1. Mr Daniel Robinson of counsel, instructed by Northcote Lawyers, appeared on behalf of the Owner. The Owner attended the hearing and gave evidence. The Owner relied upon two expert reports in support of her claim, namely:
   1. The report dated 25 October 2013 prepared by Mr Peter Limburg, director of FinalInspect, (Limburg Report) who was engaged by the Owner in October 2013. Mr Limburg attended the hearing and gave evidence; and
   2. The report dated 8 April 2015 prepared by Mr Rob Fenton, the technical assessor appointed by the Victorian Building Authority at the request of BACV (Fenton Report).[6]
2. The Builder represented himself at the hearing and gave evidence.
3. Neither party called the Architect to give evidence. The Builder said he had asked the Architect to attend the hearing, but the Architect had told him he would prefer not to be involved. I draw no inference from the failure of either party to call the Architect, but I note I am deprived of relevant evidence that he might have been able to give.
4. At the end of the hearing the parties were each given leave to file written submissions so that each party had an opportunity to address questions of law which had arisen during the hearing. Of note in this regard was the Owner's contentions that the Builder's counterclaim was precluded by reason of the terms of the Contract, and that those same terms did not apply to her claim given it was a claim for damages for breach of contract. A timetable was set requiring the Owner's submissions to be filed before the Builder's submissions, so as to afford the Builder an opportunity to obtain legal advice, should he so desire.
5. It is apparent from the parties' submissions that both the Owner and the Builder have sought to submit further evidence to that which was given during the hearing. Leave to file written submissions is not an opportunity to seek to file further evidence. The hearing having concluded, to the extent the written submissions sought to address matters or to lead further evidence, which was not addressed or led during the hearing, I have not had regard to it.

1. As stated above, the Contract is a standard form major domestic building works contract, edition ABIC SW-2008 H, published by the Master Builders Association and the Australian Institute of Architects (ABIC simple building works contract). Pursuant to the provisions of that contract, whilst the architect is the owner's agent for giving instructions to the contractor, the architect is also appointed to administer the contract. Part of the architect's administrative duties is the assessment of progress claims submitted by the contractor.[7] In acting as assessor, valuer or certifier, the architect is required to act independently. The centrality of the architect's role is underlined by the fact that the owner warrants the architect has authority to administer the contract.[8]
2. Other provisions in the ABIC simple building works contract relevant to the current dispute include the following:

1. the architect must assess a claim for progress payments and issue to the contractor and the owner a certificate setting out any payment due to either party within 10 business days after receiving the claim; 2. if the architect reasonably needs additional information to assess the claim the architect must promptly ask the contractor for it;

1. on receiving a certificate, the party to be paid must promptly deliver the certificate to the other party for payment[9] and the amount stated as owing in the certificate must be paid within the period shown in the schedule, in this case, 7 days;

1. if a party wishes to dispute a certificate issued by the architect, it must do so by giving written notification to the architect within 20 working days after receiving the certificate. If the party fails to give a notice the party will not be entitled to dispute the matter at all;[10] 2. each party must pay interest at a rate of 10% on any money that it owes the other but fails to pay on time; 3. the works are at practical completion when, in the reasonable opinion of the architect, they are substantially complete and any incomplete necessary work or defects remaining are of a minor nature and number; 4. the contractor must correct any defects or finalise any incomplete work, whether before or after the date of practical completion, within the agreed time as stated in an instruction or, if no time is stated, within 10 working days after receiving a written instruction from the architect[11]; 5. if the contractor fails to correct a defect or finalise incomplete work within the time nominated, the owner may use another person to correct the problem at the cost of the contractor[12]; 6. if the owner is required to use another person to rectify the problem, the owner is entitled to make a claim to adjust the contract and the architect must promptly assess the claim[13]; 7. the contractor is entitled to submit a final claim for payment when all defect liability periods have ended, the contractor has rectified all defects and finalised all incomplete work it became aware of by instruction from the architect and the works have been completed in accordance with the contract[14]; 8. the contractor must submit a final claim within 20 working days after receiving a written request to do so from the architect and if the contractor fails to comply with a written request, the architect may determine the final claim[15];

1. after a final claim has been made under the contract, the contractor is not entitled to make any further claims under this contract[16]; and

1. the final certificate must state the architect's assessment of all outstanding entitlements under the contract and is evidence of the party's entitlements under the contract.[17]

1. The implied statutory warranties prescribed in the DBC Act[18] include the following:
   • (a) the builder warrants that the work will be carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract;
   • (b) the builder warrants that all materials to be supplied by the builder for use in the work 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) the builder warrants that the work will be carried out in accordance with, and will 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;
   • (d) the builder warrants that the work will be carried out with reasonable care and skill and will be completed by the date (or within the period) specified by the contract.
2. These statutory warranties are also reflected in the express terms of the Contract entered into between the parties.[19]
3. The law provides a method of assessing a person's loss and damage where there is a breach of the warranty implied into a building contract. The test is what work is reasonably required to deliver to the client that which should have been provided had the contract been performed.[20] What rectification work is necessary and reasonable is a question of fact to be determined by the circumstances of the case.

1. This dispute raises interesting and complex legal issues, only some of which were addressed in the submissions filed on behalf of the Owner. Further, it is apparent that the Builder has chosen not to seek legal advice. The submissions filed on his behalf addressed only the evidence he sought to rely upon and did not raise or grapple with any of the legal questions which arose for consideration. Whilst it is the Builder's prerogative not to seek legal advice, arguments contrary to the Owner's submissions were not fully argued before the Tribunal.
2. I have set out below my view of the proper legal analysis of the facts which have given rise to this dispute and the legal consequences. In addition, I have considered the contentions put on behalf of the Owner, both in support of her claim and by way of defence to the Builder's counterclaim. It will be seen from my reasons below that, irrespective of the various legal analyses of the issues which arise based on the facts of this case, the outcome in terms of the assessment of both the Owner's and the Builder's claim is the same.

1. When it came to addressing the Builder's claim, the Owner's counsel argued that, because the Builder's claim was for work and labour performed under the Contract, and was accordingly of a type assessed by the Architect in progress claims, and because the Builder had not disputed any progress claim in the manner required by the Contract[21], the Builder could not dispute the Final Certificate.
2. However, in relation to the Owner's claim, it was contended that because her claim was for damages for breach of contract, the dispute resolution mechanism set out in the Contract did not apply and the Final Certificate could not bar her claim. In this regard it was said the claims arising from defective and incomplete work were not claims for money owing to the Owner under the terms of the Contract, but rather they are claims in the nature of damages, occasioned by the Builder's breach of the Contract.[22]
3. In support of that contention, the following was submitted on behalf of the Owner, namely, that:

1. the Architect applied the estimates detailed in the Limburg Report for rectification costs as deductions from the full adjusted contract price in order to determine the value of the work actually performed; 2. what the Architect is assessing and certifying is the amount of money payable under the Contract itself, for work and labour done under the Contract;[23]

1. the Contract does not provide for the Architect to assess and certify a claim for damages for breach of the Contract;[24]

1. what implications the Architect's certification has on any subsequent claim brought by a party depends upon the basis of the claim brought; 2. in the case of a claim for payment of money owing for work performed under the Contract, Clause A8 is definitive; 3. the Architect's certificates were relevant to damages insofar as the Final Certificate is "evidence of the parties' entitlements under this contract and that the contractor has performed its obligations under this contract, subject to any matter already in dispute under section P";[25] 4. neither party engaged the dispute process in Clause A8 and therefore Clause A8.2 precludes any claim made by any party for payment under the Contract for works which have already been assessed and certified (or refused certification) by the Architect, other than in the amount certified by the Architect;[26] 5. the Final Certificate now represents the final balance of the parties' entitlements for work done 'under the Contract';[27] 6. the Owner would be entitled to bring a 'simple' claim for the amount certified in the Final Certificate, and is still so entitled;[28] and 7. the Owner's claim for damages effectively 'subsumes' or 'nets off' the claims in the Final Certificate, 'because damages are calculated as against the full balance of the contract price (not just the value of the works actually done) so as to put her in the same position as if the Contract had been fully performed by both parties'.[29]

1. I am not satisfied that the Owner's argument, to the effect that her claim for damages is not barred by reason of the Final Certificate as it is a distinct claim to one based on money certified under a final certificate, is correct.
2. The Owner claims damages of $19,353.50 in respect of the cost of rectifying defects. The works in respect of which the defects are said to exist were all performed during the course of the Contract and must have been the subject of certification by the Architect, noting that the role of the Architect includes, 'acting as assessor, valuer or certifier'. Accordingly, it seems to me, that each of the Owner's claims must be taken to have been certified by the Architect, taking known defects into account. In this regard the Final Certificate expressly places a value on the Builder's 'unsatisfactory and incomplete' work. Ordinarily, if the Architect's progress claims have not been disputed by the Owner in the manner required by the Contract, then the Final Certificate will be conclusive in relation to known defects.
3. In my view, in the absence of either party challenging the Final Certificate in accordance with the Contract, both parties are bound by it.
4. However, I am satisfied that special circumstances exist in this case.
5. The evidence was that after the issuing of the Final Certificate, which I note was over 12 months after practical completion of the works had been achieved, the Builder willingly returned to the site, with the consent of the Owner, and carried out certain rectification works to items which had been included and considered by the Architect at the time of issuing the Final Certificate. In this way it is my view that the parties have, by their conduct, agreed that they would no longer be bound by the Architect's assessments. In these circumstances, it is not possible for the Tribunal to take the parties back to where they were at the time the Final Certificate was issued and limit their respective entitlements to where they stood in terms of certification at that stage.[30]
6. I therefore find that by reason of the subsequent conduct of the parties, they agreed to no longer be bound by the Final Certificate. The effect of this finding is that the Owner's claim is assessed on the basis upon which it was pleaded, and the case was run, namely, as a claim for damages based on breach of the statutory warranties. Further, the Builder's claim is also to be assessed on its merits, that is, as a claim for work and labour performed. I note he also ran his case on this basis. Further, whilst I have found the parties have, by their conduct, agreed not to be bound by the Final Certificate, that is not to say that the contents of it are to be ignored. I have, to the extent it was appropriate to do so in assessing the various claims, had regard to its contents, the Final Certificate forming one part of the relevant evidence to be considered.
7. For completeness, even if I accepted the Owner's submission that she is entitled to claim damages by way of the rectification and completion costs, in place of pursuing a claim based on the Final Certificate, I reject the submission that, in addition to claiming damages, the Owner would also be entitled to recover the amount owed pursuant to the Final Certificate. This is because in certifying the amount due to the Owner under the Final Certificate, the Architect assessed the contract value of the works carried out by the Builder. In doing so, the Architect took into account and deducted from the contract price, the cost to rectify and complete the work based on the findings in the Limburg Report. Accordingly, if the Owner recovered an amount to rectify defects by way of a deduction from the price of the work, then the Owner could not thereafter claim the same amount by way of damages - since it would be unjust for an owner to recover a second time that which had already been allowed as a deduction from the amount owing to the builder.

1. One of the challenging and peculiar aspects of this dispute is that the Architect issued the Final Certificate in circumstances where the works had not been completed in accordance with the Contract. It was issued over 12 months after the Builder had left the site, following representations made by the Owner to the Architect. It is apparent that the provisions of the Contract which govern the parties' rights in the event the contractor fails to correct defects and finalise necessary work were not followed.[31] It would seem that the Architect then sought to give finality to the dispute between the parties by taking into account incomplete and defective work when issuing the Final Certificate.
2. One of the cases relied upon by the Owner in support of her contention that the amount certified by the Architect is final and conclusive unless challenged in writing within the time provided[32] is JJ Armstrong Pty Ltd v Hope St Student Accommodation Pty Ltd [33](JJ Armstrong). Upon reading the decision in that case it was apparent that the Court, amongst other things, had been required to consider the validity of a final certificate issued by the architect under the same form of contract the subject of this current proceeding. The Court observed[34]:

The process for the issue of a FCC under the Contract is clear. It begins (under clause N11.1 of the Contract) with the contractor submitting a final claim to the architect when each of N11.1(a), (b) and (c) is satisfied; N11.1(b) provides that "the contractor has rectified all defects and finalised all incomplete works." Next, the architect must promptly assess the final claim, request any additional information required and then issue the final certificate to the contractor and the owner (clause N12.1). The FCC must (among other things) give written reasons for any differences between the amount certified and the amount claimed (clause N12.2).

None of those things occurred here. Instead, in an attempt to bring some finality to the escalating dispute between the parties, [the architect] purported unilaterally to assess amounts outstanding under the Contract and certify them for payment. The covering email from [the architect] described the revised FCC in the following terms: "So this Final Certificate (and it's [sic] supporting assessments)-is also the basis of a negotiation settlement which in our view is the fairest outcome".

1. In JJ Armstrong, the Court found that the purported issue of a final certificate in the absence of a final claim by the contractor was a sufficient basis on which to find the final certificate invalid. The Court said[35]:

In my view, the purported issue by [the architect] of a final certificate under clause N12 of the Contract in the absence of a final claim by [the contractor] under clause N11.1 (or, if relevant, in the absence of a written request by [the architect] to [the contractor] under clause 11.4 to submit such a claim), is a sufficient basis on which to find the revised FCC is invalid. The Contract clearly contemplates that the architect certifies "a claim", and thus it is the builder (not the architect) who sets the parameters of the issues that the architect must consider before issuing a certificate.

Further, that claim must be supported by a declaration made by the contractor that the contractor has performed its obligations under the Contract and all monies due to subcontractors at the date of the declaration have been paid (clause N11.2). In this case, the need for such a declaration would have required [the contractor] to confront during November 2014 at the latest, the impact of outstanding defects and incomplete work on its entitlement to be paid the retention sum.

1. The Court went on to observe that the actions of the architect in preparing and issuing the final certificate 'bore little resemblance to the procedure provided for in the Contract'. The Court said[36]

... This is not a case of a minor or technical departure from the strict terms of the Contract. It involved a fundamental recasting of the roles and responsibilities of each of the owner, contractor and architect as provided for in the Contract.

1. In the present case, I note the covering letter dated 4 December 2013 from the Architect to the Owner which enclosed the Final Certificate stated:

We have received a Final Inspect (sic) report dated 18/10/13 from you and your final claim ...

As per clauses M11 & M12 of the Contract, we instructed and notified the builder on 5/7/2013 & 23/8/2013 to rectify these defects. Unfortunately, there are still a number of defects that have not been rectified by the builder. In accordance with the Contract, the builder has 7 days to attend to payment.

1. There is no evidence before me that the parties have complied with the provisions of the Contract which stipulates the procedure to be followed prior to the issuing of the Final Certificate, namely, there is no evidence the Builder submitted a final claim for payment, nor is there any evidence that the Builder failed to comply with a written request made by the Architect to do so. If that is the correct analysis of the facts, then, following the reasoning of the Court in JJ Armstrong, the Final Certificate is invalid and neither party is entitled to rely upon it. If that be the case, then the Owner's claim is, again, to be assessed as a claim for damages based on breach of the statutory warranties, and the Builder's claim is assessed as a claim for work and labour performed.

1. By reason of amendments and concessions made both at the start of, and during, the hearing, the amount claimed by the Owner by way of damages is $19,353.50 (excluding the claim for interest). The following table summarises the items of work alleged by the Owner to be defective and/or incomplete and the amount claimed for each by way of rectification costs.

External paintwork - inadequate surface preparation, splashes

Windows - improper application of putty, sticking, weatherproofing

Timber floors and trim - front veranda unsupported, rear deck boards cut short and cracked

Ventilation boards - not repaired or replaced below bay window

Concrete driveway - 6m2 of surface removed by the Respondent and not reinstated

Conduit - encasing wiring on north side of the house, not fixed to external wall

Under sink recycling system (BLUM) - not installed in a pull-out drawer as per Contract Plans and Specifications, does not open and close properly

Internal paint finish - overpainting of windows, inadequate surface preparation, incomplete

Internal doors - missing fittings, bathroom sliding door not square

Failure to preserve space for water tank - rehang gate

1. For each of the items claimed by the Owner, I must determine, whether the work carried out by the Builder was defective and incomplete and, if so, what is the reasonable cost of rectifying and completing it. I turn now to consider each of these items.

1. This is the main item of complaint in this dispute.

1. The external paintwork was not included in the contract works in the initial discussions with the Builder. The Owner said after obtaining another quote at the time it was subsequently agreed it would form part of the contract works. In the Schedule of Costs which details the items which comprise the Contract price of $152,385.64, the external paintwork is stated to be $5,670 and it is noted as a 'provisional sum'. The notation refers to a letter dated 7 July 2011. This letter refers to 'a few issues which have arisen that will vary the cost of the project' and records the external painting sum of $5,670.
2. In her affidavit dated 16 July 2019 the Owner said she immediately raised concerns with the Architect and the Builder concerning what she believed to be a lack of preparation with regard to the paintwork. The paintwork was carried out in around March 2012 and the various versions of Defects Lists prepared by the Owner during the works record her concerns in relation to it.
3. The Owner's home was repainted in March 2017 for $11,820 and this is the amount sought by way of rectification costs. It was not disputed that the house was repainted in a different darker colour to that used by the Builder.

1. The Limburg Report details a number of defects in relation to the external painting finish. In summary Mr Limburg said that there had been a lack of preparation prior to painting in that, in his view, the timber boards had not been properly sanded, nor cleaned, nor had holes in the timber boards been properly filled, prior to the painting. He said this has resulted in the paint prematurely flaking away and blistering in parts. It was Mr Limburg's view that all of the timber boards needed to be sanded back to the raw timber and repainted. The Limburg Report also noted other painting related defects including splash marks on the chimney, side gate and the front light. Mr Limburg estimated the cost to 'properly prepare' the timber boards, the application of one undercoat and two topcoats at $12,540 based on 120 hours of work at the rate of $85 per hour (excluding GST).
2. When questioned by the Builder as to whether the flaking of the paint was caused by the moisture in the old timber weatherboards and not a lack of preparation, Mr Limburg said he disagreed with that view.
3. The Fenton Report found that whilst the Builder had carried out some remedial painting works, there remained defects in the works carried out on the south wall, north wall and the west wall bay windows, namely, cracking along the overlap between the weatherboards, flaking paint on some weatherboards, some small bare areas and obvious depressions. The report also found defects in the paintwork applied to the new extension at the east end of the house, including bare areas at the bottom of the sliding door and window assembly architraves, some cracking of the paintwork along cracks in the weatherboards and bare areas at the bottom of the rear deck posts.
4. The Fenton Report noted that the achievable outcome from painting old weatherboards was less than would be expected with new weatherboards, but concluded the paintwork was defective, even after taking that fact into account. The recommended action stated in the Fenton Report was for the Builder to 'carry out the remainder of painting remedial works to bring it up to an acceptable achievable standard for the north, south and west wall and to repair the paint defects to the painting of the new extension'.

1. In calculating the amount allowed for the external paintwork the Builder said he had relied upon an estimate from a subcontractor who had based his rates on an amount per square metre. He said the painter's rates had not allowed for the age of the house and that it had subsequently cost him more money. The Builder said he 'took the paintwork as a loss'.
2. The Builder said he had made the Owner aware of problems which might arise with the external paintwork given the home was an 80-year-old timber house which had been untouched for a number of years and which needed repair. The Builder relied on the Site Meeting Minutes dated 8 March 2012 which noted the external paint had been discussed and that the Builder had said the condition of the boards was very poor and it was not possible to achieve an 'as new' job.[38]
3. The Builder supplied a sample of a paint chip which he had removed from a weatherboard. He said it demonstrated the paint had bonded with the timber. The Builder said, in his opinion, the paint was blistering and flaking due to the moisture in the timber which he said had been caused by the type of plaster used in the walls, and the lack of a barrier between the walls and the weatherboards. He said the blistering is evidence of the water trying to escape.
4. The Builder said the photos in the Limburg Report had been taken prior to the further work carried out by him when he had returned to the site after the inspection conducted by BACV in February 2014[39].
5. The Builder denied the splash marks on the chimney had been caused by him and said it had been caused by the previous painter. In relation to the splash marks on the gate he said the Owner had said she was going to paint the gates, and in relation to the paint on the front leadlight he said the Owner had decided to replace the front leadlight. I understood the Builder's evidence to mean the paint marks on these items were not 'defects' as the Owner was either going to replace them eventually or paint over them.
6. The Builder said the Owner had repainted the house in a different darker colour and that this colour was more effective in hiding imperfections. He also said that photographs taken by him in November 2018 show the paint is again blistering, bubbling and peeling. He said the current blistering confirms his view that the cause is due to moisture in the timer and not a lack of preparation.
7. The Builder noted the paintwork carried out by him had been completed in 2012, more than 3 years had passed and that all weatherboards needed maintenance.

1. Primarily the issues I must determine in relation to this item are:
   1. whether the defects in the painting are due to the Builder's poor workmanship, or alternatively, are they, as the Builder says, a result of the age of the timber boards and moisture trapped within the boards; and
   2. if the defects are due to the Builder's poor workmanship, is the Owner entitled to the cost of repainting the home.
2. I prefer and accept the findings detailed in the Fenton Report regarding the external paintwork and therefore find that it was defective to the extent described in that report. I prefer the findings of the Fenton Report because:

1. The author of the report is an independent expert, not having been appointed by either party, but by BACV; 2. The Fenton Report was prepared after the Builder returned to the site and carried out further work in 2014. However, the Limburg Report was completed in October 2013. Mr Limburg had not returned to the site since 2013 and therefore his report reflects the status of the work prior to any further work being undertaken by the Builder;

1. The author acknowledged and took into account the age of the timber boards in forming their view regarding the standard of painting;

1. The author had visited the site and inspected the works in 2014, and again in early 2015, being within 3 years of the painting being undertaken. The Guide to Standards and Tolerances 2015, referenced by both experts in forming their views, provides that an external acrylic paint is defective if it fails by 'lifting, blistering, or flaking' within a minimum of 36 months for an external acrylic paint.
2. In accepting the findings of the Fenton Report, I am therefore not satisfied that the defects in the external paintworks were such that the Owner is entitled to the total cost of preparing and repainting her home. The Fenton Report did not find that the paint needed to be stripped back to raw timber, nor did it find a total repaint, including an undercoat and two topcoats, was required. In addition to the findings of the Fenton Report, in rejecting the Owner's claim for the total cost of repainting her home, I have also had regard to the fact the home was repainted in 2017, some 5 years after the painting work was carried out by the Builder, and at a time it might be expected that ongoing paintwork would be necessary.
3. The Fenton Report did not include an estimate of the cost of the rectification work, but described the recommended work as 'Builder to carry out remainder of painting remedial works' in relation to the south wall, west wall bay windows, north wall and the new extension at the east end of the house. Doing the best I can, and using the hours and rates applied by Mr Limburg as a guide,[40] I find that the reasonable cost of rectification of the paintwork to the outside walls of the home to be 5 days (40 hours), at a rate of $93.50 per hour (including GST), being $3,740.

Item 2: Windows - Improper Application of Putty, Sticking, Weatherproofing - $1,716

1. The following table sets out the description of the alleged defective work in the windows and the amount claimed by the Owner as stated in the Amended Points of Claim.

1. The Owner said all she wanted was the windows to open and close, that is, to make the windows functional. During the works she agreed to replace 5 sashes in the existing windows at an extra cost of $750. Two of the replaced sashes relate to the bedroom 2 bay windows. The Owner said rain and dirt continues to enter under the bay windows.
2. The Owner said she was 'not worried about the east kitchen' window. Whilst it was noted the kitchen windows were part of the initial complaint to BACV, no further complaint was made concerning them.
3. The Owner referred to the contract plan drawing 101WD-06 which contained the notation 'Repair Bay window'. In relation to the bathroom window it stated, 'Repair putty and patch window'. In relation to the kitchen windows it noted 'Replace glass and repair balance'.
4. The Owner produced invoices in support of the amounts detailed under 'costs incurred' in the table set out above. However, it was noted that these invoices did not describe what work was carried out for the amounts claimed. For example, the invoice which she had paid to Robe Maintenance and Construction dated 11 April 2017 for $275 referred to 'Repairs to front bay window, labour and materials.'
5. In addition, the Owner produced a 7-page quote from Sealasash dated 8 January 2019 which set out that company's pricelist for carrying out various repair works to old windows and doors. The section relied upon to support the amount of $1,458.60 claimed as the cost to carry out weatherproofing to the bay window described the work as 'Sealasash window and door renewal' and 'Repairs'.
6. It was submitted on behalf of the Owner that as it was not clear what works had been carried out for the costs which the Owner had incurred with respect to the bay windows, it was appropriate that the Owner rely upon the estimate allowed in the Limburg Report to carry out the rectification works detailed in that report, namely, the amount of $1,716. It was said that this amount was less than the total of the amount incurred by the Owner to date ($1,005) when added to the Sealasash estimate of the cost to weatherproof the bay window ($1,458.60).

1. The Limburg Report records the following defects in the windows:

1. The failure to remove old cracked putty from the glass fitted to the original windows around the original sections of the house before patching gaps with new putty - this has led to patched sections of putty dislodging; 2. The north facing window in the kitchen could not be opened because it was stuck to the window frame with paint;

1. The top section of the east kitchen window could not be opened because it was stuck to frame with paint; and

1. The two centre opening windows of the bay window in the second bedroom were not airtight and sticking.
2. Mr Limburg recommended the following remedial works:

1. Remove all old putty from windows around the house and completely re putty; 2. Ease all windows around the house so that they open and close freely; and

1. Install weather seal around two opening windows in the bay window.
2. Mr Limburg estimated it would take 24 hours of labour to carry out the remedial works described in the subparagraphs above. Applying a rate of $65 per hour (excluding GST), the cost to rectify was allowed at $1,716.
3. In the context of a window needing 'repair', Mr Limburg was of view that 'repair' includes removing old putty, otherwise, he said, you would never get proper bonding between the old and new putty. Mr Limburg said it was not hard to scrape out the old putty and replace it with new so that a consistent finish is then achieved.
4. The Fenton Report found the following defects in relation to the windows:
   1. In relation to the west wall bay windows, it was found that the failure of the Builder to replace the loose and severely cracked putty to the original two leafs (i.e. the fixed leafs) was a defect. The report recommended the putty be replaced. The report noted the Builder's reason for not carrying out the work (as he wanted an acknowledgement that if the glass panels broke during the process the Owner would be responsible for the cost of replacement) was not a reason not to replace the putty.
   2. The report also found that the two new leafs (the openable window leafs) installed by the Builder in the bay window were not watertight as it had gaps varying in width from 5 to 10 mm around the leafs. It noted that given the old window frame was out of square it would be difficult to eliminate gaps between the new window leafs and old frame. Nevertheless, the report, with reference to the relevant Standard and Tolerances found the window to be defective since, when closed, it allowed the entry of water.
5. The Fenton Report recommended the Builder make the bay leafs weathertight and replace the putty to the original fixed leafs.

1. The Builder said other than the bathroom window, the contract plan 1010WD-06 did not require removal of the putty to the windows. He therefore said replacing the putty to the bay windows was not within the scope of works. He also said the only repair work required to the bay window was to replace the sashes, which was done.
2. The Builder said that after the February 2014 conciliation meeting, he attended the home and carried out further works to the kitchen and bay windows. In this regard his documents record that, amongst other things, on 19 June 2014 he unstuck the rear window and adjusted one bay leaf window that was out of plumb and the lock.

1. I confirm that no claim is made by the Owner in relation to the east and north facing kitchen windows. However, if I am wrong in my understanding, and for the avoidance of doubt, I am not satisfied that the Owner is entitled to the claim with respect to the east and north facing kitchen windows because:
   1. the amount claimed relates to 'carpentry work'. This did not form part of the remedial work referred to in the Fenton Report or the Limburg Report; and
   2. I am satisfied the Builder returned to site and fixed the east and north facing windows so that they could open and close.
2. In relation to the failure to remove the putty from the fixed leafs in the bay window, I accept and rely on the findings of the Fenton Report. I therefore find that to the extent the Builder failed to remove the putty from the fixed leafs of the bedroom 2 bay window, this was a defect. I note, for completeness, this item 'overlaps' to a degree with the complaints regarding the external painting in that the removal of the putty was also stated by Mr Limburg in the Limburg Report to be required to achieve the required finish when painting the windows. I therefore reject the Builder's view that the removal of the putty was not required under the contract. If he is right and it did not fall within the meaning of 'repair', I find it was required as part of the preparation work for painting the windows.
3. I am also satisfied that the two new leafs installed by the Builder were not watertight and that this is a defect. In this regard I again rely upon the views expressed in the Fenton Report which acknowledged that, notwithstanding the window frame was out of plumb, the Builder was required to ensure the window was watertight.
4. I find that the Owner is entitled to the cost of removing the putty from the front bay window and weatherproofing the bay window. I accept the invoices produced by the Owner for works relating to the bay window are unclear as to what works were carried out and paid for by the Owner. As such, I agree it is not appropriate in this instance that I rely on the actual costs incurred by the Owner. However, I am not satisfied the estimate provided by Mr Limburg is an appropriate estimate of the likely cost for the works given it includes an amount allowed for the kitchen windows, as well as the removal of putty from 'all windows' around the house, and those items were not the subject of the Owner's claim, nor included in the Fenton Report.
5. Doing the best I can on the evidence available, I allow the sum of $284.50 for the rectification work required to the bedroom 2 bay window. This allows one hour of labour to remove the putty from the window at a rate of $71.50 per hour (including GST) and an amount of $200 to weatherproof the bay windows, being approximately 2 hours of labour and an amount for materials. In this regard I am not satisfied the Sealasash estimate of $1,458.60 is an appropriate estimate of the costs required to be incurred as I am not satisfied that amount relates only to the cost to weatherproof the window. Further, I note also the rates specified in the Sealasash quote to carry out repairs include works not required to be undertaken to the bay window.

1. the underside of the decking board on the southern end of the front veranda was not fully supported; 2. The skirting board was cut short at the south east corner of the veranda at the front of the house; and

1. The timber decking board on deck at rear of house was cracked.
2. Mr Limburg estimated the cost to rectify these items to be $423.50 based on 4 hours work at a rate of $65 per hour.

1. The Builder denied the timber decking was not fully supported. He said that, in any event, the Owner has since had a step constructed on this side of the veranda which required the plinth to be removed.
2. The Builder denied the trim was cut short and said that it aligned with the wall of the house. He denied there was a 'crack' in the timber deck. He said it was a natural product and the Owner had failed to protect the deck.

1. On the evidence before me I am not satisfied that the Owner has proved the works carried out to the underside of the front veranda were defective. The Limburg Report did not reference any breach of a provision in the Guide to Standards and Tolerances, nor any building regulation. In any event, I accept that the Owner has since installed steps to the relevant section of the veranda which required work to be done in the section alleged to have been without proper support. Whilst the Owner said she 'made the most of the situation', she is not entitled to the cost of doing so. There is no evidence the steps were required because the veranda was not properly supported and therefore the Owner must pay for this improvement.
2. Based on the photo of the trim and the evidence of Mr Limburg, I am satisfied that the trim ought to have been completed so that it ran to the end of the deck. It stops short and looks unsightly. I allow $80 for this item being 1 hour of work plus an amount for material.
3. I am not satisfied the Owner has proved the 'crack' in timber was caused by the failure of the Builder to carry out his work with due care and skill. I therefore make no allowance for that item.

1. The Owner says the Builder failed to replace or repair the ventilation board below the bedroom 2 bay window.
2. I note that in an email dated 21 October 2012 from the Owner to the Architect, the Owner asked that the Builder replace the low ventilation boards under the front bay windows that were removed during the renovation as 'the local cats have decided to move in under our house'.
3. I note also in the Owner's letter of compliant dated 10 August 2013, on page 3, it states that the boards were replaced 'despite being brittle, broken and in a state of disrepair'.
4. The Owner claims an amount of $627 for this item as well as the rectification work claimed in item 11. This is the amount the Owner has incurred in attending to these items.

1. The Limburg Report notes the ventilation boards below the bay window 'had not been replaced or repaired'. The photo referred to in that report shows the original board attached at one end, the other lying on the ground. An amount of $379.50 was allowed by Mr Limburg to replace the board.

1. The Builder said when he left the site, the board had been replaced. He said someone else must have removed it. He produced a photograph which he said showed the ventilation board in question had been replaced.
2. The Site Meeting Minutes dated 13 January 2012 notes 'most baseboards needed replacing'. Contract Adjustment No 2 dated 17 January 2012, item 2.8 refers to an allowance of $930 for the Builder to 'replace plinth boards after restump'. When questioned about this, the Builder said he only quoted to replace the south side plinth boards and that he was only required to replace the rotten ones.
3. In his written submissions the Builder said the north and south plinth boards were changed as part of the agreed variation work but the boards below the bay window were not damaged and did not require changing.

1. On the evidence before me, I am satisfied that:

1. It was agreed the Builder would replace the plinth boards around the original section of the house that required replacing after the restumping works and that 'most boards required replacing'; 2. the ventilation board under the bedroom 2 bay window had not been replaced but had been screwed back into position;

1. the ventilation board ought to have been replaced given it was in a state of disrepair, as evidenced by the fact it had fallen off less than a year after the works were carried out[41]; and

1. there is no evidence that another person removed the ventilation board.
2. I note also that:
   1. the photo the Builder sought to rely upon was unclear both as to where it had been taken, and when; and
   2. the Architect had allowed the amount claimed for replacing the ventilation board when assessing the contract value of the works in the Final Certificate.
3. The cost to replace the board forms part of the costs claimed and allowed in item 11.

Item 5: Concrete Driveway on South Side of House- $550

1. The Owner says the Builder failed to replace or reinstate 6 square metres of concrete driveway which had been removed by the Builder to gain access for the replacement and redirection of the sewerage pipe.

1. The Limburg Report notes the concrete driveway was removed in order to allow the Builder access to replace and redirect the sewer pipe. The report allows $550 for the cost to lay steel reinforcement and pour 6 metres square of concrete.

1. The Builder said he was not required under the Contract to replace the concrete and that, whilst he was willing to carry out the work, the Owner refused to pay or deal with it as a variation.

1. The fact the item appears in the Limburg Report, does not mean the claim is necessarily one for breach of the statutory warranties. The Limburg Report details items of work Mr Limburg considered to be defective, without regard to the contractual obligations of the parties. It is not disputed the concrete driveway was required to be replaced, the question is whether the Builder is liable for the cost of that work.
2. I refer to the folder of documents provided by the Owner at the hearing. I note that by email dated 25 September 2012 the Owner asked the Architect to clarify 'from a legal/contract perspective who holds responsibility for the repair to the driveway'. In this regard I note the Owner considered it to form part of the 'make good' clause of the contract. In his response by email dated 3 October 2012, the Architect said that 'Contractually, as the work on the sewer is extra to the contract, and the approved additional cost was only for the sewer drainage, it is not subject to the make good provision in the contract.' The email noted the Builder had provided a quote of $1,580 to carry out the work (which also included work to the front step). In a subsequent email dated 4 October 2012, the Owner states she could get the driveway repaired by another concreting contractor for less than $1,580. She also stated the damage to the front step and to the concrete pavement at the rear south side of the house did fall within the 'make good' provision. The Builder carried out the work to the front step and the south side of the house and approved the Owner getting another concreter to repair the driveway.
3. The Owner did not dispute or challenge the Architect's assessment and finding that the cost to complete the concrete driveway was not within the scope of the works.
4. Finally, I note in certifying the assessed contract value of the works in the Final Certificate the Architect did not take into account the amount allowed in the Limburg Report to replace the concrete driveway section. The Final Certificate makes a notation to the effect that this item is 'not in contract'.
5. On the evidence before me I am not satisfied the Owner has proved an entitlement to the amount claimed.

Item 6: Conduit Not Fixed to External Wall - $82.50

1. The Owner says the conduit which encased the wiring on the north side of the house is not fixed to the external wall because the Builder removed the nail in order to paint the timber boards. The Owner claims $82.50 being the cost to 'make good'.

1. The Limburg Report notes 'the conduit was not fixed to the external wall'. Mr Limburg allowed 1 hour labour at $65 per hour, plus material costs of $10, a total of $82.50 (including GST)

1. The Builder said he did not remove the conduit and that someone else did. He said the heating installers 'were the last people to work on that area' and that they removed the conduit to position the heating unit. He said the photo shows he painted over the bracket.

1. I am satisfied on the evidence before me that it is more likely than not that the Builder removed the nail in order to paint the timber boards. The photo included in the Limburg Report was taken well before the Owner had the home repainted. There is no evidence someone else removed the nail. I note also an amount for this item was deducted from the contract price by the Architect when assessing the contract value of the works for the purpose of issuing the Final Certificate.
2. I consider an allowance of 1 hour to nail the conduit to the wall to be excessive. I therefore allow a total amount of $38.50 including GST for this item.

1. It was not disputed that the contract plans specified an under sink recycling system (BLUM system.) The BLUM system detailed in the plans consisted of a full width under sink drawer with recycle and waste bin side by side and a sink organiser drawer above.

1. In her affidavit the Owner stated that 'without any notice or consultation with the project architect, a large number of significant unapproved variations from the contract plans were made throughout the kitchen.' She stated that amongst those variations the Builder had 'left out' the BLUM system. The Owner said that she was told by the Builder that the BLUM system could not be accommodated because the under sink plumbing had been reconfigured with the outlet through the floor, rather than through the back wall 'as it had originally been configured and was intended to remain'. The Owner said the plumbing reconfiguration was itself an unapproved variation.
2. The Owner referenced a number of an emails which had passed between the parties during the works concerning the failure of the Builder to install the BLUM system.
3. The Owner stated 'what I ended up with was a single electronic sliding drawer containing two bins, one in front of the other and a cupboard with an opening door and pull out shelf which was installed around the reconfigured plumbing, at my own cost.'
4. The owner claims the cost to remove the installed system and to replace it with the BLUM system.

1. The Limburg Report provides an estimate of the cost to remove the installed recycling system and to replace it with the BLUM system detailed on the contract plans. The estimate of $2,079 includes the cost to reconfigure the plumbing so that the drainpipe for the kitchen sink is redirected out through the east wall, and not through the floor.
2. In his evidence Mr Limburg said in his opinion the waste pipe could have been configured so that it went through the wall, but that as the plumber had directed the pipe through the floor, it essentially prevented the ability to install the BLUM system specified on the plans.

1. It was submitted on behalf of the Owner that although the Builder said it was not possible to install the system as specified, the only expert evidence before the Tribunal was that of Mr Limburg. He said the pipe work could have been configured so that it ran out the back of the wall and not through the floor. He said it still could be reconfigured that way.
2. It was further submitted that the Tribunal should not find there was a concluded compromise or agreement by the parties to vary the contract because:
   1. the mechanism for variations under the contract was not followed; and
   2. the Owner's agreement to the alternative system was in the context of 'attempting to achieve a negotiated compromise...something parties ought be encouraged to do without prejudice to their legal rights..' and 'her position being influenced by the [Builder's] assertion that it was impossible to install a BLUM system ... an assertion that was factually incorrect, but which the Applicant did not know to be incorrect until Mr Limburg identified it as being so'.

1. The Builder said the plumber was not able to configure the pipe so that it went out through the wall because of a 'bend in pipe work' and because of where the sink holes were located in the centre of the cabinets. He said 'therefore, you were always going to see the wastepipe'. He said the sewer ran inside the building, not on the outside.
2. The Builder said he installed the system which was agreed to by the Owner. He referred to the site minutes evidencing all were aware of the issues.
3. When the Builder put to the Owner that he had installed a similar system to what was specified, the Owner said he had never installed the BLUM under sink recycling system. During cross examination the Builder said to the Owner that the cabinet maker had told her there was no room for the BLUM system because of the sink which the Owner had purchased. The Owner denied that was the case. She said the plumbing went in first and 'everything was a domino after that'. She said she worked within the conflict and got a sink which had to fit the plumbing which had been installed.
4. The Owner said she ultimately agreed to what was installed but that it was a compromise and she was disappointed she did not have the BLUM system which she had desired.

1. In order to be entitled to the cost of reconfiguring the under sink system to that specified in the contract plans, the Owner must prove that an agreement to vary the contract to allow for the installation of the current system was never reached. For the following reasons, I am not satisfied an agreement was not reached between the parties, that is, I am satisfied such an agreement was reached.
2. I have considered the various correspondence which passed between the parties during the course of the project in relation to this item. In particular, I note the following:

1. In an email dated 13 March 2012 from the Architect to the Owner and the Builder, reference is made to a meeting between the Architect and the cabinet maker to resolve a number of matters which were detailed in the email. The email states 'Teresa and I discussed and agreed as follows...'. Item 3 notes 'Undersink to remain as cupboard, with double doors as installed. A fixed matching laminate panel will be fixed above the doors. A recycling drawer unit will be selected once the sink is installed'; 2. In the defects lists prepared by the Owner dated 31 August 2012 and 18 September 2012 the item described as 'Recycle bins' stated 'As per our email of instruction of 13 March 2012, a recycling drawer unit was to be selected (in lieu of the BLUM Under Sink storage) after the sink was installed. Tony was to advise what will fit. One installed not satisfactory. Were there other options for hinged doors?';

1. In an email dated 29 September 2012 the Owner said, after confirming that 'instead of a BLUM recycling sink organiser and draw' she had 'a cupboard with two opening doors and a shelf' and that it occurred without prior consultation with the Architect or herself, 'Therefore we propose an alternative solution that aims to meet the objective of our original design within the limitations of the stated requirements for the kitchen sink outlet to be through the floor rather than the back wall. We propose that the kitchen sink be replaced by a kitchen sink that has a central basin (within the same template) thereby freeing up space for a pull-out recycling drawer on the left-hand side of the sink.' The Architect responded by email dated 2 October 2012 to the effect 'I'm sure we can achieve a solution to this issue. I know Tony is keen to resolve it.' On 5 October 2012 the Architect then sent an email referring to a discussion and setting out the type of recycling drawer which could be used without any changes to the plumbing or sink.

1. In an email dated 21 October 2012 from the Owner to the Architect, the Owner commenced 'Thanks for following up about the pull-out drawer and recycle bins. I would like to proceed with the stainless-steel option and am happy to meet the extra cost of $125. Our original plans included a pull-out drawer and recycle bins. Replacing the original large drawer and bin system with this smaller version is a reasonable compromise. At this stage however we haven't yet negotiated what to do in lieu of the BLUM sink organiser ... I suggest a side mounted rollout ... positioned on the dishwasher side of the undersink area as one possible solution.' 2. In a subsequent defects list dated 31 August 2013 the Owner noted 'Recycling bins now adjusted. Installation almost right. Closing and opening still difficult. Price for handles requested but not provided'.
2. Finally, I note the items referred to and considered by the Architect when issuing the Final Certificate on 4 December 2013. The covering letter from the Architect which accompanied the Final Certificate stated 'We have received a [Limburg report dated 18 October 2013] from you and your final claim and we have completed the Progress Certificate No 06, Final Certificate, for amount due to you, which is attached. We have included all the final defects in an Adjusted Final Defects List attached'. However, although the Limburg Report listed the under sink BLUM system as a defect, the Architect did not include that item in the list of works he considered to be either incomplete or defective.
3. I accept that the Owner is disappointed that the under sink recycling system detailed on the plans was not installed and that she is not as happy with the replaced system. However, I am satisfied, based on the correspondence which passed between the parties, as well as the Progress Certificates and Final Certificate issued by the Architect, none of which made any allowance for this alteration, that the parties agreed to this compromised position and that the Owner is not now entitled to seek the cost of reconfiguring the system. The 'negotiated compromise' does in fact mean the Owner has waived her rights to now seek the cost of reconfiguring the system.
4. For completeness, I note that I am not satisfied on the evidence before me that the plumbing work could have, in fact, been plumbed so that the pipe work went directly out the back wall. Mr Limburg said it was possible, the Builder said it was not. Whilst Mr Limburg has many years' experience conducting inspections and preparing inspection reports, he is not a plumber. Further, I note that the Architect was appointed to act on behalf of the Owner and provide instructions to the Builder throughout the course of the works. These are matters which were possible to have investigated and considered at the time. I therefore do not accept the submission that the negotiated settlement ought to be set aside as it was based on a misunderstanding.

1. The Limburg Report refers to and describes three items of defects in relation to the internal paintwork:

1. Over paint on 2 sheets of glass fitted to the north facing kitchen window; 2. Timber window frames not adequately prepared prior to painting; and

1. 4 tall cupboard doors in bedroom 2 not painted. In his evidence Mr Limburg said that, in assessing if the cupboard was not painted, he considered if it could be painted. He said in his view the wardrobe was made of mdf[42].
2. The cost to complete the works was allowed at $2,491.50.

1. In her evidence the Owner said the contract plans noted the cupboards in bedroom 2 were to be painted by the Builder. She said the material was chipboard, not Laminex as maintained by the Builder and could be painted.
2. It was submitted that it was unfortunate that it did not emerge earlier that the photos relied upon by Mr Limburg with respect to the lack of preparation of the internal timber window frames in fact referred to areas that the Builder was not required to paint. It was submitted that this occurred because there was no 'comprehensible points of defence at the outset'. The Owner sought to submit further evidence subsequently obtained by Mr Limburg to clarify which photographs were relied upon. In the alternative, it was submitted that it was 'reasonably open to the Tribunal to find that only part of [the item] has been adequately established', namely, the items described in subparagraphs 112 (a) and (c) above and that I ought to apportion quantum as best I am able, on the available material.

1. In relation to the items identified in the Limburg Report and the corresponding photographs taken and referenced by Mr Limburg in his report, the Builder said:

1. photo 0085, which was described as showing over paint on 2 sheets of glass fitted to the north facing kitchen window, had been painted by others; 2. photos 107, 111 and 116, which was described as showing internal timber window frames for the bay window, bathroom and kitchen windows as not having been prepared adequately, were not part of the Contract; and

1. photos 108 and 109, described as the 4 tall cupboards in bedroom 2, that the doors were Laminex and the Owner was advised they were not able to be painted because they were not bare timber.

1. As stated above, the Limburg Report details items of work Mr Limburg considered to be defective, without regard to the contractual obligations of the parties. This is evident in this case where Mr Limburg reported the internal window frames had not been properly prepared and windows were required to be repainted. However, it is not disputed by the parties that the painting of the internal windows was not within the Builder's scope of works.
2. I do not accept that the 'confusion' in relation to the painting of the internal window frames has arisen because of a lack of a detailed defence filed by the Builder. The onus is on the Owner to prove the item claimed. Further I note the Builder did state in notations on the photographs submitted with material filed at the Tribunal that the photos were of sections of work not within the scope of the Contract.
3. I am satisfied based on the contract plans, and the evidence of Mr Limburg, that it was possible for the Builder to paint the wardrobe door and he ought to have done so. I am also satisfied that it is more likely than not that the over paint to the two sheets of glass to the kitchen window was done by the Builder. I therefore allow an amount of $93.50 for the overpainting of the kitchen windows, equivalent to 1 hour of work at $93.50 per hour (including GST) and $267 to paint the cupboards, allowing 2 hours of labour, plus materials.

Item 9: Kitchen Cupboards - Delaminated Melamine Lining - $99

1. The Limburg Report states the melamine lining had partially delaminated from the cupboard carcass below the bench top at the northwest corner of the kitchen. An amount of $99 was allowed as the cost to rectify, being the cost to remove partially delaminated lining and refit new melamine lining.
2. The Builder said that photo 98, which was of delaminated base carcass, was glued and repaired and that the Owner has since tampered with the corner. He said the Owner had used the kitchen since 2012 and it was 'wear and tear'.

1. The Limburg Report was prepared in October 2013, just over 12 months since the kitchen had been installed. The melamine lining ought not to have failed within this timeframe. I do not accept the delamination occurred because the Owner had tampered with it, there is no evidence to that effect. I again note that an amount of $99 for this item was deducted from the Contract price by the Architect when assessing the contract value of the works for the purpose of issuing the Final Certificate.
2. I find it is a defect and allow the amount claimed of $99 as a reasonable amount to rectify it.

Item 10: Internal Doors, Missing Fittings, Bedroom Sliding Door Not Square - (Costs Include Item 4) - $627

1. The Owner claims damages for the Builder's failure to fit the door handle and latch to the laundry door. She said in her evidence that the laundry door was originally the old back door which her partner had stripped back. In doing so, the door handles were removed. The Owner said the new handles were made available to the Builder to install and that he was required to do so under the Specification, section headed 'Joinery to B3, laundry, bathrooms'. An amount of $2,350 was allowed and agreed and approved in Contract Adjustment No 2 dated 17 January 2012 which referred to 'change laundry layout and joinery per joinery plan - $2,400.'
2. In her evidence the Owner said the carpenter had fixed the toilet door and fixed the laundry door at the same time. The Owner claims $627 being the cost she paid to Robe Maintenance and Construction dated 20 June 2015 to 'refit sliding door latch, fit handle and lock set to laundry door and supply and fit plinth to the base of bay window [being item 4]'.

1. Item 11 of the Limburg Report refers to 'the striker plate for the laundry door was not fitted to the laundry door frame' and the door handle and latch was not fitted to the laundry door. The report also stated that the sliding bathroom door was 'very difficult to lock' and 'did not close square with the door jamb'.
2. The cost allowed for rectification of the items identified in the report was $368.50.

1. The Builder said that he fitted the laundry door but that the Owner then removed it to have the door stripped of old paint. He said there was an existing handle on the laundry door and the Owner purchased a new lock which the Builder 'recalled' was a mortice lock. He said it required work to drill into the narrow door and he was not going to do it unless he was paid. He said it was not within scope of works to fit new handles. In relation to the bathroom door, he said he assumed the door needed to be adjusted up the top, but it was out of the maintenance period.

1. I find that the Builder was required under the Contract to fit the door handles and lock to the laundry door based on the Contract document.
2. I am satisfied based upon the views expressed in the Limburg Report that the sliding bathroom door was difficult to lock and did not close square with the door jamb due to the Builder's workmanship. I note also that an amount for this item was deducted from the Contract price by the Architect, being the amount of $368.50 allowed in the Limburg Report, when assessing the contract value of the works for the purpose of issuing the Final Certificate.
3. However, the Owner claims $627 being the cost she paid to Robe Maintenance and Construction dated 20 June 2015 for 'refit sliding door latch, fit handle and lock set to laundry door and supply and fit plinth to the base of bay window'. Recent authority from the Court of Appeal[43] has confirmed that, unless there is reason not to do so, actual costs incurred in rectifying defects ought to be preferred to an estimated cost to repair. I am satisfied the amount of $627 is a fair and reasonable price to undertake the work carried out for this item and for item 4.

Items 11, 12, Water Tank: Rehanging of Gate - $550, and Toilets Not Connected for External Water Tank - $500

1. The Owner seeks an amount of $550 which is the cost she incurred and paid to the Builder to rehang the side gate. The Owner says that it was necessary to rehang the side gate because the Builder failed to allow enough space for the water tank to be installed in the location on the plans. This, in turn, arose because the hydronic heating unit was installed in the location designated on the plans for the water tank and that, therefore, left insufficient space for the water tank. The Owner said the hydronic heating unit was installed at the direction of the Builder.
2. The Owner confirmed that the Builder had sought and obtained a contract adjustment for an additional $550 to rehang the side gate.[44] The Owner says she 'seeks repayment of the additional cost of rehanging the gate which I should never have been required to pay'.[45]
3. During the hearing, when it was put that it is too late for the Owner to now challenge the cost of rehanging the gate when no such challenge was made at the time the Architect certified the amount due to the Builder, the Owner's counsel said that the Architect was correct in certifying the additional expense, as that was incurred by the Builder, but that it had resulted in economic loss to Owner.
4. The Owner also claims an amount of $500 because of the Builder's failure to have the toilets not plumbed for use with the water tank, contrary to the contract plans and specifications.
5. The Owner said she first discovered the plumbing work had not been completed when she engaged a plumber early in 2019 to provide a quote to install the water tank. She relies upon quotations from Turbo Maintenance and Plumbing dated 21 January 2019, in particular, option 2 which quoted a sum of $1,300 to 'address failure of builder to internally plumb the toilets to the site of the proposed water tank, and to install the water tank as per the Contract Set Plans'.
6. The Owner claims $500 being the amount of $1,300 less the cost to install the water tank of $800[46].

1. The Builder said he played no part in determining where the hydronic heating unit was placed. He said he understood why the heater was placed down the north side of the house as that was where the mains and gas pipe were, but it was not his decision. He said he rehung the gate as a solution to the problem created by the placement of the hydronic heating unit.
2. The Builder relied upon an email from the Architect to the Owner dated 4 December 2012 which states: 'The side gate was not part of the contract documents, but included at your request for an approved additional cost and the work accepted at the time you decided not to install the rainwater tank. As you have since changed your mind and want to install the tank, the solution is to change the gate...'.
3. The Final Defects List dated 31 August 2012 and 18 September 2012, and reviewed and amended on 14 December 2012, noted at item 25 'Owner prefers tank to be installed per plan. Shorten gate and rehang to swing out. Install 300 wide fixed fence on house side.' In a subsequent amended list dated 4 July 2013, item 25 was noted as done.
4. The Builder said the plumbing work quoted for on the quotations produced by Owner was not work he carried out. He said it is up to the installer to put the required connections in when installing the water tank. He said the plumbing work was done, as far as he aware, so that the rainwater tank could be connected to the toilets and that it is a matter of cutting and connecting to pump.
5. The Builder said the deletion of the water tank from the Contract resulted in a credit of $2,000 to the Owner, which was for the pump and water connection.
6. The Builder relied upon an email dated 27 July 2012 which the Owner had sent to the Architect and the plumber concerning a discussion with the plumber about a slim line tank which was able to be installed down the north side of the house, next to the hydronic heating. It refers to two quotes obtained by the Owner. One for the plumber doing the installation, the other does not include installation. It states 'Both include tank (to fit space), my preferred pump, delivery, and concrete slab. The difference is $1,460. As per our contract with Tony: the tank was to be supplied by proprietor. The Builder was to install with connection to toilets and washing machine. Builder was to supply pump & power connection. I am keen to install as soon as possible. Please let me know the best way to proceed.'

1. The way the claim was put by the Owner, in order to be entitled to the cost of rehanging the gate, the Owner must prove that the failure to allow sufficient space for the water tank was due to the Builder's error. I am not satisfied based on the evidence that it was due to the Builder's error.
2. The contract plans provided the water tank was to be installed on the northern side of the house and that 'new hydronic heating by proprietor' was to be positioned on the southern side of the house. The project Specification on page 11 notes the water tank is to be supplied by the Owner and 'Builder to install with connection to toilets and washing machine. Builder to provide pump and power connection.' It also noted the Owner was to supply the hydronic heating and the outlets were to be determined by the installer.
3. The Owner says the Builder directed the installer to place the hydronic heater unit where the water tank was to go. The Owner said this occurred in her absence. The Builder denied he was involved in its placement. I am not satisfied the Owner has proved the Builder directed where the hydronic unit was to be placed. I note again the Architect was appointed as the Owner's agent when providing instructions to the Builder. There is no evidence the Builder acted contrary to any instructions. I note also Contract Adjustment No 6 dated 20 December 2012 records an amount of $550 allowed by the Architect to the Builder for 'changes to side gate to enable to swing out'
4. Site Meeting Minutes No 3 dated 13 January 2012, record that the water tank was deleted from the works as the Owner had decided not to install it and the Builder was to provide a 'deduction for deleted tank installation cost'.
5. Contract Adjustment No 5 dated 17 September 2012 records the deletion of $2,000 for 'Water Tank installation delete' and a credit to the Owner. The accompanying letter from the Architect to the Owner dated 19 September 2012 stated, 'The best we could negotiate from the Builder for deletion of the water tank is $2,000 incl GST and this has been deducted from the contract sum'.
6. Under the Contract, the Owner was always responsible for the cost of supplying the water tank. The Owner received a credit of $2,000 given the installation of it was deleted from the Contract. The Builder said the credit included the cost of the connections and pipes required for the installation.
7. The Owner has deducted the sum of $800 from the quotations being the cost to install the water tank but seeks an amount of $500 for the plumbing to connect to the toilets. On the evidence before me I am not satisfied the Owner is entitled to the sum of $500 as I am not satisfied that amount was not included in the credit already received.

Item 13: Cracks in Plasterboard - Bedroom 3 North Wall - $670

1. Due to the restumping work the parties agreed the Builder would remove the old plaster in bedroom 3 and re plaster. This agreement is recorded in Contract Adjustment No 2 dated 17 January 2012.
2. The Owner said that cracks in the north wall of bedroom 3 emerged after Mr Limburg inspected the property. The Owner reported the cracks as part of the conciliation process undertaken with BACV and therefore the inspector appointed by BACV inspected and provide his opinion on the cracks in the Fenton Report.
3. Item 7 of the report records a 'straight horizontal crack in the north wall plasterboard' was observed at approximately 1800 mm height. The crack was approximately 1.5 mm wide and 750 mm long and extended from the north west corner up to the window. The report also referenced a combination of 2 mm wide horizontal and vertical straight cracks below window level and between the right side of window and the north east corner.
4. The Fenton Report stated the cracking occurred along butt joints between plasterboard sheets and that, in accordance with section 9.15 of the Guide to Standards and Tolerances, is deemed a builder defect.
5. The Owner claims the amount of $670 for rectification of this work. She relies on a quotation from Elco Painters of Distinction dated 7 May 2017 'to repair various cracks in bedroom 3 and paint two coats of Haynes interior paint to walls and ceiling.'

1. The Builder said the cracks in the plaster were caused by 'soil movement where water has been ponding in which the movement of structure has caused plaster to crack'. He said this was demonstrated by the height at which the cracks had appeared.

1. Based on the opinion expressed in the Fenton Report I am satisfied that the cracks in the plasterboard are a defect.
2. The quote relied upon by the Owner referred to painting 'walls and ceiling', but the Fenton Report described the cracks only on the west wall. I will allow $335 being half that claimed as a fair and reasonable sum to repair and paint this wall.

1. Accordingly, the amounts allowed for each of the items claimed is summarised in the table below:

External paintwork - inadequate surface preparation, splashes

Windows - improper application of putty, sticking, weatherproofing

Timber floors and trim - front veranda unsupported, rear deck boards cut short and cracked

Ventilation boards - not repaired or replaced below bay window (costs include item 10)

Concrete driveway - 6m2 of surface removed by the Respondent and not reinstated

Conduit - encasing wiring on north side of the house, not fixed to external wall

Under sink recycling system (BLUM) - not installed in a pull-out drawer as per Contract Plans and Specifications, does not open and close properly

Internal paint finish - overpainting of windows, inadequate surface preparation, incomplete

Internal doors - missing fittings, bathroom sliding door not square (costs included in item 4)

Failure to preserve space for water tank - rehang gate

1. The Owner's claim for interest is, in the first instance, a claim under Clause N15 of the Contract which provides that 'each party must pay interest on any money that it owes the other but fails to pay on time'. It is submitted that the Owner is entitled to interest at the rate specified under the Contract on the amount of $16,596.25 being the amount certified as owing to the Owner under the Final Certificate. The Owner's submissions state 'The claim for interest under the contract is in the nature of payment of a debt owed to her under the contract'.
2. In my view, the entitlement to interest pursuant to Clause N15 of the Contract only arises when a party seeks to enforce a debt due under the Contract, that is, when a party seeks to recover an amount certified in a Progress Certificate or a Final Certificate under the Contract. I do not consider the right to claim the interest under the Contract arises in circumstances such as the present where the Owner claims damages for breach of the Contract and/or the statutory warranties.
3. In the alternative, the Owner sought interest pursuant to s 53(3) of the DBC Act which provides that the Tribunal may, if it considers it fair to do so, order damages in the nature of interest. The Owner submitted it was appropriate to allow the penalty interest rate having regard to, amongst other things, the rate allowed under the Contract for unpaid debts.
4. To the extent the damages claimed by the Owner was for work not yet undertaken, there was no evidence before me to suggest the cost claimed did not reflect the cost to undertake the work at today's rates. Whilst the Limburg Report was prepared some years ago, no evidence was submitted to the effect the costs relied upon did not reflect the cost to undertake the work at today's rates. Therefore, I do not allow interest on items relating to work yet to be undertaken.
5. The items for which a claim was made for the actual costs incurred were items 1 (external paint), 4 and 11(ventilation board and internal doors) and 13 (bedroom 3 cracks in plasterboard). However, of those items, and for the reasons stated above, I only allowed the total costs claimed for items 4 and 11. I do not think it is fair to award interest on those items where only a portion of that claimed was allowed. Further, I do not think it is fair to expect a builder to have identified which items in 2013, at the time the Final Certificate was issued, would be upheld in 2020, and to have paid them at that time. I therefore do not allow interest on the amounts relating to items 1, 4, 11 and 13.

1. By way of counterclaim the Builder seeks the amount of $12,437.87, excluding interest, made up as follows:

1. the cost of variation works - $5,102; 2. the cost of plumbing charged to his Tradelink account - $4,080.87;

1. a cost adjustment made against him by the Architect - $2,000; and

1. cost of additional laundry cabinetry provided at the request of the Owner - $1,255

1. In support of his claim:
   1. the Builder produced invoices from Tradelink from various dates in March 2012 which were addressed to him, but which referenced the Owner's property. He said the invoices related to items the Owner had purchased and placed on his account at Tradelink.
   2. The Builder said the claim for 'variation works' included:
      1. An amount of $1,000 for the benchtop. He said the Contract had allowed $3,800 for the benchtop but it had cost him $4,800.
      2. Electrical work in front bedroom to convert to study - $1,760
      3. Kitchen cabinetry modifications - $2,100
      4. Labour and material paid to RC Cabinets - $242
2. When questioned by the Owner's counsel, the Builder acknowledged that 6 progress claims had been submitted by him during the works and that during the project, after receiving the Architect's assessment of the amount certified by the Architect as being owed to him, he would then prepare an invoice and submit the invoice to the Owner for payment. He agreed he was not entitled under the Contract to demand more than what had been certified.
3. The Builder agreed that:
   1. the invoice dated 20 November 2018, which he had prepared, and which formed the basis of the counterclaim, was not within the Contract price as assessed by the Architect; and
   2. the amounts claimed by him had previously been submitted to the Architect in a document headed 'Notice of Practical Completion of Works' dated 11 September 2012. He said at the time he sent the claim to the Architect he had expected to be paid. He said the Architect had requested further information and proof, which he said he had supplied. The Builder said he didn't understand why the Architect knocked back the claim. He said the Architect wanted confirmation and he was shown the Tradelink account.

1. The Owner said the first time she was aware of the Builder's claim was when she received the Counterclaim. She said she had no recollection of putting items on the Builder's account, with perhaps the exception of one item, being the shower base. She said, even if she had put items on his account, all items went to the Architect for assessment.
2. It was submitted on behalf of the Owner that:

1. The Builder's claim is for work and labour performed under the Contract and therefore governed by an architect's certificate issued under Clause A8 of the Contract: 2. The Builder did not dispute any of the progress certificates issued by the Architect, nor the Final Certificate, within the time provided by Clause A8, and under Clause A15 it is accordingly too late to now dispute the Architect's Final Certificate;

1. The Builder has no entitlement under the Contract to issue an 'invoice' over and above the certified value of the work assessed by the Architect; and

1. In any event the sums claimed relate to expenses which were already within the Contract price and/or there was insufficient evidence submitted in support of the sums claimed.

1. The amounts sought by the Builder by way of counterclaim were previously the subject of a claim made by the Builder to the Architect in September 2012. I note that by letter dated 19 September 2012 from the Architect to the Owner, which enclosed the completed Progress Certificate No 5, the Architect stated 'You will note there are a number of claims for additional cost in the Builder's claim which are not approved, subject to more information. Where possible, please provide advice on these claims for additional cost.' The claims reflect the amounts now claimed in this proceeding. The Architect's handwritten notations are marked on the Builder's claims and show items about which the Architect had requested further details - many of which form the basis of the Builder's present claim.
2. The next certificate issued by the Architect was the Final Certificate.[47] This certificate does note a further approved variation of $1,255, although there is no evidence regarding what that sum related to. In any event, clearly the Builder had time to provide further information to the Architect and I note the Builder says that he, in fact, did provide it. It is apparent that any further information supplied did not alter the Architect's view of the amounts claimed.
3. Ordinarily I would have been prepared to accept and agree with the submission that the Builder's failure to give written notice about any dispute under Clause A8 in respect of the Progress Certificates or the Final Certificate has the effect the Builder was and is precluded by Clause 8.2 from now disputing the amounts certified.[48] However, I do not do so in the present case because, as I've noted in relation to the Owner's claims, the parties have conducted themselves since the Final Certificate was issued on the basis that they would ignore the Architect's assessments and deal with each other directly regarding defects.
4. Accordingly, I propose to deal with the Builders claim on its merits, and not on the basis of the Final Certificate.
5. I am not satisfied on the evidence before me that the Builder has proved an entitlement to the amounts claimed. In particular, I note:

1. The bundle of Tradelink invoices provided is not proof that the items listed on it were requested by the Owner and/or had not previously been the subject of claims made throughout the project; 2. Progress Certificate No 1 dated 18 November 2011 noted the contract had been adjusted to allow the sum of $4,180 for the benchtop - this sum is at odds with the Builder's claim that only $3,800 had been allowed for the benchtop;

1. The invoice from RC Cabinets dated 1 November 2012 which the Builder relied upon had a reference to a property at a different house number to that of the Owner's, although it was in the same street;

1. I am not satisfied the various other invoices submitted prove the amounts incurred related to the works at the Owner's home, nor that those amounts had not already been included in the Contract price; and 2. As stated above, the Architect had requested further information from the Builder in relation to the claims. I note the Final Certificate, issued by the Architect after assessment of the claims, made no allowance for the items or amounts claimed.

1. For the above reasons, the Builder's counterclaim is dismissed.

1. The Owner seeks an order that costs be reserved, and that provision is made for the filing of written submissions in respect of costs. Any application for costs will need to be determined based on the factors set out under s 109 and/or s 112 of the Victorian Civil and Administrative Tribunal Act 1998.
2. I will give the parties until 4:00 pm on 6 April 2020 to apply to the Tribunal for an order for costs. Any application must be supported by written submissions. I will direct the Principal Registrar to refer any costs application to me so that I can make appropriate Orders.
3. In the event that no application for costs is successfully made, each party will have to bear their own costs of the proceeding.

[1] Progress Certificate No 5 dated 17 September 2012.

[2] BACV was a joint service conducted by Consumer Affairs Victoria and the Victorian Building Authority prior to 26 April 2017. It has now been replaced by Domestic Building Disputes Resolution Victoria.

[4] Interest calculations attached to the Applicant's written submissions dated 6 December 2019 state the amount owing by way of interest as at 29 February 2020 is $14,243.24.

[5] At the time of filing his Counterclaim the interest claimed totalled $7,462.68.

[6] This report is admissible in evidence in proceedings in this Tribunal pursuant to section 48T of the DBC Act.

[19] Clause A3.2 - warranties by the contractor.

[20] Robinson v Harman [1848] EngR 135; (1848) 1 Exch 850 at 855: Belgrove v Eldridge [1954] HCA 36; [1954] 90 CLR 613 at 617-618.

[22] Owner's written submissions - para 65 (a).

[25] A reference to Clause N14 of the Contract.

[26] Owner's written submissions - para 85.

[27] Owner's written submissions - para 67.

[28] Owner's written submissions - para 68.

[29] Owner's written submission - para 89.

[30] Consistent with this approach I note also that items which had been taken into account and considered by the Architect when issuing the Final Certificate, were not pursued by the Owner in this proceeding.

[32] As stipulated in Clause A8.2 of the Contract.

[33] [2017] VCC 1247.