Robinson v Marcus Property Group Pty Ltd [2023] VCAT 942 | Case summary

[4]

The respondent must pay the applicants the sum of $27,828.50.
Any application for interest and costs is reserved, with liberty to apply. I direct the principal registrar to refer any application for interest and/or costs to Member Feeney.
If no application for interest or costs is made by 29 September 2023, there shall be no order as to interest and costs.

Robinson v Marcus Property Group Pty Ltd [2023] VCAT 942 | Case summary | Zoe

[8]

The hearing was commenced on 15 February 2021. It could not be completed on that day and was adjourned part heard to 8 December 2021.
The owners represented themselves at the hearing. The builder was represented by Mr Julian Marcus, one of the directors of the builder.
The owners gave evidence at the hearing. The owners also arranged for Mr Darren Love, who is a building consultant, and who prepared a report dated 14 April 2020, to give evidence in relation to the cause of the defects, the rectification works required and the estimated cost to undertake the rectification works.
Both directors of the builder, Mr Alex Marcus and Mr Julian Marcus, gave evidence at the hearing. Mr Alex Marcus is the registered building practitioner named in the contract and said he has been a registered builder since 1997. Mr Julian Marcus said he has been a project manager for four years and completed a diploma of building and construction in 2008 and 2009. Although Mr Julian Marcus is now a registered builder he was not registered at the time of the renovation of the owners' home for which he organised trades and the invoicing.
The owners and the builder provided documents in support of their claims and defences. Those documents included the contract, variations, plans, the certificate of final inspection, photographs, videos, communications with each other and documents about the cost of alleged rectification works. The builder also provided details of tiling to a cavity wall unit, a data sheet for a surface primer and a Cordell cost guide.
At the start of the second day of hearing the owners sought to rely upon a document from Roofrite dated 8 February 2021. Roofrite is a plumbing business which the owners engaged to undertake rectification works to the northern roof. This document was not provided to the builder until September 2021, a number of months after the first day of hearing and after the rectification works had been undertaken. The owners said the person who had prepared the document would not be giving evidence. The builder objected to the owners being able to rely upon that document on the grounds that it raised new claims, that it had not had the opportunity to consider that document and determine if it wanted to obtain expert evidence in response and, as the northern roof had now been rectified, it would not be able to inspect the alleged claims. The builder also submitted that the document did not comply with the Tribunal's practice note for the preparation of expert reports ('PNVCAT2'), the identity and qualifications of the person who prepared the document was not known and the comments in the document did not refer to any applicable standards or codes. The owners said they should be allowed to rely upon the document as the matters raised in the document were not new and were included in Mr Love's report, and that the builder could have obtained its own report in relation to the northern roof prior to the first day of hearing.
Whilst many of the photographs and comments in the document relate to issues already identified in Mr Love's report, I accept the builder's submission that to allow the owners to rely upon this document would be unfair to the builder. The late provision of this document after the northern roof had been rectified means the builder could no longer inspect the northern roof in the same condition as it was when the document was prepared and the builder was not going to have the opportunity to question the author of the document. For these reasons I have not taken this document into consideration in making this decision.
Following the hearing the parties were given the opportunity to make written submissions. The builder's written submissions were sent to the Tribunal on 18 January 2022. The owners objected to the submissions being permitted on the basis that any submissions were to be filed by 17 January 2022.
The Tribunal is required to act fairly and according to the substantial merits of the case in all proceedings.[2] This requires me, amongst other matters, to ensure the parties have a reasonable opportunity to present their claims and defences.[3] The builder's written submissions were only filed one day late and the owners did not allege they suffered any prejudice by reason of the late submissions which could not be overcome by extending the time which they had to reply or by an order for costs. I therefore allowed the owners an extra day to file their reply submissions which they sent to the Tribunal on 22 February 2022.

[28]

The builder submits that Mr Love has failed to comply with the expert duties set out in PNVCAT2 applying to expert reports which requires an expert to have a paramount duty to the Tribunal and not to the party retaining the expert. The builder submits that Mr Love included observations and allegations made by the owners in his report and then relied on these allegations in forming his opinion.
The builder drew my attention to a previous Tribunal decision delivered over eight years ago in which it said the Tribunal found that Mr Love acted as an advocate for his client and did not comply with his paramount duty to the Tribunal. I have not referred to that decision, as it is not relevant for the following reasons.
I must decide this claim based on the evidence in this proceeding. Whether or not Mr Love acted as an advocate for his client rather than assisting the Tribunal in a different proceeding is not evidence that he did so in this proceeding.
Including information and instructions from the person engaging the expert is not, in itself, a breach of any duties by an expert witness. What an expert witness is required to do is to set out what information and assumptions underlie their opinion so that the basis of their opinion can be properly understood.
The builder was also critical of Mr Love's attempts to give explanations during the hearing rather than answering a question yes or no. I do not consider that Mr Love's evidence was evasive.
I have reviewed Mr Love's report, in light of the opinions he gave at the hearing, and I am satisfied that he generally sets out where he has relied upon instructions and information reported to him by the owners, as he is required to do by the PNVCAT2. Relevantly he states that the owners reported leaks in the bathroom and the gutter overflowing near the kitchen window.
However I note he did not clearly state in his report that:
1. the leak near the kitchen window he refers to, was reported by the owners and not observed by him.
2. his opinions are based on the owners' reports of leaks in the bathroom and the overflowing of the guttering - he did not see these himself.
3. the photographs in his report showing the sub floor of the bathroom were taken by the owners, not him.
In considering Mr Love's entire evidence I found him to be both forthright and circumspect in his responses. He agreed that he should have labelled the photographs of the subfloor of the bathroom, in a similar way that he had labelled the photographs of the leak in the kitchen, as having been supplied by the owners but that he had overlooked this when preparing the report.
The Tribunal is not bound by the rules of evidence, may inform itself on any matter as it sees fit, and conduct itself with as little technicality as a proper consideration of the matters permit.[7] The Tribunal is required to ensure that each party is given the opportunity to present the evidence they want to present and must also act fairly and according to the substantial merits of the case.[8]
Taking these obligations into consideration, the report should also be viewed in the context of the proceeding. The parties were not represented by lawyers. Although a more precise and detailed report could have been prepared, Mr Love was available during the hearing to give evidence to explain his report and to be questioned about his opinions. Further costs are likely to have been incurred if a more detailed report was obtained, and that might not have been warranted given the amount of the claim.
I am not satisfied in all the circumstances that Mr Love's opinion should be rejected.

[31]

The parties agreed that the tiled floor of the bathroom leaked. However the builder says that the owners have not proven the leak was caused by defective works undertaken by it.
The owners have the burden of proving that it is more likely than not the leak was caused by the builder's works.[10] The owners rely on Mr Love's opinion in his report and at the hearing that the leaks were due to defects in the builder's works.
In his report Mr Love concluded the bathroom had failed as a result of the work carried out by the builder because there was no evidence of building movement. At the hearing Mr Love said his opinion that there was no evidence of building movement was because he saw no evidence that there was moving in external stucco, no cornice cracking and no cracking in the tiles.
Mr Love said he saw evidence of water staining on the floor and under the floor. He said he couldn't prove it, and therefore he did not put this in his report, but it was his opinion that the floor had not been properly waterproofed based on the photographs provided by the builder which shows a green membrane product in one corner of the bathroom, but the same product could not be seen in the other corner. He also said that the fact that water has gone through the floor was evidence in itself that the membrane had not been installed in a compliant manner.
The builder disputes Mr Love's opinion. It says Mr Love's report does not explicitly state a cause for the leak. The builder says Mr Love could not properly form an opinion about the adequacy of the installation of any membrane that may have previously been installed because he said that, when he inspected the bathroom, the builder had already removed the tiles and most of the screed, cement sheet and waterproofing.
Mr Alex Marcus gave evidence that water leaking through the floor meant it was a problem with the floor and not the walls. He said upon his inspection he found that the sub floor appeared intact, and there was no mould or structural damage. He said the cause of the leak could have been the strip drain, the waterproofing, the sealant or the tiles themselves. He said that he had examined the tiles, the grout and the flooring but had been unable to identify the cause of the leak before the investigative works stopped.
The builder says that in the absence of any evidence of the cause of the leak or that its works were responsible for the leak, the owners cannot seek damages for rectification of the leak.
It is not disputed that the bathroom leaked into the subfloor. A leaking shower in a bathroom is, of itself, defective. The VBA Guide provides in clause 13.03:

[35]

Unrelated to the leak in the bathroom, the owners claim that the cavity wall unit in the bathroom is not designed to accept the wall tiling that the builder installed. This is disputed by the builder and it further says that the owners' provided the design for the builder's works which included the cavity wall system in the bathroom.
The owners rely on Mr Love's opinion. In his report Mr Love says the cavity wall unit is not designed to accept wall tiling such as what has been installed and a new wall will need to be installed to allow for the thickness and size of the wall tiles, with fixings at 150 mm. No further explanation for his opinion such as a reference to any failure to comply with the NCC was referred to in his report.
At the hearing Mr Love changed his opinion that the cavity wall was not designed to accept the wall tiles which were installed. Mr Love said that he believed the cavity wall was a Hume cavity wall unit which was not designed to accept tiles when plaster is used. He said that a hole in the wall opposite the cavity wall showed it was a plaster wall. He said the test report for this cavity wall unit allows 6 mm Prima Aqua or 7.5 mm Prima Base which is cement sheeting to be used, but does not say that plaster can be used.
Further at the hearing, Mr Love said that if a plaster wall is installed, be it on a cavity wall or other wall, then AS2589 being the relevant standard for the use of plaster needs to be complied with. He also said that AS3958.1, being the relevant standard for ceramic tiles, requires that where wall tiles are more than 6.5 mm thick, fasteners should be spaced along each stud at 100 mm spacings. He said as there are no studs in the cavity wall, plaster should not have been used. Mr Love said that any alternative methods of fixing which did not comply with the relevant Australian Standards would require a performance solution and that must be noted on the building permit and agreed to by the owners and building surveyor prior to the construction being undertaken.
Mr Love said that he looked into the cavity and could see that there were no studs that would allow the required fixings. He said the horizontal cross rails in the cavity wall were at about 400 mm spacings so they did not comply with the standard.
Mr Love said that the consequence of the lack of fixings is that over time this wall has the capacity for tiles to leak due to banging of the door. He said that the remedy is to either install a secondary plaster wall system against the cavity wall that has the required studs for fixing as recommended in his report or that fibrous cement sheeting could be used instead of plaster which is a stronger product and could take the load of the tiles.
The builder denies any non-compliance with the tiling on the cavity wall. The builder says that the claim made in reliance upon Mr Love's report that the cavity wall unit is not designed to accept the wall tiling that has been installed, cannot be maintained as Mr Love no longer holds that opinion. The builder also relies upon a test report for the cavity wall unit included in their points of defence which shows that the type of cavity wall unit installed is designed to and able to accept the wall tiling that has been installed.
Mr Love quite clearly said at the hearing that he had changed his opinion and the cavity wall unit can accept the tiling installed and that the test report for the cavity wall unit provided by the builder shows that the cavity wall is designed to, and able to, accept the wall tiling that has been installed.
Therefore I am satisfied that the cavity wall unit is suitable for the tiling that has been installed.
The builder says that Mr Love's opinion, given at the hearing, that the use of plaster on the cavity wall rather than cement sheet, meant that there was a non-compliance with the fixing requirement of the Australian Standards for tiling on plaster walls, was not proven on the basis there was insufficient evidence:
1. that plaster was used on the cavity wall;
2. that plaster could not be used on the cavity wall, or
3. of the spacing of the fixings.
The builder says that the new claim is not proven because:
1. Mr Love's inspection of the material used on the wall next to the sewer pipe is not evidence of what material was used on the opposite cavity wall.
2. The test report does not state that plaster cannot be used on the cavity wall. It says the materials tested in the test report are not stated to be a finite list of allowable materials, only a list of the materials tested.
3. It disputes that an attempt to view between the cavity wall and the door with a torch as Mr Love said he did, could determine spacing of the fixings. The builder says the only way to ascertain the spacing of the fixings would be to deconstruct the wall or to strip the plasterboard of tiles, glue, waterproofing and wet plaster to expose the screws.
Further the builder says this was a new claim about which the builder was not given notice, was made for the first time at the hearing and did not provide the builder with an opportunity to prepare a defence, undertake an inspection of the claimed defect or produce additional evidence.
There is no evidence what material was used on the cavity wall. That plaster may have been used on a different wall does not satisfy me that plaster was used on the cavity wall. As I am not satisfied plaster was used on the cavity wall, this claim is not proven.

[37]

Where it is found that the builder has performed defective works, the loss that may be claimed is the amount of money that places the owner in the position as if the contract had been performed without defects. Often the loss that may be claimed will be the cost of rectifying the defective works.
However, if the builder can establish that the rectification of the defects is not a reasonable course to adopt, or that the owners failed to take reasonable action to mitigate (minimise) their loss, the owners might not be able to claim the costs, or all the costs, of rectifying the defective works.
The starting point is to determine what is required to rectify the defective works and how much that will cost, before considering if it is reasonable to rectify the works and whether the owners failed to mitigate their loss.
I have found that the builder's works have caused the leak through the floor of the bathroom.
The owners claim that the bathroom needed to be demolished and rebuilt; that all the fixtures, fittings, wall and floor tiles needed to be removed; the floor and joists needed to be removed and replaced; the floor and walls then waterproofed; before reinstating the tiles, fixtures and fittings.
Mr Love's opinion of the rectification work required was:
- Electrician to make safe.
- Plumber to remove all plumbing fixtures and store.
- Carpenter to strip all of room back to frame except for ceiling.
- Carpenter to install new wall to east side of shower enclosure.
- Carpenter to remove floor.
- Mould to be treated by mould expert.
- Carpenter to install new floor.
- Plaster to install new water-resistant plaster to walls.
- Water proofer to waterproof wet area plaster to AS 3740.
- Tiler to reinstall new tiles.
- Shower screen to be installed.
- Plumber to fit off all fixtures.
- Electrician to reinstall power fittings.
- Painter to repaint ceiling and door.
- Testing for leaks.
The builder says that a complete rebuild of the bathroom was not necessary. It says it was not necessary to strip, replace, waterproof and retile the walls nor was it necessary to remove and replace the floor or the joists below the floor.

[39]

The owners claim that to properly rectify the bathroom, the floor and the walls of the bathroom needed to be re-waterproofed together which required all the tiles on the walls to be removed and replaced.
The builder says that the bathroom could have been properly rectified by only re-waterproofing the floor and that the floor waterproofing could have been joined to the existing waterproofing on the walls - thus eliminating the need to strip, replace, waterproof and retile the walls.
The owners gave evidence that the builders who quoted to rectify the bathroom said they would need to waterproof the walls with the floor. However, that is not evidence of the necessity to do those works - just that the quoting builders required those works.
Mr Love's opinion is that any rectification would require the removal of the entire waterproofing system. He said if the waterproofing on the floor was joined to existing waterproofing on the walls it may prevent leaks but will not be compliant with AS3740. Mr Love's report refers to AS3740 part 2.3 and he says that requires waterproofing to be applied in accordance with installation details and "that detail calls for all previous systems to be removed fully". He said that he has not come across a waterproofing system that can be applied over another system because the supplier's installation instructions will not provide a warranty for that. He said he is also not aware of a waterproofing system that can be joined to an existing waterproofing system, even using the same product.
Mr Love said that the same issue will arise if just the first row of wall tiles is removed - that any removal of tiles will cause damage to the waterproofing system. Mr Love said that the whole of the bathroom must be waterproofed in one continuous sweep and that one waterproofing system cannot be patched or joined to another.
The builder disputes that re-waterproofing the floor requires the walls to also be re-waterproofed. The builder submits that Mr Love is not a qualified waterproofer and it is beyond his expertise to provide an opinion about this item.
Despite the builder's submissions, I am satisfied that Mr Love has sufficient expertise and experience to provide an opinion about how the bathroom should be waterproofed through his qualifications in building surveying, his teaching of relevant parts of the NCC and his experience as a building consultant.
The builder agrees that AS3740 requires waterproofing to be installed as per the supplier's instructions but says AS3740 does not say that an existing waterproof membrane needs to be removed. The builder submits that there is insufficient evidence to prove that waterproof membranes cannot be joined and says Mr Love did not provide a copy of any supplier's installation details which say they cannot be joined. It says the technical data sheet for Gripset OP, a surface primer, allows for bonding between an existing membrane coating and a new membrane and this contradicts Mr Love's opinion that this cannot be done.
Mr Love referred to this technical data sheet and said that the product requires the surface to be "free of ... existing coatings" which means the existing membrane must be removed and this product cannot be used over or patched to an existing membrane.
Whilst the data sheet does contain general preparation details for surfaces to be free of existing coatings as noted by Mr Love, it also contains the following information:

[45]

At the hearing Mr Love said during his inspection that he couldn't get all the way under the floor of the bathroom but had a really good look and he could tell water had leaked as the staining was consistent with water leaks and the state of the floor inside the bathroom. Mr Love said he saw and smelt what appeared to be mould and he recommended to the owners that they retain a mould expert to provide advice because certain moulds are more dangerous than others. He said he did not know if there was mould on the joists, but it would be reasonable to suggest there was, based on the track pattern he observed under the bathroom. Mr Love agreed that he saw watermarks on the joists and that imperfections on the timber can be black and dark, but disagreed that the marks on the joists were natural imperfections and not mould.
Mr Love said he did not take any photographs under the floor but referred to the owners' photographs. Mr Love said he took photographs of the bathroom floor and, whilst he did not say so in his report, he said there is a black mark on one of the photographs which is mould. He disagreed that the black mark on the floor in his photograph could be glue or other construction material.
Mr Love said that the floor of the bathroom should be removed to access the joists below to remove any mould that may be there. He said it was not necessary to remove the bathroom floor for any other reason and that the subfloor bearers and joists were otherwise built well and did not need to be replaced.
The builder disputed there was mould either on the bathroom floor or the joists and therefore disputed there was a need to remove and replace either the floor or the joists.
Mr Alex Marcus gave evidence that he did not see any mould or mould spores during his inspections. He said he saw discolouration and water stains on the floor and the joists, but the subfloor appeared intact and there was no evidence of mould or any damage. Mr Alex Marcus said that the brown marks on the photograph of the floor in Mr Love's report are probably construction adhesive and do not show mould on the floor.
This denial is consistent with the builder's communications to the owners in October and November 2018 when Mr Alex Marcus undertook inspections of under the floor during investigative works in the bathroom. The owners agreed the builder told them he had found no visible signs of mould but said they were surprised he couldn't see what they could see.
Mr Alex Marcus said the marks shown in the owners' photographs of the joists are comparable to features, knots, marks and water stains that would be expected on the type of timber that comprise the joists. He said water stains do not affect the performance of the floor or the floor joists and he told the owners there was no issues with the subfloor, but they insisted it be replaced.
I am not satisfied on the evidence before me that there was mould on the floor. Mr Love referred to a mark on the floor in one photograph which he took during his inspection in March 2020 - more than 12 months after the builder had removed the tiles and part of the substrate of the floor - as evidence of the mould. However, there is no reference in his report of there being mould in this specific location. Even if I was satisfied there was mould on the floor, it was Mr Love's evidence that the floor did not need to be replaced for that reason. He said that it only needed to be removed to provide access to remove any mould in the subfloor.
I cannot be satisfied on the evidence before me that there was mould on the joists. There is a dispute as to whether the marks on the joists were mould or water marks or natural imperfections. The owners, Mr Alex Marcus and Mr Love all stated they were not mould experts. There was no mould expert called to give evidence as to whether there was mould, even though Mr Love had recommended to the owners that they engage a mould expert.
In any event, even if there was mould on the joists, I have no evidence by a mould expert that it had to be removed. At the time of the second hearing day, the owners had rectified the bathroom, including removing and replacing the floor and some of the joists. However, there was no evidence of the condition of the joists revealed by removing the floor and the owners gave evidence that they did not retain a mould expert. In their reply submissions the owners said joists were treated for mould, but no details as to the works carried out were provided. Further, as this was not raised during the hearing I have not taken it into account.
For completeness, I am also satisfied that neither the floor nor the joists required replacement due to any water damage. Mr Love's evidence was that the joists did not have to be replaced even if they had mould as they were in good condition and that the floor only needed to be replaced to access the joists below. This is consistent with evidence given by Mr Alex Marcus that any water leaks though the floor to the joists may have caused staining but had not caused damage.

[48]

The owners claimed the cost they paid to rectify the bathroom of $22,157.14. This amount was made up of the amount they paid a rectifying builder to rectify the bathroom of $20,485.85, the cost of new tiles of $1,441.29 and the cost to reinstall the shower screen of $230.00. The owners said the amount they have paid was comparable to the estimate given by Mr Love in his report of $21,907.60 and therefore they rely upon his estimate to show that the amount that they paid was reasonable.
The owners provided an earlier quote from the rectifying builder that provides some breakdown for the costs. However that quote does not separate the cost of labour and materials and includes the supply and installation of a custom shower base which was not part of the original design for the bathroom. The builder said that the warranty insurance allowance in the quote of about 10% of the cost was well above the rates that a domestic building insurer would charge. The rectifying builder did not give evidence so could not be questioned about the cost.
Therefore, in order to determine the reasonable cost of the rectification works, I have considered Mr Love's more detailed breakdown and determined the reasonable cost to rectify based on his estimate, not the actual cost incurred by the owners.
In his report Mr Love's estimate was based on the following factors:
1. The cost estimate has been prepared on the basis that the works will be undertaken by a builder specialising in repairs to buildings. The engaged builder will be operating as a project manager and will take on the responsibility of managing all trades.
2. Built into the reported costs to rectify is a margin of 30% that a builder would receive to cover supervision, administrative and other cost associated with project managing the rectification. This fee of 30% is considered consistent with current industry practice.
3. The rates column also has an additional margin or allowance that allows for additional preparation time, insurances risk, and profits on working in a rectification environment, rather than a green field site.
4. Each item has been separately costed. We would assume that one builder would be engaged to carry out all works.
5. Costing Analysis is based on Rawlinson Construction Cost Guide, and where appropriate, current paid invoice amounts and local market cost.
6. The Goods and Services tax has been added at a rate of 10 % on the overall cost of rectification, including the builder's margin.
7. The Goods and Services tax estimate is indicative only and would be subject to the final costing for all rectification.
8. All trades have been quoted at $75.00 per hour (plus GST). Plumber and electrical contractors have been quoted at $100.00 per hour (plus GST).
The items costed separately were:

[58]

Mr Love said Rawlinson's Guide provides for trades at about $67.00 to $75.00 per hour but he has allowed $100.00 because this is where he finds most of the trades operate for rectification work.
The builder provided its own cost estimate to redo the tiling on the walls and floors at a cost of $4,151.36. In its estimate it provided for a 20% margin, allowed removal of tiling and plaster at a rate of $60.00 per hour but otherwise costed according to the meterage of work required at a square metre or lineal metre rate as provided for by Cordell's guide.
The builder submitted that the hourly estimates given by Mr Love are disproportionately high and in excess of industry standards. The builder submitted pages from Cordell's cost guide for comparison with hourly rates for a carpenter of about $55.00, a plumber of about $73.00, and an electrician of about $70.00.
The builder also submitted that only a 20% margin should be applied to the labour amounts, not 30% as allowed by Mr Love, and if the owners had allowed it to do the works there would have been no margin cost at all.
I will consider below whether the owners' refusal to allow the builder to rectify has an impact on the damages they can claim. But I will first consider the reasonable cost of a rectifying builder rectifying the leak.
It is very difficult to compare the costings estimated by Mr Love and the builder given they have both adopted a different approach. However the mere difficulty in estimating damages does not relieve the Tribunal from the responsibility of estimating them as best it can. The "assessment of damages ... does sometimes, of necessity involve what is guess work rather than estimation" and where precise evidence is not available the Tribunal must do the best it can.[12]
I prefer Mr Love's opinion as to the appropriate trade rates based on his experience as a building consultant and his teaching of estimating as part of the advanced diploma for design at Victoria University. Whilst Mr Love is not a quantity surveyor, the claim is not overly substantial and it is usual in the Tribunal for a claim of this amount for a building consultant to give their opinion of an estimated cost when they have sufficient experience to do so, in order to avoid the costs of engaging a second expert in respect of the cost of undertaking rectification work. Mr Love is independent and the builder is not.
Further the owners gave evidence that they have now had the works done at a similar cost to the estimate provided by Mr Love. That lends support to the estimate given by Mr Love as being reasonable.
I accept that, in the circumstances of this case, a 30% margin is reasonable for rectification works based on Mr Love's opinion. I note that no separate amount has been allowed for the cost of supervision and coordination of the trade contractors as that is included in the 30% margin as is the profit for the work.
I accept that the builder may be able to engage trades at a lower rate, and that the guides I have been referred to show rates that are lower. However the date of those guides is not stated on the document and I am also unable to tell whether those rates apply to rectification works or whether works need to be done at a particular time.
However included in the cost of rectification works estimated by Mr Love, are the estimated costs for the following items which, based on my earlier findings, I am not satisfied were required - a new wall to be built along the cavity wall, the tiles on the walls to be removed, the floor to be removed and mould treatment.
The owners gave evidence that all the builders who provided quotes to rectify the leak said that they would need to demolish the bathroom (remove the floor, wall tiles, and re-waterproof all of the wet areas). Whilst I found that the evidence did not satisfy me that such extensive rectification works were necessary, I must also consider what it will actually cost the owners to rectify the defects.
I accept the owners' evidence that the quoting builders were not prepared to just retile the floor and would require that the tiles be removed to re-waterproof the walls. If the builder had undertaken the rectification works, such extensive works may not have been necessary as it had already given warranties for the works and Mr Love agreed that it may have been able to prevent the leaking. This is an issue I will consider further below as to whether the owners have mitigated their loss and damage.
However I do not accept that in performing the rectification works, it was necessary for the quoting builders to have quoted for the removal of the bathroom floor, to build a new wall next to the cavity wall and to treat mould. Included in Mr Love's total estimate of $21,907.60 are the following amounts, totalling $4,104.10, which I am not satisfied were necessary to rectify the bathroom:
1. $600.00 plus margin plus GST, total $858.00, for carpenter to install new wall to east side of shower enclosure.
2. $600.00 plus margin plus GST, total $858.00, for carpenter to remove floor.
3. $900.00 plus margin plus GST, total $1,287.00, for carpenter to install new floor.
4. $480.00 plus margin plus GST, total $686.40, for the mould to be treated by mould expert.
5. $290.00 plus margin plus GST, total $414.70, for the timber and new floor.
I find that the reasonable cost of rectifying the bathroom by a rectifying builder, having regard to Mr Love's estimate, is $17,803.50. I make no additional allowance for the shower screen or the tiles because Mr Love's costings include an estimate for those.

[67]

The builder makes a number of submissions about whether the owners have mitigated their losses. Central to those submissions is whether the owners acted reasonably, particularly in relation to their rejection of an offer made by the builder to rectify the bathroom floor.
The builder says it was willing to remove and reinstate the tiles and if necessary, the substrate of the floor to rectify the leak but the owners refused to allow it to do so. The builder had arranged the removal of the tiles and part of the screed, waterproofing and cement sheet on the floor, but the owners refused to allow the builder to undertake further works due to a dispute about whether the floor of the bathroom also needed to be removed to allow inspection and cleaning of (any) mould from the joists in the subfloor below and then reinstated.
It is for the builder to prove that the owners acted unreasonably. It is not for the owners to prove they acted reasonably.[18] A relevant factor may be attempts the builder has made to repair the defects in the past and whether, in the light of the builder's conduct, the owners have reasonably lost confidence in the willingness and ability of the builder to do the work.[19] The question of what is unreasonable depends on all the circumstances of a particular case. Once the builder raises the reasonableness of the owners' conduct, the Tribunal is to make an objective assessment of the owners' conduct by taking into consideration all relevant circumstances which can also include matters which have come to the owners' attention after they rejected the offer to rectify if they relate to the builder's conduct at the relevant time.[20]
The builder submits that the owners have unreasonably refused it the opportunity to rectify any defects. The builder relies on the following grounds to submit the owners failed to mitigate their losses in relation to the bathroom:
1. The owners delayed any rectification work by removing the builder's trades from site when the builder was investigating the leak in November 2018.
2. The owners escalated the dispute to the DBDRV before notifying the builder they rejected its proposal to rectify the leak.
3. The owners did not contact the builder after the DBDRV decided the dispute was not suitable for conciliation.
4. The owners took a long time to make the application to the Tribunal.
5. The owners did not arrange to rectify the bathroom until July 2021.
The owners submit that their refusal of the builder's proposal to rectify was not unreasonable in circumstances where the builder denied it was responsible, the builder's opinion for the cause and its remedies for the bathroom changed, the builder then denied it was responsible for a leak in the kitchen and this caused them to lose confidence in the builder. The owners say their loss of confidence was justified by the enquiries they made about the works required to rectify the defects and the quotes obtained to rectify the works and Mr Love's report.

[68]

The owners discovered and notified the builder about the leak in the bathroom on 3 September 2018.
The builder arranged for its tiler to undertake an inspection on 5 September 2018. Following the tiler's inspection, the builder agreed there was water coming up through the tiles but said the cause was a result of building movement, and not defects in its works.
The builder offered in a text message to re-grout the tiles with silicone to allow for future movement and advised the cost would be $450.00. The owners say that the text from the builder implies that they were to pay this cost.
The owners said they did not know if that remedy was appropriate and wondered why silicone had not been used initially. So they asked a tradesperson to have a look. That tradesperson recommended that the owners have a look under the bathroom.
The owners looked under the bathroom on 12 September 2018 during which they took a video which they showed during the hearing. They said that the flooring and joists were wet, there was staining to the new joists and boards, and the ground beneath the bathroom was wet compared to the adjacent ground. They said that the staining looked like mould to them. After looking under the bathroom they said they were not satisfied that the rectification proposed by the builder would solve the issue.
During the hearing Mr Love said that putting silicone in the grout lines would not have rectified the leak because water leaking into the subfloor means there is a failure of the membrane. He said silicone may have stopped the water for a period of time but ultimately the silicone would break down and water would continue to get through the floor.
The owners said they sent images from the video showing the condition of the joists and floor to the builder. The builder then inspected the bathroom and under the bathroom on 13 September 2018. During that inspection the builder identified that the subfloor appeared to have water stains but said it was in good condition and that there was no evidence of movement.
On 14 September 2018 the builder "confirmed the original diagnosis of the problem" - which was building movement - and offered to take up the tiles and re-waterproof the area, at no cost to the owners.
The owners gave evidence that they contacted a VBA technical adviser who told them that water under the house could cause building movement, mould is a health issue, there was a need to re-waterproof beyond the floor junction and to get any proposal in writing from the builder. The owners also said the building surveyor inspected and said the membrane must be inadequate.
The owners said that this made them doubt the builder's remedy was acceptable and on 17 September 2018 the owners asked the builder to also address the mould and water damage to the flooring by replacing the flooring.
The builder sent an email to the owners on 5 October 2018 as follows:

[72]

In a response text message on 21 November 2018 the owner said they would consider the proposal and respond by email. No response was ever provided by the owners.
The owners said that they had requested the builder to replace flooring and do the waterproofing up the wall but that was not part of the builder's proposal. They said the people they were contacting said the builder's proposed remedy was inadequate. By this time a leak had also developed in the kitchen and the builder said it was not responsible for that because its opinion was that the leak was caused by a defect in the window supplied by the owners. The owners did not agree that there was a defect in the window, and say this compounded their concerns about the builder's ability to diagnose and rectify defects.
The owners made an application to DBDRV on 25 November 2018. The owners said they wanted DBDRV to assist with the dispute because they wanted the subfloor, floor, all the waterproofing and tiling replaced, and the northern roof rectified, and they couldn't see any resolution with the builder. The owners said that they expected DBDRV to arrange for an independent expert to provide advice and explain to them what was necessary to rectify the works, because they had lost confidence in the builder's opinion. However DBDRV declined to assist with the dispute and issued a certificate advising that the dispute was not suitable for conciliation in April 2019.
There is no evidence of any relevant activity undertaken in respect of the bathroom between April 2019 and early 2020. During that period the owners did not engage anyone to remove any alleged mould or to rectify the alleged defects. The owners say the cost of the renovation works had been $150,000.00, they had a very big mortgage and could not afford to spend more money at that time rectifying the works. The builder said there is no written evidence of the owners' financial status.
The owners arranged for an inspection by Mr Love in March 2020 and he issued his report in April 2020. The owners say that his report is evidence that the builder's proposal to rectify the bathroom was inadequate and justifies their refusal to allow the builder to rectify.
The owners made an application to the Tribunal in May 2020 after receiving Mr Love's report.
The owners gave evidence that they obtained two written quotes and one verbal quote for rectifying the bathroom and each of the contractors required the whole bathroom to be demolished.
In July 2021 the owners engaged and paid a contractor to demolish the bathroom, so that the whole bathroom could be re-waterproofed and to install a new sub floor. It is noted that the contractor also installed a custom shower base which was not part of the original design for the bathroom. The owners say there is no longer a leak in the bathroom.
I have found that it was not necessary to install a new floor or undertake any works to the subfloor of the bathroom. Further I have found it was not necessary to re-waterproof the walls of the bathroom.
In these circumstances, was it unreasonable for the owners to reject the proposal by the builder made on 21 November 2018 to install new AC sheet, seal, water proof and re-tile the floor of the bathroom?

[73]

Whilst I accept the builder's submission that ultimately the owners did not prove that the builder's rectification proposal was unsuitable, that is only one matter that I must consider in determining whether the owners' rejection was unreasonable in all the circumstances.
I am satisfied that it was not unreasonable for the owners to not accept the proposal in the following circumstances.
1. The owners gave consideration to the builder's proposal - they did not dismiss it out of hand.
2. The builder did not take responsibility for the leak in the bathroom, and then did not take responsibility for the leak in the kitchen.
3. The builder did not propose an underfloor inspection - that was something that was recommended by a tradesman that the owners did. It was only after the video footage was provided to the builder did it arrange an inspection.
4. The owners had received advice from the VBA that there may be issues arising from the leak with mould and subfloor movement and that any rectification of waterproofing would require at least the first row of tiles on the wall to be re-waterproofed. The building surveyor inspected and said the membrane must be inadequate.
5. The builder did not appear willing to consider or address the owners' concerns.
6. Mr Love did not consider the builder's proposal adequate.
7. Quoting builders were not prepared to undertake rectification works unless the wall and the floor were re-waterproofed together.
8. The owners are not builders and therefore it was reasonable for them to rely on the advice they were receiving from people independent of the builder.
In these circumstances it was not unreasonable for the owners to have lost confidence in the builder's ability to rectify the leak in the bathroom.
The builder submitted that it has displayed a clear willingness to remedy any alleged defect. I reject this submission as it is not supported by the evidence. The builder did not admit responsibility for the bathroom defect in its defence nor at the hearing. The owners were required to prove that the builder's works were responsible for the defect. I am satisfied that this is another reason why it was not unreasonable for the owners to not accept the builder's rectification proposal.
I am not satisfied that the owners' refusal to agree to the builder's proposal is a failure to mitigate their loss, such as would affect the damages that the builder must pay for the defect in the bathroom.
As I have found that it was not unreasonable for the owners to reject the builder's proposal to rectify the bathroom and the owners have not failed to mitigate their loss, the owners are entitled to damages for the bathroom rectification works which I have found necessary.

[77]

The owners say that they noticed water leaking onto the kitchen bench adjacent to the window frame during a rain event on 6 November 2018. They took a video, which they showed at the commencement of the hearing, and emailed photos to the builder and asked him to arrange an inspection.
The builder attended the home on 8 November 2018 and said that a seal on the window was causing the leak. The builder said it was not its responsibility to rectify the defect in the window as the window had been supplied by the owners. During his evidence Mr Alex Marcus said he didn't know where the leak was coming from, but leaks from window seals are a common problem. He said there was no leak at the time of his inspection, but he accepted the owners' evidence that there was a leak. He could not recall seeing the video prior to inspecting the window but said he would need to see the actual leak occurring to give an opinion on the cause.
The builder said they had asked the roof plumber to inspect but that's when the communication about the bathroom ceased with the owners and there was no subsequent communication from the owners about the window leak. The builder said there was no communication about the leak in the northern roof from the owners after 26 November 2018 and it then waited for the DBDRV process to resolve the matter.
The owners thought the leak was coming from around the window through the wall cavity, not through the window. The owners referred to an email from the window supplier that disputed the window was the cause of the leak based on photographs provided by the owners. This email was only provided to the builder just prior to the second hearing day and the window supplier was not called to give evidence. As there was no opportunity for the builder to question the window supplier and obtain evidence in response, and given that any evidence from the window supplier would not be independent, it would not be fair to take this email into consideration when making my decision, and I have not done so.
Mr Love's report says as follows:

[79]

Mr Love gave evidence that during his inspection the leak was not occurring, but he reviewed photos the owners gave to him. He is of the opinion the water into the kitchen is coming from the flashing around the chimney. He said the water shown in the owners' photos was coming from the top of the window and as there is an eave over the top of this window, it would be extremely unlikely that a rain event with down rain - rather than driven rain - is the cause. He said the most likely ingress point is where the stucco is joining the chimney which goes into the kitchen given that the flashing installed there is non-compliant. Another ingress point he considered was the tile connection to the tin northern roof - but there did not appear to be a connection point in the northern roof that could be causing ingress.
Mr Love said moisture can get into the area between the stucco and the brickwork and go down behind the flashing to the chimney. The installed flashing does not comply with the NCC. He referred to a figure in a Plumbing Commission Technical Bulletin which shows there are two components to the flashing. It is required to have a 90-degree component that upstands 75 mm and then a secondary folded piece of material that goes over the top with a 20 mm full silicone sandwich bead. That secondary flashing is not there. Further, the flashing is also not fixed at 100 mm spacings as it should have been.
The builder said to Mr Love that there was a secondary over flashing, but Mr Love did not agree. Mr Love said he didn't climb on the northern roof and he can't see if the stucco has been removed behind the flashing, but in his opinion it has not been removed. He said if the stucco had been removed, the flashing would have been sitting in 15 mm which is the thickness of the stucco based on his experience. The flashing is only 0.6 mm thick so if the stucco had been removed it would have been in another 15 mm and he would have seen that.
The builder said to Mr Love that as he was not qualified as a roof specialist and he says in his report that he has not checked and makes no comment about roof drainage systems, that he should not have given an opinion about roofing issues. Mr Love responded that he provided an opinion because he is qualified to look at plumbing issues due to his building surveying qualifications.
There is no evidence to support the builder's opinion that the water is coming through the windows as a result of a faulty seal.
I do not accept that a certificate of compliance from the roof plumber is evidence that the works are in fact compliant - it is only evidence that the roof plumber has stated that its works are compliant. The roof plumber was not called to give evidence to explain how the chimney had been flashed or how it says the flashing it installed complied with the NCC.
I am satisfied that Mr Love's qualifications and experience allow him to provide an opinion on roofing compliance issues. I accept the evidence of Mr Love that a secondary flashing has not been provided around the base of the chimney as required by the NCC and I am satisfied that this caused the leak into the kitchen.

[82]

In his report Mr Love says the plans for the builder's works have three downpipes to this gutter, only two have been installed and one of those is not installed in the location on the plans. However at the hearing Mr Love said two downpipes were required to be installed on the northern roof, not three as he said in his report.
Mr Love said that the design was for two downpipes to be installed close to each end of the northern roof - the downpipe at the western end ('west downpipe') was installed, but the downpipe at the eastern end ('east downpipe') was not installed. A downpipe was installed at the junction of the northern roof at the end of the pre-existing north wall ('middle downpipe') - however the plans did not show that a downpipe was to be installed in that location. He said that the middle downpipe was collecting most of the water from the northern roof because the northern roof slopes towards that downpipe which is causing the guttering to overflow. He said that the west downpipe was non-functional because it was connected at a point in the gutter which was higher than the point of the gutter to which the middle downpipe was connected.
Further, Mr Love said that the plans show an existing downpipe on the eastern side of the home at the south end of bedroom 3 ('bedroom 3 downpipe'). He said the failure to install the east downpipe meant that the bedroom 3 downpipe was about 15 metres from the middle downpipe and this is non-compliant with the NCC which requires no more than 12 metres between downpipes.
Mr Love also said during the hearing that the incorrect type of gutter has been used. However as this was not mentioned in his report, and the builder was therefore given no notice of that allegation, in fairness to the builder I have not considered whether the type of gutter installed is defective.
The builder submits that Mr Love's opinion about the alleged defect has evolved, and that he did not say in his report that the downpipes are installed in a different location to that set out in the plans.
I agree with the builder that Mr Love's evidence at the hearing changed from his report about how many downpipes were required by the design of the northern roof. However, I do not agree that Mr Love did not say in his report that the downpipes were installed in the wrong location. His opinion at the hearing that the plans required the east downpipe and that was not installed, was consistent with his report. I am satisfied the builder had sufficient knowledge of this claimed defect to be able to prepare its defence. What changed was Mr Love's opinion about whether the middle downpipe was required to be installed.
The floor plan of the existing conditions for the house shows that prior to the builder's works there was a downpipe on the western end of the northern roof, a downpipe near the middle of the northern roof and a third downpipe in the middle of the eastern side of the tiled roof (which was not part of the builder's works). The plans required the builder's works to install the west downpipe and the east downpipe. The plans do not show the middle downpipe is to be installed.
It was not disputed that the builder has not installed the east downpipe as required by the plans. Whilst I do not agree that the builder failed to install the correct number of downpipes, the failure to install the east downpipe in accordance with the plans is a defect.[21]
The builder submits Mr Love's report makes no mention of non-compliant spacings between downpipes, nor do the photos of the downpipes within the report indicate their alleged non-compliant spacings. It says the stamped plans clearly show that the bedroom 3 downpipe drains onto a separate roof drainage system and therefore submits that downpipe is not subject to the 12 metre requirement.
I note that the plans require that the drainpipes be no more than 12 metres apart but it does not state whether that only relates to water being collected from the same area. The plans also show the slope of the tiled roof which suggests that the bedroom 3 downpipe will not collect water that discharges from the northern roof or the north slope of the tiled roof, but only collects water from the eastern facing slope. Whether this means that the bedroom 3 downpipe is a separate roof drainage system from the northern roof and therefore the 12 metre spacing requirement as it pertains to the northern roof does not apply, is not an issue that was raised during the hearing with Mr Love. I prefer the independent evidence of Mr Love, that the spacings of the downpipes are non-compliant, than the builder's subjective evidence.
However I accept the builder's submission that Mr Love's report does not mention the spacings between the installed downpipes nor that there is any non-compliance with the NCC or the plans and this issue was first raised at the hearing. As this issue was not mentioned in the report, and the builder was given no notice of this allegation, in fairness to the builder I will not consider whether this the spacing of the downpipes is a defect.
In respect of the location of the downpipes, I find that the builder failed to comply with the plans by not installing the eastern downpipe as shown on the plans but instead installing the middle downpipe that was not shown on the plans.

[83]

It is Mr Love's opinion that the northern roof is not level in the east west direction and the attached guttering falls away from the down pipes in the north west corner by approximately 55 mm and the north east corner by approximately 20 mm such that the whole of the northern roof is discharging into a single down pipe and the guttering overflows.
The builder says that its works did not include replacing the rafters on the western part of the northern roof or replacing the existing part of the northern wall and because those elements were out of level it caused the northern roof to be out of level. It says if it had built the northern roof level then that would have created a gap between the roof sheet and the rafters along the pre-existing northern wall which would be a defect, therefore levelling the roof was not the correct remedy.
There was no dispute that the builder's works did not include replacing the existing rafters and kitchen wall on the west side of the northern roof and those existing structures were unlevel. What is in dispute was whether the unlevelness was a defect and if so whether the builder was required to batten or pack the rafters to achieve a level roof in the east-west direction so that the guttering attached would be able to fall equally towards each of the specified east and west downpipes.
Mr Love is of the opinion that the guttering attached to the northern roof is non-functional with the whole of the northern roof discharging into the middle downpipe. His report includes photographs showing the northern roof and the guttering from both ends of the northern roof sloping towards the middle downpipe.
Mr Love said the as constructed northern roof, guttering and downpipes, is causing the guttering on the northern roof to overflow. The northern roof has a large bow in the middle which causes the guttering, which follows the line of the roof, to fall to the middle downpipe and be non-functional. There is a 55 mm fall away from the west downpipe. The gutter is not functioning correctly and is overflowing. The bulk of the water drains to the middle downpipe. During a rain event the gutter needs to almost fill before the west downpipe has any effect.
Mr Love said the northern roof was designed with guttering and a downpipe at each corner. The notes on the plans require guttering to be laid to fall to the downpipes. The design requires the guttering to fall to the west downpipe and the east downpipe. The NCC requires compliance with AS3500 which requires gutters to have a 1 in 500 fall towards downpipes at the low points of the gutters. He said if the northern roof was installed flat in the east-west direction the plumber would have had the capacity to run the gradients of the guttering back to the installed west downpipe and the specified east downpipe so that each downpipe would take an equal amount of water. The middle downpipe was not specified and there should not be a fall in the guttering towards it.
Mr Love said he undertook a non-destructive inspection of the roof. He did not inspect under the roof sheeting and he was not able to see if the builder had attempted to level or batten the rafters and had no knowledge of the existing condition of the roof rafters.
It is Mr Love's opinion that the unlevelness of the roof is caused by a large variation between the heights of the timbers of the existing rafters on the western part of the northern roof and the new rafters installed by the builder on the eastern part of the northern roof. Mr Love said it is the existing northern wall and the existing roof structure, both of which the builder was to maintain, that are out of level and slope towards the middle of the northern roof. He said the existing rafters could have been battened out to create a level roof and if that was to create a gap between the roof sheet and the outrigger of the 55 mm fall as alleged by the builder, the gap could have been flashed to prevent any driven water to access the roof space.
Mr Alex Marcus gave evidence that he didn't realise the roof, as installed, would not function properly. He said he relied on the plumber's certificate of compliance that the guttering enabled the downpipes to discharge in accordance with the NCC.
Again, I do not accept that a certificate of compliance from the roof plumber is evidence that the works are in fact compliant. The roof plumber was not called to give evidence to explain how the guttering enabled the downpipes to discharge in accordance with the requirements of the NCC.
I accept Mr Love's evidence, as there was no evidence to the contrary, that the northern roof is not level causing the roof and associated guttering to fall away from the north west corner by approximately 55 mm and fall away from the north east corner by approximately 20 mm and that this is not compliant with either the plans or the NCC which require the guttering to fall to downpipes at the eastern and western end of the northern roof.
Whilst the builder's works did not include replacing the rafters and the kitchen wall on the west end of the northern roof, the builder was still required to undertake its works in compliance with the plans and the NCC. It is not a defence to the failure to comply, for the builder to say it was unable to comply because of the existing conditions.
I accept Mr Love's evidence that the existing rafters could have been battened out to create a level roof in the east-west direction as there was no evidence produced by the builder to the contrary. I also accept Mr Love's evidence that if that did create a gap with the wall, the gap could have been flashed: again there was no evidence to the contrary.
The owners gave evidence of variations made to the contract in respect of non-compliant work discovered during the building works that was not part of the builder's works but the builder advised needed to be rectified. A copy of the variation documents was provided. Therefore, if the existing conditions did create a difficulty with compliance, the builder could have sought the owners' consent to vary the contract to enable it to construct compliant roofing and guttering - as it had on other occasions where it discovered non-compliant works.
I find that the builder failed to install the northern roof so that it was level in the east-west direction which prevented the attached guttering from falling towards the east downpipe and west downpipe as required by the plans and the NCC, and this has caused the guttering to overflow along the middle during heavy rain events.

[85]

To determine the cost of rectification works required to the roof requires a consideration of the defects in the roof and the works required to rectify those defects.
I have made the following findings in respect of the northern roof:
1. that a secondary flashing has not been provided around the base of the chimney as required by the NCC;
2. the builder failed to comply with the plans by not installing the east downpipe; and
3. the builder failed to install the northern roof so that it was level in the east-west direction which prevented the guttering from falling towards the east downpipe and west downpipe as required by the plans and the NCC.
Mr Love gave the following opinion about the rectification work required.
1. A plumber would not certify the work by just putting a pressure flashing over the top - they would require new flashings be installed around the chimney. There was minimal damage internally from water entry when he viewed the home so he did not provide an estimate for the cost of rectifying any internal damage.
2. To rectify the guttering will require the removal of the existing roof, and the installation of levelling roof beams that are secured to the existing by laminating to the sides, thus levelling the whole structure. The roof would need to be replaced as the existing holes would not line up. The gutters would then be reinstalled with fall to each downpipe as required. He said that some plaster damage would occur during this process which he has made allowance for in the rectification cost.
Mr Love's opinion was that the roof not being level was not a structural concern, but the gutter follows the roof and it is attached to the roof and the way the roof has been installed did not allow the guttering system to fall in a manner that is compliant with the NCC.
The builder says it is not necessary to level and replace the roof because Mr Love said that the main defect is the guttering. It says as the gutter is affixed to the rafters and independent of the roof then reinstalling the gutter would be a far more reasonable and proportional remedy.
The builder did not ask Mr Love whether the gutter could be reinstalled in a compliant manner without levelling the roof, so I do not have Mr Love's opinion as to whether this is achievable. The builder also did not have any expert give any evidence that the reinstalling of the guttering without altering the roof level could rectify the defect and whether a rectifying plumber would be prepared to rectify in this manner.
As such, I prefer the evidence of Mr Love that the roof needs to be levelled for the gutter to comply with the NCC and that will require replacing the roof. In his report Mr Love's opinion is that the estimated cost to rectify the northern roof is $22,401.50 and to install the east downpipe would be $1,344.53.
However on the second day of hearing the owners gave evidence that they had rectified the northern roof at a cost of $9,075.00. They said they had not yet rectified the plaster repairs and painting that Mr Love had costed at $950.00 and they claimed that extra amount together with the cost of the actual repairs. The owners produced a document which showed the breakdown of the amount of $9,075.00 paid.
At the hearing the builder questioned the owners about the installation of a rainhead by the rectifying plumber which it said was not part of the builder's works. The owners did not dispute this.
In its closing submissions the builder disputed that a number of the items in the rectifying plumber's breakdown of costs were different to its works.
However, the builder did not submit how much of the amount paid by the owners was attributable to works done by the rectifying builder that were not part of the builder's works, and it did not provide an alternative costing for the rectification works.
As the amount paid by the owners of $9,075.00 is substantially lower than the amount estimated by Mr Love of more than $23,000.00, I find the amount the owners paid was the reasonable cost for the rectification works. I accept the evidence by the owners, which was not disputed, that they had not yet rectified the plaster and painting and find that it is reasonable to allow the amount of $950.00 for that work to be done as estimated by Mr Love.

[94]

The owners deny they are liable for any delay damages.
The owners say that under the contract the builder was to supply and install the cabinetry. The delay arose as a result of the builder advising, at short notice, it was unable to supply and install the cabinetry and the owners were then required to arrange for these works.
The owners say that after the builder issued the notice of completion it was required to return to rectify defects in its works until 3 May 2018. The owners also say the builder was not entitled to claim the final payment until the certificate of final inspection had been issued and they paid the final invoice two days after that occurred.
Under the contract, clause 37.3 delay damages can be claimed if there is an extension of time due to anything done or not done by the owners, or by an agent, contractor or employee of the owners. Therefore in order to claim delay damages the builder must first have an entitlement to an extension of time.
The builder has the burden of proving the claim for delay damages, and I am not satisfied that it is more likely than not that there was a delay in the carrying out of the building works due to the actions of the owners. The owners gave evidence the delays being claimed were due to actions of the builder except possibly for the period between 3 May 2018 when the builder had finished rectifying defects and 15 May 2018 when the certificate of final inspection was issued.
Further, the contract requires under clause 37.2 for the builder to give the owners a written notice if it claims an extension of time, and that notice is to state the cause and the extent of the delay. The contract under clause 37.2 then gives the owners the opportunity to dispute the claim for an extension of time. The Tribunal has previously determined that in order to claim delay damages under a contract, the builder must follow the procedure provided for in the contract.[22]
There was no evidence that the builder had given any written notice claiming an extension of time for either of the periods for which it seeks delay damages. Therefore, even if I was satisfied that the builder was delayed for a period of time in carrying out the building works due to the owners' actions, I am not satisfied that the builder properly exercised an entitlement under clause 37 in the contract for an extension of time. The builder did not give the required written notice to the owners which would have then given the owners an opportunity to respond. An entitlement to an extension of time is required in order to claim delay damages and the builder does not have an entitlement to an extension of time.
Accordingly, I make no set off in favour of the builder for delay damages.
The builder said it had also incurred costs in investigating the leak in the bathroom, and it had purchased tiles in anticipation of reinstating the bathroom floor, and it seeks to set off those amounts against any amounts it may be found to be required to pay to the owners.
As I have found that the leak in the bathroom was caused by the builder's works, I am not satisfied that any costs the builder incurred in investigating that leak, should be paid by the owners.
Further the builder purchased the tiles prior to the owners agreeing to allow the builder to rectify the bathroom. Whilst the builder may have purchased the tiles on the expectation it would be allowed to rectify the bathroom, as I found that it was reasonable for the owners to refuse to allow the builder to rectify the bathroom, I am not satisfied that the owners should be required to pay for the cost of the tiles.
Accordingly I make no set off in favour of the builder for any of these claims.

Robinson v Marcus Property Group Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (103 paragraphs)

Robinson v Marcus Property Group Pty Ltd (Building and Property) [2023] VCAT 942 (14 August 2023)

Parties

Legislation Cited (2)

Cases Cited (1)