Mrs Conforti gave evidence that the sprinkler system was installed after the first complaint, which as noted earlier complained of substantial cracking in the garage floor slabs and walls. She said further, upon the advice of the sprinkler installers, she only watered once a week for 25 to 30 minutes and she did not overwater. This evidence was not contradicted and I accept her evidence.

This being the case, what we have as the most likely source of water is the runoff from the concrete pavement between the house and garage as identified by Mr Scammel, which pavement slopes towards the garage wall. Mr Scammel considered that the slope of the pavement towards the garage wall was deficient workmanship and not in accordance with the Australian Standard regarding "Residential Slabs and Footings". I agree and accept his conclusions.

There may be other causes of the foundation movement; however, these have not been identified. What needs to be developed in this situation is a system that will allow soil moisture changes and soil movements whilst ensuring as best as possible, that as a result of this movement, there is no distress to the building elements making up the garage and the house.

I consider the reason the floors and walls of the garage have cracked is a combination of two things. Firstly, there are moisture changes in the highly reactive clay causing significant shrink-swell resulting in the foundation soil movement under the garage floor slab. These significant moisture changes may well be the result of the intrusion of the water from the retrograded area of pavement between the house and garage. Alternatively, it may to some extent come from the broken drain or it may be some other source altogether.

Secondly, the garage floor slab was not constructed with a slip joint ie. a joint between the edge of the infill garage slab and the garage wall brick work to ensure that there was no connection between them which could transfer stress and differential movement. Consequently, when the differential settlement of the foundation soils (due to the varying soil moisture changes) attempts to move the garage floor slab, this was restrained by the keying between the edge of concrete slab and the mortar joints of the brick wall. This restraint by the garage walls resulted in high loads and differential movements being transmitted from the infill slab into the garage walls, resulting in their cracking and distress. It also results in cracking to the garage slab. This was the evidence of Mr Kilgour and I accept his evidence.

Further, let me observe that the moisture changes in the foundation soils are always to be expected to some extent and to expect the owners to be responsible for maintaining a completely constant, ie. unchanging, soil moisture regime is unrealistic. The slab design of the garage floor must allow for differential movements of a foundation soil that is highly reactive, as described in the R.I. Brown report. The only way to allow for reasonable soil moisturise changes is to ensure that all the building elements still perform satisfactorily when such movement occurs. For that to occur requires a slip joint between the infill concrete floor slab of the garage and the brick walls. That this was not done is in itself a defect for which the builder is responsible. This slip joint is required to ensure a satisfactory building system for the garage and I find that it is essential that it be installed. I would also consider that the identified areas of water penetration from the concrete pavement sloping towards the garage should also be rectified.

In relation to subsection 11(3) of the House Contracts Guarantee Act ("the Act") the builder has produced no cogent evidence to establish that the defects in the garage floor slab were due to another person. Therefore, the builder is liable for the cracking in the garage floor and walls as a deemed defect arising from foundation movement under section 11 of the Act. All parties agree that there has been foundation movement. This being the case I would confirm the Fund's decision of 2 July 1999.

After hearing the evidence of the expert witnesses I find that the distress from foundation movement results from:

(a) the improper gradient to the concrete pavement abuting the eastern wall of the garage.

(c) the lack of a slip joint between the garage in fill floor slab and the garage wall brick work.

All of these items should be rectified by the builder in an attempt to prevent any further distress to the garage and its building elements.

In deciding the question of costs I am bound by section 109 of the Victorian Civil and Administrative Tribunal Act which sets out the limitations on my discretion in relation to costs. As set out in Australian Country Homes Pty Ltd and Vasiliou (unreported, 5 May 1999 Ref D803/99) I consider in cases where it is an inter-parties commercial dispute the most significant criteria under sub- section 109(3) is the relative strengths of the cases; whereby, if one party's position is clearly upheld by the Tribunal's decision the relative strength of its claim is much greater than that of the losing party. Therefore, under the criteria of subsection 109(3) the successful party can have a reasonable expectation that its party/party costs would be met by the losing party.

I find that the position the Fund took was far stronger than the position taken by Mr and Mrs Samaras. By my decision the Fund's decision has been totally vindicated. Therefore, I find that the Fund's request for costs on the basis of the relative strengths of the claim is made out under sub section 109(3) and I order that party/party costs of the Fund will be met by the applicant/ builder, Mr and Mrs Samaras.

I do not consider that County Court Scale `B', as requested by the Fund, is appropriate. The appropriate scale is the scale in the lowest court in the court hierarchy where the sum awarded by the Tribunal is within the jurisdictional limit of that court. Where the Tribunal does not make an award of a liquidated sum, then the appropriate sum is the Tribunal's estimate of the money's worth of its orders.

Therefore, I order that the party/party costs be assessed on the basis of the Magistrate Court Scale appropriate to an award of $10,000. The second order I will be make is that the applicant pay the party/party costs of the first respondent assessed in accordance with the Magistrate's Court Scale of Costs for an award of $10,000, such costs to be agreed and if there is no agreement to be referred to the Principal Registrar in accordance with Section 111 of the Act.