1. The defects claim for $100,046.61 brought by the owners was reduced during discussions that took place outside the hearing, by which the builder has agreed to pay to the owners:

(a) $2,175 in respect of shower base tiles defects; and

(b) $882 in respect of timber doors defects.

1. A claim by the owners in respect of the alleged need for a termite treatment certificate was withdrawn by them.

1. In respect of the defects claim the subject of these Reasons, the parties relied on the terms of a Scott Schedule, usefully setting out the parties' divergences in position both in respect of whether items of work are defective as claimed by the owners and, if so, their respective positions in respect of the reasonable costs of fixing them.
2. The owners relied on a witness statement of Mr J Komuves, one of the owners dated 12 June 2020.
3. The owners also relied on an expert report dated 18 September 2019 of Mr Tom Thorne, registered building practitioner, holder of Domestic Builder Unlimited building license, who practises as a Building Inspector (the "Thorne report").
4. The applicant relied on a responding expert report dated 13 November 2019 (updated 27 November 2019) of Darren Love, Building Consultant (the "Love report").
5. In addition, the owners relied on a report of Mr Brett Payne, Building Surveyor dated 5 April 2017 in relation to defects.
6. In addition, the builder relied on witness statements of:

(a) Mr Mark Temming, building manager of the builder, by witness statements dated 22 June 2020 and 5 March 2021;

(b) Mr Danny Martin, dated 4 September 2017 in relation to defects; and

(c) Mr Andrew Maroun, a director of A&S Carpentry Pty Ltd, who provided quotations dated 26 February 2021 for the carrying out of work respectively set out in the Thorne report and the Love report.

1. Having regard to the items of rectification now agreed between the parties, the items remaining in dispute between them (together with the respective claimed rectification costs of $96,989.61) are as follows:

Damages not only necessary, but also reasonable

1. The proceeding raises in no small way the limits on the right of an owner to damages from a builder, in respect of alleged defects in a dwelling caused by a breach of contract by a builder.
2. The owners rely upon the proposition that a building owner is, as a general rule, entitled to have a building which complies with the contract plans, and is therefore entitled to the cost of rectification as damages.[3]
3. In support of this proposition, the High Court in Bellgrove v Eldridge,[4] stated:

...the respondent [owner is] entitled to have a building erected upon her land in accordance with the contract and the plan and specifications which formed part of it, and her damage is the loss she has sustained by the failure of the appellant [builder] to perform his obligations to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building on her land which is substantially in accordance with the contract.[5]

The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt. No one would doubt that where pursuant to a building contract calling for the erection of a house with cement rendered external walls of second-hand bricks, the builder has constructed the walls of new bricks of first quality the owner would not be entitled to the cost of demolishing the walls and re-erecting them in second-hand bricks. In such circumstances the work of demolition and re-erection would be quite unreasonable or it would, to use a term current in the United States, constitute "economic waste"...We prefer, however, to think that the building owner's right to undertake remedial works at the expense of a builder is not subject to any limit other than is to be found in the expressions "necessary" and "reasonable", for the expression "economic waste" appears to us to go too far and would deny to a building owner the right to demolish a structure which, though satisfactory as a structure of a particular type, is quite different in character from that called for by the contract. Many examples may, of course, be given of remedial work, which though necessary to produce conformity would not constitute a reasonable method of dealing with the situation and in such cases the true measure of the building owner's loss will be the diminution in value, if any, produced by the departure from the plans and specifications or by the defective workmanship or materials. As to what remedial work are both "necessary and "reasonable" in any particular case is a question of fact (emphasis added).[6]

1. The question of reasonableness, therefore, is one of fact. The parties concede that the builder bears the onus of proof that it would be unreasonable to award the full rectification cost in respect of any particular alleged defect.
2. Mr Philpott, counsel for the owners, did not contend that "the reasonable cost....of fixing any defects' within the meaning of clause 44.0 excludes the restraint on such damages imposed by Bellgrove.[7] He submitted that the owners do not argue with the application of the principles in that decision, but that the builder here has failed to prove unreasonableness in respect of any of the claims for damages.

1. It follows that many of the submissions by counsel for the parties were concerned with the limits on recovery imposed by the common law on the notion of reasonableness.
2. In the event, I have made limited findings of defective works. I have nevertheless reviewed the authorities on the approach required, so as to provide an indication to the owners on whether, had I had made findings of defects in respect of their larger monetary claims, they would necessarily have recovered the amounts sought by them.
3. Other than its much-quoted example concerning second hand bricks, the Court's decision in Bellgrove left room for debate about the matters required to be considered in an enquiry as to whether the undertaking of remedial work in a given situation constitutes (in the Court's words) 'a reasonable method of dealing with the situation'.
4. In Radford v De Froberville,[8] the plaintiff sold a block of land to the defendant, the latter also covenanting to build a wall on her side of the boundary. The defendant failed to build a wall, and sold the land to a third party. The plaintiff claimed damages for breach of contract, measured by the cost of his building a wall on his side of the boundary. In a much-quoted passage in his judgment, Oliver J stated:

Now, it may be that, viewed objectively, it is not to the plaintiff's financial advantage to be supplied with the article or service which he has stipulated. It may be that another person might say that what the plaintiff has stipulated for will not serve his commercial interests so well as some other scheme or course of action. And that may be quite right. But that, surely, must be for the plaintiff to judge. Pacta sunt servanda. If [a party] contracts for the supply of that which he thinks serves his interests, be they commercial, aesthetic or merely eccentric, then if that which is contracted for is not supplied by the other contracting party I do not see why, in principle, he should not be compensated by being provided with the cost of supplying it through someone else or in a different way, subject to the proviso, of course, that he is seeking compensation for a genuine loss and not merely using a technical breach to secure an uncovenanted profit (emphasis added).[9]

1. In Radford, the Court was satisfied that the subjective value of the contract to the plaintiff, and his genuine intention to carry out the works were factors to be taken into account when awarding damages for the cost of building a wall.
2. In Ruxley Electronics and Construction Ltd v Forsyth[10] the appellant pool builder contracted to build a swimming pool to a depth of 7 feet 6 inches, but had built it only to a depth of 6 feet.
3. The trial judge found that it would be unreasonable for the respondent property owner to recover damages measured by the cost of demolishing the existing pool, and building a new and deeper one. The property owner was found to be entitled to damages for loss of amenity only, in the sum of £2,500.00.
4. The House of Lords affirmed the below findings of the trial judge, and considered the following matters to be relevant:

The trial judge made the following findings relevant to the appeal: (1) the pool as constructed was perfectly safe to dive into; (2) there was no evidence that the shortfall in depth had decreased the value of the pool; (3) the only practicable method of achieving a pool of the required depth would be to demolish the existing pool and reconstruct a new one at a cost of £21,560.00; (4) he was not satisfied that the [owner Mr Forsyth] intended to build a new pool at such a cost; (5) in addition such cost would be wholly disproportionate to the disadvantage of having a pool of a depth of only 6 feet as opposed to 7 feet 6 inches, and it would therefore be unreasonable to carry out the works (I refer to these matters as the "the Ruxley considerations").[11]

1. In so doing so, their Lordships found that the pool owner's loss should not extend to the cost of reinstatement.
2. Jauncey LJ in Ruxley (with whom the other Law Lords agreed) considered Bellgrove to fit within a line of cases in the United Kingdom and the USA, which dealt with 'the question of reasonableness in the context of reinstatement'. His Lordship stated:

Damages are designed to compensate for an established loss and not to provide a gratuitous benefit to the aggrieved party, from which it follows that the reasonableness of an award of damages is to be linked directly to the loss sustained. If it is unreasonable in a particular case to award the cost of reinstatement it must be because the loss sustained does not extend to the need to reinstate. A failure to achieve the precise contractual objective does not necessarily result in the loss which is occasioned by a total failure. This was recognised by the High Court of Australia in the passage in _Bellgrove v Eldridge..._where it was stated that the cost of reinstatement work subject to the qualification of reasonableness was the extent of the loss, thereby treating reasonableness as a factor to be considered in determining what was that loss rather than, as the respondents argued, merely a factor in determining which of [the] two alternative remedies [of remedial work, or diminution in value in Bellgrove] were appropriate for a loss once established. Further support for this view is to be found in the following passage in the judgment of Megarry V-C in Tito v Waddell (No 2)[12]:

'...if the plaintiff has suffered little or no monetary loss in the reduction of value of his land, and he has no intention of applying any damages towards carrying out the work contracted for, or its equivalent, I cannot see why he should recover the cost of doing work which will never be done. It would be a mere pretence to say that this cost was a loss and should be recoverable as damages.'

What constitutes the aggrieved party's loss is in every case a question of fact and degree. Where the contract breaker has entirely failed to achieve the contractual objective, it may not be difficult to conclude that the loss is the necessary cost of achieving that objective. Thus if a building is constructed so defectively that it is of no use for its designed purpose the owner may have little difficulty in establishing that his loss is the necessary cost of reconstructing. Furthermore, in taking reasonableness into account in determining the extent of loss it is reasonableness in relation to the particular contract and not at large. Accordingly, if I contracted for the erection of a folly in my garden which shortly thereafter suffered a total collapse it would be irrelevant to the determination of my loss to argue that the erection of such a folly which contributed nothing to the value of my house was a crazy thing to do. As Oliver J said in [Radford[13]]:

'If he contracts for the supply of that which he thinks serves his interests, be they commercial, aesthetic or merely eccentric, then if that which is contracted for is not supplied by the other contracting party I do not see why in principle, he should not be compensated by being provided with the cost of supplying it through someone else in a different way, subject to the proviso, of course, that he is seeking compensation for a genuine loss and not merely using a technical breach to secure an uncovenanted profit.'

However, where the contractual objective has been achieved to a substantial extent the position may be very different (emphasis added).[14]

1. In Tabcorp Holdings Ltd v Bowen Investment Pty Ltd[15] the tenant removed the landlord's foyer and replaced it with one of its own design. That was a breach of the tenant's covenant not to make substantial alterations to the premises without the landlord's permission. The High Court upheld the decision of the Full Bench of the Federal Court in awarding the landlord the full cost of reinstating the foyer and consequential losses, therefore applying the general principles of contract law damages as expounded in Robinson v Harman.[16]
2. The judgment in Tabcorp cited with approval[17] the above extract from the judgment of Oliver J in Radford, when referring to the circumstance in which the learned Judge considered that rectification costs will be available
3. It also contained the following passage (omitting footnotes):
   1. ...[The example given by the High Court in Bellgrove of the builder constructing the external walls with new bricks instead of the specified second-hand bricks] tends to indicate the test of unreasonableness is only to be satisfied by fairly exceptional circumstances. The example...aligns closely with what Oliver J said in Radford v De Froberville, that is, that the diminution in value measure of damages will only apply where the innocent party is "merely using a technical breach to secure an uncovenanted profit"...
   2. [In Ruxley, the House of Lords] saw the following matters as indicating that the cost of reconstruction was not recoverable.

[the Ruxley considerations are all set out, in terms, by the Court].

Their Lordships quoted and referred to various passages in Bellgrove v Eldridge and Radford v De Froberville without dissent. Although they reversed the Court of Appeal, in which the leading judgment, that of Staunton LJ, quoted various passages from Radford v De Froberville, they did not disagree with what those cases said as a matter of principle, and seemed to consider that their decision was consistent with the principles stated by Oliver J. The result at which their Lordships arrived is on one view inconsistent with those principles, but for present purposes it is sufficient to say that the facts of [Ruxley], which their Lordships evidently saw is quite exceptional, are plainly distinguishable from those of the present appeal.

1. ...The Tenant's submissions [to the effect that any excess over the amount recoverable on a diminution in value was unreasonable] rested on a loose principle of "reasonableness" which would radically undercut the bargain which the innocent party had contracted for and make it very difficult to determine in any particular case on what basis damages would be assessed. That principle should not be accepted.
2. The Court's comments in paragraph [19] of the decision suggest that subject to consideration of the restraint in Radford v De Froberville, the court should strongly incline to uphold the parties' bargain, rather than base damages assessments on a 'loose' principle of what otherwise may be thought to serve a plaintiff's interests.
3. There has been conjecture as to whether the High Court's complete citing of the Ruxley considerations suggested its endorsement of their Lordships approach in Ruxley.[18]
4. Also, in this Tribunal, in a decision published over a year after the decision in Tabcorp, Senior Member Walker in Clarendon Homes v Zalega,[19] took the view that High Court in Tabcorp supported an approach to the question of reasonableness that incorporated the Ruxley considerations. The learned Senior Member's reason for so doing was as expressed as follows:
   1. The Court in Tabcorp queried whether, on one view, the result arrived at in Ruxley could be reconciled with what Oliver J had said in Radford but nonetheless quoted the [Ruxley considerations] without apparent disapproval. It observed that the facts in Ruxley were "quite exceptionable" and were distinguishable from the case before it.
5. The learned Senior Member went on to summarise in Clarendon Homes what he regarded as the principles to be distilled from the decisions, as follows:

1. Damages for breach of contract are compensatory. To use the words of Oliver J in Radford, the innocent party is seeking compensation for a genuine loss and not merely using a technical breach to secure "an uncovenanted profit". 2. I think the following principles concerning the assessment of damages for the breach by a builder of a domestic building contract can be spelled out from the cases [the learned Senior Member had] referred to:

(a) Where the work and materials are not in conformity with the contract, the prima facie measure of damages is the amount required to rectify the defects complained of and so give to the owner the equivalent of a building which is substantially in accordance with the contract (Bellgrove); > > (b) The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt (Bellgrove); > > (c) Reasonableness is a question of fact (Bellgrove) and the onus of proving unreasonableness so as to displace the prima facie measure is upon the builder. It is the builder who is seeking to displace the prima facie position (Tabcorp per Rares J.); > > (d) In considering whether it would be unreasonable to award the cost of rectification, the tribunal should consider all the circumstances of the case before it. The nature and significance of the breach should be looked at in terms of the bargain the parties had and the relative importance of the breach within the context of the contract as a whole. The decision in Ruxley suggests that account can be taken of the following matters at least: > > > (i) whether and to what extent the work, although not in conformity with the contract, is nonetheless serviceable; > > > > (ii) whether and to what extent the defect has affected the value of the work or the building as a whole; > > > > (iii) the cost of rectification, the proportion that the breach bears to the cost of rectification and whether the cost of rectification would be wholly disproportionate to the real damage suffered by reason of it;[20] > > > > (iv) the likelihood that, if rectification cost is awarded, the sum so ordered will actually be spent on rectification. Obviously, a successful plaintiff can spend his damages as he sees fit but this may be a useful indicator of whether the amount sought is greater than the real loss suffered.

Quite obviously, this list is by no means exhaustive. Other matters might be relevant according to the facts of the particular case. For example, the innocent party might have elected to accept the non-conforming work, whether by taking the benefit of it or otherwise; the owner might have waived the breach or so acted after becoming aware of the breach as to create an estoppel or to make rectification impracticable. There might also be many circumstances in which it could be argued that an award of rectification cost would give the innocent party an uncovenanted profit (Radford).

(e) If it would be unreasonable in the circumstances to award rectification cost, what damages will compensate the owner for the breach? Matters to be taken into account might include:

(i) the magnitude of the breach;

(ii) the significance of the breach to the owner;

(iii) whether the owner, after becoming aware of the breach, has acted unreasonably so as to make rectification more expensive;

(iv) whether and to what extent an owner might have accepted a benefit from the non-conforming work that should be taken into account;

(v) since the breach is not to be rectified, the reasonable cost of mitigating the effect of it;

(vi) compensation for any lesser appearance or functionality;

(vii) loss of amenity;

(viii) if it appeared likely that less than complete rectification would be undertaken, the cost of that.

Again, this is not intended to be an exhaustive list. It must not be forgotten that the object is to fully compensate the innocent party for the breach but not provide him with an "uncovenanted profit".

1. I have been assisted by subsequent decisions that provide further guidance on the process by which a tribunal of fact might determine whether a plaintiff is suing in respect of a 'genuine loss' or 'merely using a technical breach to secure an uncovenanted profit'.
2. The decision of the Court of Appeal of the Supreme Court of Western Australia in Wilshee v Westcourt Ltd[21] was published about three months after Tabcorp. The plaintiff Mr Wilshee (the appellant) claimed that the defendant builder (the respondent) breached a term of a contract for the construction of a house by using inferior or second quality limestone in the external cladding of the house. The trial judge upheld Mr Wilshee's claim, but awarded him damages which reflected only the cost of cleaning and sealing the limestone, and some repainting necessitated by the cleaning and sealing work.
3. The Court of Appeal upheld Mr Wilshee's appeal, and awarded full rectification costs as damages.
4. The trial judge relied upon the proposition that Mr Wilshee's concern was primarily aesthetic, but it could not be said that his view of aesthetic desirability would necessarily be shared by others, and there was no term of the contract requiring a particular aesthetic standard to be achieved, nor any objective measure by which Mr Wilshee's views could be assessed.[22]
5. In relation to this reasoning, the Court of stated:
   1. The decision in Tabcorp establishes that this process of reasoning is erroneous. Although in the present case there was no express term of the contract relating to the aesthetic standard to be achieved by the limestone cladding, there was a term of the contract which required the limestone cladding to be of high quality. It was breach of that term which resulted in accelerated deterioration of the limestone surfaces which Mr Wilshee did not regard as aesthetically pleasing. As the High Court points out in Tabcorp, the question of whether or not Mr Wilshee's views and this respect are idiosyncratic, or would be shared by others, is not to the point. Mr Wilshee entered into a contract which he considered served his interests, and he is entitled to the performance of that contract quite irrespective of the views which other people might form in relation to the advancement of those interests, such as views relating to the aesthetic appearance of the house.
6. After expressly referring to the dictum of Oliver J in Radford, the Court stated:
   1. Applying [Oliver J's] test to the circumstances of the present case, it could not be said that Westcourt's breach of contract was, in any sense 'technical'. It was a serious and significant breach, which had a significant impact upon the rate at which the external cladding of the house weathered and deteriorated, and which has had a significant impact upon the appearance of the house.
   2. Nor could it be reasonably concluded that Mr Wilshee is pursuing his claim in order to secure a profit to which he has no entitlement under the building contract. Mr Wilshire gave evidence in the strongest terms of his displeasure upon discovering that a significant part of the limestone used for the external cladding of his house was of inferior quality. That evidence was entirely plausible and reasonable, and was not rejected by the trial judge...
7. In Stone v Chappel,[23] the plaintiffs Mr and Mrs Stone (the appellants) contracted to purchase an apartment from the defendant developers (the respondents). The large apartment was in a block of apartments being built by the defendants. The plaintiffs engaged an architect to fit out the shell of the apartment. The architect was employed by the project architects engaged by the defendants. The Stones instructed the architect that they wanted a uniform ceiling height of 2700 mm in their apartment, and the drawings subsequently approved by them provided for this. When the developer sought payment of the second instalment of the apartment's purchase price, the Stones complained that the ceiling height was not 2700mm in accordance with the plans. The asserted that the ceiling height was 40mm under specification resulting in a permanent loss of amenity. Arrangements were subsequently made for the Stones to make payment under protest for the balance of monies owing under the purchase contract, in return for access being granted to the Stones to complete the fit-out of the apartment and take up residence.
8. The Stones sought damages of $331,188 to rectify this defect.
9. The trial judge held that the contract did contain a term to the effect alleged, and that it was breached in that the ceiling height was on average 48 mm less than the required height of 2700 mm. However the trial judge rejected the Stones' claim for damages, on the basis that the ceiling as constructed was substantially in accordance with the contract and that it would be unreasonable to carry out the rectification work contemplated. The trial judge instead awarded the Stones $30,000 to reflect the loss of amenity suffered by them on account of the departure from the contractual specification as to the ceiling height, which he assessed in the amount of $30,000.
10. The Full Court of the Supreme Court of South Australia[24] held that the rectification costs claimed by the Stones were unreasonable, and thus fell within the qualification to the general rule in Bellgrove v Eldridge, disentitling the plaintiffs from recovering contractual damages on this basis.
11. Doyle J stated:

[249] While itself concerned with breach of a negative covenant, the decision of the High Court in Tabcorp Holdings confirmed the continued operation of the general rule in Bellgrove v Eldridge in cases involving defective building work. It also confirmed the qualification to that general rule.

[250] In so doing, the Court emphasised the primacy to be afforded to the plaintiff's performance interest in assessing damages for breach of contract. While identifying that this will result in the "unreasonableness" test underpinning the qualification to the general rule being satisfied and only "fairly exceptional" cases, the Court's reasons provide little guidance in relation to the application of the qualification.

...

[254] ...However, as the law currently stands, there has been no express identification in the Australian case law of any principal or policy underpinning the notion of unreasonableness. Certainly there has been no express adoption of the principal or policy preferable to fairness to the defendant. The matter has been largely left as a question of fact and degree to be determined by reference to the circumstances of the individual case.

[255] In determining what is a reasonable, the issue is one to be determined objectively, there being no suggestion that the plaintiff should be the arbiter of his or her reasonableness. However, the determination must take place in the context of the relevant contract, and hence by reference to the plaintiff's needs and desires reflected in the bargain he or she struck.

[256] Consistent with this general approach, my survey of the authorities has identified several matters that will be relevant in determining the reasonableness of the rectification costs claimed.

[257] The first [matter] is the proper identification of the plaintiff's performance interest; that is, the benefit bargain for. Often this will involve going behind express contractual standard or specification relied upon in order to determine whether the benefits sought to be achieved by the standard or specification was merely functional or economic in nature, or a matter of aesthetic choice or amenity on the part of the plaintiff. If the true contractual objective was purely functional or economic, then a departure from the contractual standard that does not compromise the functionality or value of the building work may not reasonably require an award of rectification damages to adequately protect the plaintiff's performance interest ["the Stone first consideration"].

[258] [His Honour here cite number of decisions in support of his propositions in paragraph [257]. Consistent with the propositions, his Honour pointed out that in Wilshee, the Court held that the contractual objective sought to be achieved by the specification of high-quality limestone was more than a merely functional one].

[259] The second matter is a consideration of the extent to which the defendant has, despite departure from the contractual standard, nevertheless achieved the contractual objective, and hence provided the plaintiff with the benefit he or she bargain for. In Tabcorp Holdings, the defendant completely ignored the plaintiff's contractual desire to control alterations to its premises. Similarly, in the incorrect paint colour and garden folly examples given in the authorities there was a complete failure to achieve the contractual objective. In Wilshee v Westcourt it was relevant that the defendant's use of inferior quality limestone involved a significant and substantial departure from the benefit contracted for by the plaintiff. On the other hand, in [Ruxley], the House of Lords was influenced by the relatively minor, if not technical, departure from the contractual objective and hence relatively minor benefit to the plaintiff from carrying out the rectification work proposed ["the Stone second consideration"].

[260] The third matter is any lack of proportionality between the proposed work and cost, and the benefit to be achieved by the plaintiff through this work. I do not understand the High Court's reasoning in Tabcorp Holdings to exclude consideration of any disproportion between the rectification work proposed and the benefit to be obtained...["the Stone third consideration"][25]

...

[263] Finally, it will be relevant to consider the plaintiff's intention and ability to carry out the rectification work. For the reasons explained in the authorities that I have summarised...these considerations are not usually decisively relevant in their own right. Rectification costs may be reasonable and recoverable even though plaintiff does not intend to, or is not able to, carry out the rectification work. One cannot say more without knowing the reasons why the plaintiff does not intend to, or is not able to, carry out the contemplated rectification works. Alternatively, rectification costs may be unreasonable and irrecoverable despite the plaintiff intending to, and being able to, carry out the contemplated rectification work. As the authorities make plain, the plaintiff's intention and ability to carry out the works are relevant only insofar as they shed light on the issue of the true nature of the plaintiff's loss, or the reasonableness or otherwise of the contemplated rectification works.["the Stone fourth consideration")

[265] ...I am not aware of any authority that has expressly taken into account the nature and quality of the defendant's breach. However, it may be that in cases where the defendant's breach is intentional, or profit driven, that the Court may be more reluctant to deprive the plaintiff of rectification damages designed to protect his or her performance interest. Indeed, the intentional and flagrant breach by the defendant in Tabcorp Holdings may have influenced the Court in that case and its preparedness to award rectification damages (emphases and definitions added for the purpose of these Reasons).

1. I have taken the liberty of quoting at some length from the judgment of the learned Doyle J in Stone because, with respect, it provides most useful guidance on the required approach when one is required to determine whether the recovery of rectification damages is reasonable,[26] which I propose to adopt.

1. The courts are not normally concerned with what a plaintiff does with his damages. In Bellgrove, the High Court considered the possibility of the plaintiff building owner taking an award of damages, and not spending it to be 'quite immaterial and...but one variation of a feature which so often presents itself in the assessment of damages in cases where they must be assessed once and for all.'[27]
2. It is plain from the authorities to which I have referred, however, that in the process of fixing damages, 'the plaintiff's intention and ability to carry out the works are relevant only insofar as they shed light on the issue of the true nature of the plaintiff's loss, or the reasonableness of the contemplated rectification works'.[28]
3. It will also be noted from the passage from Ruxley quoted above that Jauncey LJ was of the view that it would be unreasonable to treat as a loss the cost of carrying out work which would never in fact be done.

1. The owners claim $9,394.
2. There is a reference to 3 chipped bricks and to brickwork in the Miscellaneous Recommendations in the re-inspection report for handover phase, but only a limited reference again to three chipped bricks in the subsequent DBDRV agreement.
3. The following table summarises the respective positions in respect of allegedly defective brickwork the subject of the Thorne report relied on by the owners, and the response in the Love report relied on by the builder:

(a) Poor quality non-compliant bricklaying throughout (GST[29] Table 3.04)

General comment-some of the defects identified in the Thorne report were defects under AS3700-2001, but are not defects under AS3700-2011.

(b) Voids and holes in mortar, viewed from a normal standing position (GST 3.0).

No defect. Voids and holes in the mortar are minimal, and most have been addressed. Voids and holes are difficult to locate from a normal viewing position.

(c) 'Throughout the brickwork' over 2 mm deviation or 'step' of exposed masonry surfaces from adjacent masonry surfaces (GST3.04 F).

No defect. Was a defect under AS3700-2001, but is not defect under AS3700-2011.

(d) Mortar bed widths exceed 3 mm [taken to be a reference to 13 mm] 'in some wall sections' (GST 3.04 H).

No defect. Unable to locate any mortar bed joint exceeding 13 mm.

(e) Perpend widths exceed 8 mm 'in some wall sections' (GST 3.04 I and J).

No defect. Perpends exceeding 8 mm was a defect under AS3700-2001, but is not defect under AS3700-2011 where perpends between 5mm and 30mm wide are allowed.

(f) Colour variations 'throughout brickwork' in mortar repairs do not match existing mortar colour (GST 3.05).

No defect. In some areas where brickwork appeared to have been replaced, a small change in mortar colour appears, which is unexceptional.

(g) Mortar smears on masonry facing visible 'throughout brickwork' (GST 3.07).

(h) Perpend alignment 'in some wall sections' exceeds the allowable 20 mm per 2 m of wall height.

No defect. Was a defect under AS3700-2001, but is not defect under AS3700-2011.

1. The claimed rectification cost of $9,394 is made up of:

(a) $1,100 for the selected removal and replacement of about 100 bricks (upon which cost the experts agreed); and

(b) a full treatment of NAWKAW, a masonry staining technology designed to correct the appearance of faulty or mismatched bricks and mortar, at a cost of $8,294.40.[30]

1. The lack of information in Mr Thorne's report concerning the location of the alleged brickwork defects required a lengthy circumnavigation of the dwelling on the third day of the hearing, in order for Mr Thorne to point out the alleged defects, and allowing Mr Love to respond.
2. It is common ground in the construction industry that variations in the surface colour, texture and finish of walls, ceilings, floors and roofs, and variations in glass and similar transparent materials are to be viewed where possible from a normal viewing position. A normal viewing position is looking from a distance of 1.5 metres or greater or 600 mm for appliances or fixtures ("a normal viewing position").[31]
3. I read defect (a) as being in the nature of a summary comment by Mr Thorne, which I will not separately address.
4. I find that in regard to alleged defects (b) and (d), I accept Mr Love's evidence that these are either not apparent from a normal viewing position, or are unable to be identified.
5. In relation to alleged defect (d), I also find from the evidence of Mr Love that the breadth of the mortar beds in this dwelling may on analysis be illusory. I accept the evidence of Mr Love that the design of these particular bricks includes a curved finish to the edges, which needs to be taken into account when assessing the mortar bed thickness. For example, I find from Mr Love's evidence that upon inspection of what appeared to be a 15 mm wide mortar bed appearing in the first panel adjacent to the north sliding door, but that when he removed the mortar back to the actual mortar bed joint, he found it to be 11 mm wide.
6. I find that in regard to alleged defects (c), (e) and (h), these standards of masonry workmanship are not required by AS 3711-2011. I accept Mr Love's evidence in regard to these alleged defects, summarised in the third column above. I also accept Mr Love's contention that GST 2015 has not been updated so as to incorporate the provisions of AS 3711-2011, and so Mr Thorne's reliance on provisions of the GST 2015 in these respects is not appropriate.
7. In relation to alleged defect (f), I do not find that there are colour variations throughout the brickwork in the mortar repairs.
8. In relation to alleged defect (g), I find that the brickwork requires a clean, and I fix $360 as the reasonable cost.
9. Specifically in relation to alleged defect (h), I find from the evidence of Mr Love that the method prescribed by AS 3700-2011 for measuring a bow in a masonry member is by 2000 mm modified straightedge and measuring rule that has a 5 mm packer at each end, as shown in Figure F1 BOW-MEASURING DEVICE of AS 3700-2011. The brickwork must not allow the straightedge to rock.
10. I accept the evidence of Mr Love that using the prescribed straightedge, there are no parts of the brickwork that contain a bow beyond the tolerances contained in Table 12.1 of AS 3700-2011.. I find that Mr Thorne used a 1200 mm straightedge, which is inconsistent with the requirements of AS 3700-2011.
11. I am not otherwise satisfied that the matters alleged in the Thorne report relating to brickwork amount to defects in the construction of the dwelling.
12. I will fix the owners' loss and damage in respect of allegedly defective brickwork at $360 (plus 30% rectifying builder's margin) in respect of defect (g).
13. If I am incorrect in concluding that the complaints made about the brickwork by Mr Thorne do not constitute defects, and that the view should be taken that they amount to departures from AS 3700-2011 (or from other standard of work as set out in the GST 2015) such as to be a breach of contract, for the reasons that follow I would have been persuaded by the builder's submission that it would not have been reasonable in the circumstances to award the owners the claimed costs of rectification.
14. The external brick cladding is a brick veneer wall. The structural support for the dwelling comes from the wooden frame that makes up the wall behind the brick veneer wall. The brick veneer is tied to the structural timber wall by wall ties. The brick veneer wall therefore provides no structural function. Thus described, and addressing the Stone first consideration, the owners' 'performance interest' (in other words, 'the benefit bargained for', in the words of Doyle J) is better seen, I consider, as a matter of aesthetic choice or amenity by the owners. That is to say, the owners required a durable and visually pleasing external cladding for their dwelling.
15. Characterised in this way (and again, were the claimed defects considered to be departures from relevant contractual standards), and addressing the Stone second consideration, I would have considered that despite any found departures from the required contractual standards, the builder has nevertheless achieved this contractual objective. This is because the defects are, by their nature and extent, not such as to conclude that the contractual objective of a durable and visually pleasing external cladding for their dwelling has not been achieved. There is also no evidence that any of the alleged defects have affected the value of the property.
16. Wilshee can be readily distinguished from the circumstances here because, in that case, the use of inferior quality limestone was found to involve a significant and substantial departure from the benefit contract for by the owners, that is to say limestone cladding of 'high quality' was not provided, resulting in a finding of accelerated deterioration of the limestone surfaces, which Mr Wilshee did not regard as aesthetically pleasing.
17. I also have regard to the fact that the front elevation of the dwelling, facing Fortune Street, the eastern courtyard and the rear wall are rendered. The areas of affected brickwork, said to contain defects, were identified by Mr Thorne largely on the west elevation of the dwelling serving principally as a setback from the adjoining property and as an access way, and in an area adjacent to the alfresco area.
18. The Stone third consideration, any lack of proportionality between the proposed work and the benefit to be achieved by the owners through this particular work, becomes relevant. I would consider that this disproportion would be a relevant consideration in my determination that it would be unreasonable to undertake the rectification work contemplated.
19. If, therefore, in relation to the alleged brickwork defects, there were a finding that the builder is liable, in my view damages would sound only in compensation for loss of amenity. Such damages are typically modest.

1. The owners claim $14,160.
2. There is a limited reference only to plaster in the re-inspection report for handover phase, the list of known defects and incomplete work and the subsequent DBDRV agreement.
3. The following table summarises the respective positions in respect of allegedly defective plasterwork the subject of the Thorne report relied on by the owners, and the response in the Love report relied on by the builder:

(a) The plaster cornices are defective, because they deviate from a straight line greater than 4 mm over a length of 2 m and are visible from a normal viewing position (GST 9.17).

AS 2589 (2007) Part 4.2.2 and Table 4.2.2 specifies an allowance of 5 mm over 1.8 m.

Two cornices in the bedroom should be rectified together (even though one has a deviation no greater than 5 mm over 1.8 m) and one cornice in the kitchen should be rectified.

(b) Plaster ceiling in the garage has been adversely affected by a water leak during construction, with potential collapse possible.

Insufficient lead flashing installed in roof. Builder defect. Resulted in leak affecting the first 1200 mm wide section of plaster at front internal corner of garage. This section and cornice requires replacement.

(c) Ceiling plaster peaking or waviness and its jointing is visible from a normal viewing position (GST 9.18)

$14,160 for supply and installation of new plaster ceiling lining throughout dwelling, including metal battens, when cornice defects can also be rectified.

The alleged defects in the ceiling plaster is not apparent in a non-critical light.

1. I will fix the owners' loss and damage in respect of defective cornices and garage plasterwork in respect of defects (a) and (b) at $1,890 (plus 30% rectifying builder's margin).
2. It is common ground in the construction industry that variations in the surface colour, texture and finish of walls, ceilings, floors and roofs, and variations in glass and similar transparent materials must be illuminated by 'non-critical light'. Non-critical lighting occurs when the light that strikes the surface is diffused, and is not glancing or parallel to the surface as in the case of 'critical light'.[32]
3. The reason why alleged defects should not be viewed under critical light is because it has the potential for illuminating an undulation, by creating a shadow on the other side of the undulation. In the case of plasterwork, it also reveals perceived imperfections or surface texture variations caused by joints and patches in plasterwork which, under more diffused light, would not be visible.
4. I find that Mr Thorne used a torch to illustrate the plasterwork defects, as is plain from pages 58-64 of the Thorne report. Section 3.1.4 of AS 2589 (2007) notes that plaster surface imperfections in a level 4 surface finish[33] may still become apparent in critical lighting conditions of the type adopted by Mr Thorne.
5. I consider that no defects of the type said to exist are apparent in a non-critical light, as was evident to me during the inspection of the dwelling.
6. I do not accept Mr Phillpott's submission on behalf of the owners to the effect, as I apprehend it, that critical lighting of the type that may be cast when lights are on in the dwelling or when or blinds are open, is sufficient to materially reveal the alleged plasterwork defects in the dwelling.
7. I find that the owners have not proved alleged plasterwork defect (c) on the balance of probabilities.
8. If I am incorrect in concluding that the complaints made about the plasterwork by Mr Thorne do not constitute defects, and that the view should be taken that they amount to departures from the relevant AS 2589-2007 Australian Standard (or from other relevant standards of work to be achieved as are set out in the GST 2015) such as to be a breach of contract, I would have been persuaded by the builder's submission that it would not have been reasonable in the circumstances to award the owners the claimed costs of rectification for the following reasons.
9. The function of the internal plasterboard is to create walls by being attached to wall studs (or brick walls), or ceilings by being attached to ceiling joists walls, and which therefore provide no structural function. Thus described, and addressing the Stone first consideration, the owners' 'performance interest' (in other words, 'the benefit bargained for', in the words of Doyle J) is better seen, I consider, as functional or economic in nature. That is to say, a durable internal cladding for their dwelling, on which a pleasing painted or other finish can be applied.
10. Characterised in this way (and again, were the claimed defects in the plasterboard considered to be departures from relevant contractual standards), and addressing the Stone second consideration, I would consider that despite the departures from the required contractual standards, the builder has nevertheless achieved this contractual objective.
11. If, therefore, in relation to the alleged plastering defects, there were a finding that the builder is liable, in my view damages would sound only in compensation for loss of amenity.

1. The owners claim $19,300.
2. There is a limited reference only to plaster in the re-inspection report for handover phase, no reference to plaster in the list of known defects and incomplete work and only a limited reference to plaster joins in bedroom 1 in the subsequent DBDRV agreement.
3. Thorne report simply re-stated an extract from chapter 12.02 of the GST 2015 (although incorrectly referenced as chapter 9.18) concerning when paintwork is to be considered defective, as follows:

Paintwork is defective if the application has blemishes such as paint runs, paint sags, wrinkling, dust, bare or starved painted areas, colour variations, surface cracks, irregular and coarse brush marks, sanding marks, blistering, non-uniformity of gloss level and other irregularities in the surface that are visible from a normal viewing position.

1. As a consequence of his opinion, presumably to be implied from this statement, that the paintwork at the owners' dwelling is defective, Mr Thorne states that a full three-coat re-paint at an estimated cost of $19,300 as particularised on page 48 of the Thorne report is required.
2. Mr Love carried out his inspection of the paintwork having regard to the requirements of Section C4 of the Appendix C to AS 2311 (2009), which sets out the features that should be possessed by a painted surface on a final inspection of painting works. Mr Love's opinion is as follows:

During my inspection I took special note of the painting of the dwelling. I noted five small defects to the whole of the internal of the dwelling and one defect to the alfresco area. To find these defects, I had to look extremely hard. There was no light used and the inspection was from a normal viewing position.

...The paintwork as a whole is exceptional and well above the requirements of AS 23112 most parts. There is a very small number of areas that could be considered as being outside... the Standard however, as stated they are limited.

1. Having conducted a view of the paintwork in the dwelling, I am not satisfied that, seen from a normal viewing position, Mr Thorne identified relevant alleged defects in the painting. There were a number of slight blemishes, none of which, in my view, was discernible from a normal viewing position. During the view, Mr Thorne also pointed to two specific defects-a popped nail in the ceiling of the kitchen and a mark above the television in the sitting room. Mr Love disagreed that the popped nail could be seen, and rather thought that the mark was an impact mark, having caused an indentation in the plaster wall.
2. If I am incorrect in concluding that the complaints made about the internal painting by Mr Thorne do not constitute defects, and that the view should be taken that they amount to departures from the relevant AS 2311 (2009), I would have been persuaded by the builder's submission that it would not have been reasonable in the circumstances to award the owners the claimed costs of rectification for the following reasons.
3. The function of the painted internal surfaces of the dwelling is to provide visually pleasing internal wall and ceiling surfaces such as provide a pleasing aesthetic amenity to the dwelling, with a limited functional purpose. Thus described, and addressing the Stone first consideration, the owners' 'performance interest' (in other words, 'the benefit bargained for', in the words of Doyle J) is better seen, I consider, as an aesthetic requirement.
4. Characterised in this way, were the claimed defects in the painting considered to be departures from the relevant AS 2311 (2009) standards, (and addressing the Stone second consideration), I would find, by reference to the nature and limited extent of the claimed defects, that the builder has nevertheless achieved the contractual objective of delivering visually pleasing internal wall and ceiling surfaces.
5. The Stone third consideration, any lack of proportionality between the proposed work and the benefit to be achieved by the owners by this particular work, would also be a relevant consideration. I would consider that this disproportion would be a relevant consideration in my determination that it would be unreasonable to undertake the rectification work contemplated.
6. If, therefore, in relation to the alleged plastering defects, there were a finding that the builder is liable, in my view damages would sound only in compensation for loss of amenity.
7. With respect to the Stone fourth consideration, I find from the evidence that Mr Komuves is a painter by profession, and that he has worked as a painter in Australia for four years, having previously trained as a mechanical engineer in Hungary. Further, the evidence of Mr Love was as follows:

Please note that [before my inspection on 6 November 2019, being the basis of my observations in the Thorne report] I [inspected] the dwelling on 9 October 2018 and had marked up the paintwork at that time with numerous blue tape markings. When I re-attended on 23 October [2018] I noted that all of my defects had been rectified.

... I noted a large amount of painting equipment in the garage with used trays that had dry paint in the same colour as the internal walls and ceilings. I also noted drop sheets that had drops of paint that were the same colour as the walls. Further, there were two large cans of wall paint which had been opened in the area noted in the garage that appeared to be the same colour as the wall paint.

When I was inside the dwelling, standing in the kitchen, I noted that the fridge wall have been painted in a manner that had half of the cornice covered in a different paint to that applied on all other parts. It is my... opinion that the homeowner may have repainted sections of the home at some stage from the time of taking the dwelling over to the time of this latest inspection.[34]

1. It find from this evidence that Mr Komuves has undertaken painting work inside the house since the owners took up occupation. It was put to Mr Komuves that in these circumstances, whatever sum of money may have been awarded by the Tribunal to the owners in damages in respect of the paintwork claim, he will undertake any further painting works himself, avoiding the need for the task to be contracted out as presupposed by the costings proffered by Mr Thorne. I found Mr Komuves's response to the effect that he would still engage a third party painter to undertake any painting rectification works as less than plausible, and would have imposed a steep discount on the quantum claimed by the owners, to take account of the fact that they have a duty to best mitigate their loss and their plain capacity to undertake the work themselves.

(a) alleged misalignment through the hinge lines of, and visible damage, marks and scratches to the cupboards forming the kitchen cabinetry;

(b) a cabinet door that is cut short; and

(c) replacement of an allegedly incorrect single pantry door for a double pantry door, thus creating separately accessible top and bottom pantry internal shelving.

1. There is a limited reference only to kitchen items in the re-inspection report for handover phase, a reference to scratches and marks and 'adjustments to doors' in the list of known defects and incomplete work and further references to scratches and marks in the subsequent DBDRV agreement.
2. Mr Thorne's costing of $10,560 is supported by the following commentary:

Replace section of kitchen cabinets installed not as per plan. Replace damaged doors and panels. Replace previously poor fitting cabinet doors to balance gaps.

1. Mr Thorne relies on chapter 10.04 of the GST 2015, that reads as follows:

Bench tops, cabinet doors and drawer fronts

Unless otherwise specified, cabinet door and drawer fronts are defective if they are not aligned, or do not have consistent gaps between them at handover, and can be seen from a normal viewing position.

Where the time limit for defects in bench tops, cabinet drawers, drawer fronts and similar joinery is not documented, it is to be taken as six months from completion.

1. During the view, Mr Thorne also identified alleged defects not referred to in his report, as including white marks on the edges of some of the cabinet doors, and an alleged misalignment of the bulkhead and the stone top bench. I am not satisfied that the white marks can be seen from a normal viewing position, nor am I satisfied from drawings that alignment of the bulkhead and the stone top bench was required. These claims are not proved.
2. Mr Love concludes that the misalignment of the cabinetry doors is extreme, and that over his professional life he has never seen misalignment to this extent. He reports however, that during his inspection of the dwelling in October 2019, he checked off all kitchen cabinets as being aligned. This is supported by the fact that the misalignment was not referred to either in the re-inspection report for pre-handover stage or in the list of known defects and incomplete work. Mr Love speculates that a follow up adjustment that would normally occur after three months or so of occupation did not occur. Mr Love gave evidence that the adjustment of the hinges of the cabinet doors, using the adjustment screws forming part of the hinges so as to achieve properly aligned edges, would cost $195.
3. With respect to the pantry door, I am not satisfied that the owners have satisfied me on the balance of probabilities that it was a term of the building contract that the pantry door, being the 'hinged corner cupboard door' shown in:

(a) the elevation described as '01 KITCHEN ELEVATION' in INTERNAL ELEVATIONS drawing A6.0 (showing the panty door from the front); and

(b) the elevation described as '02 KITCHEN ELEVATION' in INTERNAL ELEVATIONS drawing A6.0 (showing the pantry from the side)

show a double pantry door, as contended on behalf of the owners.

1. Mr Phillpott for the owners submits that a third elevation described as '05 KITCHEN ELEV' in the same INTERNAL ELEVATIONS drawing A6.0 (showing the panty door from the front) shows a horizontal line running through the pantry door, level with the top of the stone bench top, so as to denote a split door of the type the owners contend should have been installed. This is an adventurous submission, with which I disagree. I consider that this elevation is of a most general nature, whereas elevations '01 KITCHEN ELEVATION' and '02 KITCHEN ELEVATION' are more detailed drawings that specify with more exactitude the layout of the drawers and the cupboards. In the case of any ambiguity, I consider that the more specific elevations in these elevations take precedence over the less general '05 KITCHEN ELEV' in which, there is room for argument, the lateral line through the described pantry door is an error in drafting.[35]
2. The costings of Mr Thorne are in respect of the replacement of all the kitchen cabinetry at a cost of $10,560.
3. Mr Love is of the opinion that $10,560 claimed rectification costs is excessive, and that the entire replacement of the kitchen and bench tops, were it warranted, would in his view not exceed $5,500.
4. I am not satisfied that chips, scratches and other alleged blemishes in the cabinetry, assuming that they were apparent at handover of the dwelling justify the entire replacement of the cabinetry at this cost.
5. If I am incorrect in concluding that the complaints made about the cabinetry by Mr Thorne do not constitute defects, and that the view should be taken that they amount to departures from the relevant contractual requirements, I would have been persuaded by the builder's submission that it would not have been reasonable in the circumstances to award the owners the claimed costs of rectification for the following reasons.
6. The function of the cabinetry is twofold-to create an aesthetically pleasing internal fitting that serves as a practical housing for kitchen and other household items. Thus described, and addressing the Stone first consideration, the owners' 'performance interest' (in other words, 'the benefit bargained for', in the words of Doyle J) is better seen, I consider, as both functional and aesthetic in nature.
7. Characterised in this way (and again, were the claimed defects in the cabinetry considered to be departures from relevant contractual standards), and addressing the Stone second consideration, I would consider that despite the departures from the required contractual standards, the builder has in the installation of the cabinetry nevertheless achieved this contractual objective.
8. If there were a finding of defective installation of the cabinetry by the builder, therefore, damages would sound only in compensation for loss of amenity.
9. I consider that the replacement of the entire kitchen cabinetry, in respect of the defects that I observed, is unreasonable. There are no costings for replacement of doors that are cut shorter than is appropriate.
10. I award $195 (plus 30% rectifying builder's margin) for adjustments necessary to align the doors of the cabinetry. The claim for $10,560 otherwise fails.

1. The owners claim $1,160.
2. Mr Thorne relies on chapter 11.05 of the GST 2015, that reads as follows:

Cracked, pitted, chipped, scratched or loose tiles

Tiles are defective if they are correct, pitted, chipped, scratched or loose at handover.

After handover, tiles are defective where the builder's workmanship causes details to become cracked, pitted, chipped or loose within 24 months.

1. Mr Thorn is of the view that the tiles in the family/living room and kitchen area have visible damage, and that replacement is required. Mr Thorne considers that the removal and replacement of floor tiles in the kitchen and family/living room will cost $1,160 being 16 hours labour at $55 per hour, plus materials costing $280.
2. Mr Love inspected the tiles for the purpose of the Love report, and examined all the areas pointed out by the owners has been defective, identified by blue tape clearly marking the allegedly defective tiles. Mr Love says that he observed chipped and scratched tiles to a very small number of areas, and was unable to say whether these were existing at the time of handover or were as a result of subsequent activities by the owners.
3. I am not satisfied that, other than the chip in the kitchen tile, the alleged chips and scratches to the tiles are observable from a normal viewing position.
4. I am not satisfied, given the limited nature of any complaint made about tiles in the re-inspection report for pre-handover stage (one tile in the living room in paragraph 28(a)) and in the list of known defects and incomplete work (a chipped tile in the entry hall), both documents by their nature reflecting most exacting inspections of the dwelling, that the chipped tile in the kitchen, inspected during the view and not the subject of Mr Thorne's report, existed at handover.
5. In respect of the two other tiles that were addressed in the re-inspection report for pre-handover stage and the list of known defects and incomplete work, I award $320 (plus 30% rectifying builder's margin) being the costing put forward by Mr Love.

Alleged defect 7-structural support of the bath in bathroom 1

1. The owners claim $1,452. They have had the use of the bath for almost 4 years.
2. Mr Thorne engaged by the owners is of the opinion that the fibreglass bath has not been installed properly, so as to comply with manufacturer's recommendations. He states that it is 'drummy' and unsupported on a sand and cement slurry, so as to prevent flexing and cracking. He costs the removal of the bath and its reinstallation on a sand and cement base at $1,452.
3. In his report, Mr Love expressed the view that the bath is fully supported, in accordance with industry practice, and that a sand and cement slurry is present under the bath. He stood in the bath during the view, and bounced up and down several times. He informed the Tribunal that he weighs about 125 kgs. He considers that there may be a 'slight gap' between the top of the slurry and the bottom of the bath, which is known as 'mortar sag' or 'mortar shrinkage' that is a typical occurrence. He is of the view that no defect exists.
4. During cross-examination, a document entitled 'Pre-Plaster Inspection Report' dated 5 April 2017 was shown by Mr Phillpott to Mr Love. It was prepared by a Mr Payne, a former employee of Mr Love's company. Item 26 on page 26 of that report states:

Bath installation has not [been] fully supported from underneath...the manufacturer's installation guide is to install a full bed of mortar below the bath...[the builder] will need to rework this bath installation with the correct support"

1. Mr Love responded that he believes that the defect was attended to, as when he tested the bath by jumping in it, he could not feel the trimming timbers that would be present at two points below the bath.
2. Mr Phillpott submits that the Pre-Plaster Inspection Report is consistent with the opinion of Mr Thorne, and has not been displaced by the weight-bearing test engaged in by Mr Love.
3. I find that the stress test performed by Mr Love during the view tended to indicate that the bath is supported.
4. In all the circumstances, and in the absence of the bath being removed for an inspection of what lies beneath, I cannot be satisfied by the evidence of Mr Thorne to the effect that the bath is not set into a sand and cement base that, on the balance of probabilities, this is so.

1. The owners claim $18,478.
2. Mr Thorne is of the opinion that the aluminium doors are defective, because they show 'impact damage, marks, scratches and are of poor quality'. The allegation is that they have not been installed by the builder in a proper and workmanlike manner
3. Mr Thorne provided the following detailed costings of the $18,478 replacement costs claimed:

Remove and replace architraves.

Remove and replace broken, damaged and scratched sliding door frames and fixed panels.

Remove and replace damaged and scratched aluminium framed window.

A & L Windows and Doors, Materials $14,254.00

Labour 4 people 16 hours @$66.00 per hour $4,224.00

$18,478.00

1. The owners rely on an email exchange between the owners and a Ms Barnett of A & L Windows and Doors dated 1 April 2019. Mr Phillpott for the owners submitted that the builder's counsel did not challenge this evidence, and that it must therefore be accepted. Mr Downie for the builder submitted that this exchange does not identify any exceptional damage to the windows and doors, or state that the windows and doors supplied were at the time not covered by warranty. I consider that the contents of the bare email exchange are not sufficiently probative of this issue.
2. Mr Love reported in the Love report that on his view on 16 November 2019, he was unable to find any impact damage, and that the scratches and marks that were then pointed out by the owners were, in his view, manufacturing marks.
3. Given that the relevant Australian Standard is AS 2047 does not deal with surface quality of aluminium doors and windows, Mr Love is of the view that the presentation of these items should be 'in accordance with display'.[36] He states that he has visited several display homes of the applicant, and has found that marks having the same characteristics appear on the doors that he has seen at those displays.
4. Mr Love considers the marks to be minor in nature and that, in his view the presentation of the aluminium windows and doors was close to the general standard of such items wherever supplied. He reported that if the owners wish the marks and scratches to be covered up, a window service supplier would be able to do so at a cost of $350.
5. In common with some of the other claimed defective items, the Thorne report does not particularise where the impact damage, marks and scratches on the windows and door frames appear. Again, it was therefore necessary for the parties, together with their legal representatives and respective experts, during the view on the third day, to walk around the perimeter of the dwelling, and have Mr Thorne point to marks on the window and door frames that he considered were representative of defective windows and doors.
6. There was a mark on the window adjacent to the ensuite bathroom, identified by Mr Thorne as a defect, but Mr Love was able to scratch it off, identifying it as plaster. I also observed items of dirt on the window frames, caused by the weather, which were not distinguishable from the alleged defective surface characteristics.
7. I was not able to be satisfied of the extent to which, if at all, the allegedly defective surface characteristics were caused by the owners in post occupation activities. For example, Mr Love was able to observe an area adjacent to decking works being undertaken by the owners, where some of the claimed scuffs and surface marks were present.
8. I find that no damage, marks or scratches were evident other than those that were drawn to my attention by Mr Thorne on the close surface inspection. I am not satisfied that the alleged impact damage, marks and scratches on the windows and door frames are visible from a normal viewing position, and the claim fails.
9. If I am incorrect in concluding that the complaints made about the marks to the aluminium windows and doors internal do not constitute defects as a result of poor installation by the builder, I would have been persuaded by the builder's submission that it would not have been reasonable in the circumstances to award the owners the claimed costs of total replacement for the following reasons.
10. The function of the aluminium windows and doors is to provide visually pleasing frames which provide a structural housing for the windows of the dwelling. Thus regarded, and addressing the Stone first consideration, the owners' 'performance interest' (in other words, 'the benefit bargained for', in the words of Doyle J) is seen, I consider, as having both a functional and aesthetic requirement.
11. Characterised in this way, were claimed marks and scratches in the aluminium frames and windows regarded as having been caused by defective installation, (and addressing the Stone second consideration), I would find, by reference to the nature and limited extent of the claimed marks and scratches, that the builder has nevertheless achieved the contractual objective of delivering visually pleasing structurally sound and aesthetically pleasing aluminium windows and doors.
12. The Stone third consideration, any lack of proportionality between the proposed work and the benefit to be achieved by the owners by this particular work, would also be a relevant consideration here. I would consider that the disproportion between the claimed replacement cost and the nature of the claimed defects would be a relevant consideration in my determination that it would be unreasonable to undertake the rectification work contemplated.
13. If there were a finding of defective installation of the aluminium windows and doors by the builder, therefore, in my view damages would sound only in compensation for loss of amenity.

1. The owners claim is for $1,496.
2. The claim is particularised as follows:

Remove and relay some sections of roof tiles. Repair pointing throughout.

Including safety rail hire.

2 people x 8 hrs @$66 per hour $1,056.00

Hire charge inc install and removal $440.00

$1,496.00

6.03 Roof Tiles

Roof tiles are defective if they do not conform to the manufacturer's sample. Irregularities in tiles are defects if they are visible from a normal viewing position at ground or upper floor level...

3.4 BEDDING AND POINTING

Bedding and pointing may be used to hold down, align, weatherproof, infill, and decorate the verge, eaves and junction of tiles and accessories. Where bedding and pointing is used, all mortar used shall be in accordance with Clause 2.3.

NOTES:

1. Ridge tiles and fittings may be laid without bedding or pointing provided they can be adequately installed by other means (see Table 4).
2. Bedding and pointing applied to tiles may require formation of weep holes to permit drainage.
3. Structural movement may result in the cracking of bedding and pointing.
4. Mr Thorne, engaged by the owners, is of the opinion that:

Roof tiles are not sitting flat in some areas, ridge and hip pointing , finish, has visible cracks throughout. Some tile relaying and pointing repairs required.

1. Mr Love, engaged by the builder, notes in the Love report that several tiles on the roof are broken. He opines that the photos of cracked tiles on the roof, contained in the Thorne report, could only have happened by someone walking on the roof, and opines that the damage could have been caused by a television antenna installer. Mr Komuves was cross-examined about this, and he denied any knowledge of damage by a third party. Mr Love also opines that the cracking in the pointing may have been caused by the usual structural movement of the dwelling, as suggested by Note 3 to AS 2050 paragraph 3.4.
2. The builder has not satisfied me about these matters, being speculation as to possible causes of the defects, and I find that the owners have proved the defects as likely to have existed at the time of their occupation. Note 111 of the reinspection report for handover phase also suggests that the possibility that some roof tiles were then cracked or broken.
3. I find that Mr Thorne's calculation of rectification cost of $1,496 (plus 30% rectifying builder's margin) to be reasonable.

Repair/re rendering as required. Repair to front letter box.

Min charge 10 sqm @ $88 per sqm $880.00

Scaffold hire inc delivery and pick up $260.00

$1,140.00

...there is [within the meaning of the GST paragraph 9.04] cracking and other blemishes in rendered or hard plastered surfaces on masonry substrate. Cracking, blemishes and poor quality finished (sic) noted from the normal viewing position.

1. The experts also noted a crack in the rendered letter box.
2. The GST paragraph 9.04 references paragraph 3.02 of the GST, which states that a hairline crack of less than 0.1 mm does not need repair, and that a crack of less than1 mm is a fine crack that does not need repair. Mr Love considers that the small crack in the front wall of the dwelling is less than 1 mm in width, and is therefore not a defect.
3. The owners have not satisfied me on the balance of probabilities that the crack in the letter box[37] was a defective existing at the time of handover. The crack is obvious, and it would appear most unlikely, if it was existing at handover, to have escaped the meticulous inspection that preceded the reinspection report for handover phase, and the list of known defects and incomplete works. Neither Mr Thorne nor Mr Love, during the view on the third day of the hearing, could rule out that possibility, given the nature of the crack, that it was caused by impact damage of some sort, especially given the letterbox's prominent position at the front of the dwelling, adjacent to the owners' pedestrian path leading to the front door, and adjacent to the public footpath. I find that the crack was caused by impact damage, rather defectively applied render.
4. I am not satisfied that given the size of the crack in the render at the front of the house, which I find is less than 1 mm, was caused by defective workmanship.
5. The claim in respect of rendering fails.

1. The owners claim $4,800.
2. Mr Thorne is of the opinion that there is:

Permanent staining note throughout carpet.

When viewed from normal viewing position.

Carpet replacement required.

Bed one, Bed two, Bed three, Bed four, Sitting room.

1. Mr Love stated that he inspected the dwelling twice before occupation, and that item 48 of the DBDRV report notes that the claim in this respect had been rectified. Mr Love also states that on his second inspection, he noted that the claim in this respect had bee rectified. It is Mr Love's view, therefore, that the carpet marks all occurred subsequent to handover. Mr Love allows $600 for steam cleaning of the carpet, if the marks are found to constitute a defect.
2. Mr Komuves gave evidence that he had a professional steam clean the carpets, but that he can still see staining in bedroom 3, the sitting room and the master bedroom.
3. The stains to the carpet are not obvious, and it would appear most unlikely, if they existed at handover, to have escaped the meticulous inspection that preceded the reinspection report for handover phase, and the list of known defects and incomplete works.
4. The owners have not satisfied me on the balance of probabilities that the alleged stains in the carpet existed at the time of handover.
5. Had I found that the alleged stains in the carpet are a defect for which the builder is responsible, the Stone third consideration-the lack of proportionality between the proposed work costing $4,800 and the benefit to be achieved by the owners by this particular work-would also be a relevant consideration. I would have considered that this disproportion would be a relevant consideration in my determination that it would be unreasonable to undertake the carpet replacement proposed.

1. The owners claim $1,790.
2. Mr Thorne is of the view that that:

Heating system not installed as per specifications.

Add additional zone controllers.

Add additional outlet.

1. Mr Komuves alleges by his statement that the owners upgraded the heating system 'to 5 stars for 4 zones in the contract'. He states that he 'would like to see the [four] heating system zone plans, but that [he was never given them]'.
2. The ducted heating layout is shown on drawing A5.0. It provides for 9 outlets, and 2 zones, both in the drawing itself and in the 'Note' contained in the drawing.
3. A variation document signed by the respondents on 25 January 2017[38] states as follows:

Refer to sheet A5.0 and Sales Quote page 3

Heating zoned areas (zone 1 to the bedrooms and zone 2 to the living areas)

2 additional outlets have been added, 1 to the living room and 1 to the Study...

1. Mr Komuves gave evidence that he believed that the owners were to receive a four zone system.
2. I am not satisfied, based on the contract documents to which I have referred, and there being no documentation sufficiently recording the owners' expectations that they were to receive a four zone system, that the owners have proved on the balance of probabilities that they were to receive a four zone system. The claim fails.

1. The owners claim a revised sum of $649.61 in respect of this item.
2. They allege that a retaining wall was required to be erected by them to support the neighbour's land to the north, and that the builder should have done so as part of the works. Mr Thorne's opinion is that a retaining wall was required 'due to site cut'.
3. The owners rely on item 4.1 of the builder's sales quotation, that states:

Provide Site Cut and fill not exceeding 300mm overall with excess soil spread or stockpiled on site.

1. The owners contend that the land was left by the builder in a situation where the site cut for the owner's dwelling left a differential between the two properties higher than 300 mm. Mr Komuves gave evidence that the difference was 400 mm, with a 60-65 degree batter that had to be retained.
2. Mr Love is of the opinion that a minimum of 2 m in distance had to be cut by the builder in compliance with NCC Volume 2 clause 3.1.2.3, which requires the finished surface level adjacent to the slab of the dwelling to fall away from the slab. The builder has accordingly battered up from the level of the site cut to the level of the rear lot.
3. The basis of the owners' claim is that defective site cut works by the builder necessitated the erection of a retaining wall, rather than the basis being that one was required by the building contract.[39]
4. In the 4 years since the works were undertaken, the owners have installed landscaping, including a rear deck, grass and an attractive flower bed supported by the relevant retaining wall. Noting that the owners may therefore well have had ancillary reasons for erecting the retaining wall, I find that in the absence of any countering evidence from the builder concerning the site cut differential, I find that the 400 mm height left by the builder was a sufficiently efficient reason for its erection that the owners have proved their claim.

1. I have awarded a significantly lesser amount of damages that those claimed by the owners, because of the much reduced scope of works for which I have found the builder to be liable.
2. The experts agree that the cost of rubbish removal should be fixed on a 'sliding scale' between the amounts proposed by the respective experts'.
3. Given that the amount recovered by the owners in respect of alleged defective works is less than about 10% of their claim, I fix rubbish removal and cleaning at $300.

1. Given the limited scope of rectification works, no amount for alternative accommodation is warranted, and the claim fails.

1. The table below sets out the individual amounts that I have found to be owing by the builder to the owners in respect of damages for defective works, including 30% builder's margin, which I find to be reasonable. Two of the amounts were agreed between the parties. The total is $10,747.89. The further amount agreed by the parties as owing by the builder to the owners for delay is $12,900 as also shown in the table.

Liability of the builder, as determined or agreed.

1. When the total amount of defective works and delay claims of $23,647.89 is set off from the final claim of the builder in the amount of $23,579.40 the amount I find to be owing by the builder to the owner is $68.49. There will be an order to this effect.

[3] Robinson v Harman (1848) 1 Ex Rep 850.

[4] [1954] HCA 36; [1954] 90 CLR 613

[7] Any exclusion of the right of the builder to contend, as it does here, here that certain of the damages claimed by the owners are not necessary and reasonable would appear to have been required to be expressly stated in clause 44 of the building contract: Gilbert-Ash Northern Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689.

[8] [1978] 1 All ER 33

[10] [1995] WLR 118

[12] [1977] 3 All ER 129 at 316.

[15] [2009] HCA 8, Judgment 12 February 2009.

[18] See, for example Doyle J in Stone v Chappel (infra) at [261]-[262].

[19] [2010] VCAT 1202

[20] It will be seen that Senior Member Walker's observations in paragraph 165 (d)(i)-(iv) of Clarendon Homes were indeed harbingers of the same considerations considered by Doyle J to be relevant to the question of assessing whether claimed rectification costs are unreasonable; see Stone v Chappel [2017] SASCFC 72 at [256]- [263], upon which his Honour provided a fuller exemplification (see further below).

[21] [2009] WASCA 87, Judgment 18 May 2009.

[22] Ibid. Taken from the judgment at [67].

[23] [2017] SASCFC 72

[24] Per Doyle J (with Kourakis CJ(in part) and Hinton J agreeing)

[25] His Honour then cited a number of decisions of the New South Wales Court of Appeal where the issue of disproportion was considered relevant.

[26] See also the similar analysis of Kourakis CJ in Stone v Chappel (ibid) at [28]-[71].

[28] See Stone v Chappel (ibid) per Doyle J at [263] quoted above.

[29] Guide to Standards and Tolerances (2015), issued by Victorian Building Authority (the "GST 2015").

[30] A NAWKAW total treatment would cost $10,368, but the owners seek only 80% of this amount, being the amount of affected brickwork as a proportion of the whole.

[32] See GST 2015 page 14 and AS 2589.1 (1997) (superseded in other respects) Notes to Section 6 "Levels of Finish".

[33] Such as the finish required to be provided here-see page 19 of the Specification forming part of the building contract.

[35] Mooney v Hery Boot Construction Ltd (1966) 80 BLR 66 at 83; Bovis Lend Lease Ltd v Cofely Engineering Services [2009] EWHC 1120 (TCC) at [23(a) and [26]. See also Construction Law 3rd ed 2020 [3.177].

[36] See s 43(3) Domestic Building Contracts Act 1985 and Clarendon Homes (ibid) at [104].

[37] See page 46 of the Love report, at TB 136.

[39] I accept the builder's evidence that Revision T of Drawing A1.1 SITE PLAN did not specify a retaining wall (unlike Revision F that formed part of the building contract).