1. The following issues arise for consideration in this proceeding:
   • (a) Was the retention fund required to be placed in an interest bearing account?
   • (b) Is contractual interest payable on the variation claim and the balance of the retention fund?
   • (c) Is TCM responsible for the defective works claimed by the Applicants and if so, what are the reasonable costs of rectification?
   • (d) Are the settlement monies received from the Second to Seventh Respondents by Counterclaim to be taken into account in assessing the liability of TCM?

WAS THE RETENTION FUND TO BE HELD IN AN INTEREST BEARING ACCOUNT?

1. TCM claim interest on the retention monies held prior to 16 April 2008. The claim is couched on the ground that the Contract required the retention fund to be held in an interest bearing account. According to TCM, the Owners failed to do this until 16 April 2008. Accordingly, it claims interest forgone in the amount of $4,323.61. The Owners dispute that the Contract requires the retention fund to be placed in an interest bearing account.
2. Clause C1 of the Contract required TCM to provide security for its performance of the Contract by allowing the Owners to withhold cash retention. In particular, 5% of the Contract price was to be retained progressively from progress claims until the full amount of the security was held by the Owners. In the present case, $76,717.58 was retained by way of security pursuant to Clause C1 of the Contract.
3. Clause C2.2 of the Contract states:

The owner must hold the cash retention, including interest earned on it, less any bank fees or charges on the account, as trustee for the contractor in a separate bank account designated as a trust account.

1. Mr Hellyer of counsel appeared on behalf of TCM. He submitted that the Owners breached the Contract because they failed to hold the cash retention in a separate bank account designated as a trust account. He contended that there is no reason to suggest that the separate bank account would not be an interest bearing account. He suggested that all banks pay interest on credit balances held in a bank account. Consequently, he submitted that Clause C2 should be construed to mean that separate bank account was a reference to an interest bearing account or alternatively, that as a matter of business efficacy it would be appropriate to imply a term into Clause C2 that it was a requirement that the Owners hold the cash retention in interest bearing bank account.
2. Mr Mitchell of counsel appeared on the behalf of the Owners. He submitted that although there was a technical breach by the Owners, in failing to hold the cash retention in a separate bank account designated as a trust account, there was no obligation that the bank account be interest bearing. Accordingly, no loss was suffered by TCM as a consequence of that 'technical' breach.
3. I do not accept that the construction of Clause C2 expressly provides that the cash retention must be held in an interest bearing account. The clause merely provides that where monies are held in an interest bearing account then any interest earned on the account, less any bank fees and charges, form part of the retention fund. Further, I do not find that as a matter of business efficacy it would be appropriate to imply such a term into Clause C2. In Codelfa Constructions Pty Ltd v State Rail Authority of NSW,[4] the High Court adopted the following statement of principle, taken from the majority opinion of the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings:[5]

For a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.

1. In my view, the mere fact that the clause does not expressly provide for the retention monies to be placed in an interest bearing account does not render the contract ineffective. Ultimately, it is and was a matter for the parties to agree on whether the retention account was to be interest bearing or not. The fact that bank accounts may or may not bear interest is not, in my opinion, to the point. The Contract gives the Owner's absolute discretion as to what type of bank account the cash retention is to be held in, save that it must be in a separate bank account designated as a trust account. Apart from submissions made by Mr Hellyer, there is no evidence before me that every bank account designated as a trust account will or must bear interest. In the absence of such evidence, I accept the submissions made by Mr Mitchell that no loss flows from the technical breach. Consequently, I dismiss this aspect of TCM's claim.

IS INTEREST PAYABLE ON THE VARIATION CLAIM AND BALANCE OF THE RETENTION FUND?

1. TCM claim contractual interest on the balance of the retention of sum currently held in a separate bank account designated as a trust account, on the ground that the monies held in the account should have been released to TCM upon it submitting its Final Claim, pursuant to Clause N10 of the Contract.[6]
2. Mr Mitchell submitted that no contractual interest is payable on either the balance of the retention fund held by the Owners or the outstanding variation claim, despite the fact that these claims are admitted, subject to the Owner's entitlement to set-off their loss and damage. In that regard, he referred to Clause C7 of the Contract, which states:

When the architect issues a final certificate under clause N11, or a certificate under Q9 or Q17, the owner must release to the contractor any remaining security, less any amount owing to the owner under the certificate.

1. Regrettably, the Architect resigned his commission prior to the Works reaching practical completion and as a consequence, no final certificate was issued under the Contract.
2. Mr Marraffa gave evidence that after the resignation of the Architect, TCM and the Owners agreed to administer the Contract themselves. Mr Mitchell submitted that the parties did not agree to the issue of the final certificate because the Owners required defects to be rectified. Consequently, the contractual obligation to release the remaining retention never crystallised.
3. By contrast, Mr Hellyer submitted that the parties agreed to release one half of the retention fund and pay all outstanding claims upon the Owners taking possession of the Works. He referred to the evidence of Mr Marraffa, set out in paragraph 19 of his witness statement dated 23 June 2011:

The meeting on or about 8 September 2008 took place because Ms Nikou was desperate to take possession of the home. Vince and I indicated that we were sympathetic to her position but that TCM required payment of the outstanding progress claims and release of half of the retention money in the sum of $38,358.79. To assist Ms Nikou and her family Vince and I agreed to allow the owners to take possession of the house provided that the owners make payment of the outstanding progress claims (which at that time were in the sum of $14,070.10) and to release one half retention in the sum of $38,358.79. Ms Nikou agreed to this proposal.

1. During cross-examination, Ms Nikou denied that she had agreed to pay all outstanding progress claims in consideration of being permitted to take possession of the Works. Her evidence is consistent with a handwritten note made by her where she wrote:

I Olivia Nikou, acknowledged that after the meeting with TCM on at 8.9-08 I agree that as soon as a certificate of occupancy is issued, TCM is entitled to 50% of the money presently held with Macquarie Bank. I give Lou Antonino authority to sign on my behalf for this purpose.

1. I accept the evidence of Ms Nikou that no agreement was reached to pay the balance of outstanding monies upon her taking possession of the Works, save for the release of half of the retention sum. In that regard, half of the retention fund in the amount of $38,358.79 was paid to TCM on or about 19 September 2008, shortly after the Owners took possession of the Works.
2. In my view, the Owners were under no contractual obligation to pay the balance of the Contract price upon taking possession of the Works or upon the occupancy permit issuing. I find that the Contract expressly provided that the final claim was due and payable upon the Architect issuing a Final Certificate under the Contract or in the absence of a certifying architect, upon the parties agreeing to that course.
3. Moreover, Clause N10 expressly stated:

The contractor is entitled to submit to the architect a claim for final payment (final claim) when:

• all defects liability periods have ended and the contractor has rectified all defects and finalised all incomplete work it became aware of by instructions from the architect or from its own observations during the defects liability period and
• the works have been completed in accordance with this contract.

1. As I understand the current position of the Owners, the balance of the Contract price claimed by TCM ($15,291.10), interest on the late payment of Progress Claim 2 ($800.92) and the remaining balance of the retention fund ($38,358.79)[7] would be due and payable but for the matters raised in their counterclaim.[8] Accordingly, it is necessary to consider the Owner's counterclaim in order to ascertain whether any or what of the amount claimed by TCM is payable.

1. As indicated above, there are seven items of defective work claimed by the Owners which remain the subject of adjudication by the Tribunal. Mr Casamento gave expert evidence on behalf of the Owner's as to the nature of the defects alleged and the cost to repair them. Mr Gibney gave expert evidence on behalf of TCM as to the nature of the defects alleged and what work was required to repair them. He did not provide any opinion evidence as to the reasonable cost to undertake remedial work.
2. Mr Marraffa also gave opinion evidence in relation to the nature of the defects alleged, what work was required to repair them and the reasonable cost to undertake remedial work. In that respect, he gave evidence that he had been involved in the building industry since 1971 and was a registered builder in both commercial and domestic building work. He said that in 1975 he completed an apprenticeship in carpentry and commenced working as a carpenter. He recounted that in 1978, he commenced working as a builder carrying out extensions and construction of new homes. He also said that his current duties involve contract administration and estimating. I am satisfied that Mr Marraffa is qualified to give opinion evidence in relation to the technical matters raised in this proceeding, notwithstanding his lack of independence. Nevertheless, he struck me as an honest person who was willing to make concessions when pressed on certain aspects of his evidence. Consequently, I have, in determining the Owner's defects claim taken into consideration the opinion evidence given by Mr Marraffa in addition to the opinion evidence expressed by the experts engaged by the parties.
3. In considering the cost of rectification, I note that the labour rates used by Mr Marraffa and Mr Casamento are similar, although there are some small differences in relation to some of the specialised trades and licensed trades. However, I have, in most instances, adopted the labour rates used by Mr Casamento because I accept his evidence that those rates are consistent with current building industry labour costs.[9] Nevertheless, there are some instances where I have preferred the evidence of Mr Marraffa, either because the work was specialised and the cost of labour did not fall into the categories of labour rates adopted by Mr Casamento or because Mr Marraffa gave evidence of what the work or similar work actually cost TCM. The labour rates used by Mr Casamento are as follows:
   • (a) Labourers: $40 per hour
   • (b) Carpenters: $65 per hour
   • (c) Painters: $70 per hour (including materials)
   • (d) Plasterers: $70 per hour
   • (e) Licensed trades: $75 per hour
4. What follows are my findings in relation to each category of the defective works claim.

1. It is uncontested that after the Owners took possession of the Works, water entered the gymnasium outbuilding through the north masonry wall at the rear of the gymnasium. According to Mr Casamento, the waterproofing membrane installed by TCM at the rear of that building had failed.
2. In addition, Mr Casamento gave evidence that the east wall in the gymnasium also allowed water to permeate through it. He said that it was not constructed in accordance with the Contract documents because no waterproofing additive had been used in its construction. He referred to the engineering drawings which depicted the east wall of the gymnasium to be constructed of contiguous 300 mm diameter concrete bored piers with 75 mm shotcrete sprayed to the inside face of the piers. Mr Casamento said that the shotcrete should have had a waterproofing agent, known as Xypex, added to the cement mix before it was sprayed onto the bored piers.
3. Sheet 24 of the engineering plans prepared by the Engineer depicted the construction of the east wall in the gymnasium. Those drawings expressly stated:

NOTE: ALL BORED PIERS TO HAVE XYPEX WATERPROOFING ADDITIVE...

1. TCM admit that no Xypex waterproofing additive was added to the shotcrete sprayed to the bored piers along the east wall in the gymnasium or the east wall as it extends externally out of the gymnasium and above the swimming pool. However, it contends that the omission of Xypex was not material because:
   • (a) the density of the 40 MPA concrete has a high degree of water resistance; and
   • (b) it was inevitable that there would be gaps between the bored piers, which would have permitted the ingress of moisture in any event;
2. I note that the wording of engineering detail for the east wall in the gymnasium differs from the engineering detail for the east wall as it extends externally and over the swimming pool. In particular, the width of the bored piers is 450 mm, as opposed to 300 mm within the gymnasium. In addition, Sheet 29 of the engineering drawings notes:

1. Accordingly to TCM, the engineering detail for the external part of the east wall specifies that the waterproofing agent is to be added onto the shotcrete, whereas the engineering detail for the internal part of the east wall requires the waterproofing agent to be mixed into the cement used for the construction of the bored piers.
2. Mr Casamento gave oral evidence that the engineering detail for the east wall within the gymnasium should be read to mean that the Xypex was to be added to the cement sprayed onto the bored piers. However, his oral evidence is inconsistent with what he had previously written in one of the reports prepared by him and filed in the proceeding. In his report dated 25 June 2009, he states in relation to the gymnasium outbuilding:

8.5 The waterproofing detail along the east wall, as specified by the Design Engineer is considered inappropriate, as it does not allow for the effective waterproofing of the wall.

8.6 The drawings do not specify the sprayed concrete at the front of the wall needs to be waterproof by adding 'Xypex' to the concrete mix.

1. During concurrent evidence, he agreed that there would be little point in adding a waterproofing agent to the cement used to construct the bored piers because it was inevitable that there would be gaps between each of the bored piers after they were constructed. He suggested that a prudent builder would have raised this as an issue with the design engineer and sought further clarification. This was not done.
2. I accept Mr Casamento's evidence that it would have been prudent to seek further clarification on this point, especially when one considers that the specification forming part of the Contract expressly stated that TCM were responsible to ensure the general water tightness of the building. In my view, a reasonably competent builder would have questioned the engineering detail, especially when one considers that the same wall was detailed as having waterproof shotcrete applied to the bored piers in the section of that wall as it extended externally from the gymnasium. It makes no sense to construe the engineering detail of the wall within the gymnasium and sauna as requiring less waterproofing than what is required externally, especially when one takes into account that the soil of the neighbouring property being retained by the east wall rose in height as the wall extended northward against the gymnasium and sauna, which heightened the possibility of water ingress due to increased hydrostatic pressure.
3. In my view, the express obligation imposed by the specification forming part of the Contract documents required, as a minimum, that TCM adopt some methodology to prevent water ingress through the east wall in the gymnasium and sauna. In that regard, the engineering drawings expressly note on Sheet 1 that those drawings are to be read in conjunction with architectural and other consultant's drawings and specifications.
4. I am of the opinion that a reasonably competent builder would have had regard to the specification and construed the engineering detail as it relates to the east wall of the gymnasium and sauna to mean that the waterproofing agent was to be added to the shotcrete applied to the bored piers, rather than added to the cement used to construct the bored piers. It would seem illogical to construe the engineering detail to mean that the waterproofing agent was to be added to the cement used to construct the bored piers because it would have no effect, given the inevitable gap between the bored piers. Accordingly, I find that the Contract required that the east wall of the gymnasium and sauna should have been sprayed with cement impregnated with Xypex waterproofing agent in order to give effect to the notation on the engineering drawings that all bored piers to have Xypex waterproofing additive. TCM failed in that regard.
5. Although TCM admit that no waterproofing agent was added to the shotcrete applied to the bored pier wall, it contends that no consequences flow from that omission. In particular, both Mr Marraffa and Mr Sainato gave evidence that they did not believe that any moisture was permeating through the east wall in the gymnasium and sauna. They contended that the water damaged plasterboard fixed to the east wall in the gymnasium resulted from water entering under the south wall. TCM further relied upon the expert evidence of Mr Gibney who said that moisture readings taken of the east wall were not entirely consistent with moisture entering through that wall. In his report dated 27 April 2011 filed in the proceeding, he stated:

The damage to the plasterboard appears to be as a result of water splash from the spa in front of the gymnasium. The lack of freeboard allows the water to run between the floor tiles and the concrete floor slab. The water can penetrate to the eastern edge of the wall and come into contact with the plaster board where the glue or debris was left in the channel/cavity.

1. In essence, he opined that moisture was entering the gymnasium because there was inadequate freeboard between the top of the spa water level and the internal floor level of the gymnasium. He suggested that the floor tiling, which was not undertaken by TCM and which extended under the south wall of the gymnasium to form part of the tiling surrounding the spa was allowing moisture to travel by capillary action into the gymnasium under the south wall through the tile screed.
2. During concurrent evidence, Mr Casamento conceded that it is unclear as to what degree moisture was entering the gymnasium through the east wall. He conceded that there was also a very high likelihood that water was entering the gymnasium from the spa located adjacent to the south wall of the gymnasium. [10]
3. Mr Mitchell submitted that it was of no consequence whether moisture was entering the gymnasium through or under the south wall adjacent to the spa. In particular, he contended that the excavation of the pool and spa was work undertaken by TCM and as a consequence, any issue relating to inadequate freeboard was attributable to TCM.
4. Further, he referred to the specification forming part of the Contract documents which expressly stated that TCM were responsible to ensure the general water tightness of the building.
5. No claim is made against TCM relating to water ingress under the south wall. The claim is couched in terms of water entering the gymnasium/sauna area either through the north wall or through the east (bored piers) wall. In that regard, I have already found that TCM did not adhere to the Contract documents by failing to add a waterproofing agent to the shotcrete sprayed onto the bored piers. Further, none of the experts have said that no moisture has or can enter through the east wall. Their opinion is that the east wall may or has presented as a further point of moisture ingress. In particular, Mr Gibney conceded during concurrent evidence that he was unable to discount the possibility of water or moisture also entering through the east wall of the gymnasium.[11]
6. Further, both experts, together with an engineer from McFarlane and Partners Pty Ltd (engaged by the Engineer) jointly prepared a scope of recommended remedial work, which is set out in a report prepared by Mr Casamento dated 24 November 2010. Mr Casamento subsequently provided cost estimates to carry out the work set out in that report. The cost estimates are described in the document entitled Costing Schedule dated 5 February 2011 ('the Costing Schedule').
7. Having regard to TCM's failure to adequately waterproof the east wall in accordance with the Contract documents, I find TCM liable to undertake remedial work to that wall. Subject to my comments below, I accept the scope of work as detailed in the report dated 24 November 2010 as reasonable. I note that Mr Marraffa has given evidence as to an alternative costing estimate to that set out in the Costing Schedule. His evidence comprises attachment TM-1 to his witness statement dated 23 June 2011, filed in the proceeding. However his cost estimate is based upon a revised scope of work set out in Mr Gibney's report dated 27 April 2011, which recommends that the wall be treated with a waterproofing agent up to 300 mm from ground. Having regard to Mr Casamento's evidence and the concessions made by Mr Gibney during concurrent evidence, I do not accept that this revised scope of work is appropriate, given the risk that the east wall will leach moisture or water in the future as a result of the failure to apply a waterproofing agent to the shotcrete.
8. Accordingly, and having regard to Mr Casamento's evidence as set out in the Costing Schedule, Mr Marraffa, as described in Attachment TM 8 of his witness statement dated 15 July 2011 and Mr Sainato, I find that the reasonable cost to repair the interior of the gymnasium and sauna is made up as follows:

Both experts accept that the tanking previously repaired by TCM in July 2009 requires further work as the membrane has detached from the wall. In addition, the excavation needs to be backfilled and the landscaping reinstated. Mr Casamento has estimated that the work would cost $520, including any further excavation. Mr Sainato gave evidence that the original cost of that tanking work was $851.40 for excavation and $400.41 for materials.[12] I accept that the repair work would require less labour hours and less material. Accordingly, I find the cost estimate of Mr Casamento to be reasonable in light of what that work originally cost.

Mr Sainato gave evidence that there was no rotting timber stud wall, which conflicts with the evidence of Mr Casamento. I prefer Mr Casamento's evidence, given that Mr Marraffa has also made an allowance to repair that wall. He said that a labourer would be able to demolish the existing wall in 2 hours and that a carpenter could reinstate the wall in 4 hours. I accept that evidence. I also accept his evidence that the cost of materials would be $133, given his involvement in the original construction of that wall. Accordingly, applying the labour rates set out above, I find that the reasonable cost of this work is $473.

As this work was almost completed, I accept the costing of Mr Marraffa of $40, representing one hour of work for a labourer to clean the wall in preparation for the application of the waterproofing agent.

I accept Mr Marraffa's evidence that it would take a carpenter one hour to remove the lining boards at $65 per hour.

Apply Xypex Gamma Cure and Xypex slurry to gymnasium and sauna.

Mr Casamento expressed the opinion that it would take 16 hours to undertake the work at an hourly rate of $70 per hour (exclusive of materials). Mr Marraffa gave evidence that it would take two hours to undertake the work at a rate of $40 per hour. He further gave evidence that the cost of materials was $40. Doing the best I can on the evidence before me, I find that a reasonable estimate of the time to undertake the work is 10 hours, having regard to the fact that two applications are required. Further, I consider that the appropriate rate is $65 per hour, including sundries, given that the work is to be carried out by a tradesperson. I also accept that the cost of the Xypex is $40.

Cut small drain, apply waterproof membrane and drain to sauna outlet drain.

Mr Casamento and Mr Gibney conceded that the gap left between the floor tiles and the east wall was sufficient to accommodate the drain without having to undertake significant additional work in order to form that drain. Mr Marraffa gave evidence that it would take 6 hours carry out that work, although his cost estimate is confusing because he has also added a labour component to his bill for materials, making his cost for labour and materials $810 compared to Mr Casamento's estimate for the cost of materials of only $400. Accordingly, I find that approximately $400 of Mr Marraffa's cost estimate for labour and materials is attributed to additional labour. Using his rate of $50 per hour, that equates to a further 8 hours of labour. Therefore, I find that the reasonable time to undertake the work is 14 hours, being the aggregate of the 6 and 8 hours referred to above. This amount is less than what was estimated by Mr Casamento. However, I do not consider that the scope of the work is as extensive as Mr Casamento envisaged.

I find that the appropriate labour rate is that applicable to a tradesperson, being $65 per hour, given the complexity of the work. I also accept that the cost of materials is $400.

I accept the cost estimate given by Mr Casamento over that of Mr Marraffa in regard to this item of work, given that Mr Marraffa has not broken up his cost estimate into time and materials.

Mr Marraffa gave evidence that Villaboard cost $21.85 per square metre. He estimated that the amount of board required was 8.64 m² making a total of $190. Mr Casamento estimated the cost of installation and materials as $85 per m². I do not accept that this is an accurate method to measure the cost to install Villaboard. I will allow the cost of materials in the amount of $190 plus 2 hours labour for a carpenter at $65 per hour making a total of $320.

Mr Casamento has estimated that this work will take 16 hours, whereas Mr Marraffa has estimated that this work will take 6 hours. Given the small area to be re-fixed, I prefer Mr Marraffa's evidence. Therefore, I allow 6 hours for a carpenter to undertake this work

Mr Casamento has allowed $1,000 to re-lay floor tiles taken up by the rectification work. Given that the drain is substantially formed by the gap between the tiles and the wall, I do not accept his costing on this item. Mr Marraffa has not allowed any amount for this item of work. Having regard to the fact that some minor work will be required to clean out and form the drain, which may require cutting some of the tiles to connect the drain with the sauna outlet, I will allow $300 for any associated tiling work.

Both Mr Casamento and Mr Marraffa have each allowed 8 hours to repaint the gymnasium east wall. However, Mr Marraffa has applied a rate of $50 per hour (excluding materials), whereas Mr Casamento has applied a rate of $70 plus materials in the amount of $200. In my view, the appropriate rate is $70 inclusive of all materials, which is the rate adopted by Mr Casamento in his report dated 17 October 2011 for painting.

Reapply Bulvnol waterproof membrane to the external rear wall of the gymnasium (back step).

Mr Casamento has allowed 16 hours to undertake this work at a rate of $40 per hour. Mr Marraffa has allowed $75 for labour and $75 for materials. Mr Sainato gave evidence that the work was straightforward and would not involve more than two hours at $40 per hour. He also said that the materials would not cost more than $25.[13] Doing the best I can on the evidence before me, I will allow 8 hours labour at $40 per hour for labour, which includes excavation and backfilling, including reinstating any damaged landscaping and $100 for materials and planting.

Mr Casamento conceded that the work had already been undertaken to remedy this defect and that no further work was required.

Mr Sainato gave evidence that this work was undertaken by TCM on 25 February 2011 at its cost.[14]

Add contingency (5%), margin (30%) and GST [15]

1. Accordingly, the total amount allowed respect of the gymnasium and sauna is $8,360.35. I find that TCM is wholly responsible for that amount.

1. The east wall as it extends over the pool and beyond is, like the east wall in the gymnasium, constructed of bored piers with shotcrete sprayed against the bored piers to form a solid wall. Sheet 29 of the engineering drawings expressly states that the shotcrete is to be waterproof.[16]
2. TCM admit that no waterproofing agent has been used in the construction of the bored piers or the application of the shotcrete.
3. The east wall of the pool was tiled by the Landscaper. The tiling comprises stone tiles fixed to the vertical face of the east wall and capping tiles laid over the top of the east wall. It is uncontested and was clear from my inspection of the Works that the east wall suffers from significant water staining, manifesting in a calcified residue prominent on the face of the tiles in various sections of the wall.
4. TCM dispute that the failure to add a waterproofing agent to the shotcrete is the cause of the calcified residue stains on the tiles. It contends that the water staining problems emanate from the work undertaken by the Landscaper when it tiled the face and top of the wall. In particular, both Mr Sainato and Mr Marraffa gave evidence that on 19 September 2011, two tiles were removed from the top of the east wall towards the northern end. Pooling of water was observed in the channel formed on the top of the retaining wall under the removed tiles. They said that the channel which had been constructed by TCM in order to direct water away from the edge of the east wall was blocked with tile bedding material and there were two electrical leads sitting in water. Further, there was a gap of approximately 10 mm between the vertical face of the east wall and the underside of the tiles which had been attached to it using daubs of glue. They recounted how a water hose was positioned on top of the east wall and switched on, after which they observed water running down between the face of the wall and the tiles, exiting at the bottom of the east wall where it intersected with the pool coping tiles.
5. Mr Casamento and Mr Gibney both agreed that the tiling undertaken by the Landscaper had created problems because it allowed water to penetrate between the face of the wall and the underside of the tile, thereby creating an abnormal moisture environment allowing efflorescence to appear on the face of the stone tiles. Consequently, TCM deny liability in respect of any of the water related problems affecting the east wall over the swimming pool.
6. However, neither expert was able to discount the possibility that water was also permeating through the wall itself. Indeed, Mr Kay gave evidence that he observed water leaching from the east wall after the shotcrete had been applied. He was adamant that a considerable amount of water was leaching from the east wall well before any tiling work was undertaken, despite being exhaustively cross-examined on this point. Therefore, I accept the evidence of Mr Kay and find that the east wall does suffer from water ingress, albeit that the consequential damage has been exacerbated by the problems associated with the tiling work undertaken by the Landscaper.
7. Both experts agree that Xypex added to the shotcrete sprayed onto the bored piers would have provided a waterproof barrier and that the failure to do this has left the wall vulnerable to problems associated with water ingress.
8. Mr Mitchell submitted TCM breached its contractual obligations by failing to add Xypex to the shotcrete. He submitted that following TabCorp Holdings Ltd v Investments Pty Ltd,[17] the Owners are entitled to be put into a position had the Contract been properly performed; which would mean demolition or partial demolition of the east wall and reinstatement. Nevertheless, the Owners concede that demolition and reinstatement may not be reasonable if other remedial steps are available which would ensure that the consequential damage no longer manifests.[18]
9. There is no doubt that TCM breached its contractual obligations in failing to either add Xypex to the shotcrete mix or apply Xypex to the wall after completion. In that regard, TCM contend that the relevant architectural and engineering drawings only required Xypex to be applied to the finished wall. It contends that there was no contractual obligation to add Xypex to the shotcrete mix before it was sprayed onto the bored piers. Mr Hellyer referred me to Detail 9 on Sheet 8 of the architectural drawings, which states: Xypex sprayed on finish to the length of pool, refer to engineer's details.
10. I do not accept that proposition. Mr Casamento's evidence is that the effectiveness of applying a waterproof additive to the negative side of a finished wall is significantly less than what would be the case if the waterproof additive was applied to the positive side of the wall or where the cement mix was impregnated with a waterproof additive.[19]
11. In my view, the note on Sheet 29 of the engineering drawings is to be construed to mean that a waterproofing additive was to be added to the 75 mm 32 MPA sprayed shotcrete mix and not applied after the wall was constructed. Similarly, Sheet 8 of the architectural drawings is construed such that the reference to sprayed on finish is a reference to the shotcrete mixed with Xypex, rather than the sole application of Xypex on a finished wall, given that the note is cross referenced to the engineering drawings_._ That interpretation is consistent with the evidence of Mr Casamento given during cross-examination, where he stated that as an engineer, he had interpreted the documents in that way.[20]
12. Therefore, I accept Mr Mitchell's submission that TCM is liable to the Owners for the cost of remedial work in order to make good and alleviate consequential damage caused as a result of water ingress, irrespective of whether that water ingress manifests through two distinct and separate causes, one of which is the result of work done by a separate contractor.
13. In order to remedy the defective work of TCM, it will be necessary to either demolish the wall and rebuilt it or treat the wall so that it is able to perform in a manner consistent with the Contract not having been breached by TCM. The fact that subsequent tiling works are also defective is of no consequence because the work required to remedy the breach of contract on the part of TCM will necessarily require the tiles to be removed and reinstated.
14. The three experts engaged by the parties initially agreed on a scope of remedial work for the east wall, which is set out in the report prepared by Mr Casamento and dated 24 November 2010. However, the scope of work did not address remedying the absence of any waterproofing to the face of the east wall. The scope of work was limited to making good water ingress caused by the defective tiling work undertaken by the Landscaper.
15. As I have already found, it is likely that water also leaks through the east wall, irrespective of the secondary cause of water related damage due to the tiling work undertaken by the Landscaper. Consequently, I fail to understand how the scope of work set out in the report prepared by Mr Casamento on 24 November 2010 adequately addresses the remedial work required.
16. In that regard, Mr Casamento gave further evidence confirming that the scope of work described in his report dated 24 November 2010 would not remedy the problem. He said that he had reconsidered the scope of work set out in the report dated 24 November 2010 in light of further instructions from Mr Kay and had formed the opinion that additional work was required to ensure that any water permeating through the east wall could be arrested. He prepared a supplementary report dated 17 October 2011, which comprises a revised scope of work that included removal of the tiles. In essence, Mr Casamento recommended that the east wall be treated with a waterproofing agent. He suggested that battens then be fixed to the face of the wall upon which compressed FC sheeting could be attached. The stone tiles would then be re-fixed to the FC compressed sheet, thus providing a cavity between the face of the east wall and the underside of the FC sheet to allow any water permeating through the east wall to flow down the wall without affecting the integrity of the stone tiles. Mr Casamento further recommended that a small drain be installed at the base of the east wall where it met the edge of the pool, which could then direct any water seepage away. He said that the additional cost of undertaking that work was approximately $21,000.
17. Mr Marraffa was recalled to give further evidence in response to the matters raised by Mr Casamento in his supplementary report. He criticised the proposed revised scope of work on a number of grounds. First, he suggested that the horizontal placement of battens would capture and hold any water seepage rather than allow it to flow away. Second, he was of the opinion that the steel battens would, over time, rust causing further consequential damage. Third, he believed that the additional weight of FC compressed sheet, steel battens and the stone tiles could create problems in terms of maintaining adhesion to the shotcrete.
18. As an alternative, Mr Marraffa put forward a revised scope of work which also included waterproofing the face of the east wall in a similar manner to that recommended by Mr Casamento. However, he suggested that rather than fixing steel battens and compressed sheet to the face of the wall, the wall could be rendered with a cementious product impregnated with Xypex. He said that this treatment would be far superior to that recommended by Mr Casamento.
19. During cross-examination, Mr Casamento conceded that the proposal put forward by Mr Marraffa had merit.[21] Therefore, I accept Mr Marraffa's alternate proposal. In my view, the scope of work comprising the installation of metal battens and FC compressed sheet was problematic for the reasons highlighted by Mr Marraffa. Moreover, the fixing of the battens would require penetrating the shotcrete, which may exacerbate water ingress problems. It seems to me that the proposed scope of work put forward by Mr Marraffa offers the best solution to ensure that the east wall resists water permeating through its face. Therefore, I find that this proposal constitutes the most reasonable rectification methodology to address TCM's breach of contract.
20. Mr Marraffa prepared a detailed costing of the scope of work proposed by him, which included addressing the problems associated with the capping tiles and the failure to waterproof the face of the east wall.[22] The cost estimate is broken down into discrete quantities of labour and materials and in my view, represents the reasonable cost of making good the east wall. The total amount estimated by Mr Marraffa, including a contingency of 5% and margin of 30% is $19,296.94, inclusive of GST.
21. I prefer the labour rates used by Mr Marraffa over those used by Mr Casamento. For example, Mr Casamento has used a hourly rate of $70 to remove the capping and vertical tiles, as opposed to $40 adopted by Mr Marraffa. Mr Marraffa criticised the rates used by Mr Casamento as being excessive. It seems to me that the work of removing the tiles is work that can be undertaken by a labourer and would not require attendance by a specialised tradesperson. In those circumstances, I do not accept that a rate of $70 per hour is reasonable.
22. Similarly, Mr Casamento has estimated the cost to reinstate the stone tiles by using a hourly rate of $75 per hour, whereas Mr Marraffa has costed this quantity of work by allowing $120 per square metre, which includes sundries. Again, I prefer the cost estimate prepared by Mr Marraffa as it allows for the cost of sundries based on the area to be tiled, rather than the time taken to tile, which has little correlation to the amount of sundries likely to be used.
23. Finally, Mr Marraffa has not included any work in relation to the spa. In that respect, the Owners concede that the work relating to the spa is not work for which TCM is responsible. Accordingly, it was appropriate for Mr Marraffa to disregard those quantities of work from his cost estimate.
24. Accordingly, I accept Mr Marraffa's evidence and I allow $19,296.94 in respect of this item of the Owner's claim. Given my comments above, I do not consider that any of the other non-participating respondents are proportionately responsible for this amount.

1. The west wall is part of the basement garage. It is a retaining wall as the outside ground level on the west side of the building is significantly higher than the floor level of the garage. It is constructed of masonry block work. There is clear evidence of dampness on the inside face of the wall. It is uncontested that waterproofing to the outside face of the west wall has been compromised. Sheet 3 of the engineering drawings states:

2 coats of bitumen paint or waterproofing to Architects drawings [is required to the walls of the garage]

Bituminous waterproof membrane applied to block work and concrete footing with plastic membrane over with corflute sheeting

1. It is uncontested that the waterproof membrane installed by TCM has broken down. This is a source of water ingress. However, TCM contends that the tiling work undertaken by the Landscaper to the step landing immediately north of the garden bed where the tanking has failed is another cause contributing to water ingress. In particular, TCM contends that the tiling does not grade way from the door threshold and has compromised the water tightness of that part of the building. Mr Gibney gave evidence that:

The patio slab does not have adequate fall away from the western side wall. Water sits in the sliding door frame and runs down the side of the block work retaining wall. The sill bricks are above the patio tiles and hence form a weir which provides a head of water. This water then percolates down the wall and runs through the wall. The efflorescence salts are restricted to the area immediately below the patio slab. The tiles installed by the landscaper have reduced the freeboard and allowed a build up of water which runs down the wall.[23]

1. TCM further contends that the failed water membrane to the south of the patio was damaged by the Landscaper when the garden bed was created. In particular, Mr Hellyer submitted that a substantial amount of soil, screenings and other material had been placed between the wall and the Corflute blanket up to approximately 75 mm in width thereby breaching the waterproofing tanking. Mr Marraffa gave evidence that he was not aware of any leak in the wall prior to the carrying out of the Landscaper's works. He said that he believed the leak had been caused by the Landscaper placing soil and screenings behind the Coreflute, which damaged the bituminous tanking installed by TCM.
2. Mr Casamento gave evidence that the bituminous membrane had been applied too thinly, with the effect that it did not properly seal the block work against water penetration. During the course of my view, it was apparent that soil had entered between the blanket and the masonry wall, however, it was difficult to ascertain to what depth. Further, there was no direct evidence of the soil having damaged the bituminous tanking. Mr Marraffa's evidence is speculative in that regard.
3. I prefer Mr Casamento's evidence as it is based on what he has observed, rather than on speculation. Consequently, I find on the balance of probabilities that the application of the bituminous tanking was applied too thinly with the result that it did not provide an adequate seal against water penetration, rather than it being damaged by a third party. Further, I accept Mr Casamento's evidence that the failure of the bituminous tanking to the south of the patio is a secondary cause of the water staining seen on the inside of the west wall.
4. As to the remaining source of water ingress, Mr Mitchell submits that TCM remains liable for that area of leakage because it was contractually responsible for that work. He made reference to the specifications forming part of the Contract, which stipulated that all paving and roads were to be graded away from the building with a minimum fall of 1:100.
5. I do not accept that the specification imposed an obligation on TCM to grade the patio tiling away from the building. The relevant section of the specification referred to me related to paving and roads. The patio is an elevated landing leading into a doorway that was always intended to be tiled. There is no evidence that there was insufficient freeboard between that concrete landing and the doorway so as to prevent the tiling contractor to lay the tiles with sufficient fall away from the doorway.
6. The specification states that all external tiling and paving was to be undertaken by the Landscaper. In those circumstances, I do not accept that TCM are liable for work for which it was not contracted to undertake. Consequently, I find that any shortcomings in the tiling work undertaken by the Landscaper are not the responsibility of TCM. The fact that the specification imposes an overall obligation upon TCM to ensure that the building is watertight does not take the matter any further. Save for the bituminous tanking to the garden bed south of the patio landing, there is no evidence suggesting that the work undertaken by TCM in constructing the patio landing has caused water to enter the building. The general provision requiring TCM to ensure that the building is watertight does not extend to an obligation to ensure that separate contractors adhere to that condition.
7. Mr Casamento provided a cost estimate to make good the bituminous tanking of $11,832. By contrast, Mr Marraffa provided an alternative costing of $1,216. The difference between the two cost estimates arises because the scope of rectification work differs. In that regard, Mr Casamento concedes that there are aspects of work which are no longer required. For example, initially it was thought that TCM had failed to construct a drain at the bottom of the wall. However, subsequent testing has proven that a drain exists. A significant difference between the two scopes of work relates to whether a section of the adjacent concrete paving path needs to be demolished. I accept Mr Casamento's evidence that there is insufficient distance between the paving and the west wall to achieve a safe angle of repose for the excavation, having regard to the depth of the excavation required. In my view, it is inevitable that a section of the paving needs to be demolished in order to allow excavation to be conducted safely. That adds an expense, which Mr Marraffa has not allowed for in his cost estimate. Having regard to the cost estimates of Mr Casamento and Mr Marraffa, I find that the appropriate scope of work and cost is $3,289.80 made up as follows:

I accept the costings of Mr Casamento over that of Mr Marraffa, given that he has also allowed for the removal of the small section of footpath of no more than 3 metres in length.

Re-apply bituminous membrane and re-fit corflute blanket.

I accept the costings of Mr Marraffa over that of Mr Casamento, as he has broken down the quantities of materials and labour into their discrete and separate amounts.

I do not accept the evidence of Mr Casamento that it would take 8 hours to backfill the section of wall 1.8 m long with scoria. Mr Marraffa has estimated that it would take 2 hours to excavate that area and in my view, the same period should be allowed to backfill, at $40 per hour. Similarly, I do not accept that 4 m³ of scoria is required to backfill an area 1.8 m long, 1.5 m deep and 300 mm wide (2.2 m³). Consequently, I allow 2.2 m³ of scoria at $80 per m³, being the cost per m³ allowed by Mr Casamento.

Mr Casamento has not provided a separate costing for the reinstatement of the footpath. He has costed both the reinstatement of landscaping and footpath in the aggregate amount of $3,680. However, he conceded during cross-examination that the cost of reinstating the landscaping would be no more than $500. Accordingly, it appears that $3,180 has been allocated towards the cost of reinstating a small section of footpath. I note that Mr Casamento has also costed for the demolition and replacement of the damaged public footpath and curbing located outside of the property. He has used a rate of $22 per m². I accept that a lower rate per m² might be applied in situations where a significant amount of footpath is to be replaced as opposed to where only a small section of footpath is to be reinstated. Nevertheless, even taking that factor into account, I do not accept that the reasonable cost to reinstate a small section of footpath, which would in all likelihood not exceed 3 m², is $3,180. That would equate to $1,060 per m².

Accordingly and doing the best I can on the evidence before me, I allow $50 per square metre to replace 3 m² of the footpath for labour and $50 per square metre for materials. The cost seems to be consistent with the evidence of Mr Sainato who stated that a section of the curbing to the public footpath was replaced by TCM at a cost of $440.[24]

I do not accept the evidence given by Mr Marraffa that the cost of reinstating the landscaping would be $40. That amount seems too low. Similarly, I have difficulty accepting the cost estimate provided by Mr Casamento during cross-examination that the landscaping would cost no more than $500. That cost estimate was not supported by any evidence of enquiries made of the relevant plant types or work required. Doing the best I can on the evidence before me, I will allow $300 to reinstate the landscaping to that small section of garden.

Mr Marraffa has not made any allowance in his costing for the removal of rubbish. Given that the footpath will need to be partially demolished, I accept the costings provided by Mr Casamento, including the expense of tipping fees.

Including contingencies (5%), margin (30%) and GST

1. I find that TCM is wholly liable for this amount.

1. The Owners contend that the glass frameless balustrading to the first floor deck is defective, in that some of the glass panels deflect excessively. In particular, Ms Nikou gave evidence that she was apprehensive about allowing small children onto the balcony and that she had no faith in the glass balustrading providing a secure and safe restraint.
2. Mr Casamento and Mr Gibney both gave evidence that the relevant Australian Standard, AS 1288, allowed a deflection from vertical of 36.67mm, based on the formula set out under clause 3.3.3 of that standard. Mr Casamento gave evidence that four of the glass panels were able to be deflected more than 36.67 mm, which he considered to be defective.
3. Mr Casamento provided a costing to rectify glass balustrades to both internal and external balconies in the amount of $9,159.15. However, that cost estimate related to work concerning all glass balustrades and was not confined to the four glass panels identified by Mr Casamento as being the only glass panels which exceeded the permissible deflection tolerances described in AS1288 - 2006. That costing was prepared at a time when the Owner's complaint related to all glass balustrading. Since that claim was first made, further work was carried out by TCM or its subcontractor, which remedied excessive deflection in other glass panels, the subject of complaint. Regrettably, no revised costing has been prepared dealing with the remaining four panels.
4. Mr Gibney agreed that if the panels were able to be deflected from vertical by more than 36.67 mm, they were outside the permissible tolerances described in AS1288. Therefore, I accept that four of the glass panels deflect more than what is permissible under the relevant Australian Standard.
5. Mr Canko, the general manager of Aluline (Aust) Pty Ltd, the company that installed the glass balustrading, gave evidence that after the works had been carried out, the building regulations changed, such that it was no longer permissible to have frameless glass balustrades on elevated balconies. He said that pursuant to AS 1288, it became necessary to have a steel section attached to the top of the glass balustrade or along the side of the glass balustrades near the top. Obviously, the changes made to the building regulations are designed to minimise the amount of deflection inherently present with frameless glass balustrades. Nevertheless, at the time of construction frameless glass balustrades were permitted on elevated balconies.
6. Mr Canko also made reference to the architectural drawings, which detailed the type of anchoring brackets for the glass balustrade on the upper floor balcony. He said that the detail shown constituted an anchoring system known as the Lisa Channel. He gave evidence that this type of anchoring system was the subject of load testing conducted by NATA, which provided a certificate that the anchoring system could withstand loads in excess of the force required to break the glass panels held by the bracket.[25]
7. Mr Casamento expressed the opinion that the anchoring system was insufficiently secure because there was a failure to install non-shrink grout between the bracket and the glass to support the glass within the recess of the bracket. However, Mr Canko gave evidence that the type of anchoring system did not require any grout, nor was that type of installation detailed in the architectural drawings. Similarly, Mr Gibney gave evidence that the anchoring system was not meant to be grouted. He said that it relied on the interlock between the components - between the male and female components in the extrusions. He said that he had checked a similar system installed by another contractor in the Docklands development and found that the forces required to break the bracket were significant.[26]
8. Mr Canko said that he had been on site on a number of occasions to adjust brackets and in his opinion, further adjustment could be undertaken to improve the rigidity of the glass panels.
9. I accept Mr Canko's evidence. He states in his witness statement filed in the proceeding:

On 5 August 2011 I attended the site again to inspect the glass balustrades....

During the course of the inspection I did identify three panels on the southern balcony on the first floor in respect of which I consider it would be appropriate for some further adjustment and packing to be carried out. These are the following:-

(a) a full size panel second from the north and on the east side;

(b) the two smaller "return panels" (erected in the north-south direction) in the middle of the balcony at the front of the house.

If permitted to do so, Aluline would be happy to carry out these works with no charge to anyone.

If Aluline were being engaged to carry out these adjustment works otherwise, the works would involve one hour's work for two men at $75 per hour, $150. In addition, Aluline would charge a site visit for small works of this nature of $250, making a total of $400.[27]

1. I also accept Mr Canko's evidence that further adjustment of the panels is required in order to improve their rigidity. This is evident by the fact that some of the panels are within acceptable tolerances, whilst others are not. In my opinion, this suggests that the anchoring system is capable of achieving compliance with AS 1288-2006. I also accept Mr Casamento's evidence that four panels will require further adjustment, rather than three panels as identified by Mr Canko. Therefore, I will allow an additional hour to that estimated by Mr Canko, making a total cost of $475.
2. To that amount, I add contingency (5%), margin (30%) and GST, given that there is no contractual obligation placed upon the Owners to engage TCM or any of its subcontractors to carry out this work. Consequently, it is reasonable that a third party builder would charge contingency, margin and GST to the amounts referred to above. Accordingly, I allow $713.20 in respect of this aspect of the Owner's claim for I find TCM wholly liable.

1. The Owners contend that the public footpath at the front of the property was damaged by TCM or its subcontractors during the course of undertaking the Works. Mr Casamento has estimated that the cost to make good the footpath and kerbing is $4,054.05, including contingency, margin and GST.
2. TCM deny that it or any of its subcontractors damaged the footpath and kerbing. It contends that the damage was, in all likelihood, caused by the Landscaper. Mr Hellyer submitted that it is appropriate for the Tribunal to draw an adverse inference against the Owners because of their failure to call evidence in rebuttal to the evidence of Mr Marraffa and Mr Sainata, who both lay blame with the Landscaper. He submitted that on the balance of probabilities, it was clear that the footpath damage was caused by the Landscaper. In particular, he pointed to the following factors in support of his submission:
   • (a) the damaged footpath panels were located approximately 3 m east of the driveway; and
   • (b) the driveway provided the only viable access to the property because to the east of the driveway there were located various barriers and obstructions including the embankment, the fencing, the site storage container, the power pole, water meter and site toilet.
3. Both Ms Nikou and Mr Kay gave evidence that there was no barrier fencing along the front of the property. This was disputed by both Mr Marraffa and Mr Sainata.
4. Mr Mitchell submitted that that the greater probability implies that TCM caused the damage because the preponderance of machines, materials and heavy equipment delivered to site were delivered for the use of TCM, rather than for the use of the Landscaper. He made reference to a photograph showing materials, which appear to be masonry block work, having been unloaded in the vicinity of the damaged section of the pedestrian footpath.
5. There is no direct evidence as to who damaged the footpath and kerbing. The evidence is circumstantial. In my opinion, that circumstantial evidence is insufficient to discharge the burden of proof carried by the Owners. In particular, both parties have provided reasonable hypotheses as to who is to blame for the damaged footpath and kerbing. However, in the absence of direct evidence, I am unable to make a finding as to how or by whom the footpath and kerbing was damaged. Consequently, I dismiss this aspect of the Owner's claim.

1. The architectural drawings depict eaves around the upper level of the dwelling. The drawings state that the eave lining is to be 6 mm Villaboard, with flush joints. There is no further detail on those drawings. TCM has constructed the eaves with Villaboard lining. However, many of the joints in the eave lining have cracked or opened up. Mr Mitchell submitted that the eave lining has not been installed in accordance with the manufacturer's recommendations.
2. Mr Casamento gave evidence that the James Hardie Installation Manual for Villaboard ceiling lining specified that the Villaboard should be fastened at 200 mm centres using 30 mm x 2.8 mm galvanised fibre cement nails with a minimum head diameter of 6 mm. He said that all butt joints must coincide with the centre of the timber framing outrigger. In other words each of the joints was required to be back blocked. He further opined that the joints should be reinforced with perforated paper tape and topped with HardStock base coat compound and Gypsum topping compound. He said that if the joints were not prepared in that way, they were likely to crack.
3. Mr Hellyer submitted that the architectural detail provided no detail as to how the joints between the Villaboard linings were to be made. He argued that cracking has occurred as a consequence of building movement, although no expert opinion evidence was adduced in support of that contention.
4. I do not accept that a failure in the architectural drawings to detail the methodology of installing the Villaboard lining is a design defect. In my view, it was sufficient for the architectural drawings to simply specify flush joints. In the absence of any further construction detail, the risk of construction fell upon TCM. Further, the architectural specifications expressly stated that the lining was to be installed in accordance with the manufacturer's instructions. In the present case, it is unknown whether the joints have been back blocked or whether the methodology recommended by the manufacturer has been adopted by TCM.
5. However, there is no expert evidence suggesting that the opening up of the joints is due to building movement. Consequently, I accept Mr Casamento's evidence that the likely cause of the joints opening up is the failure to install the Villaboard lining in accordance with the manufacturer's recommendations. Accordingly, I find TCM wholly responsible for this aspect of the Owner's claim.
6. Mr Casamento has costed the remedial work required to make good the eave lining in the amount of $5,586. Mr Marraffa gave evidence that the reasonable cost to repair the eave lining was $3,731.[28] The difference between the two cost estimates primarily relates to the amount of hours and the rate per hour to remove and reinstate the eave lining. In particular, Mr Casamento has estimated 48 hours at $65 per hour, whereas Mr Marraffa has estimated 40 hours at $50 per hour. I prefer the cost estimate given by Mr Casamento because the work would, in all likelihood, be undertaken by a carpenter, given the requirement to back block the joints.
7. In addition, the eaves will need to be repainted. Mr Casamento has previously priced painting work at $70 per hour inclusive of materials. Accordingly, I consider the aggregate rate used by him of $65 per hour to be reasonable.
8. Therefore, I accept the cost estimate provided by Mr Casamento and find in favour of the Owners in the amount of $5,586, for which I find TCM wholly liable.

1. The rear of the garage provides access to the subfloor of the dwelling. A section of that subfloor has been excavated to provide an area where rainwater storage tanks are housed. The excavation has a batter from natural ground level down to the floor level of the garage. On the subfloor side of the garage wall is a 225 mm concrete drain, which is designed to catch water running down the face of the site cut batter. It is discharged into the stormwater system.
2. Ms Nikou gave evidence that the garage has on more than one occasion flooded. Mr Casamento confirmed that the basement at the rear of the garage had previously flooded. He stated in his report dated 18 December 2009 that at the time of his inspection on 23 November 2009, water was still ponding up to 10 mm deep around the base of the embankment cut and water tanks. He opined that that the source of the water was leaking water tanks or subsurface water permeating through the embankment cut.
3. Mr Mitchell submitted that the general obligation to ensure that the building is watertight has not been achieved by TCM. He referred to Mr Casamento's evidence in support of his submission that water has run down the side of the site cut batter and into the garage. He submitted that the concrete drain constructed by TCM has not effectively discharged free-flowing subfloor and subterranean water.
4. Mr Casamento recommended that remedial works be undertaken which comprise the installation of an agricultural drain and concrete spoon drain at the base of the embankment (in addition to the 225 mm concrete drain installed at the base of the garage wall), which is to be drained to a legal point of discharge. He estimated that the cost to undertake that work was $2,492.
5. TCM deny liability in respect of this item. It contends that the ingress of water into the garage emanates from overflowing rain water storage tanks housed in that subfloor area. Mr Marraffa gave evidence that the filters to those tanks had not been cleaned and were blocked, which prevented the tanks from being filled. Therefore, collected rainwater could not enter the tanks and overflowed onto the basement floor. He said that the water was unable to be discharged through the drainage constructed by TCM due to the significant volume of water involved. Consequently, TCM deny that the source of water is water flowing from under the house over the battered site cut.
6. During the course of the hearing, a DVD was shown of water cascading down the side of the water tanks. Mr Marraffa gave evidence that the water was cascading down the side of the water tanks because the inlet filter was blocked. He said that regular maintenance was required to periodically clean that filter.
7. Mr Gibney gave evidence that it was unlikely that significant water was flowing down the side of the site cut batter because there was no evidence of the site cut batter being eroded by water. In his opinion, it was unlikely that the flooding of the garage was caused by water flowing from under the house. During concurrent evidence, he stated:

MR GIBNEY: Normally we would try and capture the water at the top of the batter rather than at the bottom of the batter, and there is an agi drain around the back of the wall at the tennis court level; there's also a trench grate back to the west, a couple of metres from the back wall, to try and intercept flows that are coming through. When I was there, whilst the soil felt cool, which generally in this case it was moist - it wasn't wet - there was no - when you get a lot of water coming through a wall face you tend to - it tends to wet it up and then as it dries you end up with a series of vertical fissures or horizontal fissures in the soil - there was no fissures in the soil; there's not a lot of moisture coming through there - there's nowhere near enough moisture to be coming through to flood the basement - to flood up to 100 millimetres up a wall where Mr Casamento said he saw the high water mark there.

The amount - if that amount of water was coming through that soil face we would have it - we would have it slipping - we would have it basically forming a slip circle and falling out there. There's no evidence - there's a couple of spots where - just adjacent to the water tanks, there was some horizontal piping there, but it wasn't significant, and in that area where there was moisture the clay was starting to become - what's the word - you could see the silt - you could actually see where it had been channelling through, but, again, that's not a large area to cause that problem. So a spoon drain - a 225 diameter spoon drain, as it called up on the original drawings, wouldn't take anywhere near the flows that are causing this flooding, so it's a design problem initially, not a builder's fault.

1. Having viewed the DVD footage, it was apparent that a significant flow of water was cascading down the side of the water tanks. Mr Marraffa gave evidence that on the day in question, the rainfall was moderate. He said that on the days when the garage had flooded, there was significant rain. Data produced from the Bureau of Meteorology was produced as evidence of that.
2. I accept the evidence of Mr Gibney and Mr Marraffa on this particular issue. I do not accept that water, or it least a significant amount of water is running down the side of the site cut batter which cannot be dissipated through the drainage system installed by TCM. On the other hand, it is likely that significant amounts of water, sufficient to flood the garage emanates from overflowing water tanks, given that they are sourced from rainwater collected externally. Consequently, I do not consider TCM is liable to undertake any further work in relation to this item of complaint. I find that the flooding caused to the garage is due to the filters on the water tanks not being periodically maintained, which has led to the rainwater cascading down the side of the water tanks and into the subfloor area at a rate that was not able to be dispersed through the drainage installed by TCM. I do not consider that the drainage installed by TCM is defective but rather, I find that the flow of water far exceeds the design parameters of the drainage system contractually required to be installed by TCM. Consequently, I dismiss this aspect of the Owner's claim.

1. Having regard to my findings set out above, I find that the reasonable cost to make good defective works for which TCM is solely liable is:

1. Mr Casamento has quantified the sum of $8,453 representing preliminaries in his Cost Schedule. That amount comprises the cost to prepare contract documents for the rectifying builder, building permit fees, site establishment fees, supervision, site cleaning and rubbish disposal.[29] Mr Mitchell submitted that the amount quantified in respect of preliminaries represents 38% of the total amount of defects by value. Some of the defects have not been attributed to any breach of contract on the part of TCM, accordingly 38% of the cost of preliminaries represents what the Owner's contend is attributable to the cost of defects for which TCM are liable.
2. I do not accept that the amount allocated for supervision is an amount that should form part of preliminaries. Supervision is part of the margin, which comprises supervision, administration and profit. The amounts estimated in respect of each of the defects that I have found in favour of the Owners, already comprise margin and therefore also comprise supervision. In my view, adding supervision to the preliminaries is counting supervision twice. Therefore, I deduct $3,000 in respect of supervision from the cost of preliminaries, making a total of $3,948.95 for preliminaries, of which 38% is attributable to TCM in the amount of $1,500.60. Accordingly, the total amount that I find in favour of the Owner's defects claim is $38,746.89.[30]

1. Mr Hellyer submitted that settlement amounts received from the non-participating parties exceed the liability of those parties resulting in a surplus of settlement funds. He contended that the surplus of settlement funds exceeds the value of the amount which TCM is liable to the Owners and as a consequence, any order requiring TCM to make payment to the Owners would constitute double recovery.
2. Mr Hellyer referred me to the Victorian Court of Appeal decision in Boncristiano v Lohmann.[31] In Boncristiano, the owners sued the builders and the local shire, alleging deficiencies in relation to the weatherboard cladding and foundations of their house. By way of defence, the builders alleged the owners were estopped by an earlier compromise from making their claims. As a consequence, the owners joined as additional defendants the solicitors who had advised them in respect of the alleged compromise. The owners settled the claim against the solicitors before trial. The trial judge held that the settlement sum paid by the solicitors was to be deducted from the award made in favour of the owners in respect of their claim against the other defendants. That aspect of the trial was upheld on appeal. His Honour, Winneke P observed:

The trial judge was, in my opinion, correct in requiring an allowance to be made by the owners of the settlement sum received from the solicitors...

The General Rules of Procedure in Civil Proceedings 1986 entitle a plaintiff to sue several defendants upon different causes of action. However in cases where the plaintiff seeks to recover from the several defendants compensation in respect of the same damage it is fundamental that the plaintiff cannot recover more than the total damage which he or she has sustained. Where the claims for damages are concurrent, in the sense that they "overlap", recovery by the plaintiff of the whole or part of the loss claimed from one defendant will necessarily be taken into account in assessing the damages to be recovered from the other.[32]

1. Winneke P cited with approval the following passage in the judgement of Oliver LJ in Townsend v Stone Toms & Partners:

The starting point, and one on which there is a good deal of clear authority, is that where a plaintiff with concurrent claims against two persons has actually recovered all or part of his loss from another, that recovery goes in diminution of the damages which will be awarded against the defendant.

A plaintiff can never, as I understand the law, merely because his claim may lie against more than one person, recover more than the total sum due.[33]

1. Mr Hellyer submitted that the surplus of settlement funds for the monies which the Owners have "in hand" amounts to $70,524, made up as follows:
   • (a) Amount paid by the Landscaper,

Architect, the Engineer and 7th respondent $179,264

(b) Value of Landscaper's claim forgone: $13,018

(c) SUBTOTAL: $192,282

(d) Less amount of claim for the tennis court

1. Mr Hellyer submitted that the amount of $70,524 exceeds the amount to which the Owners are entitled as against TCM and as such, recovery of $38,746.89 from TCM would amount to double recovery.
2. Mr Mitchell concedes, correctly in my view, that if judgement against TCM resulted in double recovery, TCM may resist paying the full amount to the Owners. Consequently, he submitted that the terms of settlement with the other parties were not relevant to the proceeding and that the Tribunal must make an order that represents the amount of loss attributable to TCM, regardless of any settlement reached with any other wrongdoer. Mr Mitchell referred to Gunston v Lawley [35] in support of that proposition.
3. Gunston was a building case that had its genesis in this Tribunal. In Gunston, the owner claimed against a number of respondents who were ultimately held proportionately liable for the damage suffered by her, pursuant to s 24AI(1) of the Wrongs Act 1958. Section 24AI(1) of the Wrongs Act 1958 provides:

(1) In any proceeding involving an apportionable claim -

(a) the liability of the defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just having regard to the extent of the defendant's responsibility for the loss or damage; and

(b) judgement must not be given against the defendant for more than that amount in relation to that claim.

[56] I return to 24AI (1)(a) which speaks of "the loss or damage claimed". There is, of course, very often a distinction between the quantum of the loss or damage suffered which is the subject of a claim, the quantum of the loss or damage proved and which is, therefore, recoverable and the quantum of the loss or damage which is in fact recovered. The common law has never had any difficulty with a plaintiff obtaining a series of judgements which, if all were satisfied in full, might mean that it received more than the total amount of its proved loss or damage. What is not permitted is that the plaintiff actually recovers in the aggregate a sum greater than its proved loss or damage. This is the rule against double compensation referred to in Boncristiano v Lohmann. So much was not in issue before me.

[59] The scheme of s24AI is that any given defendant is at risk of liability and judgement for an amount limited to its proper share of the loss or damage the subject of a claim. This risk is not increased by dealings between the plaintiff and another concurrent wrongdoer. For example, a failure by that wrongdoer to pay its share does not increase the liability of another defendant. Nor is it diminished by dealings between the plaintiff and another wrongdoer as, for example, the successful outcome of a subsequent proceeding under s24AK.

[60] The effect of the proportionate liability regime, therefore, is to transform fundamentally the relationship which exists between the plaintiff and a concurrent wrongdoer defendant. Where under a solidary liability regime each defendant is liable for the whole of the plaintiff's loss, payment by one must affect the liability of the other. It is for this reason that the plaintiff, after settlement with one wrongdoer which involves payment by that wrongdoer in diminution of the plaintiff's loss, cannot obtain judgement of the total loss. In the proportionate liability regime, however, a payment by one concurrent wrongdoer is a benefit conferred on the plaintiff independently of its right of address against each other wrongdoer. To adopt the dictum of Dixon CJ in National Insurance Co of New Zealand Ltd v Espagne, the benefit of the payment made by the concurrent wrongdoer is intended for the plaintiff; it is not intended in relief of the liability of the others each to compensate the plaintiff to the limit of its proportionate liability. [footnotes omitted]

1. Mr Mitchell relied on three further grounds in support of his argument that the settlement sums cannot be taken into account in determining the liability of TCM.
2. First, Mr Mitchell contended that the settlement agreements contain releases that extend beyond the scope of the defects identified in the proceeding. He argued that these releases have not been the subject of evidence that would allow them to be quantified in the proceeding. There is merit in this submission. In particular, it is not entirely clear from the express words of the settlement agreements that the amounts paid were limited to the defective work claims. Consequently, I have difficulty attributing all of the settlement monies (excluding those monies which are specified to be in satisfaction of any costs claimed) solely to the repair of defects.
3. Second, he submitted that the settlement agreement reached between the non-participating respondents and the Owners encompass claims that were not tried before the Tribunal and as a consequence, the Tribunal is unable to determine the value or the extent of any discount. Mr Mitchell argued that the claims which were settled were not adjudicated because they related to other items of complaint which were not the subject of any curial determination. Consequently, he contended that it is impossible to determine whether the amount paid in settlement of those claims was more or less than the value of the claim.
4. Third, Mr Mitchell argued that the defective work alleged against TCM is discrete and identifiable. Mr Mitchell argued that few, if any of the defects are likely to be attributable to multiple parties, in the sense that various parties can be said to have jointly caused the same loss.
5. By contrast, Mr Hellyer argued that there was no clear distinction between the acts and omissions on the part of the non-participating respondents and TCM. He submitted that in respect of most of the defects claimed against TCM, it would be appropriate to attribute responsibility to some or all of the other non-participating respondents.
6. In my view, there is a clear distinction between the loss claimed against TCM and the loss claimed against the non-participating respondents. The proposition advanced by Mr Hellyer would only eventuate where the Tribunal has determined that two or more respondents are proportionately responsible for the same loss or damage. For example, if TCM and the Engineer were held to be each 50% responsible for the damage to the east wall and the Engineer had settled for the full amount of the damaged claimed, then recovery of a further 50% of the loss against TCM would result in over compensation. However, that scenario does not arise in the present case because I have not determined that any of the other non participating respondents are proportionately responsible for the same loss for which I have held TCM liable.
7. Mr Mitchell referred me to the Victorian Supreme Court of Appeal decision in St George Bank Limited v Quinerts Pty Ltd,[36] in support of the proposition that the mere fact that two or more wrongs lead to a common result does not of itself mean that the wrongdoers are liable in respect of the same damage.[37]
8. In that case St George Bank advanced $640,000 to its client in order to purchase a residential apartment. The amount advanced by the bank represented 80% of a valuation of the property conducted by the defendant. The purchaser defaulted on the loan, with the result that the bank took possession of the property and sold the property at a loss. The bank sued the valuer for breach of contract, negligence and misleading and deceptive conduct. The valuer admitted that the valuation was incompetent, however argued that the purchaser was proportionately responsible for the loss suffered by the bank because it had defaulted under the loan. The court held that there was a clear distinction between the loss and damage said to have been caused by the borrower and guarantor in failing to repay the loan, compared with the loss and damage caused by the valuer in undervaluing the apartment building. In particular, the bank would not have offered the facility but for the erroneous valuation.
9. In the present case, the only items of defective work claimed against TCM were those agitated in the hearing of this proceeding. Of those items for which I have held TCM liable, only the east wall of the pool and the gymnasium were items where the evidence remotely suggested that some of the non-participating respondents may have been proportionately responsible for the loss and damage suffered. However, that evidence was limited and did not assist me in determining what, if any, blame was to be attributed against those non-participating parties. Ultimately, I determined that the cause of the damage to the east wall over the pool and in the gymnasium was due to the failure by TCM to adequately waterproof that wall in accordance with the engineering and architectural drawings. I did not find that any ambiguity or conflict in those drawings exculpated TCM from liability, given my interpretation of those drawings and my finding as to what a reasonably competent builder would do in order to comply with its contractual obligations under the Contract.
10. This conclusion remains true even when one considers the loss and damage claimed for the east wall over the swimming pool, where both TCM and the Landscaper have jointly, albeit through different causes, created an abnormal moisture regime resulting in efflorescence appearing on the outside face of the stone tiles. However, I concluded that it was not appropriate to apportion the loss claimed against TCM because it was separate and distinct to the loss and damage suffered as a consequence of the work undertaken by the Landscaper. The fact that settlement monies may have incorporated monies to compensate the Owners for the cost of partially re-tiling the east wall over the swimming pool does not, in my opinion, reduce the responsibility of TCM, although it may go to the question of recovery, if those monies were able to be identified from the aggregate amount paid or forgone by the Landscaper.[38]
11. In other words, the breach of contract on the part of the Landscaper is immaterial to the loss suffered as a consequence of the breach of contract by TCM because the cost to make good the breach of contract by TCM requires the tiles to be uplifted, irrespective of whether they were properly laid in the first place. This is not a situation where two or more parties have caused the east wall to leak. The leak in the east wall arose solely due to the failure by TCM to follow the Contract documents. The Landscaper was not partly responsible for that leak because it had nothing to do with the construction of that wall.
12. In my view, this finding is entirely consistent with the opinion of Nettle JA in St George Bank, where his Honour stated that mere fact that two or more wrongs lead to a common result does not of itself mean that the wrongdoers are liable in respect of the same damage.
13. Similarly, I determined that TCM did not comply with the Contract documents by failing to properly waterproof the east wall in the gymnasium. In that regard, both experts could not discount the possibility of water penetrating the east wall in the gymnasium, notwithstanding that moisture may have also been entering the gymnasium from under the south wall. Accordingly, the quantum of damage found against TCM represents the reasonable cost of undertaking remedial work so as to put the Owners in a position had the Contract been properly performed. The fact that the damage to the plasterboard on the east wall in the gymnasium (now removed) may have manifested because of the existence of a secondary source of water unrelated to the work of TCM is of no consequence. Accordingly, the quantum of damages determined against TCM for this item was wholly attributable to the acts or omissions on the part of TCM.
14. Further, I am not satisfied that there is sufficient evidence establishing that any of the settlement monies paid to the Owners represent payment or part payment of the damages suffered as a result of the defects claimed against TCM. The settlement agreements produced during the course of the hearing did not adequately disclose how monies were to be allocated in respect of the items of defective work described in the reports prepared by Mr Casamento. In those circumstances, I am unable to find that the settlement monies were paid in satisfaction or part satisfaction of any of the defective work claims that I have determined against TCM.
15. Having regard to my comments and findings above, I am of the view that it is of no consequence whether the settlement sums paid to compromise claims not prosecuted against TCM either over or under compensated the Owners. The settlement sums only become relevant to the question of double recovery where they are paid to compromise a claim for which the non-participating respondents share responsibility with TCM. That is not the case here because I am unable to make any finding that the settlement sums paid have compensated the Owners for any loss and damage caused by TCM. Accordingly, I do not regard the settlement sums as being relevant to my findings against TCM.

1. Having regard to my findings above, I determine that the Owners are to pay TCM $15,703.91,[39] being the difference between the amount I have determined in favour of TCM ($54,450.80) less the amount I have determined in favour of the Owners ($38,746.89).[40]

[1] Paragraphs 11 to 17 of the Applicant's Amended Points of Claim dated 28 July 2011, with interest continuing to accrue on the outstanding amounts claimed.

[2] This is the date when the retention fund was transferred into an interest bearing account.

[3] Paragraph 103 of the Owner's written closing submissions.

[4] (1982) 149 CLR 337 at 347 and 404.

[6] Contractual interest is distinguished from any interest accruing on the amount held in the retention fund. In that respect, Clause C2.2 of the Contract states that interest earned on the cash retention, less any bank fees and charges on the account are to be held on trust for the contractor [TCM].

[7] Plus interest earned on the retention fund account, less any bank fees or charges on the account.

[8] Paragraph 13 of the Owner's written opening.

[9] Report of Mr Casamento dated 17 October 2011.