1. In August 2005 the Respondents, Mr and Mrs Balbin, purchased a house in Caulfield North. In the ensuing two years they demolished the house and constructed a large new double storey home ("the home") as a residence for them, their four children and pets. An occupancy permit for the home was issued on 12 December 2007. In 2008 the Respondents decided to sell the home.
2. The Applicants, Mr and Mrs Meier ("the owners") and their children had, since 2000, resided in the same street. They were interested in purchasing the home. On 12 March 2008 and 10 April 2008 they inspected the home and in July 2008 they obtained the contract of sale documentation including the vendors' statement pursuant to s32 of the Sale of Land Act ("the section 32 statement"). On 13 August 2008 the respondents and the owners executed a contract for the sale of the home for a price of $3,150,000 ("the sale contract"). The settlement date for the contract was 8 December 2008. Prior to the settlement the owners carried out further inspections.
3. In this proceeding the owners claim damages in the sum of around $334,000 which they say is the cost, some of which they have already incurred, to rectify building defects in the home. The owners say that they will need to temporarily vacate the home while further rectifications are carried out and their claim includes an allowance for the cost of temporary alternative accommodation.
4. The respondents defend the claim on a number of bases:
   • - They say that many of the items of building work claimed by the owners to be defective are in fact not defective. To the extent there are defects, they dispute the rectification cost claimed.
   • - They say that some of the "rectifications" claimed by the owners constitute routine building maintenance works which are the normal responsibility of home owners. They say that other "rectifications" amount to an upgrade of the building works, not rectification of defects.
   • - They say that because the owners inspected the property prior to entering the sale contract, the owners knew what they were buying and cannot now claim compensation in respect of alleged defective or poor quality works which were, or should have been, apparent to them.
   • - In respect of the parquetry flooring in the home, the respondents plead, additionally, that the flooring is, under the sale contract, a chattel and therefore does not form part of the building work attracting the application of statutory warranties.

1. The matter came before me on 10 December 2012. A view of the home was conducted on the second day and the hearing of evidence was concluded on 13 December 2012. Final submissions were heard on 20 December 2012.
2. Mr and Mrs Meier gave evidence for the owners. Mrs Balbin gave evidence for the respondents.
3. Concurrent expert evidence was given by building consultants, Mr Rob Lees (called by the owners) and Mr Robert Lorich (called by the respondents). Mr Lees and Mr Lorich also produced written reports.

1. It is not disputed that, as "owner-builders" of the home, the respondents provided warranties in respect of the building work that:
   • (a) the work, carried out in relation to the construction of the home, was carried out in a proper and workmanlike manner;
   • (b) all materials used in the work were good and suitable for the purpose for which they were used and that, unless otherwise stated in the contract, those materials were new; and
   • (c) the work was carried out in accordance with all laws and legal requirements including, without limiting the generality of the warranty, the Building Act 1993 and the regulations made under that Act.

1. The warranties, mandated by s137C of the Building Act 1993 ("the Act"), are confirmed in the sale contract.
2. By special condition 19 in the sale contract, the respondents also warranted that they would rectify to a tradesmanlike manner:

(a) Water damage found in the ceiling above the piano in the area designated as music on the property plan; and

(b) Loose or lifting floorboards in the hallway outside the room designated as laundry and powder on the property plan.

THE SECTION 137 REPORT

1. As neither of the respondents is a registered building practitioner, they were required pursuant to s137B of the Act to provide to the owners, prior to entering the sale contract, a report on the building works prepared by a registered building practitioner. In compliance with this requirement, the respondents included in the Section 32 statement a report of Archicentre Limited (author Mr K. Collins) dated 15 April 2008 ("the Archicentre report"). The Archicentre report identifies "nil" defects in the building works.

1. There is no dispute that, prior to entering the sale contract, the owners inspected the home on 12 March and 10 April 2008 and that these inspections were private inspections organised through the selling agent. The owners say that, to the best of their recollection, these were their only inspections prior to entering the sale contract.
2. Mrs Balbin says she believes that the owners carried out one or more further inspections prior to entering the sale contract, however she is unsure as to when such further inspection/s were carried out.
3. I am not satisfied, on Mrs Balbin's belief alone, that the owners carried out more than the two confirmed inspections prior to entering the sale contract. I do, however, accept that as the owners lived a few doors down in the same street, and were interested to purchase the home, the owners likely had numerous casual observations of the home from the street. Mrs Meier confirmed in evidence that she regularly passed the home on her travels.
4. There is no dispute that, after the sale contract was entered but prior to settlement, the owners carried out two further inspections of the home. The owners' parents accompanied them at one of those inspections and Mrs Balbin says that, at that inspection, she escorted Mrs Meier around the home pointing out, among other things, some features of the cabinetry and shelving. Mrs Meir does not dispute this, although she has little recollection as to what was actually pointed out to her.
5. Mr Meier confirms that he carried out a further private inspection just prior to the settlement date.
6. In Bonarrigo v DSF Pty Ltd [2012] VCAT 1949, I commented on the importance of pre purchase inspections. It is reasonable, in my view, to presume that a purchaser of a home makes allowance for known or patent defects when negotiating the purchase price and, as such, the purchaser can have no "loss" arising from a breach of the warranties in respect of such defects. By "patent" I mean a defect which ought reasonably have been observable on inspection and the significance of which, in terms of a likely need for rectifications, ought reasonably have been appreciated.
7. The same cannot be said in respect of a defect which first becomes known or patent after a sale contract is entered but before settlement has occurred. In that situation it cannot be presumed that a purchaser has made allowance for the defect when negotiating the purchase price.
8. There is nothing in the sale contract itself to suggest that the owners' rights in respect of breaches of the warranties might be limited or reduced by reason of them becoming aware, after the sale contract was entered and prior to settlement, of defects in the building work. Indeed, any such provision would likely be void by reason of s137C(3) of the Act.
9. For the above reasons, I do not accept the submission of the respondents that the inspections carried out by the owners after the sale contract was entered (and prior to the settlement date) have relevance in this case. In any event, other than Mrs Balbin's evidence that at one of those inspections she pointed out to Mrs Meir features of the cabinetry and shelving, there is no evidence as to any particular knowledge gained by the owners on such inspections.

1. Mr Lorich and Mr Lees have each provided cost estimates for rectification of various defective works. Their costings include a builder's margin allowance. Mr Lorich says a margin loading of 20% is reasonable. Mr Lees allows a loading of 34% for builder's and preliminaries' margins combined. I am satisfied that a 30% loading for preliminaries, overheads and builder's profit is a reasonable margin to be included as part of the cost of engaging a builder to rectify defects. I will apply the margin, and an allowance for GST, following my assessment of all the claims for defective building work.

1. The upper storey of the home is polystyrene, rendered cladding. The lower storey is rendered masonry. The owners say there are a number of defects:
   • - insufficient expansion joints resulting in cracks;
   • - insufficient gap between the base of the upper storey cladding sheets and flashings between the upper storey and lower storey (in some instances the cladding sits on the flashing) causing water migration into and behind the base of the cladding sheets, compromising both their appearance and durability. The owners say also that the flashings have no, or insufficient, fall;
   • - in a number of areas, water leak staining/discolouration is apparent;
   • - the fixing to the frame of the upper storey cladding is inadequate;
   • - the render to the upper storey generally patchy. In wet/cold weather the fixing points of the cladding to the frame are visible as pale dots.
2. Mr Lees says that rectification will require replacement of approximately 50% of the upper storey cladding. He makes allowance for framework repairs, the installation of articulation joints, resealing the cladding and re-rendering of the whole house in order to achieve a uniform finish. He estimates the cost of rectifications at $61,075 (not including the reinstallation of flashing which he costs separately as part of roof plumbing works). Mr Lees' costing includes an allowance for the hiring of scaffold at $15,000.
3. Mr Lorich concedes that some rectifications are required. He allows for providing a clearance between the flashings and the cladding and installing capping to the base of the cladding sheets, installing further articulation joints and applying a further surface coat to all of the upper storey cladding. He estimates the cost of such rectifications at $16,880. His costing allows for use of portable scaffold at $2,500. Mr Lorich concedes that it may be necessary to use fixed scaffold, at an estimated further cost of $5,000, on the east side of the home where access is limited.
4. Mr Lees says that the cladding will need to be removed to allow for the rectification of the flashing which currently has no gradient fall away from the building. He says also that a number of the cladding sheets are showing signs of water deterioration at their base.
5. Mr Lorich does not agree. He says that, save for one or two sheets of the cladding which have deteriorated edges, there is no need to remove the cladding. In respect of the flashing, he concedes that in some areas it does not have a gradient fall away, but he says this is not problematic provided the base of the cladding sheets are capped and an adequate clearance to the flashing is provided. He says these rectifications may be carried out without removing the cladding sheets and that the flashing will then satisfactorily perform the function of expelling water away from the building.
6. Having viewed the home, I am persuaded to accept Mr Lorich's opinion. I was shown a couple of areas where the inadequate clearance between the base of the cladding sheets and the flashing has lead to water staining/minor deterioration to the bottom edge of the cladding sheets. I was not, however, shown any signs of water damage to windows or the interior of the home resulting from water breaching the flashings. For this reason, I accept Mr Lorich's opinion.
7. I accept the evidence of Mr Lorich and Mr Lees who agree that further articulation joints should be installed to the upper storey cladding and the lower storey masonry on the east side of the home. The need for further articulation is apparent in a number of areas where cracking has occurred.
8. Mr Lees considers that the cladding has inadequate fixing points to the frame and that this may become a problem when new articulation joints are installed. He makes an allowance of $2,000 for framework repairs. Mr Lorich says that, to the extent work is required to the framing when articulation joints are installed, such work will be minor and easily carried out. Otherwise, says Mr Lorich, there is no indication of any damage occurring as a result of the inadequate fixing of cladding to the frame.
9. While I accept that some rectification to the frame may be necessary in conjunction with the installation of articulation joints, I am not satisfied that the fixing of the cladding to the frame is, generally, inadequate. At the view I was shown some areas of cracking as evidence of the need for articulation. I was not, however, shown any damage said to be the result of the inadequate fixing of the cladding. For this reason, I prefer Mr Lorich's opinion and find that the installation of articulation to the cladding may require only minor rectification to framing.
10. In relation to scaffold required to carry out the rectifications, Mr Lorich says that, with the possible exception of the east side of the home where access space is limited, the rectifications can be carried out using portable/mobile scaffold. Mr Lees says that, even if there is no need to remove the cladding, the rectifications will still require use of fixed scaffold. He says the constant moving of the portable scaffold would be tedious and time consuming to the extent that it may, in any event, be cheaper to use fixed scaffold. Having viewed the home, I prefer Mr Lees' opinion. I am satisfied that it is appropriate and reasonable to allow for the hire of fixed scaffold to carry out the rectifications. Mr Lorich does not dispute Mr Lees' costing of $15,000 for the hire of fixed scaffold.
11. Mr Lees allows for re-rendering the whole house, following rectifications to the cladding and the east side masonry, at an estimated cost of $30,000. The need for wholesale re-rendering, however, stems largely from his view that around 50% of the cladding is to be replaced. As I have found that, save for one or two sheets, the cladding need not be removed, I do not accept that the re-rendering is necessary. I accept Mr Lorich's evidence that, following the rectifications, it will be necessary to apply a finishing coat to the upper storey cladding so as to achieve an acceptable uniform finish. The application of the finished coat will have the added bonus of improving the general appearance of the home. I accept also that some re-rendering to the lower storey east side of the home will be required following the installation of articulation joints.
12. There is no evidence that the owners had knowledge, prior to entering the sale contract, of the problem with the base of the cladding sheets. It was not identified in the Archicentre report. Having viewed the home, and having heard evidence from the experts, I am satisfied that it was not an issue that would have been "patent" to the owners. It is something that requires an expert's eye.
13. The owners say, and it is not contested, that they noticed no cracking in the cladding or the rendered masonry prior to entering the sale contract. The Archicentre report does not identify any cracking or problem with the articulation. In my view the owners could not, without expert advice, be reasonably expected to have formed a judgment as to whether the amount of articulation provided was adequate. Again, it is something that requires a trained eye. Both Mr Lees and Mr Lorich were less than impressed that it was not noted in the Archicentre report. On all the evidence, I am satisfied that the lack of articulation was not known to the owners prior to entering the sale contract, nor was it a "patent" defect.

1. At the view I observed that that the upper storey render appears patchy, as if the render is "thin" in some areas. The respondents say that the appearance is as they intended it to be. It was their aesthetic choice for the finished "look" of the home.
2. The owners produced photographs, said to have been taken on a cold morning, which show pale dots throughout the upper storey cladding. The dots are, says Mr Lees, the points where the cladding has been fixed to the frame. Although the dots were not observable at the view (it was a warm day), I accept the owners' evidence that they appear only in wet / cold weather.
3. The general appearance of the render finish would have been apparent prior to the sale contract. I think it very likely that, living in the same street and having an interest in purchasing the home, the owners would have observed the rendered finish on numerous occasions including during wet/cold weather. Accordingly, to the extent the appearance of the render (including pale dots in wet/cold weather) may be said to amount to a breach of the warranties, I find that the owners were aware of the appearance of the render prior to entering the sale contract and, as such, they have no "loss" arising from any breach of the warranties.
4. As noted above, the application of a final; seal coat to the cladding following the installation of articulation joints will, in any event, improve the general appearance of the cladding finish.

1. The rectifications that I have found are necessary are those recommended by Mr Lorich, with several additional allowances. I accept Mr Lorich's rectification costing, $16,880 with the following additional allowances:
   • - $12,500 being the difference between Mr Lorich's estimate for scaffold cost ($2,500) and the cost of fixed scaffolding ($15,000);
   • - $1,000 which, doing the best I can, I consider to be a reasonable allowance for minor rectifications to the framing as part of the installation of articulation joints and including the cost to replace one or two cladding sheets;
   • - $750 which, doing the best that I can, I consider to be a reasonable allowance for some re-rendering to the lower storey east side masonry following the installation of further articulation joints.
2. Accordingly, I allow $31,130 (not including builder's margin and GST) as the reasonable cost to rectify defects in the cladding.

1. Mr Lees says that a number of rectifications to roof plumbing are required:
   • - Installation of flashing (with adequate gradient fall) between the upper storey and the roof of the lower storey. This flashing issue has been discussed above.
   • - Recapping to area of the roof of the ground floor at the north sections of the home and garage;
   • - Installation of spreaders, adjusting box gutters and installation of at least one new downpipe.
2. He costs such work at $7,850. Save for the flashings, Mr Lorich agrees that the rectifications are required.
3. For the reasons discussed above, I do not accept that the flashings need to be replaced. Otherwise, I accept Mr Lees' and Mr Lorich's evidence that the rectifications are required. Removing the flashing, Mr Lees' cost estimate for the remaining works is approximately $4,500. The cost includes an allowance for removal and refitting of all downpipes to the upper storey to allow for the application of the finishing coat. I consider the estimated cost to be reasonable.
4. There is no evidence that these roof plumbing defects were known to the owners prior to the contract of sale. They are not identified in the Archicentre report. I do not consider them to be defects which would have been reasonably observable (to an untrained eye) prior to the sale contract.
5. Accordingly, I allow the sum of $4,500 to rectify the roof plumbing defects.

1. Mr Lees says that when he inspected the home in June 2011, there was water pooling in the subfloor area of the home. His report dated 20 September 2011 includes photographs of the pooling water. Mr Lees also says that the subfloor ventilation is inadequate and further vents need to be cut into the brickwork.
2. At the view, a small section of the subfloor area was examined. Although there is no longer pooling water, the soil is noticeably damp.
3. Mr Lees recommends rectifications which include:
   • - Install extra subfloor ventilators in brickwork;
   • - Provide further subsurface drainage across the front (north) and the two sides of the home;
   • - Shape the subfloor soil area so that it slopes to a drainage pit or provide agi drains in the subfloor space.
4. Mr Lees' cost estimate for these works is $25,833. He allows a further sum of $9,200 for floor levelling some time after the rectifications are carried out and any floor movement has settled.
5. Mr Lorich agrees that extra subfloor ventilation is required and recommends the installation of slim line or double height steel vents. As to subfloor drainage, he suggests installing sand to the low lying areas of the subfloor together with the provision of a pit and pump to allow for pumping out of accumulated water in times of flood. He allows a cost of $5,440 for such work. He concedes that the drainage at the front (north) of the home, where the ground slopes towards the home, could be improved and he suggests installing an agricultural drain, at a cost of up to $1000, where the front pebbled yard meets the building. He does not accept that, as Mr Lees recommends, drains are required along the east and west building boundaries.
6. I accept the evidence of Mr Lorich and Mr Lees that the subfloor ventilation is inadequate and further ventilators should be installed. Mr Lees allows a sum of $3,350 for labour and materials. Mr Lorich allows $1,320. The difference appears to be mainly explained by the greater allowance for labour hours (and at a higher labour rate) allowed by Mr Lees. I consider it fair to "split the difference" and allow a sum of $2,335 for rectification of subfloor ventilation.
7. I accept the evidence of Mr Lees and Mr Lorich that some rectification to the drainage within the area of the subfloor is also required. Although their recommended works differ, their costings are very close. Mr Lorich costs his recommended works (sand and pump pit) at $4,120. Mr Lees costs his recommended works (re-shape soil and drain) at $4,033. I will allow $4,076 as a reasonable allowance.
8. In respect of external drainage, Mr Lorich allows a sum of up to $1,000 whereas Mr Lees allows $18,450. The main difference is that Mr Lees' allowance includes removal of paving along the east and west boundaries of the building, install drains and reinstate the paving.
9. Mr Lorich says that any water flowing into the subfloor area of the home would most likely come from the front (north) where the ground slopes towards the home and, for this reason, he recommends only the installation of an agricultural drain along the north boundary. There is a drain in front of the garage entrance on the north boundary. Mr Lorich recommends installing an agricultural drain along the remaining section of the north boundary in the area of the pebbled front yard. He says that the two sides of the house are adequately protected with satisfactory paving and, there being no indication of water ingress or damage along the sides of the house, there is no need for installation of further drains as suggested by Mr Lees.
10. Having viewed the home, I agree with Mr Lorich and I will allow his cost estimate, $1,000, for the installation of an agricultural drain along the northern boundary.
11. I make no allowance for floor levelling following the drainage works. Mr Lees took measurements of the flooring throughout the ground floor of the home. He says the floor level variances are beyond normally accepted tolerance levels. Mr Lorich says that the variances are minor and no rectifications are required. Having inspected the floor at the view, I accept Mr Lorich's opinion and find that no floor levelling is required.
12. There is no evidence that the owners were aware of the subfloor ventilation/drainage issues at the time they entered the sale contract. In my view, they are not matters that would have been apparent to an untrained eye. They are not noted in the Archicentre report.
13. For the above reasons, I allow the following to rectify the subfloor ventilation and drainage:
    • - ventilation $2335
    • - subfloor drainage $4,076
    • - north face agricultural drain $1,000

1. The home has parquetry flooring throughout. On one of the inspections prior to entering the sale contract, the owners noticed one or two loose parquets on the ground floor outside the laundry and, for this reason, special condition 19(b) was included in the sale contract. Prior to settlement the respondents, in compliance with the special condition, attended to rectification of the loose parquets.
2. The owners say now that a large number of random parquets throughout the flooring are not firmly glued to the underfloor. The total area of parquetry flooring in the home, upstairs and downstairs, is around 330 square metres. In preparation for the view, the owners placed orange stickers on parquets which they considered to be inadequately glued to the subfloor. There were about 500 stickers in all, placed on parquets randomly distributed throughout the flooring on both levels of the home.
3. Mr Lees says that, because of the random distribution of the affected parquets, large portions of the flooring, approximately 220 square metres, will need to be replaced and then most of the floor, 300 square metres, will require sanding and repolishing to achieve a uniform finish. He also allows for repainting of skirtings/walls which will be damaged in the process. His cost estimate for these works is $48,500.
4. Mr Lorich says that there is a relatively modest number of individual parquets that will need to be reglued, around 16 to 30 square metres in total, and there is no need for large scale replacement as recommended by Mr Lees. Mr Lorich agrees that, because of the random distribution of the affected parquets, it will be necessary to sand and polish approximately 300 square metres of flooring following the rectification of the parquets in order to achieve a uniform finish. He costs the rectifications at $15,300.
5. At the view I inspected quite a number of the parquets with orange stickers. The movement in the parquets, said to be the result of uneven application of glue, is noticeable only upon very close inspection while stepping (putting weight) on a single parquet. The parquet stepped upon deflects downwards very slightly (approx 1 mm). I observed also that a number of parquets with orange stickers did not appear to deflect at all when stepped upon. Without such close inspection, the floor looks and feels normal and I am satisfied that, if the slightly deflecting parquets constitute defective work (a breach of the warranties), it is a defect that was not "patent" at the time the owners entered the sale contract. The owners say they noticed only the obvious loose parquets outside the laundry which were addressed in special condition 19(b). The Archicentre report does not identify the flooring as defective.
6. Mr Lorich says that there are no applicable tolerance guidelines or standards to assist in determining whether the condition of the floor constitutes defective building work. He says that if the flooring was ceramic tiles, rather than parquetry, the area of affected tiling would be considered insufficient under current tolerance guidelines to constitute defective work. The analogy is not particularly helpful.
7. I note that in a "scott schedule" prepared by him, Mr Lorich comments, in relation to the floor, that "several isolated locations require repair. _30 square metres appro_x."
8. On balance I am satisfied that the slight movement in random parquets throughout the floor constitutes a breach of the warranty that the building work has been carried out in a proper and workmanlike manner.
9. Having viewed the floor, I am satisfied that Mr Lorich's estimate of the area of flooring requiring rectification is accurate. I also accept Mr Lorich's cost estimate of $15,300 for the rectifications as reasonable.
10. Counsel for the respondents, Mr Gibson, submits that the parquetry flooring falls outside the ambit of the warranties. He says that because the parquetry is not noted on the construction plans, it should be considered a floor covering within the definition of chattel in the Particulars of Sale in the sale contract. As a chattel, says Mr Gibson, the parquetry is not part of the construction of the home.
11. The construction plans were not produced in evidence but, in any event, I consider the submission is misconceived. The Act defines domestic building work as having the same meaning as it has in the Domestic Building Contract Act 1995 ("the DBC Act"). The DBC Act defines domestic building work to mean any work referred to in s5 that is not excluded from the operation of the Act by s6. Section 5 of the DBC Act sets out work to which the Act applies and it includes the construction of a home including... any associated work.
12. In my view the installation of the parquetry flooring by the respondents is plainly work associated with the construction of the home. For this reason, I do not accept the respondents' submission.
13. For the reasons outlined above, I allow a sum of $15,300 as the reasonable cost to rectify the defective parquetry flooring.

1. The owners say three shower recesses in the upper level of the home are leaking. Mr Lees has assessed the cost of rectification at $30,140. The estimate allows for the stripping and relaying of all floor and wall tiles to the three showers. He accepts that, if tiles matching the existing tiles can be sourced (12 square metres is required), the showers could be adequately rectified by replacing just the floor tiles and the bottom row of wall tiles. The owners say they have been unable to source matching tiles.
2. The respondents concede that two of the shower recesses are leaking and require rectification. As to the third shower, Mr Lorich says there is insufficient evidence to conclude that the shower is leaking.
3. Mr Meier gave evidence that he became aware of the leak in the third shower when water dripped through a down-light in the ceiling immediately below the shower. At the view, the shower was turned on for around 10 minutes but no water leaked through the down-light.
4. Mr Meier also produced a photograph he said he had taken of the subfloor area beneath the third shower by directing a camera through the ceiling where the downlight is located. The photograph shows signs of a small leak underneath the drainage tray in the shower.
5. Mr Lees says, and it is not disputed, that the method of construction of the three showers is similar. He has observed, through a hole cut in the garage ceiling below the master ensuite shower, the drainage tray as the source of the leak to that shower. It is logical, he says, that the third shower would likely have have a similar defect. He says the photograph, taken by Mr Meier, of the subfloor beneath the third shower confirms his opinion that the third shower has a similar defect to the ensuite shower and, although the degree of damage is currently minor, the rectification required is similar.
6. There is no suggestion, and I do not find, that the leaking showers were known or apparent at the time the owners entered the sale contract.
7. I accept the evidence, uncontested, of Mr Meier as to the episodic leaking of water through the downlight in the ceiling below the third shower. I also accept Mr Lees' opinion and find that the third shower, like the other two showers, requires rectification.
8. The respondents say that they have in their possession a sufficient quantity of matching tiles for rectification of the three showers, save for one feature wall in the master en-suite shower which has a different type of tile. They produced an example tile at the hearing. I accept Mrs Balbin's evidence that the respondents have 16 boxes of the matching tiles, each box containing 1.4 square metres of tiles. The respondents say they are willing to give the matching tiles to the owners.
9. Assuming the owners have sufficient matching tiles (not including tiles for the feature wall in the master ensuite shower), Mr Lees says the rectification of all three showers is significantly reduced to a sum of $7,860. That estimate allows a sum of $420, at $70 per square metre, for the purchase of feature tiles for the feature wall in the master en-suite shower.
10. Mr Meier gave evidence that the shower in the tennis pavilion, recently constructed, includes one feature tiled wall similar to the feature wall in the master en-suite shower. He says the feature wall tiles used in the master en-suite are no longer available but that he was able to source similar tiles for the pavilion shower at a cost of $132 per square metre and he produced an invoice to verify this. I accept Mr Meier's evidence and find that the cost of of feature tiles, 5 square metres, for the master en-suite shower would be $798 (an additional $378 to the allowance made by Mr Lees).
11. On all the evidence I am satisfied that, subject to the respondents providing to the owners a sufficient quantity of matching shower tiles, the reasonable cost of rectifying the three showers, including an allowance for purchase of special tiles for the feature wall in the master bedroom shower, is $8,238 and I allow that sum. Mr Lees says that 12 square metres is a sufficient number of matching tiles. Allowing for some wastage, I will nominate 15 square metres as the quantity of matching tiles to be provided by the respondents. I will allow the owners liberty to seek further orders in the event the respondents fail to supply 15 square metres of matching tiles.

1. The respondents concede responsibility for the cost of repairing a few areas of water damaged plaster in the home. Mr Lees estimates the cost at $6,160. Mr Lorich estimates the cost at $1,590.
2. At the view I was shown the areas of plaster requiring rectification. In my view, Mr Lorich's costing, which allows 8 hours for a plasterer, 12 hours for a painter and $250 miscellaneous/materials cost, is a reasonable allowance. I consider Mr Lees' costing, which allows 32 hours for a plasterer, 60 hours for a painter and 32 litres of paint, is excessive.
3. On the basis of my observations, I prefer Mr Lorich's cost estimate. Accordingly I allow $1,590 for this item.

1. The home was constructed with a large timber deck area between the kitchen/living areas and the swimming pool. The decking boards were 90ml Merbau. In October/November 2011 the owners replaced the entire deck with 150ml wide Merbau boards and the configuration of the deck was slightly modified. The owners say the deck had to be replaced because the wrong nails were used to fix the decking boards to the joists. The nails were increasingly protruding proud of the boards causing a safety hazard.
2. Mr Lees and Mr Lorich agree that the wrong nails were used in the original deck. The nails, inserted with a nail gun, were too small in their shank diameter and the protective coating was ineffective, particularly in a pool environment. Mr Lorich says that twisted galvanised nails ought to have been used. He says, however, that entire replacement of the decking boards was not necessary to rectify the defect. Instead, the existing boards could have been re-nailed with appropriate nails and he estimates such rectification would have cost $2,200, allowing 40 hours labour for a carpenter at $55 per hour.
3. The owners say that the removal and replacement of the nails was neither a practicable or reasonable option as the lifting of the decking boards would have been a tedious and difficult task, many of the boards would have been damaged in the process and the filling of the numerous old nail holes would have compromised the deck's appearance. The owners say that the only practicable solution was to replace the decking boards, which they did at a cost of $18,730. They produced invoices to confirm the cost incurred.
4. Mr Lorich says that lifting and re-nailing the boards would not have been impracticable, although he concedes that some boards would be damaged in the process. He also concedes that, with numerous filled old nail holes, the appearance of the deck would be slightly compromised.
5. The owners produced photographs taken immediately before and during the reconstruction of the deck in late 2011. The photos show that, through normal wear and tear, the original decking boards had deteriorated a little. The photos also show one rotted joist where the joist had been cut on an angle. There is no dispute that the joist required rectification.
6. The respondents say that, if they have any liability, it should not extend to funding the upgrading of the deck. They say also that the nailing in the original deck was apparent at the time of the sale contract.
7. Mr Lees confirmed that the replacement decking boards - 150ml wide Merbau - are more expensive than 90ml Merbau boards.
8. I accept the evidence of Mr Lorich and Mr Lees that the wrong nails were used in the original decking. While I accept that the nailing pattern would have been observable at the time of the sale contract, I do not accept that the owners ought to have been aware that the wrong nails were used. There is no evidence that decking nails were popping at the time of the sale contract. The Archicentre report identifies no problem with the decking. Accordingly, I find that the use of incorrect nails constitutes defective building work which was not patent at the time of the sale contract.
9. I accept Mr Lorich's evidence that it would not have been impracticable to lift and re-nail the original decking boards, albeit some boards would have been damaged in the process.
10. I consider it fair to assess the owners' loss, in respect of the defective nailing of the original deck, as the cost of removing and replacing the nails, allowing for replacement of some boards, filling old nail holes and sealing the entire deck to achieve a relatively uniform finish. Mr Lees estimates such rectifications would have cost $7,040. His estimate allows 16 hours labour at $65 per hour for lifting the existing boards, $4,570 to relay the decking (calculated as $95 per square metre for 50 square metres) and $1,250 to seal the re-laid deck. Other than the allowance for the final seal, I consider Mr Lees' estimate to be excessive.
11. I consider Mr Lorich's estimate, $2,200, to be too low as it makes no allowances for replacing some boards and sealing the re-laid deck.
12. Doing the best I can, I assess the owner's loss as $4350, calculated as follows:

Allowance for materials including galvanised nails and new boards to replace boards damaged during the process of lifting the original boards

Carpenter labour to lift and re-lay decking, 40 hours at $65 per hour

Retiling wall to pool. Claim $1,045 (already incurred)

1. The owners say that the tiles above the water line to a section of the pool wall dislodged from the wall and had to be replaced. They produced an invoice from Redmann-berg Constructions Pty Ltd dated 21 September 2011 confirming the cost incurred, $1,045. They also produced an internet banking receipt confirming that they paid this account on 26 September 2011.
2. The respondents say that the replacement of the tiles was part and parcel of the owners' general upgrading/reconfiguring of the deck/entertainment area, not rectification of defective work.
3. Mr Lees confirmed in evidence that he observed the tiles detaching from the pool wall and he originally estimated the cost of rectifying the tiling at $4,520. The change to the configuration to the deck reduced the number of tiles that had to be replaced.
4. I am satisfied, on Mr Lees' evidence, that the delaminating tiles constituted defective work requiring rectification. I am also satisfied that the cost incurred and claimed by the owners is reasonable. Accordingly I allow the sum of $1,045.

Sliding door from kitchen to deck. Claim $1,595 (already incurred).

1. There is a large sliding door leading from the kitchen to the deck entertainment area. The owners say that, after they moved into the home, they realised that the door was jammed and could not be opened. They say they simply did not use the door until they had it rectified in August 2011. They produced an invoice from Redmann-berg Constructions Pty Ltd dated 15 August 2011 confirming the cost of rectifications as $1,595 (including GST). The invoice confirms the work carried out as: Make good sliding door from kitchen to deck, straighten bottom track. Supply and install F17 floor joist to inside of sliding door to support and remove bounce from floor. The owners produced an internet banking receipt confirming payment of the account on 11 November 2011
2. The respondents say that the door functioned adequately when they occupied the home. They submit that the rectification of the door by the owners was not rectification of a defect, but part of the re-configuration or upgrading of the deck/entertainment area. Alternatively, they submit the rectification of the door constituted routine household maintenance. I do not accept their submissions.
3. Mr Meier gave evidence as to his inspections and conversations with the contractors who rectified the door. He says the door was inadequately supported with the consequence that the bottom track had bowed causing the door to jam. I accept Mr Meier's evidence. It is corroborated by the works identified in the Redmann-Berg invoice. I am satisfied that the door was defective and required rectification.
4. The owners say that they did not notice the problem with the door prior to entering the sale contract. This is consistent with the respondents' evidence that the door functioned adequately when they occupied the home. Accordingly, I am satisfied that the defect was not known or patent at the time of the sale contract.
5. On all the evidence I am satisfied that the Owners are entitled to be recompensed for the cost they incurred in rectifying the defective door. I find the cost incurred, $1,595, to be reasonable and I allow that sum.

1. Mr Lees says he noted during his inspections that down-lights in the roof space had inadequate protective covers. The covers he noticed were cardboard. He did not inspect all of the down-lights however there is no evidence from the respondents to suggest that other down-lights had protective coverings other than cardboard. Mr Lees says this is a safety issue and all down-lights should be adequately protected. He allows an electrician 16 hours to install adequate covers, at a total cost of $1,450.
2. Mr Lorich says that, at the time of construction, building regulations did not mandate the provision of protective coverings to down-lights. For this reason, say the respondents, the work is not defective.
3. Although the failure to provide protective coverings may not have breached any building regulations applicable at the time, it does not automatically follow that the work satisfies the warranty that it be carried out in a proper and workmanlike manner. Mr Lees says that, although there may have been no regulations at the time of construction, it was common practice at that time for builders/electricians to provide safety covers. Mr Lorich concedes that the provision of protective covers is a sensible safety measure.
4. I am satisfied that the work, if carried out in a proper and workmanlike manner, would have included adequate fire protection covers to the down-lights. Accordingly, I find that the failure to do so represents a breach of the warranties.
5. If the covers are to be rectified, Mr Lorich estimates the cost at half that of Mr Lees on the basis that 8 hours for an electrician would suffice. I think it fair to "split the difference" and I will allow a rectification cost of $1,087.50.

1. The owners claim the cost of rectifications to the air conditioning system including the provision of a service access opening in the laundry ceiling and rectification of the incorrect fall (back flowing instead of outward flowing) drip trays. They produced two invoices from "Zone Air", one dated 7 December 2010 in the sum of $120 and another dated 15 February 2011 in the sum of $583. The first invoice appears to be nothing more than a service call and I make no allowance for it.
2. The respondents concede the need to provide an access opening in the laundry ceiling. In respect of the drip trays, they say there was no noticeable problem when they occupied the home.
3. Having examined the invoices produced by the owners, I am satisfied that, save for the provision of the access opening, the work carried out by Zone Air falls into the category of routine household maintenance, not rectification of defective work. Accordingly, I will allow only the cost of installing the access opening in the laundry ceiling. The second Zone Air invoice identifies this cost as $130 and I will allow that sum. The owners produced an internet banking receipt confirming that the account was paid on 2 March 2011.

1. Access to an air conditioning return air vent in an upper storey bedroom is restricted by an inbuilt storage cupboard. Mr Lees and Mr Lorich agree that the vent should be readily accessible and that the problem can be solved by replacing the hinged filter with a drop out unit. I am satisfied that construction of the vent constitutes a defect not patent at the time the sale contract was entered. Mr Lorich and Mr Lees agree on a rectification cost of $116 and I allow that sum.

Cisterns and venting issues to sewer. Claim $4,500.

1. The owners say they have experienced some blocking of the sewer. They say also that cisterns are not always filling from the grey water system. Mr Lees estimates a cost of $4,500 for a plumber to investigate and address these issues. He agrees with Mr Lorich, however, that there is no readily observable building defect.
2. In my view, these plumbing issues are routine maintenance issues, not building defects, and I make no allowance for this claim.

1. There is no skirting to the section of wall behind the washing machine in the laundry. The owners claim the cost of installing the skirting, estimated by Mr Lees at $64.
2. In my view this is not a building defect but rather, as Mr Lorich says, a not uncommon construction choice. The claim fails.

1. A portion of the south boundary fence, constructed by the respondents, is blue board with decorative tiling. Mr Lees says that, exposed to the weather, the panels will eventually fall off. He says vertical battens should be installed to prevent the panels from falling off.
2. In my view the fence is not defective. Most fences require maintenance. The fence the respondents constructed reflects an aesthetic choice (an aesthetic choice the owners have replicated in further fencing provided by them) and I do not accept that some likelihood of future protective works amounts to any more than the likelihood for future fence maintenance works. For this reason the claim fails.

1. Mr Lees and Mr Lorich agree that Colourbond cappings must be installed to the top of the decorative columns to prevent water ingress/damage. They agree on a cost of $445. On their evidence, I find that the need to install capping as necessary rectification of defective work. I am satisfied it is a defect that would not have been patent at the time of the sale contract.
2. Accordingly I allow the claim in the sum of $445.

Miscellaneous alleged defects, rectified by Owners. Claim $15,745.95 (already incurred).

1. The owners say that after moving into the home they became aware of numerous miscellaneous items of defective work. Following some email correspondence between the parties, the result of which was that the respondents did not accept responsibility for rectifications, the owners engaged contractors to attend to rectifications. The owners have produced invoices totalling $15,745.95.
2. The respondents say that they have no liability because:
   • - the "rectifications" constitute routine maintenance or "upgrading" of building works, not rectification of defective work; and/or
   • - if the works were defective, the defects were patent prior to the sale contract.

1. The owners say that many of the windows in the home did not open and close freely and that many of the window handles were loose. They say that a number of casement windows (approximately 12) on the east side of the upper storey had to be replaced. They produced an invoice from Hi-Tech Aluminium Windows dated 5 November 2009 which identifies $2,050 as the cost for the supply of new window handles and the supply and installation of 12 casement windows.
2. In my view the condition of the windows is something that ought to have been reasonably observable by the owners during their inspections prior to entering the sale contract and, for this reason, the owners have no "loss" claimable against the respondents. Further, to the extent the windows required some maintenance, such work falls within the category of routine maintenance, not rectification of building defects. For these reasons, I disallow this claim.

1. The owners say much of the cabinetry and shelving in the home, particularly the kitchen, was of poor quality. They say that kitchen drawers dropped when opened. They say that shelving was inadequate to bear the weight of ordinary household items. They engaged Multi-Tek Designer Interiors to attend to numerous works, including alteration of cabinetry and shelving, at a cost of $8,899.
2. The respondents say that the cabinetry and shelving was adequate and functional while they occupied the home and that the.
3. In my view, the quality and functioning of the cabinetry and shelving would have been patent prior to entering the sale contract and, for this reason, the owners have no "loss" claimable against the respondents. Accordingly, the claim fails.

1. In addition to works to the cabinetry and the shelving, Multi-Tek attended to numerous minor works including:
   • - sealing of the junction between the floor and the kickboard to the kitchen island bench;
   • - installing a missing internal side panel in the buffet;
   • - easing the entry door to the master bedroom en-suite;
   • - sealing around pipe penetrations in the cabinetry under the sink of the master bedroom en-suite;
   • - filling a small gap between rear panels in a bedroom wardrobe.
2. I do not consider that any of these relatively minor items of work constitute rectification of building defects for which the respondents are liable. The easing of the en-suite entry door constitutes routine maintenance, not rectification of a defect. The remaining items would have been reasonably observable prior to the sale contract.
3. The owners produced two invoices from "Maintenance Masters (Aust) Pty Ltd" dated 14 May 2009 and 31 October 2009 totalling $3,740.95. Both invoices describe the work undertaken as "Supply labour and materials to perform general repairs and property maintenance as requested". The owners say these invoices relate to rectification of defects including:
   • - re-silicon bathroom fittings/sink and spa steps
   • - rectify gaps around square lights
   • - provide further stability to a panel in the master bedroom wardrobe.
   • - remove a nail sticking out of a cupboard wall
   • - re-grouting to two bathroom sinks
   • - install latch/striker for back door
   • - rectify storeroom door not closing properly
4. The owners' claim in respect of these items fails. I accept that the owners have paid Maintenance Masters $3,740.95 for general repairs and property maintenance work, however there is nothing in the invoices identifying the actual works carried out. Further, I am satisfied that the items claimed constitute minor maintenance or improvement works, not rectification of building defects. Accordingly the claim fails.

1. The owners produced three invoices from "Punctual Plumbers Pty Ltd" dated 13 May 2009, 22 July 2009 and 5 October 2010. The invoices total $1,056. The owners claim this as cost incurred to rectify building defects.
2. I do not accept the claim. It is apparent from the invoices themselves that the works carried out were comprised mainly of investigations to sewerage/drainage plumbing and general maintenance works, not rectification of defects. To the extent that a few of the items referred to in the invoices might arguably constitute rectification of defects, there is nothing in the invoices to identify the separate cost of such items. For these reasons, the claim fails.

Window flashings/angles. Claim $550 (already incurred).

1. The owners say that, in order to provide adequate weather protection to two windows on the ground floor, they had exterior cover plates/flashing installed to the windows. These items were pointed out to me at the view. The owners produced an invoice dated 10 September 2009 from "Clive's Maintenance Service" as verification of the cost incurred, $550. They also produced an internet banking invoice confirming that the account was paid on 12 September 2011.
2. The respondents say that the windows were adequately weatherproofed and that the extra work carried out by the owners was not necessary, but rather an aesthetic choice of the owners. The respondents say also that the condition of the windows was apparent prior to the sale contract.
3. Having viewed the windows, I am satisfied that the extra cover/flashing was necessary to provide proper weather protection to the windows. Further, given the location of the windows, I am satisfied that the missing flashings would not have been reasonably observable prior to entering the sale contract. I am satisfied that the owners have incurred the expense of rectifying a building defect and I allow the sum claimed, $550, as the reasonable cost to rectify the defect.

1. The owners say that they will need to move out of their home when rectifications are being carried out, in particular the rectifications to the parquetry flooring. They have produced an email quotation from "Quest East St Kilda" identifying the cost of a three bedroom, two bathroom apartment at $330 per night. Mr Meier believes that two weeks' alternative accommodation will be required. The respondents neither contested, or gave evidence, on this matter.
2. I am satisfied that it will be necessary for the owners to vacate the home while the parquetry flooring is sanded and polished. I consider that up to one week alternative accommodation will suffice. On the basis of the evidence provided, I will allow 7 nights at $330 per night, for a total of $2,310.

1. I have allowed for the following rectifications to be carried out:

1. To the above I add a 30% margin for preliminaries, overheads and profit bringing the sum to $96,417.75. To this sum I add a further 10% allowance for GST bringing the total cost of rectifications to be carried out to a sum of $106,059.52.
2. In addition I allow the sum of $2,310 as the cost of temporary alternative accommodation.
3. In addition I allow the following as rectification costs already incurred by the owners:

1. I consider it fair that the owners be awarded interest in the nature of damages in respect of the rectification costs, $3320, already incurred by them and as allowed by me. I consider it fair also that such interest be calculated from the date of the issue of the proceedings in the Tribunal, 2 April 2012, on the rate prescribed pursuant to section 2 of the Penalty Interest Rates Act (1983). I calculate that sum as $281.99.
2. I make no allowance for interest in respect of the rectification costs and alternative accommodation cost yet to be incurred as the amounts awarded represent my assessment of damages for these items as at the date of these written reasons.

1. For the above reasons I will order the respondents to pay to the owners $111,971.51. I will also order that the respondents deliver to the owners, at the respondents' cost, 15 square metres of tiles that match the tiles in the showers, with liberty to the owners to seek further orders in the event the matching tiles are not provided. I will hear any application the parties may wish to make in relation to costs.