Building contract fixed $250 per week liquidated damages for late completion - Owner's claim for delay damages capped by liquidated damages until termination - J-Corp Pty Ltd v Mladenis [2009] WASCA 157 and Hacer Group Pty Ltd v Euro Façade Tech Export Sdn Bhd [2022] VSC 373 applied.

1. Leave to the Respondent to rely upon his Amended Points of Counterclaim filed on 22 August 2022.
2. Leave to the Applicant to file and serve its Points of Defence to Amended Points of Counterclaim dated 23 June 2023.
3. Declaration that the building contract between the parties dated 25 February 2019 was terminated by the Respondent accepting the Applicant's repudiation of the contract by the allegation in paragraph 12 of his Points of Counterclaim dated 16 July 2021.
4. Judgment for the Respondent against the Applicant on his counterclaim that the Applicant pay to the Respondent the sum of $5,849.60. Stay this order until 31 August 2023.
5. Order pursuant to s52(3)(h) of the Domestic Building Contracts Act 1995 (Vic) that:
   1. by 4.00pm on 21 August 2023, the Respondent take possession of the property at 69 Bayview Road Officer and restore the electricity and gas supply to the property;
   2. by 4.00pm on 23 August 2023, the Respondent provide access to the property to the Applicant in order for the Applicant to install and commission the rangehood, cooktop, oven, dishwasher, fireplace and hot water service ("the appliances");
   3. by 4.00pm on 30 August 2023, the Applicant must properly and completely install and commission the appliances at the property;
   4. reserve to the Tribunal, upon application by either party, the determination of any issue arising out of the orders in this paragraph.
6. The Applicant's claim is otherwise dismissed.
7. By 4.00pm on 14 August 2023, the parties must file and serve written submissions on the following matters:
   1. the calculation of the judgment sum, limited to any errors in the arithmetic;
   2. the form of the orders in paragraph 5;
   3. the question of the costs of the proceeding;
   4. whether the parties wish to make further oral submissions and, if so, the reasons for requesting a further hearing.

1. On 25 February 2019, Metricon Homes Pty Ltd ("Metricon") entered into an HIA standard form building contract with Vannak To for the construction of a new dwelling on Mr To's property at Officer for the contract price of $776,604.00 ("the building contract").
2. Metricon gave notice to Mr To that construction of the dwelling was complete in late 2019. On 19 February 2020, a Certificate of Occupancy was issued and Metricon made a final claim of $77,662.00 on 20 February 2020, which sum included variations pursuant to the building contract.
3. Mr To and a building consultant, Hayden Loomes, first inspected the "completed" building on 19 December 2019. Extensive discussions and further inspections followed. Mr To disputed that the works were complete and refused to take possession or to pay Metricon's final claim.
4. Metricon carried out additional work at the property over many months. However, the parties were not able to agree on the basis for Mr To to take possession of the property. Metricon claimed the final payment and Mr To asserted that the building works had not been satisfactorily completed. As time passed, issues also arose in relation to the costs and other losses of both parties as a result of the delays.
5. The proceeding was commenced by Metricon at VCAT on 4 November 2020. Metricon contended that, by 10 June 2020, all outstanding defects had been rectified and the building work was complete. However, at the time of the conclusion of the hearing before the Tribunal on 13 June 2023, the property still remained in the possession of Metricon.

1. The proceeding was set down for hearing at VCAT on 12 September 2022. The hearing did not proceed at VCAT because of the disruption caused by COVID. The proceeding was part of a tranche of about 80 cases referred in early 2022 for hearing by Vice-Presidential members of VCAT at the County Court.
2. When the matter came on for hearing before me on 12 September 2022, it was not ready to proceed. From my examination of the experts' reports and the extensive allegations of defective works, it seemed that the case was more appropriate for determination by a special referee with expertise in defective workmanship in a domestic dwelling.
3. The proceeding was managed by me during the second half of 2022 in an attempt to have the case ready for a hearing. The critical issues were the state of the works at various dates, particularly 10 June 2020, and whether there were defects or incomplete work that had not been rectified.
4. The hearing was delayed to allow the parties and their expert witnesses to prepare a Scott Schedule particularising the alleged defective and incomplete work, summarising the opinions of the experts and containing the estimates of the rectification and completion costs.
5. Because of the extent and nature of the incomplete and defective work alleged, on 28 October 2022, from a list of candidates prepared by the parties, I appointed a building consultant, Mr Sunny Blumson, as a Special Referee to investigate these matters, to conduct a hearing and to report to the Tribunal.
6. However, as further time passed, it became apparent from the rate of progress in bringing the matter to a final hearing and the significant disagreement between the parties about the extent of incomplete and defective work and the likely cost of rectification, that the special reference process may not be suitable.
7. Mr To's expert, Mr Alan Sherrard, expressed the view in his report dated 25 October 2022 that the total cost of rectification was $589,711.00. Metricon's expert, a building consultant, Mr Robert Lorich, responded in a report dated 31 October 2022 that the reasonable cost of rectification was $5,698.00.
8. In these circumstances, I determined that it was inappropriate to leave the conduct of the matter with a Special Referee. By orders made on 23 January 2023, I reappointed Mr Blumson as an independent expert to assist the Tribunal and fixed the date of 30 January 2023 for the hearing of the matter before me, to commence with a view on site at Officer with all the parties' representatives, lawyers and experts present. Following the view, Mr Blumson was to prepare a report for the Tribunal.
9. The view on 30 January 2023 was video recorded. The view was conducted by both me and Mr Blumson, although it primarily consisted of dialogue between the experts. The inspection of the house and surrounds followed a logical route covering substantially all the matters of complaint recorded in the latest version of the Scott Schedule.
10. My overall impression of the building from the view and the discussion between the experts was that, although there were a limited number of matters which required attention, the building presented as a new dwelling in new condition. This was notwithstanding the fact that, apart from ensuring that the property was secured and maintained, little other work had apparently been carried out by Metricon since about June 2020.
11. Mr Blumson had further inspections of the property, on one occasion with the parties' experts (including a plumbing expert who had not been present at the view), and on one occasion by himself. Mr Blumson reported on 16 March 2023 that, in his opinion, there was further work required which he estimated would cost $37,511.59. There were also a few items which Mr Blumson was unable to inspect (including in the roof space) or where he suggested that an opinion should be sought from a supplier or from the building surveyor for the project.
12. The parties could not agree on what to do with the report. Metricon submitted that Mr Blumson's report should be wholly adopted, Mr To disagreed, pointing to what were said to be errors and omissions in the report.
13. On 15 May 2023, I ordered that the final hearing recommence on 29 May 2023. In the meantime, I ordered that an experts' conclave be held and a joint report, based on the draft Scott Schedule be prepared. The conclave was facilitated by Ms Nicole Maher, The County Court Commercial Division Lawyer. She met with Mr Blumson, Mr Sherrard, Mr Lorich and Mr Quick over 5 days. A final written report dated 22 May 2023 was produced and agreed to by all the experts.
14. On 24 May 2023, Mr To notified the Tribunal that his solicitor/advocate Mr Gray was no longer acting for him and that he intended to be represented by Frank Tlozek, a qualified Law Clerk who also, apparently, had some building experience. This course was not opposed by Metricon.
15. On 29 May 2023, the hearing commenced with a concurrent evidence session with Messrs Blumson, Sherrard and Lorich and, for the plumbing items, Mr Quick. Each of the remaining disputed items in the experts' joint report were discussed and the experts were cross examined and further examined. On subsequent hearing days, Metricon's employees and Mr To gave evidence. Further time was then allowed for the parties to file final submissions, including written submissions.
16. There have been a number of matters relating to the conduct of the parties which have made the determination of this proceeding more difficult. These include:
    1. by Metricon:
       1. the expert reports by Mr Quick dated 31 May 2022 and by Mr Lorich dated 31 October 2022, 19 August 2022 and 10 June 2022 appear, by comparison with Mr Blumson's report and the findings of the Tribunal in relation to the disputed item of alleged defective work, unduly supportive of Metricon's workmanship;
       2. a substantial number of photographs (636) taken by Metricon employees during construction of critical parts of the structure were not discovered and were only produced by Metricon during the final hearing.
    2. by Mr To:
       1. Mr To and his solicitor did not accept sufficient responsibility for the preparation of a comprehensive Scott Schedule. The Schedule lacked necessary detail and cross-referencing to source material;
       2. he did not file experts' reports in a timely manner or consistent with the Tribunal order made on 22 September 2022 with the effect that adequate notice of additional defects was not given to Metricon;
       3. he did not file points of counterclaim consistent with the Tribunal orders made 22 September 2022;
       4. the expert reports by Mr Sherrard dated 25 October 2022, 20 March 2022 and 9 November 2021 are, by comparison with Mr Blumson's report and the findings of the Tribunal in relation to significantly disputed items of alleged defective work, speculative and lack specificity about many aspects of Metricon's workmanship complained of. The reports display a lack of appropriate investigations concerning major matters and a lack of reasoning to support what are primarily statements of conclusions. Further, the quantification of the cost of items of defective work is generally limited to global figures without any supporting calculations;
       5. photographs taken by Mr To during construction were not put before the Tribunal in a timely manner or adequately cross referenced to the items of defective work complained of.

1. The Points of Claim and Points of Defence are in narrative form, which did little to elucidate the actual matters in dispute. Mr To filed a number of versions of his Points of Counterclaim. As the last two versions had not been filed in accordance with previous orders of the Tribunal, I granted leave at the hearing for Mr To to rely on the document he wished, that had been filed on 22 August 2022. This document was essentially an update of Mr To's particulars of loss and damage.
2. There was a later version of Mr To's Points of Counterclaim dated 18 November 2022. This document was drafted by his Solicitors and was in the form of a coherent pleading. Metricon prepared a response to this document as its Points of Defence to Counterclaim dated 9 June 2023. This document was also in the form of a pleading. I considered that it was appropriate to allow Metricon to file this document rather than filing a document responding to the Amended Points of Counterclaim dated 22 August 2022 and notwithstanding that Metricon, on 13 August 2021, had filed Points of Defence to the Respondent's Counterclaim dated 16 July 2021.
3. It is necessary to also have regard to Mr To's original Points of Counterclaim dated 16 July 2021 by which he purported to accept Metricon's conduct as a repudiation of the building contract. This matter was further alleged in paragraph 24 of Mr To's Amended Points of Counterclaim dated 18 November 2022. In the circumstances, I do not consider that it would be unfair to either party to have regard to each of the "pleading" documents filed by the parties in determining the issues for decision in the proceeding.
4. On the second day of the hearing on 29 May 2023, Metricon's counsel, Mr Marcou, informed the Tribunal that his client wished to make a concession in regard to the question of the completeness of the works. The concession was, at the Tribunal's direction, filed in a document dated 13 June 2023. The concession reads as follows:

"The Applicant (Metricon) concedes that to the extent that the installation and commission of appliances is a requirement for completion in accordance with s42 of the Domestic Building Contracts Act 1995 (Vic), the cooktop, fireplace, hot water service and rangehood have not been installed and commissioned by Metricon, and completion has therefore not been achieved".

1. Each party, in compliance with an order of the Tribunal, filed a Statement of Issues dated 23 May 2023. These documents were useful but not comprehensive. It is therefore necessary to articulate the issues raised by the parties for decision during the course of the proceeding.
2. In the proceeding, the following matters require a decision by the Tribunal:
   1. Metricon's claims:
      1. for the final payment of $77,662.00;
      2. for interest on that sum pursuant to cl. 31 of the building contract;
      3. for an extension of time for the delay allegedly caused by Mr To's failure to take possession;
      4. for $250.00 per week as liquidated damages for delay pursuant to cl. 34.3 of the building contract;
   2. Mr To's counterclaims:
      1. for damages for the cost of rectifying defective or incomplete work;
      2. for interest he paid on the Lock-up and Fixing stage progress payments prior to the works required by those stages having been completed;
      3. for liquidated damages of $250.00 per week pursuant to cl. 40.0 of the building contract, or further or alternatively, common law damages for late completion of the contract work;
      4. for a declaration that the building contract was terminated by Mr To accepting Metricon's conduct as a repudiation of the building contract, as alleged in his Points of Counterclaim dated 16 July 2021;
      5. for repayment by Metricon for items included in the building contract to be supplied, but not in fact supplied.
3. In dealing with the parties' claims and counterclaims, the Tribunal must determine the following issues:
   1. Whether Metricon is entitled to claim the final payment of $77,662.00?
   2. Whether Metricon had completed the Lock-up stage and Fixing stage works at the time Mr To made the progress payments for those stages?
   3. On what date, if at all, did Metricon complete the building works and become entitled to be paid the final claim?
   4. What is the effect of the concession by Metricon that it did not complete the works under the building contract by its failure to install and commission the appliances?
   5. Is Metricon entitled under cl. 34.3 of the building contract to the sum of $250.00 per week for the maintenance and security of the property, and if so, from what date and in what sum?
   6. Is Metricon entitled to interest on the final payment of $77,662.00?
   7. Was the building contract terminated as a result of Mr To purporting to accept Metricon's repudiation of the building contract by the allegations in his Points of Counterclaim dated 16 July 2021?
   8. Is Mr To entitled to interest on the Lock-up and Fixing stage progress payments for the period before which Metricon was entitled to claim those payments?
   9. Is Mr To entitled to any, and what, sum as the cost of rectifying incomplete or defective building work?
   10. Is Mr To entitled under cl. 40 of the building contract to liquidated damages of $250.00 per week for late completion of the building works, and if so, from what date and in what sum?
   11. Further or alternatively, is Mr To entitled to common law damages for delay, or is he limited to the sum specified in the building contract of $250.00 per week as liquidated damages? If Mr To is entitled to damages, from what date and in what sum is he so entitled?
   12. ls Mr To entitled to be paid the cost of items required to be supplied pursuant to the building contract but not supplied by Metricon?
4. The critical matter for decision is the extent of the incomplete and defective work and the date upon which it was, if at all, completed or rectified. The determination of this issue will largely determine many of the remaining issues.

1. The first issue to examine is the nature and extent of the defective and incomplete work that is present in the dwelling. Mr To asserts that the building is far from complete and that this justifies his decision to refuse to take possession of the property for the last 3 years.
2. The construction of the dwelling has been exhaustively examined, including through the following processes:
   1. examinations, during construction, by a building consultant engaged by Mr To, as well as quality assurance reviews by Metricon;
   2. after the proceeding was commenced, inspections and reports by the parties' experts;
   3. preparation by the parties' lawyers of a Scott Schedule;
   4. a view conducted at the property on 30 January 2023, with representatives of the parties' lawyers and experts, and Mr Blumson;
   5. further consultations and inspections by the parties' experts and Mr Blumson;
   6. preparation of a report by Mr Blumson, and the parties' submissions on the report;
   7. a conclave of the experts (including Mr Blumson) conducted by a court officer, with a joint report assented to by each of the participating experts;
   8. a concurrent evidence session at the hearing with the experts (including Mr Blumson).
3. Before examining the alleged items of incomplete and defective work, it is appropriate to briefly set out the legal principles which have guided me in the examination of the material before me. The principles include:
   1. The Tribunal is not bound by the rules of evidence. However, the rules of evidence do provide a valuable guide as to how the Tribunal should approach the material placed before it. For example, the opinion of a person who has not appeared before the Tribunal and whose evidence has not been tested by cross-examination, might be given less weight than the evidence of witnesses who have appeared;
   2. The Tribunal has an overriding responsibility to act fairly between the parties. Consistent with this obligation, the Tribunal must also do what is necessary to bring the proceeding to a conclusion as soon as it can be;
   3. Appropriate regard must be had to the "burden of proof". The general rule is, "They that allege, must prove";
   4. The standard of proof is "on the balance of probabilities". The Tribunal must determine whether the evidence establishes that a matter "is more likely the case" or "less likely the case";
   5. In certain circumstances, the Tribunal may draw inferences from a party's failure to lead evidence that is more likely to have been available to that party rather than to the opposing party. The Tribunal, in such a case, may conclude that, if evidence could have been called on a particular issue and has not been, the evidence would not have assisted the case of the party failing to call that evidence;
   6. The Tribunal must consider all evidence, whether given by witnesses or by the tender of documents. The evidence must be assessed and given appropriate weight;
   7. The Tribunal, by its reasons for decision, must disclose how it reached the conclusions it has.
4. Generally, I have preferred the evidence of Mr Blumson to the evidence of Mr Sherrard. Mr Blumson was appointed by the Tribunal as a Special Referee from nominations made by the parties. I considered that the nature and extent of the complaints of incomplete and defective work were such that the resolution of the dispute would better be entrusted to a Special Referee.
5. This process became untenable because of the failure to achieve the level of cooperation necessary from the parties, if a special reference were to have any chance of success. I was also concerned that the parties were in "entrenched positions" with the scope of potential damages ranging from Mr Lorich's total estimate of $5,698.00 to Mr Sherrard's estimate of $589,711.00, as the cost of rectification.
6. I therefore reappointed Mr Blumson as an independent expert to assist the Tribunal and directed that the hearing commence with a view on-site. I was able to observe the demeanour of each of the experts and Metricon's representatives. Initially, I controlled the conduct of the view. However, I increasingly handed over to Mr Blumson the conduct of the view and the discussions that he engaged in with the parties' experts.
7. My general impression from the view was that the dwelling presented as a newly completed house of reasonable quality and little observable defective workmanship. As for the experts, my general view from their reports, the view, reading the joint report and from the conduct of the concurrent evidence session was that all experts were experienced and competent. I would make further observations, as follows:
   1. Mr Blumson was fair, objective and considered in his approach;
   2. Mr Sherrard appeared reluctant to concede any claim that had previously been advanced;
   3. Mr Lorich was prepared, on occasion, to make concessions, although this was usually only where he aligned his views to those of Mr Blumson.
8. At the view, a Mr Radevich was in attendance. He was introduced as a person assisting Mr Sherrard. He had no status otherwise in the proceeding. He had not prepared an expert report. His qualifications and experience are unknown. He was permitted to attend solely as a person that Mr Sherrard might call upon for assistance, for example, in fetching equipment. Insofar as Mr Radevich took measurements or purported to offer comments or mark items, those matters were regarded of no direct relevance to the Tribunal hearing, of which the view was an integral part.
9. Subsequently, it has been asserted in the Respondent's submissions on Mr Blumson's report, by Mr Sherrard in the conclave of experts (as reflected in the joint report) and at the hearing by Mr Tlozek, that Mr Blumson had ignored measurements or failed to check or confirm measurements taken by Mr Radevich or to take note of matters marked by Mr Radevich. These matters have been ignored by me in my consideration, as the actions of Mr Radevich, apart from assisting Mr Sherrard, had no other relevance to the proceeding.
10. The major examples of matters of concern in Mr Sherrard's approach to the defects were his views that:
    1. all windows potentially required replacement because of photographs taken prior to final installation of the windows;
    2. all the brickwork would need redoing for various reasons, including that the bricks had been damaged by acid cleaning and/or that the specified brick had not been used;
    3. were based upon assumptions formed about the inadequacy of the excavations and foundations after only minimal investigations;
    4. similarly, assumptions that were made about the roof framing without proper investigations or evidence.
11. These matters have influenced my consideration of the items of alleged incomplete or defective work and the decisions I have reached in relation to those matters.

Disputes identified by the joint report of the experts' conclave

1. In the present proceeding, the interlocutory processes involved the parties' expert witnesses and Mr Blumson painstakingly reviewing the allegations of incomplete and defective work and determining the issues which remained in dispute between the parties. This work of the experts was extremely useful to the Tribunal.
2. The table that follows sets out the conclusions reached by the experts at the conclave, as set out in their joint report. The terminology used in the headings has the following meanings:

"Agree liability." - the experts agreed on liability (whether or not item defective).

"Agree quantum" - the experts agreed quantum (if item found to be a defect).

"$ Claim Sherrard" - Mr Sherrard's estimate of the cost of rectification.

"$ Dispute" - Quantum for disputed eitems suggested by other experts.

1. It is noted that the total quantum of agreed items is $7,086.53. This differs from the figure of $6,900.63 referred to in paragraph 10(a) of the Joint Experts' Report. The difference is $185.90. I assume that there is either a mistake in the report or, more likely, item 7.8 (render splashes on wall tiles) has not been included as an agreed item in the total as it is only one part of item 7 (external wall tiling) and Mr To, subsequent to Mr Blumson's report had indicated that he disagreed with the report's assessment that the balance of the items in item 7 had been satisfactorily completed. I will therefore deal with item 7 below, as a disputed item.

Disputed liability items considered by the Tribunal

1. It is necessary to examine each of the disputed items and to reach a conclusion, first on the question of liability (whether the item reflects incomplete or defective work), and secondly, on the question of the quantum to rectify any work found to be incomplete or defective.
2. The following table lists the items where there is a dispute as to liability or quantum. Each of these items will be examined in detail below.

1. This item is disputed on the question of liability. If liability for the item were established, all the windows of the dwelling found to have, or reasonably suspected of having, this defect would need to be replaced. The only evidence of the cost of rectification is from Mr Sherrard. In the joint experts' report, Mr Sherrard gave a global estimate of $30,420.00 to complete this work.
2. Mr To alleges that the evidence establishes that there is an absence of packers that should, in accordance with good building practice and the manufacturer's requirements, have been used in the installation of the windows. As a consequence, Mr To asserts that all windows and glazed doors in the dwelling should be reinstalled in a proper manner.
3. In Mr Sherrard's third report dated 25 October 2022, he stated, "Photos from the owner during construction indicated the windows had not been installed to the manufacturer's specifications. The packers as required were not installed. The fasteners to the frame could not be clearly identified. ... Verification is sought for installation of the windows to the manufacturer's specifications, including packers, correct fastening nails, and flashings. Non compliant window installations need to be removed and installed to the manufacturer's specification".
4. The joint experts' report records, "Sherrard assumes the packers may be missing due to photos taken by the owner during construction that show packers were not installed. ... Blumson and Lorich ... have no reason to believe that the packers are missing, because the photos were taken prior to wall cladding. Packers are usually installed after wall cladding ... The absence of packers would ordinarily lead to entry of weather. There is no evidence of weather entry".
5. Mr Sherrard, in his "Summary of cost", has a single line item, "Windows replacement or rectification $52,000.00". Together with margin, contingencies allowance and GST as allowed by Mr Sherrard, the total estimate would be $75,018.00. His estimate in the joint experts' report of $30,420.00 also lacks any detail of how the estimate is calculated.
6. Metricon does not dispute the requirement to use packers in the installation of the windows. It says it used packers in the installation of the windows and there is no evidence that packers were not used.
7. Mr To relies upon photographs he took "during construction" that show an absence of packers. These photographs were first included in Mr Sherrard's first report dated 9 November 2021 and are numbered 1-5 (TB 146-8). The photographs are undated. They show significant gaps at the sides and top of the frames of the window and glazed external doors depicted in the photographs. Similar photographs, included as photographs 21 and 22 in a document prepared by Mr To titled, "List of Photos taken by Respondent 2019, 2021 and 2022", dates those photographs as having been taken on 1 September 2019.
8. The building contact imports the definition of stages in s42 of the Domestic Building Contracts Act 1995 (Vic) ("DBCA"). "Lock-up" stage requires that, "external doors and external windows are fixed (even if those doors or windows are only temporary)" and "Fixing" stage that all "doors ... are fitted and fixed in position". In this case, Metricon claimed the lock-up stage payment on 20 September 2019 (TB 1129) and the fixing stage payment on 18 October 2019 (TB 1131).
9. In my view, it is highly unlikely that Mr To's photographs reflect the way in which the windows and glazed doors were finally installed. If no further fixing had been undertaken, it is likely that there would have been substantial movement and dislocation of the windows and doors. It was agreed that this has not happened.
10. Metricon says that Mr To's photographs were taken before installation of the windows was completed. It is obvious that the photographs, on their own, are insufficient evidence that packers were not used.
11. Metricon said further that there is no evidence that packers, or proper fastenings and flashings, are absent. In the almost 4 years since the windows were installed, there has been no evidence of movement of the windows. It is likely that there would have been such movement if packers or proper fastenings had not been used in the installation. I accept that there was no evidence of movement in any of the windows. This would suggest that packers were installed.
12. During the concurrent evidence, Mr Sherrard stated that when the surrounds of the windows were "knocked" there was a "hollow" sound, which might indicate an absence of packers. I reject this evidence. Mr Sherrard did not suggest or demonstrate this phenomenon at the view.
13. Mr To suggests that the Tribunal should direct testing of windows by the removal of the surrounds to show whether packers were present. This suggestion was made at the view by Mr Sherrard and Mr To's lawyer, Mr Gray. It was, in my view, an ill thought-through suggestion. The testing would involve damage to the window surrounds requiring the substantial replacement of each window tested. Little thought had been given as to what the results of deconstructing one (or more) window would establish or who would accept responsibility for the reinstatement of the windows tested. Notwithstanding the discussion of these matters at the view, and at an earlier directions hearing, no proposal had been put forward by Mr To to carry out destructive testing.
14. The Tribunal is in the same dilemma as Mr Blumson was when he prepared his report. Mr Blumson had available copies of the reports of Mr Sherrard and Mr Lorich. Mr Sherrard has drawn conclusions about Metricon's workmanship on the basis of photographs taken by Mr To at some time during construction.
15. The only photographs that have been produced are those included in Mr Sherrard's reports, or the similar ones taken by Mr To to which I have referred. The photographs in Mr Sherrard's reports were the only ones specifically referred to when Mr To delivered his revised response to Mr Blumson's report, after paragraph 8 of the Tribunal orders dated 20 April 2023 required him to make "specific reference to photographs" and other source material.
16. As Mr Lorich stated, the photographs may, in certain instances, demonstrate defective workmanship or incomplete work. However, the photographs were taken whilst the building works were on-going. It is not clear whether further works were undertaken by Metricon before the work was covered up.
17. Mr Sherrard's "observations" (as he describes them in his reports), are based on his study of a limited number of photographs. He extrapolates from those photographs that no further work or remedial work was later carried out by Metricon. Mr Sherrard also concludes that the photographs demonstrate a quality of workmanship which is likely to have affected all similar work on the project. In some instances, Mr Sherrard states that he is raising certain matters in his reports because Mr To's photographs "are sufficient to maintain the claim and justify further enquiries being made", for example to the Registered Building Surveyor.
18. Mr Blumson, with his experience, was not prepared to undertake that path of reasoning. He looked for objective signs that would support the view that there may be anything of significance affecting the performance of the construction. That is a common-sense approach and provides some guidance as to what sort of matters an expert might consider relevant when faced with only limited evidence.
19. Mr Sherrard raised these matters in his first report in November 2021. Mr To was, presumably, alive to the issues at that time, by his provision of the specific photographs. Mr To considered that Metricon's failure to address his complaints of poor workmanship was sufficient to regard its conduct as repudiatory and to terminate the building contract, as he purported to do by his counterclaim dated 16 July 2021.
20. In these circumstances, it was incumbent upon Mr To to do more than make assertions, even though at some stage in the construction process it may have appeared that Metricon's work was incomplete or defective. Whilst destructive testing, which may involve a significant cost to undertake, and to reinstate, is rarely an attractive option, the Tribunal is being asked to allow substantial sums by way of damages to essentially explore what, if any, rectification work is necessary.
21. The Tribunal would not be acting fairly or appropriately if it did so without being satisfied that it is more likely than not, on the material before it, that such a course of action were necessary.
22. In the circumstances, I am not satisfied that there is a defect requiring rectification and, therefore, no allowance will be made.

1. On the view, it was apparent that a large number of scratches were present on both the inside and outside of the windows and glass doors of the dwelling. The matter in issue is whether Metricon is responsible for the scratches. This is likely to depend on what date Mr To was obliged to take possession of the property. If the matter is Metricon's responsibility, it was agreed by the experts that the cost of rectifying the scratches was $12,084.19.
2. I have determined later in these reasons that Metricon should have completed the dwelling by 28 May 2020, and that it remained responsible for the delays in completion until 29 October 2021, a total of 519 days. The total period from 28 May 2020 until the date of this decision on 9 August 2023 is 1,168 days. Metricon's responsibility for the delay in completing the rectification of defective work was therefore 44% of the period to the decision in this proceeding.
3. There is little if any reliable evidence of when the damage to the windows occurred. Some "external ... blemishes" were noted by Mr Sherrard in his first report dated 9 November 2021, although he "was unable to ascertain the exact level of this damage due to the bright sunlight". He said that any assessment could only "be determined with the windows cleaned". He repeated the same description in his second report. In his third report dated 25 October 2022, Mr Sherrard said that, "There are numerous areas of glazing which are scratched".
4. Mr Blumson did not inspect the house until the view on 31 January 2023. In his report, Mr Blumson noted that:
   • "There were numerous scratches to many window panes throughout the dwelling.
   • Scratches are on the inside and outside surface of glass.
   • The scratches are noticeably consistent in many areas with similar pattern of damage.
   • Many scratches appear to the result of vandalism, rather than a random pattern of accidental damage occurring throughout construction.
   • [Mr Blumson refers to Mr Sherrard's comments in his reports].
   • Due to the above, I have not been unable to confirm the cause or timing of scratches to glass.
   • For the benefit of the Court I have provided costing to replace the damaged glass observed at my inspections [$12,084.19]".
5. Josh Taylor, Metricon's Site Manager, gave evidence at the hearing that he was told by a cleaner, before the view on 31 January 2023, that there were "significant" scratches on the windows. Mr Taylor confirmed this by his own inspection in May 2023. Mr Taylor said that there were scratches on the glass that were not there when he had inspected the property at some time prior to the end of 2022. Because of the imprecision of this evidence, I do not give it much weight.
6. In the circumstances, I consider that it is appropriate to equally apportion responsibility for the scratched glass. I will allow $6,042.10 for this item.

1. The dispute between the parties relates to the extent of the defect. Mr Sherrard considered that the damage was more extensive and would require the replacement of a number of door handles at a cost of $700.00. Mr Blumson's assessment was that the door handle he identified as damaged could be adequately cleaned at a cost of $55.77.
2. Mr Sherrard's view was that the "external door handles are acid damaged". Mr Blumson's view was that, "There were surface rust marks observed to the exterior dining door handle at my inspections. The rust marks are unlikely to be the result of acid as they are minor".
3. Mr To's comment in response to Mr Blumson's report was that, "The damage to the handles appears to be more severe than minor, with most of the surface showing results of tarnishing. The builder is required to hand over the building without damage to the fixtures and fitting. Replacement appears to be warranted".
4. Mr Blumson had further stated that, "It is typical for external stainless steel elements to show some tarnishing and minor surface rust and cleaning or polishing will remove such staining. For a stain free appearance, this attention may be required every 6-12 months or so. This item is an issue of maintenance, but assuming the builder is responsible because handover has not yet been achieved, I have listed the issue as defect for rectification and provided costing".
5. I inspected the dining door handle on the view. I prefer the evidence of Mr Blumson. I do not accept that more than one handle is damaged or that the dining door handle requires more than a minor cleaning. The amount estimated by Mr Blumson of $55.77 will be allowed, if Mr To were not obliged to take possession of the dwelling.

Item 2.2.1 - Garage roof sheeting has insufficient fall

1. This item was first raised by Mr Sherrard in his third report dated 25 October 2022. The first time that Metricon's plumbing expert, Mr Quick, inspected this item was the inspection following the view, on 16 February 2023.
2. In his third report, Mr Sherrard described the inadequate gradient in two places in his brief description of this item at STB 43-44, as follows:
   1. under the inspection, he noted, "The roof was measured with a digital level which recorded a gradient of less than 2 degrees. The reading was 1.8 degrees";
   2. a photograph has the caption, "digital level show 1.1 degrees gradient to the garage roofing". The digital level can be seen to have a level reading of "1.1".
3. Mr Blumson in his report (STB 162) states, "During my inspection the roof sheets were measured to be graded to fall an average of approximately 1 degree". Mr To's revised response to Mr Blumson's report notes that, "The roofing was measured at less than 1 degree on the tray of the roofing".
4. The dispute with this item was whether any rectification was required notwithstanding that the construction of the roof was non-compliant. Mr Sherrard, in his report dated 25 October 2022, stated that the garage roof should have a 2 degrees gradient. He said that, "The roof was measured with a digital level which recorded a gradient of less than 2 0. The reading was 1.8".
5. Metricon does not dispute that the garage roof was required to be constructed with a 2 degrees gradient. However, it is said that the 1 degree slope was "adequate" and rectification is not required. In the concurrent evidence session, Mr Quick, Mr Blumson and Mr Lorich contended that the gradient was adequate for the following reasons:
   1. the slope could cope with the runoff expected from the area of garage roof and the other catchment from above or from the adjacent wall. I note that Mr Sherrard contended otherwise;
   2. the garage roof showed no evidence of "ponding", including under testing;
   3. the roofing material was of sufficient thickness to justify the lesser gradient;
   4. the garage roof was supported by battens much closer together than the building requirements. This would add strength to the roof and obviate the need for a greater gradient than that at which the roof had been installed.
6. Mr Quick gave evidence that 2 degrees was, in his view, likely to have been made to cope with a lesser thickness of roof sheeting than was used, and for roof supports, a greater distance apart than they were. Both these factors compensated for the lesser angle of the pitch of the roof and that, "a 1 degree fall was more than sufficient for the roof".
7. I am satisfied that the garage roof will probably continue to function adequately. However, that is not the test. Mr To did not get what he bargained for. The difference of gradient is said to be "sufficient" and the roof is likely to continue to function appropriately in all circumstances.
8. However, there is a defect. The cost of rectification is assessed by Mr Sherrard to be $5,144.90. This figure is not disputed. Although Mr To may not actually carry out the rectification work, unless and until circumstances make that necessary, in this case it would be unreasonable to deny Mr To damages calculated to put him in a position that he would have been if the contract had been properly performed. It is not a matter of "betterment", as Metricon suggested.
9. Although Mr Sherrard has not provided details of the make-up of his estimate, no alternative figure was provided. My assessment is that the labour and materials required to replace the roof and reinstate it is likely to cost in the vicinity of Mr Sherrard's estimate.
10. I allow the sum of $5,144.90 for this item.

1. There are a number of interrelated items to consider under this heading, as follows:

1. The main complaint related to the paving around the house, particularly on the southern side. The plans required the paving to be graded away from the dwelling with runoff caught in a swale drain near the outer edge of the paving. What was erected was paving draining to outlets, at intervals in the paving, connected to the stormwater drainage.
2. Generally, Mr Blumson and Mr Lorich regarded this as a superior system. However, there were two difficulties:
   1. the drainage system installed apparently does not meet "the requirements of AS2870 and the Alternative Building Solution of the engineer in the stamped approved plans", and a "deemed to comply solution" would need approval;
   2. Mr Blumson "observed the paving to be graded insufficiently (too flat) to drain water to the stormwater adequately in three locations including:

• "SE corner outside Living (refer photos 6457 to 6458)

• South elevation outside study and kitchen (refer photos 6459 to 6461)

• West elevation outside Family (refer photos 6462 to 6466)".

These areas would "require demolition and reconstruction to achieve adequate drainage to the stormwater drains".

1. Mr Blumson's opinion was that, "The current installation ensures water is collected and discharged off the property by the stormwater system, rather than draining on the ground at the outer edge of the paving". Mr Quick considered that the "water is running to the legal point of discharge and a deemed to comply solution will be possible".
2. Mr Sherrard's "concern is that the rectification does not strictly comply with the engineering requirements or the NCC [National Construction Code, and] the rectification proposed by Blumson, Quick & Lorich is not approved by the engineer. The paving should be rectified in accordance with the engineering requirements regarding fall and swale drain (because of the slab design and reactive soil)".
3. Metricon has not rectified these matters, as it has with other items. It has had 3 years to attend to the three areas of paving with inadequate fall and to obtain the necessary approvals if it wished to use an alternative drainage method. In the circumstances, it is appropriate that Mr To should recover the cost of completing the works as required by the approved plans.
4. The majority of the items under the heading "Earthworks and Footings" have not been costed separately. Mr Sherrard has included them under the one item, "3.3 Paving", for which he has estimated the cost of rectification of all items (apart from item 3.4) at $17,852.00. Mr Blumson adopted a similar approach although, for the more limited work he proposed, his estimate was $7,131.84. Mr Sherrard did not provide a breakdown of his estimate. Mr Blumson's estimates were fully detailed.
5. Accordingly, I shall allow an amount to rectify the defective work covered by items 3.1.4, 3.2.4, 3.3.2, 3.3.5 and 3.3.6. I allow the sum of $10,720.16, being the difference between Mr Sherrard's lump sum estimate of $17,852.00 and Mr Blumson's costed estimate of $7,131.84 (although it is for a lesser quantity of work).

Items 3.2.1 - Vapour barrier, 3.2.2 - Slab short poured and 3.2.3 - Vapour shield

1. Mr Sherrard raised issues in his reports about these items. Mr Lorich responded that as "concrete has covered this area", these matters were "not now evident". Mr Blumson said that he "was unable to observe any defects on site because the areas are covered by paving". Mr Blumson said Mr Sherrard's second report, including consideration of the photographs in the report, "did not substantiate the claim sufficiently for me to verify the existence of defective work".
2. In Mr To's submissions on Mr Blumson's report, it is stated, "Plainly a defect exists. The photo from the Blumson report clearly shows there is no vapour shield at all on the exposed slabs. ... There is various section of the slab where the installation could have been verified but Mr Blumson chose not to investigate".
3. These submissions were filed by Mr To's solicitor, Mr Gray. It is not clear what is the basis for these submissions and whether they were prepared by Mr Gray or Mr To and whether there was any input from Mr Sherrard or any other person with the necessary expertise and experience to express those views with any authority. The photographs referred to are apparently nos. 6481 and 6482 at page 62 of Mr Blumson's report. Without explanation, the photographs do not assist me with the present dispute.
4. In the joint report from the experts' conclave, it is stated that, "We agree that, because works are required under item 3.1.4, it is reasonable to investigate item 3.2.3 and if the vapour barrier is missing it should be rectified, excluding the side garage wall right elevation boundary wall (north wall). Blumson and Lorich agree that the purpose of the vapour barrier is to prevent migrating damp through the concrete, the section of the garage where the concrete is exposed and where the vapour can't be seen is not a concern because the slab is exposed and draining. The vapour barrier would deteriorate and there is nothing for the barrier to protect".
5. In the joint report, beside the side headings "Scope of work to rectify" and "Quantum" are the words "Subject to findings".
6. In my view, it is inappropriate to defer making a decision in relation to these items until further investigations are conducted. As I have indicated, I propose to allow an amount as damages in respect of the other items included under the heading, "Earthworks and Footings". I would not make the award of damages contingent upon those works being carried out by Mr To. He may, for example, when he takes possession, sell the house without having carried out any, or only part, of the rectification work for which he will be compensated.
7. In these circumstances, where the present position in relation to these other items is unclear, and will not be clarified without further investigation, I am unable to determine whether there is any defective work requiring rectification. I will not allow any sum for this item.

Item 3.2.4 - Colour and texture of concrete repair to SE corner at front of dwelling

1. Item 3.2.4 will be rectified by the works required for item 3.3.5 for which I have allowed damages for rectification. No further allowance will be made.

1. Mr Sherrard claimed that, "The footing is poured short to the northwest corner". Mr Blumson said that, "There was no defect observed at my inspections". He took photograph no. 6482. In Mr To's submissions in response, it is stated that the photograph "clearly shows the brick overhang off footing exceeding 15 mm". It is not clear to me and, apparently, was not clear to Mr Blumson.
2. In the experts' joint report, it states, "We agreed on site that this is not a defect because the overhang is marginal". In relation to the photograph, Mr Lorich and Mr Blumson expressed "their opinion that the overhang is marginal and is of no material consequence". Mr Sherrard maintained his opinion that, "it does not comply with the specifications".
3. It was agreed by the experts that the cost of rectification proposed by Mr Sherrard of $120.00 would be appropriate, if the item were defective. Metricon, in its final submissions, conceded the item. I shall allow the sum of $120.00.

1. Prior to the view, Mr To asserted that there was no evidence that a damp-proof course had been installed, as required, in the brickwork. It was demonstrated at the view that this was incorrect by Mr Blumson using a key to scrape back the mortar in a gap between bricks to expose the damp-proof course.
2. This had occurred because the bricklayers had laid the mortar between the bricks set back slightly from the face of the bricks in the sense that a concave finish was achieved, close to the face of the brickwork at the top and bottom of the mortar layer and rounded concavely between those points. This finish, a "rolled profile" for "mortar joints", was specified by Studio M (STB 467).
3. The experts (apart from Mr Sherrard who did not express a view) stated that this was common practice to achieve a more pleasing or aesthetic finish. Mr Blumson and Mr Lorich stated that this would not affect the integrity or effectiveness of the damp-proof course. Mr Sherrard pointed to non-compliance with the requirements of AS 4773.2.
4. In his first two reports, Mr Sherrard stated that, "The damp proof course is not visible to the outer edge of the masonry" and that, "The damp proof course is non‐compliant as it is not to the entire width of the masonry units" (TB 173 & 267). In his report, Mr Blumson observed:
   • "In relation to both items above there was no defect observed requires rectification.
   • The damp proof course (DPC) was readily visible in numerous locations around the house (refer to photos 6474 to 6480).
   • There were no issues with rising damp observed anywhere in these walls.
   • Set back to the DPC was observed and measured to be minimal and up to approx. 5mm‐7mm.
   • It is common practice to conceal the damp proof course with minimal set back to prevent an unsightly finish with DPC protruding.
   • In my experience this degree of minor DPC setback will not cause any problems with rising damp and therefore should be accepted".
5. In this case, I am not satisfied that the finish to the mortar, and the damp-proof course within it, at the appropriate level of the brickwork, does not comply with the AS 4773.2 requirements. I am not satisfied that the adequacy of the damp-proof course was in any way affected or that there was any evidence of efflorescence as suggested by Mr Sherrard.
6. There is no defective work. The damp-proof course was constructed effectively and as required. No allowance shall be made for this item.

1. This item was not originally included in the defects identified by Mr To. However, the issue has been accepted as a matter in dispute since at least the view and has been fully discussed and considered by the experts. Mr To asserted that the brick used on the project was not the specified brick - "Ebony Adbri" (STB 467). The joint experts' report notes Mr Sherrard's opinion that the use of the wrong brick would require the removal and replacement of the brickwork at a cost he estimated at $55,000.00.
2. At the view, it was suggested by Mr Sherrard that the brick used on the project had been "acid-cleaned" and had lost the distinctive speckled finish it should have had. At that time, Mr Sutton, Metricon's Construction Manager, produced a loose unused brick stored in the garage. Upon comparison with the bricks used in construction, all the experts (except Mr Sherrard) were of the view that the spare brick had the same finish as the bricks used in the construction of the house, including discrete areas where the constructed brickwork had not been subject to any cleaning. From my observations, I accept the general view of the experts that the brickwork, as constructed, was consistent with the spare brick.
3. After the view, Metricon produced further, more specific, information about the technique use to clean the bricks after they were laid (STB 23-26). These matters were discussed in the concurrent evidence session. In my view, the evidence appeared to reinforce the conclusion that the cleaning of the bricks had not affected the finish of the bricks.
4. In the concurrent evidence session, Mr Sherrard gave evidence that he had recently acquired an Ebony Adbri brick from the brick supplier. He gave evidence that the brick he purchased had a different finish than the brickwork as constructed at the property, that had a "smoother finish ... the speckle had disappeared [and] the edges were roughed".
5. Metricon produced contemporaneous documents relating to the purchase of the bricks used in construction. The bricks delivered to site and used were a "Brick 110x076 Brick Solid Brick Ebony" (STB 487-8).
6. Mr To included in his witness statement an Adbri Masonry catalogue "Architectural Masonry" at TB 1334-61. At TB 1357, "The Range" of products is listed. The only brick with the dimensions "110x76" is an "Architectural Brick" with the description "Smooth Coloured Brick". At TB 1339-40 the "Architectural Brick" is illustrated. At TB 1340, there is a photograph of the 3 "available textures", one of which is "smooth" and 7 colours, one of which is "Ebony". There is also a photograph of a building with the brickwork labelled as "Ebony/Architectural". The photograph appears to portray some variation of colour. There is nothing in the brochure which would indicate that the brick used at Mr To's dwelling was otherwise than specified.
7. In the circumstances, I am satisfied that the brick used in the construction was as specified and that the essential features of the brick were not affected by the processes used by Metricon during construction, and particularly in the cleaning of the bricks after they were laid.
8. There is no defective work involved in the construction of the brickwork or the materials used. No allowance shall be made for this item.

Item 5.1-5.3 & 5.5-5.7- EPS (Expanded Polystyrene) cladding, installation and rendering; sundry issues

1. There are a number of related items to consider under this heading, as follows:

Render varies in colour and texture and poorly repaired

Unsealed underside of EPS bottom edge & flashing with render debris

1. The joint experts' report records, "We disagree in relation to whether the extent of bow and plumbness in the other items because: Lorich & Sherrard consider they are not defects because they are not structural and are not visible (the Guide). Sherrard's opinion is that it is outside tolerance and is therefore a defect. ... Sherrard's opinion is that all items require rectification by removing render, straightening wall battens, plumb and rectification of EPS".
2. Mr Blumson maintained the views he expressed in his report. After the Blumson report was distributed to the parties, Mr To said about this item in his revised response that:

"The EPS wall cladding measured for plumb and straight are defective. The defect - non compliant to plumbness and straight has been identified in the Blumson report. Measuring plumb and straight from a normal viewing position is not an acceptable recognised method of determining compliance. Mr Blumson has made no reference to the Guide to Standards and Tolerances for assessing the breaches in compliance. The installation of the cladding is required to meet the allowable tolerance of straight and plumb. The only method of rectification is removal of non-complying EPS installation, supply and install new, render to match existing. Description & observations: AS2 p42 & AS3 pp32-35; photos: AS2 p43 & AS3 pp36-37".

1. Mr To's comments do not advance the matter further than the opinions expressed in the reports of Mr Sherrard. Mr Sherrard's reports are not particularly helpful, in the following respects:
   1. Mr Sherrard refers to the need to comply with "CSIRO Appraisal Technical Assessment No.310", "the manufacturer's manual", "the manufacturer's specification" and "the technical literature" without further specificity;
   2. he refers to a number of matters with which there should be compliance, without references, and with little apparent relevance to the specific observations of defective work. Paragraphs (a) and (b) in the first two reports, immediately before the heading: "5.1.5 OBSERVATIONS and DEFECTS", are incomplete;
   3. the locations of specific defects (for example bowing) are imprecise;
   4. the first two reports give an overall rectification cost of $25,700.00 plus 22% margin, 7.5% contingencies and GST, without any further breakdown of the work required or the calculation of the cost;
   5. the third report adds additional matters under the heading "observations and defects" (without explanation as to the late reporting of the defects and in breach of paragraph 7 of the orders made on 22 September 2022);
   6. the third report gives an overall rectification cost of $13,700.00 plus 22% margin, 7.5% contingency and GST without any further breakdown of the work required, the calculation of the cost or the reason for the variation from Mr Sherrard's earlier estimate.
2. Following the preparation of Mr Sherrard's three reports, and Mr Lorich's response to the first two reports of Mr Sherrard, there have been extensive opportunities for Mr Sherrard, Mr Lorich and Mr Blumson to discuss the EPS cladding issues. During the view, the items were discussed and considered. There was a second inspection on-site with all the experts and the experts participated in the conclave in order to prepare the joint report.
3. During the concurrent evidence session, Mr Blumson gave evidence that the cladding should not be out of plumb more than 5mm. From measurements taken on site, there was cladding west of the main bedroom where there was a deviation up to 10mm and centrally on the south elevation, there was bowing of less than 10mm. Other areas were about 4mm out of plumb. Mr Blumson's view was that, as these matters were difficult to observe from the ground, it would not be reasonable to take down the cladding and reconstruct the walls.
4. Mr Sherrard raised a concern that had apparently not been raised in his reports, although it had been discussed between the experts. Mr Sherrard said that the cladding was required to be coated with a number of coats of sealant to prevent cracking. The joint report of the experts notes that, with regard to the quantum of rectification, "$12,475 - Sherrard (of which $10,065 is for new sealant: Dulux acratex)".
5. Evidence was given by Metricon's site manager on the project, Mr Taylor, that the appropriate number of coats of the sealant "Dulux Acrashield" were applied. He produced photographs showing that the product was on site and was being used to seal the EPS cladding (FSTB 13-17). Mr Taylor said that he had taken the photographs at the time because "Mr To had raised his concern before the sealant was applied". I accept the evidence of Mr Taylor about these matters. The evidence appears to accord, in material respects, with the recollection of Mr To.
6. In his witness statement at paragraphs 60 and 61, Mr To states that, "On 1 October 2019, I attended an onsite meeting with Josh Taylor and Metricon's Construction Manager Dale Sutton to meet with the tilers to run-through tiling layout. After a short discussion, the tilers started work. Both Josh Taylor and Dale Sutton spoke to me about the LHS pier of the portico advising that Metricon needed to change the colour to match the ground floor render because the pier was to be rendered as one piece. Josh Taylor stated that after the pier was rendered, rendering for the entire dwelling would be complete. I disagreed as the Acrashield protective coat for the render had not yet been applied anywhere. Despite being informed that I paid for the upgrade as part of my signed Contract, both the managers told me that Metricon do not provide Acrashield and that I did not know what I was talking about. Both Josh Taylor and Dale Sutton stated that they would not apply any other coats to the render, despite my repeated efforts to tell them that it was required as part of my Contract. ... On 2 October 2019, Josh Taylor backpedalled from his earlier false assertion that Acrashield was not part of the Contract and advised me that Acrashield was now quickly being applied that day".
7. In the circumstances, it seems that the main concern of Mr Sherrard, as discussed in the experts' conclave, had no basis in fact. Mr Sherrard's cost estimate largely related to the application of Acrashield. I am not able to ascertain to what the balance of his estimate related. In the circumstances, I am unable to determine any sum to which Mr To might be entitled to rectify what Mr Blumson regarded as having little significance.
8. In the circumstances, I will not allow any sum for any items for the EPS cladding, apart from the agreed figure for Item 5.8.

Items 6.1 - 6.3, 6.5 - Embedment and placement of stormwater pipes

1. In his reports, Mr Sherrard identified inadequacies with the embedment of the stormwater pipes at the south side stormwater pit and said that pipes had been placed "too high" in the pit. Mr Sherrard referred to the "drainage notes" on sheet 32 (STB 452). Note 14 provided that, "ALL STORMWATER DRAINS SHALL BE BEDDED ON A MINIMUM OF 80MM COMPACTED THICKNESS 20 N.S. CLASS 3 FINE CRUSHED ROCK, IN SOIL BASED TRENCHES, INCREASED TO 200MM THICKNESS IN ROCK BASED TRENCHES".
2. Mr Blumson, in his report, stated that he was "unable to determine if any defects exist". The experts had carried out an inspection, apparently on the occasion of the further meeting on site after the view. At Mr Sherrard's direction, a hole was dug "in the area of ground adjacent to the stormwater pit at the SE corner of the building". During the concurrent evidence at the hearing, Mr Sherrard gave evidence that the "back-filling material was not sufficiently compacted and was holding too much moisture". He said the material was "very wet" although, "No photographs had been taken on that day".
3. Mr Sherrard referred to the photograph from his report dated 25 October 2022 at STB 58. There are further photographs in Mr Sherrard's first report dated 9 November 2021 at TB 181. He said that it would be desirable to "excavate further" or "put a camera down the pipes to see if there had been movement".
4. During the concurrent evidence session, Mr Blumson stated that he did not observe any issue with the pit. He noted that crushed rock was not required in the area dug by Mr Sherrard because the hole dug was next to a stormwater pit as opposed to a stormwater pipe. Mr Blumson's view was that, "the dig showed soil that appeared to be clay". He noted "that clay is generally suitable back fill for stormwater pipes".
5. Mr Quick's view, noted in the joint report, was that the "drainage notes" were "defective in that they refer to AS 2870 which are 'residential slabs and footings'; the relevant standard is AS 3500.3 which requires 300mm width trench [and that] the installation conforms to AS 3500.3". In the concurrent evidence session, Mr Quick said that AS2870 "refers to residential slabs and footings and not the laying of stormwater pipes".
6. The relevant engineer's specifications are at STB 452. I refer to the following provisions:
   • Under the heading "General drainage notes", paragraph 14 does not refer to AS 2870.
   • Under the heading, "Drainage notes", paragraph 1 states that, "All surface drainage works shall be installed in accordance with clause 5.6.3 drainage requirements of AS 2870-2011..." and paragraph 5 provides that, "Drainage design is in accordance with AS 3500".
7. In Mr Sherrard's third report (STB 57), he notes:

"Preferred bedding materials are listed in AS/NZS 2566.2 as follows:

Suitable sand, free from rock or other hard or sharp objects that would be retained on a 13.2 mm sieve.

Crushed rock or gravel of approved grading up to a maximum size of 14 mm.

The excavated material may provide a suitable pipe underlay if it is free from rock or hard matter and broken up so that it contains no soil lumps having any dimension greater than 75 mm which would prevent adequate compaction of the bedding".

1. The joint report records that Mr Sherrard's opinion was that, as a result of matters he had observed during the joint site inspection, "he expects the stormwater drainage is not working correctly because it doesn't comply with the engineering requirements [and] he has a significant concern that warrants further investigation (asking the engineer to consider whether it complies with the drainage notes). Sherrard's observations of the small areas inspected are that he expects the stormwater drainage is not working correctly because it doesn't comply with the engineering requirements. Sherrard believes "the engineer requirements conform with AS 3500.3".
2. Mr Sherrard stated that, "there is an area along the northern boundary that would be accessible to investigate ... If the investigation does not identify further issues, he would agree it is not defective. If the stormwater was found to be defective, the rectification works would involve: removal, excavation & embedment as required, cost of labour & materials, reinstallation of pits".
3. The experts' joint report records that Mr Blumson, Mr Lorich and Mr Quick considered that, "there is no evidence of non-compliance and no basis to warrant further investigation". Mr Quick stated that, "he has not observed any issue, there is no evidence of collapsed pipes, fail or flow issues in the pipes".
4. I prefer the evidence of Mr Quick and Mr Blumson. If any further investigations were considered appropriate by Mr Sherrard, the investigations should have been undertaken at an earlier time. I am not satisfied on the evidence, including reference to the Australian Standards and the available photographs, that these items are defective. No allowance shall be made.

Item 7.1 - 7.7 - External wall tiling, adhesion and sealing

1. The experts' joint report considered that the only item under the heading "External Wall tiling" requiring attention was item 7.8 relating to the removal of render splatter that the experts considered could be carried out at a cost of $185.90. All the experts agreed with Mr Blumson's report where he stated: "In relation to all items 7.1 to 7.7 inclusive there were no defects observed. Any defects in this regard that existed appear to have been rectified".
2. In his revised response to Mr Blumson's report, Mr To stated about this item:

"Agreed defect. However, the lack of tile adhesion to the substrate and issue of the tiles not having been sealed to manufacturer's specification have not been investigated by Mr Blumson ... Description & observations: AS2 p48 AS3 p38".

1. Mr To, in his response to Mr Blumson, also referred to investigations and observations he had made at various times. These matters were attested to in Mr To's witness statement dated 30 June 2022, particularly paragraphs 60, 63, 104, 105, 109 and 139. Mr To also attached to his witness statement (TB 1570) "laying instructions for Natural Basalt Stone by Beaumont Tiles" which includes in a "short rundown on the installation advice", that, "Basalt needs to be completely sealed on all sides before it is laid" and, "It is recommended to apply a final coat of sealer once the stone has been laid and is completely cleaned. See specific laying instructions on page 17 for full details".
2. Mr To attached to his witness statement, emails from Mr Taylor which indicate the steps taken by Metricon to clarify the situation. At TB 1575, in an email from Mr Taylor to Mr To dated 8 May 2020, Mr Taylor stated, as follows:

"I have read over the PDFs you have sent of the Beaumonts catalogue, and having discussed with their state manager on site, they have advised the tiles are not to be sealed on the backs before laying as this would undermine the integrity of their adhesion. Beaumonts supply, install and warrant their own product and have advised the tiles were pre sealed before install on all edges and their face before being resealed".

1. At TB 1191, in paragraph 105 of his witness statement, Mr To purported to summarise what he was told by Mr Taylor, as follows:

"On 8 May 2020, ... Josh Taylor stated that he had read the Beaumont Tiles installation instructions that I had provided him and advised me that the basalt stone tiles to the front LHS Living room section had been presealed prior to installation".

1. Mr Sherrard in his third report included a basic rectification cost for external wall tiling defects of $4,700.00. The specific references by Mr To in his response to Mr Blumson's report were to Mr Sherrard's second and third reports. These matters, including the further matters raised by Mr To, were likely to have been considered by the experts (particularly Mr Sherrard) in their preparation of, and agreement to, the joint report.
2. Accordingly, I am not satisfied that items 7.1 to 7.7 are currently defective. No allowance will be made for these items.

1. Mr Sherrard considers that the roof framing was installed by Metricon in a "cavalier way". He suggested that it would be necessary to remove the roof as the first step in the rectification process as any work found to be required "must be completed from the outside". He estimated the cost of rectification at $7,142.00 for all roof framing issues, noting that, "this assumes that all items need to be replaced".
2. This conclusion is based on limited observation from an inspection inside the roof space, reference to photographs taken by Mr To and assumptions that very few proper connections had been installed by Metricon. In my view, it would not be appropriate, on the basis of the presently available material, to form the conclusion, that the defective work is as Mr Sherrard suggests.
3. I note that the following inspections of the roof framing were undertaken:
   1. on at least one occasion by the registered building surveyor, during which it is likely he would have inspected the framing from the first floor. The frame was approved at the mandatory inspection on 8 August 2019 (TB 1284);
   2. by Metricon, as part of its quality assurance processes, prior to the inspection by the registered building surveyor. The inspection was carried out by Mr Taylor who took photographs and completed a written report on 27 July 2019 in the form of Metricon's "Mandatory Frame Checklist". Apart from the photographs in that report, the only other photograph of the roof framing, are contained in Mr To's document, "Respondent's response to List of Photos taken by the Applicant 2019" (photographs 6, 15 and 16), do not assist;
   3. by Mr To who took photographs during the construction process, The photographs he took during the period 29 July to 18 August 2019 are marked as attachment VT15 to his witness statement but were not included in the Tribunal Book or the Respondent's Tribunal Book filed by his solicitors and dated 31 August 2022 (which also included Mr To's witness statement but not some of the attachments). No relevant photographs relating to the roof framing are included in the document, "List of photos taken by Respondent 2019, 2021 and 2022", recently compiled and submitted by Mr To;
   4. by Mr Sherrard entering the roof space and taking photographs before his third report (STB 72).
4. In his first report in November 2021, Mr Sherrard raised concerns about the roof truss connections. He said that he was "informed by the owner he had noticed that several trusses have been damaged during installation [and that certain] brackets had not been installed to the manufacturer's specification".
5. In his third report in October 2022, Mr Sherrard said that he accessed "the ceiling space from the access hatch [although this] was limited to the east end ... due to installed services". Mr Sherrard said the brackets required by the manufacturer connecting to the girder truss were either "not installed" or the "nail connection [was] not according to fixing requirement of AS 1684. There is little or no nail penetration to the connecting timber". Mr Sherrard also referred to "photos of the truss installation supplied by the owner". He also commented on the failure to install Multi grips to S, C and J trusses. It is unclear from the report what observations Mr Sherrard actually made or whether his opinions were based on other sources of information or conjecture.
6. Mr Blumson did not go up into the roof space. He engaged in discussion with Mr Sherrard and Mr Lorich about these matters, and "a series of photographs provided by Mr Sherrard were reviewed". In his report, Mr Blumson stated that it was "agreed" that the reported inadequate "nail penetration" "required rectification by the installation of additional nail plates". Mr Blumson stated his opinion that this work "can be undertaken from within the roof space".
7. In Mr To's submissions on Mr Blumson's report, he stated that, "the installation of the roof trusses requires further investigation. There is every reason to believe the same noncomplying installation of the trusses to the rear of the dwelling corresponds to those identified at the front".
8. The joint report of the experts states that Mr Sherrard "assumes the problem extends beyond the one truss that he inspected [and that connections to] front and rear trusses are missing because he could only get within 1m and could not confirm they were in place".
9. The joint report noted that, "Blumson & Lorich's observations do not give rise to a concern that there's anything majorly wrong. If grips and connectors weren't in place, they would expect to see the roof not holding. There is no evidence that this is occurring. We agree that rectification of any missing brackets, connections and fasteners to girder trusses can be rectified from within the roof space".
10. Mr Sherrard is noted as "having contacted the manufacturer to see if they have a fix and hasn't heard back". His opinion was that, "the triple grip connections have to be connected from the outside because of space restrictions and this will require the roof being removed".
11. Mr Blumson and Mr Lorich costed the necessary rectification work at $943.80, although if rectification were not feasible, Mr Sherrard's "costings [of $7,142.00] would be reasonable".
12. In the concurrent evidence at the hearing, Mr Sherrard said that he had spent limited time in the ceiling because it was "hot in there". The girder truss was at the rear of the house where there was no access. Mr Blumson said that the girder truss had other connecting trusses and ancillary connections. He said that he did not believe there were major problems present as there "would otherwise be cracking".
13. There was debate between the experts as to what might be achieved within the roof space. To emphasise this point, Mr Sherrard suggested that the absence of use of multigrips evidenced in the photograph gave rise to an apprehension that the connection of the girders to the house frame would likely be inadequate.
14. Mr Taylor gave evidence on the following day of the hearing. He referred to the inspections carried out at the completion of the framing roof, including by Metricon as part of its processes, and also by the building surveyor and by Mr To and the experts engaged by him.
15. Mr Taylor produced 2 photographs taken by Metricon during its standard processes for the completion of the roof framing (FSTB 6-7). These photographs formed part of the "Mandatory Frame Checklist" completed by Mr Taylor and Metricon supervisor, Brian Aveling on 29 July 2019. That report contained 12 photographs and specific questions required to be checked off at the inspection.
16. The photographs had not previously been discovered. From evidence given by Mr Taylor and by Dianne Anderson, Metricon's Customer Relations Manager, this was probably an unintentional, although serious, "oversight" rather than a deliberate non-disclosure. One particular photograph showed that all observable connections from the roof trusses to the house framing had been appropriately installed.
17. I am satisfied, based on the material before the Tribunal, that:

a. there are deficiencies in the connections in the roof framing;

1. there is no basis, on the evidence, to assume that the roof framing was installed "in a cavalier way" or that assumptions should be made about other parts of the roof framing that have not been the subject of direct observation or photographs taken after the completion of the framing;
2. the likely deficiencies in the roof framing should be able to be rectified from within the roof space, without removing the roof, at a cost of $943.80.

1. For this item, I shall allow the sum of $943.80.

Items 9.2, 9.3 & 9.6 - Floor framing, Joist hanger installation, Balcony beams

1. There are six related items to consider under this heading, as follows:

Incorrect installation of floor joists and floor panels

Confirmation sought that cut-through timbers removed

1. During construction, Mr To took photographs of three separate matters which, if not rectified, would have affected the integrity of the floor framing. These matters are the subject of the first three items (9.2.1, 9.2.2 and 9.2.3). The first two are examples of the builder creating excessive holes in beams for other services to pass through. These matters are shown in Mr To's photographs which are included in Mr Sherrard's reports; for example, photographs 30-33 at TB 187-9 attached to his first report dated 9 November 2021.
2. There are similar photographs (nos. 23 dated 25 September 2019 and 72 dated 25 September 2019) in the document, "Respondent's response to List of Photos taken by the Applicant 2019". Although the latter photograph was taken after the approval of the frame stage by the building surveyor on 18 August 2019, Mr Taylor gave evidence that where there were excessive cut-outs for services, these matters were rectified to the engineer's satisfaction. A photograph taken by Mr Taylor on 27 September 2019 (TB 1411) shows that rectification of this, or a similar, matter was completed and notified to Mr To by email on that date.
3. The third item (9.2.3) covers defects in the installation of floor joists and panels. These defects are shown in Mr To's photographs included in Mr Sherrard's reports; for example, photographs 34-36 at TB 191-2 attached to his first report. Item 9.2.4 (raised in Mr Sherrard's third report dated 25 October 2022) seeks confirmation from Metricon that the "cut-through timbers" shown in photographs 35 and 36 have been removed and presumably replaced.
4. Mr Lorich's response in his third report (STB 118) was that the photographs were taken "when the work on site [was] actually ongoing. All claimed items have been rectified with all cut outs in frame being reinforced as part of normal building practice. The frame has been passed by the registered building surveyor (RBS)".
5. Mr Blumson reported that he "was not able to determine the existence of any defects in relation to the above frame items. The relevant areas are completed and framing is now covered over". He did not comment on what the photographs showed, other than to note that, "the Building Surveyor has approved the frame. These claims could be raised with the Building Surveyor for their consideration".
6. Mr To's revised response to Mr Blumson's report states that, "The floor has been installed after the frame inspection. The photograph supplied by the owner and taken after frame inspection (floor installed) shows timber split, timber cut [word unclear] and use of a roofing screw as a fastener to attempt to connect the timber sections".
7. The joint experts' report notes that, in the opinion of Mr Lorich and Mr Blumson, "they would expect to see cracks to the plaster and floor creaking if the floor framing was built as claimed by Sherrard, and they have not observed cracks to the plaster, creaking or any evidence of collapse. Sherrard agrees with Lorich and Blumson that cracking and creaking would be the typical consequence of floor framing defects and he has not observed either. However, Sherrard's opinion is that, "the photos taken by the owner are sufficient to maintain the claim and justify further enquiries being made to the RBS to confirm whether a building order was issued and the frame was rectified".
8. The joint experts' report records, "Lorich notes that the frame was inspected by Kevin McDonald who is an independent building consultant". I have been unable to find any reference to Mr McDonald in the Tribunal books, or to a "building inspector" other than Mr Loomes.
9. Mr Taylor said in evidence that oversize cut-outs for the plumbing rough-in (shown in photograph 31 at TB 188) had been rectified after the matter had been raised on site by Mr To. He produced photographs showing the installation of an adjacent 600mm piece of timber (FSTB 8-12).
10. There is no evidence that a "building order" was issued by the Registered Building Surveyor requiring any part of the frame to be rectified or of any enquiries to that effect having been made by Mr Sherrard or anyone else on behalf of Mr To.
11. The cut-outs for services installation were apparently brought to Metricon's attention by Mr To on 2 August 2019 (paragraph 42 of his witness statement at TB 1174). However, photographs taken by Mr Taylor and sent to Mr To on 27 September 2019 show that the cut-outs for services had been rectified by additional timber bracing (TB 1411-2).
12. Mr Sherrard's "observations" are based on his study of a limited number of photographs and his extrapolation from those photographs to conclude that no remedial work was later carried out by Metricon and that the photographs demonstrate a quality of workmanship which is likely to have been reflected in all similar work on the project. In the joint report of the experts, Mr Sherrard states in relation to this item at STB 367 that he is raising the matter because Mr To's photographs "are sufficient to maintain the claim and justify further enquiries being made", for example, of the Registered Building Surveyor.
13. Mr Sherrard raised these matters in his first report in November 2021. Mr To was, presumably, alive to the issues at that time, by his provision of the specific photographs. Mr To considered that Metricon's failure to address his complaints of poor workmanship was sufficient to regard its conduct as serious enough to accept it as a repudiation and to terminate the building contract, as he purported to do by his counterclaim dated 16 July 2021. In these circumstances, it was appropriate for Mr To to do more than make assertions, even though at some stage in the construction process it had appeared that Metricon's work was incomplete or defective.
14. Mr Sherrard provided an estimate for the cost of these items during the experts' conclave. The estimate of $10,898.00 includes other items to be considered below. On the basis of the material presently before the Tribunal, I am not satisfied that the floor framing is defective. I will not allow any amount for the rectification of the items under this heading.

1. A similar position arises in relation to items 9.3.1 to 9.3.4. These items are as follows:

Nail spacing and closeness to edge outside tolerance

1. In support of these items, two photographs are relied upon by Mr Sherrard. In his first and second reports, photograph 37 (TB 195 & 289) shows two joist hangers. Photograph 38 is a closer view of one of the hangers in 37. Photograph 38 is also contained in Mr Sherrard's third report (STB 82).
2. In his first and second reports, under the heading "Inspection of photos", Mr Sherrard states, "The inspection of the installation of the joists hangers does not meet the above criteria. Most or all of the joist hangers have been installed with the gun system. There is no pattern, but ad hoc installation of the nails. Many are installed with minimum spacing between the nails and are outside the allowable tolerance to the edge of the brackets. Replacement shall be required to many of the brackets".
3. It is not clear, from this statement, to what Mr Sherrard is referring when he uses the phrases "most or all of the joist hangers have been installed", "many are installed" and "Replacement shall be required to many of the brackets", as there are only photographs of two hangers. Mr To, in his revised response to Mr Blumson's report, refers to the same two photographs and says, "The owner's photos in Sherrard 2 is the only evidence".
4. In the joint report of the experts, similar remarks are made by each of the experts as I have recorded in relation to Items 9.2.1 to 9.2.4. Accordingly, I consider that I must reach the same conclusion for these items.
5. I am not satisfied that the joist hanger installation is defective. I will not allow any amount for the rectification of these items.

1. In his second report, Mr Sherrard noted the specific construction requirements for the balcony beams (TB 281). Photograph 30 on that page is captioned "excessive check out to top plate".
2. In his third report, Mr Sherrard repeated the construction requirements and the caption from photograph 30. Under the heading "Rectification", Mr Sherrard further stated, "The joists will have to be removed and replaced, or an engineered method of strengthening the beam to the penetration employed".
3. Mr Blumson's report states, "In my opinion the balcony beam construction is not defective. I cannot see an alternative method of construction with this beam/post detail. The Building Surveyor has approved the building permit and inspected the frame. It is reasonable to assume if they had any concern regarding this prominent detail, it would have been raised by them with a direction to fix".
4. It is not clear to me whether Mr Blumson is addressing the specific issue that appears to be raised by this item. Mr Blumson refers to a "beam/post detail" and describes the detail as "prominent". It may be that Mr Blumson was referring to the matter shown in photograph 43 in Mr Sherrard's second report (TB 294) which has the caption "bearing to fixing of post is non-complying". Mr Sherrard then refers to "The timber framing code, AS 1684 [that] specifies the minimum washer sizes required for coach screws, bolts and tie-down rod connections".
5. However, in his revised response to Mr Blumson's report, Mr To says that the relevant photographs from Mr Sherrard's reports are photographs 30 (TB 281) and, at the top of the following page, photograph 31, captioned "excessive size holes and location for service installation". This latter matter shown in photograph 31 was dealt with under items 9.2.1 and 9.2.2. In relation to the four parts of Item 9.2, Mr To in his revised response document referenced photographs 30-36 as relevant to that item.
6. Mr To also said that, "item 15" at TB 1394 from the report of Hayden Loomes dated 12 September 2019 was relevant to this matter. Item 15 relates to the "porch" and Mr To notes that, "The holes that have been cut out to the floor joist to this area are bigger than allowed which will need to be replaced". The 2 photographs illustrating this issue are similar to what is shown by photograph 31 in Mr Sherrard's reports. As referred to above in relation to items 9.2.1 and 9.2.2, the issue raised by Mr Loomes was addressed subsequently by Metricon.
7. In his revised response document, Mr To also appears to refer to the issue raised by photograph 43 - "bearing to fixing of post is non-complying". Mr To refers to AS 1684 and the "beam to post detail" in Mr Sherrard's second report at TB 294-5, that Mr To says "clearly shows that the bearing to fixing of post is non-complying with incorrect size washers".
8. Mr To also refers to the report of Mr Mladichek dated 8 July 2021, in which at TB 1720, Mr Mladichek refers to the "Poorly finished balcony post with visible fixing to metal strap. Balcony post with surface fixed galvanised strap and inadequate attempt to cover it up is an example of poor workmanship. Balcony posts are detailed as 140mm x 140mm on drawings but the installed posts are smaller in dimension".
9. Mr To also refers to the report of Mr Loomes dated 22 December 2019, in which Mr Loomes states in relation to the "Balcony" that, "The faces and edges of the roof beams around this area contain splits, and visible joins within the veneer along them". Mr Loomes refers to the "Victorian Building Authority's, Guide to Standards and Tolerances clause 12.04 Natural Characteristics and Mechanical Imperfections/Damage" and concludes, "The holes and edges along these beams need to be properly filled before being properly sanded and repainted".
10. It is not clear whether any further work was done by Metricon in relation to Mr Loomes' observations. Mr Blumson took his own photograph of the "beam/post detail" shown in Mr Sherard's photograph 43. Mr Blumson's photograph is included in his report (STB 229) without further comment. I have examined each of the photographs from Mr Sherrard, Mr Loomes and Mr Blumson without further assistance from them.
11. In my view, it is appropriate to accept the opinion of Mr Blumson about the post/beam detail. I am not satisfied that the matters shown in Mr Sherrard's photographs 30, 31 or 43 are defective work currently existing in the dwelling and requiring rectification. No amount shall be allowed in respect of this item.

1. There are six specific items relating to "bracing", as follows:

Bracing connection to floors does not meet requirements

1. The relevant photographs to these items are said by Mr To, in his response to Mr Blumson's report, to be the photographs in Mr Sherrard's second report at various pages. As best I can, I believe that the following are the photographs appropriate to the items:
   • 9.4.1 to 9.4.2 - photographs 39 ("sheet bracing installation") and 40 ("40 nailing to sheet bracing non-complying - nail head proud, too deep, and excessive spacing") (TB 291-2).
   • 9.4.3 to 9.4.4 - photograph 54 ("with nail spacing exceeding allowable spacing nailing to sheet bracing non-complying") and 55 ("sheet bracing nailing non-complying as too close to edge of sheet and nails punched too far into board") (TB 298-299).
   • 9.4.5 - unable to identify.
   • 9.4.6 - photograph 56 ("shear bracing incorrectly installed timber is abutting truss connection member") (TB 300).
2. Relying upon these photographs, Mr Sherrard said that there were various non-compliances with AS 1684.3 (TB 291). AS 1684 Residential Timber Framed Construction has four parts. Part 3 is designed for the cyclonic areas of northern Australia. The "Metricon Construction Specification" for the project at TB 1045 notes that, "The standard home is designed to withstand up to and including Wind Classification N2". Part 2 of the Australian Standard would be appropriate for the dwelling.
3. The commentary of these items by Mr Lorich and Mr Blumson in their respective reports and in the joint report of the experts is very similar to the discussion of items 9.2.1 to 9.2.4; referring to the absence of "typical signs that would be present where there is insufficient bracing".
4. The joint report records, in relation to this item, that Mr Sherrard's "opinion is that there is sufficient evidence to maintain the claim and that further small areas of destructive investigation could be useful", and that with regard to the "scope of works to rectify" and the issue of "quantum", he is "unable to say because the extent is unknown".
5. Accordingly, I am not satisfied that there is currently defective work that requires rectification. No allowance will be made for this item.

1. In Mr Sherrard's third report, he raised the issue of the wall framing (STB 74). After referring to the requirements of the Guide to Standards and Tolerances, he made the following observations:

"There are a number of areas in the home that exceed the allowance of 4 mm tolerance over 2 m:

• The feature tiled wall to the study and Living rooms.
• The front entry north wall.
• The wall to the feature window to the stairs the rear wall of the living room.
• The rear wall of the upper rear bedroom.
• The walls indicated being out of plumb exceeding 10mm over 2.1 m.
• The featured tiled walls to the gas fire places exceeded the horizontal tolerance of 4 mm".

1. Mr Sherrard attached 4 photographs to his report at STB 74-6, which Mr To agreed were the appropriate photographs. Mr Sherrard captioned them, as follows:
   • "tiled feature wall not straight packers indicates 6 mm deviation".
   • "deviation of 5 mm to south end of fire place wall".
   • "20 mm deviation to north side wall to entry void".
   • "Wall to stairs window showing 5 mm deviation".
2. In his report, Mr Blumson made the following comments:

"In relation the above item 9.5 defects were observed. The defects observed were in relation to plaster lining exceeding tolerances in bow or plumb. The following areas were confirmed as defective by my measurements:

• Wall areas around control joint above both sides of front entry door.
• Wall area at LHS of west Bed 1 window (note window frame was reasonably plumb).
• Wall corner at SW side above dining - Plaster reveal at mid landing on stair case.
• Wall area at LHS of study shelving.

The defects observed are not necessarily present in the frame and can be rectified generally by reworking plaster lining and packing of wall frames where required as detailed in the attached costings for this item.

I note that the fire place walls were checked for bow and measured to be within allowable tolerances, i.e. not exceeding 5mm over 1.8m".

1. Mr To, in his revised response to Mr Blumson's report, made comments about the extent of "the walls framing being out of plumb" and the requirement that the wall framing "be rectified to meet AS 1684 [Residential Timber Framed Construction] compliance". Mr To said, "Rectification will require removal of the plaster to the areas identified, plumbing the walls and supplying and installing new plaster sheet, and repainting [and] removing and replacing feature wall tiles". Insofar as Mr To's comments express expert opinions and go beyond what Mr Sherrard has said, those comments cannot be accepted as having any weight.
2. The joint report records two fundamental disagreements by the experts:
   • the appropriate requirements in the Guide applicable to a wall finished with ceramic tiling.
   • whether Mr Sherrard "measured bow" correctly.
3. In relation to the "tiled feature wall", in his report Mr Sherrard extracted Table 4.2.2, Figure 2.2.2(A) and clause 4.2.2 of AS 2589 Gypsum linings (plasterboard) and Diagram E from the Guide to Standards and Tolerances. It is not clear whether he also relied upon clauses 4.02 and 4.03 of the Guide to measure "plumbness" and "straightness". Mr Sherrard apparently asserted in the conclave that, "the finish to the walls is ceramic tiling". Mr Blumson and Mr Lorich say that, "the finish to the walls is not ceramic" and that the governing clauses of the Guide are 9.01 and 9.02.
4. In the Guide, Section 4 is headed "Framing", clause 4.02 is headed "Verticality or plumbness of steel and timber frames and exposed posts" and clause 4.03 is headed "Straightness of steel and timber frame surfaces". Section 9 is headed "Plastering and Rendering", clause 9.01 is headed "Verticality or plumbness of internal and external wall surfaces" and clause 9.02 is headed "Straightness of internal and external wall surfaces".
5. In my view, clauses 9.01 and 9.02 are more appropriate than clauses 4.02 and 4.03. The measurements to be applied should be those relevant to the wall "finish" not the underlying "framing". I note that Section 11 is headed "Floor and wall tiling". There do not appear to be specific provisions relating to taking measurements of "plumbness" or "straightness". Clause 11.08, headed "Uneven tiling", is of no assistance.
6. In relation to the appropriate method of measuring, Diagram E on page 13 of the Guide describes both "Measurement of horizontal tolerances" and "Measurement of vertical and inclined surfaces". Mr Sherrard extracted Diagram E in his report at STB 77. However, Mr Sherrard seems to concede that his measurements were not in accordance with Diagram E. The joint reports notes Mr Sherrard saying that, "his method of measuring is acceptable and the manufacturer's warranty requires a level 4 finish".
7. I do not accept Mr Sherrard's explanation or the likely accuracy of his measurements. I prefer the evidence of Mr Blumson including his assessment of the areas requiring rectification.
8. Mr Blumson's report (STB 197) contains a detailed costing of the rectification work as opposed to the global figures provided by Mr Sherrard. To his basic costing, Mr Blumson adds a builder's margin of 30%, rather that Mr Sherrard's (essentially equivalent) margin of 22% and 7% for "contingencies". I accept Mr Blumson's estimate totalling $3,381.81. For this item, I shall allow the sum of $3,381.81.

1. On 9 November 2021, Mr Sherrard raised in his first report the question of whether the garage with a wall on the boundary of the property was constructed with appropriate fire rated materials. As constructed, the top of the boundary wall is covered by colorbond sheeting which is not fire rated. It is unclear whether the brickwork and/or other materials behind the colorbond are compliant.
2. Mr Sherrard recommended that, "The boundary garage wall will need to be verified by the Building Surveyor for FRL [as the] FRL is to be continuous behind the Colorbond flashing". This verification has not been undertaken. Mr Lorich suggested in his report that, "The frame and wall as constructed has been passed by the building surveyor (RBS). No further proof re wall construction should be needed". This comment was made before Mr Sherrard's third report.
3. Mr Sherrard's third report notes that, "The inspection shows the construction as per the above drawing. The detail does not indicate the type of FRL as the Colorbond flashing to the top of the brickwork does not meet the FRL requirements". From the first two reports, it is unclear as to what is the "above drawing" or the "detail" referred to. The third report contains what is described as "Detail on plans indicating non compliance to fire rating", without identifying the plan which contains the detail.
4. The detail has apparently been extracted by Mr Sherrard from sheet 6 of 12 of the architectural drawings for the project (TB 1065). It appears to be the position that, if the boundary wall of the garage has been constructed in accordance with the plans, that it would be likely not to comply with the fire rating requirements.
5. In the documented discussions between the experts, this matter has not been mentioned. Instead, Mr Blumson and Mr Lorich agree that the matter should be left to the Registered Building Surveyor. That is not a practical option open to me. I consider that the matter might have been clarified by evidence from Metricon as to whether the relevant area was constructed in accordance with the detail on the plan for the "boundary line" and the experts' consideration of whether that detail, without more, would be sufficient compliance with the fire rating requirements.
6. In the circumstances, I consider that the garage boundary wall has been constructed in a defective manner. Mr Sherrard, in his third report, gave a global estimate of $3,140.00 as the rectification cost. There is no alternative or better evidence. Adding 22% margin, 7.5% for contingencies and GST, the total cost would be $4,529.92. I shall allow that amount for this item.

1. There is agreement that areas of the ground floor slab are out of level and require rectification. However, there is significant disagreement about a number of matters:

b. the absence of documentation of measurements of out of level areas;

d. whether the out of level areas can be rectified by fixing small areas;

e. whether the reasonable cost of rectification is $70,728.00 or $3,497.78.

1. The fundamental issues relate to the measurements of levels of the ground floor slab taken at various times, as follows:
   1. by Mr Sherrard, or under his direction, on 25 February 2022 as contained in his report dated 20 March 2022;
   2. plan of internal levels by L Johnson of Peter Richards Surveying Licensed Land Surveyors on 15 September 2022;
   3. by Graeme McMillan, an employee of Metricon, on 9 June 2022;
   4. by the experts, under the direction of Mr Blumson, at the view on 31 January 2023;
   5. by Mr Blumson on 27 February 2023, apparently to check measurements taken by Mr Radevich and marked by him at the view on 31 January 2023.
2. The joint report of the experts notes:
   1. Mr Sherrard stated that, "Mr Radevich marked all areas of concern at the joint inspection".

I assume that the reference to the "joint inspection" is a reference to the view on 31 January 2023. Mr Radevich did not attend the view at the direction of the Tribunal. He was apparently there to assist Mr Sherrard. On that day, I observed Mr Radevich taking measurements, marking certain parts of the dwelling (including scratched windows) and spray-painting comments on the ground outside the dwelling. Mr Radevich was not asked to perform any tasks at the view by me or, I believe, by Mr Blumson. I did, however, request Mr Blumson to examine each of the scratched windows marked earlier by Mr Radevich;

1. Mr Sherrard stated that, "No issue was raised at the joint inspection as to the accuracy of these measures and not all of them were discussed on the day, meaning that the opportunity to verify them was lost".

At the view, I discussed with counsel and the experts what was expected at the view (to logically examine each of the matters listed in the Scott Schedule as defective). The initial task undertaken was to take levels. This was done at the direction of Mr Blumson and the agreed measurements, as shown by the laser equipment used, was agreed by the experts and recorded by Mr Blumson.

Later, during the view, measurements were also taken of levels of discrete areas in the rooms of the house by using an electronic digital level and packers. These measurements were the subject of discussion between the experts and recording by Mr Blumson.

During this process, I understood that Mr Sherrard was indicating points of significance, including areas where he had reported areas out of level.

I recall Mr Radevich taking measurements himself, separate to what was happening in the view. None of that work was directed by the Tribunal or, I believe, by Mr Blumson. I assumed that it was work carried out to assist Mr Sherrard, and at his direction. Mr Sherrard had the opportunity to raise the issues he wished at the view. Although Mr To's counsel, Mr Gray, was present for the whole of the view, his participation was largely as an observer and Mr Sherrard essentially had the conduct of the view on behalf of Mr To.

I was not aware that Mr Blumson intended to recheck "the areas marked by Sherrard's assistant, Mr Radevich" on a subsequent inspection. The need for at least one further inspection was contemplated by the Tribunal's orders dated 14 February 2023 to inspect the "plumbing defects" and "to discuss the appropriate modification of any works required to rectify defects at the property". The third visit to the property by Mr Blumson on 27 February 2023 was authorised by me;

1. I consider that the steps taken in relation to the measurement of floor levels was appropriate:
   1. the measurements considered to be critical by Mr Sherrard were checked and agreed by all the experts at the view;
   2. the further short-distance areas marked by Mr Radevich at Mr Sherrard's direction were all examined and checked at a subsequent inspection by Mr Blumson;
   3. in accordance with the Tribunal's orders, Mr Blumson reported his findings to the Tribunal and the parties on 16 March 2023.
2. It is possible that different measurements might be taken at different times. However, there was no suggestion that there was internal cracking in the dwelling that might suggest significant movement of the foundations. A survey was undertaken by licensed surveyors at Mr Lorich's request and, as Mr Lorich and Mr Blumson suggest in the joint report, where there are any inconsistencies in the measurements, it would be appropriate to "accept the land surveyor's report as the most reliable evidence".
3. Mr Sherrard's measurements on 25 February 2022 indicate significant discrepancies at different locations in the dwelling which, he suggests, would make it inappropriate to contemplate localised remedies. Mr Blumson and Mr Lorich disagree, saying that it is likely that, if the specific areas identified by Mr Blumson are rectified, the overall discrepancies in different locations in the dwelling would be reduced to within allowable tolerances.
4. In the concurrent evidence session at the hearing, Mr Lorich referred to a series of localised areas contemplated for rectification which would be likely to achieve that goal.
5. It is necessary to attempt to tabulate the various measurements that have been taken, so far as they are recorded in the documents before the Tribunal. The source of the information is as follows:
   1. the locations of Mr Sherrard's measurements on the ground floor are shown on the plan forming part of his second report at TB 309;
   2. the relevant measurements, and variations from the bench mark and between measured locations, are recorded by Mr Sherrard at TB 310;
   3. the locations and measurements by the licensed surveyor are at STB 27.
6. It is important to note that the analysis that follows was undertaken without the assistance of the experts. Mr Sherrard set a benchmark within the building at the northwest corner of the kitchen bench. The surveyor's benchmark was obviously outside the property. However, what is being attempted is a comparison of "relative levels" within the building. In other cases, I have experienced an inversion of positive and negative measurements by different measurers. I do not believe that is the case with the measurements of Mr Sherrard and the surveyor that I have recorded below. However, if it were the case, and the "variation from benchmark" measurements were inverted, it would slightly affect the "difference of experts" figure, but not the conclusion that I have drawn from the analysis about the reliability of Mr Sherrard's measurements. These comments also apply to the analysis in relation to Item 13.2.
7. A comparison of the results of the measurements is set out in the following table:

1. The differences in the measurements are substantial, when comparing:
   1. variations between the measurements at comparative locations and the benchmark, as follows:

1. variations between other locations, including from the front entry to the benchmark, over the length of the dwelling from the front entry to the west wall, and across the width of the dwelling from the northwest corner of the dining room to the south wall (or "kitchen" as described by Mr Sherrard), as follows:

1. On the basis of this analysis, there appears to be little reason for having confidence in the measurements contained in the second report of Mr Sherrard as a basis for assessing the deficiencies of the ground floor slab. In the circumstances, it is likely that the measurements taken by Mr Blumson and the parties' experts at the view are likely to be more reliable than those in Mr Sherard's second report.
2. Graeme McMillan is employed by Metricon as a Warranty Site Manager. He obtained a Certificate IV in Building and Construction in 2018 and stated in an affidavit at TB 1161 that, "in the course of my work, I regularly take levels of houses and document levels taken". On 9 June 2022, Mr McMillan took "levels on the ground floor and the first floor [of Mr To's dwelling] using a Nivcomp digital hose levelling instrument". Mr McMillan's measurements of the ground floor are at TB 1164.
3. Ordinarily, I would be reluctant to give much weight to measurements taken by a person with Mr McMillan's limited experience and expertise. I do note, however, that all of Mr McMillan's measurements are generally consistent with the measurements taken by the licensed surveyor. Mr McMillan's zero point was within about 2-3 metres of the northwest corner of the kitchen bench used by Mr Sherrard as the benchmark.
4. Mr McMillan's measurements on the ground floor (with the surveyor's measurements in brackets afterwards) were:

Ground floor length: McMillan, Front entry to Fam Rm NW cnr -12 to +8; variation 20 (Surveyor, -15 to +10; variation 25).

Ground floor width: McMillan, Fam Rm mid S wall to Din Rm NW cnr -8 to -6; variation 2 (Surveyor, +10 to +5; variation 5).

1. I accept the opinions expressed by Mr Blumson in his report as being more likely to reflect the actual defects to the ground floor slab, and therefore the rectification work that is required.
2. Mr Blumson provided detailed calculations of his estimated cost of $3,497.78 to complete this work. I propose to allow that sum.

1. Similar issues arose in relation to the first floor timber floor. It is necessary to examine the various measurements taken by the experts. The source of the information is as follows:
   1. the locations of Mr Sherrard's measurements on the first floor are shown on the plan forming part of his second report at TB 311;
   2. the relevant measurements and variations between measured locations recorded by Mr Sherrard, also at TB 311;
   3. the locations and measurements by the licensed surveyor at STB 28.
2. The following table sets out the relevant details of the measurements:

1. The significant differences between the measurements over the length and breadth of the first floor noted by Mr Sherrard are not apparent from the measurements of the licensed surveyor between similar locations.
2. Mr McMillan's measurements of the first floor are at TB 1165. Mr McMillan's measurements on the first floor (with the surveyor's measurements in brackets afterwards) were:

First floor (length): McMillan, Leisure Rm NE cnr to BR1 NW cnr +15 to + 22; variation 7 (Surveyor, 103.905 to 103.895; variation 10).

First floor (width): McMillan, BR1 SW cnr to En suite NW cnr -15 to -16; variation 1 (Surveyor, 103.905 - 103.905; variation 0).

1. On the basis of this analysis, there appears to be little reason for having confidence in the measurements contained in the second report of Mr Sherrard as a basis for assessing the deficiencies of the first floor slab. In the circumstances, it is likely that the measurements taken by Mr Blumson and the parties' experts at the view are likely to be more reliable than those in Mr Sherard's second report.
2. Accordingly, I propose to accept the opinions expressed by Mr Blumson in his report as being more likely to reflect the actual defects to the first floor slab, and therefore the rectification work that is required.
3. Mr Blumson provided detailed calculations of his estimated cost of $2,516.23 to complete this work. I propose to allow that sum.

1. The joint report of the experts considered that this item was related to item 9.5 Wall frame. In regard to Item 9.5, I accepted the opinion of Mr Blumson as to what works required rectification. That was in accordance with his report.
2. Mr To, in his revised response to Mr Blumson's report stated, "This item has not been rectified" and Mr To repeated comments he made about the nature and extent of rectification required. Mr To also referred to an email to him from Mr Sutton of Metricon on 19 December 2019 in which Mr Sutton stated that, following the inspection that day, Metricon would undertake "a thorough plaster and paint review and rectification process before proceeding with a new inspection".
3. It is clear from the annotations included as part of the joint report, that further repair work was undertaken by Metricon. Mr Lorich stated in his first report dated 10 June 2022 that, "only one wall remained that exceeded tolerances, being the rear bedroom back wall". However, the joint report notes that, "the rear bedroom back wall was repaired" subsequently.
4. In the circumstances, there is no remaining defective work to which this item relates. No allowance will be made for this item.

1. In Mr Sherrard's second report (TB 333), Mr Sherrard includes a photograph that is captioned "garage floor - uneven finish and requires cleaning". The report provides no further description of the alleged defect. The report, immediately before the photograph (TB 332-3), quotes paragraph "18.08 Cleaning" from the Guide to Standards and Tolerances. There is no further discussion of the issue of the "uneven finish" in the later report of Mr Sherrard.
2. Mr Blumson's report noted that, "there was no defect observed". The Respondent's submissions on Mr Blumson's report stated, "The experts' inspection revealed the garage floor to have been cleaned. However, the floor was measured and marked for Mr Blumson to observe the floor is out of level exceeding the allowable tolerance, with rectification required".
3. In the experts' joint report, it is recorded, "We agree the defect as originally reported is rectified. Mr Sherrard has raised a new concern that the level from the entrance door from the house is out of tolerance, as measured by Mr Radevich at the joint inspection (12mm on the 2/4 rule, taking account of the designed slope). Blumson wasn't aware that the claim was for a deviation in level and is of the opinion that it would be reasonable to apply a more loose tolerance to the surface of a garage slab ...".
4. In my view, the issue of the garage floor being out of level was not raised appropriately by Mr To. Any unconfirmed measurements that Mr Radevich made are not matters the Tribunal should consider. There is no evidence of any defect in the garage floor. No allowance shall be made for this item.

1. Mr To alleges in items 3(b) and 3(c) of his amended counterclaim dated 22 August 2022 that Metricon prematurely claimed both the Lock-up stage and the Fixing stage progress payments. Mr To alleged that the Lock-up stage requirement that, "external doors and external windows are fixed (even if those doors or windows are only temporary)" was not complied with until a temporary garage door was installed on a date after 13 December 2019. This meant that also that the Fixing stage payment was claimed, out of sequence, before the Lock-up stage was complete.
2. Mr To claims the additional interest he paid from the date he made the Lock-up stage payment of $268,569.00 on 16 October 2019 and the Fixing stage payment of $194,151.00 on 27 November 2019, in both cases until 14 December 2019. The additional interest on the Lock-up stage payment was $1,856.44 and on the Fixing stage payment was $402.13.
3. In the amended counterclaim dated 18 November 2022 filed by Mr To's solicitor, it is alleged as follows:

"11. The builder wrongly issued multiple lock-up stage invoices from 26 August 2019 and eventually issued a lockup invoice dated 11/10/19 and which was paid by the owner.

1. The builder wrongly issued multiple fixing stage invoices from 18/10/19 and eventually issued a fixing stage invoice dated 25/11/19 and which was paid by the owner".
2. Each of these paragraphs were denied in the amended defence to counterclaim dated 9 June 2023.
3. Section 40(1) of the DBCA provides:

lock-up stage means the stage when a home's external wall cladding and roof covering is fixed, the flooring is laid and external doors and external windows are fixed (even if those doors or windows are only temporary);

fixing stage means the stage when all internal cladding, architraves, skirting, doors, built-in shelves, baths, basins, troughs, sinks, cabinets and cupboards of a home are fitted and fixed in position".

1. Section 40(2) provides that, "A builder must not demand or recover or retain [a progress payment until] the completion of a stage ...".
2. I am satisfied that:
   • Metricon made a claim for the Lock-up stage progress payment on 20 September 2019, and a claim for the Fixing stage progress payment on 18 October 2019;
   • a temporary garage door was installed on a date before 19 December 2019. I consider that this was necessary before the Lock-up stage was complete as the garage door was an "external door" of the home, notwithstanding that there appears to be a door from the house directly into the garage (TB 1502-1503);
   • the installation of at least a temporary garage door was necessary for the completion of the Lock-up stage;
   • the installation of the final garage door was probably necessary for the completion of the Fixing stage;
   • the Lock-up stage must be completed in sequence before the Fixing stage could be said to be complete (see Cardona v Brown [2012] VSCA 174; (2012) 35 VR 538 ("Cardona") at [68-9].
3. What is not clear is the date upon which the temporary garage door was installed. The photograph of the front of the house and garage taken after the scaffolding was removed, and sent by Mr Taylor to Mr To on 8 October 2019, shows an open garage with no door (TB 1419). The details of the permanent garage door were not finalised until Variation no. 10 was signed. The Variation was issued on 28 October 2019 (TB 1441) and signed by Mr To on 2 December 2019 (TB 1472). Mr Sutton wrote to Mr To on 13 December 2019 advising that the permanent door would be "installed prior to your customer presentation".
4. Mr To refers in his witness statement to the garage door not being installed in a number of paragraphs, although the references are generally without any context from which it can be understood how Mr To would have had that knowledge. The references to the garage door in his witness statement are as follows:
   • paragraph 56 (11 September 2019) - Mr Loomes and Mr To attended the property and would have observed had the garage door not been installed (TB 1177).
   • paragraph 58 (27 September 2019) - Mr To states that the "installation of garage door was still outstanding" (TB 1178). He refers to an email from Josh Taylor dated 27 September 2019 as though that was the source of his knowledge. However, the email does not refer to the garage door.
   • paragraph 63 (8 October 2019) - Mr To states that the "garage door still had not been installed". He refers to an email from Mr Taylor that day which clearly shows that no garage door, either temporary or permanent was installed.
   • paragraph 75 - Mr To said Studio M contacted Mr To "to confirm profile and colour of Garage Door for ordering" (TB 1180).
   • paragraph 78 - Mr To said that on 29 November 2019 he disputed that the house was ready for a final inspection because the "garage door had not been installed".
   • 2 December 2019 - Amy Ranaudo sent variation 10 and confirmed garage door was being ordered with supplier (TB 1182).
   • 11 December 2019 - Metricon cancelled final inspection and stated they would reschedule once garage door was installed.
   • 19 December 2019 - At the inspection that day, Mr To observed that a temporary garage door had been installed.
5. There appears to be an absence of evidence as to whether a temporary garage door had been erected by 16 October 2019 or at any time thereafter until Mr To saw the temporary garage door at the inspection on 19 December 2019.
6. There is also an absence of specific evidence from Metricon on this point. Whilst that is not decisive of the issue, I can assume that, if Metricon had produced evidence of when the temporary door had been installed, it would not have been favourable to it on this issue, and I can more readily accept the evidence of Mr To, which although not without some lack of clarity, is sufficient to satisfy me that a temporary garage door would have likely not have been installed during the period 16 October 2019 to 14 December 2019.
7. Accordingly, I am satisfied that the requirements for making the Lock-up stage progress claim were not complete when the claim was made on 20 September 2019 and when Mr To made the payment on 16 October 2019 and would not have been due until at least 14 December 2019. The Fixing stage progress claim was not payable until at least the date upon which the Lock-up stage payment was due.
8. Mr To is entitled to recover the interest payments he made to enable him to make the premature progress claims. The damages are assessed at the total amount claimed by Mr To of $2,258.57. In addition, Mr To is entitled to interest at the Penalty Interest Rate of 10% per annum from 14 December 2019 until judgment on 9 August 2023, a total of 1,334 days.

Item 28 - Bushfire Attack Level rating of 12.5 Report (STB91-94)

1. Mr Sherrard's third report dated 25 October 2022 raised the issue of whether the construction of the dwelling was sufficient compliance with the applicable Fire Attack Rating of 12.5. This required that, "all sarking to the roof must be sealed to a size opening no greater than 3 mm and all wall penetrations must be less than 2 mm" in accordance with clauses 3.6.5 "Roof penetrations", 5.4.2 "Joints" and 5.4.3 "Vents and weepholes" of AS3959:2018 Construction in Bushfire-prone Areas.
2. Mr Sherrard raised a number of matters which he considered required attention including:
   1. "All gaps to roofing and wall cladding greater the 3m need to be sealed";
   2. "The garage doors are required to be recertified to conform the BAL 12.5 provisions";
   3. "A concern is the gap to the underside of the EPS which in some areas is not sealed";
   4. "ALL penetration and weep holes are to comply the methods of sealing".
3. Mr Sherrard provided a cost estimate of $12,700.00 for "BAL FZ 12.5 requirements" without details of the make-up of the estimate.
4. Mr Blumson, in his report, noted the matters raised by Mr Sherrard, including "Gaps in walls and roofs", "Glazing to windows" and "doors". He also noted that he "was not able to find a specified requirement on the plans for any BAL rating treatment other than sarking to the roof". He suggested that, "The Building Surveyor should therefore be requested to review the BAL rating compliance for this building and provide their opinion" and "listed this item as 'pending'". Mr Blumson also "provided a ball park cost estimate to retro fit fire rating mess to the first floor roof here: $4000 incl. margin and GST".
5. The joint experts' report endorsed Mr Blumson's suggestion of seeking the advice of the Building Surveyor. The report also noted that, "the costs will be subject to any rectification required by the RBS and the ballpark figure is estimated to be in the vicinity of $4,000 - $7,000".
6. The Supplementary Tribunal Book at [489] includes a letter to Metricon dated 31 January 2023 from the supplier of the "window and door products" to the project. The letter noted that, "As per the specifications supplied, these products have been glazed to comply with AS1288-2006 Glass in Buildings -Selection and Installation, AS2047-2014 Windows in Buildings - Selection and Installation, and rated in accordance with AS3959-2018 to BAL 12.5".
7. At the hearing, Mr Sherrard maintained that there still may be a problem with the gaps he had observed in the sarking, although he had contacted the manufacturer of the sarking who had advised that, "their product doesn't need gaps to be filled". Mr Blumson stated that the only "gap" in the brickwork larger than 3mm that he had observed was where "he scratched out the mortar to view the damp proof course".
8. In my view, the existence of a likely defect has been sufficiently established. The glazing to windows and the doors would appear to satisfy the necessary requirements. I consider, however, in circumstances where Mr Blumson and Mr Lorich are not unequivocal in their responses, and in the absence of any information as to what the Building Surveyor may require, that I should decide that rectification work is necessary to satisfy the BAL rating.
9. Accordingly, I shall allow an amount at the mid-point of the estimated cost range of $4,000.00 - $7,000.00, particularly as the windows likely satisfy the requirements. I will allow $5,500.00 for this item.

Item 29 Installation of appliances, fixtures and fittings including HWS

1. The failure by Metricon to install appliances is an issue which appears to have assumed greater significance as the proceeding progressed. Neither Mr To's Points of Defence dated 16 July 2021, nor his Points of Counterclaim dated 22 August 2022 refer to "appliances".
2. The Points of Counterclaim dated 18 November 2022, which Mr To disavowed, also did not refer to "appliances". However, paragraph 14 of that document pleaded:

"14 The builder wrongly issued final stage invoices on 10/6/20 and 17/6/20 when the works were not complete".

1. In response, Metricon's Defence to Counterclaim dated 9 June 2023 (after the non-installation of the appliances had become an issue) stated:

"14 It denies paragraph 14 and says further and in the alternative that the only works which were not complete was the installation of appliances at 69 Bayview Road, Officer, Victoria (the Property).

Metricon refers to the Joint Report of Alan Sherrard, Bob Lorich, Robert Quick & Sunny Blumson dated 22 May 2023 (the Joint Report). The items expressed as defects in the Joint Report by Mr Blumson, as well as the non-installation of appliances, were trivial failures or alternatively failures borne of impracticalities which do not preclude effective and satisfactory completion. As expressed by Mr Blumson (pg 62), 'It is standard practice for builders to hold delivery of such items until same day as final payment is receive and keys are handed over. This is to avoid the possibility of theft'".

1. Paragraph 22 of the Points of Counterclaim dated 22 August 2022 pleaded:

"22. As a consequence of the builder failing to repair the defects and complete the incomplete items as described in the reports of the owner's experts the final payment did not ever become due to the builder under the building contract".

1. In response, paragraphs 22 and 25 of Metricon's Defence to Counterclaim dated 9 June 2023 makes a very lengthy reply raising many issues, as follows:
   1. Mr To "is estopped from denying the achievement of completion on the basis of non-installation of appliances";
   2. the appliances have at all times been available since prior to 10 June 2020 to be installed (see the correspondence from the supplier of the appliances and the electrical contractor at STB 490-2);
   3. Mr To "induced Metricon to reasonably expect that installation of appliances would be futile";
   4. Mr To cited other reasons for refusing to take possession. He did not request the installation of the appliances, there was a "risk of theft" if the appliances had been installed, the issue was not raised until the report of Mr Sherrard dated 25 October 2022 and Mr To had not maintained the supply of electricity and gas to the property which was necessary for the installation of the appliances;
   5. an order was sought by Metricon, pursuant to s53(2)(h) of the DBCA, that it install and recommission the appliances upon the reconnection of services by Mr To;
   6. alternatively, an order was sought by Metricon pursuant to s53(2)(ba) of the DBCA for part payment of the final payment in circumstances where, although the building works may not be complete, an occupancy permit had been granted and "the work required to complete the contract is minor in nature and not such as it would prevent the owner from occupation and quiet enjoyment of the building";
   7. alternatively, that if completion of the building works had not been achieved, the delay had been caused "by actions of [Mr To] or alternatively causes beyond Metricon's control, thereby entitling an extension of time under cl 34 of the Contract", being Mr To's failure to ensure that gas and electricity remained connected to the property.
2. In neither of the Statement of Issues filed by each party separately on 24 May 2023 is the matter of the installation of appliances specifically mentioned.
3. I accept the following evidence:
   1. Mr Loomes, after inspecting the property on 19 December 2019 at Mr To's request, stated in his report dated 22 December 2019 that, "Inspection notes - ... 2. The appliances and hot water unit had not yet been installed ..." (TB 81);
   2. there does not appear to have been a specific request by Mr To for Metricon to install the appliances;
   3. the responsibility for the maintenance of electricity and gas to the property passed to Mr To due to the passage of time, and the completion of work on site by the electrical sub-contractor;
   4. all appliances had been purchased by Metricon prior to 10 June 2020 and have since that time been available, and still are in storage and available, for installation;
   5. the building contract did not (as standard building contracts by volume builders other than Metricon do make provision for) allow for the installation of appliances on the day of or shortly after final payment and handover of possession;
   6. the installation of appliances was part of Metricon's obligations in "completing" the building works, both pursuant to the building contract and s42 of the DBCA.
4. In the circumstances:
   1. I am not satisfied that an estoppel arises or that extensions of time for completion of the building works are appropriate;
   2. I consider, in the circumstances, I should make orders pursuant to s53(2)(ba) of the Act requiring Metricon to install and commission the appliances as soon as is reasonably practicable and for Mr To to facilitate that process by taking possession of the property and having gas and electricity supplies reconnected.
5. I will otherwise make no further allowance in respect of this item.

1. The following table summarises the conclusions reached by the Tribunal in relation to each item disputed as to liability or quantum and includes the items agreed by the parties.

1. In the circumstances, it is appropriate that orders be made:
   1. for Metricon to install the appliances;
   2. for damages of $52,946.85 for the cost of rectifying incomplete or defective work.
2. I will refer to these matters in more detail later.

Mr To's counterclaim accepting Metricon's repudiation of the building contract

1. In the initial Points of Counterclaim prepared by Mr To and dated 16 July 2021, Mr To, in the concluding paragraphs, referred to Metricon's conduct amounting "to repudiation of the Contract" which he "wishes to accept". The specific allegations include:
   1. "The Respondent [to counterclaim] has failed in its responsibility to remedy defects brought to its attention and has chosen not to acknowledge the existence of clearly visible and costly defects" (para. 11(ii));
   2. "The Respondent is aware that the house has not reached Completion, yet aggressively pursues the Applicant for payment, escalating the dispute with interest charges and other costs, wilfully breaching contract" (para. 11(iv));
   3. "Complaints to the Respondent affected nothing which indicates an intention that the Respondent no longer intended to be bound by Contract. For example exhaustive efforts by the Applicant from repeated on-site meetings, DBDRV, Solicitors, a long series of complaint letters, texts and emails from the Applicant have all been ignored, denied or dismissed by the Respondent" (para. 12.0(vi));
   4. "Constant breaches of important obligations, and breaches of subsequent opportunities afforded by the Applicant, after considerable frustration, for the Respondent to continue and complete the build" (para. 12.0(xii));
   5. "It was when the Respondent demonstrated that it had as much intention of observing the subsequent opportunities as the provisions of the contract itself that the Applicant believed the respondent had acted in repudiation of the Contract; in which case the Applicant wishes to accept" (para. 12.0);
   6. Metricon "failed to complete the Works within the specified building period Schedule 1" (para. 12.1(v));
   7. Metricon "refused to accept and comply with clause 37.2. If the Owner gives the Builder a list of known defects and incomplete work the Builder must carry out the work required to rectify any defects or to do any incomplete part of the building works for the Building Works to reach Completion" (para. 12.1(ix)).
2. Mr To's Amended Points of Counterclaim dated 22 August 2022 essentially updated the claims for damages in paragraphs 1 to 9 of the original Points of Counterclaim from 16 July 2020 to 31 August 2022 and repeated the statements made in paragraphs 11, 12.0 and 12.1 of the original Points of Counterclaim as paragraphs 14, 15 and 16 of the document dated 22 August 2022.
3. The later Amended Points of Counterclaim dated 18 November 2022, apparently drafted by Mr To's solicitors, included as paragraph 24, the following pleading:

"24. The owner in his Points of Counterclaim dated 16 July 2021 filed and served in this proceeding at paragraph 12 the owner described the builder's repudiation and accepted the repudiation as terminating the contract".

Provisions of the building contract relevant to "completion"

1. In the building contract (Clause 1.0), "Completion means that the Building Works to be carried out under the Contract have been completed in accordance with the Plans and Specifications set out in the Contract".
2. Clauses 36 and 37 of the building contract set out procedures to be followed when "completion" is reached. Clause 36 is headed "Final Inspection" and cl. 37, "List of defects and Final Payment". The relevant procedures are as follows:
   • the Builder gives a Notice of Completion and the final claim (cl. 36.0);
   • the Owner must meet the Builder on the Building Site 7 days after receiving these documents (cl. 36.2);
   • at the Final inspection, the Owner is to give the Builder "a written list of all known defects and incomplete work" which both "the Builder and the Owner are to sign" (cl. 37.0);
   • the Builder "must carry out the work required to rectify any defects or to do any incomplete part of the Building Works for the Building Works to reach Completion" (cl. 37.2);
   • the Builder must "give the Owner a written notice when the work... has been done" (cl. 37.3);
   • the Owner must pay the Final Claim within a further period of 7 business days after the owner receives the notice (cl. 37.4).
3. The clauses also provide that the final claim will become due if the owner fails to comply with their obligations under this process (cls. 36.3, 36.4 and 37.1). Further, the payment of the final claim by the owner is not evidence that there are no defects or incomplete work nor a waiver of any rights under a statutory warranty (cl. 37.5).
4. The contractual provisions for the final claim are significantly different to those relating to progress payments in cls. 29 and 30, which provide that:
   • "The Builder must give the owner a written claim for each progress payment" (cl. 29.0).
   • "The Owner must pay the amount of the Progress Payment... within [7] days after both:
     • the stage has been completed [emphasis added]; and
     • the Owner has received a written claim for the Progress Payment" (cl. 30.0).

Metricon's obligations to complete the building works

1. It is necessary to consider Metricon's obligations pursuant to the building contract, and generally at law, in light of the findings about the defective and incomplete work presently apparent in the building work. Those findings, in my view, lead to the conclusion that the building works are not now, and have never been, "complete" in accordance with the building contract.
2. Further, Metricon has made the following concession in the proceeding:

"The Applicant (Metricon) concedes that to the extent that the installation and commission of appliances is a requirement for completion in accordance with s42 of the Domestic Building Contracts Act 1995 (Vic), the cooktop, fireplace, hot water service and rangehood have not been installed and commissioned by Metricon, and completion has therefore not been achieved".

1. In Victoria, two recent decisions by higher courts have considered the circumstances when building works might be regarded as "complete". The first limb of s42 of the DBCA, under the heading, "When work is to be considered to have been completed", provides (relevantly) that, "A builder must not demand final payment under a major domestic building contract until - (a) the work carried out under the contract has been completed in accordance with the plans and specifications set out in the contract; and (b) the building owner is given ... a copy of the occupancy permit".
2. In Cardona at [74], Tate JA, with whom the other members of the Court of Appeal agreed, stated (with footnotes omitted) that:

"It is necessary for there to be 'effective and satisfactory' completion of the required stage ... [as] a condition of any instalment payment and while trivial failures, or failures borne of impracticalities, do not preclude effective and satisfactory completion, it is noteworthy that the dispute in relation to the trusses was not resolved until the first day of the hearing before VCAT. That resolution involved work being done on the trusses to strengthen them in accordance with the recommendations of a consultant engineer. The 'final approval' was not given until Mr Kidd undertook a personal inspection on 13 March 2007" [emphasis added].

1. The citation for the part of the passage I have emphasised from the judgment of Tate JA was a reference to Hudson's Building and Engineering Contracts 12th edition. As the 15th edition states at paragraph 3-066, "It was consequently in the field of construction contracts that the courts evolved the doctrine of substantial performance. This doctrine is that payment is due in an entire contract if there is a substantial performance, that is 'a man fully performs his contract in the sense that he supplies all that he agreed to supply but what he supplies is subject to defects of so minor a character that he can be said to have substantially performed his promise'".
2. Cardona was a decision about the state of completion of the works required before a claim for a progress payment may be made. It was essentially a case decided on its facts and by reference to, and construction of, the applicable contractual and statutory provisions, including the definitions of the relevant stages at which the progress payments were due.
3. On the other hand, Saath Pty Ltd v Seascape Constructions Pty Ltd & Anor [2021] VSC 358 ("Saath"), was a case involving a final payment claim. At paragraphs 96-99, Stynes J referred to the definition of "Completion" in the contract which provided that completion occurred, "when the Works to be carried out under the Contract:
   • have been completed in accordance with the Plans and Specifications; and
   • if a building permit was issued for the Works, the owner is given an occupancy permit...".
4. In the present building contract, "Completion means that the Building Works to be carried out under the Contract have been completed in accordance with the Plans and Specifications set out in the Contract and is the day on which the Builder provides the Owner with the Notice of Completion (as issued pursuant to Clause 36.0)". Clauses 36 and 37 of the building contract set out procedures to be followed when "completion" is reached.
5. In my view, the present contractual provisions for the final payment (as compared with those for progress payments) are unlikely to distinguish the case from Cardona and Saath where the contractual provisions were construed as requiring any non-compliance to be limited to "trivial failures or failures borne of impracticalities".
6. In Saath, the terms of the relevant clauses, although likely to be similar, may not have been precisely the same as in the building contract. I note also that, in Saath, Stynes J stated in paragraph [106] that in regard to her conclusion on the "error" by the Adjudicator in construing the meaning of "Completion" in the contract before her, "neither party raised it or made submissions in relation to it".
7. In fact, as Stynes J records at paragraph 109, "The parties agreed that trivial failures or failures borne of impracticalities do not preclude effective or satisfactory completion of the Works [citing Cardona]. However, neither sought to rely on the construction of 'Completion' adopted by the Adjudicator [that 'the Contract does not require that there be zero defects and/or incomplete work items']".
8. In the present case, the processes in the building contract anticipate the likelihood of defective and incomplete work being found during the processes, and the possibility of differences of opinion between the builder and the owner about what is defective or incomplete work.
9. However, protections are provided. So long as the owner complies with their responsibilities under the processes, the builder must rectify the defects identified by the owner and the final claim is not payable until 7 business days after the builder gives notice that it has completed the listed defective or incomplete work. Further, neither party, by following the processes, concedes conclusiveness of, or admits the description of, the listed works. These matters do, therefore, anticipate that the processes themselves may give rise to disputes or leave some matters unresolved, even if the processes are followed.
10. In the present case, Mr To submits that Metricon did not rectify the incomplete or defective work notified to it by him, and accordingly, Metricon did not complete the building work as it was required to do (cls. 37.2 - 37.4 of the building contract) before it was entitled to payment of the final claim.
11. It is appropriate to summarise the conduct of the parties from the date Metricon notified Mr To that the dwelling was "complete" and ready for the "final inspection" (6 December 2019) and the date Mr To purported to accept Metricon's repudiation of the building contract and bring it to an end by his counterclaim dated 16 July 2021.
12. Mr To's witness statement attests to the difficulties he found working with Metricon. During the contract negotiations, prior to the building contract being executed, Mr To records many instances when he was disappointed with the service provided by Metricon staff. At times, Mr To escalated his issues to Metricon management to resolve matters.
13. During construction, particularly in his dealings with the site manager, Mr Taylor, Mr To was in constant communication seeking information, providing photographs and other material including product information and building standards. There was debate each time Metricon claimed a progress claim as to whether the stage of the works was complete. The tone of the communications worsened in around late November, early December when Metricon claimed that the works were complete and sought a final inspection.
14. A series of inspections followed with repeated complaints by Mr To of items requiring rectification. During this period, Mr To accused Metricon of deceit, intimidation, neglecting its contractual responsibilities and not acting reasonably in seeking resolution of the issues between them.
15. Much of the correspondence between the parties, particularly after 9 July 2020, might be regarded as privileged, although any privilege has presumably been waived by Mr To annexing the documents to his witness statement. The correspondence foreshadows the probability of legal proceedings and often uses the language of ongoing negotiations. On one occasion, Mr To referred to an offer by Metricon on 7 September 2020 as indicative of its "use of intimidation and coercion" (TB 1199) and Mr To described a letter from Metricon later in September as making "inflammatory, unfounded and baseless allegations" (TB 1200).
16. I will not attempt a comprehensive analysis of the parties' dealings. For the purposes of the proceeding, it is necessary that I determine the question of whether Metricon's conduct was such that Mr To was justified in accepting that conduct as sufficient indication that Metricon was repudiating its contractual obligations.
17. In that regard, the critical issue is whether between December 2019 and July 2021 (and particularly, as at 10 June 2020), Metricon had been appropriately addressing the items of construction work that required completion or rectification.
18. The following table sets out a summary of the relevant events, concentrating on the critical period I have referred to:

At Mr To's request, Mr Loomes inspected the works completed on site and reported.

Email from Metricon to Mr To enclosing "Notice of Completion", and claim for "Completion Stage payment" of $77,662.00 (TB 425). Notice of completion requested Mr To to "attend a final inspection of the dwelling to identify and list any defects and those defects are to be rectified before the Completion Stage payment is paid and the house is handed over".

Final inspection scheduled by Metricon. Mr Loomes attended and later Mr To. Mr Taylor prepared "a report of defect items to be completed prior to completion" (TB 481) All items on the list were, according to Mr Taylor, subsequently rectified by Metricon and "ticked-off" the list. Mr To said that, at the inspection, he was "continuously pressured to leave" and that it was agreed with Metricon that it would not be treated as a "final inspection" and that Metricon would do a "thorough paint and plaster review".

Mr Loomes' report from the inspection (TB 429). Mr To said Loomes told him he would provide a "general" rather than a "final report", that the site was "defective and not clean" and that, "when I received the report, I should have the builder complete the items listed".

Mr Loomes' report provided to Metricon after it requested a copy in order that the report could be treated as part of the "client list" from the "final inspection".

Occupancy permit issued (TB 1155). The permit was provided to Mr To on 20 February 2020.

Metricon issued a notice to Mr To advising that, "defects notified had been rectified and final payment was due within 7 days" (TB 445). Payment was not made by Mr To.

Mr To issued a notice of dispute with Domestic Building Disputes Resolution Victoria ("DBDRV") and advised Metricon on 5 March that the dispute had been issued.

Further "final inspection" agreed to by Metricon after a request by Mr To. Mr To said Mr Taylor and Mr Sutton told him that the rectification work was not finished. Following the inspection, Mr To provided Metricon with a "207 page document [noting] a further 417 items of alleged defects" (TB 507). Items on the list were claimed by Metricon to have been subsequently rectified by Metricon and letters of warranty were obtained from product suppliers. Mr To's defects list with Mr Taylor's notations of work undertaken is at TB 715. Mr Taylor said that Mr To asked him to "mark each brick that [Mr To] considered to be defective". Photographs of the marked bricks are at TB 923. Metricon determined that, "no further work was required to be carried out in respect of the brickwork".

Metricon sent an email enclosing notice of completion and advising that, "defects identified by you ... were completed on the 10 June 2020 [and] final payment is due within 7 days" (TB 447). Payment was not made by Mr To.

Inspection on site. Metricon wished to check-off defective items as complete. Mr To wished to examine the property. Mr To was told to leave, and later, he was informed that the police had been called. Metricon claimed that Mr To was not entitled to a "re-inspection".

Email from Metricon to Mr To advising that final payment was required to be paid (TB 1597).

Metricon received a copy of Mr To's complaint from DBDRV. The document listed 105 items of defective work and 8 further general complaints.

Metricon issued a notice advising that Mr To was in "substantial breach" of the building contract by failing to make the final payment. The notice requested that Mr To "rectify the breach" (including the payment of interest) within 10 days (TB 1159). Mr To did not make a payment. Metricon said it "decided not to terminate the Contract and to retain possession of the house until the full contract price had been paid by Mr To" (TB 939 paragraph 28).

Metricon responded to Mr To's complaint to DBDRV item by item, generally responding by indicating that the item "has already been fixed", "no issue "identified" or "no defect visible from normal viewing distance". (TB 1600)

Metricon denied further access until final payment was made and stated that, "After settlement, you can submit further reports or lists to us which will be addressed at the end of the 3 month defect liability period" (TB 1625).

Mr To visited the site and was critical of what he found. He said, "It was clear that Metricon was suspending building works and only returned to carry out sub-standard work on site to support its fraudulent demands for final payment and interest for late payment" (TB 1200).

Building Consultant, Tony Croucher, after inspecting the property at Metricon's request on 19 October 2020, reported on 27 October that, "It is my opinion the home is finished to a very good standard with some minor adjustments and repairs required" (TB 372).

Counterclaim filed by Mr To alleging acceptance of Metricon's repudiation of the building contract.

1. Mr Croucher's report is dated 27 October 2020. He stated, "My instructions were to carry out a 'Handover' inspection noting any items of defective work observed" (TB 353). Mr Croucher was provided with certain documents, including Mr Loomes' report dated 22 December 2019, the occupancy permit dated 19 February 2020 and Mr To's defects list of 207 pages.
2. Mr Croucher stated, "I am advised construction of the home was completed sometime in 2019 however the Owner alleged numerous defects existed within the dwelling and refused to settle. It is my understanding the Builder has addressed the majority of items requiring rectification (based on industry standards). It is my further understanding the Owner still refuses to accept the dwelling and settle as it is his opinion the dwelling has not been constructed to his standards. Accordingly, I was instructed to inspect the dwelling as if Handover was about to occur and list any defective items of work for the Builder to rework if necessary" (TB 353).
3. Mr Croucher said, "In my opinion, the home presents in very good condition. I am advised the home has been completed for approximately 12 months and has not been inhabited for that time. I expected the home to require numerous adjustments and minor repairs such as filling of cracks etc as it has been sitting uninhabited. I was surprised to find the expected settlement cracks and blemishes were not present" (TB 354-5).
4. Mr Croucher's report contained 18 pages of photographs - both outside and inside, room by room (TB 355-372). He concluded, "As noted earlier in this Report, it is my opinion the home is finished to a very good standard with some minor adjustments and repairs required" (TB 372).
5. Mr Mladichek inspected the dwelling and reported on 8 July 2021. Mr Sherrard's first report was dated 9 November 2021. He estimated the total cost of rectification as $556,978.00.
6. Mr Lorich inspected the property on 11 May 2022 and reported on 10 June 2022. In his report, Mr Lorich stated, "The major claim is that completion has not been achieved by Metricon, however it is clear from my recent inspection that completion of the works has been achieved, save for several minor defects that are noted and commented on in this report. Minor defects are considered as typical 'Handover' items which are usually rectified by the builder promptly after the inspection" (TB 390).
7. Mr Quick first inspected the property on 11 May 2022 and reported on 31 May 2022. The estimates of the cost of rectification were stated by the experts in their reports, as follows:
   1. 9 November 2021 by Mr Sherrard - $245,034.00;
   2. 19 August 2022 by Mr Lorich - $9,353.30 or $5,888.30 without floor level rectification works;
   3. 20 March 2022 by Mr Sherrard - $556,978.00;
   4. 25 October 2022 by Mr Sherrard - $589,711.00;
   5. 10 June 2022 by Mr Lorich - $5,888.30;
   6. 31 October 2022 by Mr Lorich - $5,698.00;
   7. 16 March 2023 by Mr Blumson - $37,511.59 together with allowances which may be made after further investigations by others.
8. A comparison of the allowances each expert made, item by item, has not been attempted. However, it is noted that major claims made by Mr Sherrard have either been rejected outright by the Tribunal or allowances made in substantially reduced amounts. The major items are as follows:
   1. replacement of windows and glazed doors because of the absence of packers;
   2. the replacement of all brickwork;
   3. removing the roof to rectify connections to trusses;
   4. replacement of flooring on the first floor and wall framing.
9. On the other hand, it cannot be said that the Tribunal's findings, and the concessions made by Mr Lorich, during the joint consideration of the issues by the experts, provides any endorsement to the views expressed by the experts on behalf of Metricon in their reports, including:
   1. Mr Croucher's comment in his report dated 27 Ocober 2020 that, "it is my opinion the home is finished to a very good standard with some minor adjustments and repairs required";
   2. Mr Lorich's comment in his report dated 10 June 2022 that, "completion of the works has been achieved, save for several minor defects";
   3. Mr Lorich's costings in his report dated 31 October 2022 that $5,698.00 was an appropriate estimate for the rectification of defects;
   4. Metricon's concession in relation to the installation and commissioning of the appliances.
10. It appears that Mr To was persistent and exhaustive in his recording of what he considered to be Metricon's defective workmanship and that he was, no doubt, encouraged in his approach by the views put forward by Mr Sherrard which, at times, were based upon speculation rather than conclusions resulting from forensic investigation.
11. At times, Metricon's approach was impatient (for example when it prevented or curtailed inspections by Mr To), whilst at other times it appears that Metricon made meticulous attempts to comply with its contractual obligations to rectify defective work. It chose, however, to rely on the encouraging views of Mr Croucher and initiated the proceeding at VCAT shortly after receiving his report. Mr Croucher's views were largely supported by Mr Lorich when he later reported and prepared estimates of what he considered was the fair price to rectify the defective work.
12. For perhaps too long, the parties exchanged a war of correspondence from increasingly entrenched positions. As time went by, the hope by Mr To that Metricon would carry out any further rectification work became increasingly unlikely. He was left with no alternative than to bring the contract to an end, and to thereby release Metricon from its obligation to further perform the building contract. By doing so, Mr To accepted responsibility for what was then to happen with the defective works.
13. In my view, the building contract was brought to an end on 16 July 2021 by Mr To filing his Points of Counterclaim. This document expressed Mr To's view that Metricon's conduct constituted substantial breaches of the building contract and it was his wish to accept that conduct as a repudiation of the contract. The conduct of Metricon, in failing to rectify some significant defects that had been indicated to it, justified the action of Mr To in treating that conduct as a repudiation of the contract which, upon his acceptance, brought the building contract to an end.

1. Mr To claims common law damages, as a consequence of the delayed "completion" of the contract works. The building contract entitled him to liquidated damages of $250.00 per week as specified in cl. 40 of the building contract.
2. Clause 40 of the building contract is headed "Owner's claim for agreed damages" and reads as follows:

"40.0 If the Building Works have not reached Completion by the end of the Building Period the Owner is entitled to agreed damages in the sum set out in Item 9 of Schedule 1 for each week after the end of the Building Period to and including the earlier of:

• The date the Building Works reached Completion;
• The date this Contract is ended; and
• The date the Owner takes Possession of the Land or any part of the Land.

40.1 The Owner may deduct the amount of any such damages from the Final Payment".

1. Item 9 of Schedule 1 to the building contract specifies "$250.00" as the "Agreed damages for late completion of the Building Works".
2. In order to establish a claim under cl. 40, the owner must prove that, "the Building Works have not reached completion by the end of the Building Period". In that event, the owner is entitled to $250.00 for each week "after the end of the Building Period to and including the earlier of" three possible dates; in this case, "the Date the Building Works reached Completion", was never reached. The relevant date therefore is "the date this contract is ended", on 16 July 2021.
3. The owner is entitled to liquidated damages "for each week after the end of the Building Period". The "time for completion" specified in cl. 1 of Schedule 1 and cl. 10 of the building contract was 342 days following the "actual day of commencement" of building work. Clause 1 of Schedule 1 provides that, "The building period is 342 days" and notes that, "the building period is the total of the days of actual building work and the estimates for delays".
4. The parties have agreed, in the Counterclaim "pleadings", that, "work began on site on 14 June 2019". Considering the building period of 342 days, "works ought to have been completed by 28 May 2020, including an extension of 7 days for Variation 11".
5. In regard to Mr To's claim for delay damages, I am satisfied that he has a claim pursuant to cl. 42, for the period from 28 May 2020 to 16 July 2021, a period of 59 weeks and 1 day. At $250.00 for each week of this period, Mr To would be entitled to liquidated damages of $14,785.71.
6. However, Mr To claims damages for delay. Metricon has pleaded that, "liquidated damages are the sole remedy under the Contract". It is necessary, therefore, to consider whether the delay damages should be capped at the figure for liquidated damages of $250.00 per week specified in the building contract or whether Mr To is entitled to have delay damages assessed at large.
7. The legal principles which I must apply in this case are that Mr To is limited to the agreed liquidated damages of $250.00 per week unless the agreed sum is too great, so as to be regarded as a "penalty" and not a genuine pre-estimate of loss, or too small, as to be regarded as an inappropriate limitation on a party's entitlement to damages for breach. It was not suggested by Metricon that the sum of $250.00 was a penalty.
8. In J-Corp Pty Ltd v Mladenis [2009] WASCA 157 ("J-Corp"), a decision of the Western Australian Court of Appeal, Newnes JA (with whom the other members of the Court of Appeal agreed) stated at [35] and [36], as follows:

"35 It is clear that the parties to an agreement may, as part of their agreement, fix an amount that is to be payable by way of damages in the event of a breach of the agreement. Provided the amount so fixed is a genuine pre-estimate of the damage that would arise from the breach, and not so out of all proportion as to be by way of a penalty, that amount is recoverable without proof of the actual loss caused by the breach. It is immaterial that the amount of the actual loss turns out to be less than the amount specified. Equally, if the actual loss turns out to be greater than the amount of the liquidated damages, the claimant cannot ignore the liquidated damages clause and sue for unliquidated damages: Diestal v Stevenson [1906] UKLawRpKQB 92; [1906] 2 KB 345; Talley v Wolsley-Neech (1978) 38 P & CR 45 (CA). That is, ordinarily a valid liquidated damages clause fixes the amount that is recoverable in the event of a breach, regardless of whether the claimant's actual loss is greater or less than the amount specified.

1. The position would appear to be the same where the amount specified is, not so disproportionately large as to be a penalty, but on the contrary so small that it cannot be regarded as a genuine pre-estimate of the probable loss. In such a case, the clause has been regarded as akin to a clause limiting the extent in damages of a party's liability: McGregor on Damages (17th ed, 2003) 13-071".
2. In Hacer Group Pty Ltd v Euro Façade Tech Export Sdn Bhd [2022] VSC 373 ("Hacer"), Stynes J followed the decision in J-Corp, stating at paragraphs [179] to [182], as follows (with footnote references omitted):

"179 If the actual loss turns out to be greater than the amount of liquidated damages, the claimant cannot ignore the liquidated damages clause and sue for unliquidated damages. That is, ordinarily, a valid liquidated damages clause fixes the amount that is recoverable in the event of a breach, regardless of whether the claimant's actual loss is greater or less than the amount specified.

1. In my view, two factors in combination weigh heavily in favour of finding that a liquidated damages clause provides an exhaustive remedy for delay:

(a) if a positive sum of liquidated damages has been stipulated under the contract. In this case, Schedule E of the Subcontract sets out a positive sum for liquidated damages in relation to each milestone date of $9,500.00 per day capped at 5% of the contract price; and > > (b) if the liquidated damages clause is mandatory.

2. In my view, clause 29 of the Subcontract is mandatory. The language used does not evince an intention of the parties to confer a discretion to opt for common law damages over the liquidated damages provided for in the Subcontract.
3. Consequently, I consider that the mandatory language in clause 29, in conjunction with the positive sum specified for liquidated damages, indicates that the parties intended to be bound exclusively by the liquidated damages regime. Accordingly, I find that Hacer's entitlement to damages for delay is limited to the recovery of liquidated damages under clause 29".
4. In my view, Stynes J was not intending to derogate from the judgment in J-Corp by referring to a relevant requirement in all cases as being, "if the liquidated damages clause is mandatory". In each case, the Court or Tribunal must construe the relevant clause or clauses of the contract. In many of the reported cases, where this issue has been decided, the amount of liquidated damages has been specified as "nil" or "n/a" [not applicable] or left blank (either with or without some indication on the printed form as to what the default position might be). In these circumstances, a determination must be made as to the effect of the contract provision and whether all damages are excluded.
5. J-Corp was also followed by Dixon J in the Supreme Court of Victoria in the matter of Dura (Australia) Constructions Pty Ltd v. Hue Boutique Living Pty Ltd (No. 3) [2012] VSC 99 at paragraph [644].
6. In the present case, the amount of $250.00 per week was specified as the amount of liquidated damages. In the circumstances, Mr To is not required to prove his actual loss but is limited to recovering no more than that sum for the period until the building contract was terminated on 16 July 2021.
7. Accordingly, Mr To is entitled to liquidated damages totalling $14,785.71 for the period to 16 July 2021.

1. Apart from the cost of remedial building works, Mr To claims further losses, as follows:
   1. extra interest incurred on the investment construction loan;
   2. extra interest on the construction loan;
   3. loss of rental income;
   4. legal costs;
   5. building consultants' reports;
   6. private investigator report;
   7. council rates;
   8. cost of utilities;
   9. mowing of vegetation and weeds;
   10. non-delivered contract items.
2. In my view, although Mr To's damages for delay should be limited to the figure of $250.00 per week for the reasons set out in the previous part of these reasons, after termination of the building contract, damages are at large. The principal reason for this is that the building contract itself limited the application of liquidated damages to "the date this contract is ended".
3. Mr To chose to terminate the building contract by accepting Metricon's conduct in failing to rectify defective work as a repudiation of its obligations under the building contract. Having terminated the building contract, Mr To could no longer expect Metricon to rectify the defective workmanship. That was now his responsibility.
4. As Mr To has made a number of separate claims for damages, I will deal with each of the claims in turn.

a. extra interest incurred on the investment construction loan

1. In my view, this claim cannot be sustained. So long as Mr To retained ownership of the property, he would continue to pay interest on whatever loans he had, for so long as those loans were held and at the interest rates which were applicable over that period. The loss Mr To has suffered is the net rental income he would have earned during the period the property is rented.

1. I have allowed this matter when considering Item 27 of the "defects"; the "completion of stages" of construction.

1. In the Counterclaim filed by Mr To's solicitor on 18 November 2022, it is claimed that, "As a consequence of the builder failing to repair and complete the defects and incomplete items as described in the reports of the owners' experts' reports the builder has been and is in breach of contract, being the section 8 warranties, for which the owner is entitled to damages or compensation in the amounts [including] ii. lost rental income at $650 p.w x 64 weeks = $41,600".
2. In his Counterclaim dated 22 August 2022, Mr To claimed "Loss of Rental Income. [Metricon] was informed that time was of the essence from the outset and had the knowledge that any delays in completing the build would lead to loss of rental income and costs to the Applicant. By way of a written notice during contracting on 18 January 2019, the Respondent [Metricon] was unequivocally reminded that, 'it is costing me money every day by not having a house on my land to be rented'. The Respondent [Metricon] entered the Contract on 25 February 2019, upon knowing time was of the essence and therefore ought to be accountable for its non-performance, protracted delays in completing the build, and breaches of the Contract, which has subsequently led to the consequential loss of substantial rental income for the property. The Applicant relies upon and refers to Hadley v Baxendale 156 ER 145 and Koufos v C Czarnikow. The Applicant seeks orders for the Respondent to pay the amount of $76,700.00 (accruing), to compensate the Applicant for the substantial loss of rental income. (Attachment 2 - Rental Appraisals - 69 Bayview Road Officer VIC 3809) The loss of rental income incurred is as calculated below: The rental value of comparable rental properties in the area, as appraised by local real estate agencies is $650.00 per week. Lost Rental income commencing from 28/05/2020 to 1/09/2022, the time of writing, which is 118 weeks at $650 per week = $76,700.00 (accruing)".
3. I have determined that, until the building contract was terminated by Mr To on 16 July 2021, his damages were capped by the figure agreed for liquidated damages in the building contract. After the contract was terminated, Mr To's damages were at large.
4. In those circumstances, it was incumbent upon Mr To to take steps to complete the outstanding works. Mr To has said that he, at all times, had made clear to Metricon that he intended to rent out the property. A certificate of occupancy had been issued on 19 February 2020. Of the defective work items that I have found Metricon liable for the cost of rectification, none of them in my view, would prevent occupancy of the premises.
5. However, services would need to be connected and the appliances installed and commissioned before a tenancy could commence. It would also, in my view, be appropriate to allow time to organise the rectification works and, at least, to complete the major items which would cause unnecessary disturbance to occupants of the dwelling.
6. The building contract was executed on 25 February 2019. On 18 January 2019, Mr To wrote to Metricon a long letter complaining of the delays in finalising the building contract. In the penultimate paragraph at TB 1212, Mr To stated, "I can no longer agree to have contract pushed back any further, as it is costing me money every day by not having a house on my land to be rented". It cannot, therefore, be asserted by Metricon that loss of rental income was not a reasonably foreseeable loss to Mr To, if Metricon were to delay the completion of the contract works.
7. In arriving at an appropriate period of loss, I need to take into account a number of factors, including:
   1. the nature and extent of the rectification work;
   2. the areas of the house affected which would allow trades to work in different areas at the same time;
   3. information derived from the estimates for the work provided by Mr Blumson, including the cost, trades involved, hours of work estimated;
   4. the fact that most of the work could be undertaken concurrently with other work;
   5. by the alternative orders I intend to make, Metricon will complete the installation of appliances that otherwise would have fallen to Mr To to organise.
8. The following table brings together the factors considered relevant in making a determination as to how long the rectification work might take to complete:

1. Based on the estimate I have made and using the available information, it is likely that it would take at least 7 (5 day working) weeks to complete the rectification work that I have found is necessary as a result of Metricon's breaches of the building contract and at law. I should also make allowance for the following matters:
   1. time will be needed to plan and organise the execution of the work and to engage a contractor or the necessary trades directly;
   2. much of the rectification work can be performed concurrently;
   3. some work, in isolated areas outside the house or involving the garage, might reasonably be performed whilst the house was being occupied;
   4. at the relevant time, if Mr To was undertaking the rectification and completion works, they would have needed to have included the installation and testing of the appliances before occupation of the house;
   5. Mr To would have expected that part of the post-termination period, and prior to the completion of rectification work, would be without rental income. This would happen in the normal course of arranging for a tenancy before occupation commenced (engaging a real estate agent, advertising, selecting a suitable tenant, executing a tenancy agreement and attending to other statutory requirements) and the likely expenses of an agent doing this work (usually at the cost of at least one week's rental). Most of these matters could likely, however, be attended to whilst rectification work was being undertaken.
2. Accordingly, I have determined that Mr To is entitled to damages for a further period of 15 weeks (approximately 3.5 months) from 16 July 2021 to 29 October 2021. In calculating this period, I have essentially multiplied my estimate of 35.25 days by a factor of 3 to allow for all contingences in the planning and execution of the work and securing a tenant for the property. I will not otherwise make any deduction for likely lost rental charged by the agent for securing a tenant.
3. It is necessary to determine the appropriate amount of lost rental to allow. In relation to the weekly rate, Mr To has supplied 3 letters from real estate agents in the vicinity of the property.
4. The letters are as follows:
   1. 22 June 2021 from Jade Robertson Property Manager Century 21 Preferred Berwick (TB 2033)

"Thank you for allowing Century 21 Preferred to provide a rental appraisal on your above-mentioned property. Given the current rental market conditions, we believe you could achieve a rental amount of approximately $650 per week. Should you require any further information ...";

1. 6 May 2022 from Roula Kapotis Team Leader and Senior Property Manager Barry Plant Berwick (TB 2034)

"Thank you for your email. The property looks amazing. Thank you for the photos. In regards to the rental, there is only one property in the area that has achieved a price of $700.00. I have attached a rental report for your perusal, with most properties sitting below $500.00. In saying that and now seeing what the property has to offer, I believe you could achieve somewhere in the 600.00's however, the market will tell us where the property is sitting once it goes live. Let me know your thoughts". [the "photos" and the "rental report" referred to were not in the Tribunal Book];

"Thank you for allowing me the opportunity to appraise your abovementioned property. We estimate the property could lease for $650 per week. This appraisal has been conducted as a desktop appraisal only. Considerable care has been taken to provide you with the most accurate estimate possible based on our professional knowledge of the area, prevailing market trends and recent lettings of comparable properties. Should you have any further queries please do not hesitate to contact our office".

1. Each of the letters offers an expert opinion about the expected rental. None of the letters are supported by the material, which is required to ensure that the opinions expressed have a reasonable basis. Only the second letter provided supporting material, although the documents referred to were not included in the Tribunal Book. The letter refers to the fact that the "rental report [shows] most properties sitting below $500.00".
2. Material available on the internet from https://abs.gov.au/census/find-census-data/quickstats/2021 (and Google Maps in relation to distances by road) discloses the following information:

1. There is also statistical material available via screen capture from realestate.com showing the market rental for a 4 bedroom house in July 2021. Data for a 5 bedroom house was not available. The median rental price for a 4 bedroom house in Officer in July 2021 - Jun 2022 was $460.00 per week based on 242 houses leased.
2. I consider, in all the circumstances, that I should use a range of $500.00 to $550.00 per week as a more realistic figure for the property, considering its location, size and the newness of the house.
3. I have referred to further matters that should be taken into account, including the time it would take to advertise, select tenants and let the property. These matters might take up to 3 weeks and it is likely the agent's letting fee would cost a further week's rent. There are other contingencies, including a tenant defaulting in paying rent or leaving the property requiring reletting. It is likely, however, that the nature of the dwelling and careful selection of tenants would minimise these latter possibilities. I have taken all of these matters into account in determining that 15 weeks would be the appropriate period that it would take to rectify all defects and have the property ready to be occupied.
4. I consider, however, that it would be appropriate to deduct 5% from the rental likely to be received as the real estate agent's management fee in respect of the rental payments.
5. Accordingly, I will allow the sum of $7,875.00, being 15 weeks at $525.00 per week less 5% ($393.75) for the agent's commission as the likely rental income lost as a result of Metricon's failure to complete the works and rectify defective work. The loss is therefore $7,481.25. I shall allow this sum as Mr To's damages for delay as a result of Metricon's failure to rectify the defective work.

1. Legal costs, if ordered at all, will be considered after the decision is handed down and further submissions are received from the parties on this issue.

1. Building consultants' reports, if to be the subject of compensation, will form part of a party's legal costs and disbursements, if such an order were made in that party's favour.

1. It is unlikely that this expense would be allowed. If it were, it would need to be a justifiable part of a party's legal costs and disbursements. The cost of employing private investigators to ascertain whether Metricon was doing, secretly, what Mr To wished it to do (to rectify defective work), would be unusual. The report is dated 6 September 2021 and consists solely of photographs. The report is at TB 1744.

1. These costs would have been payable for so long as the property was held by Mr To. What he potentially lost was the rental income during the delay period.

1. The same comment as for the council rates applies to this item.

1. In his counterclaim dated 22 August 2022, Mr To claims the cost of "Non-Delivered Contract Items [that] the Respondent has failed and/or refused to provide and install".

Mr To seeks payment of the amount of $19,588.00 for the following non-delivered Contract items:

Undermount rangehood, 900mm Elica IXGL/A/90 Hidden S/Steel White Glass

InAlto MC25BF Convection Microwave w/integrated trim kit

InAlto DWI62CS 600mm Integrated Dishwasher with cutlery trays

4 x Legrand Arteor Mirror White/White Double Powerpoints ($190 each)

2 x Methven Aio Aurajet Rail 228563 8 chrome shower outlet (Ensuite, Item 142)

Pair of Southern Star Windows, 'Commercial D' handles for Family and Outdoor room sliding door

Additional Dulux Acrashield Advance finishing coat (Item 29)

1. The appliances (range hood, dishwasher, oven and cooktop) will be supplied by Metricon in accordance with the orders proposed. The orders will precisely specify the particular items to be installed.

Item 6 - 4 x Legrand Arteor Mirror White/White Double Powerpoints

1. Photographs 137-139 in the document "Respondent's response to List of Photos taken by Applicant 2019" include the powerpoints. Although I indicated in the order dated 1 August 2023 that I would ignore Mr To's commentary, I record the commentary for each of the photographs, as follows:

"incorrect double powerpoints in the kitchen. 4 x Legrand Arteor Mirror White-White Double Powerpoints not installed as required by the Contract. Page 3 of the Contract's electrical upgrades list dated 29/01/2019 (Tribunal book at page 1704) specifies an upgrade from four standard Powerpoints to four Legrand Arteor Mirror White-White Double Powerpoints. The Applicant charged the Respondent $760 for four of the upgraded Legrand Arteor Mirror White-White Double Powerpoints. The Applicant has not installed the four Legrand Arteor Mirror White-White Double Powerpoints. The contract's ground floor electrical floor plan shows the locations where the four Legrand Arteor Mirror White-White Double Powerpoints were supposed to be installed. (Tribunal book at page 1091)".

1. At TB 326-7, Mr Sherrard's second report notes, "5.2.11 ELECTRICAL FITTINGS The installation of electrical power points to the kitchen areas does not match the specification, RECTIFICATION Remove existing power points and replace to match specifications" with photographs of "supplied and installed GPO" and "specification diagram of GPO required to be installed".
2. At the view, this matter was discussed. However, my recollection is that it was discussed in the context of the photograph of what Mr Sherrard described in his report as "specification diagram of GPO required to be installed". It appeared at that time that there was some reasonable doubt that what had been installed was not what was shown in Mr Sherrard's photograph.
3. It is apparent from the document at CB 1074 (not CB 1704) that 4 powerpoints described as "Arteor Mirror White/White" finish were to be installed at an upgraded cost of $190.00 each, totalling $760.00.
4. The ground floor electrical floor plan at TB 1091 shows the location of the 4 powerpoints. Although finalising the location of powerpoints was an issue that was raised in correspondence from Mr To to Metricon contained in the Tribunal Book, it is not the issue in dispute.
5. The sole matter in dispute is whether the powerpoints installed were as specified. This issue was not addressed specifically, except in Mr Sherrard's report. Mr Lorich's response in his report dated 10 June 2022 to Mr Sherrard's photograph and opinion that, "The installation of the power points to the kitchen areas does not match the specification" was that, "No defect was now evident". I do not consider that Mr Lorich's comment was unreasonable.
6. The matter was not otherwise raised in the material placed before the Tribunal. No further detail was available in Mr To's final submissions. Mr To did provide a draft document of 231 pages to the Tribunal and Metricon on 29 June 2023. I indicated that I would not consider any further material until an application was made in accordance with the appropriate VCAT processes. The amended document I earlier referred to, containing photographs 137-139 and commentary, was not received until 31 August 2023.
7. The powerpoints were not mentioned under the heading "8 - Non-Delivered Contracted Item" in the counterclaim filed by Mr To on 16 July 2021. However, in the amended counterclaim dated 22 August 2022, the item "6. 4 x Legrand Arteor Mirror White/White Double Powerpoints ($190 each) $760" was included in paragraph 10, "Non-Delivered Contract Items".
8. Metricon did not address the issue in either its evidence (although Metricon's witness statements had been filed in June 2022) or in its final submissions.
9. Even with reference to Mr To's commentary on the photographs, I am unsure of whether the powerpoints that were installed were not "Arteor Mirror White-White" powerpoints as specified. Accordingly, I do not propose to allow this claim.

1. The specification at TB 1075 contains an item "IPCHIP Paradox IP chip package, quantity 1, Unit price $330.00". I can find no other relevant document. I will make no allowance for this item.

Item 8 - Methven Aio Aurajet Rail 228563 8 chrome shower outlet

1. Photographs 140 & 141 in the document "Respondent's response to List of Photos taken by Applicant 2019" include the shower outlets. Although I indicated in the order dated 1 August 2023 that I would ignore Mr To's commentary, I record the commentary for each of the photographs, as follows:

"2x Handheld Methvan Aio Aurajet Rail chrome shower outlet not installed as required by the Contract. Item 142 at page 18 of the Contract (Tribunal book at page 1014) shows that two handheld Methvan Aio Aurajet Rail chrome shower outlets are to be installed in the Ensuite. The Applicant charged the Respondent $1360 for two of the upgraded handheld Methvan Aio Aurajet Rail chrome shower outlets. The Applicant has not installed the two handheld Methvan Aio Aurajet Rail chrome shower outlets".

1. At TB 1014, Item 142 of the upgraded items lists "Provide Methvan Aio Aurajet Rail 2285638 chrome shower outlet" x 2 at a total cost of $1,360.00. The Studio M specification at STB 422 and communications referred to in Mr To's witness statement, on dates before the building contract was executed, confirms this information.
2. Otherwise, there appears to be no other material before the Tribunal, apart from the commentary to the photographs belatedly produced by Metricon. I cannot recall the matter being discussed at the view, although that would not be surprising as the matter had not been raised in the experts' reports. The matter has therefore not been put in issue, as the powerpoints had been, by the discussion in the experts' reports and at the view.
3. The shower outlets were not mentioned under the heading "8 - Non-Delivered Contracted Item" in the counterclaim filed by Mr To on 16 July 2021. However, in the amended counterclaim dated 22 August 2022, the item "8. 2x Methven Aio Aurajet Rail 2285638 chrome shower outlet $1,360.00 (Ensuite, Item 142)" was included. The amended counterclaim was filed after Metricon had filed its witness statements and its status was not regularised until orders were made on 14 June 2023.
4. The only material suggesting that the Methvan Aio Aurajet Rail chrome shower outlets were not installed is the statement by Mr To in the commentary to the photographs that, "The Applicant has not installed the two handheld Methvan Aio Aurajet Rail chrome shower outlets". Metricon has not had the specific opportunity to answer that statement. Further, although Metricon could have responded to the items in the amended counterclaim, it is not surprising that it did not.
5. The late discovery of the photographs by Metricon is not the reason Mr To's statement supporting this part of the counterclaim was not received earlier than it was. However, although the position with the powerpoints is not entirely clear, Mr To would be unlikely to be mistaken about what shower outlets were installed. I consider that it is more likely than not that the specified shower outlets were not installed.
6. However, it was not a matter of complaint until August 2022. There is no evidence of what was installed and whether there is any material difference between the outlets or their value. Accordingly, I am not satisfied that there is a proper basis to make any allowance for these items.

Item 9 - Pair of Southern Star Windows, 'Commercial D' handles for sliding doors

1. Mr To's counterclaim dated 16 July 2021 included the following claim:

Due to a design fault/oversight by the Respondent, a pair of door handles to one of the alfresco sliding doors has not been possible to install. The Respondent refuses to refund the cost of the handles despite multiple requests by the Applicant without fair reasoning. The total for the door handles (a pair of Southern Star Windows, 'Commercial D' handles) as quoted by the Respondent in the Contract quote is $720.00. which is to be reimbursed".

1. The claim was also included in Mr To's amended counterclaim dated 22 August 2022.
2. The only correspondence between the parties in evidence that addresses this issue was initiated by a letter from Mr To to Metricon dated 2 September 2020 said to be "In response to your [Metricon's] letter dated 12 August 2020, to PCL Lawyers's [Mr To's solicitors'] letter of 6 August 2020" (TB 1656). Mr To, in answer to Metricon's offer that he should pay the final claim stated that, "The set of commercial door handles to the Alfresco slider ($720); these should either have been installed or varied by now as I pointed out to your site manager several times; however Metricon, as usual, chooses not to acknowledge or address this".
3. On 7 September 2020, Metricon responded to Mr To's letter. The relevant part of the reply at TB 1659 reads as follows:

"I have been advised that the Alfresco sliding door handles installed are as per your Contract. I have also looked at the Studio M doors and window quote and cannot see any item priced at $720.00 as per your letter. Could you please provide me with further information as to what you believe you should have, as opposed to what has been installed, and a photo if you have one. If it is proven that the door handles are incorrect and not in accordance with the Contract, we will either replace them or credit you back the cost, whichever you prefer".

1. On 21 September 2020, Mr To replied. The relevant part of his letter, at TB 1664, stated, "I can give you more information regarding the Alfresco sliding door handles if you send me the Studio M doors and window quote you are referring to". Metricon replied to Mr To's letter on 24 September 2020 (TB 1667), but did not refer to the door handles. I could find no further relevant correspondence.
2. The Studio M specification includes at STB 470, "External doors and door furniture". In "additional notes" at the foot of the page, the "handles" for "W5" and "W6" to the dining room are specified as "Southern Star 300 Series Commercial D handle". From the "Floor Plan" drawing at TB 1061, the door from the dining room to the al fresco area is marked as "W5".
3. Mr Sherrard in his first report noted at TB 150, "The door handle to the door to the al fresco is not installed". In his second report, there was a photograph of the door leading to the al fresco area with the caption, "Door handles not installed". The matter is not mentioned in Mr Sherrard's third report. Mr Lorich, in his third report at TB 109 notes, "There are no missing door handles at this time", with photographs suggesting that his comment related to the door to the al fresco area. Mr Lorich's comment is referred to in Metricon's response to Mr To's DBDRV claim in which the issue of the missing door handle was raised.
4. I could not find any other relevant documents. On the basis of the material I have examined, it appears that the matter was resolved by the installation of an apparently missing door handle at about the time Mr To filed his amended counterclaim in August 2022. No allowance will be made for this claim.

Item 10 - Powder room 1, Polished edge Mirror 1250mmx 850mm

1. In the amended counterclaim dated 18 August 2022, under the heading "Non-delivered contract items", item 10 is described as "10. Powder room 1, Polished edge Mirror 1250mmx 850mm $249 11". There appears no doubt that a mirror was required to be installed in Powder Room 1, although I can find no specific reference to it in any specification.
2. At TB 1446, in an email to Mr To dated 1 November 2019, Mr Taylor informs him that, "mirrors are all in". I could find no other reference to mirrors or Powder Room 1 of any relevance. No allowance will be made for this claim.

Item 11 - Additional Dulux Acrashield Advance finishing coat (Item 5)

1. In my consideration of defect Item 5, I accepted the evidence of Mr Taylor that the "appropriate number of coats of the sealant 'Dulux Acrashield' were applied". Accordingly, there is no basis to make any allowance for this claim.

1. It is assumed that this item refers to the Hot Water Service (or System). As with the appliances, the hot water service will be supplied by Metricon in accordance with the orders proposed. The orders will precisely specify the particular items to be installed.

1. It is assumed that this item also refers either to the Hot Water Service or more likely to the fireplace or heating system. It will be supplied by Metricon in accordance with the orders proposed. The orders will precisely specify the particular items to be installed.

1. No allowances shall be made in respect of these claims. Specific orders will be made for the installation of the appliances including the hot water service and fireplace.

1. In calculating the amount to which Mr To is entitled, it is necessary to take into account the balance owing under the building contract. This is necessary as the damages awarded to Mr To are assessed on the basis that he is entitled to be put in the position as if the building contract had been performed and the building properly constructed for the contract price (as adjusted for variations).
2. By reason of the findings I have made as to the lack of completion of the building works, Metricon must fail in its claims for liquidated damages under cl. 34.3, and in its claim for interest.

1. I consider that Mr To is entitled to interest on his entitlements to liquidated damages and for delay damages, and on the interest he lost by paying the premature progress payments. As the first two of those sums accrued over time, it is appropriate to calculate the interest from the mid-point of the relevant periods. I shall allow interest at the Penalty Interest Rate.
2. The calculation of interest is as follows:

Interest from the mid-point of the period 28 May 2020 to 16 July 2021 (21 December 2020). Interest from 21 December 2020 to 9 August 2023 ($14,785.71 for 961 days @ 10% p.a.)

Interest from the mid-point of the period 16 July 2021 to 29 October 2021 (6 September 2021). Interest from 6 September 2021 to 9 August 2023 ($7,481.25 for 702 days @ 10% p.a.)

Interest from 16 December 2019 to 9 August 2023 ($2,258.57 for 1,334 days @ 10% p.a.)

1. The calculation of the parties' entitlements are as follows:

1. In the circumstances, the following orders are appropriate:
   1. Leave to the Respondent to rely upon Amended Points of Counterclaim in accordance with the document filed on 22 August 2022.
   2. Leave to the Applicant to file and serve Points of Defence to Amended Points of Counterclaim dated 23 June 2023.
   3. Declaration that the building contract between the parties dated 25 February 2019 was terminated by the Respondent accepting the Applicant's repudiation of the contract by the allegation in paragraph 12 of his Points of Counterclaim dated 16 July 2021.
   4. Judgment for the Respondent against the Applicant on his counterclaim that the Applicant pay to the Respondent the sum of $5,849.60. Stay this order until 31 August 2023.
   5. Order pursuant to s52(3)(h) of the Domestic Building Contracts Act 1995 (Vic) that:
      1. by 4.00pm on 21 August 2023, the Respondent take possession of the property at 69 Bayview Road Officer and restore the electricity and gas supply to the property;
      2. by 4.00pm on 23 August 2023, the Respondent provide access to the property to the Applicant in order for the Applicant to install and commission the rangehood, cooktop, oven, dishwasher, fireplace and hot water service ("the appliances");
      3. by 4.00pm on 30 August 2023, the Applicant must properly and completely install and commission the appliances at the property;
      4. reserve to the Tribunal, upon application by either party, the determination of any issue arising out of the orders in this paragraph.
   6. The Applicant's claim is otherwise dismissed.
   7. By 4.00pm on 14 August 2023, the parties must file and serve written submissions on the following matters:
      1. the calculation of the judgment sum, limited to any errors in the arithmetic;
      2. the form of the orders in paragraph 5;
      3. the question of the costs of the proceeding;
      4. whether the parties wish to make further oral submissions and, if so, the reasons for requesting a further hearing.
2. Upon receipt of the parties' written submissions, or the expiry of the time limited by the order in paragraph 7, further orders will be made by the Tribunal.