Chelbrooke Homes Pty Ltd v Russell and Anor [2011] QCAT 278

CITATION: Chelbrooke Homes Pty Ltd v Russell and Anor [2011] QCAT 278 PARTIES: Chelbrooke Homes Pty Ltd v Michael Russell and Charmaine Russell APPLICATION NUMBER: BD159-09 MATTER TYPE: Building matters HEARING DATE: 21, 22, 23, 24 and 25 February 2011 HEARD AT: Brisbane DECISION OF: R F King-Scott, Member DELIVERED ON: 28 April 2011 DELIVERED AT: Brisbane ORDERS MADE: The Respondents pay the Applicant the sum of $91,576.88 $97,332.69 by 4:00 pm on 10 June 2011. CATCHWORDS: BUILDING CONTRACT – Wrongful repudiation – Calculation of time under the contract – Defective work – Whether AS 1684 or AS 1720 appropriate to the roof design – Is a roof truss chord a rafter? Sopov and Another v Kane Constructions Pty Ltd (2007) 20 VR 127 DTR Nominees Pty Ltd V Mona Homes Pty Ltd (1978) 138 CLR 423 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr Codd of Counsel, instructed by O‘Keefe Mahoney Bennett Solicitors RESPONDENT: Mr Hitchcock of Rudkin Hitchcock Lawyers -- 1 of 44 -- 2 REASONS FOR DECISION – AMENDED Introduction [1] This is a building dispute between the Applicant Builder, Chelbrooke Homes Pty Ltd, and the Respondent Owner, Michael and Charmaine Russell. [2] The Owner entered into a regulated contract under the Domestic Building Contracts Act 2000 (DBCA) with the Builder to construct a 794.2m² house at Lot 11 Samuel Drive for $790,470. [3] During the course of the contract, the Owner, represented by the male respondent, Michael Russell, expressed concern on a number of issues relating to the Builder's performance and progress with the contract. [4] The issues were pleaded under the former legislation, the Commercial and Consumer Tribunal Act 2003 (CCTA), and included a counterclaim by the Owner. The proceeding is a pending proceeding within the definition of section 245 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT), and jurisdiction to hear the proceeding was vested in this Tribunal. [5] At the outset of the hearing I asked the parties‘ legal advisers to identify the issues they required the Tribunal to determine. Counsel for the Builder, Mr Codd, identified those issues as follows:– (a) whether or not practical completion was achieved; (b) whether or not the final claim became payable or, in the alternative, the determination of the amount payable as damages; (c) whether or not termination was effected by the applicant or the respondent, and the proper basis upon which termination is found to have been effected; (d) the calculation of time under the contract, and whether or not liquidated damages are applicable; and (e) the extent, nature and approach to the evaluation of the alleged defects. [6] Mr Hitchcock, solicitor for the Owner, agreed that those were the issues for the Tribunal‘s determination. [7] A claim for general damages by the Owner for distress, upset and humiliation was abandoned at the commencement of the hearing. [8] In accordance with directions given by the Tribunal‘s predecessor under the CCTA, evidence in chief was directed to be in the form of sworn statements. Expert witnesses were called by both sides. The experts were:– Eric Fox, a registered professional engineer; Eldon Bottcher, a registered professional architect; Desmond Salmon, a registered Builder; -- 2 of 44 -- 3 Jeffrey Hills, a registered professional engineer and registered Builder. [9] All experts were called and cross-examined. There had been an earlier conclave of experts comprising Mr Fox and Mr Hills, at the direction of the Tribunal, and as a consequence of the conclave some issues were agreed. I will refer to those agreed issues later in these reasons. [10] Of the lay witnesses, the Builder called:– Stephen Jon Goulding, the current Operation Manager of the Builder; Peter Riewoldt, Director and Owner of the Builder, Chelbrooke Homes Pty Ltd; Peter Wheatley, Supervising Builder; Neville Holland, previous Operations Manager of the Builder. [11] Michael Russell was the only lay witness called by the Owner. [12] Before considering whether Practical Completion has been achieved, it is necessary to determine the Contract Period from which the Date for Practical Completion can then be determined. The Calculation of Time Under the Contract. [13] The contract is described as a Residential Building Contract, and comprises the completed contractual schedule published by the Queensland Master Builders Association, September 2001 edition. The basic home price appears to be $559,119 with inclusions of $231,280 particularised in an annexure to the Schedule entitled Chelbrooke Homes Inclusion. [14] The Queensland Master Builders Association, September 2001 edition General Conditions of Contract are also annexed and form part of the contract. Eight drawings are also annexed. All these documents are contained in Exhibit 1 and comprise the contractual documentation. [15] Item 10 of the Schedule contains the Date for Practical Completion provisions. It provides that practical completion will be 266 days from the date of commencement. Item 9 of the Schedule provides that the Date of Commencement is to be determined in accordance with clause 8. [16] Clause 8 provides that ―The Builder must commence the Works on Land or before the date (if any) specified in Item 9 of the Schedule; or within 10 days of receiving all of the following‖… provision is then made for the delivery of certain documentation the last document being a notice from a lending body. The Works are defined as meaning ―… the whole of the work to be carried out by the Builder under the contract, a description of which is contained in Item 3 of the Schedule, includes variations to the Works‖. Item 3 is the Description of Work and refers to ―Construction of -- 3 of 44 -- 4 a New Home‖. [17] Although the Owners did not provide a notice from the lending authority that the Works may commence until 9 February 20071, it is not disputed that on 5 February 2007 a subcontractor, John Burrows, excavated the house pad2. Quite clearly, the excavation comprised ―Works‖ within the meaning of that term as contained in the contract. Mr Riewoldt‘s contention was that such work was done at the Builder‘s risk and before the requisite financial approval was given, because the sub-contractor was going on holidays and would be away for three weeks. He contended that the starting date was 16 February 2007 when the substantive part of the works was commenced. I find that the Works commenced on 5 February 2007. [18] The original date for completion of 266 days from 5 February 2007 sets the completion date as 29 October 2007. It is argued by the Owner that the 28 days allowed for the Christmas break in 2006 should not be included because the Works did not actually commence until after that time. It is further argued that an adjustment should be made to delete the 28 day Christmas break pursuant to section 18(6) of the DBCA. [19] Section 18(6) provides that ‗If the contract is varied but the building contractor has not complied with a variation provision for the variation, the stated completion date or period- (a) must be adjusted to take account of any reduction in the number of days required to carry out subject work; and (b) may, with the tribunal's approval given on an application made, as provided under the QCAT Act, to the tribunal by the building contractor, be adjusted to take account of the additional days required to carry out the subject work.‘ [20] The word ―variation‖ is defined in section 16 as an addition of the domestic building work to the subject work; or an omission from the subject work. I read the definition as meaning an omission ―of domestic building work‖ from the subject work. [21] The Owner argues that by commencing the Works at a date after the 2006 Christmas break the contract had been varied, presumably, by conduct. In my opinion, section 18(6) relates to variation by the addition or omission of domestic building work and not to the calculation of the construction period. It is true that the passage of time has caused the allowance of 28 days for the Christmas 2006 break to be rendered otiose. However, it would be unreasonable at a later stage of the contract for the Owners to reduce the construction period when the Builder has programmed his works in reliance on the construction period 1 Letter Westpac Bank to Builder 30 January 2007 date stamped received 9 February 2007 Ex 6 page 627. 2 Tax invoice $2,194.50 Ex 6 page 360. -- 4 of 44 -- 5 agreed to in the contract. In any event, any variation whether under the contract or under statute, requires notice in writing (unless it is a matter of urgency). There is no such notice from the Owner. The first time it was raised was on 19 May 2008 when the construction was nearing completion. At that time, the Owner wrote to the Builder in terms that he had found a discrepancy in the contract and asserted that the construction period was actually 232 days3. [22] There have been three extensions of time for which notice has been given in accordance with clause 15 of the contract and which the Owner has not disputed by notice in writing within seven days of receipt of the claim. The extensions of time are as follows:– EOT1 4 September 2007 delays in construction whilst awaiting Owners‘ tile selection 30 days claimed; EOT2 12 November 2007 delays in construction program whilst awaiting spa 30 days claimed; and EOT3 17 December 2007 Christmas break 2007 – 24 days claimed. [23] There were two further claims for extension EOT4 and EOT5 which were not persisted with. [24] Two of the above claims for extensions of time were accepted by the Owner. The EOT2 claim is disputed. The evidence is not clear as to when it was served but the Owner acknowledges receipt on 23 November 2007. In an email to the Builder dated 27 November 2007, the Owner said ―I do not want to argue with (the Builder) regarding this issue I felt that I would like it noted for the records that I am not happy about the situation…‖. The Owner then goes on to allege that he was misled about the reason for the extension of time. The Owner relies upon the email as a notice of dispute disputing the claim for the extension in EOT2. The Owner has not included this period of 30 days in its calculation of the construction period, although I note that the Owner had impliedly accepted the claim when he came to calculate the contract period under Section 90 of the DBCA, as appears below. In my opinion, the Owner fails to exclude this period as the email does not categorically give notice that the claim for extension is disputed, but rather begrudgingly accepts it. [25] The delay was caused by the unavailability of the spa as originally ordered. Although the Owner made allegations of dishonesty in the email, it was not followed up with any further evidence. Cara Gale, the Builder‘s representative who purportedly made the allegation, was not required for cross-examination. I am satisfied that it was reasonable to adjust the completion period under section 18(4) and (8)(b) of the DBCA. [26] The calculation of the construction period applying claims EOTs 1, 2 & 3 in accordance with Item 8 of the Contract Schedule, is as follows:– 3 Ex 6 page 655. -- 5 of 44 -- 6 Construction period (Item 8) 266 days Plus EOTs 1, 2 & 3 84 Total 350 [27] Before determining the quantum of liquidated damages, it is necessary to proceed to the next issue which is whether or not the Owner has validly determined the contract under section 90 of DBCA and, if not, whether that determination amounts to a wrongful determination of the contract that has been has been accepted by the Builder. Was the Contract validly determined? [28] On 10 June 2008, the Owner by email purported to determine the contract. He did so in reliance upon section 90 of the DBCA. Section 90 provides: Ending contract if completion time extended or contract price increased (1) The building Owner under a regulated contract may end the contract if— … (a) the subject work is not finished within a period that is 1.5 times— (i) if the contract has an effective completion date— the period starting on the starting date for the contract and ending on the effective completion date; or (ii) if the contract has an effective completion period— the period. … (2) To end the contract, the building Owner must give the building contractor a notice under this section. (3) The notice mentioned in subsection (3) must— (a) be in writing; and (b) be signed by the building Owner; and (c) state the building Owner is ending the contract under this section; and (d) state the ground on which the building Owner is ending the contract; and (e) give details of the ground. (4) In this section— starting date, for a regulated contract, means the date stated in the contract as the date the subject work is to start. [29] The ―effective completion period‖ is defined in section 18 of the DBCA, for a regulated contract that has a stated completion period, as ―… the -- 6 of 44 -- 7 stated completion period, as adjusted under (the) section.‖ As I stated earlier it was reasonable for the Builder to make the adjustment for the spa under section18(4) and (8)(b) of the DBCA. [30] The Owner, in calculating the section 90 period, has multiplied the 266 days by 1.5 and then added on the extensions EOTs 1, 2 & 3, resulting in a figure of 483. The Owner calculated the period from the commencement of the contract to the date of the email (10 June 2008) as 485 days, when in fact from 5 February 2007 it is 491 days. However, the calculation is clearly in error, as the calculation of 1.5 times the completion period should be on the whole of the adjusted period. A calculation of 1.5 times 350 days returns a figure of 525 days which, from 5 February 2007, is 14 July 2008. [31] The calculation above is consistent with the legislative intent of the DBCA. [32] It is apparent that the Owner‘s calculation is wrong and the determination of the contract based on that calculation is misconceived. [33] The Owner also alleges, in the alternative, that he was terminating the Contract due to the Builder‘s breach by its refusal to complete the Works.4 By email dated 4 June 2008, the Builder advised the Owner that the Works had reached Practical Completion and their intention was to schedule the handover for 18 June 2008.5 The Owner responded requiring a final progress claim. By email dated 5 June 2008, the Owner disputed that the Works had reached Practical Completion and particularised 6 areas of defects.6 Further, the Owner suggested that the Builder was a long way from Practical Completion. On 6 June 2008, the Builder provided a Progress Claim Certificate 5 (Practical Completion) Tax Invoice of $88,839.00.7 [34] In considering this issue, I have to look at the DBCA and the contract. The provisions of the DBCA cannot be contracted out.8 Section 67(6) provides:– In this section— completion payment, for a regulated contract, means a payment required to be made under the contract by the building Owner to the building contractor for the practical completion stage. practical completion stage, for a regulated contract, means the stage when— (a) the subject work has been completed in accordance with the 4 Paragraph 44 of the Defence and Counterclaim. 5 Ex 6 page 554. 6 Ex 6 page 557. 7 Ex 39 MJR 86. 8 Section 93 DBCA. -- 7 of 44 -- 8 contract and all relevant statutory requirements, either— (i) without any omissions or defects; or (ii) apart from minor omissions or minor defects; and (b) the detached dwelling or home is reasonably suitable for habitation. [35] The defects listed by the Owner at that time were not such as to prevent the home from being reasonably suitable for habitation, and I accept the Builder‘s submission that that was evidenced by the fact that the Owner did move his family into the property. In my opinion, the defects at the time notified were minor. Mr Eldon Bottcher, an architect, called as an expert by the Builder, expressed the opinion that the Works had reached Practical Completion. No contrary opinion was expressed by any other expert. [36] I find that the Builder did not refuse to complete the Works prior to 10 June 2008, and was not in breach of the contract. [37] The next issue is whether the Owner has repudiated the contract. Was the Repudiation Wrongful? [38] Following the email of 10 June 2008, the Owner took possession of the site that day by moving his family in. Clause 17.9 of the Contract provided:– If the Owner takes possession of the Works or any part of the Works when not entitled to do so under this Contract, the Works are deemed to have reached Practical Completion on the date of Possession and the Owner is liable to the Builder. [39] In Sopov and Another v Kane Constructions Pty Ltd (2007) 20 VR 127, the Court of Appeal reviewed the authorities on repudiation. I have extracted some relevant statements of principle. The Court said at paragraph [9]:– ―In our view, the objective test of repudiation, as stated by Brennan J in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd, (1989) 166 CLR 623 leaves no room for consideration of whether the party in breach — the alleged repudiator — held the honest belief that its action was justified by the contract. Axiomatically, the repudiator’s state of mind is irrelevant. What matters is the character of the repudiator’s conduct.‖ [40] In DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 the High Court said at 432 per Stephen, Mason and Jacobs JJ.: ―No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But -- 8 of 44 -- 9 there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him.‖ [41] In the instant case, the Owner, following his letter of termination on 10 June 2008, went into possession of the property. The next day, he wrote to the Builder offering to pay the value of the Works up to termination. For the next 3 days, insulation was installed in the house by a subcontractor, apparently in ignorance of the state of the Contract. Two Extension of Time claims dated 4 June 2008 sent by registered post prior to the Owner‘s termination arrived on 11 June 2008, and were the subject of dispute by the Owner. The Owner engaged another Builder, Trevor Scott, mid June 2008 who inspected the roof and on 19 June 2008 requested Currumbin Roof Trusses to inspect the site9. On 26 June 2008, the Owner engaged another Builder to install a partition wall into the garage.10 [42] I find that the Owner has repudiated the contract, and he did so wrongfully. His conduct subsequent to the Notice evinced an intention to be no longer bound and he frankly admitted that he had had earlier discussions with Mr Hills‘ employee, one Blair Ripley, on how he could bring the contract to an end. It is unfortunate that the Owner did not heed Mr Ripley‘s concerns about the complexities of terminating a contract under section 90 of DBCA. [43] By letter dated 10 July 2008, the Builder accepted the repudiation and the contract came to an end.11 Whether or Not the Final Claim Became Payable or, in the alternative, the Determination of the Amount Payable as Damages? [44] The Builder has elected to claim damages and not a quantum meruit. The proper measure of the damages is that the Builder is entitled to be paid the balance of the contract sum less the cost of the defects and incomplete work less any liquidated damages. [45] It follows that if the commencement date of the Works was 5 February 2007, then the Date for Practical Completion would be 21 January 2008. The Owner is entitled to liquidated damages of $20 per day for 141 days or $2,820. The Builder has credited the amount of $1,160, leaving a balance of $1,660. 9 Ex 39 paragraph 146. 10 Ex 39 paragraph 150. 11 Letter OMB to Owner dated 10 July 2008 Ex 39 MJR 101. -- 9 of 44 -- 10 The Overhang Issue [46] The design of the house provided for several large, flat, sloping roofs which extended beyond the house walls and had significant overhangs. [47] The plans of the house, including the roof, were drawn up by a draftsman, not an architect. The draftsman was one Stuart Osman, whose affidavit was filed in the tribunal. However, Mr Osman was not required for cross-examination. The Owner did not engage an architect but administered the contract himself. [48] The Owner alleged in paragraph 4 of the Defence and Counterclaim: ―During the course of construction and at frame stage, the Applicant did negligently and in breach of the contract, allow installation of roof trusses that were structurally deficient and defective, and non- compliant with the building code of Australia, as set out in the report dated 18th of May 2009 from Geoffrey Hills & Associates Engineers. Particulars: (i) The eave line varies more than 50 mm; (ii) Tie-down rods in the roof cavity have not been connected to anything; (iii) Rafter overhangs exceed limits provided in Australian Standard 1684.2; (iv) Inadequate structure fascias are installed, being 90 x 35 mm size timber which is not equivalent to 190 x 19 mm fascia; (v) The rafter overhangs are structurally inadequate.‖ [49] The Builder pleaded by way of Reply: In respect of paragraph 4 of the Amended Defence, the Applicant:– (a) … (c) Says the installation of the roof trusses were not structurally deficient or defective or, in the alternative, to the extent any such defects exist, such defects were not such as to amount to more than minor incomplete works or minor defects as would not preclude practical completion. (d) …. Further and, or in the alternative:– (e) Says to the extent that there was any variation in the eaves line, such variation would, at best upon practical completion, amount to a minor defect or omission, not that it admitted there was any such variation at the relevant time. -- 10 of 44 -- 11 (f) Says that to the extent any tie-down rods were not connected, such, at best, amounted to minor incomplete work in relation to works under construction. (g) Says that in relation to Particulars (iii), (iv) and (v), the matters therein alleged were irrelevant as at the date of the first Hills report, but that the allegations therein pleaded are denied because:– i. the roof structure had been appropriately engineered; ii. in accordance with proper engineering principles; iii. has been accepted by the statutory building certifier; and iv. is structurally sound. [50] The framework for the roof comprised pre-manufactured trusses designed and made by Currumbin Roof Trusses. They made a mistake in the design of the trusses in the area known as the ―alfresco area‖ which, as originally designed, had a gable end on a 45 angle to the main roof line. The roof as designed by Currumbin Roof Trusses manufactured this part of the roof with a 90 angle to the roof line. The incorrect trusses were installed by the Builder. When the Builder became aware of the error, the trusses were modified and strengthened by Currumbin Roof Trusses. At the hearing, I was informed by the solicitor for the Builder that as the error had been rectified, it ceased to be part of the claim but so far as the standard of workmanship was concerned it was still a relevant issue. [51] A considerable amount of the Tribunal‘s time was taken up with the ―overhang‖ issue. Both engineering experts, Mr Eric Fox of Eric Fox Consulting Pty Ltd and Mr Jeffrey Hills of Jeffrey Hills & Associates Pty Ltd, were examined and cross-examined on issues such as which Australian Standards applied to the structure and whether a ―rafter‖ and top chord of a truss were the same. [52] It was asserted by the Owner that the rafter overhang in many areas of the building were sagging and out of alignment and exceeded 50 mm in many areas. [53] Pursuant to an order of the Tribunal, a conclave of engineering experts was held and a joint report produced from Messrs Fox and Hills. It is dated 3 June 2010 and is Exhibit 12 in the hearing. [54] The substance of that report so far as it is relevant to this issue is: 1. It was agreed that there was no significant danger of collapse of the roof due to ―breakage‖ of structural members due to long-term or short-term loading. 2. It was agreed that with respect to deflection of roof of the roof the relevant performance criterion of the Building Code of Australia (P2.1) is that the structure ―to the degree necessary … minimise … loss of amenity through excessive deformation …‖. -- 11 of 44 -- 12 3. It was agreed that the architectural design of the house is such, in that it includes long flat sections of sloped roof with unusually large overhangs, that deflection of the overhangs is unusually prominent. 4. It was observed that the corner overhangs in some areas demonstrated readily visible excessive deflection. The deflection in these areas is primarily attributed to errors in construction with a problem with the structural connections of the roof support. The exact cause had not been identified. 5. It was agreed that analysis of the roof design indicates that the members specified for the overhangs should be sufficient to carry the self-weight of the roof, which is the load presently on the roof, without perceptible deflection. 6. It was agreed that with respect to maintenance loading the overhangs as designed are adequate to carry the distributed load in accordance with AS/NZS 1170 Loading codes without inordinate deflection. 7. It was agreed that the overhangs as designed are strong enough to resist the ultimate wind load for the site without collapse. [55] Both experts have inspected the house and have prepared several reports containing their observations and opinions. [56] I will start with the first report of Mr Fox dated 10 August 2009.12 In that report, Mr Fox referred to the appropriate Australian Standards that applied when designing a structure such as the house. He opined that in a timber frame house, an engineer might use the simplified designs of AS 1684 Residential timber framed-construction in the ―standard‖ areas and the more sophisticated design approach of AS 1720.1 Timber structures Part 1:Design methods for more unusual or complex elements, or in order to obtain a more efficient ―tailored‖ design. Mr Hills in his report of 7 September 200913 referred to AS 1684.2 Residential Timber Framed-Construction – Non Cyclonic areas and AS 1684.4 Residential Timber Framed-Construction – Simplified – Non Cyclonic area as being the minimum requirement for timber frame design and the construction must comply with those mentioned manuals to comply with the Building Code of Australia. [57] Mr Fox observed that the trusses had been designed and constructed in accordance with a proprietary computer program, MiTek 20/20, the details of which were not ordinarily available. However, in Mr Fox‘s experience, the structural models are based on physical tests and computer modelling. He noted that there appeared to be no suggestion of any problem with the trusses, and on inspection none was revealed. [58] In respect of the outrigger members, Mr Fox on his analysis considered them to be adequate. He also relied on the certificate of the MiTek engineer, Mr Sunil Narsey. I will refer to that certificate later in these reasons. 12 Exhibit 9. 13 Exhibit 19. -- 12 of 44 -- 13 [59] On inspection of the house, Mr Fox observed no structural failure or significant structural distress, but he did observe some signs of ―out of line‖ or unexpected deflections. He detailed these in his report, and I will refer to them later. [60] Mr Hills in his report of September 200914 stated that a site inspection revealed that the rafter overhangs in many areas around the dwelling were sagging and were out of alignment. The extent of the sag, he stated, exceeded 50 mm. [61] Mr Hills, in his commentary report of 13 September 2010,15 summed up the issue between them. It is this. Mr Hills contends that the roof structure does not comply with the requirements of the Building Code of Australia Volume 2 (BCA 2) with specific reference to AS 1684.1 and 1684.2 as the structure is not adequate to comply with allowable maximum deflection under design loads for overhang of 10 mm as stated in AS 1684.1. Mr Fox on the other hand, contends that AS 1684.1 does not apply, and that the roof structure complied with AS 1720. [62] A subsidiary issue is whether a top chord of a truss, which is what has been constructed in this house, is a ―rafter‖ for the purposes of interpreting AS 1684.1. The design criteria of AS 1684.1 refers to rafters, and there is no reference to a chord of a truss being referred to as a rafter in that Australian Standard. [63] Applying the tolerances set out in AS 1684.2 for rafter overhangs, Mr Hills expresses the opinion that timber members comprising the truss overhang in this case being 90 x 35 mm softwood are undersized, and F 27 hardwood top chord of 120 mm x 35 mm would comply with the defection limits for the overhang length constructed. Mr Hills then states that the construction does not comply with the requirements of the BCA 2. [64] In my opinion, there is a significant structural difference between a rafter overhang and a truss overhang. The former largely operating in isolation of the other members, the latter being, to use Mr Fox‘s words, is ―inextricably part of the assemblage‖. I note that Mr Fox did in an earlier report refer to the top chord as a rafter but he did so not in circumstances of loading and I place no weight on that discrepancy. [65] AS 1684.2 does not consider truss overhangs, but AS 4440.2004 Installation of Nail Plated Timber Roof Trusses refers to AS 1684. Mr Fox16 in his report of 4 December 2007 states:– With respect to design elements within timber trusses, such as the truss overhangs that are used extensively in the subject residence to form the 14 Exhibit 19. 15 Exhibit 22. 16 At page 12 of Exhibit 10. -- 13 of 44 -- 14 horizontal upper and lower eaves, AS 4440 Installation of Nail Plated Timber Roof Trusses advises, ―AS 1720.1 provides for the design of timber elements within nail plated timber trusses‖. It is not appropriate to analyse truss overhangs in accordance with AS 1684.2 as suggested by (Mr Hills). [66] The conclave of experts agreed that the ―architectural design of the house is such that it includes long flat sections of sloped roof and unusually large overhangs.‖ [67] Mr Fox has observed that AS 1684.2 is not an engineering standard, but rather a standard for the building industry for traditional timber framed houses. Mr Fox says that for this house, because of the unusually large overhangs, some allowance must be made for an alternative engineering solution. [68] Much discussion centred around the correct interpretation of BCA 2. The starting point is Clause 1.04 that a building solution will comply with the BCA if it satisfies the Performance Requirements. [69] Compliance with the Performance Requirements can be achieved by:– a) complying with a Deemed-to-Satisfy Provision; or b) formulating an Alternative Solution which: i. complies with the Performance Requirements; or ii. is shown to be at least equivalent to the Deemed-to-Satisfy Provisions; or c) a combination of (a) and (b). Any Alternative Solution has to comply with the Performance Requirements which are set out in Part 2.1, namely:- ―(a) a building or structure, to the degree necessary, must - (i) remain stable and not collapse; and (ii) prevent progressive collapse; and (i) minimise local damage and loss of amenity through excessive deformation, vibration or degradation; and (ii) avoid causing damage to other properties;‖ [70] The Builder‘s case is that the overhang can be designed under AS 1720.1. In those circumstances, deflection limits shall be determined by elastic analysis method. The determination of acceptable deflection limits is said to be part of the design process performed by the design engineer. Guidance is provided by Appendix B. [71] I note that AS 1684.1 Design Criteria is not referred to in BCA 2. [72] It seems tolerably clear to me that a design of overhangs in compliance with AS 1720.1 would be quite acceptable. I prefer the evidence of Mr -- 14 of 44 -- 15 Fox in this regard. He had a wealth of experience of and involvement in the formulation of some of these standards. [73] Mr Hills asserted that any overhang would have to comply with AS 1684.1. In my opinion, the rigidity of that view was incompatible with the purpose of AS 1720 Design criteria which allowed a more innovative design provided the engineer complied with the alternative solution under the BCA 2. [74] Mr Hills had conducted some onsite testing. He placed a load on the roof and measured the degree of deflection. The results revealed a deflection ranging between 13 mm and 19 mm. Putting aside the criticism of Mr Fox as to the inappropriateness of such testing, it became apparent during the course of cross-examination that the only situation that would give rise to a live load being present on the roof (it being acknowledged that it is a non-trafficable area) would be the rare occasion when workmen would be required to work there. It was suggested by Mr Hills that that gave rise to a safety issue and fell within the requirement of a loss of amenity. As a 10 mm deflection was permitted, a differential of 3 mm to 9 mm would appear to be insignificant as the cause of any potential fall. In fact, under the Workplace Health and Safety Requirements, any workmen would be required to be protected by a safety rail and scaffolding, or at least harnesses. Scaffolding, incidentally, is apparent in photograph Exhibit 18. This example of the alleged loss of amenity relating to the roof was raised for the first time at the hearing and, in my opinion, is of little weight. In my opinion, it is not a shortfall in the Performance Requirement of the design. [75] I note that Mr Fox states in his report of 4 December 200917 that he is unable to state with certainty that the design of the overhang members complies with AS 1720.1 because it is the product of the MiTek program, the internal workings to which Mr Fox is not privy. However, that company gave a certificate by its detailer and later a further examination and design check analysis was conducted by its Senior State Design Engineer, Mr Sunil Narsey, who certified that the design was within the Australian Design Codes and Building Codes of Australia. Although Mr Fox was critical of the way the certificate was worded, he noted that the MiTek programme design criteria complied with AS 1720 and that the reference to AS 1684 in the certificate was made because of the allegation that it did not comply with that requirement. I accept conclusiveness of that certificate and the Form 15 Compliance and Certificate of Currumbin Roof Trusses18 and the separate certificate of Currumbin Roof Truss by David Lee of 21 June 200719. The Counterclaim 17 Exhibit 10. 18 Exhibit 6 page 317. 19 Exhibit 6 page 302. -- 15 of 44 -- 16 [76] Before the completion date, the Owner was becoming anxious about the delay in completion of the house. There were a series of emails that passed between him and the Builder‘s management team, with the Owner questioning the reasons for the apparent delay. [77] On 27 March 2008, he commissioned an independent building inspection by Mr Hills‘ firm. He did not notify the Builder of his intentions. Mr Hills‘ representative, Blair Ripley, was admitted to the house site after hours and without the knowledge or consent of the Builder. It was suggested by the Owner that he had the Builder‘s permission to enter the site without being accompanied by the Builder and without obtaining prior permission on each occasion. This was strenuously denied by the Builder. It is not necessary for me to determine this matter as it has little significance in respect of the matters in issue. [78] More importantly, is what weight do I give to the inspection and subsequent report of Mr Ripley? A report of Jeffery Hills and Associates Pty Ltd, under the authorship of Mr Ripley dated 1 April 2008, set out a number of alleged defects. Over the following weeks, some of these alleged defects were brought to the attention of the Builder. [79] Counsel for the Builder submitted that the scheme of the contract did not provide any opportunity for the Owner to direct the Builder, prior to practical completion being claimed by the Builder, to rectify defects, to require the Builder to complete work in a particular order, or to interfere, at an interim stage, with the conduct of the works. The capacity to direct, he submitted, was limited to the specification of provisional sums and variations. [80] Counsel further submitted that any notifications, requests and/or instructions to rectify defective and/or incomplete work prior to the formal Notice of Practical Completion on 6 June 2008 as a matter of construction, is of no effect. I agree with that submission. [81] Nevertheless, a number of defects have been identified in the completed house. Some have been conceded by the Builder as defects; others are disputed. A Scott Schedule was tendered in evidence20, and evidence was given by a number of experts in respect of the cost of rectification. [82] In this regard, it is necessary for the Tribunal to determine the value of rectifying the defects as to whether it is to be the cost incurred by the Builder had the contract not been terminated, or the cost the experts have assessed for rectifying the items. If it is the former, then the Builder submits that in some instances where it was a subcontractor‘s responsibility and as a consequence of the Owner‘s breach of contract, the Builder‘s opportunity to have the subcontractor attend and rectify the matter has been lost. In those circumstances, where the subcontractor has been paid out, the cost should be assessed as nil. 20 Exhibit 4. -- 16 of 44 -- 17 [83] In relation to the cost to the Builder, Mr Riewoldt, a director of the Builder, has given his estimate21. The Builder has also obtained an independent assessment22 from a Mr Des Salmon, who is a Queensland licensed Builder and building inspector. [84] The Owner relies upon an assessment made by Mr Hills. [85] It is not necessary for me to make findings of credit in respect of the Owners‘ representative, Mr Russell, and the Builder‘s representative, Mr Riewoldt. Mr Russell was in the witness box for a very short time. It would be unfair of me to form any impression as to his truthfulness in those circumstances. I did note that he kept fairly good records during the whole of the construction period. Mr Riewoldt gave evidence for a longer period, and other than a reluctance to concede any points adverse to his company‘s case, I make no further observations about his evidence. Mr Holland, the building supervisor, was asked about conversations he had with Mr Russell. I was not convinced that his recollections were very accurate, and where there was conflict between what he said and what Mr Russell said, I would prefer Mr Russell‘s recollection. [86] In assessing the cost of rectification, I have been provided with estimates from Mr Hills who, in addition to being a professional engineer, also holds a Queensland Building Services license. His qualifications as a Builder were explored in some detail in the course of the hearing. I accept his qualifications. The initial inspections were carried out by Mr Hills‘ employee, Mr Blair Ripley. Mr Hills gave evidence that he did inspect the site on several occasions and verified Mr Ripley‘s findings. Nevertheless, I gained the impression that there was more input to the report by Mr Ripley on the defects issue than by Mr Hills. Mr Ripley did not give evidence. [87] For the Builder, Mr Salmon was asked to assess the cost of rectifying the defects. Mr Salmon was an experienced Builder who had been in business on his own as a Builder for many years, but lately in the more specialised area of building inspections. I found him to be competent and I accepted his evidence that although he did not personally inspect this house, he was more than qualified to make the assessments from the photographs and reports provided. He informed the Tribunal that he does so on a regular basis for the Building Services Authority. [88] I formed the opinion during the course of the hearing that Mr Hills‘ approach was one of counsel perfection. Some of his assessments of the cost of rectification work were greatly disproportionate to the advantage to be gained. I much preferred Mr Salmon‘s assessment where the two assessments differed. I have, to a large degree, ignored the costs assessed by Mr Riewoldt, as such costs are costs to the 21 Exhibit 7. 22 Exhibit 36. -- 17 of 44 -- 18 Builder and to a large degree are irrelevant so far as the disputed items are concerned. [89] I would now deal with each of the items starting with those items conceded by the Builder as defective or incomplete. Items Conceded as Defective or Incomplete 1. Entry Portico Two downpipes were not installed. The Builder says that its subcontractor failed to attend to this item. Had the Owner not repudiated the contract, it, the Builder, would have picked this item up and had it rectified by the subcontractor before he was paid. He has since been paid for his services. Incidentally, I note it was asserted by Mr Riewoldt that the Owner did not want the downpipes installed as he intended to have a dropping chain feature instead of a downpipe. However, I note there is no written variation of the contract to omit this item. Mr Riewoldt states in his costing report23 that the Builder has already paid the subcontractor. I note that the Builder had difficulty getting this subcontractor back on site to attend to defects before practical completion. Although the Builder has paid the subcontractor, it is my opinion unreasonable that it must meet the cost of rectification which, in this instance, on Mr Salmon‘s evidence, was $106.40. I allow the sum subject to the comments I make at the end of these conceded items. $106.40 3. Entry Portico Some bolts were not painted. Mr Salmon assessed the cost at $25.00 and I would allow that. $25.00 9. Airconditioning Pipes Not Fully Sealed Mr Salmon has allowed $30.00 and I allow that amount. $30.00 10. Spa Pump & Pipe Works There was a variation to the contract to allow for the spa pump and pipeworks to be installed under the spa. It became apparent that this was not possible because of the size of the pump. The pump had to be installed outside. Mr Salmon has allowed the cost of cover plates at $180. I have allowed that item. $180.00 11. Paint Finishes to Shed Skirting, ceiling and architraves were not painted. Mr Salmon has assessed the cost at $300.00. I have allowed that item. $300.00 18. Foam Feature Hood in Bedroom 4 – Wall Line Mr Salmon allowed the cost of $80.00 for this item. Again, I allow that cost. I note that Items 17, 18, 19 and 20 have been assessed overall at a cost of $7,000 by Mr Hills. I note Mr Salmon‘s observation that this cost is disproportionate to the aesthetic gains $80.00 23 Exhibit 8 page 1. -- 18 of 44 -- 19 in rectifying the work. I agree with that observation. 20. Non-sealed External Control Joint Mr Salmon has allowed $30.00 to rectify this item. I have allowed that sum. $30.00 22-28. Holes, Gaps in Wall Cladding Mr Salmon and Mr Hills are virtually in agreement as to the cost of rectification in respect of these items. The total cost with an adjustment from $55.00 to $30.00 in Mr Salmon‘s assessment on Item 28 totals $430.00 and I allow that sum. $430.00 29. Guttering Ponding Water and Not Straight Mr Salmon has allowed $55.00. He notes that there has been no water penetration. I allow that sum. $55.00 30. Missing Downpipes to Alfresco Area Mr Hills‘ photographs show water ponding in gutters with evidence of building debris not removed. The rectification work, he states, involves cleaning out the debris in the gutters and installing two new downpipes. The cost he assessed at $245.00. Mr Riewoldt says no downpipes were required for this area. Mr Bottcher notes it is 4 metres from the other downpipe and one is not required but the Builder should realign the gutter to fall to the existing downpipe. It would appear that Mr Salmon has assessed the rectification work on that basis at $37.50. I allow that sum. $37.50 31. Render Finishes This relates to render finishes in bedroom 2 wall area and the location of originally incorrectly installed internal light fitting. Mr Hills has included the cost with Item 32 which makes it difficult for me to assess the individual cost. Mr Bottcher notes that minor painting work is required. Mr Salmon assessed the cost at $25.00 and I accept that sum as reasonable. $25.00 35. Downpipes Not Painted I have allowed the cost as assessed by Mr Salmon at $35.00. $35.00 42. Downpipes Not Painted Again, I allowed Mr Salmon‘s estimate of $35.00 $35.00 43. Verandah Post Bolt Fixings The bolts apparently protrude and need to be cut off and the cut ends need to be treated with anti-corrosion paint finish. Mr Salmon assessed the cost of this at $70.00. I allow that sum. $70.00 44. Install Missing Downpipe Mr Hills assessed the cost at $245.00. Mr Bottcher says that the downpipe is missing but not required for the roof area. The Builder should realign the gutter to fall to the existing downpipe. Mr Salmon assessed the cost at $160.00. I allow the sum as assessed by Mr Salmon. $160.00 -- 19 of 44 -- 20 46. Complete Render/Paint Finishes This is to the wall line below the external sliding door to the guest/gym room. Mr Salmon assessed the cost at $120.00 and I allow that sum. $120.00 47. Fascias/Barge Board and Soffits The fascias/barge board and soffits to left side elevation show evidence of deflection which caused a failure of the pop rivet fixings to the corner joint of the fascia and sagging of the soffit sheets and gaps between the edges of the sheets and groove in fascia board according to Mr Hill. The cost of rectification is included in a group costing of 8 items which is $86,400 on which I will expand later. I think that cost is excessive. Mr Salmon, for this particular item, has assessed the cost at $130.00 and I allow that sum. $130.00 51. Damage to Sliding Door Frame The metal sliding door frame to the laundry door has been damaged during construction period. Mr Hills assesses the cost at $2,000 which would involve the supply and installation of a new window and sliding door frame. Mr Bottcher says it can be rectified by over-flashing and Mr Salmon has assessed the cost at $160.00. I allow that sum. $160.00 52. Air Conditioning System Air conditioning pipes and conducts are not fully sealed to prevent water penetration through the external masonry wall. Mr Hills assessed the cost of rectification at $70.00. Mr Salmon has allowed $70.00 and I allow that sum. $70.00 53. Downpipes Not Painted These are situated to the left side of the double garage door. Mr Salmon has allowed $35.00 for this item. $35.00 55 – 57, 59 & 61. Roof Sheeting/Flashings This is a complaint that roof sheeting is not seated properly at junctions and external corner gables or is deformed. The total cost assessed by Mr Salmon amounts to $240.00. $240.00 72. Paint Finishes, Roofing Gable Cladding This involves the eaves and soffits. I allow the sum of $55.00 as assessed by Mr Salmon. $55.00 75. Roof/Eaves and Soffits No mechanical fixings (tie-down straps and triple grip connectors) have been installed between support beams and rafters. Mr Hills assessed the cost of rectification as part of Item 89. Mr Salmon assessed the cost at $600.00. I allow that sum. $35.00 78. Entry Portico No mechanical fixings (tie-down straps and triple grip connectors) $600.00 -- 20 of 44 -- 21 have been installed between support beams and rafters. Mr Hills assessed the cost of rectification as part of Item 89. Mr Salmon assessed the cost at $600.00. I allow that sum. 81. Roof Flashings The barge rolling was not fixed and pop rivets have become loose and need to be rectified. I have allowed Mr Salmon‘s estimate of $60.00. $60.00 87. Roof Sheeting/Flashings Again, missing screws to the roof sheeting. Two missing screws are required to be installed. Mr Salmon has allowed $70.00 for this item as well. $70.00 91-98. Roof Truss Modification to the Alfresco Area Mr Hills assesses the rectification costs for these items 90 to 98 at $2,470.00. Item 90 itself has been rectified and I do not understand that Mr Hills suggests that item itself needs any further work. However, Item 91 involves missing bolts and washers. Item 92 is a complaint of insufficient screw fixings. Item 93, 94, 95 again missing screws and inadequate fixings. Item 96 refers to the absence of tie down strapping and triple grips. Item 97 is a complaint that beams are not properly anchored to masonry piers and will require the fabrication and installation of brackets. Item 98 is a complaint that roof trusses are not secured adequately to the walls. Mr Salmon does not address all of these items in his costings. Mr Fox concedes these are defects. I am of the opinion that this is very poor workmanship by the Builder or its sub- contractor and requires rectification. I allow the sum assessed by Mr Hills in full. $2,470.00 101. Office Toilet Stone bench needs to be cut out properly to fit vanity bowl – gap. I allow Mr Salmon‘s assessment of cost at $27.00. $27.00 103. Office Toilet Painting to cavity sliding door head. The cost is assessed as part of Item 100 which was a disputed item, but I will nevertheless allow $80.00 as assessed by Mr Salmon for Item 100. $80.00 108. Water Leaks to Lounge Room According to Mr Hills this occurred because of roof sheeting defects. Mr Salmon assessed $50.00. I allow that sum. $50.00 109. Internal Plaster Board Setting Angles Mr Hills described this as misalignment of the external bullnose setting angles to lounge room columns/walls/junctions. He assessed the cost at $245.00 for rectifying it. Mr Salmon agrees and I allow that sum. $245.00 121. Wall/Cornice Alignment $110.00 -- 21 of 44 -- 22 This relates to the tiled wall in the bathroom. I allow Mr Salmon‘s estimate of $110.00. 122. Clean Tiles Sealing coatings have not been removed from tiled walls in the main bathroom. Mr Salmon assessed the cost at $45.00 and I allow that sum. $45.00 125. Linen Cupboard Fill gaps between walls and shelf linings. I allow the sum of $14.50. $14.50 126. Plasterboard Finishes Exposed nails in plasterboard linen cupboard doorframes. I allow Mr Salmon‘s estimate of $25.00 $25.00 127. Water Leaks into Ceiling and Area Adjacent to Kitchen I allow the sum of $50.00. $50.00 132. Paint Finishes I allow the sum to complete this work of $55.00. $55.00 133. Plasterboard Finishes I allow the sum of $25.00 to complete this work. $25.00 136. Paint Finishes I allow the sum of $55.00 to complete this work. $55.00 137. Paint Finishes I allow the sum of $25.00 to complete this work. $25.00 138. Doors and Door Furniture Poor installation of locks. I allow a sum of $35.00 as assessed by Mr Salmon. $35.00 142. Door and Door Furniture Between Powder Room and Bedroom No locks are installed. I allow the sum of $85.00 as assessed by Mr Salmon. $85.00 144. Door and Door Frames Pelmet moulding missing. I allow the sum of $52.50 as assessed by Mr Salmon. $52.50 145. Plasterboard Finishes in Living Room Ceiling I allow the sum of $50.00 as assessed by Mr Salmon. $50.00 147. Water Leaks in Hallway Between Living Room and Bedroom I allow the sum of $50.00 as assessed by Mr Salmon. $50.00 -- 22 of 44 -- 23 150. Door Paint Finishes Rebated lockstiles in walk-in robe in bedroom. I allow the sum assessed by Mr Salmon of $30.00. $30.00 161. Cleaning Wall Tiles Sealant coat not removed in ensuite and toilet. I allow the sum of $70.00. $70.00 162. Roof Ventilation Eave vents not installed. I allow the sum assessed by Mr Salmon of $113.40. $113.40 163. Cleaning Wall Tiles External WC. I allow the sum of $70.00. $70.00 164. Sealant Jointing to Tiles External WC. I allow Mr Salmon‘s assessment of $70.00. $70.00 $7,076.30 [90] It is the Builder‘s case that most of these items could have been attended to during the defects period at no cost to the Builder, either because the relevant subcontractor had an obligation to do so, or, if it was a matter for which the Builder was responsible, it had workmen onsite and available to do so at a lesser cost than engaging independent Builders. There is merit in this submission. However, I am not convinced that all defects would have been attended to in this way or at all. For this reason I propose to discount the cost as assessed by me (other than the roof truss defects Items 90 to 98) by 50% to take account of this contingency. That is $7,076.30 - $2,470.00 = $4,606.30. That amounts to $2,303.15. I award the sum of $4,773.15 ($2,303.15 + $2,470.00). Disputed items Item 2 – Front Entry Door Colours The specifications for this door required an African Cherry Veneer with a double-stain grade. However, the specifications were varied to an African Birch Veneer. Mr Hills, in assessing this item, appears to have been unaware of the variation. The Owner submits that Mr Hills‘ error does not affect his criticism. That is, that the doorframe and entry doors should be matching as required by the contract specification. The Builder says that the doorframe and door could be colour matched and the defect can be overcome by painting/staining the door. Mr Hitchcock refers to a warning in the specifications that painting the doors in dark colours could void the warranty. Unfortunately, this issue was not canvassed in the hearing and was raised for the first time in submissions. Counsel for the Builder objects to this matter being raised. The cost of rectification claimed by Mr Hills is $2,200.00 which is the cost to remove and replace the double front entry $200.00 -- 23 of 44 -- 24 doors, but re-using all door hardware. It is also alleged that the doors have warped. Mr Hills suggests that this may have been because of the absorption of heat. He refers to the warranty but takes the issue no further. The Builder says that the selection of doors was a matter for the Owner and if they subsequently warped for reasons unrelated to the Builder‘s actions, then it is the Owner‘s responsibility. I agree. I allow the cost of repainting/staining the doors assessed by Mr Salmon at $200.00. Item 4 – Termite Barriers The lid to the termite junction box is missing. The Builder says that Termicide Pest Management were responsible for the termite barrier installation. That work was carried out before landscaping work carried out by the Owner. I am not satisfied it was missing at the time of installation. A Form 16 Certificate issued on 19 May 2008; I expect it would have been noted as missing at that time. It is not mentioned in the original defects report of Mr Ripley of 1 April 2008. I don‘t allow the claim assessed at $68.00. Item 5 – Fascia/ Media Bargeboard to Lounge/ Room It is alleged that the board is out of alignment along the length of the roof area. Mr Hills has included the cost of rectifying this defect in the overall costs of Item 89. Mr Bottcher does not deal with the item. Mr Salmon in his assessment allowed $245.00. I see no reason why this defect should not be allowed. I therefore allow Mr Salmon‘s estimate of $245.00. $245.00 Item 6 – Downpipe Not Fixed to Wall The Builder alleges that this has been altered by the Owner or on the Owner‘s behalf. The original holes are still in the render from the original fittings. The cost claimed by Mr Hills was $100 and $40.00 for Mr Salmon. I am not convinced that this was a defect and I do not allow the item. Item 7 – Render Finishes This relates to render at the control joint line under the left hand end of the playroom front window. There is evidence of cracking and damage to the render finish. The Builder says that the cracking is an indication that the joint is working and it has formed under normal circumstances and that rectification is a maintenance item to be performed by the Owner. In my opinion, it is not a defect and I don‘t allow the assessed amount of $180.00. Item 12 – Damage to Shed Walls Mr Hills describes this as physical damage to the wall area adjacent to the roller door track caused by the garage roller door installer when drilling out lock holes. The Builder doubts that a professional installer would have caused such damage and notes it was not in the original defects list. Again, if present at the time of inspection during the defects period, it would have been rectified. I have not allowed the cost of rectification. -- 24 of 44 -- 25 Item 13 – Shed Area Concrete Floor Slab Mr Hills states that a rebated edge should have been formed to prevent water ingress into the shed area. The Builder has installed rebated edges in other areas. I note that the plans24 do not have any rebate noted. The Builder has raised the concrete at this point to prevent water penetration, but it would be insufficient to prevent wind-driven rain penetrating. Mr Salmon observed that this is a non-habitable area and does not consider the work necessary. If rectification was necessary he would assess the cost at $330.00. Mr Hills on the other hand, has assessed the cost at $1,520.00. In my opinion, the rectification work is unnecessary. It is not clearly identified in the plans or specifications as a requirement and I don‘t allow the item. Item 14 – Render Finish to Rear Elevation Wall There is evidence of cracking and damage at the control joint line. The Builder says this is normal movement and is an Owner‘s maintenance issue. I agree. I do not allow the item. Item 15 – Fascia Board to Shed Area Mr Hills alleges that this is out of alignment. Mr Fox says it is not defective but is within normal limits for such construction. He says further deflection is discernible only under close scrutiny and from a very limited part of the site. If rectification was warranted, realignment of the fascia board would only be required. Mr Salmon assessed that cost at $40.00. Although the photographs of this defect are not very clear, it is impossible, in my opinion, to discern the alleged defect. I note that it appears to have been allowed in the Stoddart Report 225 though it is not possible to assess the cost from that report. I allow $40. $40.00 Item 16 – Fascia/Barge to Bedroom 4 Roof Line Mr Hills makes the same allegation that it is out of alignment. Mr Fox responds in the same manner. Again, I find it difficult to see from the photographs that there is any alleged defect. I note that it appears to have been allowed in the Stoddart Report 2. I allow Mr Salmon‘s estimate of $40. $40.00 Item 17 – Foam Feature Hood to Bedrooms 2, 3 and 4 Wall Line This was identified by Mr Hills as being as a consequence of inadequate fixings of the feature hood boxes. He does not think the matter can be rectified by gap sealant. It would involve the removal of the feature mouldings. It is noteworthy that this was on the defect list in the Hills‘ report of April 2008.26 Mr Bottcher alleges that this is an Owner maintenance issue and can be $75.00 24 Exhibit 1 page 50. 25 Exhibit 8. 26 Exhibit 6 page 642. -- 25 of 44 -- 26 rectified using sealant. Mr Hills has included this cost with various other items and it is difficult for me to consider them separately. I therefore accept Mr Salmon‘s assessment of $75.00. Item 18 – Foam Feature Hood to Bedroom 4 Wall Line This relates to the external door opening; according to Mr Hills, it has been installed out of level and alignment to the feature hoods of the adjoining bedrooms. Mr Salmon assessed the cost at $80.00. He makes the observation that the cost of rectifying as proposed by Mr Hills would be disproportionate to the aesthetic gain. I note that Mr Salmon has worked on photographs, but he says that he is experienced in doing so and frequently has to proceed in that way. I am satisfied that that is a reasonable expense. In any event, it is not possible for me to dissect the costs as assessed by Mr Hills unless I allow each of the Items 17, 18, 19 and 20, the total cost of which Mr Hills put at $7,000. Item 19 – Timber Post/Columns to Bedrooms 2, 3 & 4 Mr Hills says there is evidence of extensive splitting and cracking to these timber posts. It is apparent from earlier photographs that the cracks have progressed further in recent times. Mr Hills alleges that the Builder has failed to supply and install properly seasoned timber. The hardwood posts are structurally sound. Mr Hills concedes that. He says however that a crack greater than 5 mm is a significant defect and the cracks in this column are up to 8 mm. It is argued on behalf of the Builder that if the column is structurally sound, then it is really an architectural decision as to whether the columns should be replaced or whether they can be filled and stained/painted. The cracking is quite significant and it may be that the hardwood was not properly dried. I would allow the defect and assess the cost of rectifying it in accordance with Mr Salmon‘s evidence of $225. I think it is disproportionate to the defect to consider replacing the columns; the cost of $7,000.00 is significant. $225.00 Item 21 – Termite Barriers to Columns/Posts of Bedroom 2, 3 and 4 Mr Hills says that the reticulated termite barrier system did not comply with AS 3660.1 of 2000 at the wall/slab line at location of masonry piers, steel and timber posts which support the feature hood to the wall line of bedrooms 2, 3 and 4. The Builder says that the relevant certificate has been given to warrant the termite protection system as installed. As the relevant certification has been given, the barriers comply with the Building Code of Australia. I find that there is no defect. Item 27 – Holes and Gaps to Wall Cladding Mr Hills says external cladding, metal and external hollow metal corner mouldings are required to cover caps installed and paint to all areas adjacent to the laundry. The Builder says that the corner stop used is a standard James Hardie product and does not come $50.00 -- 26 of 44 -- 27 with an end cap. It also alleges that using another method would void the product‘s warranty. Mr Salmon agrees with Mr Hills on this matter and assesses the cost at $50.00. I would allow the sum and I assess the cost of rectification at $50.00. Item 32 – Masonry Wall Finishes This relates to the masonry wall at the internal corner of the lounge/meal rooms wall line which have uneven margins. The Builder says no rectification is warranted. It is a matter of aesthetics only. Mr Salmon considers that some rectification work is necessary, but thinks that Mr Hills‘ costs assessment of $3,700.00 is excessive. Mr Salmon has allowed $230.00. I agree with that and would allow that amount. $230.00 Item 33 – External Concreting Concrete works undertaken to Bedrooms 2, 3 and 4 paths /alfresco area and bedroom 1 verandah have not been completed. There is no level and uniform finish to enable the tiling works to proceed. The Owner has already rectified this work at a cost of $3,630.00 and the area has been tiled subsequently. Mr Bottcher who inspected the area before it was tiled did not consider there was any substandard workmanship. This assertion by Mr Bottcher is disputed because the work was carried out before his inspection. Mr Hills opinion is also suspect in this regard in that he did not inspect the work prior to the installation of the tiling. The Owner submits that as part of the preparation for tiling, the area would be levelled. I take no account of the hearsay evidence contained in Mr Russell‘s statement. The subcontractor could have been called as a witness considering the amount being claimed is significant. I make no allowance for this component. Item 34 – Fascia/Barge Board and Soffits to Alfresco Area This is alleged by Mr Hills as being out of alignment along the length of the roof area. Mr Fox addresses this in his report of 4 December 200927. He formed the opinion it was not defective. The deviation is discernible only under close scrutiny. If rectification was warranted, it would require the realignment of the fascia board. The cost of that has been assessed by Mr Salmon at $180.00. I do not consider it a defect. Item 36 – Incomplete Drainage/Field Gully Mr Hills says that the works were not completed in relation to the stormwater drainage system/yard gully pits. The Builder says that the field gully has been covered by landscaping and is unable to be seen. The ground level should have fallen towards the gully and that this has not been attended to by the Owner. Captured water may cause movement issues with home and potential blocked stormwater drainage issues. Mr Salmon agreed with Mr Hills and assessed the cost at $100.00. I have allowed that item at $100.00 27 Exhibit 10. -- 27 of 44 -- 28 $100.00. Item 37 – Gaps to Gutters/Fascia Line at Junction to Cladding According to Mr Hills there is a gap and unsealed connection between the linea board and the blueboard cladding, fascia, gutter line of the alfresco area on bedroom 1. Mr Salmon assessed the cost at $120.00. The Builder agrees that it is a defect, but would have been attended to during the defects period. I allow the cost of rectification at $120.00. $120.00 Item 38 – Cladding Installation The cladding to the truncated section of bedroom 1 of the alfresco area has been installed with no kick-out to the bottom edge. The Builder says that there is no defect; it is a minor aesthetic issue due to the unevenness of margins on each side of the corner moulding. Mr Hills says the rectification cost with Item 39 would be $1,400.00. Mr Salmon assesses it at $400.00. Mr Bottcher says there is no defect and Mr Salmon cannot see one in the photographs. I find that there is no significant defect. Item 39 – Linea Board Cladding Mr Hills says that the truncated end of the alfresco area on bedroom 1 side has had the linea board cladding installed without the specified sarking membrane installed. There is no doubt it should have been installed according to the specifications in the contract and it is a requirement of the board manufacturer. The idea of the sarking membrane is to prevent water ingression. Mr Bottcher says there have been no signs of water ingress and it is unlikely to leak in the future. Mr Salmon says that sarking is not required in non-habitable areas and that the cost of rectification is disproportionate to the value gained. The Builder says that there is no expressed requirement in the contract or in the BCA to build it in accordance with the manufacturer‘s recommendations. When one looks at the objective of the sarking and the absence of any water penetration to date, no defect has been demonstrated. I agree with that submission and I don‘t allow the cost of rectification. Item 40 – Complete Render/Paint Finishes This relates to the finishes to the wall line below the external toilet door sill. The door to the toilet sill has been tiled by the Owner since the inspection. It is alleged by the Builder that the plaster has been cracked by applied force to the door. It is alleged by the Builder that these matters would have been attended to prior to practical completion. I am not satisfied that the plaster has been cracked by applied force to the door. I allow the cost of rectification by Mr Salmon of $120.00. $120.00 Item 41 – Complete Render/Paint Finishes in Access Panels This relates to the access panels to external walls to enable maintenance of spa pumps near the rear elevation of the ensuite $120.00 -- 28 of 44 -- 29 wall area. Since Mr Hills reported this matter, the access panel has been covered with stone cladding by the Owner. The Builder says he was not given the opportunity to complete the minor finishing detail at handover. I would allow the cost of rectification as assessed by Mr Salmon at $120.00. Item 45 – Fascia Barge to Roof Line above Bedroom 1 Again, it is alleged by Mr Hills that it is not straight and is out of alignment. This was responded to on behalf of the Owner by Mr Fox who says it needs a very minor deflection and within normal limits for such construction. It is not discernible except under close scrutiny and from a very limited part of the site. In my opinion it is not a defect and I make no allowance for it. Item 48 – Gaps to Apron Flashing/Boards Mr Hills says there is evidence of gaps between the roof apron flashing and the fascia barge line to the left side elevation of the guest/gym room. The Builder says this is a maintenance matter. No further details are given. I allow the assessed cost by Mr Salmon of $30.00. $30.00 Item 49 – Hot water System The hot water system does not have any airflow base installed to prevent corrosion/rusting. The Builder says that the area around the hot water system has been tiled by the Owner. Originally it would have been above the slab. It is alleged that there are signs that a large bedding has been used which is covering some of the weep holes. In my opinion, there is no defect and I make no allowance for it. Item 50 – Sagging Deflection of Soffits This is at the rear of the garage adjacent to the laundry area. The Builder says there is no defect. It is part of the natural movement of the building. Mr Salmon considers it is a defect and has allowed $65.00. I allow that sum. $65.00 Item 54 – Roof Sheets/Flashing Connections The Builder says this is a result of poor roof design which did not allow for the transition from under flashing on the upward sloping roof to over flashing on the downward sloping roof. The failure to see this was alleged to be due to the thickness of the sheeting, the sheet having to be taken out with provision for it to happen. Although this may be the case, it would appear that it is a matter Mr Salmon considers could be rectified for the cost of $65.00. I would allow that sum. $65.00 Item 58 – Roof Sheeting/Flashings There is evidence of sagging to roof sheets, fascia bargeboard line to upper level roof line which is cantilevered above rear of garage roof line. Mr Fox addresses this on behalf of the Builder. He says the deflection is very minor and within normal limits for such -- 29 of 44 -- 30 construction and is not visible from normally accessible parts of the site. The cost of rectification is assessed by Mr Salmon as $500.00. I make no allowance for this defect. The cost of rectification is disproportionate to the impact of the defect, if it is a defect. Item 60 – Roof Sheeting/Flashing The roof line apron flashing at bargeline on rear elevation of garage has no fixing screws and ends of roof sheets are not fixed to fixing battens where roof line is under roof overhang of upper roof line. The Builder‘s response to this is that the area is not accessible due to poor roof design. There is no evidence of any water leak or penetration. The cost of rectification as assessed by Mr Salmon is $65.00. I see no reason why it should not be rectified. I allow $65.00. $65.00 Item 62 – Roof Sheeting/Flashing Mr Hills says there is evidence of dented and damaged roof sheets to the roof area at the rear of the garage at the junction of the upper level roof line. The Builder says that there are dents in the roof sheeting which have been created by roof traffic. Communication aerials have been placed nearby; the inference being that those workmen caused the damage. As this is the only area of roof sheeting that has been dented, the reasonable inference can be drawn that it has been caused by other workmen. I don‘t consider it a defect. Item 63 – Roof Sheeting/Flashings Mr Hills says that there is evidence of loose roof sheeting and loose ridge cap flashing at the rear of the garage and above the laundry area. Mr Bottcher agreed that loose roof sheeting was evident due to the apron flashing extending under the sheet. He thought there was a potential for water leakage and that the roof should be rectified. Mr Salmon assessed the cost at $65.00. I allow that sum. $65.00 Item 64 – Roof Sheeting/Flashing Mr Hills referred to apron flashing as being too short to provide adequate cover and fixings at roof intersection junction to roof line above living room/ensuite area. Again, Mr Bottcher on behalf of the Builder agreed that there is a defect. I allow the assessed cost by Mr Salmon of $390.00. I note that there is no evidence of water entry to the house at this stage. $390.00 Item 65 – Roof Sheeting/Flashings Mr Hills says there is a small section of guttering and fascia board that has been incorrectly installed to the bottom of the roof line above the ensuite area. Mr Bottcher says this is an aesthetic issue as the area is not readily visible other than from the roof. The cost of rectification as assessed by Mr Salmon is $120.00. Mr Bottcher also says that the gutter could be removed as it doesn‘t $120.00 -- 30 of 44 -- 31 affect the roof‘s performance. I allow the sum of $120.00 as assessed by Mr Salmon. Item 66 – Roof Sheeting/Flashing The sections of apron flashing at the junction of different roof lines are too narrow and are of different widths and the flashing does not extend over the roof rib profile to the area above the ensuite roof at the junction of the bedroom and living room roof lines. The Builder says this is a result of poor roof design. There has been no evidence of any water leak or penetration. Mr Salmon assessed the cost of rectifying this at $300.00. The Builder has undertaken to construct this roof in accordance with the design. If there was a problem with the design, then it should have been referred back to the Owner. I would allow the cost of rectifying this defect at $300.00. $300.00 Item 67 – Roof Sheeting/Flashing There is evidence of water ponding in guttering to the return section of the roof line above the Bedroom 1 walk-in robe area. The Builder agrees that this is a defect although it doesn‘t appear on the Scott Schedule as such. The cost of rectification by Mr Salmon was $120.00. I allow that sum. $120.00 Item 68 – Roof Sheeting/Flashings There is evidence of white-coloured sealant jointing to the roof/wall apron flashing joints to the roof line of verandah above Bedroom 1. The Builder says this is not a defect although it agrees that the white sealant is visible. It seems to me to be a result of poor workmanship. It seems to me that the work involved would be the removal of the sealant and the re-sealing of the apron. Mr Salmon has allowed $100.00 for that. I allow that sum. $100.00 Item 69 – Roof Sheeting/Flashings Mr Hills says there is evidence of water ponding in gutters to the lower level roof line of living room and above external WC. The Builder agrees that there is ponding in the gutter over the living room. Again, this is not agreed in the Scott Schedule. The cost of rectification as assessed by Mt Salmon is $60.00. I allow the sum. $60.00 Item 70 – Roof Sheeting/Gutters Builder‘s debris has not been removed from gutters upon completion of works. The Builder has stated he removed the debris whilst inspecting the roof. The photograph appears to depict that. I make no allowance for the cost of rectifying this defect. Item 71 – Roof Sheeting/Flashings Roof sheeting laid in wrong direction. Mr Hills says that the manufacturer‘s specifications require roof sheeting to be laid with lap joints to be facing away from general direction of prevailing wind direction. Mr Bottcher says that the manufacturer‘s $180.00 -- 31 of 44 -- 32 specifications do not require roof sheets to be fixed as suggested. It is only recommended for maximum water tightness that sheets be laid in that manner. There is no evidence of water leak or penetration. Mr Salmon appears to consider it is a defect and has assessed the cost of unscrewing sheets and changing the laps. This is assessed at $180 and I allow that. Item 73 – Roof/Eaves Soffits The eave soffit linings to the roof line of the kitchen on living room end has evidence of severe sagging and deflection according to Mr Hills. Mr Bottcher agrees that this is a defect. Again, not mentioned in the Scott Schedule. Mr Salmon has assessed the cost at $240.00. I allow that sum. $240.00 Item 74 – Valley Tray Joints The valley tray joints have not been sealed with sealant material to prevent wind-driven rain to all valley tray joints. Mr Bottcher agrees that the valley tray is not sealed. Mr Salmon assessed the cost of rectification at $75.00 and I allow that sum. $75.00 Item 76 – Roof Sheeting/Gutters Mr Hills says there is evidence of water ponding in the gutters to the gutter line of the alfresco/meals area at hallway end of roof line. The Builder says that this is the same gutter as referred to in Item 29. It appears to be, and I make no allowance for the cost of rectification. Item 77- Roof Sheeting/Flashing The roof sheeting is not sealed properly at the junction of external corner to gable end above lounge room roof line. Mr Bottcher agrees that the sheeting has not been sealed. He says it is the product of poor roof design. Again, I think it is a matter that should be rectified. The cost of rectification as assessed by Mr Salmon is $120.00. $120.00 Item 79 – Roof Sheeting/Flashings The end of roof sheets are raised and not properly secured to roof area above entry foyer at junction with entry portico roof columns. Mr Bottcher agrees the sheeting is not fixed or sealed and that an apron flashing or (bracket soaker tray) is required to this area to correctly seal the roof. Mr Salmon has assessed the cost of rectification at $90.00. I allow that sum. $90.00 Item 80 – Roof Sheeting/Flashings Mr Hills says the valley tray has been installed so that any discharge is not contained within the guttering and water flows straight over outside edge of guttering. I don‘t understand the response of the Builder. I allow the cost of rectification assessed by Mr Salmon at $200.00. $200.00 Item 82 – Roof Sheeting/Flashings $240.00 -- 32 of 44 -- 33 Mr Hills says that the formed-up feature columns at the base of roof-mounted timber support post to entry portico have not been installed in a true and even alignment. Mr Bottcher agrees the portico columns are out of alignment. He says this is an aesthetic issue in an area that is not visible and not obvious except from the roof. There are no rainwater issues as a result. He considers it is a minor defect that causes no detrimental effect either visually or practically. Mr Salmon does consider the columns need to be adjusted to be in even alignment. Further work beyond what he has assessed he considers disproportional to the aesthetics gained. He allowed $240.00. I allow that sum. Item 83 – Roof Flashings Mr Bottcher agrees that flashing is not adequate. He states that there is no evidence of water leakage or penetration. He also notes that the flashings were not drawn on to the roof plan. However, I expect that a competent tradesman would have identified the issue. Mr Salmon assessed the cost of rectification at $320.00 and I allow that sum. $320.00 Item 84 –Valley Tray The end of valley tray to gable end of roof above Bedrooms 3 & 4 has not been flattened down on to adjoining apron flashings. Mr Bottcher agrees the valley tray has not been flattened and that the valley edge allows water to flow on to lower roof. He says the cutting or flattening of the valley edge may cause potential water leak. He says there is no defect. I am not satisfied there is a defect that requires rectification. I make no allowance for this item. Item 85 – Roof Sheeting/Flashings Mr Hills says section of linea board cladding to gable roof line above Bedroom 3 and Bathroom area have insufficient fixings and section cladding is loose and has moved from original position. Mr Bottcher agrees that sections of cladding have not been properly fixed and there appears to be movement causing nails to pop. It appears to me that it is poor workmanship and I allow the assessed cost by Mr Salmon of $160.00. $160.00 Item 86 – Roof Sheeting/Flashings Mr Hills says sections of installed sarking are exposed below bottom edge of linea board cladding and is visible from ground level. Mr Bottcher observes that sections of sarking are exposed at the base of the linea board. They should be trimmed. Mr Salmon assessed the cost of that at $25.00 and I allow that sum. $25.00 Item 99 – Garage Storeroom Mr Hills says the garage storeroom cavity sliding door has damage scratch marks on the outside face of the door caused by nails/screw fixing protruding through doorframe. Mr Bottcher observes that the sliding door is off track. He identified the scratch and the source of it to be from a screw being used for fixing of -- 33 of 44 -- 34 shelves by the Owner in the study off the kitchen penetrating the cavity area. Mr Salmon agrees with Mr Hills‘ assessment of the cost, but if the Builder‘s assertion is correct, then it is not a defect. I don‘t propose to allow it as a defect. Item 100 – Office Toilet (WC) Office toilet door has damage to inside face of door caused by incorrect adjustment of door guides and a combination of bowing of cavity sliding door. Mr Bottcher says this is not a defect. The bottom of the door has been installed incorrectly. He noted the guides appeared to have been removed and re-installed by the Owner and that is the cause of the damage. I am not satisfied that the Owner is responsible for this. I allow the cost of rectification at $80.00. $80.00 Item 102 – Office Toilet (WC) Sealant jointing to vanity mirror is not completed and the sealant material is not a suitable colour match to beige coloured wall tiles. Mr Bottcher says that the strong inference is that this work was completed after the termination of the contract when the ensuite mirror was installed and was probably carried out by the same person. The sealant marries the colour of the sealant used for the installation of the ensuite mirror. I don‘t propose to allow it as a defect. Item 104 – Office Internal Entry Doors from Study Mr Hills says the door handle to the internal double access doors between the office and the study have loose door handles. Mr Bottcher observed that one door handle was missing and one was sagging. He says it is an Owner‘s maintenance issue. I agree. Item 105- Entry Foyer Setout Mr Hills says the internal entry foyer is off centre approximately 150 mm to the internal wall/ceiling line in front entry portico. The aesthetic impact of this defect is readily apparent from photographs of the entry foyer. Photograph 148 in Mr Hills‘ report of 14 October 200928 and Mr Bottcher‘s report of 7 August 200929 clearly show the discrepancy. The disproportionate width of the left and right columns and the discrepancy in width between the door opening and the bulkheads are readily apparent. The Owner supplied the drawings. I am satisfied that the drawings are defective as demonstrated by Mr Bottcher. I note that Clause 11.11 of the General Conditions contains a warranty that the plans are accurate and it is reasonable for the Builder to rely upon them. I also note that where a discrepancy was found in the contract (which includes the plans) the party must notify the other and then $11,500.00 28 Exhibit 20. 29 Exhibit 30 page 40. -- 34 of 44 -- 35 consult in an attempt to resolve the discrepancy. See Clause 3 of the General Conditions Exhibit 1. On the outside no discrepancy appears. The walls on each side of the portico are symmetrical. Mr Hills opines that the Builder has altered the internal timber framework to match the incorrectly positioned external entry portico structure. Such is apparent from the position of the masonry brickwork on the left side which extends well beyond the internal timber framework, but is flush on the right side. See photograph at page 156 of Exhibit 20. That photograph was taken by the Owner in the course of construction. It must have been apparent to the Builder at an early stage that such a discrepancy existed. However, it was never brought to the attention of the Owner until it was too late. The cost of rectification as assessed by Mr Hills is $23,000. It is argued by the Builder that the cost of rectification is grossly disproportionate to the alleged defect which is of aesthetic value only. However, the defect is so apparent and in such an obvious position in the house at the main entry that it would have a significant impact on the value of the house. Mr Riewoldt has suggested to centre the doors internally and move the internal wall including column towards the door. It would decrease the foyer width by 70 mm. The bulkheads would remain the same. That would still leave the discrepancy in the width of the bulkhead. The cost of that rectification work to the Builder would have been $5,100. Unfortunately, Mr Salmon has provided no estimate of the cost of rectification. Mr Riewoldt‘s solution is assessed on the basis of the cost to the Builder, that is Chelbrooke Homes‘ costs, and I suspect the actual cost would be significantly more if it were carried out by an independent contractor. Mr Riewoldt stated that the discrepancy would have become apparent when the front doors were put on. He is not sure whether temporary doors were fitted or the actual doors at the time of lockup stage. Nevertheless, he says it would have been at that time. The ―enclosed stage‖ was reached on 11 May 200730 as appears in the Progress Claim Certificate. Mr Russell, the Owner, says he was not made aware until March 2008. Mr Riewoldt says there were discussions before then with Mr Wheatley. When Mr Wheatley was cross-examined he referred to a conversation between Mr Russell and Paul, the carpenter, to which he was not a party. I am of the opinion that the Builder well knew of the discrepancy early in the construction period, at least by May 2007. I am not persuaded that the discrepancy was brought to the 30 See Exhibit 6 page 289. -- 35 of 44 -- 36 attention of the Owner at all. I find that he discovered the discrepancy in March 2008 and brought it to the attention of Mr Wheatley on 18 March 2008. I also accept that at that time, in the course of that conversation, it was obvious that Mr Wheatley was already aware of the discrepancy and had been aware of it for some time. In that conversation Mr Wheatley advised Mr Russell that a decision had been made with the carpenter at frame stage to adjust the internal measurements. The discrepancy would also have been obvious at the frame stage as appears in the photograph referred to earlier, and the fact that he had to pack it out to bring the frame up to the level of the masonry works. Had the discrepancy been brought to the attention of the Builder at an earlier stage there would have been additional costs incurred for which the Owner would have had to indemnify the Builder. Counsel for the Builder submits that there is no evidence of the cost of rectification and therefore the claim must fail. Counsel also submits, in the alternative, that the Tribunal could apportion the damage equally between the parties. That I propose to do, but with Mr Hills‘ estimate of $23,000. I, therefore, allow $11,500.00 for this item. Item 106 – Entry Foyer Bulkheads As I have allowed an amount for rectification of Items 105 and 106, I do not propose to make any separate allowance for this item and it is not necessary for me to consider it further. Item 107 – Entry Foyer Doors Warping Mr Bottcher says the doors have been damaged, he thinks by an attempted forced entry. He did not notice the damage on his first inspection. Mr Salmon also found that there is warping. He notes that the doors are higher and wider than standard and whilst the top is covered by the portico, the bottom half is exposed to the weather. This causes differential movement in the doors and he thinks it is the cause of warping. He recommends the installation of one bolt. (I note that in his report he refers to two bolts, but in his oral evidence he corrected that to one bolt). That would affect the cost by reducing it by $15.00 to $65.00. Nevertheless, I do not consider this a defect for which the Builder is responsible and I don‘t allow it. Item 110 – Air Conditioning Units Air conditioning outlets have been installed out of position to alignment at downlight fittings. Mr Bottcher says that this is not a defect. Mr Bottcher says these issues are not addressed on plans supplied by the Owner although light locations and ceiling plan -- 36 of 44 -- 37 positions are shown. The Owner says that in November 2007 during an onsite inspection with Mr Wheatley, the building supervisor, the problem was identified. The Owner says it was mutually concluded that although in some cases the position of trusses would have been a factor in selecting the location; generally it appeared that virtually all of the outlet vents needed rectification by way of repositioning into a symmetrical and uniform manner. The Owner says that Mr Wheatley committed to rectifying them and expressed disappointment with the air conditioning contractor. Mr Wheatley disputes this. Mr Salmon states in his report that the air conditioning outlets cannot be installed in line with light fittings. The air conditioning ducts are 250 mm to 300 mm in diameter and take into account the roof structure plus best position for maximum benefit and alignment cannot be achieved. The Builder also asserts that the plan which is exhibited31 does not contain dimensions or the position of the electrical services or the air conditioning outlets. It is therefore argued that it was not a critical item in the terms of the contract. I agree. I find that the misalignment of the air conditioning vents and lights is not a defect and I do not propose to make any allowance for this item. Item 111 – Plasterboard Finishes Mr Hills says there is evidence of cracking and separation of external bullnose angles to columns/bulkheads to entry foyer/lounge room. Mr Bottcher says it is a result of typical building movement. Mr Salmon says it is a double-up in respect of Item 109. Mr Hills also makes the observation that the logical cause would be normal building movement, however, he observes there has been no prior history of problems with the bullnose angles. I do not consider it a defect. Item 112 – Plasterboard Finishes Mr Hills says there is evidence of hairline cracking/separation lines to plasterboard lines at the junction of external bullnose angles on entry columns, lounge room/media, room/hallway and play room to both vertical and horizontal wall line. Again, Mr Bottcher says that that relates to normal building movement and that the cracking is very hard to locate. Mr Salmon says that it is a painter‘s job, not a plasterer‘s job, to cover hairline cracks. He assessed the cost at $240.00. I find that there is no defect. Item 113 – Plasterboard Finishes Mr Hills allows no cost for this item and I don‘t allow it as a defect. Item 114 – Light Fittings Installation One downlight fitting to the play room is misaligned in relation to the location of the other five light fittings in the same room. Mr $157.50 31 Exhibit 6 page 162 – 162. -- 37 of 44 -- 38 Bottcher can‘t locate the misalignment. It is difficult for me to determine the misalignment from the photograph although I note Mr Salmon appears to agree with Mr Hills as to the cost of rectifying it at $157.50. I accept Mr Salmon‘s assessment at $157.50 and I allow that item. Item 115 – Plasterboard Finishes Mr Hills says there is evidence of sand lines in plaster setting to top of doorway opening into play room. Mr Bottcher says there is no defect. He says it is a minor imperfection and is in line with the description of a level 4 finish. He says it was only visible under bright lighting condition and even then it was difficult to see. Mr Salmon agrees with Mr Hills on this point and allows the sum of $25.00. I will allow $25.00 for rectification. $25.00 Item 116 – Plasterboard Finishes Mr Hills says there is evidence of airholes (pinholes) in plasterboard setting material to hallway wall between play room and powder room at 2400 mm high. Mr Bottcher says there is no defect. It is a minor imperfection and is in line with the description of a level 4 finish. Again, he says it is only visible under bright lighting conditions. Mr Salmon allows $25.00 for rectification and I allow that sum. $25.00 Item 117 – Plasterboard Finishes Mr Hills says there is evidence of scour marks, damage and paint spray to plasterboard wall finish to the side of walls of powder room and vanity recess. Mr Bottcher says there is no defect although he notes scour marks and paint splatters. Mr Salmon allows $25.00 for rectification and I allow that sum. $25.00 Item 118 – Powder Room Vanity Mirror The mirror has been installed at 1090 mm when all others have been installed at 1280 mm. Mr Bottcher says it does not affect the operation and there is no defect. He says the different mirror heights are due to some mirrors being cut to suit wall tiles while others are mounted on untiled walls. The rectification costs by Mr Hills suggest removal and replacement of a 1280 mm high frameless edge mirror at a cost of $250.00. Mr Salmon agrees with that cost. I allow the cost of $250.00. $250.00 Item 119 – Plasterboard Finishes There is evidence of damage/marks on powder room toilet wall adjacent to the window frame. Mr Bottcher says the defect in the toilet cannot be found and may be covered by tiling installed post- occupancy. I am unable to determine this issue and therefore make no allowance for the defect. Item 120 – Toilet Door Adjacent to Main Bathroom Mr Hills says that this door has not been correctly installed and has insufficient clearances between top of door and door frame to $110.00 -- 38 of 44 -- 39 enable lift off hinges to function. Mr Bottcher says this does not require lift off hinges under the BCA requirements. That appears to be inconsistent with the non-complied notice from Total Building Consult dated 19 May 2008 which records it as a defect. In those circumstances I would allow it as a defect and the estimated cost of $110.00. Item 123 – Main Bathroom Shower Screen Mr Hills says the shower screen door is binding on closing. Mr Bottcher says it needs adjustment. It is a maintenance issue. Mr Salmon observes that it is a matter that would be done under the manufacturer‘s warranty. I allow nothing for this defect. Item 124 – Floor Waste Mr Hills says there is evidence of discolouration/corrosion to the main floor waste to the main bathroom area. Mr Bottcher notes that there is floor waste corrosion but says it is a matter arising from the cleaning regime as the same waste cover in the shower shows no damage. This is an Owner generated issue. I agree. I make no allowance for this defect. Item 128 – Bi-Fold Doorframes to Meals Area Mr Hills says the installed bi-fold doors are detailed and specified to be recessed into the floor slab to prevent stepping over sill frames and adjoining window frames. Mr Bottcher says that the frames proud of inside floor height. He also notes that the Owner has tiled to the underside of the door sill externally and must have been satisfied to proceed in that way. He also notes that the costs are disproportionate to the practical value gained. The Builder agrees that there is no controversy that the lower track to the bi- fold doors was not set down. It is alleged that there was an agreement between Mr Holland and the Owner that no remediation of the defect would be undertaken. It is also noted that had rectification taken place at that time, it would have been at far less cost. The Owner, on the other hand, disputes any such conversation. As the only evidence of the conversation arose from some hearsay evidence, I would disregard it. The cost of rectification assessed by Mr Hills is $11,700.00. Mr Salmon assessed the cost at $810.00. Neither party appeared to want to explore with the Owner or Mr Holland whether there was an agreement to waive this defect. In any event I have reached the conclusion that the cost of rectification far outweighs the damage, if any, suffered by the Owner. I propose to make no allowance for the cost of rectifying this defect. Item 130 – Windows Mr Hills says that the window frame between living room and bi- fold doors has excessive movement within the frame and sash and the sash will not stay in the correct position. This was interpreted by the Builder to be the incorrect size window. Mr Bottcher says it only requires an adjustment of the spring. Mr Hills suggests that it -- 39 of 44 -- 40 be replaced. Mr Salmon says it is a matter for the manufacturer to attend to under warranty. I consider this is an Owner‘s maintenance problem and I make no allowance. Item 131 – Cornices Mr Hills says there is evidence of cracking to the stepped cornice line to the living room, the side of the kitchen bulkhead ceiling line at junction of installed ceiling line expansion joint. Mr Bottcher says this is an Owner‘s maintenance issue. There is no defect. The cracking has occurred on the expansion joint and it appeared to Mr Bottcher that the Builder had filled in the expansion joint for aesthetic reasons. Mr Hills observes that the expansion joints are installed to control movement and prevent cracking to ceiling and walls. He says it is logical to assume that if the cornice line crosses a ceiling expansion joint, it too should have an expansion joint installed. Mr Salmon assessed the cost at $150.00. I allow that sum. $150.00 Item 134 – Doors to Computer Nook The left side door of bi-fold doors to computer nook has a broken pivot hinge and the doors are binding on the frame and floor when used. Mr Bottcher says there is no defect. It is his opinion that the damage has been caused by the Owner. In my opinion it is highly unlikely that the Builder would leave the doors in that state. It appears to be an Owner maintenance issue. I don‘t allow the defect. Item 135 – Stone Bench tops to Kitchen The Builder has installed a strip of stone bench at the rear of the oven to fill an 80 mm gap between the stone splashback panels and the rear of the oven. The Owner says that the bench should have been installed in one full length piece. Mr Bottcher says there is no defect. The joint is an acceptable colour match. Mr Salmons says to install a full length piece of stone would make it vulnerable to cracking. Mr Hills‘ cost of rectification amounts to $2,880.00. Mr Bottcher suggests that the Owner dealt directly with the stonemasons regarding the bench tops. He certainly picked the colour and size, but whether this issue was canvassed is not apparent. It is certainly denied by the Owner. I have formed the opinion that it is not a defect and if it were a defect, I would find that the cost of rectification is disproportionate to any gain. I allow nothing for this item. Item 139 – Powder Room Toilet Door Mr Hills suggests the toilet door has not been correctly installed and has insufficient clearances between the top of the door and the doorframe to allow lift off hinges to function. This is the same as Item 120. As it is a non-compliance issue in the Total Building Consult Notice of 19 May 2008. I allow the cost of rectification $110.00 -- 40 of 44 -- 41 assessed at $110.00. Item 140 – Floor Waste Mr Hills says there is evidence of discolouration/corrosion in the main floor waste to the powder room floor. Mr Bottcher says this is an Owner maintenance issue and is caused by the cleaning regime of the Owner. He notes that there is no corrosion to the floor waste in the shower. This is similar to Item 124. I make no allowance for this defect. In any event, Mr Salmon says it is merely a case of removing the grate cover. Mr Hills‘ assessment of the cost of rectification is $110.00 which seems to be excessive. Item 141 – Tiling Works There is evidence of cracked wall tiles in the powder room to the right corner of the guest bedroom side access door. Mr Bottcher says there is no defect although he notes there is a crack in the tile, but says it is an Owner maintenance issue. He says it is caused by building movement. He says the crack is not visible and can only be identified by feel. He also observes the rectification would possibly be a less desirable issue than having the crack. Mr Salmon agrees with Mr Hills‘ assessment of $70.00. Although the crack is not readily visible now, it may well expand in the future. I allow the rectification cost of $70.00. $70.00 Item 143 – Tile/Wall Finishes There is misalignment of wall tile finishes at the junction with the window and architraves according to Mr Hills. The gap is sometimes up to 6 mm. Mr Bottcher says the window architrave is proud by 3 mm in areas when he investigated it. He says the purpose of the architrave is to conceal or hide the variation. He does not consider it a building defect. I allow the cost as assessed by Mr Salmon at $100.00. $100.00 Item 146 – Plasterboard Finishes The living room ceiling to the corner closest to the kitchen area has evidence of sheer cracking to the lower ceiling line. Mr Bottcher says there is no ceiling line crack. There is a natural crack due to normal building movement. Mr Hills suggests rectification by the installation of back blocking to plasterboard ceiling line with roof cavity to strengthen up plasterboard sheets to prevent further cracking. He assessed the cost at $50.00. Mr Salmon agrees with that. I allow that figure. $50.00 Item 148 – Wardrobe Shelving This claim was withdrawn. Item 149 – Door Furniture The walk-in wardrobe door in Bedroom 1 is missing a hinge pin at the top. I allow the defect at $12.80. $12.80 Item 151 – Cracking Separation of Plasterboard in Bedroom 1 $30.00 -- 41 of 44 -- 42 Hallway Area Mr Bottcher says it is normal building movement. Mr Salmon says it is a small area and it is normal practice for hairline cracks to be rectified by a painter. I allow the sum of $30.00. Item 152 – Hallway Areas to Wall Line Above Entry Doors Have Poor/Rough Plaster Setting at Ceiling/Wall Line Mr Bottcher noted a small bulge in the corner and some minor imperfections. I allow the cost of rectification by Mr Salmon at $30.00. $30.00 Item 153 – Plasterboard Finishes Mr Hills says the Bedroom 1 side of wall has evidence of poor plasterboard finishes including indentations. Mr Bottcher notes minor defects and minor imperfections. He says it is an acceptable level of finish. Mr Salmon agrees with Mr Hills, but allows the cost of a painter at $30.00. I allow that sum. $30.00 Item 154 – Door Frames Bedroom 1 There is evidence of physical damage to the sill section of the frame on the left hand end. Mr Bottcher says there is no evidence this damage was caused by the Builder. It is not noted in the original defects and not noticed in the original inspection. The cost of rectification was assessed at $80.00. I don‘t allow the defect. Item 155 – Sliding Door Frames to Bedroom 1 These have not been recessed into the floor slab to provide an even level finish to the top of the sill section where the internal floor finishes. The cost of rectification by Mr Hills is assessed at $9,360. The Owner has now tiled in the external area. Mr Bottcher says there was no requirement for recessed door frames indicated in the specification or construction drawings. In my opinion the cost of rectification is disproportionate to any value gained. This is the same as Item 128. Mr Salmon has assessed the cost of rectification at $810.00. I make no allowance for rectification. Item 156 – Toilet Door Bedroom 1 Suite Mr Hills says the door has been improperly installed with insufficient clearance to allow it to be lifted off to function in accordance with BCA Part 3.83.3. Again this is a matter that is in the Total Building Consult Non-Compliance Notice of 19 May 2008. Mr Salmon makes the observation that inserting fingers below a door is new to him. It is not a requirement of the BCA. Removal from the outside is achieved by using lift off hinges, however, for costing purposes he agreed with Mr Hills. I don‘t allow the sum on the basis of Mr Salmon‘s observations. Item 157 – Floor Waste This is the same corrosion problem as the other items. I don‘t allow it. -- 42 of 44 -- 43 Item 158 – Tile Wall Finishes Mr Hills says the Bedroom 1 ensuite to window wall line has evidence of misalignment of wall tile with variations up to 7 mm recorded. Mr Bottcher says there is very little variation and says the architrave is designed to take out this type of minor discrepancy. Mr Salmon allows this item at $157.00. I allow the cost of rectification as assessed by Mr Salmon at $157.00. $157.00 Item 159 – Sealant Joint All sealant joint in between mirrors and wall tiles to wet areas is grey coloured and does not match the beige coloured wall tiles or mirrors. Mr Bottcher says the grey sealant is not compatible with the colour of the rest of the sealant used. The sealant is the same colour and style of finish for the bathroom mirrors. The ensuite mirror was not installed until after termination of the contract by Owner. It is suggested by Mr Bottcher that the same person has completed these works, but not the Builder or their agents. In my opinion that is a reasonable inference to be drawn, particularly as it is not rebutted by the Owner. I make no allowance for this defect. Item 160 – Plasterboard Finishes to Bulkhead Bedroom 1 ensuite bulkheads above vanity area has a visual evidence of bulkhead soffits being out of level in excess of 10 mm in a 500 mm width of bulkhead. According to Mr Bottcher the bulkhead rake is due to a large cornice setting and is a consequence of the materials used and is not a defect. Mr Salmon says it is caused by a metal corner angle installed to the underside of the head which is standard building practice to protect corner. He assessed the cost of rectification at $150.00. He does not consider it a defect. I make no allowance for this item. $17,507.30 [91] The total cost of rectification of the defects I have allowed amounts to $22,280.45. I allow the counterclaim in that amount. [92] In conclusion, I find that the contract was terminated on 10 June 2008, as a consequence of the Applicant‘s acceptance of the Respondent‘s wrongful termination. The amount of damages flowing from the Respondents‘ breach of contract is the amount owing under the contract of $88,839.00 less the balance of the liquidated damages owing of $1,660.00 leaving a balance of $82,746.72 $87,179.00. The Respondent has been partially successful in their counterclaim and I assess the cost of defects at $22,280.45. [93] The balance owing to the Applicant I assess at $60,466.27 $64,898.55 with interest of 15% compounding daily (as provided for in the -- 43 of 44 -- 44 contract)32, which on my calculations amounts to $29,965.90 $32,434.14. I order the Respondents pay the Applicant the sum of $90,432.17 $97,332.69 by 4.00 pm on 10 June 2011. [94] I will receive written submissions in respect to costs. Such submissions, if any, to be filed by the Applicant by 9 May 2011 and the Respondents by 16 May 2011, otherwise I will make no order as to costs. 32 Clause 11.9 and Schedule 19 Exhibit 1. -- 44 of 44 --