate of her late husband, Peter Hyndman, ("the Owners") are the Owners of two adjoining and attached units at Arden Court in East Kew ("the Units").
The Respondent is and was at all material times carrying on business as a Builder. Its director, Mr Hunter is and was at all material times a registered Builder.
On or about 22 December 2009 the Owners and the Builder entered into a cost- plus contract for the construction of the Units with an estimated price of $980,000 inclusive of GST ("the Contract").
The Units were to be constructed in accordance with plans prepared by Mr Hyndman who was an architectural draughtsman, a building consultant and a former builder. The Owners intended that, upon completion, they would live in Unit 2 and rent out Unit 1 in order to derive an income.
With his knowledge and expertise Mr Hyndman would have been well capable of carrying out the construction himself except that he was suffering from very poor health. He approached Mr Hunter on several occasions requesting that he undertake the construction on a cost-plus basis and Mr Hunter eventually agreed to do so.

[2]

Despite the Contract, the contracting and supervision of some aspects of the construction were undertaken by Mr Hyndman himself. These included the roof, the lift and the demolition of the existing house. In addition, a number of suppliers were paid directly by the Owners. Additionally, because of Mr Hyndman's contacts within the building industry and his belief that he as owed favours by various people it was agreed that he would be consulted about the trades to be used and had the right to suggest subcontractors.

[7]

Most of the hearing time was occupied in dealing with the Owner's allegations of defective work. Mr Hegarty prepared three reports and Mr Campbell for the Builder produced one. Mr Lorich reported on the cladding and rendering but not on the other matters. A report was tendered by the Renderer from Mr Mladichek but he was not called. There were also reports about the acoustics of the party wall but the acoustic evidence was uncontroversial.
Mr Beck-Godoy submitted that Mr Hegarty, who had known Mr Hyndman professionally for many years, was not a disinterested witness. He described him as an admitted personal friend and close associate of the Owners for over 30 years. That was not quite the evidence. Mr Hegarty had known Mr Hyndman for 30 years and they had socialized but he had only met Mrs Hyndman once and he had not seen Mr Hyndman for three years when he received instructions for this proceeding.
Mr Beck-Godoy said that Mr Hegarty used "unmeasured language" in his reports to criticize Mr Campbell and that he gave the impression that he was advancing the Owners' interests rather than impartially assisting the Tribunal.
I think there is some validity in this criticism. Mr Hegarty's first report does express opinions on legal and contractual matters which are outside his function. He refers throughout his report to rectification of "poor workmanship" and "very poor workmanship" in contexts where it appears gratuitous. After referring to photographs he had seen of the render and a letter from Unitex he said in his report: "...it follows that the application of the applied finish was applied in a could not care a less attitude..." which is not only emotive but proved to be quite unwarranted on the evidence.
In his report of 17 October 2013 he ventures into arguments as to liability, supported by accounts of what he has been told. That is the role of an advocate rather than an expert. He criticized Mr Campbell for using Rawlinson's guide although that is commonly used in hearings in this list, as is Cordell's guide, which Mr Hegarty also criticized. He did this in a way that was very disparaging of Mr Campbell. For example, he said that Mr Campbell "generally uses a made up rate, which I assume he found in Cordells". It is possible for him to say that Cordell's rates are inappropriate, if that is his opinion, and say why without being disrespectful of the other expert.
I thought Mr Campbell gave more detached evidence but he did not assist me on the biggest item, which was the rendering. On that item I was more assisted by Mr Lorich. Mr Mladicheck's report consisted largely of annotated photographs of the render that he had taken but he did not do any destructive testing nor express any opinion on rectification.

[10]

The architectural plan, No. 2 of 5, provides that it is to be "75mm thick foam Easyclad with 3-5mm acrylic coating and finishing membrane coating".
Both the specifications and the drawings were prepared by Mr Hyndman.
The Builder engaged the Renderer to supply and install the foam and external mouldings and render them. Instead of using the Easyclad system the Renderer used materials supplied by Unitex.
According to the evidence of Mr Concannon the Unitex system has a number of components, all of which have to be used in accordance with the recommendations of Unitex in order for it to attract the warranty that that company gives to those using its materials.
After hearing the evidence of the Renderer as to the method of construction used, Mr Concannon said that he had departed from the Unitex system in several respects.
First, he did not glue the polystyrene panels together at the edges as required. Secondly, he did not use a sufficient build-up of the base coat of the render to the required thickness and thirdly, the mouldings that he used were manufactured by another company.
In addition, it appears that the Renderer stuck the mouldings to the cladding of the Units using an adhesive recommended to him by the staff at Bunnings, a well known hardware retailer.
After the Owners took possession of Unit 2, Mr Hyndman noticed that the render had a spotted appearance on very cold mornings. He took photographs, which were tendered, showing spots over the walls.
According to the expert evidence, this spotting is due to the transference of the warmer temperature from inside the house to the external skin of the foam cladding. The transfer occurs because the screws used to hold the foam panels to the frame conduct the heat to the outside. The difference in temperature dissipates over the plastic washer between the head of the screw and the outer face of the foam panel that it secures. The result is a moisture spot clearly visible from outside equivalent to the shape of the plastic washer. The appearance is unsightly but disappears as soon as to the external air heats sufficiently. It only appears on a very few cold mornings. At most times of the year the effect would not occur.
Mr Hegarty drew my attention to paragraph 5.02 of the Guide to Standards and Tolerances 2007, which provides:

[13]

Mr Hegarty said in his first report that the coatings applied to the walls were far too thin or had insufficient base in the mixture to conceal the fixings from view under all conditions. That accords with the evidence of Mr Concannon. Mr Hegarty pointed out that the contract requirement was for 3-5mm applied acrylic and finishing membrane to be applied and that certain delaminated pieces that he had observed were nowhere near that thickness.
In his next report Mr Hegarty reported on delamination of the architrave mouldings including the quoin mouldings at the corners and the shrinkage of some sill mouldings on one side of the house. He said that the Renderer had used a "conglomeration of various suppliers' products" and had installed them in an untradesmanlike manner. In addition to the thinness of the render he said that the aluminium window frames had not been masked and the mouldings had not been properly installed as a result of which a number of them were delaminated from the walls.
In regard to a join in one sill moulding which had opened to a gap of 7mm, he said that a full length moulding should have been used, although I note the Renderer's evidence that a longer piece was not available. He said some of the joints were cut and finished in an amateurish way and some mouldings had been cut too short. He also said that no expansion joints had been installed in the wall cladding system
Mr Campbell said that the scenario whereby the position of the fixings of the foam become apparent on cold mornings is a rare one but did not deal with the specific allegations as to defects in Mr Hegarty's report. He said that in the absence of any visual confirmation or written evidence he could make no further comment. As to costing he said that would depend upon the recommendations of the manufacturer.
Mr Mladichek said in his report that he considered the rendering to be above average. He acknowledged "...a small number of workmanship defects..." but said that since these were apparent to the Builder and the Owners at the time of handover, they were "...estopped from claiming defects". It is not for an expert to express an opinion about legal matters.
Mr Mladichek said that his testing was that the thickness of the render exceeded 3mm. He said that the spotting was a consequence of the physical properties of the cladding and rendering system used and that responsibility for the selection of the building elements was with Mr Hyndman as the designer. He said that increasing the thickness would make no difference.
Mr Lorich said that the surface coating over the foam board substrate was very thin and he considered it to be approximately 2mm to a maximum of 3mm in most areas. He also said that the render had no finishing trim to the bottom edge of the foam boards which left them exposed to future deterioration. He agreed with Mr Hegarty that there was a lack of wall expansion in contractual control joints to the internal corners and around window and door openings. He said there appeared to be a paint finish applied over the rendered surface which was to act as a membrane.
Mr Lorich concluded by saying that the Renderer may have used as little material as possible in the cladding and the application of the moulding product for a system from an unknown manufacturer. He suggested that this might be due to the cost of the Unitex products which, he said, are regarded within the cladding industry as being of superior quality.
He agreed that the "spotting" issue was a thermal bridging effect with heat from the inside of the house diffusing onto the metal fixing screws but he said that this only occurred if the plastic washers were too close to the surface. He said that if the render had been of the required thickness it would not have occurred. He said that the Unitex materials had not been applied in accordance with their documented requirements and that it was a fault of the application of the render not the materials supplied by Unitex.
The Renderer said that he used Unitex materials except for the mouldings and that he followed advice given to him from time to time by an employee from Unitex. That person was not called to give evidence.
He acknowledged not having glued the polystyrene panels together which Mr Concannon had said was required. He said that although the baseboard system had required a 5mm build-up of render as a basecoat this could not be achieved in practice. He said that following the fixing of the polystyrene foam boards he then applied the first coat of polymer render, then mesh, then the second coat of polymer render, then the baseboard render 1mm thick followed by the dry texture which is 2mm thick followed by 2 coats of paint which is the sealer over the other materials. On this basis, he said that he achieved a thickness of 5mm.
He referred to a photograph of a sample of render taken by Mr Hegarty and said that he measured the thickness of the render at that location at being 5.2mm. Mr Hegarty did not dispute that, but said that that was not the thickness of most of the render.
The Renderer said that he did put expansion joints in the external cladding but acknowledged that these had been rendered over or painted over. He said that the sill moulding was joined in the middle because the mouldings came in 3m lengths and the sill was longer than that.
Mr Hegarty said that he measured the thickness of the render at being less than 3mm on the side of Unit 2. Mr Lorich said that he took two samples to form his opinion that the render was too thin but was unable to recall precisely where he took them from.
The Renderer identified the supplier of the mouldings as a company called Auscuf and Mr Campbell said that that was a reputable company.
The Renderer said that Unitex had changed their plastic washers for a smaller white washer and suggested that the problem with the spotting might be due to the older washers that he had used.
Mr Concannon denied that the washers had been changed for any reason to do with performance but was instead related to Unitex having taken over another company. There was no expert evidence to support the Renderer's suggestion that the earlier washers were deficient.
The Renderer had tendered some product information sheets of the adhesive that he had used, suggesting that it was suitable for external application, despite the misgivings expressed by Mr Lorich in his evidence. Notwithstanding that, the mouldings have delaminated in several places, raising questions as to the suitability of the adhesive or the manner in which it was applied.
The Renderer said that he used finishing trim to the bottom edge of the foam boards and I find that he did.
The preponderance of the expert evidence is that the render is defective and that the two Units require additional render and the replacement of the external mouldings.
I do not accept that it is necessary to remove what is there. I accept Mr Lorich's opinion that it requires further coats of render in order to build it up to the required thickness.
Mr Hegarty costed the replacement of the render at $54,694.72. A major component in this costing was the erection and subsequent dismantling of a scaffolding for both Units. The Renderer said that he did the job with a mobile scaffold at considerably less expense, but the weight of expert evidence was that a perimeter scaffold is required. That was the view of Mr Hegarty.
Mr Campbell raised the possibility of using a scissor lift but I preferred Mr Hegarty's and Mr Lorich's opinion that the whole job will have to be scaffolded. Mr Campbell queried why all of the mouldings would have to be removed since only some have delaminated. I prefer Mr Hegarty's opinion that in view of the extent of movement between the mouldings that have already failed and the substrate the conclusion can be drawn that they are not properly fixed and that all of them should be replaced.
Accordingly, the amount of $54,694.72 assessed by Mr Hegarty will be allowed.

[14]

The ground floors of both Units are tiled and the finished floor levels are irregular.
Mr Hegarty referred to paragraph 2.08 of the Guide to Standards and Tolerances 2007 which provides that new floors are defective if, within the first 24 months, they differ in level by more than 10mm in any room or area or more than 4mm in any 2 metre length. The overall deviation of floor level to the entire building footprint is not to exceed 20mm.
Mr Campbell said that the appropriate tolerance to apply is that set out in paragraph 2.07 of the Guide, which provides that finished floor levels and/or reduced levels are defective where they depart from the documented finish level by more than 40mm.
There was some debate about this but I think that the two clauses are directed to different things. The complaint in the present case is about the levelness of the floor and in that respect Clause 2.08 is the appropriate measure. The evidence of Mr Murrihy demonstrates numerous instances in which the floor levels of both Units exceed the specified tolerance and these are set out in Mr Hegarty's report.
At the on-site inspection I did not consider that the floors were unsightly in any respect, apart from some very minor lipping. A golf ball placed on the floor will roll to the low points confirming that the floor is out of level and the legs of furniture needed to be packed in places. Otherwise the difference in levels is not visually apparent. Since the degree to which the floors are out of level exceeds the tolerance set out in the Guide and since there is no reasons to discount what the Guide says in this particular case, I find that the floors are defective. The real issue is, who is responsible?
Mr Hyndman was a building expert of considerable experience as well as having been a Builder on his own account. The tiles were laid by Mr Spiteri. He was sent to the site by Mr Hunter but was paid directly Mr Hyndman.
According to Mr Spiteri, he was engaged by the Builder and sent to the site and told that the tiles would be supplied directly by the Owners and that they would be paying him directly. He quoted a price per square metre to Mr Hunter and also told him that he believed that some of the floors were not level. From that I conclude that he had already been out to the site and had a look at it.
In paragraph 4 of his witness statement he said that he refused to tile the floors in the lounge dining and kitchen area because they were so out of level. However from his evidence it became apparent that his refusal related entirely to Unit 1. He had already tiled the floors in Unit 2. Mr Hunter hired a machine to level the floor and according to Mr Spiteri, he was then told by Mr Hunter that the floor was ready to receive the tiles.
Mr Spiteri said that, although he could see that they were still out of level, he proceeded to tile them, even though he had formed the view that the grinding had not fixed the floor problems.
He made a general statement in paragraph 8 of his witness statement that Mr Hunter "at all times was the person directing me to perform the tiling works" but he does not suggest that Mr Hunter was there when he was working and he gives no details of what he claims Mr Hunter said to him. He said that his company, Tiling Creations, was moribund but not in liquidation.
Mr Hunter said that it was Mr Hyndman who directed the Tiler, that Mr Spiteri had raised concerns about the levels of the concrete floor slabs which the Builder rectified. He said that he believed at the time that Mr Hyndman was then happy with the floors because he then instructed the Tiler to lay the tiles. Mr Hunter said in paragraph 30 of his witness statement:

[26]

Mr Hegarty refers to the requirement of Clause 3.3.1.8 of the Building Code of Australia that vertical articulation joints must be provided in straight continuous walls of unreinforced masonry at no more than 6 metre centres. He said that in the present case, the Building Surveyor had required them to be spaced at 5 metre intervals. He said no articulation joints have been provided in the basement brickwork of the party walls.
Mr Hegarty refers in his report to photographs that he was told the Owners had which confirm that no articulation joints have been provided in the base brickwork walls in the cellar. No such photographs have been tendered but I could see no articulation joints in the base brickwork at the inspection unless they were concealed behind the nib walls.
Since the site was low lying and on a flood plain, the two Units were required to be constructed upon very high base brickwork because of the danger of flooding, There is a single continuous suspended concrete slab poured on "Bondeck" integrated formwork under the Units extending right across the base brickwork from the external side of one unit to the external side of the other, resting also on the base brickwork of the party wall. Above this suspended Bondeck slab, the party wall is constructed from bricks but the rest of the cladding is timber frame clad in rendered foam. The effect of the Bondeck slab is to isolate the party wall above it from the party wall that forms part of the base brickwork. The Bondeck would also give the wall lateral support. Nevertheless I can see nothing in the Code which exempts the base brickwork from the requirement to incorporate articulation joints.
Apart from the base brickwork, the only brickwork walls where articulation joints would be required would be the party wall and the garage wall. There are none in the garage walls.
The engineering plans specify that articulation joints are to be provided as shown in the architectural plans. The architectural plans, drawn by Mr Hyndman, specify articulation joints in the party wall, which Mr Hunter says were installed, and one articulation joint at the rear of the garage which, it is acknowledged, exists, but none are shown in the base brickwork
Mr Campbell said that because of the internal linings it is not possible to say whether the articulation joints required to be placed in the party wall were provided or not. He said that the foundation and site plans show no specified articulation joints in the supporting base brickwork supporting the structural floor slab upon which the two Units are supported. He said that there no evidence of any structural movement, cracking or failing of the masonry walls nor any concerns raised.
There is no evidence to contradict Mr Hunter's evidence that the articulation joints required to be installed in the party wall above the Bondeck slab have in fact been installed. Mr Hyndman was regularly on site and in view of his interest in the construction and his undoubted expertise must have noticed if articulation joints had not been included. I am not satisfied that it has been established that there are no articulation joints in the party wall. However the Code required them in the base brickwork and also in the two garage walls, which are 6.5 metres long.
Mr Campbell said that he did not consider that the articulation joints were necessary but that if they were, Mr Hegarty's costing of $7,404.54 is fair and reasonable. However that costing includes the party wall and I have no costing for just installing them in the base brickwork and the garage. Looking at Mr Hegarty's costings and the apparent proportion of that relating to the party wall to be deducted I will allow $2,500.

[27]

Mr Hegarty said that there was no damp proof course in the base brickwork and to install it now will cost $11,356.25. It was not suggested that there was no damp proof course for the Units themselves.
Because the land is on a flood plain, Melbourne Water stipulated that the area under each Unit was not to be used for storage. However since taking possession the Owners have excavated under the Bondeck slabs and poured concrete slabs to create a cellar under each Unit. Some minor efflorescence was visible on some parts of the cellar walls, which are base brickwork. The Owners have since painted the walls.
Mr Hegarty suggested that the cause of the efflorescence was rising damp. Mr Campbell said that there was no evidence of rising damp but that water was back tracking in from the balconies. At the onsite inspection I noted that there was no drip line at the outer edge of the balcony above and the water appeared to be tracking along the underside of the Bondeck. I accept Mr Campbell's evidence in that regard. Mr Campbell pointed out that the Owners had paved the area under the Bondeck and that might have an influence on any dampness in the walls but that suggestion was not explored. In a notation to a photograph in the Tribunal Book at page 644 Mr Hyndman blamed the efflorescence of the west wall of Unit 1 on water shedding from the slab above. On the following page he made a similar comment regarding efflorescence on the face of the party wall. Other efflorescence he attributed to rising damp (see page 604)
Both paving and painting were post-construction. Notwithstanding this work, the areas in question were not constructed by the Builder or required by the plans to be habitable rooms. Mr Campbell said that the walls in question are structural support walls and that they do not form part of the habitable building. I think that is correct.
The requirement of the Code is to have a damp proof course not less than the specified distance above the ground. The complaint here appears to be that they are an excessive height above the ground, due to the height of the base brickwork. It was not suggested that there was any requirement in the plans to install a second damp proof course closer to the ground in order to prevent efflorescence in the base brickwork. In any case, it was not demonstrated to me at the inspection that there was rising damp in the base brickwork.
The Builder was required to construct the Units in a proper and workmanlike manner but Mr Hunter said that there was a damp proof material added to the mortar in the base brickwork. I do not find any breach by the Builder in this regard.

[28]

Mr Hegarty said that the rear balconies had insufficient fall allowing water to pond. I accept his opinion that this was undesirable and needed to be rectified. He said that this required the tiles to be removed, the concrete scabbled and the tiles re-laid on a screed to allow a sufficient fall. The balconies have since been retiled by the Owners at a cost of $4,543.00 which they now claim from the Builder.
According to the evidence of Mr Hunter and Mr Ellis which is also supported by amended drawings, the Builder was directed by Mr Hyndman to lower the sill of the sliding door leading onto the balcony just before the concrete was poured. The effect of this was to reduce the height of the step down to the balcony at the doorway from 150mm to 70mm. This reduced the amount of fall that could be achieved, because the concrete could not be laid below the steel supporting the outside edge of the balcony.
Mr Hunter said that after Mr Spiteri left the site another tiler came and laid two thirds of the balcony in Unit 1 but could not complete it because of the balustrade. The Owners completed that balcony and also the balcony of Unit 2.
In his report of 17 October 2013 Mr Hegarty acknowledges that the balconies have since been tiled "in an effort to mitigate loss" and in order "to allow occupation of the premises" but still suggests that further rectification is required "...to achieve a tradesmanlike finish so that water will drain freely ... ' from the balconies. He does not suggest that water is still ponding on the balconies. According to Mr Campbell's report, at the time of his inspection, both balconies were draining to the balcony edge.
I am satisfied that there was a lack of fall initially present. The Builder blames that on the lowering of the doorway but the rectifying tiler has managed to achieve a sufficient fall. I therefore find the claim for the cost of rectification the Owners incurred established. However I am not satisfied that the problem is still present and, consequently, I am not satisfied that the scope of works costed by Mr Hegarty are required.

[31]

After moving in to Unit 2, the Owners complained about the transfer of noise from Unit 1 through the party wall.
The plans had required the installation of insulation wool in the gap between the two leaves of brickwork. This would need to be put in progressively as the wall was constructed. Mr Hunter believed that it could not be put in because it would get wet from the rain during installation and would then not dry out. He said that Mr Hyndman was aware that the wool had not been installed.
After the Owners' complaints the Builder filled the gap between the two leaves of brickwork with styrene but that did not solve the problem. The Owners obtained a report from a Mr Unkles of Audiometric & Acoustic Services, acoustic engineers, who inspected the Units on 3 April 2011.
Mr Unkles said that standard wire ties linking the two leaves should not have been used and that resilient ties should have been used instead. He also said that the styrene in the cavity had poor sound insulating properties. He recommended that the plaster on one side of the party wall be removed, that it be re-fixed on specially mounted furring channels and that the gap between the plaster and the wall be filled with a specified insulating material. This was subsequently done by the Builder.
The Builder did not construct the wall as required by the plans in that it omitted the wool in the cavity. However according to the expert evidence this would have made no difference. The problem with sound transmission was due to the use of standard brick ties instead of the resilient ties recommended by Mr Unkles. The use of standard ties made the wall a continuous construction. Mr Reid submitted that this was defective work of the Builder. He said that an experienced builder should have know what brick ties to use. However it can also be said that a designer and building consultant of Mr Hyndman's experience should have known what brick ties to specify, yet no special brick ties were specified. It is the job of the designer to design to an owner's requirements and it is then the contractual obligation of the Builder to build what is designed.
Mr Unkles pointed out that the Building Code of Australia does not specify the degree of impact isolation but it does specify for the building to be of discontinuous construction. In the present case, the concrete floor between the two Units is continuous but that is what was designed. The wall is also continuous because standard brick ties were used.
Mr Hegarty considered that, notwithstanding the extensive work that has already been done, further work is necessary because of noise that he could hear. On this issue Mr Hegarty has ventured outside his level of expertise. He is certainly well qualified to cost rectification work but the scope of work necessary to achieve an acceptable acoustical outcome needs to be determined by an acoustic engineer.
Mr Campbell said that the Builder's opinion was that the noise transfer was through the concrete slab, which was continuous under both Units. He said that if that was correct then it would be a design problem. However he declined to venture an opinion, suggesting that Mr Unkles be consulted about the matter.
Since no special ties were specified I find no breach by the Builder in using standard ties.

[62]

The Builder claims that it has omitted to claim GST on some of its contractors' invoices, totalling $5,002.20. The amount claimed is apparently detailed in a letter from the Builder to the Owners dated 18 February 2011, although only the first and last pages of that letter were included in the Tribunal Book and the missing page was not produced.
Mr Reid submitted that because the invoices from the individual tradesmen did not specify that they were GST inclusive I must infer that the GST is included in the invoice. On that basis, he said that I should infer that there is GST already included and so it was not open to the Builder to charge GST again on the amount of the invoice. He referred me to the decision in ACCC v. Signature Security Pty Ltd [2003] FCA 3 but that case related to misleading pricing. The argument requires me to assume that GST has been collected by the tradesmen concerned. The regime for collection of GST was explained to me by Mr Reid and it appears that where a business has a turnover of less than $75,000 per year it is not required to be registered for GST.
I think the provision of the services of these tradesmen to the Owners by the Builder, together with the margin of the Builder for its own work and supervision, amounts to a taxable supply upon which GST is payable. The Builder will have to charge it and remit it to the tax office. It does not seem to me that it would have been open to the Builder to claim an input credit on GST in regard to any one of the invoices referred to. I ought not to assume that GST has already been included in the invoice from the subcontractor in the absence of some indication that that has occurred. The invoices are informal in nature and do not by their appearance suggest that they were issued by a tradesmen who is registered for GST.
However the only amounts about which evidence has been given are those set out in the two pages of the letter that are on the Tribunal file. They amount to $1,179.30, not the $5,002.20 claimed.

[71]

Mr Reid submitted, correctly I think, that the fact that the symbol "0" appears in that part of the Contract relating to liquidated damages simply means that the parties have not agreed upon a figure for liquidated damages and that therefore it is open to the Owners to prove the amount of any actual loss they have suffered by reason of the delay of the Builder. I accept that submission.
The Contract provided that the time for completion was 340 days from the commencement date.
The problem with this claim is that the remaining work to complete Unit 1 was shared by the Builder and the Owners and each blamed the other for the delay. It is apparent that there was great activity to have Unit 2 ready for occupation by the Owners by the date they moved in. Christmas followed shortly thereafter and then the complaints about sound transmission through the wall. There as then confusion as to who was to do what and lines of communication broke down from time to time. Both sides then expressed concerns about delay and each blamed the other.
The Builder complains that the Owners refused to allow the Builder's cabinetmaker or painter to be engaged and eventually engaged their own contractors. Mr Hunter said that his Cabinet Maker could have started in July 2010 and his painter would have started in September. He said that whereas his own painter was "ready to go", the Owners' painter was still carrying out work in late 2011.
Mr Hunter also complained that the windows the Owners had selected were not in accordance with the plans and not compliant because they were single glazed and not "Comfort Plus" as required. He said that he could not certify that the energy requirements were met.
The Builder complained about some mistakes in the plans and changes made by Mr Hyndman. Apart from the set down for the windows on the back balconies it appears that the architectural plans did not match the engineering drawings in regard to the staircases, which Mr Hyndman blamed on the engineer. Down pipes and a box gutter also had to be added.
Mr Reid said that I should ignore any time before 17 December 2010, which is when the Owners took possession. He said that nothing much happened between then and the 4 January and that thereafter the critical path was blocked by the deficiencies in the party wall and the Builder's rectification work. Certainly the work done on the party wall on its own would have prevented the completion of the work.
Mr Reid did not join issue with Mr Beck-Godoy in regard to the apparent inactivity of Mr Hyndman to order the water tank and the concreting which had to be done before the certificate of occupancy could be issued. However he said that although the painting was still progressing well into 2011, this was not relevant because work could not proceed in any event because of the party wall. However that argument operates both ways. The Builder could equally say that any delay on its part was not causative of any loss to the Owners because they had delayed in the work that they were to do.
I suggested to Mr Reid that the evidence was that the Builder's cabinetmaker and painter could both have started well within 2010 and that had the Owners been content for the Builder to use its own tradesmen the works might have been much more advanced by the end of 2010. Mr Reid said that, nonetheless, it was the party wall that drove the delay. He acknowledged if I did not find that the deficiency in the party wall was due to the Builder's breach, the delay damages could not be claimed.
I think that both parties contributed to the delay and I do not think that I ought to attribute the loss that the Owners now claim to the Builder.

Hyndman v Hurtob Homes Pty Ltd

At a glance

Court

Decision date

Source

Judgment (74 paragraphs)

Parties

Cases Cited (1)

Hyndman v Hurtob Homes Pty Ltd (Domestic Building) [2014] VCAT 380 (4 April 2014)