Langham & Anor v Verticorp Pty Ltd [2025] QCAT 227

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8

Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27

• [1] The applicant owners entered into a building contract with the respondent builder on 2 December 2020 for the construction of a new home in Townsville.
• [2] Construction occurred during the Covid-19 crisis period and the work was delayed, amongst other reasons, because of a lack of available trades people.
• [3] Extensions of the time for completion were agreed through to 21 January 2022. A further extension of time after that associated with a delay in engaging painters was not agreed to by the owners.
• [4] Practical completion finally occurred on 24 March 2022 according to the owners and 25 March 2022 according to the builder.
• [5] The specifications to the contract provided for the supply and laying of Buffalo grass around the dwelling. By mistake, the builder supplied and laid Couch grass.
• [6] The applicants made complaint about the type of grass some six weeks after completion. The parties fell into dispute about that and the applicants have applied to the Tribunal for determination of a building dispute. There are two issues in dispute, a claim for the cost associated with removal of the established Couch grass and its replacement with Buffalo grass and a claim for liquidated damages.

• [7] The contract specifications provided for "Supply and lay Buffalo Turf on 50mm top soil and initial watering and Auto watering system 200 to 299m2(T) includes 206 sqm of Buffalo % Automatic Irrigation to front and rear".
• [8] The builder supplied Couch grass instead of Buffalo grass. Buffalo grass had not been available from the supplier at time of purchase and Couch was purchased and laid instead. The owners had not been consulted.
• [9] The Couch grass was laid on 7 March 2022. An inspection for practical completion occurred on 10 March 2022 and practical completion handover itself took place on 24 or 25 March 2022.
• [10] The builder complains that the error with respect to the turf was not noted on the defects document prepared for the practical completion inspection. Had the error been raised by the owners at practical completion it would have been a simple matter of removal and reuse of the existing turf at another property. However the first notice to the builder about the error was on 6 April 2022.
• [11] The owners say they did not know that the grass laid was the wrong species until 6 April 2022, when Couchie Lawn Services, a landscaping company engaged by the owners to inspect the lawn, identified the grass as Couch rather than Buffalo.
• [12] The owners say they called in Couchie Lawn Services because there were patches of the lawn dying off and weeds were emerging.
• [13] The builder's submission is effectively that the owners failed to mitigate their loss by advising the builder too late that the grass laid was the wrong type. The owners have obtained a quoted cost of replacing the Couch grass with Buffalo grass of $8,140.55.

• [14] What must be kept in mind is that it was the builder's failure to adhere to the requirements of the contract that initially caused the problem, not any failure on the part of the owners.
• [15] In Lazicic v Rossi [2024] NSWSC 777, Kirk J said:

Neither excessive diligence nor perfection is required of a claimant: note eg Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313; (2000) 10 BPR 18,235 at [187]. As was said in Lodge Holes Colliery Company Ltd v Wednesbury Corporation [1908] UKLawRpAC 40; [1908] AC 323 at 325 by Lord Loreburn LC:

Now I think a Court of justice ought to be very slow in countenancing any attempt by a wrong-doer to make captious objections to the methods by which those whom he has injured have sought to repair the injury. ... Errors of judgment may be committed in this as in other affairs of life. It would be intolerable if persons so situated could be called to account by the wrong-doer in a minute scrutiny of the expense, as though they were his agents, for any mistake or miscalculation, provided they act honestly and reasonably.

• [16] In Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 referred to in Lazicic, Giles J for the New South Wales Court of Appeal said:

187. A plaintiff who acts unreasonably in failing to minimise his loss from the defendant's breach of contract will have his damages reduced to the extent to which, had he acted reasonably, his loss would have been less. This is often misleadingly referred to as a duty to mitigate, although the plaintiff is not under a positive duty. The plaintiff does not have to show that he has fulfilled his so-called duty, and the onus is on the defendant to show that he has not and the extent to which he has not (TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130). Since the defendant is a wrongdoer, in determining whether the plaintiff has acted unreasonably a high standard of conduct will not be required, and the plaintiff will not be held to have acted unreasonably simply because the defendant can suggest other and more beneficial conduct if it was reasonable for the plaintiff to do what he did (Banco de Portugal v Waterlow and Sons Ltd [1932] UKHL 1; (1932) AC 452; Pilkington v Wood (1953) Ch 770; Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd (1976) 1 NSWLR 5).

• [17] It is not for the owners to show they have acted reasonably after the builder's breach. It is for the builder to show the owners have acted unreasonably following the breach.
• [18] The owners say in a statement of evidence that if they had known Buffalo grass was not available at the time they would have either paid for premium quality Buffalo grass (presumably that was available) or varied the contract by removing supply and laying of grass from the contract.
• [19] At hearing Ms Langham said the first she and her partner knew the grass was the wrong species was when they engaged a lawn services contractor to inspect the grass and were told the grass was Couch, not Buffalo. On the same day she contacted the builder.
• [20] Mr Payne for the builder challenged her statement that she had not known about the error before that, but I accept Ms Langham's evidence about her ignorance on the subject (and that of her partner). There is nothing in the evidence to indicate the contrary.
• [21] Accordingly I find that the owners did not fail to act reasonably in advising the builder on 6 April 2022 that the builder had made a mistake concerning the grass specie.
• [22] Given the turf is well established now, and is able to be used as a lawn, another factor for consideration is whether asking the builder now to replace the existing turf with Buffalo grass in compliance with its obligations under the contract is a reasonable remedy in the circumstances.
• [23] In Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27 Bathurst CJ explained the rule as follows:

186. The general principle on which damages are recoverable by a building owner for breach of a building contract is the cost of making the work or building conform to the contract, subject to the qualification that not only must the work be necessary to produce conformity, but it must also be a reasonable course to adopt: Bellgrove at 617-618; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 at [15]. In the latter case, the court indicated that the test of unreasonableness is only to be satisfied by fairly exceptional circumstances: at [17].

• [24] In Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 referred to, the High Court said this about the unreasonableness factor:

17. ...(I)n Bellgrove v Eldridge this Court pointed out that there was a qualification to the rule it stated in regard to damages recoverable by a building owner for the breach of a building contract. "The qualification ... is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt."[25] The example which the Court gave of unreasonableness was the following[26]:

"No one would doubt that where pursuant to a building contract calling for the erection of a house with cement rendered external walls of second-hand bricks, the builder has constructed the walls of new bricks of first quality the owner would not be entitled to the cost of demolishing the walls and re-erecting them in second-hand bricks."

That tends to indicate that the test of "unreasonableness" is only to be satisfied by fairly exceptional circumstances. The example given by the Court aligns closely with what Oliver J said in Radford v De Froberville, that is, that the diminution in value measure of damages will only apply where the innocent party is "merely using a technical breach to secure an uncovenanted profit." It is also important to note that the "reasonableness" exception was not found to exist in Bellgrove v Eldridge. Nothing in the reasoning in that case suggested that where the reasoning is applied to the present circumstances, the course which the Landlord proposed is unnecessary or unreasonable.

• [25] According to Tabcorp, the test of unreasonableness is only to be satisfied by fairly exceptional factors. Generally a party will be obliged to comply with their obligations under a contract.
• [26] The owners contracted for Buffalo grass. They said in their statement of evidence that had they known the grass was not available they would have sourced it themselves or paid more for premium Buffalo.
• [27] Ms Langham said her main concern with Couch was the problem with weeds. Her evidence at hearing was that Couch was less resistant to invasive weeds than Buffalo. She said that Buffalo was the most suitable grass for their conditions and it was the most popular grass laid in Townsville. She said Couch:

... was the wrong species for the type of ground that we had, so it (the weeds) was growing out of control.[1]

• [28] She also said that Couch grass did not do well during the rainy season in Townsville, and it needs full sun to survive, contrary to Buffalo.
• [29] Mr Payne was asked if he agreed that Buffalo was the grass of preference for Townsville. He disagreed, saying he had built over 130 houses in Townsville and the only "... Zoysia..." laid was "... in North Shore where it's specified ... and Couch grass is predominantly the grass." That of course does not answer the question given Zoysia grass is not relevant nor the builders' grass commonly supplied to be equated to the grass of preference in Townsville.
• [30] The owners had been offered compensation of $2,500 for the wrong turf being supplied but Ms Langham had rejected the offer explaining:

My concern moving forward, if we were to accept that two and a-half thousand dollars, would be that we would still be dealing with the weeds that came with the provided Couch.[2]

• [31] Based on the fairly limited evidence before me I conclude it was not on whim that the owners specified Buffalo grass rather than Couch. I accept that the owners understood that Couch grass presented them with reduced maintenance obligations.
• [32] In an email dated 19 July 2023 to the builder from Great Northern Turf, a grass supply company, it was said that Couch has a very rapid growth rate and requires frequent watering and frequent mowing to keep healthy. The author added "If the Couch turf is left to grow long and stalky, this is an invitation for weeds to germinate through the gaps of the long leaves."
• [33] Mr Payne said at hearing that Couch required cutting. He said Buffalo was better in the shade but Buffalo requires more watering than Couch and when one cuts it one must cut it fairly deeply to the root system. Mr Payne used the word "problem" when talking about maintaining Couch.[3]
• [34] The builder also submits the owners failed to list the error of the wrong grass supplied in the practical completion defects list. The turf had only been cut from a paddock of grass and laid two days beforehand however. Ms Langham said she mistook it for "juvenile" Buffalo grass but in fact it was fully grown but close cut Couch grass. That mistake rather supports Ms Langham's (and her partner's) contention that she knew very little about grass and grass species. Hence the owners' failure to note the wrong grass had been laid in the defects list in the practical completion report.
• [35] It did not have to be listed there. The breach could be raised anytime within the 12 month defects liability period applying. Payment of the final payment under a construction contract does not preclude a subsequent claim for breach of contract.
• [36] In the absence of expert evidence addressing the different attributes of the different grass species, and accepting that the owners had reason to specify Buffalo rather than Couch in the contract for maintenance reasons going forward, I determine that requiring the builder to comply with the contractual requirement to supply Buffalo grass now is not an unreasonable or unnecessary remedy.

• [37] The owners supply a quotation from Townsville Landscape Concepts dated 3 November 2022 for the removal and disposal of the existing Couch grass and replacing it with 205m2 of Buffalo grass. The total cost with GST is $8,140.55.
• [38] The quote covers excavating the Couch and disposing of it, preparing a turf underlay with 5m3 of fresh soil, fertilizer and inspecting the existing irrigation system and diagnosing and setting it for adequate coverage. The contract specifications were not unsimilar, save for the cost of removing existing turf and the initial work installing the watering system.
• [39] The quoted work seems appropriate and necessary to effect a change in the turf from Couch to Buffalo.
• [40] In the builder's Response document it states that the Couch had rooted into the ground leaving no capacity to recover and reuse it. That suggests the existing underlay is compromised by the Couch roots, and there will be a need for new soil underlay for new turf.
• [41] In an email from Great Northern Turf to the builder dated 9 May 2022 the cost of supplying and installing Buffalo grass was quoted as $12/m2 excluding GST. The quotation from Townsville Landscape Concepts puts the cost of supplying 205m2 of Buffalo at $2,150 excluding GST. That means a cost of $10.49/m2, which is less than the cost quoted by Great Northern Turf.
• [42] At hearing Ms Langham said at both sides of the house where the fence shades the grass the Couch had died off. She said they had had "to concrete the side of the house". It is not clear whether that was one side or both sides, and there is no evidence concreting work was done or the extent.
• [43] The quote by Townsville Landscape Concepts is old. It expired on 3 December 2022. In so far as less than 205m2 of Buffalo grass may be necessary because an area or areas at the side near the fence or fences may have been concreted, I consider allowing the quote in full is a reasonable compromise adjusting for any increase in price for the supply and work concerned since 2022.
• [44] The builder does not challenge the amount of the costs claimed based on the Townsville Landscape Concepts quotation.
• [45] The amount of $8,140.55 is allowed the owners.

• [46] Clause 32 of the general conditions of contract provides that if practical completion is delayed the owners are entitled to the sum specified in the schedule of the contract for each day after the scheduled completion date until the date of actual completion or termination of the contract or when the owners take possession of the site.
• [47] As stated, the practical completion and handover date was 24 March 2022 according to the owners and 25 March 2022 according to the builder.
• [48] In the owners' application for building dispute, liquidated damages from 21 January 2022 to 8 March 2022 for the 29 business days of that period are claimed at $50 per day. The total is $1,450.
• [49] At hearing however the applicants stated they sought liquidated damages from the last agreed date of extension of time for completion, 22 January 2022, until the final date proposed for date of completion by the builder, 4 March 2022.
• [50] Why the owners limit the claim to business days only and why to 4 March 2022 rather than the date of actual completion, 24 (or 25) March 2022, is unclear.
• [51] The owners say there were five extensions of time of the date of practical completion.
• [52] The builder forwarded a document described as Variation certificate to claim the fifth extension of time. The document bears a date 14 January 2022. It is not really a variation as defined in clause 38.1, the interpretation provisions of the general conditions. By clause 38.1, variation means an omission, addition or change to the works or a change in the manner of carrying out the works. Works is defined as the works to be carried out, completed and handed over to the owner in accordance with the contract as shown in the contract documents including variations.
• [53] In short, there was no change in the scope of work to be done under the contract effected through the subject claim for an extension of time.
• [54] Clause 17.1 of the general conditions provides however that the builder is entitled to a reasonable extension of time to the building period if the carrying out of the works is delayed by a claimable delay. Clause 17.2 sets out examples of claimable delays. The list is not exhaustive.
• [55] Looking to the subject Variation certificate, the same grounds for extension of time sought by this document, insufficient trades people available to work the job, had been the basis of earlier requests for extension of time, all of which had been approved.
• [56] The building period was the construction period of 168 calendar days plus a time allowance of 21 days for inclement weather, a total of 189 days. The work started on 31 May 2021.
• [57] The Variation certificate is a confusing document. It mentions 140 "claimable days" in addition to the original build period and apparently notes four previous extensions of time, three of which were based on claimable days due to insufficient trades people available. It gives a revised practical completion date of 4 March 2022 and states the revised building period in total will therefore be 308 days.
• [58] The owners say they rejected this final request for extension by email dated 13 January 2022. The email concerned is addressed to Sandra of the builder's office. It commences "Hi Sandra" and then simply states "I do not agree or consent to this extension of time, consider this my notice within 5 business days as required."
• [59] The builder challenges the refusal was effective given it was sent before the builder requested the extension of time in writing on 14 January 2022.
• [60] The parties could not readily explain the discrepancy at hearing. The rejection email of 13 January 2022 does not explain the basis of rejection. It does not refer to the Variation certificate. By clause 17.7 of the general conditions the owners were obliged to explain the basis of rejection. They do not do that with the email of 13 January 2022. Here, an explanation was surely called for given previous extensions of time based on the same problem confronting the builder had been accepted as valid grounds for an extension of time by the owners.
• [61] Ms Langham said at hearing that the owners did give full explanation of the reasons for refusal in another email to the builder dated 23 January 2022.[4] But that was outside the five day period stipulated for in clause 17.7. In any case, the letter does no such thing. The email of 23 January 2022 mentioned five requests for extension of time and then talks of the builder's painting contractors being scheduled to start on 19 January 2022, but that the owners learned through neighbours that that had been extended to 23 January 2022. The delay from 19 to 23 January 2022 appears to have been the substance of the communication of 23 January 2022, not explaining why the fifth extension of time was refused.
• [62] That same communication of 23 January 2022 mentions a "current practical completion of 308 days", which points to an accepted date for practical completion of 4 March 2022 in accordance with the final extension of time.
• [63] I am not persuaded that the owners' email of 13 January 2022 was given in response to the written claim for extension of time to 4 March 2022. Even if it did, there was no explanation for the rejection of the extension of time where previous extensions for the same difficulty facing the builder had been allowed. The email of 23 January 2024 relied on by the owners as explanation was out of time under clause 17.7. The email of 23 January 2022 is reasonably understood as confirming the extension of time to practical completion to 4 March 2022 was in place between the parties.
• [64] The claim for liquidated damages as pursued fails.
• [65] Ms Langham was clear in her evidence at hearing. The owners were not claiming for the entire period of delay to completion, only for the period associated with the final extension of time.
• [66] I therefore make no award in respect of the period of time from 4 March 2022 to actual date of completion of 24 (or 25) March 2022.

• [67] The builder must pay the owners the sum of $8,140.55 as damages for breach of contract.

[4] The communication is dated 23 January 2022 and the author is Ms Langham but there is no recipient noted - there is an email address apart and above the message which perhaps also suggests the message was sent (for the first time) or resent to the builder on 28 October 2022.