Did the owners unreasonably allow the builder an opportunity to rectify?

1. The builder says that it offered to rectify these window frames but the owners refused to allow it to do so unless it rectified in accordance with Mr Love's scope of rectification works.
2. The defects had been raised in the handover report. Item 5 in the handover report is:

It was noted that the window frames for dwelling present with severe moisture damage in the form of bloating. As per AS 2047, clause 7.4 inserted, the windows are now defective and will need to be made "as new" prior to installing same.

1. The builder had previously advised the owners by letter dated 6 September 2018 that this item had been addressed/ rectified and no further action was required.
2. By letter attached in an email dated 6 April 2019 the owners asked the builder to rectify, amongst other items, item 5 in the handover report. The letter says that the builder tried to hide these defects with extra coating of paint and brush marks and requested the builder rectify the defects as recommended in the report.
3. The defects were also part of the items in dispute in July 2019 during the DBDRV process where the builder's response was that it had built within standards and tolerances and it had requested A&L Windows (its window supplier) to inspect and A&L Windows said the reveals were not damaged.
4. I am satisfied that between the handover report in August 2018 and April 2019 the builder had an opportunity to rectify these defects but did not do so because it did not accept the items were defective. As Mr Love did not prepare his first report until April 2020 - if the owners did refuse the builder an opportunity to rectify unless it did so in accordance with Mr Love's scope of rectification works that could not have been until after April 2020. As this was more than 18 months after the handover report and two years after the Darbecca report dated 24 April 2018 - I am satisfied that the builder had been given a reasonable opportunity to rectify.

1. Mr Love said that the kitchen windows can be sanded and painted but the bedroom 2 window and the middle ensuite window need to have the reveals replaced. He said that there is severe moisture damage in the reveals of bedroom 2 and the ensuite. He said light water ingress could be sealed but this is substantial, there is seepage. Mr Love said the timber around the window is the same as the reveal and therefore the windows will need to be replaced if replacing the reveals. The new windows he has allowed for are the ensuite and the bedroom 2 windows. Mr Love estimates the cost to sand and paint the kitchen window and remove and replace the reveals and windows in bedroom 2 and the ensuite as $8,566.00 including a 30% margin and GST.
2. Mr Brownhill said it is not necessary to replace the window frames as they are aluminium. He said the estimated cost to remove and replace the reveals and paint is $3,684.12. If a 30% margin and GST are added that amount increased to $5,268.29.
3. Mr Molnar said the cost to patch and paint the reveals is $370.00 being 4 hours of labour and $50.00 of materials. If a 30% margin and GST are added that increases to $529.10.
4. All the experts agree that the kitchen window reveal can be sanded and repainted. I accept the evidence of Mr Love and Mr Brownhill that the damage to the window reveals is more substantial than shown in the photographs and that the reveals in bedroom 2 and the ensuite need to be replaced. However, I am not satisfied that it is necessary to replace any of the windows in light of Mr Brownhill's evidence that the windows are aluminium which I accept.
5. Therefore, I prefer the estimates provided by Mr Brownhill who has provided a costing to sand and repaint the kitchen window reveal, and to replace the bedroom 2 and ensuite window reveals but not replace those windows. I will also allow an escalation of 7.5% for the increase in labour and costs since the estimate was prepared.
6. I find that the reasonable cost to rectify these defects is $5,663.41.

Item 8(e) - roof flashing - amount claimed $200.00

There is a hole to the flashing due to the method of forming the lead. The area needs to be reworked to remove the cupping that likely will result in water ingress under heavy rain events.

1. It is noted that the photographs in each of Mr Love's reports are taken from the handover report and are not photographs taken at the time of Mr Love's inspection in 2020.
2. Mr Sekic for the builder gave evidence that its plumber attended the dwelling in November 2018, after the handover report was prepared and inspected the roof. There is an email from the builder's plumber dated 22 November 2018 that says it went over the whole roof and didn't find any obvious defect that would cause leaking. The email states the plumber changed a split tile above where the client reported the leak and found another tile that had been heavily siliconed. It further states the right-hand side of the property has had solar panels installed and they believe the damage has occurred from the contractors walking around on the roof.
3. Both Mr Brownhill in 2024 and Mr Molnar in 2022 have undertaken an inspection of the dwelling and are of the opinion that it is not a defect.
4. Mr Molnar says that there is no evidence of non-compliance against a standard or code and no evidence has been given of any occurrence of failure of the flashing, nor any proof of water ingress from wind driven rain.
5. Mr Brownhill says that did not observe cupping to the roof flashing or water damage to the soffit lining as a result of water leaking through the flashing. He says in his opinion the condition of the flashing is satisfactory.
6. I prefer the more recent evidence of Mr Brownhill and Mr Molnar that there is no defect in the roof flashing.
7. I find that this item is not a defect.

Item 8(f) - masonry mortar - amount claimed $974.00

1. The builder agrees that there are some voids and small holes as well as mortar smears in the finished faces of the mortar joints around the house and garage. In the 2024 Brownhill report he also refers to several pipe penetrations on the north west wall not sufficiently grouted or fitted with a cover plate or collar.
2. In their reports the experts estimate the cost of materials and labour to rectify this item is as follows:

(a) Mr Love - $545.00.

(b) Mr Brownhill - $279.55.

(c) Mr Molnar accepts Mr Love's scope of work and estimate of cost.

1. The owners submit I should prefer Mr Love's estimate and the builder submits I should accept Mr Brownhill's estimate.
2. As Mr Molnar agrees with Mr Love, I am satisfied that the reasonable cost of materials and labour to rectify this item is $545.00. When a 30% margin and GST are added that increases to $779.35. I will also allow an escalation of 7.5% for increased labour and costs since the estimate was prepared.
3. I find that the cost to rectify this item is $837.80.

Item 8(g), item 8(k) and item 8(o) - level of concrete at front of dwelling, weep holes at porch and driveway stormwater - amounts claimed $13,710.00, $4,326.00 and $9,240.00

1. These items relate to claimed defects at the front of the dwelling.
2. Item 8(g) is a claim that the concrete paving to the front of the dwelling has been installed above the level of the damp proof course and is covering approximately half of the height of the weep holes.
3. Item 8(k) is a claim that at the porch no weep holes have been installed.
4. Item 8(o) is a claim that a failed, or broken, or otherwise damaged storm-water drainage pipe was installed under the concrete driveway.
5. The builder disputes that the level of the concrete paving at the front of the dwelling or any lack of weep holes at the porch are defects. It admits that the stormwater drainage pipe was defective. The builder says that it offered to rectify the driveway stormwater and that if the owners had accepted that offer, it would have enabled the builder to also rectify the porch concrete paving and weep hole issue however the owners refused to allow it to rectify these items.
6. Therefore, it is convenient to consider the offers to undertake rectification works in relation to the stormwater drainage before considering the concrete paving items.

1. It is agreed that the stormwater drainage under the driveway was defective and needed to be rectified.
2. It is also agreed that the builder offered to rectify the stormwater drainage. The owners say that the builder's offer was not reasonable and therefore they arranged for another contractor to rectify the stormwater drainage and seek the costs of that work from the builder.
3. The issue in dispute is whether the owners should be able to claim the actual costs they say they incurred in rectifying this defect given they rejected offers by the builder to rectify the defect.
4. Mr Thomas gave evidence that on 4 October 2021 he arranged for Jim's Plumbing to undertake a CCTV inspection of the stormwater drainage and they said it was a major problem. He said he sent a message to the builder about this and Mr Sekic came to the property to discuss how it could be rectified. He said the builder then arranged for two plumbers to attend the property and they recommended that the driveway needed to be cut in order to fix the stormwater drainage.
5. On 13 October 2021 the owners sent an email to the builder to organise someone to resolve the stormwater issue as soon as possible.
6. On 15 October 2021, which was a Friday, the builder sent an email to the owners advising that they would commence the works the next day. The works would involve replacing all the concrete paving in the driveway and also under the porch which would also rectify the issues with the weep holes. The email also said that the concrete would be removed the following day, the stormwater pipe would be repaired early the following week and the concrete driveway and path reinstated middle to late the following week.
7. Later on 15 October 2021 the owners sent an email to the builder rejecting the proposed rectification works.
8. Mr Thomas said he did not agree to this because he only wanted them to cut into part of the driveway, and the works would have restricted vehicle and pedestrian access and it wasn't sufficient notice. The owners advised in their emails that they would not allow the builder to replace all the concrete in the driveway and they would not allow the builder to rectify the porch and weep hole issues because they were issues for the Tribunal to determine. Mr Thomas also gave evidence that the builder had previously offered to rectify other defects during the DBDRV process but had not previously agreed to rectify the porch and weep holes issues as a reason for refusing to allow the builder to rectify these issues in 2021.
9. The builder then offered, on 26 October 2021, to rectify the stormwater drainage by replacing only part of the driveway (without replacing the concrete porch) as requested by the owners and asked the owners to sign a release in respect of issues that might occur if the whole driveway was not replaced.
10. On 27 October 2021 the owners proposed an amended release to the builder requiring the builder to now remove all of the driveway but not replace the porch. The builder did not accept the terms of the owners' release for the builder to do the rectification works.
11. On 4 November 2021 the builder made an offer to pay to the owners $4,900.00 for them to engage their own contractors to rectify the stormwater drainage. The payment was to be made on the condition that it would release the builder from any obligation current or future to do with the concrete paving to the driveway, porch area, water leak/broken pipe under it, any landscaping that may need to be rectified and the weep hole issue to the porch area on the grounds that the builder said this would have been rectified in its original proposal.
12. Mr Sekic gave evidence that he had obtained quotes in October and November 2021 for the proposed rectification works to be undertaken at a cost $3,470.00 or $3,600.00 for the concreting and a cost of $450.00 plus GST or $1,320.00 for the plumbing works. The owners did not seek to challenge Mr Sekic's evidence in relation to these quotes. Mr Sekic gave evidence it may have been a little bit cheaper to do the porch works together with the stormwater driveway works.
13. The owners rejected the offer on 5 November 2021. Mr Thomas said he sent to the builder a copy of a quote from a rectifying builder of $9,718.90 for the cost of the rectification works and said if the builder did not rectify by 12 November 2021, he would arrange to have the works done and seek the full cost of the works from the builder.
14. There was no response from the builder and the owners then arranged for the stormwater drain to be rectified in late November 2021. The owners claim costs associated with the rectification works in the amount of $9,240.00 comprising:

(a) Jim's Plumbing call out fees of $132.00.

(b) Jim's Plumbing investigation of $748.00.

(c) Sunny Concrete Construction Pty Ltd for removal of driveway and relaying of $4,980.00.

(d) S&S Plumbing & Gas Fitting Pty Ltd for rectification of underground stormwater drainage of $3,380.00.

1. The owners also claim interest on the driveway costs calculated at 5% (CPI average) per annum x $9,240.00 from November 2021 when the works were done and paid for by the owners - calculated at $1,617.00 for 3½ years.
2. The builder submits that it was unreasonable for the owners not to give the builder access to undertake the rectification works as proposed by it and therefore the owners' claim should be limited to what it would have cost the builder to do the rectification works.
3. I am satisfied that it was unreasonable for the owners to refuse to allow the builder to undertake the rectification works as proposed for the following reasons:

(a) The owners said the works needed to be undertaken as soon as possible and two days later the builder offered to replace all the concrete driveway starting the next day and finishing within a week. Whilst I accept the owners' concern about possible difficulties accessing the property, I reject their submission that they would then have been denied all access to the dwelling for two to three weeks.

(b) It was not reasonable to reject the offer to also replace the porch to rectify any issue with the weep holes because the owners wanted the Tribunal to make a decision about that issue and the builder had not offered to rectify that issue before.

(c) When the owners said they did not want all of the concrete driveway replaced, the builder offered to replace only part of the driveway if the owners were prepared to take the risks if all the driveway was not replaced. The owners then rejected that offer and said they did want all the concrete replaced.

1. The builder submits it would have cost $3,470.00 for it to repair the stormwater pipe and reduce the level of the concrete at the front of the dwelling and the weep holes at the porch. However, Mr Sekic gave evidence that the amount of $3,470.00 was the cost for removing and replacing the concrete on one of the quotes the builder obtained and that it would have also been necessary for it to repair the stormwater drain for which it obtained separate quotes. Further, the 2024 Molnar report states that the builder advised Mr Molnar that it would have cost the builder $3,800.00 to undertake the works.
2. I am satisfied that if the builder had done the rectification works in October 2021 as proposed by it, it would have incurred the costs of $4,920.00 being:

(a) $3,600.00 in the quote dated 20 October 2021 from Jarrcon Constructions which includes both the concrete driveway and pathway - rather than the quote for $3,470.00 which only refers to the driveway; and

(b) $1,320.00 in the quote dated 14 October 2021 from LCL Plumbing & Drainage as that was the plumbing quote the builder had at about the time it proposed to do the works - rather than the quote for $450.00 plus GST that was not obtained until 30 November 2021.

1. These quotes all include GST and no allowance needs to be made for a builder's margin as the builder would have managed those contractors at no cost to itself.
2. I find that the refusal by the owners to allow the builder to rectify these items was unreasonable and therefore the loss and damage that can be claimed by the owners is limited to what it would have cost the builder to rectify - $4,920.00.
3. I do not allow the owners claim for interest on the amount that they incurred in rectifying these items as if they had allowed the builder to rectify the items they would not have been out of pocket for any of that amount.

Item 8(g) - level of concrete at front of dwelling - $13,710.00

1. Mr Love and Mr Brownhill gave evidence that AS4773.2 clause 9.6.1 requires that there is clearance from the damp proof course (which is at the base of the weep holes) of 75 mm when exposed to the weather or 50 mm when protected from weather, and that clause 9.6.2.1 requires veneer walls to have weep holes at 1200 mm maximum centres.
2. The experts agree that the level of the concrete paving at the front of the dwelling is above the damp proof course and covers part of the height to the weep holes at the front of the dwelling.
3. Mr Love and Mr Brownhill gave evidence this is a defect which prevents the weep holes and damp proof course from functioning, but Mr Molnar did not agree.
4. Mr Love gave evidence that the weep holes are half covered making them completely ineffective. He said the purpose of the weep holes and the damp proof course is to prevent rising damp and to dry condensation inside of the wall. He said over time it might cause mould but that he has not seen any mould problems in this dwelling.
5. Mr Brownhill agrees that the level of the concrete makes the weep holes completely ineffective. He says the level of the concrete restricts drainage of built-up moisture in the wall cavity as it does not allow water to penetrate through the weep hole.
6. Mr Molnar says that the rendering of the wall prevents water from penetrating the wall, the render does not allow water to penetrate like it would a non-rendered single skin masonry wall and weep holes are not therefore required by AS4773.2 clause 9.6.2.1 for drainage of the wall cavity. In respect of any rising damp from the ground, Mr Molnar says that there is no evidence of moisture travelling up the walls since the dwelling was completed in 2018. Whilst he agrees the covering up of the damp proof course is a breach of the standards, it is functioning as designed and therefore he does not agree it is defective.
7. I am satisfied from this evidence that the damp proof course has not been installed in accordance with the relevant standards as it has been covered by the concrete paving at the front of the dwelling. This means that the item is a defect because it is a breach of the section 8 warranty that the work will be carried out in accordance with, and will comply with, all laws and legal requirements.
8. I am also satisfied that the covering of the lower part of the weep holes by the level of the concrete has rendered the weep holes ineffective. Whilst Mr Molnar is of the view weep holes were not required by the standards due to the render providing a waterproofed wall, I accept the evidence of Mr Love and Mr Brownhill that the weep holes not only allow water to drain that comes through the external wall, but they also allow water to drain if moisture builds up inside the wall from condensation. Therefore, as the standards do not specifically state that weep holes are not required to a waterproofed veneer wall, I am satisfied that the rendering of the single skin masonry wall does not alleviate the need for weep holes as set out in the standards.
9. I find, therefore, that the level of the concrete paving above the damp proof course and over part of the weep holes is a defect.
10. Even though there is no evidence of damage from either external water entry, rising damp or condensation inside the wall, I am satisfied that it is reasonable or necessary to rectify the level of the concrete. Neither Mr Love nor Mr Brownhill conceded that it should not be rectified despite no evidence of any performance issues to date.
11. Mr Love said to rectify this item it is necessary to cut out concrete at the front of the dwelling, cut around the piers and reinstate the concrete at a lower level that is 75 mm below the bottom of the weep holes. He has also provided for decking at the porch to be installed and drainage under the decking. Mr Love estimates the cost of materials and labour to rectify this item is $7,670.00.
12. Mr Brownhill said to rectify the defect the concrete must be removed and new paving installed at 50 mm lower than the weep holes to comply with the Australian Standards. He did not include decking to be installed at the porch. Mr Brownhill estimates the cost of materials and labour to rectify this item is $5,129.00.
13. Mr Molnar did not provide an estimated cost of rectification as he was of the opinion no rectification works were required.
14. However, as I have already found that the builder made an offer to remove the concrete at the front of the home including the porch to rectify this item, and the owners unreasonably refused to allow the builder to undertake the rectification works, the loss and damage that can be claimed by the owners is limited to what it would have cost the builder to rectify. The cost to the builder is included in the cost for the rectification of the driveway stormwater drain item and no further amount will be allowed for the rectification of this item.

1. In the 2020 Love report it is stated that Mr Love noted no weep holes to the porch wall. He says in his report that weep holes are mandated in this location as per AS4773.2 clause 9.6.2.1 and the fact that this wall is rendered does not negate the obligation to install weep holes.
2. In the 2024 Brownhill report he says that the weep holes are covered by render.
3. Mr Molnar said he has located the weep holes and referred to a photograph in the 2022 Molnar report that he says clearly shows a divet where the weep hole is under the render.
4. As a result of these photographs Mr Love accepts that weep holes have been installed at the porch.
5. Therefore, at the hearing all the experts agreed that there are sufficient weep holes at the porch but they are covered by render.
6. As I have said above, whilst Mr Molnar is of the view weep holes were not required by the standards due to the render providing a waterproofed wall, I accept the evidence of Mr Love and Mr Brownhill that the weep holes not only allow water to drain that comes through the external wall, they also allow water to drain if moisture builds up inside the wall from condensation. Therefore, as the standards to not specifically state that weep holes are not required to a waterproofed veneer wall, I am satisfied that the rendering of the single skin masonry wall does not alleviate the need for weep holes as set out in the standards.
7. I find that the rendering over the weep hole at the porch is a defect.
8. Mr Love says to rectify this item, the weep holes will need to be located, it will be hard to clean out the render, and this will require the whole front elevation of the home to be re-rendered for consistency. He says that the estimate cost of labour and materials to rectify this item is $2,400.00. Of this amount, $2,200.00 is to patch the area after the weep hole is exposed and to re-render the front of the dwelling.
9. Mr Brownhill says that the estimate cost of labour and materials to rectify this item is $1,315.20. He does not allow to re-render the front of the dwelling but does allow the wall with the weep hole to be redone.
10. In his reports Mr Molnar does not provide an estimate of the cost to rectify this item which he says is not a defect and no rectification works are required. When giving evidence he estimated the cost would be $400.00 plus margin plus GST. In this estimate he did not allow for painting or rendering of the front elevation - as he said it only related to 'two spots'.
11. The builder's submissions do not include an estimate for the cost to rectify this item as it submits the cost are part of what it would have cost the builder to undertake the works at the same time it offered to undertake the stormwater repair in the driveway.
12. The builder's costs in relation to the stormwater repair only include removing and relaying the concrete at the front of the home, including the porch, not cleaning out the render over the weep hole at the porch and repairing the render. Further, it is not clear in the builder's offer to rectify the storm water drainage that it was also offering to do these works - there is no mention of rendering in any of the emails sent by the builder to the owners. I am not satisfied that the builder offered to rectify this item.
13. I prefer Mr Brownhill's estimate of cost over Mr Love's estimate of cost. There is only one weep hole that needs to be cleaned out, and it is only on one wall. Therefore, I am satisfied that it is not necessary to re-render the entire front of the dwelling but only the wall where the weep hole is located. I also prefer Mr Brownhill's estimate of cost over Mr Molnar's estimate of cost, as I am satisfied that it is likely that some damage will occur and that the relevant wall should be redone so that the immediate area all matches.
14. When a 30% margin and GST are added to Mr Brownhill's cost estimate that increases to $1,880.73. I will also allow an escalation of 7.5% for increased in labour and costs since the estimate was prepared.
15. I find that the cost to rectify this item is $2,021.79.

Item 8(h) - roof void insulation - amount claimed $768.00

1. This item was described in the 2020 Love report as the 'insulation needs to be reworked to be installed in a manner that complies with AS3999 with all areas covered and the batts flush to the top of the plaster'.
2. There is no dispute that the current status of the insulation is a defect. However, the builder says it rectified an issue with the insulation after handover of the property and says that the current defect was not caused by the builder.
3. Mr Sekic gave evidence that prior to handover of the property in 2018 the insulation that had been installed had been dislodged. He arranged for his insulation subcontractor to put it back. The insulation subcontractor sent an email and photographs saying this work had been done on 23 November 2018.
4. In the owners' letter of demand in 2020, the owners said that this item did not require any action from the builder. Mr Thomas said he did not remember why he did not require the builder to action the insulation in 2020 but said it might have been for a reason other than it was caused by his own contractors. In re-examination he said that the builder's plumber went on the roof to investigate a leak and that could have dislodged the insulation.
5. Mr Thomas could not remember if the builder had rectified this item in 2018. When referred to an email from the builder's insulation contractor stating that the insulation had been completed on 23 November 2018 with photographs attached of the works, Mr Thomas said he conceded that he had no reason to believe this work had not been done.
6. Mr Thomas agreed that after handover of the property he arranged for CCTV and solar panels to be installed which required cables in the ceiling but said there was no need for those contractors to have touched the insulation in the ceiling.
7. I am not satisfied that the current defect with the insulation was more likely than not caused by the builder. The builder has photographs showing that the insulation was compliant in November 2018 and the owners admit that their contractors have had to access the ceiling to install CCTV and solar panels.
8. I find that this item is not a defect caused by the builder.

Item 8(i) - sliding door aluminium frames damage - amount claimed $4,620.00

1. This item is damage to the aluminium frames of the sliding doors.
2. The builder does not dispute that the aluminium frames are damaged but submits that the damage is not visible from a normal viewing position and therefore it is not reasonable to rectify the damage. The builder further submits that it offered during the DBDRV process to rectify the item and therefore the owners' loss and damage should be limited to what it would have cost the builder to arrange for its contractor to rectify this item.
3. In the 2020 Love report the damage is described as the powder coat finish to the aluminium frames has been scratched and dinted. Damaged powder coat finish cannot be correctly repaired on site and may have to be replaced. The damage in case is down to raw aluminium, with sections that are left jagged and replacement is a must. The report further states:

the damage to all aluminium frames must be made "as new". Given the information above, we would suggest replacement of the damaged sections is warranted as a minimum. Please note that the repairs on site to date carry out by the builder's trades are not preforming [sic] in a manner that is consistent with the original powder coating installation.

1. In the 2024 Brownhill report, Mr Brownhill refers to two sliding doors - the south sliding door in the family room and the east sliding door in the meals area. He says that the top of both frames are dented and scratched. Mr Brownhill says where there are dints there was paint chipping. He says that the photographs in his report are not taken from a normal viewing position and whilst the damage is minor it affects the functionality of the door. The doors are getting caught on the top pelmet, they still slide but not freely.
2. Mr Molnar in the 2022 Molnar report states that the builder is prepared to rectify the door in the family meals area sliding door which the DBDRV report said was slightly damaged on the edge with paint missing to a length of approximately 50 mm when viewed. He did not view any damage to any other door as it appears that it was not visible from a normal viewing position and therefore is not defective.
3. Mr Sekic referred to a letter dated 29 May 2018 from A&L Windows who had inspected the windows and sliding doors on 25 May 2018 and said there are no issues. However, the property was not handed over until September 2018 and in the handover report in August 2018 this item was identified.
4. I find that the two sliding doors/ windows are defective.
5. Whilst I accept the evidence that the defect is not able to be viewed from a normal viewing position I accept Mr Brownhill's evidence that jagged edges are preventing the doors from operating smoothly and therefore they need to be rectified to address these functionality issues.
6. I am not satisfied that the owners have unreasonably refused the builder an opportunity to rectify this item as there was no evidence given of any request for access to the property to allow this item to be rectified or of the owners refusing any such request. The item was brought to the builder's attention in the handover report in 2018 and whilst the builder's response to the handover report said it agreed to address or rectify this item and it stated again during the DBDRV process that the builder will rectify this item however that does not satisfy me that the owners unreasonably refused the builder an opportunity to rectify. Mr Sekic's assumption that the owners would not allow access because agreement could not be reached during the DBDRV process is not sufficient. Further, the builder had many months before the DBDRV process to request access and rectify this item and before initiating the DBDRV process, the owners wrote to the builder in April 2019 asking it to contact them to make a suitable time to rectify issues.
7. I find that the owners can claim the amount it will cost them to arrange to have the windows rectified and that their damages are not limited to what it would have cost the builder to rectify.
8. Mr Love says to rectify this item, two windows will need to be removed to replace both sections. He says that the estimated cost of labour and materials to rectify this item is $2,585.00.
9. Mr Brownhill agrees with the scope of work proposed by Mr Love and says that the estimated cost of labour and materials to rectify this item is $2,843.18.
10. Mr Molnar says the estimated cost for rectifying the damage to the one window identified by DBDRV is $370.00. He says it is not necessary to remove the windows.
11. As I am satisfied that there are functional issues with the windows and both Mr Love and Mr Brownhill are of the opinion that the windows must be removed, I prefer their evidence of the estimated cost of labour and materials to rectify this item.
12. Mr Love and Mr Brownhill's cost estimates are very close and therefore I will allow an average of the two amounts - being $2,714.09. When a 30% margin and GST are added to this cost estimate that increases to $3,881.15. I will also allow an escalation of 7.5% for increases in labour and costs since the estimate was prepared.
13. I find that the cost to rectify this item is $4,172.23.

Item 8(j) - grouting air bubbles - amount claimed $866.00

1. This item is a claim that the grout works installed in the dwelling is defective and incomplete, with many air bubble holes, voids and pinholes visible in the finish.
2. The builder does not dispute that some of the grouting is defective. There is a dispute however about what grouting works are defective and whether the owners have unreasonably refused the builder an opportunity to rectify this item and therefore what amount can be claimed by the owners for the rectification of this item.
3. Mr Love says it is necessary to regrout all of the tiles in the house. In the 2020 Love report he had included photographs only of the tiling in the showers for this item. He said that he would not have said all the grouting in the house needs to be rectified unless he saw it in places other than the showers. He initially gave evidence that he believes he also saw issues with tiles in the kitchen but later said he did not see it in the kitchen but saw small holes in the grout in an area of the laundry and laundry floor.
4. Mr Brownhill said he only inspected the grouting in the showers of the bathroom and the ensuite for this item and found the grouting had small holes and voids.
5. Mr Molnar said he only inspected the bathroom shower for this item because the DBDRV report found that there were pin holes in the surface finish of the shower wall in the bathroom. I note however that in the DBDRV List of matters in dispute, there is a dispute about the grouting in both the ensuite and the shower.
6. I am not satisfied that the owners have proven that all the grouting in the dwelling is defective as there are no photographs of any defects in any location other than the showers. I am satisfied by Mr Love's evidence and Mr Brownhill's evidence that the grouting in the ensuite shower is defective as well as the bathroom shower.
7. I find that the grouting in the bathroom and ensuite showers is defective.
8. For similar reasons given for the item relating to the sliding aluminium doors above, I am not satisfied that the owners have unreasonably refused the builder an opportunity to rectify this item as there was no evidence given of any request for access to the property to allow this item to be rectified or of the owners refusing any such request. The item was also brought to the builder's attention in the handover report in 2018. Whilst the builder's response to the handover report said it agreed to address this item, during the DBDRV process the builder said the items were already rectified but that it was willing to rectify the bathroom tile grouting if it was still not rectified. This evidence does not satisfy me that the owners unreasonably refused the builder an opportunity to rectify. Mr Sekic's assumption that the owners would not allow access because agreement could not be reached during the DBDRV process is not sufficient. Further, the builder had many months before the DBDRV process to request access and rectify this item and before initiating the DBDRV process, the owners wrote to the builder in April 2019 asking it to contact them to make a suitable time to rectify issues.
9. I find that the owners can claim the amount it will cost them to arrange to have the grouting in the bathroom and ensuite showers rectified and that their damages are not limited to what it would have cost the builder to rectify.
10. Mr Love estimates that the cost of materials and labour to rectify all the grout in the dwelling is $485.00.
11. Mr Brownhill did not give an estimated cost to rectify this item because he said it would be rectified as part of the rectification he had allowed for tiling in the bathrooms generally. However, as I have found that the builder is not liable for the rectification of tiling in the bathrooms generally this item will not be rectified with those items.
12. Mr Molnar estimates the cost of materials and labour to rectify the grout in the bathroom shower is $360.00.
13. As Mr Love has provided a costing for more rectification work than I have found is required and Mr Molnar has provided for less rectification works than I have found is required, and the differences in the costings are not substantial, I will allow an average of the two amounts - being $422.50. When a 30% margin and GST are added to this cost estimate that increases to $604.18. I will also allow an escalation of 7.5% for increases in labour and costs since the estimate was prepared.
14. I find that the cost to rectify this item is $649.49.

Item 8(l) - concrete isolation joint (entrance porch) - amount claimed $715.00

1. This item is a claim that the concrete paving has not been caulked to the dwelling at the isolation joints.
2. The builder denies that caulking is required on the grounds that there is only a requirement the isolation joint resist detritus (which it does already) not a requirement that it is caulked.
3. The 2020 Love report states that the concrete paving has not been caulked to the dwelling at the isolation joints. This caulking will need to be completed in accordance with AS3727.1, Figure 5.4.3.
4. Figure 5.4.3 shows a typical isolation joint with the installation of sealant above compressible filler material to the top of the pavement abutting a building 'to prevent ingress of detritus'. The standard does not specifically state that sealant must be used but does require the isolation joint to resist the entrance of detritus.
5. In the 2022 Molnar report it is stated:

At the time of my inspection, it was identified that the installation of Able Flex 10mm compressible filler material in accordance with the standard has been installed to the joint between the concrete and the building.

The Able flex has been installed at the same finished height as the finished height of the concrete slab.

As there is no void at the isolation joint location, the installation of the optional "Sealant to prevent the ingress of detritus" is not required as there is no void or area for detritus to accumulate.

1. Mr Molnar further says that at the time of his inspection in 2021 the joint was resisting the entry of detritus and therefore sealing the joint is not required.
2. The 2024 Brownhill report notes that as the joint is not caulked, and that allows for deteriorated material or debris (detritus) to build up inside the joint. It further notes that over time this accumulation of debris will solidify restricting the two surfaces from moving independently and therefore not sealing the joint is in breach pursuant to AS3727.1 Figure 5.4.3. Mr Brownhill also noted that at his onsite inspection in 2024 voids were forming in the compressible filler material which can allow infiltration of debris into the joint and requires sealing.
3. All three experts agreed that none of them had observed any detritus in the joint which they all also agree is the reason why the figure shows sealant in the joint.
4. However, Mr Brownhill who has inspected the dwelling more recently than Mr Molnar refers to voids forming in the compressible filler material which can allow infiltration of debris into the joint and requires sealing. The application of sealant would prevent voids and the ability for the infiltration of debris.
5. I am satisfied by this evidence that it is reasonable to install sealant to ensure detritus cannot enter the joint which is required by AS3727.1 clause 5.4.3 and as shown in Figure 5.4.3.
6. I find the failure to seal the isolation joint is a defect.
7. Mr Love says to rectify this item, 10 mm of the flexible material needs to be removed, and caulking installed at an estimated cost for materials and labour of $400.00.
8. Mr Brownhill estimates the cost of material and labour to supply and install sealer along the joint is $317.60.
9. Mr Molnar did not provide an estimate of the cost to seal the joint.
10. Mr Love and Mr Brownhill's cost estimates are very close and therefore I will allow an average of the two amounts - being $358.80. When a 30% margin and GST are added to this cost estimate that increases to $513.08. I will also allow an escalation of 7.5% for increases in labour and costs since the estimate was prepared.
11. I find that the cost to rectify this item is $551.57.

Item 8(m) - doors - not installed correctly - amount claimed $898.00

1. In the Further Amended Points of Claim this item is a claim that doors are not installed correctly, including they external laundry sliding door, with sealant around the door incomplete around the junction between the bottom of the hardiflex infill panels and the top of the window/ door frames.
2. The builder denies that this is a defect.
3. Mr Love did not refer to this item in any of his reports.
4. In the 2024 Brownhill report Mr Brownhill notes unsealed gaps were identified along the bottom edge of the fibre cement sheet infill and the face of the window/ door frames which are not in accordance with the manufacturer's technical specifications. There is an extract of a diagram of a drip strip joint in the 2024 Brownhill report which is labelled as Figure 9 Drip Strip Joint from the James Hardies Technical Specification for sheet cladding with which the installation is said not to comply. Mr Brownhill gave evidence that this diagram requires sealing/ flashing between different materials to prevent water ingress which has not been installed. He conceded that no water ingress has occurred.
5. In the 2024 Molnar report Mr Molnar disputes that the diagram extracted by Mr Brownhill relates to the junction of windows or doors. He states that the diagram extracted by Mr Brownhill is relevant to the horizontal connection of two panels not the horizontal connection of a panel with the window. The 2024 Molnar report extracts a different diagram said to be from page 34 of the James Hardie Installation Guide for Hardi Flex products, which Mr Molnar says is the relevant diagram for the junction of a panel and a window head and that this does not required sealant to be installed. He says that it only requires the panel to be finished and the bottom panel edge sealed. He is of the opinion that the builder has complied with the manufacturer's requirements.
6. I am not satisfied by Mr Brownhill's evidence that this is a defect. I prefer Mr Molnar's evidence that has an extract of a diagram that refers to windows rather than the extract of the diagram provided by Mr Brownhill that does not reference windows/ doors. Further given that there has been no water ingress, I am satisfied that the panels are likely to have been installed correctly.
7. I find that this item is not a defect.

Item 8(n) - external pillars - amount claimed $322.00

1. The owners submit that the steel tops located on two of the external pillars are loose and have not been installed or secured correctly. They rely on the 2024 Brownhill report.
2. Mr Molnar agrees this is defective work and the builder agrees that it is defective.
3. Mr Brownhill estimates the cost of labour and materials to securely fix the capping flashing in position is $219.65.
4. Mr Molnar estimates that the cost of labour and materials is $140.00 being a plumber for one hour to apply a squirt of silicone to secure the steel tops.
5. Mr Brownhill's estimate and Mr Molnar's estimate are very close and therefore I will allow an average of the two amounts - being $179.83. When a 30% margin and GST are added to this cost estimate that increases to $257.15. I will also allow an escalation of 7.5% for increases in labour and costs since the estimate was prepared.
6. I find that the cost to rectify this item is $276.44.

1. A summary of my findings in relation to the items being claimed as defects is below.

Tiling in bathroom and ensuite - No defect in ensuite; Cracks in bathroom shower tiles not defective; Shower wall in bathroom not plumb is a defect but not reasonable to rectify

Masonry concrete paving - Defective - cost included in 8(o)

Roof void insulation - Not defect caused by builder

Grouting air bubble - Defective in the showers of the bathroom and ensuite

1. I find that the total amount of damages payable by the builder to the owners for items which are defective is $19,092.73.

ARE THE OWNERS ABLE TO CLAIM LIQUIDATED DAMAGES FOR ANY LATE COMPLETION OF THE WORKS? IF SO, WAS THE BUILDER LATE IN COMPLETING THE WORKS?

1. In his closing submissions the owners claimed that the builder did not complete the works in the time provided for under the building contract. Therefore, the owners submitted, under the building contract, they were entitled to claim liquidated damages at a rate of $200.00 per week and for a 13 week delay they claimed from the builder the amount of $2,600.00.
2. By the filing and service of the Further Amended Points of Claim the owners removed any claim for liquidated damages. The Further Amended Points of Claim were prepared by the then lawyers acting on behalf of the owners.
3. The owners were represented by a lawyer leading up to and during the hearing. Despite being ordered to provide a joint summary of the issues in dispute and written outline of opening submissions by 24 November 2024 - the owners did not do so and therefore they did not notify of any issues in dispute including any issue about whether there was a claim for liquidated damages.
4. The builder prepared its own list of issues in dispute and filed written opening submissions. The builder's documents did not note any claim by the owners for liquidated damages. The owners did not raise during the hearing that the builder's list of issues in dispute failed to note that a claim for liquidated damages had been made.
5. No mention of any claim for liquidated damages was made in the owners' oral opening submissions.
6. No evidence was given during the proceeding about any a claim for liquidated damages. No evidence was given about the date the building works commenced, the period for the building works under the building contract or when the works were due for completion. It was not put to Mr Sekic, the builder's building manager that the works were not completed by the date due for completion under the building contract.
7. The owners did not, prior to filing their closing submissions, give any notice to the builder that they intended to pursue a claim for liquidated damages for any late completion of the works.
8. In these circumstances it would be unfair and not in accordance with natural justice, to allow the owners to make a claim for liquidated damages against the builder without notice and after the hearing has been concluded.
9. I refuse to allow the owners to make a claim for liquidated damages for any late completion of the works. It is not therefore necessary for me to determine when the works were due for completion under the building contract.

1. I will reserve my decision in respect of any claim for costs and make orders providing the parties with an opportunity to make any such application.

1. I will make orders in accordance with these reasons.

[1] Reifek v McElroy [1965] HCA 46; (1965) 112 CLR 517 at 521-2 as referred to in Olivera v Google Homes Pty Ltd (Building and Property) [2015] VCAT 835 at [33].

[2] Item 14 of the Appendix to the building contract.

[3] The Owners - Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067, 46.

[4] Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 ('Bellgrove') at 617 - 618 and 620.

[5] [2009] HCA 8; (2009) 236 CLR 272, [17].

[6] Clarendon Homes v Zalega (Domestic Building) [2010] VCAT 1202, [165]; Stone v Chappel [2017] SASFC 72, [255].

[7] [2010] VCAT 1202, [165].

[8] [1996] 1 AC 344; [1995] WLR 118.

[9] (Building and Property) [2022] VCAT 1086, [47] and [61] - [66].

[10] [1977] Ch 106; 2 WLR 496; [1977] 3 All ER 129; [1977] ChD 106 (which had been quoted in Ruxley).

[11] [2017] SASCFC 72.

[13] Grilli v Downing (Building and Property) [2020] VCAT 704, [142], which references The Gombac Group Pty Ltd v Vero Insurance Ltd [2004] VCAT 2540; The Gombac Group Pty Ltd v Vero Insurance Ltd [2005] VSC 442; Ashjam Pty Ltd v Carroll [2006] VCAT 2612.