Marceau v Homes With Integrity Pty Ltd [2025] VCAT 764 | Case summary

Marceau v Homes With Integrity Pty Ltd [2025] VCAT 764 | Case summary | Zoe

[9]

The owners, being the applicants, have made a claim against the respondent for liquidated damages under the building contract. The builder has acknowledged it has a liability for liquidated damages and has allowed liquidated damages up to the time of the occupancy permit. However, the applicants claim that they are owed further liquidated damages from the date of the occupancy permit until 2 November 2023, on the basis that the building works were not completed within the meaning of the contract until 2 November 2023. The amount claimed is $4,714.29.
The building contract is a standard MBA Form building contract in this case. Liquidated damages were agreed at $500 per week. The applicants say, and Mr Marceau gave evidence that, the work was not completed by the date of the occupancy permit within the meaning of the contract because there were further works outstanding which were not completed until early November 2023.
Mr Marceau contends that 'completion' within the definition of the contract means when the works have been completed in accordance with the plans and specifications and the occupancy permit has been issued. Mr Marceau further contends that the work must be completed in accordance with the plans and specifications, which refer to various standards, including the VBA Guide to Standards and Tolerances 2015.
He gave evidence that, as at the date of the occupancy permit, the works had not been completed in that they did not comply with the VBA's Guide to Standards and Tolerances and, therefore, they were not completed in accordance with the meaning of 'completion' under the contract.
He also gave evidence that there were a number of items of defective work which had not been attended to by the builder at the time of the occupancy permit, including scratching to triple glazed window units - that is the glazing needed to be replaced. This work was not done until 2 November when the owners signed a completion checklist. On that basis, the owners contend that they're entitled to a further period of liquidated damages.
In response to that claim, Mr Torrance, a director of the respondent gave evidence that the builder considered the work had been completed within the meaning of the contract by the time of the issue of the occupancy permit. He said that all works under the building contract had been completed and at the time the occupancy permit was issued, the works were suitable for occupation. In other words, all services and appliances and everything had been connected. The place was locked up and able to be occupied.
He acknowledged that there were some items of defective work, which had been identified before the occupancy permit was issued and referred to in a report, which inspection report the applicants referred to in their claim dated 25 September 2023.
Mr Torrance gave evidence that there was some delay in attending to rectification of those defective items of work, including replacing the scratched glazing on the windows. The respondent's position is that the building work is completed notwithstanding defects which may exist. In other words. The respondent's position is contrary to the applicants' position - that the building work is not completed until the work has been carried out and complies with the various standards and the regulations.
I find on the evidence before me that the term 'completion' under the contract means that the work is completed but not necessarily defect free. In other words, the work has been completed and is suitable for occupation. But there may be some items of defective work which may not affect occupation. In this case, there were some existing items of defective work and other items which were identified before and during the defects liability period which commenced after completion of the work.
I also find on the evidence that the work was physically completed at the time the occupancy permit was issued. There were some defects already identified and others identified after the occupancy permit.
Accordingly, this claim fails.

[10]

In relation to the second claim, which concerns a defective bath, the applicants claim that the bath installed by the builder creaks and is a defect. Mr Marceau gave evidence that after installation of the bath, there was audible creaking when used both with and without water. This is a defect. The applicants allege that the creak and that the reason for the creak is because the bath has not been correctly installed.
Mr Marceau gave evidence that the applicants contacted and obtained advice from the manufacturer or supplier, Decina, of the acrylic bath. Decina did not inspect the bath but gave an opinion. On the information provided by the applicant, Decina opines it appears the bath has not been correctly installed and that is the reason for the creak or audible noise. The applicants seek an order that the respondent fix the problem with the bath.
In response to this claim, Mr Torrance gave evidence that the builder had installed the bath in accordance with the manufacturer's instructions or guidelines. He called a plumber, Mr James Althaus, who was engaged to install the bath. Mr Althaus gave evidence that these types of baths, which are acrylic and this one had legs, could be installed in accordance with the manufacturer's guidelines in one of two ways. Either by mortar bed or by silicon adhesive. He said that he installed the bath by using silicon adhesive and the method was in accordance with the manufacturer's instructions.
I advised the applicants at the beginning of the hearing that they had the onus in this case of proving two issues concerning the bath. The first issue is that there was a defect which was caused by the builder's workmanship, and secondly, the only remedy available was the cost of rectification of the problem with the bath.
In relation to the first issue, I'm not satisfied that the applicants have proved on the balance of probabilities that the problem with the bath (the creaking) has been caused by improper installation by the builder. The applicants did not call any expert to give expert opinion in support of the allegation that the problem, the defect with the bath, is caused by faulty workmanship or failure to follow the manufacturer's instructions.
Accordingly, this claim also fails.
The only order I'll make based on my findings is that the proceeding is dismissed.

Marceau v Homes With Integrity Pty Ltd

At a glance

Court

Decision date

Source

Judgment (10 paragraphs)

Marceau v Homes With Integrity Pty Ltd (Building and Property) [2025] VCAT 764 (26 August 2025)

Parties