Barton v Stiff [2006] VSC 307 cited.

EVIDENCE-builder contended that at date of supply and installation, the floorboards were good and suitable for purpose-builder relied on an expert report to the effect that the cause of the damage to the floorboards was the alleged warm, dry conditions in the dwelling following occupation by the owners, being conditions not likely to be encountered within the dwelling at the date of supply-owners' counsel chose not to cross-examine the expert-weight to be ascribed to the report-report found to carry little weight, given the period of time between the alleged warm, dry conditions and the date of inspection by the expert, and the lack of data made available to the expert as may otherwise have informed him as to the actual conditions the subject of his opinion.

EFFECT OF CONCESSION BY OWNERS' EXPERT-expert evidence relied on by the owners that the damage to the floorboards was consistent with drying shrinkage of the floorboards by reason of too high a moisture content at date of their supply-concession by the owners' expert during the hearing that the evidence did not tend to prove this proposition-whether this concession led to the conclusion that the builder has proved on the balance of probabilities that the cause of the damage to the floorboards was the alleged warm, dry conditions in the dwelling following supply of the floorboards by the builder.

S & D Grant Pty Ltd (ACN: 603 262 415) t/as Granted Constructions

Applicants' and Respondent's principal submissions each dated 8 May 2023

Applicants' and Respondent's submissions in reply each dated 8 May 2023.

Wright v S & D Grant Pty Ltd (Building and Property) [2026] VCAT 47

1. It is declared that the respondent failed to supply floorboards to the applicants that were good and suitable for the purpose for which they were to be used, in breach of the implied warranty in s8(b) of the Domestic Building Contracts Act 1995 (Vic).
2. The respondent must pay damages to the applicants, being the reasonable cost of replacing the floorboards, including consequential losses, to be assessed.
3. The claim by the applicants for damages in respect of the alleged defective drainage works undertaken by the builder behind the wall of the first-floor northern balcony is dismissed.
4. The applicants must by 4:00pm on 13 February 2026 file and serve an affidavit stating whether they have undertaken rectification works, if at all. If they have done so, they must provide particulars, and indicate whether they make a further claim for damages in the nature of interest, providing details. If not, the affidavit must indicate whether they seek any compensation for inflation as may have affected the estimates of building prices in their costings in their material filed with the Tribunal.
5. The respondent may by 4:00pm on 27 February 2026 file and serve any reply material.
6. A final decision on quantum will be made in Chambers.

1. The applicants ("the owners") are registered owners of land located at Saturn Street, Balwyn North. On 19 May 2016, they engaged S & D Grant Pty Ltd ("the builder") to construct a new double-storey brick veneer dwelling ("the residence") with a basement, four bedrooms, four bathrooms, a study, and timber floors for $907,123 pursuant to a Master Builders New Homes Contract ("the Contract"). Mr Devin Grant is the sole director of the builder.
2. The flooring provided by the builder comprises 133 mm x 12 mm tongue and groove Tasmanian oak timber floorboards of approximately 200 m² in area on the ground and first floor levels of the residence ("the floorboards"), on a Yellow Tongue particleboard subfloor ("subfloor"). The flooring is glued to the subfloor.
3. The builder sub-contracted MF Southern Pty Ltd trading as Southern Timber Floors ("Southern") to supply and install the subfloor and the floorboards.
4. Southern laid the flooring between 7-11 August 2017.
5. The builder completed the works on 13 December 2017, when handover to the owners occurred ("handover").
6. The delay in publishing this determination arises from pressure of work in the Building and Property List of the Tribunal. An apology is extended to the parties for this delay.

1. The front of the residence faces southwards onto the street, and there is a large balcony facing north, off the upper floor.
2. Adopting the terminology of Mr Browning,[1] the ground floor is comprised of a central hall leading from the front door, extending to the rear. To the left of the hall, upon entering the residence, is a lounge/dining/entry, followed (travelling northwards) by a central staircase leading to the upper floor, followed by a kitchen/living area. To the right of the hall, (travelling northwards from the front door) is a front bedroom 1, followed by a study, followed by a rear bedroom 2.
3. The upper storey, accessed by the central staircase, is a large entertainment area covering the entire floor, facing west. Along the easterly side of the upper storey are bedrooms 3 and 4, each with ensuite bathrooms located centrally between the bedrooms. The northern balcony extends the entire width of the upper storey.

1. The owners commenced the proceeding on 29 August 2022, in which they claimed damages in respect of a number of alleged defects. By the end of the hearing, the claims were limited to:

(a) the cost of replacing the floorboards that the parties agree are not fit for purpose ($161,183 is claimed, made up of $137,630 rectification costs, $20,000 for rental costs upon the owners needing to vacate their residence and $3,553 furniture removal cost); and

(b) the cost of rectification of the rendered wall abutting the northern balcony, so as to ensure that water allegedly entering the cladding through cracks and split joints around windows or doors is directed to an external drainage gap below rather than, as alleged, through laps or tears in the sarking into the interior of the house ($16,858 claimed, made up of $11,523 for rectification cost, $5,335 for cleaning, contingency and supervision, both including margin and GST).

1. The owners were represented at the hearing by Mr Little of Counsel, and the builder by Mr Gurr of Counsel.

1. The applicants claim that the builder breached one or more of the warranties implied in the contract by ss 8(b), (d), (e) and (f) of the Domestic Building Contract Act 1995 ("the DBCA").
2. For the reasons set out below, I find that the owners' claims are limited to breach of the warranty in s8(b) of the DBCA.
3. The warranty implied by s8(b) of the DBCA relevantly reads as follows:

[The] builder warrants that all materials to be supplied by the builder for use in the work will be good and suitable for the purpose for which they are used...

Floorboards not fit for purpose, and require replacement

1. The owners have two school-age daughters, who live with them.
2. The parties agree that by reason of damage to the floorboards, they are not good and suitable for purpose and must be replaced.
3. It is common ground that the nature of the damage is "cupping" of the floorboards, "gapping" between adjacent floorboards, and "splits" and "cracks" within the floorboards themselves.
4. All the floorboards will need to be replaced. This will mean the removal of the skirtings, because the floorboards extend under the skirting boards to the walls behind. It will also require the removal of interior doors, door architraves, built in robes and the kitchen. Removal of the skirting boards will result in some damage to the plasterboard paper surface, requiring patching and repainting of walls abutting the floorboards.

1. The issue for determination is whether the builder supplied floorboards at handover on 12 December 2017 that were not good and suitable for the purpose for which they were to be used.[2]
2. The warranty that materials would be good and suitable for their purpose is an absolute warranty of fitness for purpose, which relates to the purpose as properly identified.[3]
3. I find that the purpose for which the floorboards were to be used was to provide an aesthetic, durable and damage-free internal surface covering on top of the Yellowtongue particleboard subfloor, such that a family such as the applicants' would be able to use the flooring for decades.
4. The owners are therefore required to satisfy the Tribunal, by reference to such evidence of the occurrence of damage upon which they rely that, at the date of handover, the floorboards supplied by the builder were not good and suitable for their intended purpose (in respect of which proposition there is no dispute), as caused them loss and damage.
5. Contrary to the submissions on behalf of the builder,[4] therefore, the warranty being absolute, the owners are not in my view required to establish that the damage to the floorboards as made them not good and suitable for purpose was caused by an act or omission of the builder in breach of the warranty. Far less, I consider, are the owners required to prove that the existence of any particular defect in the floorboards caused by an act or omission of the builder, as led to the damage to the floorboards of which they complain.

1. It is of course open to a builder which has supplied materials, and which subsequently faces such a claim, to seek to establish on the balance of probabilities that the materials were good and suitable for their intended purpose at the date of supply, such that an owner to whom materials were supplied fails to establish a breach of the warranty.
2. The builder seeks to do so in this case. The builder contends that material damage to the floorboards occurred after handover.
3. Specifically, it contends, the damage to the floorboards was caused by the owners' acts or omissions after handover, by creating an unusually warm and dry internal environment in the residence. The builder alleges that this was due to a combination of constant heating, combined with the absence of internal and external window shading, both creating a "hot-box" environment in the residence (described in submissions as the "hot-box concept").
4. In Barton v Stiff,[5] some of the bricks used in the construction of a residence, located below the damp course, failed because they were affected by salty groundwater at the land. The Tribunal found that the presence of salty groundwater was found to have been "highly unusual". Notwithstanding this finding, the Tribunal concluded that, in regard to the bricks, the builders were in breach of its absolute warranty they gave in respect of the bricks being good and suitable for purpose.
5. On the builders' appeal, the Supreme Court found that by failing to consider the purpose by reference to the likely groundwater conditions as found, the Tribunal erred in law, and the appeal was allowed.
6. Hargrave J stated:
   1. In my view the reasoning in [the quoted extracts from Independent Broadcasting Authority v EMI Electronics Ltd and BICC Construction Ltd[6]] should be applied in this case. The conclusion in that case as to the content of the obligation as to reasonable fitness for purpose is, in my opinion, a statement as to the way in which the relevant purpose is to be identified. It is not a statement as to the content of the objective standard of reasonable fitness. Nor does it mean that the warranty of fitness for purpose is not absolute. It means that the absolute warranty of fitness for purpose relates to the purpose as properly identified.

1. In this case, there is no cataclysmic event. However, the reasoning in Independent Broadcasting is, in my view, applicable. If this is not the case, it would be tantamount to finding that the contract provided for the builders to be insurers of the house. The parties could not have intended this. I hold that the warranties of fitness for purpose in this case required the builders to provide materials, and completed house, which would be proof against any groundwater conditions likely to be encountered at the land. As the presence of salty groundwater was "highly unusual", the failure of the bricks for this reason does not constitute a breach of those warranties.
2. In terms of the rubric in Barton v Stiff, the builder's case here is that the warranty of fitness for purpose required the builder to provide floorboards, and a completed house, which would be good and suitable for environmental conditions likely to be encountered in the residence. It follows, on the builder's case, that as the environmental conditions created by the owners were allegedly highly unusual, as on the builder's submission, caused the damage to the floorboards, the failure of the floorboards does not constitute a breach of the warranty.

1. The owners deny that they created an unusually warm and dry internal environment in their residence. They also deny that the state of their internal and external window shading, alone or in combination with the atmospheric environment, caused the damage to the floorboards. They also contend that the external climate conditions were nothing out of the ordinary for January in Melbourne. They submit that the hot-box concept is not credible.
2. The owners also chose to lead expert opinion, which I regard as standing in response to the hot-box concept advanced by the builder. The opinion is to the effect that the damage to the floorboards was consistent with the floorboards having been laid with too high a moisture content, or had become wet afterwards, and that the subsequent shrinkage of the floorboards caused the damage to them (described in submissions as the "moisture content concept").
3. The owners also contend that material damage to the floorboards was sufficiently evident in November 2017 (a month prior to handover) as, they contend, refutes the builder's hot-box concept.
4. Has the builder, then, persuaded the Tribunal, on the balance of probabilities, that the cause of the damage to the flooring was by reason of acts or omissions on the part of the owners after the date of supply, being the handover on 13 December 2017?

1. In order to advance its hot-box concept, the builder relied on the expert evidence of Mr Stringer. Mr Stringer is an inspector of timber flooring since March 2007, accredited by Australasian Timber Flooring Association ("AFTA"). He has undertaken over a thousand inspections of timber floors in both residential and commercial properties, and having prepared over 400 reports. He holds a Certificate III in Floor Coverings and Finishing and the AFTA Diploma of Timber Flooring. He is an AFTA Accredited Instructor for the installation and sanding of timber floors.
2. Mr Stringer has concluded that the shrinkage in the floorboards was caused by the ambient conditions in the residence, being warm, low humidity conditions
3. The builder also relies on the expert evidence of Mr Trevor Jeffery, quantity surveyor, registered building practitioner and qualified carpenter.

1. In order to advance its moisture content concept, the owners relied on the expert evidence of Mr John Browning, registered building practitioner.
2. Mr Browning has spent most of his working life managing the renovation, restoration, design construction and fit-out of residential and commercial properties. He has extensive experience in building matters, and in giving evidence before the Tribunal and QCAT. His statement of expertise indicates recent experience in floor tiling defects, timber strip footing failures, sprung timber floor ventilation and failure problems, rising damp and penetrating damp problems.
3. Mr Browning concluded that the cause of the damage, as has led the floorboards being not good and suitable for purpose, was due to shrinkage of the floorboards, following their being laid with too high a moisture content.

1. Mr Scarpella, also an AFTA accredited inspector, conducted an inspection of the dwelling on 24 January 2018, at the request of Mr Lawson of Southern. Mr Grant and Mr Lawson accompanied him. Mr Scarpella concluded in his report:

Upon inspection of the flooring, the primary concern observed appeared to be gapping/peaking along suspected construction joints in the yellow tongue/chipboard sheet flooring beneath the timber flooring (in some instances the length of the room)-accompanied by some isolated edge bonding in these areas.

1. Mr Browning inspected the residence, at the request of the owners, on 30 August 2018, just over 8 months after handover.
2. He subsequently provided a number of reports, including two liability reports dated 7 January 2019, in regard to "flooring" and "other building issues" respectively.
3. In the flooring report dated 7 January 2019 (the "Browning first report"), Mr Browning concluded:
   1. It [is] very likely that the timber was partially or noticeably damp/wet by the time it was stacked inside the house.
   2. The flooring was laid wet virtually immediately after delivery to site as the floor was complete within 3 weeks of delivery to site.

1. The damp/wet...flooring was oversized due to moisture expansion as a result of wet flooring and conditions.[7]
2. Mr Jeffery, engaged by the builder, first inspected the residence on 21 January 2019, about 13 months after handover. He refers to a subsequent report dated 24 May 2019,[8] which was not in evidence.
3. Mr Stringer inspected the residence at the request of the builder on 13 December 2019, 24 months after handover. He had been asked to "assess the cause of concerns regarding gapping and cracks and splits that [had] developed in the floor following completion of the floor". He then measured the moisture content of the floorboards, using a capacitance moisture meter.
4. Mr Jeffery accompanied Mr Stringer on that occasion, to witness the testing procedure then undertaken by Mr Stringer. Mr Grant was also in attendance.
5. Mr Stringer subsequently produced a report dated 18 December 2019 (the "Stringer report"). Mr Stringer concluded in terms that supported the hot- box concept:

The main contributing causes of the problem [were] considered to lie with internal conditions resulting in warm low humidity conditions conducive to shrinkage in both the flooring and subfloor. The consequence of this was the gapping, cupping, splits and cracks observed in the floor. Aspects including heavy use of [hydronic] heating and no window coverings also contributing to maintaining the dry conditions. Additionally, the aspect of the particleboard fixing [was] considered to have contributed to some unevenness in the floor surface.[9]

1. Mr Jeffery, engaged by the builder, produced a report dated 1 July 2020 (the "Jeffery first report"), in which:

(a) he disagreed with Mr Browning's findings in the Browning first report as to the cause of the damage;[10]

(b) he drew attention to specific paragraphs of the Stringer report, providing his own supporting commentary in respect of them, and specifically cited Mr Stringer's conclusions referred to in the previous paragraph, concluding:

I agree with the recommendation by [Mr Stringer], namely that the full replacement of the timber flooring is required. However, in my opinion, the [builder] is not responsible for the purported defects associated with the flooring for the reasons set out [in the Stringer report] and accordingly is not liable for the full replacement of the timber flooring.

1. Mr Browning prepared a report dated 20 August 2020 (the "Browning second report"), in reply to the Jeffery first report which, in addition to other comments, rejected the suggestion that the owners had overheated their residence or had provided insufficient ventilation, as to cause excessive drying of the floorboards.
2. Mr Jeffery produced a further report dated 18 December 2020 (the "Jeffery second report"), in which he replied to the Browning second report.

1. The Browning first report dated 7 January 2019 contained photographs taken by Mr Browning on 30 August 2018, showing:

(a) an example of a split in the body of a floorboard in the flooring of the ground floor living area, and in the stairs, being examples of many such splits;[11]

(b) an example of an opening between joints of floorboards on the north side of the stairs on the upper floor and on the ground floor adjacent to the stairs, many of the floorboards, being examples of many such openings;[12]

(c) an example of a split at a joint between boards caused by edge bonding, in the ground floor rear bedroom, near the family room door;[13]and

(d) an example of cupping of boards, on the ground floor living room at the base of the stairs, being an example of a limited amount of cupping. [14].

1. By an email dated 11 September 2018, Mr Browning requested the owners:

(a) to count the number of floorboards in each room or area; and

(b) count the number of boards that have splits in the timber (without reference to how many splits there may be in an individual board).

1. Mr Browning concluded from a spreadsheet subsequently supplied by the owners dated 15 September 2018 that 26% of the total boards were affected by splitting, and that the incidence of split boards was "throughout" the residence, in particular, the appendix to the Browning first report shows that:

(a) of the 588 boards installed on the ground floor, 138 had splits; and

(b) of the 463 boards installed in the upper floor, 136 had splits.

1. The split boards were distributed among all living areas of the residence, to which I have referred.

1. The builder primarily relies on the analysis conducted and the opinions reached by Mr Stringer in the Stringer Report. In particular, Mr Gurr drew attention to the following:

(a) at section 5.0, Mr Stringer identified the location of the main gaps in the floorboards relative to the particleboard sub-floor.

(b) at section 6.0, Mr Stringer set out his observations, measurements and photos, including his observation as to the absence of eaves and a verandah, his observation that only 2 rooms on the right hand side of the dwelling (being bedrooms 1 and 3) had window coverings and, that on the date of his inspection (13 December 2019), he records the outside temperature being 18° centigrade, inside temperature 21° centigrade and relative humidity 40%), and that the hydronic heating was operating.

(c) Mr Stringer detailed his moisture content readings of the floorboards using capacitance moisture meters (noting that more accurate assessment of moisture content can only be obtained by removing samples from a floor and testing externally by the oven dry method).[15] Mr Stringer states that timber flooring is generally manufactured to be between 10% and 14% moisture content, with average moisture content being between 10% and 12% at time of manufacture. Based on his readings,[16] he concluded that the moisture content of the floorboards at the time of his testing was likely to be in the range of 7% to 9% and, as such, "quite low".[17]

(d) Mr Stringer detailed further moisture content "gradient" testing. That test assesses the difference in moisture through the depth of a board where there are higher gradients in board edges caused by cupping. He notes, firstly, that there was no significant gradient in the boards tested, meaning that similar dry conditions existed both above and below the boards. Mr Stringer further notes (in the third and fourth paragraphs) that:

Measurements over groups of boards of individual boards and of any gaps at board edges assists in determining the condition of the floor at installation and also what has occurred since that time. Such measurements are also useful when assessing affected and unaffected areas of a floor. Also, depending on the situation with the floor, this enables assessment of such aspects as floor expansion or average board width at installation.

In this floor measurements over ten boards were taken in various locations and ranged from 1329mm to 1331mm with most being 1330mm. This indicated that the flooring was installed at or close to the manufactured cover width of 133mm.

(e) Mr Stringer again observed the drying of the timber boards over time, noting that the moisture reading of 7.1% "is considered at the low end of timber moisture contents". Mr Stringer opines that the 5mm gap between the boards "likely coincides with a join in the particleboard subfloor below".[18]

(f) Mr Stringer noted further that:

...gaps are present that have occurred in the solid Tasmanian Oak staircase which was manufactured by different contractors[19] than the ones that did the flooring. This suggests that this timber has also lost moisture since being installed.

(g) Mr Stringer recorded a split in a floorboard close to a join in the particleboard subfloor.

(h) Mr Stringer recorded a gap between boards exceeding 5mm and a split in a board on the upper shoulder of the groove.[20] He notes that "[b]oth of these are likely to fall in close proximity to joins in the particleboard". On that same page (by reference to photo 30) he again observes the close proximity of "a 5mm gap between the floorboards and a 5mm gap between the particleboard" (emphasis added by Mr Gurr).

(i) At section 7.0 of his report, Mr Stringer provided his analysis of observations, measurements and testing. He records that on the date of his inspection on 13 December 2019:

...the hydronic heating was operating, and there were no window coverings throughout the house, other than in the bedrooms. It was considered to be extremely warm inside the house at that time. When considering this floor, it was apparent that the flooring had failed in this environment.

(j) Mr Stringer explains the impact which the warm and dry conditions in the house have on the moisture content of the floorboards, noting that the relatively warm and dry conditions will effectively suck moisture from the boards, and cause them to shrink:

It is important to understand that relative humidity and temperature (if both are maintained) will dictate the moisture content of timber flooring. This is given by the Equilibrium Moisture Content (EMC) table below. As an example, if the temperature is 200 C and the relative humidity is 40% [being the temperature and humidity found on Mr Stringer's inspection] then the flooring in this environment will want to attain a moisture content of about 8%. Therefore, timber at 11% moisture content will over time release moisture from the air until it is close to 8%. As the moisture content decreases so does the width of the board. Low humidity and a loss of moisture content results in shrinkage.[21]

(k) Mr Stringer then continued:

Although temperature and humidity alter throughout the day and night, a floor's response is usually relatively slow, and we often see only minor changes from month to month. In addition to these natural seasonal responses, changes to the internal environment through heating and air-conditioning can either moderate the internal conditions or at times create conditions that are more severe. Temperature has two effects. Firstly, high temperatures within a house will significantly lower the relative humidity making the air drier and flooring more prone to shrinkage and secondly high floor temperatures make it easier for the moisture in timber flooring to be released to the air, again promoting shrinkage.

When evaluating this floor, and with an understanding of the above, it is firstly necessary to consider both the external climate and internal climate within the dwelling. It should be noted that the external climate has a seasonal influence on internal conditions but that, as indicated, the likes of heating and cooling systems can significantly influence actual conditions in the dwelling (emphasis added by Mr Gurr)

(l) Mr Stringer stated that the high temperatures and low humidity in the house have caused the flooring to dry after installation. This, in turn has resulted in cupping, gapping, splits, particleboard movement and floor flatness irregularities.[22]

(m) Mr Stringer refers to an ATFA publication dealing specifically with gapping in floorboards. That publication notes, relevantly:

Gapping in a floor is not necessarily a fault. It is simply the timber reflecting the in-service conditions and is natural. ... To limit gap width, flooring is produced to within a tight moisture content range and this combined with appropriate installation practices generally limits gap widths in floors. Flooring manufactured outside this range, flooring that has become wet (or put in high humidity conditions) prior to or after laying and very dry conditions from sun exposure etc are generally the reasons for wide gaps.... (emphasis added by Mr Gurr)[23]

1. Mr Stringer summarises the factors that he considers "to be contributing to the problem", as follows:
   • Hydronic heating causing high temperature and low humidity
   • The timber flooring and subfloor reacting to these dry conditions by shrinking
   • Subfloor fixing methods
   • No window coverings fitted to protect the floor from additional sun exposure and associated additional heating
   • Movement in the subfloor that has transferred to the upper layer of flooring
   • Small gaps occurring after installation then these gaps filling with coating and as the floor has further shrunk this has bonded these boards together and resulted in some edge bonding in parts of the floor.[24]
2. Mr Gurr relied on Mr Stringer's conclusion:[25]

The main contributing causes of the [gapping and splitting] was considered to lie with internal conditions resulting in warm low humidity conditions conducive to shrinkage in both the flooring and the subfloor. The consequence of this was the gapping, cupping, splits and cracks observed in the floor. Aspects including heavy use of the [hydronic] heating and no window coverings also contributing to maintaining the dry conditions. Additionally, the aspects of the particleboard fixing were considered to have contributed to some unevenness in the floor surface.[26]

1. In the Jeffery first report, Mr Jeffery responded to specific paragraphs of the Stringer report as follows:

When evaluating this floor, and with an understanding of the above, it is firstly necessary to consider both the external climate and internal climate within the dwelling. It should be noted that the external climate as a seasonal influence on internal conditions but that, as indicated, the likes of heating and cooling systems can significantly influence actual conditions in the dwelling.

With regard to the...[Mr Stringer's] comment, I again note that due to the owner's constant heating and lack of window dressing is combined with the lack of air exchange within the dwelling the moisture content of the timber flooring has dropped to around 7-9% which is a major contributing factor [to] the defects experienced in the flooring.

Therefore, regarding this floor, it is likely high temperatures and low humidity caused the flooring to continue to dry after installation and the dwelling has become occupied. Note that timber moisture content was fixed internal conditions and moisture contents were estimated to be 7-9% which is below the 9-14% manufacturing range. Such dry conditions also affecting the particleboard and would result in some shrinkage in it.

The consequence of these conditions on the floor is that it is now experiencing the following as observed in the floor

• cupping
• gapping
• splits
• particleboard movement
• floor flatness irregularities

The...statement by [Mr Stringer] basically concludes that the defects experienced in the five dot points are as a result of the owners' use of heating, cooling and lack of ventilation/air exchange within the dwelling, thereby affecting the flooring and resulting in shrinkage

ATFA specifically notes within its remedial option recommendations that [it is important to understand when Heating, Ventilation and Air Conditioning (HVAC) systems are not used or are used in a way different in the install flooring moisture content requires, or if these systems are completely shut down for an extended period of time, the conditions necessary for the performance of the home, its contents, and the wood floor will be compromised. Without air exchange, sunlight through windows can generate heat, which can lead to drastic fluctuations in humidity levels. This can result in cupping, buckling, gapping, spitting, delamination, edge bonding, and more. Controlling the atmosphere before, during and after installation of wood floor this critical.

The comments of [Mr Stringer] as set out in this item [and further described in items d and e of the Jeffery report] again stress the importance of maintaining the moisture of the timber flooring at its natural levels rather than an artificial level of 7-9% which is what has been experienced in this instance.

The main contributing causes of the problem was considered to lie with internal conditions conducive to shrinkage in both the flooring and subfloor. The consequence of this was the gapping, cupping, splits and cracks observed in the floor. Aspects including heavy use of the and no window coverings also contributing to maintaining the dry conditions. Additionally, the aspects of particleboard fixing were considered to have contributed to some unevenness in the floor surface

In my opinion, the above conclusion by [Mr Stringer] clearly states that the reason for the effective flooring is due to the owners' use of heating, cooling and lack of ventilation/air exchange within the dwelling.

... The fixing method of the particleboard (glue and nails rather than screws) made no difference to the extent of the defects found on the floor. Consequently, in my opinion, the only other rational explanation for the defects flooring is the conclusion drawn by [Stringer], being that the reason for the defective flooring is due to the owners' use of heating, cooling and lack of ventilation/air exchange within the dwelling.

1. The builder also relied on the lay evidence submitted to have been given by Dr Wright that the hydronic heating is kept on throughout the year (including summer) and is maintained at a temperature of between 21 and 25 degrees.[27]

1. Mr Gurr submitted on behalf of the builder that the expert evidence led by the builder - in the form of the unchallenged Stringer report[28] and the expert reports of Mr Jeffery, together with the evidence of Mr Jeffrey provide a plausible explanation for the gapping and cracking in the floorboards.
2. Mr Gurr submitted that the cover width measurements taken by Mr Stringer confirmed that the floorboards were at or about their manufactured cover width "at the time of installation" and, contrary to the owners' expert opinion, were not "laid with too high a moisture content" or "oversized due to moisture expansion".
3. Mr Gurr submitted that Mr Stringer's moisture reading of 7.1% "[is] considered [by Mr Stringer to be] at the low end of timber moisture contents". Mr Stringer opines that the 5mm gap between the boards "likely coincides with a join in the particleboard subfloor below" and is consistent with consistently warm and dry conditions in the residence, resulting in the drying out both the floorboards and the particleboard subfloor, and causing gapping and splitting of the floorboards.
4. The drying and gapping of the staircase-in a manner similar to the gapping seen in the floorboards-supports the conclusion, it was submitted on behalf of the builder, that the cause of the gapping is the warm and dry conditions, and not (as the owners contend) the boards having been laid too wet and subsequently drying.[29]
5. Mr Gurr submitted that the owners' practice of maintaining the temperature between 21 and 25 degrees has the consequence that the internal temperature in the house will always be at least 21 degrees, and that (winter or summer, day and night) the hydronic heating will always operate to prevent the internal temperature of the house from ever falling below 21 degrees. He submitted that this was the "constant internal heat" that led Mr Stringer to conclude had pulled the moisture from the floorboards and caused them to shrink.
6. The builder's case, properly characterised, must be taken to be that it is therefore open to the Tribunal to conclude, based on the expert evidence, that the gapping and splitting in the boards was caused by the constant warm and dry conditions to which the floorboards had been exposed by the owners following installation and handover, and not by reason of the floorboards not being good and suitable for their purpose at the date of handover.

1. I am not satisfied that the builder has proved the hot-box concept on the balance of probabilities, for the following reasons.

Owners' internal heating arrangements were not uncommon

1. The residence is modern, with good insulation. It has hydronic heating.
2. The hydronic heating has a modern, commonly understood control system, that comes on only when the temperature dropped below the set temperature. If the temperature was more than the set temperature, it turns off.
3. Contrary to the submissions on behalf of the builder, I am not satisfied that the evidence establishes that it was the practice of the owners in January 2018 to have maintained the set temperature between 21 and 25 degrees Celsius, or their practice since.
4. The evidence of Dr Wright was as follows:
   1. And it is the case also Dr Wright that the hydronic heating is kept on most of the year in your house?
   2. No we set it on a low-on an automatic low temperature and forget it.
   3. So it is set throughout the year is that correct to be on throughout the year at the relevant time?
   4. Well throughout the year what is the relevant time?
   5. Well I am asking you Dr Wright, you said you set and forget so it is the case that you just set and forget and you just leave it on is that right and if it hits whatever temperature it is set at that is what the thermostat is set at then this is what happens?
   6. Then it stops working yes.
   7. Yes, and that temperature is set at roughly 23 degrees is that right?
   8. No it is set between 1 and 20 (sic)-it depends. At the moment [April 2023] it is set between 21 and 25 and it has been set higher on occasions in winter and lower on occasions in summer (emphasis added).
5. On 13 December 2019, the temperature inside the residence was recorded by Mr Browning as 21 degrees Celsius.
6. On the occasion that Dr Wright provided to Mr Browning photographs of the thermometers installed in the residence, apparently in about August 2020, being the late Australian winter, the temperature was set at 22-23 degrees Celsius.[30]
7. I find that these temperature settings were reasonable, and not excessive.
8. There is also no direct evidence that there was any lack of ventilation. Windows and doors were opened as required, as in any house. Mr Jeffery conceded that lack of outside ventilation is not one of the most significant contributing factors.[31]
9. In January 2018, there were also two air-conditioners in the residence. One was upstairs at the top of the landing above the window. One was on the west wall downstairs. They were installed and functioning before the handover.[32] The one upstairs was for the children to use and was sufficiently effective to cool the bedrooms.[33] The air-conditioner upstairs managed the heat upstairs quite well.[34] If it became uncomfortable for the owners' children upstairs, they turned it on, and it was powerful enough to cool the rooms.[35]

Temperatures in January 2018 were not out of the ordinary

1. The temperatures in January 2018 were not extreme for long periods of time. There were 11 days out of 31 days that were above 30 degrees Celsius. Of those days, there were two days of 41.8 and 42.0 degrees Celsius.[36]
2. There were 10 days out of 31 days that were between 25 and 29 degrees Celsius.
3. The remaining 10 days of January 2018 were between 20 and 24 degrees Celsius.
4. The hydronic heating would have rarely come on. This is not extreme heat, apart from one occasion that lasted 2 days.
5. There was no time when the temperature remained high on consecutive days.
6. These were no unusual or extreme temperatures that would cause unnatural heat in the residence, and even if it became hot, it was not for long. There was no heat wave. In fact, the temperatures at the time would have been considered usual, especially for an Australian summer.

Evidence of external and internal window shading in answer to Mr Stringer's and Mr Jeffery's observations

1. Mr Stringer observed that during his inspection on 13 December 2019:

No verandah or eaves are on the perimeter of the building and only the two rooms on the right-hand side which are bedrooms 1 and 3 [on the ground floor] have window coverings.

With regard to the above [Stringer] comment, I again note that due to the owner's constant heating and lack of window dressing is combined with the lack of air exchange within the dwelling the moisture content of the timber flooring has dropped to around 7-9% which is a major contributing factor of (sic) the defects experienced in the flooring.

1. On 1 December 2017, 10 blinds were installed, in the residence.[37] They are located in the four bedrooms, study, kitchen and common area downstairs. Lace curtains were also installed.[38]

Results of moisture testing on the floorboards shows that they were not excessively dry

1. It is common ground that the drying out of timber flooring if it is laid with too high a moisture content, or the effect of warm low humidity conditions on flooring that is laid with an appropriate moisture content, can result in shrinkage of the boards. Either circumstance can cause gapping, cupping, splits and cracks resulting in the type observed in the floorboards at the residence.
2. I find that timber flooring is generally manufactured to between 9% and 14% moisture content, with average moisture content between 10% and 14%.[39]
3. Southern engaged a transport company Lizio Bros Transport to collect the floorboards and other materials from the timber supplier, Britton Timbers in Dandenong. Lizio delivered the floorboards in five "packs" directly to the property on Monday 7 August 2017. On the same day, Southern invoiced the builder for the supply, delivery and unloading of the floorboards and other materials.[40]
4. Attached to the Britton Timbers despatch docket were the results of timber size checks and moisture readings for each of the five packs, obtained by Britton. Moisture readings were recorded for pack A-7365 on 10 May 2017, pack A-7394 on 11 May 2017 and packs A-8029, A-8030 and A-8033 as having been obtained on 12 July 2017. There is no issue whether the floorboards would have undergone any drying between the dates of the respective moisture readings and the date of delivery to the property. The moisture readings were verified by Britton Timbers as being within its own acceptable tolerances, being stated in the results as "9% +/-2%".
5. Employees of Southern also checked the floorboards for moisture content and cover width of the floorboards on Monday 7 August 2017 upon the flooring being delivered to the property and also afterwards, when the following moisture content readings were obtained:

Upon completion of installation on 11 August 2017

1. Mr Ben Lawson gave evidence that the readings were taken from different boards selected from various packs. Mr Lawson correctly concluded from these figures that the average moisture content of the boards over the installation period was therefore 9.6%.
2. The AFTA certified timber inspector Mr Scarpella who, it will be recalled, inspected the property on 24 January 2018, stated in his report:

Timber sample measures demonstrated only marginal dimensional variation and moisture content estimates were at the lower end of the acceptable moisture range (emphasis added).[41]

1. Mr Browning was the next person to take moisture readings on 30 August 2018. He stated in the Browning first report:

The readings [taken by him and set out in the Browning first report] range from a low of 7.1% to a high of 9.9% with an overall average of 8.7%. These readings, with the exception of one at 7.1% are within the tolerances of 9.5% +/- 2% = 7.5% to 11.5% detailed in [Britton Timbers] test sheets [apparently] attached to the [Scarpella report] (emphasis added).

1. Following his inspection on 13 December 2019, almost 16 months after Mr Browning's inspection and 24 months after handover, Mr Stringer stated:

Photos 4 to 8 show resistance moisture meter readings of the particleboard and floorboards all close to 7% uncorrected...Corrected for species and temperature, the solid timber would have a 0% to +2% adjustment to the reading. Note that with particleboard readings are only indicative. Based on the readings in the solid timber estimated moisture contents would likely be in the range from 7% to 9% and as such quite low (emphasis added).

1. The builder does not rely on any material specifying what level of dryness in floorboards, or what level of ambient heat and/or dryness may cause damage to floorboards of the type and extent as occurred here.

Mr Stringer's evidence not sufficiently persuasive

1. Mr Stringer did not consider the implications upon the hot-box concept arising from damage in the flooring reported on about 17 November 2017 and 13 December 2017 (see further below).
2. Mr Stringer carried out his examination on 13 December 2019, which was two years after the owners moved into their residence. This was, in my view, too long a time period after the damage occurred to the flooring from November 2017 and, more broadly, from January 2018. I am not satisfied, especially given the evidence of external weather conditions and internal temperatures, that in the absence of readings taken over the period since December 2017 about the heating of the residence, Mr Stringer's opinion can regarded as other than professional speculation.
3. The moisture level readings obtained by Mr Stringer during his inspection on 13 December 2019, when he observed they were at the "lower end" of timber moisture requirements do not, in my view, provide a sufficient basis for conjecture about the cause of damaged flooring at the date of handover of the residence.
4. He did not consider any scenario other than that the claimed internal temperatures in the residence were conducive to a hot-box, as now submitted by the builder. Other scenarios ought to have been considered, because it may be fairly considered that it is not within the common experience of families including children to be living in the warm low humidity hot-box conditions suggested by him.
5. Mr Stringer made no comment on the observations made by Mr Browning in the Browning first report that the moisture readings taken by Mr Browning on 30 August 2018 suggested that they remained within the tolerances prescribed by the supplier Britton Timbers at the date of timber supply, that is to say, 9.5% +/- 2%. It would have been open to have given consideration to the fact that moisture levels, being still within tolerance after 12 months of handover, to whether moisture levels were higher at date of installation (as opined by Mr Browning) and they were reduced by reason of the claimed hot-box effect or, if they were within tolerance at date of handover as the evidence suggests, there was no sufficient hot-box effect as might have been supposed to have reduced the moisture levels below tolerance.
6. Mr Stringer did not carry out any scientific test or examination, or obtain any records that as may have justified his conclusions. What was the measure of the heat in the residence over the relevant period of time? What were the readings of the moisture content in the air over a period of time? There were only insights available to Mr Stringer on a part of the day of inspection. He does not appear to have checked what temperature was set in the residence, other than on that day He did not obtain sufficient information as to the effect of the heating system in the residence over the two-year period following handover prior to his inspection, including the owners' general practices in connection with the hydronic heating. In these circumstances, Mr Stringer still concluded that the defective flooring was mainly caused by the owners' hydronic heating system, and lack of windows and coverings. In the absence of testing, examination or a better history obtained by the owners, I do not consider that there is a sufficient basis for Mr Stringer reaching his conclusions so long after handover.
7. Further, Mr Stringer was factually incorrect as to his assertion concerning the lack of window coverings. Mr Stringer did not identify and to take into account the effect of the two air conditioners in the residence, the installation of 10 blinds, lace curtains. There is an insufficient basis on which he formed his conclusions about the hot-box concept.[42]

Owner's election not to cross-examine Mr Stringer

1. The builder also filed a witness statement from Mr Stringer in support of his expert report which complied with the VCAT Practice Note for the provision of expert evidence.
2. Mr Stringer was made available for cross-examination.[43] Counsel for the owners, despite advising the Tribunal that he intended to cross-examine Mr Stringer, elected not to do so.[44] The consequence of this forensic decision, Mr Gurr submitted on behalf of the builder, is that the opinions and reasoning in the Stringer report, directly refuting the owners' moisture content case with respect to the cause of the gapping and cracking in the floorboards-are unchallenged by the owners. Mr Gurr submitted that no parts of Mr Browning's moisture content case or Mr Browning's conjecture that the floorboards must have become wet at some time after they were laid, were put to Mr Stringer by way of a challenge to the opinions and reasoning contained in the Stringer report. He submitted that the Stringer report provides a compelling, well-reasoned and unchallenged alternative explanation from a qualified expert as to the cause of the gapping and cracking of the floorboards, which directly contradicts the owners' case. He submitted that, in consequence, the builder has proved its case on the balance of probabilities.
3. An election not to cross-examine an expert called by an opposing party is attended by a risk of a finding of the very nature urged upon the Tribunal by the builder's counsel. In the circumstances, though, I am not persuaded to make such a finding. For the reasons to which I have referred, I do not consider that the opinion expressed by Mr Stringer was sufficiently credible as to give rise to an obligation upon counsel for owners to challenge the opinion by cross-examination, and the submission is rejected.

Evidence of Mr Jeffery not sufficiently persuasive on the issue

1. In the Jeffery first report, Mr Jeffery responded to the findings in the Stringer report. In my view, as demonstrated by the above excerpts from the first Jeffery report, Mr Jeffery accepted Mr Stringer's findings, without analysis and independent verification. Mr Jeffery did not carry out the necessary investigations as may have verified or supported Mr Stringer's conclusions.
2. It can be seen from the excerpts that Mr Jeffery's opinions are simply supportive of the views of Mr Stringer, without having undertaken any additional analysis as may have supported the hot-box concept.
3. It is not possible with the required degree of confidence to identify the assumptions and facts upon which Mr Jeffery has founded his opinions in relation to the heat and its effects.[45]
   1. Further, while the Tribunal is not bound by the Evidence Act 2005, the rule stated as set by Dixon J in Wilson are consistent with VCAT's Practice Note PNVCAT 2: Expert Evidence. The Practice Note defines an 'expert witness' as 'A person who has specialised knowledge based on the person's training, study or experience' (at paragraph 4). Paragraph 1 provides:
      1. Expert witness evidence may be relied upon by the Tribunal to form an opinion about a specialised or technical matter that is relevant to the issues to be determined in a proceeding. Where expert evidence is provided in the form of a written report and/or the expert being called as a witness, it is important that the expert's opinion is soundly based, complete, impartial, dispassionate, and within the scope of his or her expertise. [emphasis added].[46]
   2. Mr Jeffery's evidence, in many significant respects, did not meet the requirement that his expert opinion should have been based on a relevant specialty about measurement of and effect of heating on the floorboards; and also based on facts either instructed or identified as assumed, and which facts and matters are established by other evidence.
   3. I am not persuaded that, despite his extensive qualifications and experience, Mr Jeffery's opinion about the heat and its effects on the floorboards are within his specialised knowledge as puts him in a position to support Mr Stringer's opinions.

Timber damage to floorboards in the stairs does not have the same characteristics as the floorboards in the rest of the residence

1. The timber damage to the floorboards comprising the stairs, not having been supplied by Britton Timbers, are relied on by the builder as supporting the hot-box concept. That is to say, the dry, warm conditions affected both timbers equally. I do not consider that the damage to the floorboards comprising the stairs has the same characteristics as the floorboards in the rest of the residence. Mr Browning expressed the view that there is not the same gapping or splitting on the stairs, nor is the extent of the splitting and cupping the same. There was only gapping in the outer seams of the landing. Mr Browning said there was some opening up of the joints of individual pieces of timber particularly on the landing where the width of the pieces of timber is quite wide.[47] Mr Browning observed that there will always be some shrinkage in the flooring of the stairs, particularly at wide panels where you go up a flight of stairs and the treads on the stairs are maybe 250-260 mm, deep. The pieces of timber in the corner will tend to shrink and show a gap.[48]
2. I am unable to find support for the hot-box concept by the nature of damage to the stairs.

Evidence of relevant damage having occurred prior to handover

1. The evidence perhaps most at odds with the hot-box concept, I consider, is that of relevant damage to the floorboards having occurred prior to handover, and shortly afterwards, as recorded in mid-January 2018.

115. The owners and Mr Grant of the builder undertook an inspection of the residence to identify defects, about a month before handover on 16 November 2017.**

1. On 17 November 2017, Mr Grant emailed the owners, setting out the "final defects agreed upon yesterday to be rectified".
2. Mr Grant denied that there was any cracking, gapping or cupping of the flooring on 16 November 2017. He stated that when the owners inspected the house on 16 November 2017 to identify defects to be rectified, the owners did not raise any issues concerning cracking, gapping or cupping of the flooring.[49] He relies on the "final defects list" which did not refer to any cracking, gapping or cupping of the flooring.

1. The owners state that the floorboards started to show signs of damage as early as 17 November 2017. At this time, they allege, there was a significant crack that led along the floor to the front door. At this stage, the owners conceded that damage was in a small area.[50]
2. There was, however, also evidence of cracking and cupping in the floorboards.[51] In evidence, Mr Grant of the builder observed gapping in the upper floor, at the front of the house, near the octagonal shaped windows.[52]
3. Mr Grant considered it to be serious enough for him to take some photographs[53], and send them by text message dated 17 November 2017 to Mr Lawson of Southern, describing the photos as "Saturn St Balwyn. Second story. Mr Lawson replied:

Is that the that the top story? Has this been handed over yet? Looks like the timber's dried out a bit.[54]

1. Mr Grant estimated that the gapping was probably 900 mm,[55] and he conceded at the hearing that there was splitting.[56]

1. On 13 December 2017, the owners contend that they attended a handover inspection at the residence, and at the end of the inspection, Mr Grant gave them the occupancy permit.
2. There is a dispute concerning whether Dr Masik attended the inspection, and whether the builder provided to the owners a Southern Fact Sheet about care of the timber floor.
3. I find that there was still an issue with the floorboards in the entrance hallway.[57] There was evidence of cupping.[58] Dr Masik identified it, and told Mr Grant.[59] Mr Grant told the owners not to worry as it can be fixed.[60] The owners accepted Mr Grant's proposal, by allowing the residence to settle for a month or two. He would then cut out those floorboards and replace them.[61]
4. Dr Masik thought that the defects were going to be rectified and, as they then affected a small area, she was content with Mr Grant's reassurance, which the owners contend was reasonable in the context.[62]
5. The owners state that in good faith and based upon Mr Grant's comments, they then paid the final instalment of the contract price in the amount of $12,697 and took possession of the residence.
6. Within a very short period of time after handover, peaking, cracking and large gaps had appeared in the flooring on both levels. On 15 January 2018, Mr Grant sent an email to Mr Ben Lawson and Mr Toby Lawson of Southern, a series of photographs about the defects and stated:

I want to raise an issue with the floor at the above project address. There is some peaking, cracking and large gaps appearing on both levels of floor.

I sent a couple of photos to Toby [on 17 November 2017] and discussed we will look at it after another couple of months but unfortunately it has worsened and happened in quite a few locations around the house. Could we arrange a time to meet together on site?

1. Mr Grant attached to the email a number of photographs, some of which he had earlier sent by his November 2017 text message.[63]
2. The photos showed the peaking, cracking and large gaps. As far as Mr Grant was able to determine during cross-examination, the photos were of the floorboards adjacent to the upper floor octagonal shaped windows on the southern side of the residence, and also floorboards that are adjacent to the upper floor French doors leading to the northern balcony. The photographs also showed "edge bonding", where the polyurethane polish has penetrated gaps between board edges, and subsequently has bonded sections of adjacent boards together, where shrinkage gaps have otherwise formed between the very same boards.[64] This was about 32 days after handover.
3. The owners also gave evidence that:
   1. Within weeks, the cracking, splitting and cupping of the floorboards continued and became more and more noticeable. While living in our home, the sound of the floor splitting under pressure was significant. It sounded like a rifle shot. Later, one of our neighbours complained and said not to shoot rifles in a suburban area.
   2. The cracking sound occurred at various times but at night it was the worst as we, and our girls, were suddenly awoken with what sounded like a rifle shot.[65]
4. The owners were away in New Zealand from 15-26 January 2018.
5. Matters were sufficiently serious that Mr Toby Lawson of Southern commissioned a representative from AFTA Mr Scarpella, to attend the residence. On about 15 January 2018, an inspection was arranged for 24 January 2018. Mr Scarpella accepted there were defects in the flooring:

Concerns have been raised in regard to gapping/shrinkage of floorboards in this recently completed new home construction. Upon inspection of the flooring the primary concern appeared to be gapping/peaking along suspected construction joints in the yellowtongue/chipboard sheet flooring beneath the timber flooring (in some instances the length of the room)-accompanied by isolated edge bonding in these areas. Timber sample measures demonstrated only marginal dimensional variation and moisture content estimates were at the lower end of the acceptable moisture range. Some isolated "checking" or cracking was identified in boards in boards which may have occurred under different internal conditions than observed during inspection...

...if the subfloor can be confirmed to be stable and well fixed and that the timber is observed by the supplier, then the floor may be deemed suitable for amelioration/rectification. In this instance it is considered likely that such works would be most successful if initiated after a further measure of seasonal adjustment has occurred (cooler period - March / April) when the timbers may again adjust slightly. Then new boards can be "spliced in" where required and the remainder of the floor repaired, re-sanded and refinished. These works completed successfully should bring the floor to a condition suitable for a floor of this type and age.

1. The Scarpella report does not identify where in the residence the three photographs included in the report were taken.
2. In summary, I consider that the evidence demonstrates sufficient instances of damage having occurred to the floorboards prior to and upon the owners' occupying the residence as to place in doubt the hot-box concept.

Moisture content concept relied on by the owners not proved. Does this lead to the conclusion that the builder has proved the hot-box concept?

1. The evidence establishes,[66]and the experts accept,[67] that the timber floorboards installed at the site were manufactured with a moisture content within the appropriate range.
2. The evidence also establishes,[68]and the experts also accept,[69] that the moisture content of the floorboards at the time they were laid was within the appropriate range.
3. The evidence of Mr Grant establishes that the floorboards were not exposed to rain either during delivery or unloading.
4. There is also no sufficiently probative evidence, and it was not put to either Mr Grant or Mr Stringer, that the floorboards became wet after laying.[70]
5. It may be suggested that this reasonably leads to the conclusion that the builder has proved the hot-box concept on the balance of probabilities. I consider that the fact that the proposition advanced by the owners to the effect that the damage was caused by excessive moisture in the floorboards at the time of their supply is not sustained on the evidence does not reasonably lead to this conclusion. I have not been persuaded on the evidence before me that the cause of the particular damage to the floorboards (being not inconsistent with drying shrinkage of timber floorboards) is a binary choice between drying shrinkage on the one hand as propounded by the owners' moisture content concept, and shrinkage caused by warm, dry conditions by reason of the alleged hot-box effect propounded on behalf of the builder.

1. I am not satisfied that the builder has sufficiently demonstrated the hot-box concept to establish a plausible explanation for the cause of the damage to the floorboards. The builder has therefore not proved on the balance of probabilities that, at handover, the floorboards were good and suitable for the purpose for which they were to be used, and that their subsequent failure was caused by events for which the owners were responsible.
2. The builder's hot-box concept is rejected as a credible explanation for the damage to the floorboards as caused them to be not suitable for the purpose for which they were to be used.
3. It becomes unnecessary for me to consider whether the owners have demonstrated that damage to the floorboards was caused by the moisture content concept.

1. I am not satisfied on the evidence that, in relation to the floorboards, the owners have demonstrated any breaches by the builder of:

(a) the warranty in s8(d) of the DBCA, the owners not having made out any failure by the builder to exercise reasonable care and skill in the installation of the floorboards;

(b) the warranty on s8(e) of the DBCA, the applicable test being whether the residence was in a condition at handover that made it injurious to health;[71] or

(c) the warranty in s8(f) of the DBCA, the Contract having not stated the particular purpose for which the work was required, or the result which the owners wished the work to achieve to show that the owners were relying on the builder's skill and judgement.

1. These claims, and the claim in negligence, are dismissed.

1. By his further report dated 7 January 2019 on issues other than the flooring, Mr Browning stated:

The wall above the balcony floor level has not been built with drainage from the cavity behind the rendered external foamboard cladding onto the balcony tiles surface. As a result, water is trapped behind the skirting tiles, resulting in damp damage to the plasterboard ground floor ceiling beneath. This appears as damp patches on the ground floor ceiling.[72]

1. By the Jeffery first report, Mr Jeffery stated:

[I] was unable to view what had been installed "behind the rendered external foamboard cladding" as the works in the stated area were completed at the time of [my] inspection leaving them inaccessible.

The further report of Mr Browning does not provide any photos of the "damp damage to the plasterboard ground floor ceiling beneath". At the time of my inspection there were no visible damp patches to the ground floor ceiling beneath.

[Mr Browning] does not provide any moisture readings to prove there was any "damp damage to the plasterboard ground floor ceiling beneath. At the time of my inspection the moisture readings taken by me provided no evidence of any damp patches to the ground floor ceiling beneath. In my opinion this reported item is not a defect.

1. By the Browning second report, Mr Browning stated in response:

Inspection of the ceiling cavity was not possible but I rely on my extensive experience in this area in terms of construction of drainage to walls at balconies to identify the cause of the water entry. My inspection of this detail did not disclose any drainage provision from behind the wall, which is the cause of water entry in every case I have inspected.

At the time of my inspection the plasterboard sheeting to the ceiling was not dished, as this can take some years to appear depending on the amount of water entry. I note that the rate of water entry increases over time as a result of moisture related movement opening up split joints.

1. By the Jeffery second report, Mr Jeffery observes:

There is no factual evidence for the alleged defect. Mr Browning has not been able to inspect the ceiling cavity or prove that there has been any water entry in the ceiling cavity.

1. At best for the owner, I consider that there is no allegation of evidence of water entry or leaking; but, rather, that the detail that Mr Browning has assumed the builder has followed is prone to water entry. The only basis for Mr Browning's belief that the builder has built the balcony wall in accordance with the detail he has alleged is because that is the way builders typically build it. When I pressed Mr Browning as to whether the builder had in fact followed the detail drawn by him, Mr Browning was unable to give a conclusive answer.[73]
2. When asked if he had observed any evidence of leaking or damage caused by water ingress during any of his inspections, Mr Browning confirmed that he had not. He argued that he did not expect there to be any such evidence, as it was too early and that it could take several years for this problem to appear. When it was pointed out him that at the time of the hearing it had been almost six years since the issuing of the Occupancy Permit, and yet he still had not obtained any evidence of water damage or ingress, Mr Browning conceded that he did not, and stated that could not recall whether or not he had made any enquiries of the owners on the issue.[74]
3. When there is water ingress upon a plaster ceiling, it invariably leaves a permanent mark on the ceiling, which would remain even after the plaster had dried. Neither Dr Masik or Dr Wright in their written statements, statements in reply nor in evidence in chief and cross-examination, gave evidence that they had observed any form of water damage as a result of the alleged north balcony water entry.
4. Mr Browning had earlier given evidence, when speaking about the nature of the alleged defect and consequence of the alleged water entry said that:

...you get a little bit of evidence and then six months later you got a major amount of evidence including its raining outside and I've got water cascading down from the ceiling...;

and went on to say that:

...so what I'm trying to explain here is the way the water gets inside the building, because you've got - and apparently water type or weather type 45 external façade, and then you've got a nice line of, you know, tiles forming a skirting around the edge of a - a balcony, in this case, but you're getting water galore coming inside the building...[75](

1. It is noted that this evidence concerns what Mr Browning would expect to see happening; not what he in fact observed at the residence. Despite this, however, none of the evidence of either the owners or their expert established any proof of water ingress from the 1st floor balcony. Both Mr Jeffrey and Mr Grant gave direct evidence that they had inspected the ceiling and observed no evidence of any water damage. Mr Grant was not cross-examined on this evidence. Mr Jeffrey firmly maintained his position that there was no evidence of a leak.
2. On the balance of probabilities, I find that the owners have failed to prove that these works were defective, and the claim is rejected.

1. A reasonable period of time has passed since the hearing. The Tribunal is not aware of the extent to which the owners have incurred the cost of rectification of the damaged floorboards, if at all. Further evidence is required, to be fair to both parties, in order to be satisfied of the quantum of damages caused by the breach.
2. If the owners have incurred the cost of rectification, it may also be fair within the meaning of s53 of the DBCA to award damages in nature of interest in respect of certain of monies spent because they have been deprived of the alternative uses of that money.
3. If they have not, it may be fair to account for inflation in respect of other items of damage because, in respect of expenditure the owners have yet to incur, the damages awarded by the Tribunal will not compensate them for the notorious increase in residential building construction prices in Victoria, as recorded quarterly by the Australian Bureau of Statistics.
4. I therefore propose to provide the applicant with an opportunity to provide material as to where matters now stand. If rectification of the floorboards has not been carried out, then I invite their submissions on inflation. The builder will of course have an opportunity to respond. I make the accompanying orders.

[1] See Appendix B to the Browning first report at TB 611.

[2] For the reasons expressed below, I am not satisfied that the owners have made out breaches of ss 8(d)-(f) of the DBCA.

[3] Barton v Stiff [2006] VSC 307.

[4] See builder's outline of submissions at [8]. [10], [54]-[58], [80], [102] and builder's reply at [39].

[6] (1978) 11 Build LR 38.

[8] TB 804 (the front page of Mr Jeffery's report dated 18 December 2020).

[15] Samples of boards and of the particleboard subfloor were in fact removed and tested using the oven dry method. The results of that testing, undertaken by ATFA, are at TB 955. The reference to "PB" in these testing results is to the yellow tongue particle board substrate.

[16] Which, as set out in the photographs at TB 941, shows moisture readings in the range of 7.3% to 7.6%.

[17] These moisture readings were significantly lower than the moisture readings taken by the Southern when the boards were laid between 7 and 11 August 2017.

[19] The stairs were manufactured and installed by Tarosa Stairs. See entries in the Agreed Chronology dated 10 July 2017; 4 August 2017; 28 August 2017; 1 September 2017.

[26] Mr Jeffery and Mr Browning both agreed in subsequent reports that the manner of the particleboard fixing did not cause any of the gapping or splitting of the floorboards - see TB 715 - 716 (Mr Jeffery) and TB 696 at [53] (Mr Browning). Nor did Mr Stringer reach that conclusion, opining only that the manner of particleboard fixing 'contributed to some unevenness'.

1. [28] Mr Stringer expanded on this opinion in the Stringer report at paragraph [12] of his witness statement dated 19 April 2022.

[29] Mr Jeffery reached a similar conclusion - see Jeffery second report dated at TB 823 - 824.

[30] Evidence of Dr Wright T1 P340 L5-7; see Jeffery second Report at TB 694-695.

[31] Evidence of Mr Jeffery T2 P135 L16-24.

[32] Dr Wright's evidence T1 P369 L1-9 and L29-L31.

[33] Dr Wright's evidence T1 P370 L1-5.

[34] Dr Wright's evidence T1 P338 L8-15.

[35] Dr Wright's evidence at T1 P338 L8-15.

[37] Refer to statement of account for period 1 November 2017 to 28 February 2018 from KiwiFit, who installed the blinds.

[38] Dr Masik's evidence T1 P375 L28 to 376 L2

[39] See the Sringer report p6 at TB 941.

[41] TB 1124. An attached Oven Dry Testing report dated 20 December 2019 (sic), apparently being the moisture content estimates referred to by Mr Scarpella, stated that the moisture ranges were also reported over 5 sample areas on both the ground and upper floors as being between 8.2% and 9.3% (TB 1126).

[42] He identified only one measurement of the temperature in the residence, but he did not identify where and how he obtained this information.

[43] See day 1 at TR 26.22 - TR 27.23; TR 61.9 - TR 63.20; TR 64.4-19; day 2 at TR 97.10-17; TR 144.13 - TR 145.17; TR 160.27 - TR 161.17; TR 165.28 - TR 166.13; TR 167.27 - TR 171.18; TR 172.3 - 13; TR 235.20-24; day 3 at TR 289.21 -TR 290.13; TR 297.21-26; TR 312.15 - TR 313.28; TR 317.27 - TR 318.8; day 4 at TR 477.7 -27.

[44] Day 1 transcript at TR 64.4-19.

[45] See Wilson v Bauer Media (Ruling No 7) [2027] VSC 357 at [14]- [17] per Dixon J.

[46] These principles were followed by Senior Kirton Anderson v Holden Peel Projects Pty Ltd (Building and Property) [2020] VCAT 538 at [24]-[25].

[47]. Mr Browning's Evidence at T2 P129 L23-28

[48] Mr Browning's Evidence at T2 P129 L41 - 47.

[49] Mr Grant's WS in Reply dated 19 April 2022 at [14].

[50] Dr Masik's evidence T1 P392 L19-22.

[51] Dr Masik's evidence T1 P379 L8-L14.

[52] Mr Grant's evidence T1 P435 to P437 L8 and T1 P442 L12.

[55] Mr Grant's evidence T1 P440 L8 to P442 L14.

[57] Dr Masik's evidence T1 P390 L9-11.

[58] Dr Masik's evidence T1 P391 L14-15.

[59] Dr Masik's evidence T1 P380 L18-28.

[60] Dr Masik's evidence T1 P382 L4-5 and T1 P380 L26 - 28.

[61] Dr Wright's WS at [16]. Dr Wright's evidence at T1 P344 L29 - P345 L6

[62] Dr Masik's evidence at T1 P382 L9-13 and at T1 P386 L 29-31.

[63] During cross-examination, Mr Grant identified the "November photographs" as those appearing at TB481-486 and stated that the balance of the photographs from the bottom of TB486 to TB493 were photographs he took on 15 January 2018.

[65] Dr Wright's statement at [17]-[18].

[66] See Britton Timbers Despatch Docket and pack reports dated between May and July 2017 at TB 465 - 473.

[67] See Jeffery first report dated 1 July 2020 (TB 701) at TB 711 and Jeffery second report at TB 819

[68] See Southern Timber Floors moisture readings and cover widths taken between 7 and 11 August 2017 at TB 446.

[69] See Jeffery second report at TB 825, Browning second report at TB 693 and Stringer report at TB 937.

[70] Mr Browning's suggestion that the floorboards must have been exposed to moisture after they were laid (see 25 November 2022 TR: P-46:11 - 47:44) is speculative and is rejected. In oral evidence, Mr Jeffery rejected the suggestion, noting that had the boards become wet after they were laid, they would have exhibited problems entirely different from those subsequently observed - see evidence of Mr Jeffery on 25 November 2022 TR: P-71:46 - 72:11.

[71] See Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612 at [100]- [107].

[73] 6 April 2023: TR 230:10 - 27.

[74] 6 April 2023: TR 221:32 - TR 222:27.

1. [75] 6 April 2023: TR 205:37 - TR 206:2).