Vagg v Routledge

Defects not yet rectified

1. The plaintiffs rely principally on evidence given by Mr Bruce Hall, a licensed builder, who has provided detailed reports which describe the nature of the defects and explain why the relevant work was not done with due care and skill or in accordance with the plans and specifications that formed part of the contract. Mr Hall also prepared a detailed Scott's schedule, and an amended schedule, setting out his estimated costs of rectifying the defects he has identified and providing a breakdown of those costs. In some cases, Mr Hall has relied on expert reports or expert opinions provided by others in reaching his conclusions. To the extent necessary I will say something more about those reports and opinions later in this judgment.
2. In the brief submissions he made, Mr Routledge made two points. The first was that the total contract price for building the house was approximately $1,200,000 whereas the plaintiffs' total claim was in excess of $2,700,000, which Mr Routledge submitted was completely disproportionate to the costs of building the house. Second, Mr Routledge referred to a report prepared by Mr Zakos, an expert quantity surveyor retained by the architect, which took issue with much of what was contained in Mr Hall's reports and provided costings to rectify a number of the defects identified by Mr Hall which were substantially lower than those provided by Mr Hall.
3. I do not accept Mr Routledge's submissions.
4. The fact that the amount claimed to rectify defects is very much more than the total contract price does not itself establish that the costs of rectification are unreasonable. The Builders may have underquoted for the work in the first place; or the nature of the defects may mean that the costs of repair are greater than the costs of performing the initial work in a proper and workmanlike manner in the first place.
5. Before the claim against the architect was settled, the architect tendered a report prepared by Mr Zakos. In accordance with normal practice, Mr Hall and Mr Zakos met and produced a joint report which was also tendered before the claim against the architect was settled. As is apparent from what I have said, Mr Zakos was not called by the Builders and was not cross-examined. In those circumstances, his evidence is not available to contradict the evidence given by Mr Hall.
6. Mr Hall prepared detailed reports. He also gave some oral evidence. The reports themselves and the oral evidence given by Mr Hall suggest that he approached the task given to him diligently and thoroughly. For those reasons, with some exceptions which I will explain, I accept the evidence given by Mr Hall in his reports and Scott's schedule.
7. Mr Hall grouped the defects he identified into 34 items, which are the subject of his reports and Scott's schedule. Having regard to the conclusion that I should generally accept Mr Hall's report, it is not necessary to deal with each item in detail. However, I say something about each of them below and indicate where I am not prepared to accept Mr Hall's evidence and why.
8. Before dealing with each item, I should make one other general point. As I have said, the house was built between 2009 and 2010. Proceedings were not commenced until 2016 and Mr Hall did not inspect the house until 2017. No explanation was given for the delay in commencing the proceedings. The delay in commencing the proceedings is particularly significant when it appears that the plaintiffs have apparently decided not to make any major repairs until the case is resolved, although there is no evidence that it would have been beyond their financial capacity to do so. That raises the question whether the plaintiffs have taken reasonable steps to mitigate their loss in relation to costs which are consequential on the failure to repair defects. As will become apparent that is relevant to one of the items in respect of which the plaintiffs make a claim. In addition, the plaintiffs have had the use of the house for a number of years. There is a question how extensive that use has been. Mrs Vagg gave evidence that she and her husband principally visited the house to deal with defects. However, it is difficult to accept that evidence given the lack of progress prior to 2017. The result is that the plaintiffs have had the use of the house for a number of years and, as might be expected particularly of a house near the sea, it has been the subject of normal wear and tear. On the other hand, the work involved in repairing many of the defects will result in many components in the house being new. In those circumstances, it is necessary to make some allowance for betterment. I deal with that issue below.

Item 1 - Scratches to internal floor

1. Mrs Vagg gives evidence that when she and her husband arrived at the property to take possession on 24 December 2010 she noticed considerable scratching to the internal timber flooring, primarily on the ground floor. Mr Hall gives evidence that the degree of scratching on the timber floors is greater than he would expect and that the timber floor sealer was easily scratched with his thumbnail, indicating that the seal on the floor had not set or was defective. He expresses the opinion that the Builders appear to have failed to apply the specified sealant in the manner described and specified by the manufacturer. On that basis, I am satisfied that the warranty implied by s 18B(a) of the HBA was breached. Mr Hall originally estimated that the cost of repairing this defect was $6,650. However, in the joint report with Mr Zakos he conceded that an appropriate allowance was $4,910. In my opinion, the Builders should have the benefit of that concession.

Item 2 - Concrete blade support wall

1. The evidence of Mr Hall is that the finish of this wall is poor and irregular and includes patch repair work that was visible in an irregular pattern and colour. According to Mr Hall, the finish does not comply with an architectural drawing which specifies the finish as "being very smooth use fibre glass coated plywood as formwork". I am satisfied that the finish of the wall breaches the warranty implied by s 18B(a) of the HBA.
2. Mr Hall originally estimated that the cost of repairing the wall was $10,785. In his joint report with Mr Zakos, he conceded that an appropriate allowance was $9,025. In my opinion, the plaintiffs are entitled to recover that amount.

Item 3 - Marks and stains to garage floor

1. It appears from evidence given by Mrs Vagg that there were marks and stains to the garage floor at the time she and her husband took possession of the property.
2. Mr Hall points out that the schedule of works specification CI CC5 stated the following: Concrete slab Protection Protect slab surface from staining and impact damage through the course of construction by maintaining cover with polyethylene sheet and jute under felt or similar.
3. I am satisfied that the staining involved breach of the warranty implied by s 18B(a) of the HBA.
4. Mr Hall provides two options for repairing the floor. The cheaper option involves the application of a suitable cementitious topping compound to the garage floor slab. He estimates the costs of that option are $4,640. In my opinion, the plaintiffs are entitled to recover that amount.

Item 4 - Electrical issues

1. This claim relates to the alleged failure to install certain lighting in accordance with the construction plans. Mr Hall relies on an inspection report provided to him by Laser Electrical to identify the relevant lights. He then provides in the Scott's schedule he prepared a detailed breakdown of the costs of installing those lights. According to the Scott's schedule the total cost of supplying and installing the relevant lights is $25,880.
2. There are difficulties with the evidence relied on by the plaintiffs. The electrical inspection report prepared by Laser Electrical does not comply with Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 31.23 and the Code of Conduct set out in Sch 7. The report does not identify the relevant construction plans. Mr Hall does not give evidence which would enable the Court to form a view on whether the lights were required to be supplied in accordance with the building contract or not. For those reasons, I would not permit any amount to be recovered in respect of this item.

Item 5 - Damaged blinds

1. Mr Hall gives evidence that he observed damage to five blinds. I am satisfied that the damage existed at about the time the plaintiffs took possession. There is a reference to damaged blinds in defects lists prepared at about the time that work was undertaken. I accept that as a consequence the work was not performed in a proper and workmanlike manner in breach of the warranty contained in s 18B(a) of the HBA. Mr Hall estimates the cost of replacing the damaged blinds at $6,630.60. There is no reason not to accept that estimate.

Item 6 - Scratched glazing

1. The plaintiffs make a claim for scratches to a number of windows which Mr Hall says were visible from a normal standing position of 1500mm in natural light in contravention of The Guide to Standards and Tolerances 2007 s 18 CI 18.04 which relevantly stated that "Scratches, fractures, chips or other blemishes on glazing and mirrors are defects if they are caused by the builder and can be seen from a normal viewing position".
2. The real question in respect of this item is whether the scratches were caused by the Builders.
3. There is evidence of scratches to the windows in the master bedroom at about the time the plaintiffs took possession of the property, including in defects lists existing at the time. However, there is no evidence that the other scratches existed at the time; and in the absence of evidence I would not, given the time that has elapsed, be prepared to infer that the other defects existed at that time.
4. Mr Hall gives evidence that the only satisfactory way of correcting the defects is to replace the glass. I accept that evidence. He estimates the cost of replacing the windows in the master bedroom at $2,627.14. Again, I accept that evidence.

Item 7 - Cracked render finishes

1. Mr Hall gives evidence that there is no tooled gap between the window and door frames connected to render, which is resulting in cracking.
2. I accept Mr Hall's evidence that that was not the correct method of installation in accordance with proper building practice which would have provided a gap between the frames and render, which would be filled with a flexible sealant and that there has, therefore, been a breach of the warranty implied by s 18B(1)(a) of the HBA.
3. Mr Hall expresses the opinion that the defect should be corrected by tooling a positive joint between the render and window and door frames and filling the joints with a UV prohibitive external grade flexible and paintable sealant. He estimates the costs of that work at $3,336. I accept that evidence.

Item 8 - Roof leaks etc

1. Mr Hall gives evidence of the roof leaking into the main upper level north western internal stairwell wall causing paint blistering. He also gave evidence that the western gutter and downpipes do not provide for overflow.
2. I accept that these are defects involving a breach of the warranties implied by s 18B(1)(a) and (e). Mr Hall estimates the cost of rectifying them at $15,313. In the absence of any other evidence, I accept that evidence.

Item 9 - Defective pump

1. The defect identified by Mr Hall as Item 9 is no longer pressed by the plaintiffs. The defective pump was included in Item 10, but Mr Hall conceded that it was really a separate defect, which I have described as Item 9.
2. Mr Hall gives evidence that the fire fighting pump does not operate due to water damage caused by the fact that it is housed in a non-waterproof box. According to Mr Eric Shilson-Josling, an expert building surveyor and building consultant engaged by the plaintiffs, the pump is required in order to comply with recommendations in Planning for Bushfire Protection 2006. Mr Hall has allowed $1,090 for the cost of acquiring a new pump.
3. The existing pump is approximately 10 years old. There is no evidence concerning the expected life of the pump. In my opinion, it would not be appropriate to allow for the costs of replacing the old pump with a new one. In the absence of evidence concerning the expected life of the pump, I would not allow any amount for this item.

Item 10 - Defective decking etc

1. Mr Hall gives evidence of defects in the waterproofing of a timber balcony and storage box structures which has caused the timber boards to be exposed to the elements and twisted to an unacceptable extent. There is no reason not to accept Mr Hall's evidence, which the result that I accept the defects involve a breach of the warranty implied by s 18B(1)(a) of the HBA.
2. Mr Hall estimates the costs of rectifying these defects together with the cost of rectifying defects in the next item.

Item 11 - Other waterproofing issues

1. Mr Hall identifies a number of other waterproofing defects concerning the intersection of the decking referred to in item 10 and the interior of the house including the fact that the southern upper deck external finished floor level was laid at the same internal finished floor level contrary to the relevant approved construction issued drawing. He also gives evidence that the external deck flooring had been laid up to an aluminium door sill contrary to the relevant drawing. The result is that water from rain and storms is likely to pond against the door seal and enter the internal living area if it fails to drain adequately. Mr Hall also expresses the opinion that inadequate flashings have been installed. He expresses the opinion that in order to correct these problems and the problems with the balcony, it will be necessary to remove the doors, sills and frames and the deck and to provide a new stormwater drainage system and a new deck and reinstall the doors, sills and frames. Mr Hall estimates the cost of that work at $126,158. There is no reason not to accept that estimate.

Item 12 - Waterproofing of living, kitchen and dining areas

1. Mr Hall gives evidence that water ingress is occurring into the upper floor living, dining and kitchen areas and has caused damage to a number of features including the fireplace, floor mounted GPO and light switching in the dining room. He expresses an opinion on various causes of the water ingress and recommends a method of repair which involves the installation of flashings and waterproof membranes and the replacement of damaged parts including the power and light cabling to the fireplace, the floor mounted GPO and the light switching in the dining room and the replacement of the damaged fireplace. He estimates the costs of that work to be $91,286. Again, there is no reason not to accept that evidence.

Item 13 - Front northern entry deck

1. Mr Hall gives evidence that this deck does not comply with the relevant drawing which depicts a concrete strip footing supporting the timber deck. He also observed that the decking boards were not sealed with a protective coating and that the decking does not slope away from the external wall together with a number of other problems affecting the waterproofing of the deck.
2. Mr Hall provides two alternatives for rectifying the defects. One involves reframing the deck. The other involves leaving the deck and layout in its current location. The costing of the first alternative appears to include some additional items totalling $3,585. Mr Hall estimates that he total costs of rectifying the defects in accordance with his first alternative is $53,092.50. In my opinion, it is appropriate to deduct the amount of $3,585 from that amount, making a total of $49,507.50.

Item 14 - Northern deck entry

1. According to the relevant drawings, the front entry was designed to have a steel structure above it which was to be covered by a glass canopy. Mr Hall gives evidence that the paintwork on the steel structure does not comply with AS 4100 (1998) Steel Structures, cl 3.5.6, which specifies a degree of protection required against corrosion, and is deteriorating. Mr Hall also gives evidence that the structure does not comply with the approved drawing because it does not include a supporting beam, which is necessary to support the glass canopy. Mr Hall gives evidence that the cost of repairing the structure and installing the glass canopy is $73,432. There is no reason not to accept that evidence.

Item 15 - Rising damp

1. The evidence is that there is a problem with rising damp throughout the building and that water ingress and damp has caused a high level of mould. I say more about this issue in relation to Item 34.
2. Mr Hall expresses the opinion that flashings and waterproof membranes have not been installed in a number of areas where they were required in accordance with relevant standards. The absence of flashings and membranes have caused excessive moisture which not only accounts for the mould, but water damage including cupping to internal timber flooring, the cracking of render and blistering and spalling paintwork. Mr Hall estimates that the total cost of installing the necessary waterproofing and repairing the damage is $239,860. There is no reason not to accept that estimate.

Item 16 - Rear patio

1. The southern rear patio consists of natural stone. According to Mr Hall, it suffers from a number of problems. One is that it has not been properly sealed, leading to staining. There is no membrane system leading to effervescence and moisture migration. There are no intermediate joints causing debonding or drumminess of tiles. Finally, the tiles were not laid properly, resulting in water ponding. Mr Hall expresses an opinion for each of these defects. He estimates the cost of correcting them at $37,740. There is no reason not to accept those opinions.

Item 17 - Rendering of external walls

1. Mr Hall expresses the opinion that the rendering on some external walls was poorly finished and exceed the tolerances set out in the relevant specification. He also states that the fitness of the render coat was below that set out in the relevant specification. Mr Hall expresses the opinion that this defect should be corrected by painting it with a suitable high build commercial grade skim coat. He estimates the cost of carrying out that work at $17,859. There is no reason not to accept that evidence.

Item 18 - Waterproofing of windows and doors assemblies

1. Mr Hall gives evidence that a number of windows and door assemblies were not waterproofed, resulting in a failure to comply with the relevant provisions of the Building Code of Australia relating to damp and weatherproofing. He estimates the costs of correcting those defects as being $39,740. Again, there is no reason not to accept that evidence.

Items 19, 20 and 21 - Bathroom floor and wall tiling

1. Mr Hall identifies problems with the ensuite bathrooms for the master bedroom and two other bedrooms. The problems are similar and consist principally of the tiles having been laid with an inadequate fall resulting in ponding, the absence of a waterproofing edge on the shower screens and the fact that the waterproof membrane had been poorly turned down into the drainage rise. Mr Hall estimates that the costs of rectifying these defects are $17,968 in the case of the ensuite in the master bedroom, $16,754 in the case of the ensuite in bedroom 3 and $16,440 in the case of bedroom 2. There is no reason not to accept that evidence.

Item 22 - External light fittings

1. This item was not pressed.

Item 23 - Water connections

1. It is not easy to follow the evidence in relation to this item. Mr Hall expresses the opinion that the plumbing pipes for the drip irrigation system were defective because they were partially laid into the adjoining block (which is also owned by the plaintiffs). Mr Hall regards that as a defect, although there is no evidence that it was part of the specification that the whole of the drip irrigation system had to be located on the block on which the house was built. Mrs Vagg gives evidence that part of the drip irrigation system encroaches onto Council land, but that evidence is not supported by Mr Hall. Mr Hall expresses the view that the cost of rectifying this defect is $12,314.
2. Separately, Mr Hall identifies as another defect (Item 29) the fact that the water services system was connected to town water and not tank water as specified. Mr Hall originally allowed $109,371 to correct this defect. However, that amount includes $12,205 for the production of a hydraulics report by AJ Whipps Consulting Group, on which Mr Hall relied, and $4,320 for his own costs. They are costs properly claimable in the proceedings, not costs of rectification. Moreover, of the total amount identified by Mr Hall, the amount of $82,500 is taken from the report of AJ Whipps. It appears from Mr Hall's Scott schedule that the costing for the work recommended by AJ Whipps is based on a quote provided by Patrick Arthur Plumbing. I was unable to find that quote in the evidence and there is no evidence that the quote was prepared in accordance with UCPR r 31.23. As I understood Mr Hall's evidence, the cost of re-laying piping to deal with the fact that it was not connected to tank water would also encompass the work that Mr Hall says would be necessary to stop the piping from encroaching on the neighbouring property.
3. It is apparent that there has been a breach of the relevant warranties at least insofar as the watering system has been connected to town water rather than tank water. However, there appears to be no admissible evidence concerning the cost of rectifying that defect. The only exception is that there is costing of the costs of relocating some pipes which would be included in that cost.
4. On the evidence before me, I would only allow the plaintiffs to recover those costs - that is, the $12,314.

Item 24 - Gas bottles not linked for continuous flow

1. The evidence is that two large gas bottles supply the premises with gas. No switching device was installed between the bottles, with the result that if one bottle ran out gas would not be automatically switched to the other bottle. I accept Mr Hall's evidence that this involved a failure to comply with the specifications which relevantly provided that the builder was to "Provide the accessories and fittings necessary for the proper functioning of the plumbing systems…" and consequently involved a breach of the warranty implied by s 18b(1)(a) of the HBA.
2. Mrs Vagg gives evidence that in or about June 2013 a plumber installed an automatic flow switch between the tanks. That cost is claimed by the plaintiffs.
3. Mr Hall allows an amount of $8,740 in respect of this item. It appears that that cost includes the cost of mapping the location of underground gas services.
4. It is not clear to me why the fix implemented by the plaintiffs is inadequate. Consequently, I would not allow any amount for this item.

Item 25 - Main entry glass door

1. Mr Hall gives evidence that the main entry glass door is a pivot door that is designed to open both inwards and outwards. However, at present, the location of the fire shutter on the exterior of the building prevents the door from opening outwards. I accept that this is a defect which should be corrected.
2. Mr Hall estimates the cost of fixing the defect at $1,510. There is no reason not to accept that estimate.

Item 26 - Mechanical exhaust systems

1. Mr Hall gives evidence that the mechanical exhaust systems in each of the three ensuite bathrooms is inadequate to ventilate steam from the bathrooms.
2. I accept that the failure to provide adequate ventilation is a breach of the warranty implied by s 18B(b) of the HBA.
3. Mr Hall estimates the cost of replacing the three fans with more powerful ones and performing the necessary repair work to the ceilings is $8,200. There is no reason not to accept that evidence.

Item 27 - Fly screens

1. This item is no longer pressed.

Item 28 - Rubbish removal

1. Mr Hall gives evidence that he was advised by the plaintiffs that they agreed that the Builders could use the adjacent property to dump waste on condition that the property was reinstated on completion of the works. However, no evidence of that agreement is given by the plaintiffs.
2. Mr Hall estimates that the total cost of removing the rubbish is $34,458. That estimate includes the cost of making good the surface of the block.
3. It is possible that the plaintiffs have a claim against the Builders in respect of material left on the adjacent property. However, that claim would need to be separately pleaded and be the subject of evidence. It cannot be claimed as a defect arising from a breach of the statutory warranties or express terms of the building contract.
4. For those reasons, I would allow nothing in respect of this item.

Item 29 - Water services system

1. This item has been dealt with above.

Item 30 - Collapsing gates

1. Mr Hall gives evidence that the north double gates to the property are collapsing into the adjacent property arising from poorly formed control joints or no control joints in the walls to accommodate brick growth and settlement. He estimates the costs of repairing the walls to be $91,819. I accept this evidence.

Item 31 - Squeaking floors and excessive handrail movement

1. Mr Hall gives evidence that he observed creaking on the eastern deck, that the internal stairs squeaked loudly and that the handrail rotates excessively. He allows $88,229 to correct these defects. There is no reason not to accept that evidence.

Item 32 - Paintwork

1. Mr Hall gives evidence that the paintwork throughout much of the premises does not comply with the relevant specification in that there were visible grit, paint dribbles, poor coverage and inadequate film thickness externally on numerous locations and irregularly painted and unsealed junction between window and door frames and the reveals which was the result of poor workmanship. He estimates the cost of correcting these defects at $75,489. There is no reason not to accept that evidence.

Item 33 - Failure to comply with bushfire risk assessment report

1. The house is located in a bushfire prone area. In connection with obtaining development approval, the plaintiffs were required to obtain a bushfire risk assessment report from Wysco Building Services. Condition 24 of the Development Approval relevant provides: The measures described in the report, prepared by WYSCO dated 21 April 2007, and attached to this approval shall be undertaken to mitigate the risk of bushfire hazard for the entire period that the development/buildings exists.
2. Mr Shilson-Josling gives detailed evidence of the respects in which the property fails to comply with the Wysco report and the measures that need to be taken in order to achieve compliance. Mr Hall estimates the cost of implementing those measures as $193,937. There is no reason not to accept this evidence.

Item 34 - Manhole hatches and mould damage

1. Mr Hall gives evidence that a number of manhole hatches to allow access to services were not included in certain areas in accordance with the specifications. He estimates the costs of installing those manholes at $7,200. There is no reason not to accept that evidence.
2. In relation to rectification of the mould growth, Mr Hall estimates the total cost to be $258,193.
3. There are, however, difficulties with that estimate. The estimate is based on a report dated 19 June 2017 prepared by Dr Neumeister-Kemp. Dr Neumeister-Kemp prepared two reports, one dated 19 June 2017 and the other dated 19 July 2017. Neither report complies UCPR r 31.23. The second report contains the results of measurements taken by Myotech (the organisation for which Dr Neumeister-Kemp works). I would be inclined to admit that report even though it does not comply with UCPR r 31.23 because it primarily contains measurements which Myotech are clearly qualified to undertake. According to that report the entire house is considered a Grade 4 building contamination in accordance with the Australian Mould Guidelines (AMG-2010-1) meaning that visible mould growth is present on greater than 25 per cent or more of 10m2 on interior surfaces with the consequence that no person should enter the property without the appropriate full personal protective equipment. Dr Neumeister-Kemp expresses the view that the presence of undue moisture levels throughout the premises is the primary factor underpinning the mould proliferation.
4. The earlier report contains a costs estimate. Dr Neumeister-Kemp is plainly an expert microbiologist. However, it is not clear what her qualifications and experience are in estimating the costs of remediation work. She explained that remediation costs are extremely difficult if not impossible to estimate prior to any significant deconstruction works being undertaken. However, she gives the following estimates: 2.3.1 Structural Remediation Cost Estimates Mobilisation, set-up, containment - 140 hours Deconstruction, structural drying, Remediation - 840 hours De-mobilisation, removal of containment, and other equipment (ready for reinstatement works) - 40 hours Total 1020 hours - $86,700.00 Specialised tools and equipment (e.g. negative air pressure, dehumidifiers etc.) allowance - $10,000.00 Materials and specialist third-party services (e.g. IPT (lab) test, Clearance Test) allowance - $30,000.00 Total Structural Remediation Cost Estimate - $126,700.00 2.3.2 Contents Remediation Cost Estimates Inspection and Remediation (160 hours) - $13,600.00 Materials and specialist third-party services (e.g. IPT (lab) test, Clearance Test) allowance - $15,000.00 Allowance for replacement of non-remediable items suggested - $25,000.00 Total Contents Remediation Cost Estimate - $53,600.00
5. Dr Neumeister-Kemp also says that a 25 per cent premium should be applied to these figures having regard to the location of the property. Mr Hall derives his estimate from the figures given by Dr Neumeister-Kemp.
6. In my opinion, Dr Neumeister-Kemp's report provides an inadequate basis on which to accept the claim for this item. It does not comply with UCPR r 31.23. There is an inadequate description of the work involved; and it is not possible to tell whether any of it would be duplicative of other work involved in correcting damage resulting from water ingress. Moreover, there must be a serious question whether the plaintiffs have taken reasonable steps to prevent the growth of mould. The leaks causing excessive moisture have been present for some time. It my opinion, the plaintiffs have delayed excessively in repairing those leaks.
7. For those reasons, I would not permit the plaintiffs to recover the amount claimed to remove the mould.

Item 35 - Preliminaries, builders margin and GST etc

1. Mr Hall in his estimate has allowed $81,269 for preliminaries, a builder's margin of 35 per cent, home owners' warranty insurance of 1.2 per cent and GST of 10 per cent on the total.
2. There is no reason why those items should not be allowed having regard to the nature of the project.

Betterment

1. It is apparent from a description of the work that is involved that a substantial part of the work will involve the replacement of items that would be expected to wear over time with new finishes. The replacement of floors and new painting are examples. In my opinion, having regard to the time that has elapsed and the use that the plaintiffs have had from the items to be replaced, some allowance must be made for betterment. Mr Galvin, who appeared for the plaintiffs, conceded as much in relation to some items.
2. There is little evidence before the Court in relation to that question of what an appropriate allowance would be. Doing the best I can, in my opinion, an appropriate allowance would be 20 per cent.

Summary

1. It follows from what I have said that the total amount recoverable is $1,457,126.88 calculated as follows: Costs of Work (including preliminaries) $1,333,193.24 Add builders margin (35 per cent) $1,799,810.87 Add insurance (1.2 per cent) $1,821,408.60 Deduct 20 per cent for betterment $1,457,126.88

Amounts paid by the plaintiffs

1. The plaintiffs make a claim for a number of defects that they have rectified at their own expense. It is convenient to deal with them item by item.

Item 1 - Damage to mirror

1. Mrs Vagg gives evidence that when she and her husband went to the house on 16 January 2011 she discovered that the mirror in the ensuite bathroom to bedroom 2 had dropped off the wall into the bedroom and damaged some of the joinery. Following delays by the Builders in rectifying the damage, Mrs Vagg arranged for the joiner who had constructed the original joinery to carry out repairs. The plaintiffs were charged $6,517. There is no reason why they should not recover that cost.

Item 2 - Door handles

1. Mrs Vagg gives evidence that there were no door handles on the sliding doors. The plaintiffs purchased those handles from the supplier. The cost was $809.33. The relevant invoice is in evidence. There is no reason why the plaintiffs should not recover that amount.

Item 3 - Insect screens

1. At the time the plaintiffs took possession of the house, there were no screens installed on the doors. They arranged for fly screens to be installed and claim the costs of doing so.
2. In accordance with the Wysco report, the Builders were required to install fire screens on the doors. The cost of complying with that requirement is included in the costs claimed under Item 33 above. In my opinion, the plaintiffs are not entitled to recover the cost of installing screens twice. If they chose to install screens that did not comply with the Wysco report that is a decision they took. It is not the responsibility of the Builders. Consequently, I would not permit the plaintiffs to recover the costs of this item.

Item 4 - Laundry benchtop

1. This item was not pressed.

Item 5 - Blade wall

1. This item relates to an attempt to fix the problems with the blade wall by the addition of stainless steel strips. Mrs Vagg gives evidence that the proposal was recommended by the architect and discussed with Mr Routledge. As a result, the plaintiffs paid $1,265 to the supplier towards the cost of the strips. However, the Builders did not pay the balance of the cost and the strips were not installed.
2. In my opinion, the plaintiffs are entitled to recover this amount. It was paid as part of the costs of rectification but the work did not proceed because the Builders did not pay the balance of the invoice from the supplier, although they had an obligation to do so.

Item 6 - Roof repairs

1. This item relates to the repair of a leak in the roof by Metaline Roofing for a total cost of $3,000. It appears that Metaline Roofing did not issue and invoice. However, there is evidence that it identified a problem with the roof and that the plaintiffs paid the amount of $3,000. There is no reason why they should not recover that amount.

Item 8 - Fire Screens

1. It is not easy to follow this item. It appears to be supported by an invoice from Coastal Décor. However, the issue appears to be the same as the issue in relation to Item 3. I would not allow anything for this item.

Item 9 - House number

1. The plaintiffs claim $3,000 for the costs of a house number.
2. I was informed that this work has not been completed. There is no evidence supporting the claim. I would not allow anything for it.

Item 11 - Connection of gas bottles

1. This item relates to Item 24 on Mr Hall's Scott's schedule and has been dealt with earlier. The plaintiffs paid a plumber $171.60 to connect the gas bottles. I can see no reason why they should not recover that amount.

Item 12 - Survey certificate

1. An amount of $2,000 is claimed in respect of this item. There is no evidence of what this item relates to or that it has been paid I would not allow anything for this item.

Item 14 - Services "As built" diagrams

1. This item does not relate to costs that have been incurred but relates to the costs of engaging qualified consultants to inspect the works and conduct appropriate tests and provide certifications to the plaintiffs. The total amount claimed is $14,000 including GST ($2,000 for each of seven consultants). It is not clear how the amount is calculated and there is no evidence explaining why the work is necessary to rectify some breach of the statutory warranties. For those reasons, I would not allow anything in respect of this item.

Item 15 - Granite

1. This item relates to the cost of replacing a missing granite tile. The amount claimed is $120. There is no reason why the plaintiffs should not be entitled to recover that cost.

Item 16 and 17 - Replacement of power points and external light fittings

1. These items relate to the costs of replacing power points said to have been affected by water ingress and the installation of external lighting. The total amount claimed in respect of Item 16 is $2,500 and in respect of Item 17 $1,250. There are no invoices relating to the work and no evidence that the amounts were paid. I would not allow any amount in respect of these items.

Item 18 - Excess water usage

1. This item is said to be consequential loss arising from the failure to connect the watering system to tank water. The total amount claimed is $1,168. There is no evidence setting out how the amount is calculated. Mr Hall says that he has based the calculation on estimates by the "owner". In addition, there is a question whether the plaintiffs have failed to mitigate their loss by connecting the plumbing to the tank water. I would not allow anything in respect of this item.

Summary

1. It follows from what I have said that the plaintiffs are entitled to recover $11,882.93 in respect of costs they have incurred.

The claim for solatium

1. The plaintiffs make a claim for solatium, although no substantive arguments were advanced in support of that claim.
2. The claim for solatium in this case is a claim for distress and disappointment not consequent upon physical injury. Such a claim is still a claim for "personal injury damages" for the purposes of the Civil Liability Act 2002 (NSW) (CLA), with the result that s 16(1) of the Act applies: Insight Vacations Pty Ltd v Young [2010] NSWCA 137 at [78] (Spigelman CJ), [118], [125] (Basten JA), [166]-[167], [175] (Sackville AJA). That section provides that "No damages may be awarded for non-economic loss unless the severity of the non-economic loss is at least 15% of a most extreme case". Section 16 applies regardless of whether the claim for the damages is brought in tort, in contract, under statute or otherwise: s 11A. A claim for damages for disappointment and distress is a claim for "non-economic loss" within the meaning of s 16: see CLA s 3; Insight Vacations, ibid.
3. It follows that the plaintiffs would only be entitled to an award of solatium if they could establish that the severity of their disappointment and distress was at least 15% of a most extreme case. There is no evidence to support such a claim. As a result the claim for solatium must be rejected.

Conclusion

1. It follows that the plaintiffs are entitled to judgment in the sum of $1,469,009.81 ($1,457,126.88 plus $11,882.93).
2. There is no reason why the Builders should not pay the plaintiffs' costs.
3. The orders of the Court therefore are: 1. Judgment for the plaintiffs against the first and second defendants in the sum of $1,469,009.81; 2. The first and second defendants' cross-claim against the plaintiffs is dismissed; and 3. The first and second defendants pay the plaintiffs' costs of the proceedings except for those costs solely attributable to the claims against the third and fourth defendants.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 February 2020