1. As noted earlier, the owners bring various claims for damages related to delay in completion of the works.
2. The builder says that the works under each of the contracts were delayed for various reasons including the large number of variations to the works carried out at the request of the owners, and the time taken by the owners to finalise selections in respect of various provisional sum items.
3. Each of the parties called expert witnesses who gave opinion evidence and produced reports, founded on differing theoretical modelling, as to delays in the construction programs for 7 and 9 Page Street.
4. Mr Senogles, called by the builder, adopted a time - impact analysis model. His analysis used, as a starting point, a simple baseline construction program prepared by the builder at around the time of, or shortly before, the commencement of works. With the aid of the builder's site diary, various invoices and the witness statement of Mr Just, Mr Senogles then constructed further construction programs at various time intervals. In this sense, his modelling on alleged delay is prospective rather than retrospective.
5. Mr Andrews, called by the owners, is critical of Mr Senogles' modelling primarily because it relies on what Mr Andrews considers to be insufficient and unreliable sources such as Mr Just's witness statement and the builder's incomplete site diary.
6. Mr Andrews used alternative modelling. Rather than the prospective approach of assessing delay and then analysing the effect on the critical path of construction looking forwards, Mr Andrews starts with the works 'as constructed' and creates, retrospectively, the critical path of construction.
7. Although I do not doubt the experience and earnestness of Mr Senogles and Mr Andrews, in my view their conclusions emerge from the somewhat artificial realm of theoretical modelling, and are of no real use to me.
8. The limited value of the evidence of Mr Senogles and Mr Andrews is also partly due to the fact that, as discussed earlier, I have found that, as part of the November 2015 agreement, the due date for completion of the contract works was amended to 14 December 2015 for 9 Page Street, and 15 February 2016 for 7 Page Street.
9. The agreement to extend the completion dates means, in effect, that it is only delay arising from causes after that agreement that might be taken to impact on the parties' rights and obligations under the contracts.
10. The issue is whether there is satisfactory reason/s to allow any extension to the agreed completion dates. In my view there is no satisfactory reason.
11. The contracts provide the mechanism by which the builder might claim, and be granted, an extension of time for the completion of works. Clause 15.1 in each of the contracts sets out causes of delay in respect of which the builder may be entitled to an extension of time. Those causes include:
    • - the general unavailability of materials necessary to carry out the works;
    • - any act, default or omission on the part of the owners... including the failure of the owners to provide to the builder information requested by the builder in respect of provisional sum items of work;
    • - any obstruction, interference or hindrance with the carrying out of the works caused by the owners;
    • - any other cause beyond the reasonable control of the builder.
12. Clause 15.1 goes on to state that in the event of such delay:

the Builder will within a reasonable time advise the Owner of the cause and the reasonable estimated length of the delay and the Builder will be entitled to a fair and reasonable extension of time for Completion of the Works;

the Builder may, within fourteen days (14) Days of becoming aware that Completion of the works will be delayed, notify the Owner in writing of the delay stating the cause and the reasonable estimated length of the delay

If the Owner does not notify the Builder in writing and reject or dispute the cause of the delay and/or the estimated length of the delay within fourteen (14) days after receipt of the Builder's notice under clause 15.1, the Completion Date under the Contract will be automatically extended by the delay period stated in the said notice...

If the Owner serves a written notice upon the Builder disputing or rejecting the estimated length of the delay stated in the Builder's notice, the Builder is still entitled to a fair and reasonable extension of time for Completion of the Works.

1. The builder submits[16] that extensions of time for completion of the works is warranted for delays in respect of:
   • - the stonework to 7 Page Street;
   • - the parquetry at 9 Page Street; and
   • - the pool fencing/lattice at 9 Page Street

1. The builder says that the material for the stone bench tops was selected early in the progress of works, in around March 2015, and set aside by the supplier, Adriatic Stone ("Adriatic"). The builder says that the quantity of the benchtop material set aside by Adriatic was based on drawings approved by Alex on behalf of the owners.
2. The builder says that Alex subsequently made a number of amendments to the drawings, increasing the amount of stone required. Mr Just says that he provided the amended drawings/templates to Adriatic on 12 November 2015, and that he expected there would be a lag time of between 15 - 22 days for delivery of the stonework for installation. He says that Adriatic informed him on 10 December 2015 that it had insufficient stone for all the stoneworks at 7 Page Street, and Adriatic would need further time to source the additional stone. Mr Just says that Alex did not approve the acquisition of further stone until 14 January 2016.
3. The builder claims an entitlement to 54 days extension of time, based on the Mr Senogle's modelling. As noted above, I find Mr Senogles evidence to be of no real use to me. But that, in itself, does not count out an extension of time.
4. It is not in dispute that there was a delay in the supply of the stonework from Adriatic.
5. Alex says that the final drawings in respect of stonework was approved and provided to the builder a considerable time, some months, prior to November 2015. The owners say that if the builder did not provide the drawings to Adriatic until 12 November 2015, that is a delay attributable to the builder, not the owners.
6. It appears that Adriatic acquired the requisite extra stone by 22 December 2015. I draw this conclusion from Adriatic's invoice to the builder dated 22 December 2015[17] which makes reference to additional slabs of Carrara stone.
7. Email correspondence between the builder and Adriatic[18] indicates that on 14 January 2016, Alex inspected the additional Carrara stone and confirmed directly to Adriatic his approval of it. The builder blames Alex for the delay between Adriatic's acquisition of the stone, and Alex's inspection and approval of it. Alex disputes this. He says he inspected the stone in a timely manner following a request to do so.
8. If the builder was concerned that the delay to stonework, beyond its control, would delay the completion of the contract works, the builder might well have issued a written notice of the type contemplated under clause 15 in the contract. But the builder did not do this.
9. All up, the evidence as to the delay in the stonework is equivocal. I am not satisfied, on the evidence before me, that the cause for delay in the stonework was of a type specified under clause 15.1 in the contract. That is, I am not satisfied on the evidence that the delay was caused by the owners' acts or omissions, or was otherwise a cause beyond the control of the builder.
10. And in any event, whatever the cause of the delay in the stonework, I am not satisfied that such delay justifies an extension to the due date for completion of works. The due date for completion was, pursuant to the November 2015 agreement, extended to 15 February 2016. There is no satisfactory explanation as to why the stonework delay prevented the builder from achieving completion by the due date.

1. Mr Just says that the parquetry boards for flooring in 9 Page Street were of poor quality such that a high percentage of them could not be used. He says the poor quality boards were obtained from a supplier nominated by Alex, namely 'Vandar Trading Pty Ltd'.
2. Once all the boards were installed, a sub-contractor was engaged to sand, stain and polish the boards. Mr Just says that the sub-contractor, whom he recalls was named 'Mario', was also nominated by Alex.
3. Mario attended in around November 2015 and began sanding the floor, but soon advised Mr Just that he could not complete the works because some of the parquetry boards were coming loose and showing signs of 'drumminess'.
4. The builder's carpenters thereafter investigated the boards and found some had become loose from insufficient glue, while others were drummy due to the poor quality of the timber which was cupping/twisting. The problematic boards were removed and replaced with new boards. Mr Just says that approximately 100 boards, out of a total of around 3000, were replaced. He says these works took proximally 7 to 9 days.
5. The builder submits it was delayed in finishing the parquetry flooring because of the poor quality boards supplied by the supplier nominated by the owners. It says the delay was beyond its control and is therefore entitled to an extension of time. The builder seeks an extension of 26 working days, based on Mr Senogles modelling.
6. Again, as noted above, I find Mr Senogles evidence to be of no real use to me, but that does not mean there should be no extension of time.
7. I accept the evidence of Mr Just that the quality of the parquetry boards caused some delay in finishing the flooring works. But I do not accept the builder's submission that I should find that the owners are responsible for the delay, and that as such, the builder is entitled to an extension of time.
8. Mr Just gave evidence that, instead of accepting the parquetry supplier nominated by the applicants, he should have stuck with a supplier he knew and trusted. It is a salient point. But the evidence is not that the builder was compelled to select the supplier nominated by the owners. It was a choice the builder made, albeit at the suggestion of the owners. As such, I am not persuaded that the delay to the parquetry is just cause for an extension of time under clause 15 in the contract.
9. And, as with the stonework, if the builder was concerned that the works would be delayed for a reason beyond its control, the builder could have issued a notice under clause 15 in the contract. But the builder did not do so.
10. I am not satisfied, on the evidence, that the delay in the parquetry flooring justifies any extension of time to the due completion date.

1. Mr Just says that Alex instructed the builder to install lattice panels, to create some privacy, to boundary fencing. This is not disputed.
2. Mr Just says that when the RBS carried out a site inspection on around 15 February 2016, he directed alterations to the lattice - the installation of mesh - to ensure that the latticed fence was not a 'climbable' fence around the swimming pool.
3. Mr Just says that the mesh works took three days to complete, and it took a further two days to co-ordinate a further inspection by the RBS.
4. The builder submits that the fencing surrounding the pool would have been compliant, that is it would have been approved by the RBS, if the lattice had not been installed. The builder says that because the lattice works were a variation requested by the owners, they bear responsibility for the delay caused as a result of the direction of the RBS. The builder submits it is entitled to an extension of time of five days.
5. I do not accept the submission.
6. The variations schedule prepared by the builder, discussed earlier in these reasons, includes information as to when the lattice panel works were carried out. Some works were carried out between 24 October and 4 November 2015. Further works were carried out between 9 December and 11 December 2015. And then some further additional works were carried out between 4 January and 5 January 2016.
7. The builder is not claiming an extension of time for the lattice variation works carried out by 5 January 2016. The builder is claiming the extension of time for the delay resulting from the direction of the RBS on or about 15 February 2016. I do not accept that the owners are responsible for such delay.
8. The lattice variation works were part of the overall building works which would ultimately be inspected by the RBS. Had the builder contemplated that the lattice works would cause concern to the RBS, the builder could have included the remedial works, the installation of mesh, as part and parcel of the lattice installation works. Had the builder been unsure as to whether the lattice works would be compliant in the eyes of the RBS, the builder could have sought the opinion of the RBS before the lattice works were installed.
9. In my view, the owners are not responsible for the builder's lack of knowledge in this regard.
10. I am not persuaded that the cause of the alleged delay falls within clause 15.1 in the contract. The owners request for the lattice variation works is not the cause of the claimed delay.
11. Nor do I consider the delay to have been beyond the reasonable control of the builder. In my view, the builder should have appreciated the reasonable likelihood that the alteration to the fencing around the pool would be a matter of concern to the RBS. Had the builder appreciated this, the builder could have sought clarification from the RBS before the works were commenced on 24 October 2016.
12. I find that the builder is not entitled to an extension of time in respect of the remedial works to the lattice panel fencing required as a result of the RBS direction on or about 15 February 2016.

1. Under the November 2015 agreement, the agreed due dates for completion of the works were 14 December 2015 for 9 Page Street, and 15 February 2016 for 7 Page Street. For the above reasons, I find that the builder has no entitlement to an extension of these dates.

OWNERS ACTIONS AFTER THE TERMINATION OF THE CONTRACTS

1. The owners completed construction of 7 Page Street as 'owner - builders'. The owners engaged 'B&J Chen Pty Ltd', at a cost of $22,000, to provide project management services to assist in bringing the works to completion. The RBS issued an occupancy permit for 7 Page Street on 19 September 2016, and the construction of 7 Page Street was completed at around this time.
2. 7 Page Street was quickly thereafter sold at auction on 8 October 2016 for a price of $3,690,000, with settlement occurring on 3 November 2016.

1. Following termination of the contracts, the owners attended to complete works at 9 Page Street, including:

1. in early May 2016, the owners satisfied the Building Notice issued by the RBS on 21 December 2015 by arranging for the engineer to inspect and certify the foundations to the retaining wall. The cost of the engineer was $330; 2. in around mid-June the owners engaged 'SWAT Constructions' to alter the windows in two bedrooms as required by the Building Order issued by the RBS on 21 December 2015. The RBS confirmed cancellation of the Building Order on 16 June 2016;

1. on around 1 September 2016, the owners arranged a plumber to complete the installation/commissioning of the dishwasher, and to complete the installation/commissioning of the sink and barbecue in the alfresco area. The plumber was, at that time, also engaged in a number of works at 7 Page Street.
2. There is little explanation as to why it took the owners more than four months, after termination of the contracts in April 2016, to carry out the minor scope of works required to bring the 9 Page Street to completion. As I understand it, the owners initial enthusiasm to sell 9 Page Street was tempered by the mediocre response to the marketing campaign in February/March 2016. And it was convenient to complete the installation/commissioning of the dishwasher and the barbecue in around early September 2016 when a plumber engaged by the owners was carrying out similar works at 7 Page Street.
3. There is also little evidence as to attempts to sell or lease 9 Page Street after it was completed. Alex says that the selling of 7 Page Street at auction on 8 October 2016, with settlement on 3 November 2016, relieved the financial pressure on the owners, such that they did not have to sell 9 Page Street quickly.
4. In mid-November 2016, the owners' daughter and her four children, residents of China, made a visit to Australia. She and her children, and the owners, moved into 9 Page Street until February 2017 when the owner's daughter and her children returned to China.
5. Mr Zhang says that he and his wife again lived at 9 Page Street for a few weeks in August 2017. As I understand it, the owners were generally open to offers to buy or lease the property, and in this regard the property was listed with a real estate agent, but no satisfactory offers were received. There was no further marketing campaign until shortly before the property was put to auction in early April 2018. 9 Page Street was sold at the auction.

1. As discussed above, I find that the owners were entitled to accept the builder's repudiation of each of the contracts and terminate the contracts, as they did on 14 April 2016.
2. The owners are entitled to damages. The general rule with respect to damages for breach of contract is that where a party sustains a loss by reason of the breach, that party is, in so far as money can do it, to be placed in the situation he would have been had the contract been properly performed. The general rule is subject to the qualification that it must be a reasonable course to adopt.[19]
3. In the case of a domestic building contract, assessment of damages include assessment of the reasonable cost, over and above the contract price (that is the adjusted contract price after allowances for provisional items expenditure and variations), to bring the contract works to completion in conformity with the scope of works prescribed under the contract, subject to the qualification that it is a reasonable course to adopt.
4. In my view it is appropriate that the damages be assessed separately in respect of the two contracts. That is, damages arising as a result of breach of the 9 Page Street contract be assessed separately from damages arising as a result of breach of the 7 Page Street contract. This does not mean that the circumstance of two side-by-side contracts involving the same parties is a circumstance that is ignored.
5. As part of the assessment of damages, I will include the payments made by the owners to the builder under each contract. As discussed earlier, the owners made payments in a total sum of $$2,129,130. Of this sum, $1,075,000 is the stage payments up to and including completion stage for 9 Page Street (not including provisional sum overrun and variations), and $954,000 as stage payments up to and including fixing stage for 7 Page Street (not including provisional sums overrun and variations).
6. This leaves a balance of $100,130 as the sum paid by the owners towards provisional sums overrun and variations for 7 and 9 Page Street together. In my view, it is reasonable to allocate this sum in proportions which correspond to my previous findings as to allowed cost of provisional sums overrun and variations. As set out earlier in these reasons, for 7 Page Street I allow $14,831.41 for provisional sums overrun and $45,536 for variations works, a total of $60,366 (rounded off to the nearest dollar). For 9 Page Street, the allowances are $105,759.93 for provisional sums overrun and $67,261 for variations, a total of $173,021 (rounded off to the nearest dollar). These figures translate to a percentage allowances (rounded off to the nearest whole number) of 26% for 7 Page Street and 74% for 9 Page Street. Applying these percentages to $100,130, I allow $26,034 as the sum paid by the owners for provisional sums overrun and variations for 7 Page Street, and I allow $74,096 as the sum paid by the owners for provisional sums overrun and variations for 9 Page Street**.**

1. I assess the adjusted contract price for 9 Page Street as follows:
   • - contract price nominated in the contract document $1,075,000
   • - plus variations and provisional sums overrun $ 173,021

1. I allow for payments made by the owners as follows:
   • - stage payments $1,075,000
   • - variations and provisional sums overrun allocation $ 74,096

1. Accordingly, I assess the unpaid contract balance for 9 Page Street as $98,925.

1. The owners claim a number of items of expenditure incurred by them after the termination of the contract. I heard expert evidence from Mr Berkowitz (called by the owners) and Mr Garrard (called by the builder) in respect of these items.

1. The owners claim $1021.01 which they say is the cost of water and electricity charges for 9 Page Street paid by them during the period the builder was on site. Mr Berkowitz says that such utility charges are normally borne by a builder while the builder is in possession of the site. As the contract does not reference express any obligation on the builder in respect of such charges, I do not allow this claim.

Engineer certification of retaining wall footings

1. As discussed earlier, in May 2016 the owners obtained the engineer's certification in respect of the retaining wall footings as required pursuant to the building notice issued by the by the RBS on 21 December 2015. They claim the cost of such certification, $330.
2. The contract quotation sets out a number of exclusions from the contract price, including 'Any costs associated with the building permit or inspections of the works' and 'Any fees from Consultants, Architect, Engineer or Building Surveyor.'
3. The owners submit that, despite the exclusion in the contract quotation, the builder should bear the cost because it could have been avoided had the builder arranged for inspection of the retaining wall footings at the appropriate time. That is, inspection of the retaining wall footings could have been arranged to coincide with one of the RBS' other inspections.
4. I do not accept the submission. There is no evidence before me that the retaining wall footings were exposed and capable of inspection on any particular date when the surveyor was inspecting the works. On the evidence before me, I am not satisfied that the fee in respect of the retaining wall footings, whether an engineer certification fee and/or a survey inspection fee, was an expense to be borne by the owners under the contract. I do not allow this claim.

Windows rectification pursuant to RBS requirement

1. As noted earlier, in around mid-June 2016 the owners arranged for 'SWAT Constructions' to alter the windows in two bedrooms as required by the building order issued by the RBS on 21 December 2015. They claim $1996.50 as the cost of such works.
2. I am not satisfied that the builder should bear this cost. The construction drawing in respect of these windows[20] clearly illustrates the windows as fixed. However, an explanatory note under the illustration makes reference to 'awning window', thus raising an ambiguity between the window drawing and the notation.
3. In my view, in the circumstance where the builder has followed the construction drawing provided by the owners, the builder should not be liable for the cost of altering the windows as required by the RBS, merely because the builder did not pick up the ambiguity raised by the notation in the drawing.
4. I do not allow this claim.

Installation of barbecue, sink and bulkhead in the alfresco area

1. There is no dispute that the builder had not installed the barbecue and sink in the alfresco area. Mr Berkowitz and Mr Garrard agree that the cost incurred by the owners to attend these works, $220, should be allowed. I allow $220.
2. Mr Berkowitz and Mr Garrard also agree that the construction of a bulkhead over the alfresco rangehood falls within the contract scope of works, and as such the owners should be compensated for the cost of such works incurred by them. The work was carried out by 'MAD Plaster Design', who also carried out similar works to 7 Page Street. MAD Plaster Design' provided only one invoice for all the works in a sum of $1468.50.[21] Mr Berkowitz and Mr Garrard agree that it is fair that half the sum of this invoice, $734.25, be allocated to the bulkhead construction at 9 Page Street. I allow $734.25 for this item.
3. Accordingly, I allow a total of **$954 (**rounded off to the nearest dollar) as the cost of contract works for 9 Page Street borne by the owners after termination of the contract.

1. Section 8 of the Act sets out mandatory warranties in relation to works under a domestic building contract. Each of the 7 Page Street and 9 Page Street contracts sets out these warranties under clause 10. The warranties include the following:

(a) the builder warrants that the work will be carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract;

(b) the builder warrants that all materials to be supplied by the builder for use in the work will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new;

(c) the builder warrants that the work will be carried out in accordance with, and will comply with, all laws and legal requirements including, without limiting the generality of this warranty, the Building Act 1993 and the regulations made under that Act4;

(d) the builder warrants that the work will be carried out with reasonable care and skill and will be completed by the date or within the period) specified by the contract;

1. The applicants say there remains a number of unfinished works and some defective works at 9 Page Street. The applicants claim, as damages, $54,598.10 as the cost to complete and rectify the works as assessed by their expert witness Mr Ryan. They say that this represents the reasonable cost to bring the works to conformity as prescribed under the contract.
2. In respect of these matters, I heard evidence from Mr Ryan, and expert evidence from Mr Lorich and Mr Garrard. I inspected the alleged incomplete and defective works with Mr Lorich and Mr Ryan at the view of 9 Page Street on day nine of the hearing.
3. The owners have sold 9 Page Street. At the time of the sale, the owners had not attended to rectification of any of the defects and deficiencies identified by Mr Ryan. The owners say that it remains appropriate, as part of the assessment of their damages arising from the builder's breach of contract, to include the reasonable cost to bring the defective/deficient works to contract conformity as prescribed by Mr Ryan. If I do not accept that damages should be allowed on this basis, the owners submit that, in the alternative, it is appropriate to award damages for the diminution in the value of 9 Page Street by reason of the alleged defective/deficient works, and they say the diminution in value should be assessed as the same amount, $54,598.10.
4. In my view, the sale of 9 Page Street does not, of itself, displace the general principle as to assessment of the owners' damages arising from the builder's breach of contract. However, it may well be that the sale of the property is a circumstance that may make the usual method of assessment of damage an unreasonable course to adopt. In my view it is appropriate to make the assessment having regard to the various alleged items of defective/deficient work, which I do below.

1. The experts agree that the following items may be classified as minor items requiring completion. They are items which would have been attended to by the builder had the builder fully performed the contract:
   • - a prominent drill hole in the front door just above the lock needs to be filled and made good;
   • - the rear garage door seal is to be sanded and stained;
   • - screws missing from rear garage door hinges;
   • - remove protection masking tape from the garage ceiling sensor;
   • - provide 2 remotes for garage door. One was provided, however the contract specifies 3. The experts agree on an allowance of $120;
   • - paint/seal the top and bottom of rear garage door;
   • - alfresco stone caulking required at top of splashbacks;
   • - caulking required to expansion joints installed to 1st floor rendered foam cladding;
   • - caulking required to minor gaps at ground floor entrance porch mouldings/columns;
   • - fixing of loose downpipe clip;
   • - paint the unpainted downpipe at alfresco East End;
   • - remove excess tiles stored in the garage;
   • - external PowerPoint for water tank pump to be relocated on the correct side of the tank;
   • - clean and caulk floor tile junction at powder room;
   • - seal waste pipe penetrations in kitchen base cupboards;
   • - minor adjustments required to a few draws and doors to kitchen cabinetry;
   • - install missing shelves (3) to kitchen base cupboards;
   • - fill and repaint minor cracks/gaps in alfresco ceiling cornices;
   • - final commissioning of alarm and sprinkler to ensure correct operation;
   • - adjustment to front centre window sash which is sticking and ensure correct operation of opening mechanism;
   • - clean marks on window in bedroom 3 and bedroom 4;
   • - fill and paint minor gaps/cracks to ensuite cornice;
   • - install missing screws to powder room door hinges;
   • - repair minor damage to 2nd ensuite door jamb at hinge area;
   • - install missing light cover to butler's pantry range hood;
   • - the skirting below the gas fire requires repainting to achieve a consistent finish;
   • - remove paint marks on the black metal surround at the underside of the firebox wall;
   • - realign and paint ceiling access panel in the bedroom 3;
   • - align and fix air-conditioning grilles in master bedroom.
2. The experts agree that the following rectifications to minor defective works are required:
   • - re-align letterbox metal cover plate which is crooked;

- remove moisture from entrance gate intercom and ensure correct functioning, including the functioning of the connected front gate release;

- downpipes on first floor to be extended over flashing onto the metal roof with spreaders installed;

- southside air-conditioning condensation pipe to be extended into box gutter;

- adjustment of a misaligned master bedroom double doors, and any necessary touch-up repainting.

1. It is impossible to say whether all or any of the above items may have had a bearing on the sale price of the property. In my view, they all contribute to the general appearance and condition of the property and I think it reasonable that there be an allowance for damages, measured in the usual way, that is the reasonable cost to attend to their completion/rectification.
2. Mr Ryan allows a sum of $3451.60, excluding allowances for contingency builder's margin and GST, as the cost to complete and rectify all of the above minor items. Mr Garrard allows a sum of $2496.75, excluding allowances for contingency, builder's margin and GST. I think it reasonable to assess damages as the midpoint between the two assessments. On this basis I allow $2974, not including allowances for contingency, builder's margin and GST.
3. Mr Ryan says that, in addition to the above items, there are minor scuff marks on the garage wall and minor chips to the render at the rear garage door which constitute defective works. Mr Lorich says that, having regard to the age of the property, these items should be considered as reasonable wear and tear rather than defective works. Having viewed the items, I agree with Mr Lorich.

1. The cladding to the ground level of the building is rendered brickwork. There is no dispute that the number of articulation joints in the render is not compliant with the construction drawings. That is, there are areas where prescribed articulation joints are missing. Mr Ryan says that, all up, 12 prescribed articulation joints are missing. Further, where articulation joints have been installed, they are not fully formed. That is, they do not continue right through the render.
2. Despite these deficiencies in respect of the articulation joints, the rendered cladding is showing no signs of distress, save for a very minor crack at the location of one partially formed articulation joint at the north-east corner of the property. Mr Ryan says that, without the prescribed articulation joints, the render may suffer movement cracking in the future. Mr Ryan says that because a colour match with the existing render will not be practically possible, the rectification works will effectively require the re-rendering of the whole of the ground level rendered areas, installing articulation joints as required. Mr Ryan estimates the cost of such works as $8333, not including builder's margin and GST
3. Mr Lorich says the render will likely not suffer any significant cracking in the future because the building is constructed on a class "M" site and the ground floor clay bricks are less volatile to movement than other forms of masonry. He says that no further articulation joints are required, however the partially formed articulation joints that have been installed should be properly fully formed. Mr Lorich agrees that matching the existing render is problematic. However, he says that rather than wholesale re-rendering, it would be preferable to apply a coloured membrane topcoat to the ground floor render. This would resolve any colour mismatch difficulties and provide the added benefit of topcoat membrane protection.
4. Mr Ryan agrees that the application of a topcoat membrane is a good solution to the problem of matching the render colour. Adopting this, in lieu of wholesale re-rendering, Mr Ryan's cost assessment is reduced to $6633, not including allowances for contingency, builder's margin and GST. Mr Garrard's allowance is $3880, not including allowances for contingency, builder's margin and GST.
5. I am not satisfied that it is reasonable to award damages for this item. The deficiencies in respect of the articulation joints have not diminished the appearance of the property. It is unknown whether the deficiencies will translate to a diminished appearance in the future. In my view, with no effect to the appearance of the property, and the property having now been sold, an allowance for damages in respect of this item would be an unjustified windfall to the owners. As such, in my view it is not reasonable to allow damages for this item.

1. Mr Ryan identifies the following defects in the render finish:
   • - render marks at front porch;
   • - render marks/cement spots at Northeast Corner;
   • - render stain alongside the left and right side walls of the front of the garage and the rear alfresco right side wall panel;
   • - a couple of areas where there are large gaps in the rendered cladding adjacent to ventilation grills;
   • - drill holes errantly drilled in the render adjacent to a downpipe.
2. Mr Lorich agrees that the gaps in the rendered cladding adjacent to the ventilation grills, and the errantly drilled drill holes, constitute defective works. As to the various render marks/stains, Mr Lorich says these are not defects in the works, but rather fair wear and tear.
3. Having viewed the render, I agree with Mr Ryan and find that the blemishes in the render constitute defects in the works carried out by the builder. All of the items are noticeable and, in my view, diminish the general appearance and condition of the property such that I think it is reasonable that there be an allowance for damages, measured in the usual way, that is the reasonable cost to attend to their completion/rectification.
4. Excluding allowances for contingency, builder's margin and GST, Mr Ryan's cost estimate to rectify these works is $4,403, and Mr Garrard's estimate is $1,442.90. I think it fair to assess damages as the midpoint between these two estimates, namely $2,923 (not including allowances for contingency, builder's margin and GST).

1. There is a very noticeable line of cracking in the marble paving in the rear alfresco area. Mr Ryan and Mr Lorich agree that it is movement cracking located at the junction between the alfresco reinforced concrete slab and the concrete paving around the adjacent swimming pool. There is no dispute that it is defective work requiring rectification. As the crack is very noticeable and, in my view, diminishes the general appearance of the property, I think it is reasonable that there be an allowance for damages measured in the usual way, that is the reasonable cost to rectify the defect.
2. Mr Ryan says that rectification works include:
   • - provision of rubbish bin rubbish bin;
   • - remove pool fence/barrier and reinstall on completion of works;
   • - remove cracked paving tiles and clean concrete paving substrate;
   • - supply and install new paving tiles including grouting and sealing;
     • - install expansion joint;
     • - install flexible coloured caulking;
     • - clean floor tiles.
3. Excluding allowances for contingency, builder's margin and GST, Mr Ryan estimates the cost of rectification works as $2914, whereas Mr Garrard allows $1290. Again, I think it fair to assess damages as the midpoint between the estimates, that is $2,102 (excluding allowances for contingency, builder's margin and GST).
4. I note for completeness that there is no dispute that the pool fence, at the location of the cracked alfresco pavers, has shifted slightly such that the pool gate no longer closes properly. As Mr Ryan says, this will be rectified when the fence is reinstated.

1. There are several noticeable chips, approximately 1 to 2 cm in width and depth, in the concrete garage floor. The floor has been painted with paving paint. The paint coverage is noticeably patchy. It appears that some areas of the floor may have had a thicker or extra coat of paint applied compared to other areas of the floor.
2. Noting that the chips in the floor have paint coverage, I am satisfied that the chips existed before the floor was painted.
3. Mr Ryan and Mr Lorich agree that the floor is not acceptable and requires rectification which will include filling the chip holes and repainting the floor.
4. Mr Ryan says it will be necessary to sand the entire floor to guard against the delamination of the new paint, fill the chips and then apply two coats of paving paint. He allows $4476 for such works, excluding allowances for contingency, builder's margin and GST.
5. Mr Lorich says a thorough clean, rather than sanding the floor, is all that is required before the filling of the chip holes and repainting. But even with this reduced scope of works, Mr Lorich considers that Mr Ryan's rectification cost estimate is reasonable.
6. Mr Garrard's cost estimate to rectify the floor is considerably lower, at $590 excluding allowances for contingency, builder's margin and GST. The scope of works Mr Gerard has costed is not clear. Having regard to Mr Lorich's evidence that Mr Ryan's cost estimate is reasonable, I allow damages for this item as the cost assessed by Mr Ryan, namely $4,476, excluding allowances for contingency, builder's margin and GST.

1. Mr Ryan says that a flue should be fitted to the range hood in the alfresco barbecue area. Mr Lawrence says the contract made no allowance for installation of a flue. It appears that the contract may have allowed for a range hood that does not require a flue. Mr Ryan says that the range hood installed should have a flue fitted for safety reasons.
2. Mr Ryan's opinion that a flue is required may well be sound, however I am not satisfied on the evidence that the builder was contractually obligated to install a flue. Accordingly, I make no allowance for this item.

1. The builder has installed wiring for Telstra and Foxtel connection, however the wiring has not been fitted off to phone, data and TV points. As the contract quotation expressly includes "Structured Cabling throughout the home, including all phone & data points, Free-to-air TV points & Foxtel TV points", in my view the builder's works are incomplete in that the wiring has not been finally connected to its usage points.
2. Excluding allowances for contingency, builder's margin and GST, Mr Ryan allows $680 to complete these works, whereas Mr Gerard allows a $525. I think it fair to assess damages as the midpoint between the estimates, namely $602 (not including contingency, builder's margin and GST).

1. Mr Ryan referenced three more items of work which the owners allege as incomplete or defective.
2. The ensuite tiles were said to need final cleaning. This was not evident to me at the view, and I make no allowance for this item.
3. The owners say that an external weather proof power-point on the north side of the building is not functioning properly. At the view, the builder demonstrated that the power-point functions by use of an internal switch, and as such, I do not accept that this is an item of defective work.
4. The owners say that a feature aluminium angle in the master bedroom ensuite tiled niche is misaligned. At the view, the misalignment was not apparent to me from a normal viewpoint, and as such I do not accept that this is an item of defective work.

Conclusion - incomplete and defective works at 9 Page Street

1. In summary, I allow a total of $13,077, not including allowances for contingency, builder's margin and GST, as damages in respect of the non-rectified items of incomplete and/or defective works at 9 Page Street:
   • - miscellaneous minor incomplete works $2974
   • - render defects $2923
   • - alfresco/pool paving $2102
   • - garage floor slab $4476
   • - Telstra/Foxtel connection $602

1. As part of his overall cost estimate, Mr Ryan makes additional allowance for allowance for:
   • - supervision at $110 per hour;
   • - across-the-board contingency allowance of 5%;
   • - across-the-board builder's margin of 35%;
   • - GST
2. Mr Lorich says that, having regard to the nature and scope of the works, he considers a 35% allowance for builder's margin is adequate, with no extra allowance for supervision or contingency. Having regard to the modest nature of the works that I have allowed, I agree with Mr Lorich.
3. In my view, it is reasonable that the assessment of damages includes a normal allowance for builder's margin and GST. After allowing, on the above assessed sum of $13,077, a builder's margin of 35% and then GST at 10%, I reach a total of $19,419 as my assessment of damages in respect of non-rectified items of incomplete and defective works at 9 Page Street.

1. The liquidated damages clause in the contract, clause 18, provides:

18.1 Owner's entitlement to liquidated damages

If the Builder fails to bring the Works to Completion by the Completion Date, the Builder will pay or allow to the Owner by way of pre-estimated and Liquidated Damages, a sum calculated at the rate stated in Item 17 of the Appendix for the period from the Completion Date until the Works reach Completion or until the owner takes Possession, whichever is the earlier.

18.2 Liquidated damages may only be deducted from final payment

The amount of any Liquidated Damages may be deducted by the Owner from the Final Payment only and any deficiency may be recovered by the Owner as a debt due to the owner by the Builder.

1. As discussed earlier in these reasons, at the time the parties entered the contract the item 17 in the Appendix provided for liquidated damages of 'Nil' dollars per week, and I have found that, pursuant to the November 2015 agreement, the liquidated damages sum was amended to $2500 per week. I have also found that the due date for completion of the works was, pursuant to the November 2015 agreement, amended to 14 December 2015.
2. I have also found, as discussed earlier, that the builder has no entitlement to an extension of time for the completion of the works.
3. I have found, as discussed earlier in these reasons, that the owners' access to 9 Page Street in February and March 2016 for the purpose of a sales marketing campaign did not constitute taking possession of the works.
4. I have found that the owners terminated each of the contracts on 14 April 2016.
5. In my view, the owners took possession of the works at 9 Page Street and 7 Page Street upon the termination of the contracts on 14 April 2016. As such, in respect of 9 Page Street they are entitled to liquidated damages at the rate of $2500 per week for the period 15 December 2015 to 14 April 2016 (17.28 weeks). I calculate that sum as $43,200.
6. In addition to the contract entitlement to liquidated damages for delay, the owners claim an entitlement, at general law, to further damages for delay in the form of lost rent and/or in the form of increased interest burden on the loan obtained for the construction of the home.
7. Contract prescribed liquidated damages is a sum, agreed by the parties to a contract, to be paid in the event the building works are not completed by the due date, whereas delay damages at general law is the actual loss arising from a builder's failure to comply with the contractual requirement to complete building works by the due completion date. An owner is not entitled to both prescribed liquidated damages for delay, and general law damages for delay, for the same period of delay.
8. The question arises as to whether the owners have any entitlement to delay damages at general law for any period after 14 April 2016.
9. The fact that a contract includes a provision for liquidated damages for delay, that is, the parties have turned their mind to and reached agreement in respect of damages for late completion of the contract works, does not of itself necessarily mean that the parties have agreed that the liquidated damages entitlement is the only available entitlement in respect of delay damages. It is a matter of construing the contract. One starts with the presumption that neither party intends to abandon remedies available at general law, and there must be clear words in the contract to rebut the presumption.[22]
10. In my view, the language of clause 18 in the contract, set out above, does not lead to a conclusion that the parties agreed to abandon any entitlement to delay damages at general law. Clause 18 provides an entitlement to liquidated damages for a prescribed period, and makes provision as to how the entitlement is to be applied. But it does no more than that.
11. Set out earlier in these reasons are the emails of 12 November 2015 and 15 November 2015 which confirmed the November 2015 agreement. There are no words in those emails to suggest abandonment of any entitlement to delay damages at general law.
12. I am satisfied that the contract does not bar a claim by the owners for delay damages at general law for any period after 14 April 2016.
13. 9 Page Street was very close to completion at the time the contract was terminated. The RBS had issued the occupancy permit on 21 December 2015, however the building notice (requiring engineer certification of retaining wall footings) and the building order (requiring alteration of two bedroom windows) were yet to be satisfied.
14. As I understand it, the owners claim delay damages for the period up to 16 June 2016, that being the date by which the owners had satisfied the building notice and the building order.
15. As discussed earlier, I find the builder is not liable for the cost incurred by the owners to satisfy the building notice and the building order issued by the RBS on 21 December 2015. If there was delay in carrying out these tasks, it is a delay not attributable to the builder.
16. In my view, the time it took for the owners to satisfy the building notice and the building order, and to carry out other works at 9 Page Street (installation of barbecue, sink and bulkhead in the alfresco area) is not attributable to delay caused by the builder. Rather, it reflects that tasks were carried out at times convenient to the owners.
17. I note also the evidence of Alex that, because of the underwhelming response to the sale marketing campaign for 9 Page Street in March/early April 2016, the owners took 9 Page Street off the market and concentrated their efforts on completing 7 Page Street, and putting it to sale, as soon as practicable. And, as discussed above, 9 Page Street was used for family accommodation.
18. On all the evidence, I find that the owners have failed to prove any loss or damage after 14 April 2016 caused by delay attributable to the builder. Accordingly, for 9 Page Street there is no further allowance for delay damages at general law.

1. As discussed above, I assess the unpaid contract balance for 9 Page Street as $98,925. Against this sum, I set off the following allowances, as assessed above, in favour of the owners:
   • - works carried out by the owners $ 954
   • - damages for remaining incomplete and defective works $19,419
   • - liquidated damages for delay $43,200

1. The result is an allowance in favour of the builder in the sum of $35,352.

1. I assess the adjusted contract price for 7 Page Street as follows:
   • - contract price nominated in the contract document $1,060,000
   • - plus variations and provisional sums overrun $ 60,366

1. I allow for payments made by the owners as follows:
   • - stage payments $954,000
   • - variations and provisional sums overrun allocation $ 26,034

1. Accordingly, I assess the unpaid contract balance for 7 Page Street as $140,332.

1. Mr Nguyen, of Northwind Quantity Surveyors, inspected 7 Page Street on 11 May 2016 and took a number of photographs. He produced a report dated 24 June 2016 in which he estimated the reasonable cost to complete the 7 Page Street contract works as $291,367.
2. As the owners completed construction of 7 Page Street as owner-builders, they no longer rely on Mr Nguyen's estimate. They have produced invoices and other documents as evidence of the alleged actual cost they have incurred to complete the works.
3. Mr Berkowitz and Mr Garrard have inspected the documents produced by the owners, and with reference to Mr Nguyen's above-mentioned report, they have each provided an assessment as to the reasonable cost incurred by the owners to complete the 7 Page Street contract works. Their assessments are similar. Mr Berkowitz has assessed the cost at $270,538.22. Mr Garrard assesses the cost at $254,352.71. I heard evidence from them both in respect of the items of work, and the claimed cost, where their opinion differs.
4. To reach my finding as to the reasonable cost incurred by the owners to complete the 7 Page Street contract works, I will start with Mr Berkowitz's assessment, and then make any deductions I consider warranted having regard to the evidence of Mr Berkowitz and Mr Garrard on the items where their opinion differs.

1. Mr Berkowitz says that because a builder generally bears the cost of water and electricity, it is reasonable that the cost of water and electricity incurred by the owners during the period the works were being completed, claimed to be $2107.61, be included as a reasonable expense. Mr Garrard makes no such allowance.
2. The evidence as to the cost incurred by the owners is unconvincing, with one water bill produced dating back to 13 October 2014. The 7 Page Street contract does not provide that the builder should bear such cost, and I am not satisfied that it is a cost that should ultimately be borne by the builder. Accordingly, I deduct $2107.61.

1. Mr Berkowitz allows the cost incurred by the owners, $550, to obtain an amended building permit. There is no dispute that an amended building permit was required. Mr Garrard says that because the 7 Page Street contract (the contract quotation) expressly excludes fees charged by the RBS, this cost should not be allowed.
2. I do not agree with Mr Garrard. The provision in the 7 Page Street contract is not relevant. The cost of the amended building permit is a direct consequence of the termination of the contract. I allow the sum claimed, $550.

1. On 8 September 2016, the RBS invoiced the owners $165 for "additional inspection fee". There is no evidence as to why an additional inspection was required. Having regard to the date of the invoice, it is likely that the inspection was related to the issue of the occupancy permit. But with no evidence as to why an "additional" inspection was required, I am not satisfied that the cost of such inspection is an expense that should ultimately be borne by the builder. Accordingly, I deduct $165.

1. Mr Berkowitz allows $3480 as the evidenced cost for 10 mirrors. Mr Gerard says that, if any allowance should be made, it should be for approximately half that sum on the basis that one mirror is allowed for each bathroom/powder room.
2. The only reference to mirrors in the 7 Page Street contract is the notation 'Mirrors as shown' under the heading 'GLAZING' in the contract quotation. There are no mirrors noted in any of the construction drawings. This being the case, in my view the provision of mirrors does not fall within the scope of the 7 Page Street contract works. As such no allowance should be made and I deduct $3480.

1. The contract quotation specifies a number of Miele appliances at a total provisional allowance of $11,000.
2. The owners have produced invoices totalling $18,093 for various Miele appliances. Mr Berkowitz has simply allowed the provisional allowance, $11,000, on the basis that any cost over and above the sum would in any event be borne by the owners.
3. Mr Garrard says that a number of the items purchased by the owners were not expressly provided for in the contract quotation, namely a coffee machine and two fridge/freezers. Mr Gerard has deducted the cost of these items, $9737.40, from the total cost of appliances purchased by the owners, $18,093, to come up with a figure of $8355.60 which he says is the appropriate allowance.
4. I do not agree with Mr Garrard. The fact that the choice of appliances made by the owners differs from the items specified in the contract quotation is not the relevant issue. The provisional allowance under the contract for appliances is the relevant issue. The contract provides an allowance of $11,000 for appliances. Clearly, any expense over this would always have been borne by the owners. For the purpose of assessing the reasonable cost of completing the contract works, as part of the overall assessment of damages, it is appropriate for this item to allow the provisional sum provided under the contract. That is what Mr Berkowitz has allowed. Accordingly, there is no deduction.

1. Mr Berkowitz allows the cost of the painting as set out in two invoices produced by the owners, $4985.20 and $4449.50.
2. Mr Garrard accepts that the rates charged by the painters as set out in the invoices is reasonable, however he thinks the charge overall is excessive having regard to the painting works that remained to be done. His assessment of the painting works remaining to be done is based on the photographs in Mr Nguyen's report.
3. The 7 Page Street contract provided for painting of the home. There is no evidence before me that the painting works now claimed by the owners are works outside the scope of the contract. Having regard to the fact that Mr Garrard also accept the rates charged by the painters as reasonable, I am not satisfied that there is sufficient reason to make any deduction. Accordingly, I make no deduction to Mr Berkowitz's assessment.

1. The owner supplied a number of invoices from 'AOG Tiling' in respect of tiling works. Mr Garrard, having viewed one invoice for $2200, queried whether Mr Berkowitz may have made an error in allowing for a further invoice in the sum of $220. As the further invoice for $220 was identified in evidence, I am satisfied that the $220 allowance was not an error on the part of Mr Berkowitz. Accordingly, there is no deduction.

1. Mr Berkowitz has allowed $555 as the cost incurred by the owners to install a letter box at the front gate. He considers the allowance is reasonable and in keeping with the quality of the house.
2. Mr Garrard says there should be no allowance because there is no reference in any of the contract documents to the inclusion of a letterbox within the contract scope of works.
3. I agree with Mr Garrard. I find that the letterbox is outside the contract scope of works, and accordingly there should be a deduction of $555.

1. Mr Berkowitz allows $8800, the sum of a 'SWAT Constructions' invoice which identifies the works carried out as 'hang internal doors, removed to be painted, re-fit and install handles and fittings and finish off skirting and architrave around cupboards'.
2. Mr Garrard says that as the contract provides for pre-hung doors, the extra cost involved in removing doors to be painted and re-hung is not reasonable. He says an allowance of $5760 would be reasonable for the scope of the door works under the contract.
3. As discussed earlier in these reasons, the door works were varied such that custom-made higher quality doors were to be provided in place of standard pre-hung doors. At the time of termination of the contract, the doors had been initially hung, and had been removed off site for painting.
4. For the purpose of assessment of damages, the cost to be allowed for the doors is the reasonable cost of the doors prescribed under the contract. The contract prescribed standard pre-hung doors. When the builder agreed to provide more expensive custom-made doors, the contract price was not varied. Rather, the cost of the doors was treated by the builder as a provisional sum item. (And as discussed earlier in these reasons when assessing provisional sum expenditure, I have not allowed the builder's claim for the doors because the doors were never returned to site).
5. I agree with Mr Garrard that allowance should be made for the cost of standard pre-hung doors as prescribed under the contract. I accept his allowance, $5760, as reasonable in this regard. Accordingly, I make a deduction of $3040 from Mr Berkowitz's allowance.

1. When giving evidence, Mr Garrard confirmed that the exclusion in his report of $790 for custom lighting was an accidental error. Accordingly, there is no deduction from Mr Berkowitz's assessment in respect of the custom lighting.

1. Pursuant to mandatory requirements under section 137 of the Building Act 1993, as owner-builders the owners were required to obtain, prior to selling 7 Page Street, a report on the completed works by a prescribed building practitioner and required insurance (commonly known as 'warranty insurance') in respect of the works completed by them. Mr Berkowitz has allowed the cost of the building report, $695, and the cost of the warranty insurance, $2130.70.
2. Mr Garrard says that these costs should be excluded because the builder was not obliged to meet any such costs under the 7 Page Street contract.
3. In my view, having regard to the status of the works as at the date of termination of the contract, and the owners' desire to complete the works at an affordable cost and as soon as practicable, the decision to complete the works as 'owner-builders' was a reasonable course to adopt.
4. If, instead of completing the works as owner-builders, the owners had entered a building contract with a new builder for the completion of the works, they would not have incurred the cost of the building report, but warranty insurance would still have been required and the cost of such insurance would no doubt have been included in the new builder's contract price.
5. In my view, the cost of the building report and the warranty insurance is similar to the cost of the amended building permit discussed above. That is, it is cost incurred as a direct consequence of the termination of the contract, and it is reasonable to allow it as part of the cost incurred by the owners to complete the contract works. Accordingly, I make no deduction to Mr Berkowitz's assessment.

1. Mr Berkowitz allows $55.90 as the cost of a door/weather seal. I agree with Mr Garrard that, because the 7 Page Street contract makes no reference at all to such an item, it constitutes works outside the scope of the contract works, and as such no allowance should be made for it. Accordingly, I deduct $55.90.

1. Initially, Mr Garrard excluded this item. However, in evidence Mr Garrard conceded that allowance for the sum claimed, $341, was reasonable. Accordingly, there is no deduction in respect of this item.

1. Mr Berkowitz has allowed $400 as the documented cost incurred by the owners to repair a damaged benchtop. Mr Garrard says the item should not be allowed because the date and cause of the damage is unknown.
2. The invoice for the repair cost is dated 1 September 2016. In the absence of evidence from any of the witnesses as to how and when the damage to the benchtop occurred, I am not satisfied that it is damage for which the builder is responsible. Accordingly, I deduct $400.

1. An invoice dated 1 September 2016 from 'Wattle Glen Plumbing' for various plumbing works includes a sum of $460 for a drainage inspection. I agree with Mr Garrard that, in the absence of any evidence as to why the inspection was necessary, it is unreasonable to assume it is related to any act or omission of the builder. I deduct $460 from Mr Berkowitz's assessment in respect of this item.

Conclusion on the cost to complete works at 7 Page Street

1. I assess the reasonable cost incurred by the owners to complete the contract works at 7 Page Street as $260,274.71, calculated as follows:
   • - Mr Berkowitz's assessment $270,538.22

- water and electricity $2107.61

- RBS additional inspection $ 165

- mirrors $3480

- letterbox $ 555

- internal doors $3040

- weather seal $ 55.90

- damaged benchtop $ 400

- drainage inspection $ 460

1. The contract provision as to liquidated damages for 7 Page Street is similar to 9 Page Street. The due date for completion of the works for 7 Page Street was, pursuant to the November 2015 agreement, amended to 15 February 2016. As with 9 Page Street, the sum specified for liquidated damages was, by the November 2015 agreement, amended to $2500 per week.
2. I have found that the builder has no entitlement to an extension of time for completion of the works at 7 Page Street.
3. The date of termination of the 7 Page Street contract was 14 April 2016. I find that the owners took possession of the works on this date.
4. Accordingly, I find that the owners are entitled to liquidated damages for the period 16 February 2016 to 14 April 2016 at the rate of $2500 per week (8.3 weeks). I calculate that sum as $20,750.
5. As with the claim for 9 Page Street, the owners also claim an entitlement, at general law, to further damages for delay in the form of lost rental and/or in the form of increased interest burden on finance.
6. As with 9 Page Street, I find that the contract does not bar a claim by the owners for delay damages at general law for any period after 14 April 2016. The issue is whether the owners have such loss and damage attributable to the builder's failure to complete the contract works by the due completion date. Unlike my finding in respect of 9 Page Street, I am satisfied that in respect of 7 Page Street the owners have such loss and damage.
7. In my view, the owners cannot claim delay damages at general law in respect of both lost rental and increased financial interest burden for the same period. Renting 7 Page Street would necessarily mean there would be no proceeds of sale to be applied to reducing the owners loan commitment and the consequential interest burden.[23]
8. In any event, I find that, as at 14 April 2014, the owners did not intend to lease 7 Page Street. I make this finding on the evidence of Alex, referred to above, that the owners took 9 Page Street off the market and concentrated their efforts on completing 7 Page Street, and putting it to sale, as soon as practicable.
9. And I am satisfied that the owners did, in fact, complete 7 Page Street and put it to sale as soon as practicable.
10. As discussed earlier, the owners took on the task of completing the 7 Page Street works as 'owner-builders', and they engaged a supervisor to assist with the task.
11. A certificate of occupancy was issued on 19 September 2016. The owners nominate this date as the date of completion of the building works.[24] The completed home was promptly put on the market and sold at auction on 8 October 2016 for $3,690,000 with settlement occurring on 3 November 2016.
12. There is no evidence before me as to whether, as an alternative to completing the 7 Page Street works as 'owner-builders', the owners considered entering a new building contract with a new builder to complete the works. There is no evidence as to the contract price a new builder might have charged. There is no evidence as to the likelihood of the owners finding a suitable and willing new builder in a timely manner. There is no basis upon which I might find that an alternative course of action - entering a new building contract with a new builder to complete the works - would have resulted in an earlier completion date for the works.
13. As noted above in these reasons, I consider the owners' decision to complete the works as 'owner-builders' a reasonable course to adopt.
14. Having regard to the scope of works carried out, and the management of those works, I am satisfied that the works were completed within a reasonable timeframe. I am also satisfied that 7 Page Street was sold, and the settlement proceeds received, as soon as reasonably practicable.
15. Alex's evidence[25] is that:
    • - the owners borrowed $2,781,815 from Westpac to partially fund the purchase of, and construction of the new homes on, 7 Page Street and 9 Page Street;
    • - of the proceeds of sale from 7 Page Street, $2,782,330.36 was used immediately to pay off the Westpac loan account;
16. In support of this evidence the owners produced a Westpac 'Investment Property Loan' statement[26] which shows:
    • - an opening balance, as at 1 July 2016, of $2,675,815;
    • - the balance, as at 7 September 2016, being 2,779,315;
    • - the interest rate charge being 4.5% for the period 23 May 2016 to 22 August 2016, and 4.4% thereafter;
    • - an interest charge of $3015.36 on 3 November 2016, bringing the account balance to $2,782,330.36; and
    • - a deposit payment into the account on 3 November 2016 in the sum of $2,782,330.36, noted as 'deposit of settlement proceeds', which reduces the account balance to zero.
17. I am satisfied that the construction loan would have been entirely paid off sooner, had the builder fully performed the 7 Page Street contract and completed the works by the due completion date.
18. The period between the date of completion of 7 Page Street, 19 September 2016, and the payment of settlement monies into loan account, 3 November 2016, is 45 days. Using this yardstick, I think it fair to say that had the builder completed the 7 Page Street works by the due completion date, 15 February 2016, the owners' construction loan would have been entirely paid off about 45 days later, that is on about 31 March 2016.
19. I am satisfied that it was in the contemplation of the parties at the time the contract was entered that the owners might suffer loss in the form of interest payable on a loan financing the construction project in the event the builder failed to complete the works by the due completion date under the contract. In my view, for a project of this size such loss would ordinarily be in the contemplation of a builder whether the builder had actual knowledge that the owners had obtained finance to fund the construction project. In any event, as discussed earlier in these reasons, the contract was amended shortly after it was first signed. The original contract provided for monthly progress payments to the builder. The amended contract provided for progress payments to the builder in accordance with the payment schedule set out in section 40(2) of the Act. The amendment was required to meet the demands of Westpac which was providing finance for the project. The evidence of Mr Just does not address whether he knew of this reason for the amendment. It is most unlikely, in my view, that Mr Just would have agreed to the amendment without knowledge as to why the amendment was required.
20. I am satisfied that loss arising from late completion of the works, in the form of interest payable on a loan, was within the contemplation of the parties at the time the contract was entered.
21. In my view the owners are entitled to damages at general law measured as the interest incurred on the construction loan after 14 April 2016 until 3 November 2016 when sale proceeds were deposited into the account.
22. In his witness statement, Alec sets out the interest allegedly accrued since July 2015.[27] The interest incurred for all of April is noted as $10,696.96. Half of that sum, as the allowance for April after 14 April 2016, is $5348.48. The interest accruals noted for the remaining months until 3 November 2016 total $72,741.87. The total interest claimed then, from 15 April 2016, is $78,090.35.
23. Alex's witness statement references bank statements as alleged evidence of these interest accruals[28]. However, the bank statements provided do not, in my view, satisfactorily evidence the claimed interest accrual. The bank statements referenced by Alex are the statements of a different account, a "Classic Plus Account" in the name of the owners, and although the statements show interest payments to another account, not all of those payments reference the above-mentioned Investment Property Loan account_._
24. On the documents provided, I am not satisfied that the interest accrual for the period April 2016 to 3 November 2016, as set out in Alex's witness statement, is accurate.
25. However, I am satisfied that the owners have incurred interest on the construction loan account for the period 15 April 2016 to 3 November 2016. Having regard to the information included in the above-mentioned Investment Property Loan account statement, and doing the best I can, I allow $66,826 as the interest incurred on the construction loan account in the period 15 April 2016 to 3 November 2016. I calculate this as follows:
    1. interest on the first noted account balance $2,675,815, at 4.5% per annum for the period 15 April 2016 to 22 August 2016, 129 days, $42,556;

1. interest on the same amount, $2,675,815, at 4.4% per annum for the period 23 August 2016 to 6 September 2018, 15 days, $4838;

1. interest on the account balance as at 7 September 2016, $2,779,315, at 4.4% per annum for the period 7 September 2016 to 3 November 2016, 58 days, $19,432

1. Alex says further that had the works been completed by the due date, the owners would have applied the remaining balance of the proceeds of sale of 7 Page Street to reducing the balance in a further loan account held by the owners, thus reducing the interest burden in that further loan account. Alex's witness statement references bank statements in respect of that other account[29]. The statements appear to present the status of a Westpac "Bank Bill Business Loan" account in the names of the owners at six intervals in the period December 2015 to 9 November 2016. The closing balance in each of the statements is $2,629,000. The alleged saving on interest for the period after 15 April to 2016 would have been around $29,150.[30]
2. The evidence is not sufficient for me to accept that the owners would have made the claimed saving on interest in this other Bank Bill Business Loan account. The statements provided do not confirm the interest accrual claimed. But more importantly, unlike the Investment Property Loan account statement discussed above, the Bank Bill Business Loan account statements show no deposit into the account on or after 3 November 2016 when the sale of 7 Page Street settled. For this reason, I am not satisfied that if 7 Page Street was completed and sold earlier, the owners would have applied some of the proceeds of sale to reducing the balance in this Bank Bill Business Loan account.
3. For the above reasons, I find that owners are entitled to further delay damages at general law in the sum of $66,826 for the interest incurred on the construction loan for the building project after 14 April 2016.

1. In conclusion, for delay damages in respect of 7 Page Street, I allow $20,750 as contract prescribed liquidated damages, and I allow a further sum of $66,826 as damages at general law. The total allowance is $87,576

1. For 7 Page Street, I assess the damages in favour of the owners (not including any allowance for interest) as $207,529, calculated as follows:
   • - reasonable cost incurred to complete works (rounded

1. As set out above, I have assessed an allowance of $35,352 in favour of the builder in respect of 9 Page Street, and I have assessed an allowance of $207,529 in favour of the owners in respect of 7 Page Street. In my view it is appropriate that the sums be set off such that the net result is allowance in favour of the owners of $172,177.
2. However, before making final orders, I consider it appropriate that the parties provide submissions on the question of interest, having regard to the findings set out in these reasons. I will order that the proceeding be listed before me for the purpose of hearing submissions on the question of interest. I will consider any request from the parties for the filing of written submissions in lieu of attendance at the further hearing.

[1] Paragraph 36 (d) (iii) in the applicant's Second Further Amended Points of Claim dated 24 April 2018.

[4] RBS email to the builder 17 November 2015, Tribunal Book page 1188.

[5] witness statement of Mr Just, paragraphs 412 - 414.

[6] Regulation 12 of the Domestic Building Contracts Regulations 2007.

[7] The penal nature of sections 40(2) and (3) has been confirmed by Supreme Court in Imerva Corporation Pty Ltd v Kuna [2016] VSC 461.

[8]By order made 3 November 2016, the builder was required to file and serve a provisional sum adjustment schedule and a variation schedule.

[9] supplementary Tribunal Book pages 951 - 975.

[10] Supplementary Tribunal Book pages 498 to 513.

[11] The documents are identified in the PS spreadsheet under the heading 'Cornice'.

[12] 'Vandar Trading' invoice at page 470 3A and Page 594 of the Supplementary Tribunal Book.

[15] clause 7.2 in the contract provides the granting of the license.

[16] builder's closing written submissions, schedule paragraphs 33 - 49.

[19] Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613.

[20] Tribunal Book p 251, windows marked W 23, W 26 in the drawing.

[21] invoice dated 7 September 2016 at Tribunal Book p 1654.

[22] Lord Diplock in Gilbert Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689 at 717-718

[23] in closing oral submissions, the owners conceded they cannot claim both the interest burden and lost rental. It is one or the other.

[24] confirmed in paragraph 196 (b) of the owners Reply closing submissions.

[25] Alex witness statement paragraphs 123-124, Tribunal book pages 864 - 867

[27] Alex witness statement paragraph 124, at Tribunal book p 866

[28] the bank statements are said to be found at Tribunal book pages 2793 - 2820

[30] This approximate figure, $29,150, is extrapolated from the figures presented in Alex's witness statement at Tribunal book page 867