District Court New South Wales Medium Neutral Citation: Betta Build Group Pty Ltd v El Baba [2019] NSWDC 331 Hearing dates: 3 – 7, 11, 21 June 2019 Date of orders: 17 July 2019 Decision date: 17 July 2019 Jurisdiction: Civil Before: Abadee DCJ Decision: See paragraph 328 Catchwords: BUILDING AND CONSTRUCTION – construction works for residential dwelling – whether breach of statutory warranties under Home Building Act 1989 (NSW) – whether works defective or incomplete. DAMAGES – whether Bellgrove v Elridge measure of damages applicable – relevance of sale of dwelling to purchaser – whether scope of rectification works as proposed by home owner's building expert reasonable and appropriate. PRACTICE AND PROCEDURE – referral of issue of costs of rectification to referee. Legislation Cited: Home Building Act 1989 (NSW) Cases Cited: Bajic v Paraskevopoulo, (New South Wales Civil & Administrative Tribunal, Senior Member Charles, 22 May 2018) Bellgrove v Elridge (1954) 90 CLR 613 Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 Browne v Dunn (1893) 6 R 67 Director of War Services Home v Harris (1968) Qd R 275 Home Owners of Strata Plan 80458 v TQM Design & Construct Pty Ltd [2018] NSWSC 1304 Hyder Consulting (Australia) Pty Ltd v Wilh Wilhemsen Agency Pty Ltd [2001] NSWCA 313 Jones v Dunkel (1959) 101 CLR 298 P & M Kaye Ltd v Hosier & Dickinson Ltd [1972] 1 All ER 121 Pisano v Dandris [2014] NSWSC 1070 Tabcorp v Bowen Investments Pty Ltd (2009) 236 CLR 272 The Home owners – Strata Plan No. 66375 v King [2018] NSWCA 170 Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253 Wheeler v Ecroplot Pty Ltd [2010] NSWCA 61 Willshee v Westcourt Ltd [2009] WASCA 87 Category: Principal judgment Parties: Betta Build Group Pty Ltd (Plaintiff) Mr El Baba (Defendant) Representation: Counsel: Mr D Thomas (Plaintiff) Mr M Klooster (Defendant) Solicitors: Sage Legal (Plaintiff) G&S Law Group (Defendant) File Number(s): 2018/256941 Publication restriction: Nil index THE BUILDER'S CLAIM Mr Rahme's primary affidavit Mr El Baba's affidavit in response Expert evidence on quantum of works performed by the Builder Expert evidence on delay damages THE HOME OWNER'S CLAIM Mr El Baba's evidence Mr Rahme's evidence in response Mr Rahme's first affidavit Mr Rahme's second affidavit Mr El Baba's evidence in reply Evidence of the sub-contractors Moses Gea Gea Simon Semaan Chadi Bejjani Rida Tawk Jeffrey Azzi Mansour Tarabay EXPERT EVIDENCE ON DEFECTS & SCOPE OF RECTIFICATION WORKS The experts Overview of evidence on defects Mr Shilson-Josling's opinion on defects & recommended rectification Mr Coombes' response on defects Concurrent evidence of Shilson-Josling & Coombes CONSIDERATION Credit Mr Rahme Mr El Baba Messrs Bejjani, Tawk, Tarabay, Gea, Semaan, Azzi Statutory provisions and principles relating to claims for damages for breach of statutory warranties Summary of the statutory provisions Agreed principles Other principles regarding rectification Analysis of builder's claims Quantum meruit Delay damages claim Analysis of home owner's claim Whose expert evidence should be preferred? General findings Jones v Dunkel inference for failure to call Mr Yassine? Aspects of Bellgrove Principle Defects & scope of rectified works Quantifying costs of rectification of works Home owner's claim for overpayment to builder SUMMARY & ORDERS Judgment INTRODUCTION 1. By this proceeding, the plaintiff and cross-defendant ('the builder') brings two claims for damages against the defendant (the 'home owner'), who at all material times, was the owner of property located at Bankstown ('the property'). After entering into a contract with the home owner on 6 August 2015 for construction works, for the fixed price of $767,000, the builder performed works on the property from October 2015 to February 2017; for which it issued payment claims and received monies totalling $531,479. Essentially, the construction works comprised demolishing existing improvements and the construction of a new duplex on the property. The contract set out six stages for payment of the works including the 5% deposit payment. In March 2016, prior to completion of the works, and shortly before the commencement of stage 6, the builder was locked out of the site following the home owner's termination of the contract. 2. The builder's first claim is a claim for work done, whose amount is to be assessed on the basis of a quantum meruit, being what is fair and reasonable. In this respect the builder claims the sum of $177,023.65. The builder's second claim is for "delay damages" during the pendency of the contract prior to its termination. In this respect the builder claims the sum of approximately $31,020. The aggregate quantum of the plaintiff's claim is thus $208,043.65, plus interest. 3. The home owner brings a cross-claim against the plaintiff (cross-defendant) for the cost of rectification works which it says followed after the builder breached several statutory warranties implied in the contract by the Home Building Act 1989 (NSW) (the 'Act'). He says, and it is not disputed, that he paid on account the sum of $513,890 under the contract. 4. The home owner subsequently engaged a remedial builder to carry out some rectification works and paid that builder the sum of $223,500, for "defective works," and $226,500 for "incomplete works". In total, there are 29 items of alleged defective work, of which 15 have been rectified by the remedial builder. 5. The home owner seeks, by way of damages for alleged breach of the statutory warranties, the costs of rectification. He also makes a claim for overpayment of monies paid to the builder. 6. The home owner has identified the issues arising from its cross-claim as consisting of whether the home owner has established each of the 29 items of defective works; what is the reasonable and necessary rectification costs for each item of defective work that is established; what is the value of the works carried out by the builder under the contract and whether the builder was overpaid. 7. In its defence to the cross-claim, the builder contends that the cross-claim does not reflect the fair and reasonable value of any damage suffered as a result of defects. There is also an anterior argument as to whether the defects were as asserted by the home owner and the scope of works alleged to be necessary to rectify them are compensable if they do not affect the value of the property. 8. The property was eventually sub-divided into two dwellings. Both dwellings have subsequently been subject for contracts for sale. For one of those, the contract for sale has been completed (dwelling one) for a sale price of $1.048 million. For the other (dwelling two), completion of the sale (for a contract price of $1.1 million) is apparently imminent. THE BUILDER'S CLAIMS 1. The plaintiff called evidence from Mr Ray Rahme, sole director of the plaintiff, as well as several sub-contractors. Mr Rahme affirmed two affidavits (14 September 2017 and 23 February 2018), the latter one being in response to the home owner's cross-claim. 2. Much of what Mr Rahme said in his affidavits was not disputed. His cross-examination was relatively brief having regard to the scale of the issues (particularly the question of the defectiveness of the works) in question. What follows is his evidence that, to a large degree, was not contested. Mr Rahme's primary affidavit 1. Mr Rahme is a licensed builder (and qualified carpenter) and has been in the construction industry for over 20 years. He has built over 100 houses plus over 200 residential units for other companies. 2. The builder took possession of the site on or about 24 November 2015. Mr Rahme said that at the time that the builder took possession the home owner did not have a construction certificate. This was only granted on 3 March 2016. 3. Mr Rahme explained that he makes payment claims on the basis of milestone payments; not monthly percentage payments. He said that in this case he submitted and received payment for milestones 1 to 4 inclusive. He said that the builder had not been able to submit a payment claim for milestone five because it had not yet reached completion of the milestone: it was necessary for him to complete a range of things including but not limited to: the installation of two internal staircases; waterproofing to wet areas, tiling, kitchen fitout, floor coverings, door jams, hydraulic services fitout, mechanical services fitout and electrical services fitout. He said that the builder had barely commenced work for milestone number six. There were also external works that needed to be completed for milestone five. 4. Under cross examination, he was asked about waterproofing to wet areas being one of the things that had to be completed to achieve milestone five. Mr Rahme was referred to his supplementary affidavit which was (responsive to the cross-claim) where he said in a number of instances that waterproofing had been completed. Mr Rahme accepted that it was not entirely accurate to say in his first affidavit that waterproofing needed to be completed. In re-examination, however, Mr Rahme clarified that it was the external areas of waterproofing that needed to be completed and only one internal area. 5. In relation to milestones 1 to 4 inclusive, Mr Rahme believed that work could be done for the defendant purely on verbal agreements. He referred to a number of verbal variations including the redirection of an easement under the property; and the front face of a balcony that was agreed to be tiled instead of rendered. In his evidence in chief, Mr Rahme explained that this particular matter arose because there was no drainage and the home owner did not wish to pay for an additional drain. The home owner agreed to the builder putting tiles on the front face. He said he was also required to install some cladding on the front-left-hand side of the dwelling. 6. Under cross-examination, Mr Rahme was referred to the contract and, in particular clause 14, which stipulated that variations were to be in writing and signed by the home owner. Mr Rahme accepted that in relation to the variations referred to in his primary affidavit, none of them were at any time signed. In relation to the tiling of the front face of the balcony it was put that the home owner never requested him to change the front facade from the designs. Mr Rahme could not recall the date when he was supplied such instruction but thought it might have been after the lock-up stage (possibly in 2016). This was, Mr Rahme said, in a context where there were regular verbal communications. It was put that the reason the variation was not in writing was because it was not requested. It was put that in so far as the change to the front facade was concerned, the Council might be interested in such change. Mr Rahme responded that there was a problem in the plans and specifications which necessitated the change. In answer to that, it was put that if there was such a problem there was nothing to stop Mr Rahme recording it in writing. It was also put to him that he understood that the home owner's complaint was that the bulkhead for the pipes was too low. Mr Rahme explained that there was a problem with the plans that had been prepared on the home owner's behalf. But it was put that the reason he changed the cost of the bulkhead was that it was cheaper. It was also put that he did not have regard to the construction certificate when he changed it. Mr Rahme denied both propositions. Generally, it was put that for each and every oral variation that he claimed, the home owner had never agreed to any of them. It was put that the home owner ensured that most communications were put in writing. Mr Rahme said that only some of them were. It was put that all of the oral variations claimed by Mr Rahme were inserted only to explain the occurrence of non-compliance with plans and specifications. This was denied. In re-examination, he said that through his entire period of works there were a lot of verbal, or handshake agreements; and this applied also to all the subcontractors he had used. 7. When he received a letter (a breach notice) on behalf of the home owner dated 23 November 2016, Mr Rahme said he became concerned about the home owner's intentions, capacity and commitment to completing the project. When he considered the attachments to that letter, as well as the letter of 28 November 2016, he believed that all of the alleged defects were either incomplete works, simple fixes of which he had previously explained to the home owner, or something the home owner and he had discussed and had reached agreement about. 8. On 30 November 2016, he sent claims for extension of time (EOT) and notices of dispute to the home owner. The claims for extension of time included a claim for delay costs. 9. Although he made reference in his primary affidavit to no less than seven EOT claims (on 30 November, 13 & 21 December 2016 and 20 March 2017), ultimately the builder's claim was limited to the period 6 August 2015 to 24 December 2015, a period of 141 days. The reason that was given for this EOT was a failure by the home owner to provide evidence of capacity to pay. In estimating the quantum of his EOT, Mr Rahme used the rate of $200 per day. No basis was given for this figure in his affidavit. The selection of this rate was challenged under cross-examination. Mr Rahme said it represented between $75-85 per hour, but it was put that there was no indication of expenses of $200 per day. He had not explained what work was done, and what types of costs were incurred, in the period from 6 August until 24 November 2015 when the builder took possession of the site. Further it was not until 30 November 2016 – nearly one year later - that the builder brought this claim to the notice of the home owner. Mr Rahme said that although he believed that he had a right to bring such a claim as at 24 December 2015, he had no intention of bringing such a claim at that point. There was no documentation, up until 30 November 2016, which asserted or proved such claim. Mr Rahme said that, as a builder, he tried to work with the client. It was put that this claim was fabricated. Mr Rahme denied this. In re-examination, Mr Rahme reiterated that he did not bring his first EOT because he wanted to keep good relations with the client. 10. Mr Rahme also makes claim in respect to the unpaid costs of engaging subcontractors in relation to the completion of milestone five. The detail is set out in paragraph 50 of Mr Rahme's primary affidavit. These total approximately $177,023.65 (incl GST). They were notified to the home owner in a letter dated 20 March 2017. Mr Rahme was not challenged in relation to these amounts. Mr El Baba's affidavit in response 1. Amongst other things, in his first affidavit sworn on 16 November 2017, the home owner, Mr El Baba, responded to certain matters in Mr Rahme's primary affidavit. He said that payments made by him were on account only. He denied entering into any verbal agreements; or instructing the builder to divert from the plan specifications. He denied ever discussing or agreeing to the builder fixing defects at a later stage; indeed he asked the builder repeatedly to fix the defects immediately and to comply with its obligations under the contract. Since the contract documents he prepared were designed to be a complete set of instructions, he said there was no need for him to provide any oral instructions at any time. He says that at all times he had been fully funded and able to pay the entire contract price. 2. Under cross-examination, it emerged that the sub-divided dwellings at the Bankston property were both the subject of contracts of sale; and, in both cases, the sale price was more than $1 million. Curiously, although a contract was entered for the sale of dwelling two in February 2018, completion had still not occurred by the time of the trial. It was also curious that the purchaser for this property was Mr Yassine, who performed the remedial works after the builders contract had been terminated in March 2017. Mr El Baba accepted that it was always his intention to sell these properties for profit. Other features of his cross-examination included his evidence that: 1. for the duration of the contract, he attended the site regularly, every 3 to 4 weeks and sometimes had his interior designer attend; 2. he often spoke to Mr Rahme and when he was not happy with the general progress, his practice was to discuss things and then put them in writing; 3. although he did not consider having agreed to any verbal variations, he had in fact made two payments in relation to verbal variations. Mr El Baba believed he had no real choice but to do so; 4. although he had now completed or (in relation to dwelling two) exchanged contracts for sale, he had not rectified many of the items of defective work claimed on his behalf. His explanation for this was that he did not have the funds; although he accepted that he did not explain this incapacity in his earlier evidence; 5. he was challenged on his compliance with a notice to produce when, at the point of informally producing documents, he withheld production of the contract for sale in relation to dwelling two whilst, at the same time, informally producing a letter from his real estate agent, Mayflower Real Estate, which letter suggested that the property was still on the market. The contract for sale was only produced at the point when the notice to produce was formally called upon during the trial. 6. the reason for the current non-completion of the sale of one of the two dwellings was a financial arrangement with his bank. It was put to Mr El Baba (and denied by him) that the reason for the delayed completion of the sale was to try to ensure that the transaction would not come to light at trial; 7. it was put to Mr El Baba, and he denied, that he failed to complete the rectification works in relation to the project because he considered them uneconomical or unnecessary to fix; 8. it was put to him that his evidence that he did not enter into two verbal variations (beyond the agreed scope) was untrue because he had paid monies, on at least two separate occasions arising from verbal variations. Mr El Baba explained that he paid these amounts so as to avoid legal dispute. Expert evidence on quantum of works performed by the Builder 1. The builder relied upon the evidence of Mr Peter Lee, in his report dated 9 May 2018 (Ex G). Mr Lee is a quantity surveyor of the firm JRQS Pty Ltd. Having graduated with a Bachelor of Building degree (UNSW) in 1989 he has had approximately 30 years of postgraduate experience in building construction. He is an Associate member of the Australian Institute of Quantity Surveyors. He has provided numerous expert reports on rectification works and cost estimation. He is experienced in residential building construction, including duplexes. 2. Mr Lee's report is divided into two sections. The first concerns his quantification of the builders' claim for unpaid money. The second section concerns his response to the home owner's expert evidence (from Mr Shilson-Josling) relating to the costs of rectification works. 3. Mr Lee inspected the site on 16 February 2018. He observed that the buildings were already completed, including the external works, landscaping and driveways. Except for the brickwork, most other alleged defects were not visible; having been either concealed or addressed. 4. Mr Lee's indicative cost estimate of the value of the outstanding works to be completed by the builder was in the order of $271,092 (incl GST). The remedial builder's (Mr Yassine) actual cost to complete the outstanding works was $226,500 (incl GST). Mr Lee regarded the remedial builder's actual cost to complete the outstanding works was 'not unreasonable'. 5. Taking that sum of $226,500 away from the amount of the contract price ($767,000) yields the sum of $26,500 (Ex G, Section H, par 3). Expert evidence on delay damages 1. Mr Lee noted that there was no agreed rate for holding costs. He regarded the $200 daily figure selected by Mr Rahme as being not unreasonable. Having regard to a project of this nature he thought that a daily holding cost of $200-$500 was not uncommon and would not be unreasonable. Beyond that, Mr Lee did not have sufficient information to provide further comment on the delayed damages claim. THE HOME OWNER'S CLAIMS Mr El Baba's evidence 1. Mr El Baba swore two affidavits (16 November 2017 and 6 May 2019). In his first affidavit, he explained that he had not previously renovated or constructed a property; or worked in the building industry. He said he purchased the subject property in 2014 and had made no improvements to it. 2. He obtained development consent from Bankstown Council for alterations and additions on 16 April 2015. Construction plans were prepared by his architect in May 2015. 3. The home owner entered a contract with the builder on 6 August 2015. Mr El Baba recalls that the builder took control of the site in or about October 2015. He believes that home warranty insurance was obtained by 28 January 2016. On 1 February 2016, a construction certificate was issued. He said that he, and his interior designer, attended the site on numerous occasions. For his part, Mr El Baba said that he attended to inspect the progress and works being carried out every three to four weeks. 4. Mr El Baba denies any written document agreeing to variations. 5. From July 2016, Mr El Baba says he became concerned with various aspects of the works, including both progress and quality. He sent correspondence to Mr Rahme in early August and early September 2016. He says that most of the time, most of his dealings were with Mr Moses Gea Gea, Mr Rahme's nephew. By November 2016, he had retained lawyers. On 23 November 2016, his lawyer issued a breach notice to the builder on the home owner's behalf. 6. Several important inspections occurred between November 2016 and March 2017: 1. A report prepared by 'Vital Building and Pest Inspection', dated 24 November 2016 (the report being not admissible for the opinions contained within it); 2. A report prepared by Criterion Building (Mr Shilson-Josling), an independent building consultant, dated 2 March 2017. This was the report which the home owner primarily relied upon at the trial. 1. The 'Criterion' report was sent to the builder on or about 7 March 2017. On 10 March 2017, after receiving correspondence from the builder, the home owner terminated the contract. 2. After having taken possession, Mr El Baba set about finding builders to carry out rectification works. On 20 March 2017 the home owner entered into a contract with JHK Civil Pty Ltd to carry out those works. They commenced around early April 2017. The total amount payable under the contract was $450,000. Mr Rahme's evidence in response 1. Mr Rahme's response to the home owner's claim came in two instalments: it was briefly touched upon in his first affidavit and was then more fully developed in his supplementary affidavit of 23 February 2018. Mr Rahme's first affidavit 1. On 7 March 2017, Mr Rahme was served with a report prepared by Mr Shilson-Josling (dated 2 March 2017). The report had been prepared by Mr Shilson-Josling based upon his inspections of the site on 12 December 2016 and 25 January 2017. Approximately 25 defects had been identified. A response was demanded within 3 days. In the next three days Mr Rahme says he prepared a detailed and considered response. 2. That response is contained in his letter of 10 March 2017. Mr Rahme says that, for each response, he gave proper reasons to each item as to why he considered it to be or not to be a defective or incomplete item - because the works were under suspension pursuant to the contract. The contents of that letter were not before me. Mr Rahme's second affidavit 1. The main point of Mr Rahme's affidavit evidence was to provide further commentary on the status of the works on various dwellings as at the date when the home owner took possession, on 10 March 2017. Mr Rahme's evidence in this respect may be summarised as follows. (a) Ground floor works 1. As to the ground floor on dwelling one (left-hand side, facing from the street), in relation to the 'front entry'/'lounge', he says that the gyprock was installed on all walls and the ceiling; the windows were installed; the window sills, heads, jams and architraves were all installed, the carpet was not installed, the skirting was not installed, the electricals were installed but only to a rough stage and needed to be fitted with some general power outlets, light switches and light fittings. In relation to the "staircase", he had possession of it at his personal residence and the home owner was welcome to have it once he had paid for it. In relation to the "laundry", the waterproofing and tiling was complete; but neither the laundry tub nor the tapware was purchased or installed. In relation to the "main bath", the internal door, between the garage and the rest of the house, was installed and lockable; the internal finishes to the walls and ceiling were completed; the garage doors were not installed; the stairs from the garage to the rest of the house were installed. In relation to the "bed/study", he said that: the gyprock was installed on all walls and the ceiling; the windows, window sills, heads, jams and architraves were all installed; the carpet and skirting were not installed; the electricals were installed to a rough stage and needed to be fitted with some power points. In relation to the "kitchen", the gyprock was installed on all walls and the ceiling; the windows, window sills, heads, jams and architraves were all installed; the kitchen benches had been manufactured and were waiting to be installed. They are in a warehouse. The tapware, the other and the dishwasher had not yet been purchased to be installed. In relation to the "family room", the gyprock was installed on the walls and the ceiling; the windows, window sills, heads, jams and architraves, and sliding door, were installed. In relation to the "hallway", the gyprock was installed on the walls and the ceiling, the gyprock was painted, the electrical rough in was completed; the step and carpet was installed. Lights and power points were not installed; however these did not need to be completed before 10 March 2017. (b) First Floor works 1. In relation to the first bedroom, Mr Rahme said that the gyprock was installed on all walls and the ceiling; the electrical rough in was completed; the carpet and skirting were not installed; the lights and power points were not installed however that did not need to be completed prior to 10 March 2017. In relation to the "robe/his", the wardrobe was not installed; the gyprock was completed and the installation of metal railings and a shelf was a minor task to be completed. The doors to install the wardrobe had not been purchased. In relation to the "robe/hers", the same position applied as per the 'robe/his'. In relation to the 'ensuite', Mr Rahme says that the waterproofing was completed, the screed for the tiling installed. However the tiling was not completed and the toilet, vanities and basins were not purchased. In relation to each of the second, third and fourth bedrooms, the position was the same as per the first bedroom. In relation to the 'hallway', Mr Rahme said that the gyprock was installed on all walls and the ceiling; the gyprock was painted, the electrical rough in was completed. Although lights and power points had not been installed, these did not need to be completed before 10 March 2017. In relation to the 'bathroom', the gyprock was installed on all walls and the ceiling, the exhaust fan was roughed in; the waterproofing was completed and the tiles were installed (although Mr Rahme had been since advised that these had been removed at Mr El Baba's direction with a new design of tile to be installed.) Vanities were not completed because Mr El Baba could not decide what size vanity he wanted to have the builder construct for him. In relation to the 'linen cupboard', the linen cupboard had been formed by the gyprocker, but the doors had not been purchased or installed. (c) External works 1. In relation to the 'ground floor front patio', Mr Rahme said that the front door was fitted and the concrete patio was laid. In relation to the 'first floor front patio', the waterproofing and the screed for the tiles had been completed; the tiles had been laid, the lighting rough in had been completed. The ceiling had been lined with incorrect sheeting. Mr Rahme says he was prepared to have his sub-contractors fix this at their cost as they agreed that they had installed the wrong ceiling lining (this hearsay evidence was not objected to on the home owner's behalf). In relation to the external tiling, the vertical surface that was formed by the balcony slab was supposed to be tiled. Mr Rahme agrees that this front tiling requirement was required by the DA. In relation to the external painting/rendering, Mr Rahme says that all external painting and rendering was completed. In relation to the pouring of the concrete driveway, Mr Rahme says that this work had not been commenced and had not needed to be commenced as at 10 March 2017. In relation to each of the 'ground floor rear patio' and 'first floor rear patio', Mr Rahme says that the roof was erected and the electrical works were roughed in. In relation to the 'rear landscaping', this was due to commence very shortly after 10 March 2017. Mr Rahme also recalled that the status of the construction of the works on the ground floor of dwelling two was the same as for dwelling one as at 10 March 2017. 2. In his second affidavit, Mr Rahme also alluded to other development projects that Mr El Baba had entered into in April 2015. These were in respect to properties at Harold Street, Mount Lewis and Dargan Street, Yagoona. Mr El Baba's evidence in reply 1. In his affidavit dated 6 May 2019, Mr El Baba responded to Mr Rahme's affidavit of 23 February 2018. His main point was that he relied upon the expert report of Mr Shilson-Josling, dated 2 March 2017. He did however, set out line-by-line responses to all of the evidence of Mr Rahme's description of the works that had been performed and which had not yet been performed. In view of his reliance upon his expert (and particularly in circumstances where that report was produced over 2 years before Mr El Baba's affidavit of 6 May 2019), it is unnecessary to list these line by line responses. It suffices to say that Mr El Baba contested virtually every aspect of the evidence that Mr Rahme had adduced. 2. I generally note that Counsel for the builder and home owner did not put to their adversaries that either party's recollections of what was complete and not complete was wrong and infer that no point is to be taken about the application of the rule in Browne v Dunn (1893) 6 R 67. As I note in my findings below, although I have had regard to what both the builder and home owner had to say, it is the independent and objective evidence of third parties which carries (much) more weight. Evidence of the sub-contractors 1. In this section I refer to the evidence of Mr Rahme's sub-contractors. Sometimes reference is made to paragraph numbering in Mr Shilson-Josling's 25 October report. Moses Gea Gea 1. Mr Gea is the nephew of Mr Rahme. At the time he affirmed his affidavit of 14 December 2017 he had worked as a finishes foreman for one of the subcontractors to the builder in this case, but at the material time for this case he was employed as a general hand by the builder. 2. Mr Gea was not required for cross-examination on his affidavit. The material part of his evidence was as follows. He disputed being the only worker on site from eight October to 15 November 2016. In response to the home owners concern about a lack of supervision and construction inexperience, Mr Gea said that he did not need to be licensed as he was not a project manager or construction manager. As to his experience, he had been working in the construction industry since 2013 on various projects. Specifically, he did not require a license for the subject works; nor any supervisor's license. He received instructions directly from Mr Rahme, by telephone and in person. 3. He described his duties in the subject works as including calling various subcontractors to come on the site, double-checking that works were completed on the site and reporting to Mr Rahme as to the status works; site cleaning; general site labouring and signing delivery dockets for the couriers and suppliers who had supplied goods and building materials to the site. He denied engaging in activities of the kind that a project manager or a licensed builder/supervisor was responsible for, including such things as deciding which subcontractors to use and meeting with subcontractors regarding their performance. He said the works that he did he did not need to have a builder's licence or supervisors license. On the subject works he worked under Mr Rahme's builder's license. 4. In response to Mr El Baba's assertion as to his lack of building-related qualifications or experience, Mr Gea recalled a conversation with Mr El Baba in which the latter described himself as being an electrical engineer and who could have done all the electrical works on the site. Simon Semaan 1. Mr Semaan is the director of SSE Roofing Pty Ltd. the company was a (roofing) subcontractor who worked on the project at the Bankstown property. It had had a good association with the builder and had said that it had never had the payment problems with the builder that it had in relation to this project. 2. Mr Semaan said that from an agreed price of $30,000 (incl GST), a sum of $5000 remained unpaid. 3. Mr Semaan was asked to provide commentary in response to certain parts of the home owners expert builders reports, being the: standard property report dated 24 November 2016; Mr Shilson-Josling's building inspection and defect report dated 2 March 2017 and the second Shilson-Josling report of 25 October 2017. It was really on the last report in respect to which he had anything relevant to say. 4. In response to paragraphs 12.434 to 12.474 (Item 16: Brickwork and Roof Abutment), Mr Semaan said that he had never been asked by the home owner to come back and complete the flashings – something which he says was an easy task to complete and capable of being done straight way. 5. In response to paragraphs 12.782 to 12.808 (Item 26: roofing, flashing and capping), he characterised the works as being incomplete, and appropriately finalised at the end of the project. For example, in relation to the rusted silicon, additional screws, screws to be tightened; these could all be fixed very easily. He could replace the 40mm capping with a 50mm capping if required; he had never been asked by the home owner to complete the flashings; and the excess silicon (identified in photo 1.177) was at the top of the building and not generally visible. 6. Mr Semaan says he could have completed these works at no additional cost to the builder. 7. Mr Semaan was not required for cross-examination. Chadi Bejjani 1. Mr Bejjani is director of the bricklaying company, The Phoenician Services Pty Ltd. 2. He says that he would happily have organised for his company to return to the site at the Bankstown property if it was allowed back on site, to fix the defects that were truly 'defects' (Items 9-17). 3. Mr Bejjani was not required for cross-examination. Rida Tawk 1. Mr Tawk is the director of Pro View Plumbing Pty Ltd. He has known Mr Rahme since he was a child. He is a licensed plumber. 2. For the subject project, Mr Tawk's company carried out the hydraulic services for the builder. It did so without a written project. Out of a contract price of $33,000 (incl GST) all but $11,500 has been paid. 3. Mr Tawk says that had he been permitted to return to the property to complete the works (after the builder had been locked out) he would have done so and done so at his company's expense. 4. He also reviewed the Standard Property Report, the First Shilson-Josling Report and Second Shilson-Josling Report. His commentary was material to the last of these reports. 5. In response to paragraphs 12.28 to 12.52 (Item 2), he said, first, that for all projects he works on, he needed to comply with AS3500, the requirements of the Office of Fair Trading and the local council. He also ensures that when setting out a layout for sewer design, he contacted the Office of Fair Trading to register the lay out and book an inspection. He says that, in this instance, the Office of Fair Trading did not attend the site. He did, however, later submit the design. 6. Mr Tawk described as proper practice for the layout for sewer design to be done before the concrete slab is poured. It was at this stage that Mr Tawk said that he noticed that (a) the garage on the property had sunk below the rest of the house; and (b) there was a 540mm difference between the two sewer stacks. 7. He explained that he thought it practical to put all of the stack points in the garage, since the whole trench would need to be lowered about 700mm to allow for the requisite fall and allow gravity to make the waste water flow from the lowest point at the front of the property to the back. 8. He said that when he needed to eliminate the stack point in the garage, he raised the issue with Mr Rahme. Mr Rahme indicated to him the need to make the home owner aware of that. He heard Mr Rahme speak to Mr El Baba. He thereafter received permission from Mr Rahme to do what he had proposed. 9. Under cross-examination it was suggested that the 'practical' solution he had chosen was simply the cheaper solution. It was put there was no reason why the plans could not been complied with. Mr Tawk disagreed with this. 10. He said that he had been on the site on numerous occasions when Mr El Baba was on site. At no time had Mr El Baba complained about the overhead pipework or request a meeting to discuss how to change the design. 11. In one of his answers in cross-examination Mr Tawk mentioned, with reference to his relations with Mr Rahme that often there were verbal 'handshake' agreements. Jeffrey Azzi 1. Mr Azzi is a licenced electrician and licenced carpenter and is the director of A & T Electrical Services Pty Ltd. his company was engaged to carry out the electrical services. There was no written contract specifically for this project. He had known Mr Rahme and had had no payment problems with him of the kind encountered on the subject project. He said that $7700 had remained unpaid. 2. Mr Azzi recalled that on or about 10 June 2016 he received an email directly from Mr El Baba. This was about some extra wall lights being supplied by him (Mr El Baba) and installed by Mr Azzi. 3. He said that the cost of rectification of electrical defects would have been included in his contract sum and that he would not have charged the builder any more money for this. 4. He said that he had completed all of the scope of his works except for the installation of lights, the installation of kitchen appliances (as the kitchen was not installed) and the installation of some of the general power outlets. He says he had completed the usual testing and commissioning. 5. Mr Azzi was not required for cross-examination. Mansour Tarabay 1. Mr Tarabay is a pest technician, being the director of Delta Pest Management and Maintenance Pty Ltd. Mr Faraday has known Mr Rahme for 10 years. 2. Mr Tarabay reviewed Mr Shilson-Josling's report dated 2 March 2017 and specifically, Part 6.6, titled "Termite Management System" (TMS). He also reviewed Mr Shilson-Josling's report dated 25 October 2017, and, specifically, Part 12.130 (Item 6). 3. He said that a system of termite protection was designed and installed at the project. He interpreted the reference to the 'rear patio' as being to an internal wall and that this did not need termite protection: termite protection was only needed to all external walls. 4. In response to paragraphs 12.143-12.145, the TMS installed did have a "codemark" the proprietary system produced by 'HomeGuard'. He provided Mr Rahme a certificate of compliance on the day that his firm had finished. 5. In response to paragraph 12.146, he said that even where there was no tag which was visible, the blue HomeGuard termite mesh was personally installed by him. 6. He said that there was no cavity to protect and the subsequent trades cut down the termite mesh, to install their components of the building. That meant that there was either an entry point, being a doorway, or the full height window itself as a physical barrier to termites. Under cross-examination, Mr Tarabay indicated that he did not see this occur and that the subsequent trades had been engaged by Mr Rahme. EXPERT EVIDENCE ON DEFECTS & SCOPE OF RECTIFICATION WORKS The experts 1. The home owner relied upon the evidence of Eric Shilson-Josling, in a report dated 25 October 2017 (Ex 3). Mr Shilson-Josling is a senior building surveyor of the firm Criterion Building Codes and Access Pty Ltd. He is a member of the Australian Institute of Building Surveyors and an accredited building surveyor. He has previously provided expert reports of existing, proposed and completed building works against current statutory and other applicable standards. The subject report followed inspections by him on 12 December 2016, 25 January 3 June and 17-19 September 2017. These inspections occurred in the presence of Mr Rahme. 2. The builder relied upon the evidence of Doug Coombes, of Doug Coombes & Associates, in a report dated 16 October 2017 (Ex E). Mr Coombes is a building consultant, with a Bachelor of Building degree and a Joinery Trade certificate. Mr Coombes is currently a Chartered Builder and Fellow of the Australian Institute of Building. He has 55 years of experience in the building industry. He conducted a site inspection on 5 October 2017. Overview of evidence on defects 1. The defects identified by Mr Shilson-Josling, the home owner's contentions (based on the Shilson-Josling report) as to whether they have presently been rectified and the builder's contentions (based on Coombes report) as to whether they were defects at all are essentially set out in the following table: Item Issue [1] Building defects according to Shilson-Josling report [2] Whether home owner says defect rectified Building defects according to Doug Coombes report [3] 1 Tiles used on front façade Defect Yes Neither defect nor incomplete work 2 Low section to hall ceiling Defect No Neither defect nor incomplete work 3 External soffit linings Defect Yes Neither defect nor incomplete work 4 Garage ceiling lining Defect Yes No defect 5 Exposed Concrete to walls Defect Yes Incomplete work 6 Termite treatment system Defect No No defect 7 Discontinuity of concrete slab Defect Yes No defect 8 easement restrictions Defect No No defect 9 Brickwork- staining Defect No Incomplete work 10 Brickwork- mortar filling & cleaning Defect No Incomplete work 11 Brickwork - Bed joints Defect No No defect 12 Brickwork - Perpends Defect No No defect 13 Brickworks - window sills/thresholds Defect No No defect 14 Brickwork – weep holes Defect No Partial defect 15 Brickwork - flashing & damp-proof course (DPC) Defect No No defect 16 Brickwork & roof abutment - cavity and roof flashing Defect No No defect 17 Brickwork - articulation joints and other control joints Defect No No opinion 18 Brickwork - global scope of work Defect No No defect 19 Rear patios - fixing of roof beams Defect Yes No opinion 20 Rear patios - spacing of ceiling supports Defect Yes No defect 21 Waterproofing internal Defect Yes No defect 22 Waterproofing external Defect Yes No defect 23 Stone tiles - internal Defect Yes No defect 24 Stone tiles - external Defect Yes No defect 25 Steel being and Joists - first floor veranda Defect Yes No opinion 26 Roofing, flashing and capping Defect Yes No opinion 27 Internal stairs Defect Yes No opinion 28 Timber framing roof void first floor Defect Yes No defect 29 Glazing Defect Yes No opinion Mr Shilson-Josling's opinion on defects & recommended rectification 1. A concise, overly-simplified summary description of Mr Shilson-Josling's views in respect to each items, as to (a) the defects and (b) the suggested rectification, as set out in his report of 25 October 2017 (Ex 3) is as follows: 1. Item 1: tiles are applied to the front facade of the building which are supposed to be of the rendered brickwork. The finishes to the vertical faces of the first floor balconies have not been installed as specified. 2. Suggested rectification: allow for provision of a finish that resembles rendered brickwork to the front elevation of both dwellings one and two, without significant demolition and reconstruction of the facades; and allow face brickwork to be reinstated on the west elevation of dwelling one. 3. Item 2: the work concerning the sewerage stack work and bulkheads across the lower level hallways are not in accordance with the approved drawings. 4. Suggested rectification: ensure pipework is correctly tested and that there is no loss of amenity through water sounds of effluent in the pipes being heard in the entrance hallways. 5. Item 3: the plasterboard ceilings to the porch and balconies are not in accordance with the manufacturer's installation manual (which required gyprock). 6. Suggested rectification: remove the existing ceiling/soffit linings and supply and install Merbau on treated pine to ceilings/soffits and finish with Dulux into grain exterior natural stone; and install the ceilings that are suitable for use in the external locations. 7. Item 4: plasterboard ceiling in the garage is not a suitable material; and normal gyprock should have been used. 8. Suggested rectification: this is to be specified by the engineer. 9. Item 5: concrete is exposed in the wall surfaces of the hallway and ground floor bathroom of dwelling one. 10. Suggested rectification: after removal of concrete, make good the surface to allow interior finishes to be provided or make good or complete the internal wall framing and lining then provide waterproofing to the repaired or completed wall section in the bathroom (the expert noted that this had been completed by September 2017). 11. Item 6: the TMS is not installed in accordance with the BCA. 12. Suggested rectification: re-install and revise a complete TMS as installed in accordance with the manufacturer's specifications, certificate of conformity and/or other approval conditions. 13. Item 7: there is an unformed construction joint in the concrete slab beneath the brick wall, separating the front ground floor patio and garage. 14. Suggested rectification: a practising structural engineer should assess the unformed construction joint, to determine the extent of the unformed construction joint and to determine if the performance of the concrete slab and/or edge beams had been affected. 15. Item 8: works are not in accordance with the approved architectural drawings and there is a possible encroachment to the easement. 16. Suggested rectification: engage a qualified land surveyor to determine if the works have encroached within the easement (which, if it has arisen, may necessitate an application to amend the easement). 17. Item 9: the face brickwork is stained and not clean from the mortar. 18. Suggested rectification: treat and clean the whole of the masonry exterior to ensure all areas of acid staining and remaining mortar marks are rectified. 19. Item 10: the external brickwork to both dwellings has improperly filled mortar joints. 20. Suggested rectification: filling of blow outs, voids and cracking to meet mortar joint requirements. 21. Item 11: bed joints to both dwellings have inconsistent horizontal alignment and joint thickness. 22. Suggested rectification: replacing the external face of masonry walls at the same time as rectification works for the perpends. 23. Item 12: perpend joints to both dwellings have inconsistent vertical alignment and joint thickness. 24. Suggested rectification: replacing the external face of masonry walls at the same time as rectification works for the bed joints. 25. Item 13: various defects associated with the brick window sills to both dwellings. 26. Suggested rectification: removal of existing window sills and re-lay windowsills in conjunction with the provision of weep holes at all window sill flashings. 27. Item 14: several defects associated with the weepholes, including blockages and missing weepholes. 28. Suggested rectification: removal of existing window sills and re-lay windowsills in conjunction with the provision of weep holes at all window sill flashings. 29. Item 15: several defects associated with the damp-proof course, including that it does not project to the outer face of the external brickwork. 30. Suggested rectification: reinstall and provide a complete damp proof course, in conjunction with rectification of the termite Management system at ground floor level. 31. Item 16: several defects associated with cavity flashing. 32. Suggested rectification: provide a cavity flashing that extends beyond the external face of the masonry wall above the roof line of the ground floor groups, in conjunction with the provision of an over flashing extending over the existing apron flashing. 33. Item 17: some articulation and control joints have not been provided as per the engineering plans. 34. Suggested rectification: the control joints, articulation joints, contraction and expansion joints, wall ties are to be in accordance with specifications and relevant Australian Standards. 35. Item 18: due to the range of issues concerning the masonry work demolition and reconstruction is recommended. 36. Suggested rectification: remove and replace the external face of masonry with the same masonry units and lay strictly in accordance with provisions of part 3.3 of the BCA and Australian Standard. 37. Item 19: fasteners to the joint hangers and multi-grips are not in accordance with the manufacturer's specifications. 38. Suggested rectification: provide fasteners to the framing brackets and multi-grips, in accordance with the manufacturer's specifications (the expert noting that ceiling linings had been provided to the rear patios of both dwellings). 39. Item 20: spacing of furring channels to the rear patios is not in accordance with the manufacturer's specification. 40. Suggested rectification: provide support to ceiling lining in accordance with the relevant standard of construction and/or the manufacturer's specification (the expert noting that ceiling linings had been provided to the rear patios of both dwellings). 41. Item 21: defects associated with internal waterproofing are not in accordance with Part 3.8.1.2 of the BCA and AS 3740-2010. 42. Suggested rectification: removal of relevant tiles, water stops and mortar beds and provide waterproofing in accordance with BCA (3.8.1) and Australian standard (AS 3740). 43. Item 22: defects associated with external waterproofing are not in accordance with Part 3.8.1.3 of the BCA and AS 4654 Part 2. 44. Suggested rectification: remove existing masonry in stages to the wall between the verandahs; ensure that minimum lapse of flashings are provided in accordance with AS 3700 and ensure that a suitable interface is achieved between the through flashing and the verandahs waterproofing. 45. Item 23: tiling to the bathrooms and ensuites is incomplete, and wall tiles have only been spot fixed. 46. Suggested rectification: remove tiling to affected floors and wall panels; waterproof as required and install tiles in accordance with manufacture's specifications. 47. Item 24: defects associated with the stone tiling to the front balconies, as well as to the sheet flooring system. 48. Suggested rectification: remove the tiling; where necessary replace wall tiling; supply and install tiles in accordance with the manufacturer's specification. 49. Item 25: no engineering details provided for the steel beams that support the leading edge of the front balconies on both dwellings. 50. Suggested rectification: to be specified by an engineer (the expert noted that works had been undertaken to the front verandahs). 51. Item 26: defects associated with the upper level roof. 52. Suggested rectification: provide and install parapet flashing that has a minimum 50mm downturn and anti-capillary breaks; provide an over flashing with anti-capillary breaks. 53. () Item 27: the steps between the garage in the hallway of both dwellings do not comply with the requirements of Part 3.9.1.b(b) of the BCA. 54. Suggested rectification: ensure that the stairs riser and going dimensions are constant and that the slope relationship quantity is in accordance with the BCA by applying a topping surface finish to the treads and risers after term determining the height of the select finish. 55. () Item 28: parts of the roof structure do not comply with the provisions of AS 1684 – Timber Framing Code. 56. Suggested rectification: engineer access and report on roof/ ceiling framework with rectification as specified by engineer. 57. () Item 29: not all window units have been legibly labelled in accordance with AS 1288. 58. Suggested rectification: access compliance of glazing to BCA provisions; such assessment being undertaken by qualified glazier or engineer. Mr Coombes' response on defects 1. A summary of Mr Coombes' stated differences from the Shilson-Josling report, as set out in the former's report of 23 February 2018 (Ex F), is as follows: 1. Item 1: any tiles applied to the front façade had been removed. The beams and columns to each dwelling now have a white painted finish. Any tiling use would only represent a departure from the contract, rather than a defect in construction. 2. Item 2: the distance between the finished floor level and the underside of the bulkhead is compliant with the requirements of the BCA. 3. Item 3: if the specification and selection schedule specifies timber ceilings to the porch and balconies, there has been a non-compliance with the contract. 4. Item 4: agrees with Mr Shilson-Josling. 5. Item 5: the issue has been rectified at both locations. The work was incomplete at the time of termination. 6. Item 6: at some locations the edge of the termite barrier may not be visible at the outer edge of the brickwork. 7. Item 7: the concrete driveway and adjacent paving had concealed the edge of the concrete slab. 8. Item 8: the brickwork was continuous to form the external corner at the family room. The drawings indicated the brickwork was to be omitted at this corner. 9. Item 9: the brickwork was clean and fit for purpose. It was incomplete at the time of termination. 10. Item 10: the current condition of the brickwork was acceptable and fit for purpose. It was incomplete at the time of termination 11. Item 11: there was minor isolated evidence of bed joint thickness, but the external brickwork was fit for purpose. The work is not a defect in construction 12. Item 12: there was minor isolated evidence of perpend joint thickness but the external brickwork was fit for purpose. The work was not a defect in construction 13. Item 13: the brick sills and tiled thresholds are fit for purpose. This is not a defect in construction. 14. Item 14: agrees generally with Shilson-Josling, but considers AS 4773.2 is the more appropriate standard. This means he is only an agreement where Mr Shilson-Josling's report refers to a lack of weepholes in areas other than at sill flashings. 15. Item 15: the paving alongside the garage of the dwelling has been poured since the termination. It is no longer possible to view some of the alleged defects. Nevertheless at some locations the damp proof course does not project to the outer edge of the brickwork. 16. Item 16: the weep holes have not been provided to allow water from the cavity flashing to escape and the cavity flashing does not extends to the outer edge of the brickwork. There is no evidence of water penetration to the interior of the building. 17. Item 17: because this is a new issue, no opinion is offered. 18. Item 18: disagrees with recommendations for demolition and reconstruction of masonry work. 19. Item 19: not possible to inspect the condition of the joist hangers and multi-groups used to connect the patio roof timbers. 20. Item 20: no evidence of distress to the lining boards. No defect in construction. 21. Item 21: tiling completed to all internal wet areas. No defect in construction identified. 22. Item 22: tiling completed to all internal wet areas. No defect in construction identified. 23. Item 23: all bathroom and ensuite tiling, including waterproofing has been replaced. Unable to identify any defect in construction. 24. Item 24: some of the defects assumed may not be correct as some of the issues are concealed and unable to be inspected (ie those labelled at b, c and d of paragraph 12.739). 25. Item 25: Not able to comment without being provided with engineering drawings or details. 26. Item 26: not able to comment since on day of inspection the expert was unable to gain access to the upper roof level. 27. () Item 27: not able to comment. 28. () Item 28: only a limited inspection of the roof structure can be carried out, due to the low clearance within the roof void. Roof structure has not exhibited any form of structural failure. 29. () Item 29: This is a new issue. No opportunity to inspect the issue. 1. Mr Coombes did not provide for any alternative recommendations for rectification for items 8-29 (inclusive). Concurrent evidence of Shilson-Josling & Coombes 1. Mr Shilson-Josling and Mr Coombes gave evidence concurrently. Their evidence was principally centred upon Mr Shilson-Josling's report dated 25 October 2017 (Ex 3) and Mr Coombes' report of 23 February 2018 (Ex F). The evidence they gave may be summarised as follows: Item 1 1. After some hesitation, Mr Coombes accepted that the plans did not require tiling on the front façade. Absent some variation, Mr Coombes agreed that this amounted to a defect. He also accepted that he provided no alternative recommended form of rectification to that which had been proposed by Mr Shilson-Josling, despite having the opportunity to express such recommendation. Item 2 1. The home owner's complaint here is that the bulkheads in the ground floor hallways are too big and the sewer was redirected from where it should have been (stack located in the garages), based upon the plans. This was contrary to the construction certificate plan. Mr Shilson-Josling said in his report (paragraph 12.39) that the wall and bulkhead width dimensioned on the CC approved plan had a frame size of 90mm and the depth of the approved bulkhead was not dimensioned or represented on the drawings. But bulkheads were not as per the approved plans and the inclusion of the sanitary drainage pipework resulted in wider bulkheads constructed in the ground floor hallways. 2. Mr Coombes' response was that the distance between the finished floor level and the underside of the bulkheads was greater than 2 metres and therefore complied with the BCA. He said that the plan did not show where the routed pipes were. Mr Coombes did not see anything wrong with the bulkhead, although he acknowledged that he did not set out any test to determine the width of the bulkhead, nor did any testing. He maintained that it was not necessary to measure the width of the bulkhead, even though he had the opportunity of doing so. He agreed that he had not provided any alternative recommended scope for any defect, in this respect, in his report. 3. Mr Coombes said that he would not have been surprised if the bulkhead had not subsequently been reduced. In respect to the routing of the pipes, he had not suggested any re-routing. That was not necessary for safety or living. He added that routing of the hydraulic pipes was a matter for the plumber on site; and that at the end of the job, the plumber would certify the work in a compliance certificate. Mr Shilson-Josling said that no hydraulic plans had been provided to him regarding sewerage. 4. Mr Shilson-Josling had said in his report [12.47] that his proposed method of rectification did not require the reduction in size of the bulkheads; or the pipes to be routed in accordance with the plans, so long as testing (to be undertaken by a licensed drainer) had occurred. The testing was necessary to ensure the pipes did not leak. However, he accepted that even if they were leaking, changing the size of the bulkhead would not likely make any difference. It was put to him that not having conducted any tests suggesting leaking pipes, he was not in a position to say that there were any problems with the pipes. Mr Shilson-Josling said that the architect had specified that the sewer be directed in stacks through the garage. Mr Coombes did not know whether or not any tests had been carried out. Item 3 1. The first complaint was that the wrong materials were used. Mr Shilson-Josling identified 5 locations where plasterboard material had been used, rather than gyprock, being the ground floor patios at the rear of both dwellings and patios to the front of both dwellings and the first floor verandah [12.57]. He said in his report [12.62] he found that the plasterboard used in five locations was not in accordance with the contract specifications (a schedule of finishes, at p 182 of his report, and a finishes schedule, at p 192 of his report). Mr Coombes had not been supplied with those documents. 2. The second complaint was that the plasterboard was not suitable for external use. The spacing of ceiling furring channels (ceiling battens) exceeded maximum spacing for Boral external plasterboard ceilings. 3. Mr Shilson-Josling recommended that the existing ceiling and soffit linings should be removed in accordance with the specification. Merbau should be supplied and installed on the treated pine to ceilings and soffits and finished with a Dulux Intergrain Exterior natural stain. In relation to the spacing, the ceilings should be installed and supports spaced in accordance with the manufacturer's specifications. Mr Coombes accepted that he had provided no alternative recommendation should this be a defect. 4. Mr Shilson-Josling inferred that the plasterboard ceilings to the rear patios had been removed through the dots that appeared; which had left a residue. Mr Coombes agreed that the original plasterboard ceiling had been removed. It was put to Mr Shilson-Josling that the mere fact of a non-compliance with a manufacturer's manual requirement did not equate to a non-compliance with the BCA requirement. He agreed with that. It was also put that there may be circumstances in which it is inappropriate to follow the manufacturer's manual. Mr Shilson-Josling responded that that was not his practice; nevertheless, he accepted, in the abstract, that it may be inappropriate to follow the manufacturer's guide in some circumstances. This led Mr Coombes to say that the BCA made no reference to plasterboard linings. Mr Shilson-Josling later said that plasterboard mining was not waterproof. 5. Mr Shilson-Josling was not able to say how long, in labour, it would take to execute his recommendation for rectification. Mr Coombes said he thought it would probably take one day for each of the areas. 6. It was put to Mr Shilson-Josling that in respect to areas where plasterboard had been removed all the remedial builder had to do was install specified materials. Mr Shilson-Josling disputed this. On the hypothetical basis that the builder had not installed plasterboard, it was put that it was not a defect to fail to install the specified material; rather, the omission should be regarded as work that was incomplete. Mr Shilson-Josling said he assumed that the plasterboard would be reinstalled, but if the builder had been shut out, he would regard the work as incomplete. Item 4 1. The home owner did not press this item. Item 5 1. The complaint here concerned concrete exposed in the walls. Mr Shilson-Josling was referred to 2 photos (1.17 & 1.18 of his report) which depicted concrete having been exposed in the hallway of dwelling one and the downstairs bedroom, respectively. In relation to the hallway, Mr Shilson-Josling proposed the removal of the concrete surface requiring protrusions to allow placement of framing and/or wall lining, as required. In relation to the ground floor bathroom, the removal of concrete was also required to allow for a continuous surface for tiling, waterproofing and room for the continuation of the wall lining to the rear wall of the bathroom. Mr Coombes had not provided any alternative recommendation for rectification. 2. Mr Shilson-Josling was referred to his report (paragraph 12.129) where he had said that he had observed that the bathroom and hallway had been completed. It was put to him that the exposed concrete depicted in the photos was merely the consequence of work that was incomplete. Mr Shilson-Josling disagreed with this. Mr Coombes considered that the work still needed to be completed, however accepted that at the time that he saw it, the wall had been built and painted. Mr Coombes characterised this work as being incomplete. Item 6 1. The complaint here concerned the TMS across the external walls, columns and doorway openings in both dwellings. Mr Shilson-Josling noted that the CC and construction plan drawings (No.4) provided for TMS under building specifications required physical and/or chemical barriers in accordance with the BCA. Mr Shilson-Josling annexed many photographs to his report, where TMS did not extend across or was set back from the brickwork external face of the walls. When he gave evidence, he was referred to one such photo (photograph 1.19 of his report (p 240)) and said that there was no evidence of termite barriers at the hallway. With reference to other photographs he was taken to, his evidence was that he was unable to observe termite barriers at certain parts of the property and, further, that to the extent that they appeared, they did not fully extend, as they should have, on the external face of the masonry wall (photo 1.27), or the construction joint (photos 1.32, 1.35), or the bottom of a door extending beneath the doorway (photo 1.36). 2. Mr Coombes' proposed method for rectification was the use of a chemical barrier. He did not opine on the adequacy of the TMS nor take any photos himself. He favoured a chemical barrier because it was cheaper. Mr Coombes explained that it would be necessary to trench outside the perimeter of the property and flood the space with the chemical. Mr Shilson-Josling was against this method because of his concern that the chemical barrier could affect the stormwater system. He said he thought it would need to be done by specialist. He indicated certain points, with reference to the drawings, where he thought it might be risky to apply the chemical: this included the landscaped yard and retaining wall. Mr Coombes disagreed that the potential impact upon the stormwater system would be a reason against the application of chemical barrier. This prompted the question whether or not it was possible to have a composite system, comprising both physical and chemical barriers. Mr Shilson-Josling thought that was possible, but that it would be difficult to implement. Mr Coombes thought there was nothing wrong with a composite system, where there was doubt about the physical barrier. But he explained that a chemical barrier was a standard means of treatment that was preferable to tearing down brickwork because of the cost. Mr Shilson-Josling disputed the proposition that in order to re-install a physical barrier, it was necessary to pull down external masonry: only parts of the brickwork could be removed in order to insert or realign the physical barrier this could be done with the rectification work for the damp proof course item (item 15). Mr Shilson-Josling was challenged upon his expertise to comment on whether the use of physical barriers had compromised the integrity of the property. He thought that they had: there was a lack of continuity across openings; such as at the control joints and the doorway. Item 7 1. The complaint here was about unformed construction joints in the concrete slab. Mr Shilson-Josling clarified that the cracking on the slab was contrary to the specifications in the engineering plans and the AS 3600. It did not amount to a structural defect. 2. Mr Coombes said in his report (sub-paragraph (c) in issue 7) that there was no evidence (from a practising structural engineer) of any failure of the concrete slab. He had (therefore) not provided any alternative form of rectification. Mr Shilson-Josling indicated that if the crack was too large, it may end up with issues down the line particularly concerning termites. 3. It was put to Mr Shilson-Josling that when the works were completed, the cracks that he observed would not have been exposed. He accepted that concrete had been subsequently poured over it. Mr Shilson-Josling was not certain that this would cure the problem: there may, for example, have been concealed entry for termites. Item 8 1. The complaint here was that brickworks and concrete slab elements extended beyond the easement line. A photograph of the easement appeared at [1.200] (p 330). It was an alley way from the back towards the front. The stormwater system was underneath. In photograph 1.201 (p 331), an extension of slab and brickwork was indicated. 2. Mr Shilson-Josling had recommended that a land surveyor look at this: to ensure that the building finishes were in the correct place and did not encroach within the easement. Mr Coombes agreed with this. Item 9 1. This was the first in a series of items (the remainder being items 10-17) in Mr Shilson-Josling's report on the subject of brickwork defects. This particular item concerned staining and marking on all faces of the masonry walls. This was demonstrated in a photograph [1.39] (p 250). This defect was only aesthetic and not structural. Nevertheless, AS 3700-2011 required compliance with engineering plans. 2. Mr Coombes says that when he inspected the property, he found that the brickwork was clean. He took certain photographs (13-19) in his previous report of 16 October 2017 (Ex F). 3. More generally, in relation to the brickwork defects, Mr Coombes accepted that there were a large number of alleged defects in the brickwork. When asked about his testing, Mr Coombes acknowledged that he had done very little testing to the brickwork even though there was nothing to stop him from doing so. 4. It was put to Mr Shilson-Josling that when he had concluded that there was a defect in connection with the staining, what it really amounted to was a matter that could and would have been rectified prior to completion. Therefore, so it was put, the matter could not be characterised as a defect. Mr Shilson-Josling acknowledged that he would have expected the problem to be rectified prior to completion, but maintained that the cause of the staining may have amounted to a defect. He said that the AS applied to the brickwork even when the property was under construction. 5. When Mr Coombes had inspected it, the work had in fact been completed: there was no staining or unusual mortar joints requiring rectification. 6. More generally, in respect to the global scope of the works in connection with brickwork, Mr Shilson-Josling considered that because there were so many defects, it was better to fix all of them at once rather than on an individual basis. This explained why he recommended that rectification for staining should be undertaken at the same time as rectification of the other brickwork defects. Mr Shilson-Josling said that the last time that he had looked at the brickwork, in December 2016, a stain was still there. Mr Coombes said that when he viewed the alleged defects in October 2017 no rectification was required. Item 10 1. The principal complaint regarding this item concerned the appearance of 'honeycombing' in the mortar between the bricks. This was said to be contrary to a condition of development consent. An example of this was photograph 1.42 at p 251 (being an eastern wall) of Mr Shilson-Josling's report. Mr Coombes did not see any honeycombing. He was asked whether he inspected the area depicted in the photograph and said he thought that he had taken a photo of the area (photo 14) in his report. Mr Shilson-Josling said that this was a different area to the area that he had taken photographs. 2. It was put to Mr Shilson-Josling that he took photos of the brick wall at a point when the property was a construction site and therefore the complaint which he made was substantially about a matter that could and would have been undertaken prior to completion. This led to an exchange between the experts as to what amounted to a defect and what amount to incomplete work. Mr Coombes interpreted a defect as something apparent at the time the works were purportedly completed. For him, incomplete work was work to be done prior to completion of the contract for the works. Mr Coombes regarded this distinction as being common amongst builders. There are no Australian Standard to distinguish these concepts. 3. Mr Shilson-Josling accepted that his recommended work for this item alone, as with the previous item, would not necessitate pulling any walls down. Mr Shilson-Josling said that the problem had remained even since his visit in December 2016. Mr Coombes said that often there were imperfections in the brickwork but so long as they did not compromise the integrity of the work often rectification work would be unnecessary. Item 11 1. Bedjoints are the horizontal joints between two bricks (with perpends being the vertical joints). The thickness of the bed joint should be 10 mm although, for the purposes of AS3700 cl 4.9.1, there is 3 mm of leeway above and below that level, in accordance with AS 3700 Table 12.1(g) Tolerances in Masonry Construction (and the Guide to Standards and Tolerances, an interpretative guide). 2. The first complaint relating to this item was the variance in thickness. Mr Shilson-Josling did not regard the alleged differences in thickness as amounting to any structural concern. Mr Coombes agreed with this. The latter regarded this problem as only being cosmetic. So far as Mr Coombes was concerned, the test was for someone to stand back about 1.5 m: a 'defect' should only be apparent at that viewing distance. 3. The second complaint was a lack of alignment across the openings. This was depicted in photograph 1.45 (p 253) of Mr Shilson-Josling's report. 4. Mr Shilson-Josling was referred to his opinion [12.294] that it was not feasible to provide isolated rectification works (which would require replacing the walls) to address the bedjoint defects, as to their alignment and widths. He agreed that it was unnecessary to rectify this item for the sake of structural integrity. Item 12 1. The complaint here was about a lack of alignment and thickness of the perpends, being the vertical joints between the bricks. The problem was depicted in photographs 1.53, 1.54 and 1.57 in Mr Shilson-Josling's report. 2. Mr Shilson-Josling said in his report [12.333] that because of the extent and consistency of defects to the perpends, it was not feasible to provide isolated rectification works but rather that rectification should be provided by replacing the external face of the masonry walls. But he did consider that rectification required replacing the walls. He favoured rectifying the perpend defects to be undertaken at the same time as rectification works to the bedjoints (item 11). 3. Mr Coombes acknowledged that (unlike Mr Shilson-Josling, who tested at random locations at ground level) he did not do any empirical testing in response to this item. 4. It was put to Mr Shilson-Josling that there was no need to fix this, or even to regard the problem as a defect. Mr Shilson-Josling responded that because the plans and specifications set the standard of workmanship, there was a defect. It was put that it was no longer practical to knock down the wall for what was only a cosmetic defect. I understood Mr Shilson-Josling as having accepted that there was a significant cost to this recommended form of rectification. Item 13 1. This item concerns the window sills: the gaps between them (depicted in photos 1.81-1.82) some cracking (photo 1.84), and some inconsistency, in terms of the evenness, of the surface (photo 1.45). These defects were such, in Mr Shilson-Josling's view, as to indicate a lack of compliance with the engineering plans, and also the Guide to Standards and Tolerances. 2. Mr Shilson-Josling said in his report ([12.380] that he thought the recommended rectification for this problem would see the removal of the existing window sills and re-laying them, in conjunction with weepholes at all window sill flashings. He considered that the rectification should form part of the global scope of rectification to the brickwork. 3. Mr Coombes agreed that a gap was required to be maintained between the window and window sill. He said that the cracks between the seal were explicable to shrinkage of the mortar. This rarely required fixing; as opposed to wiping the mortar down the joint. This view of Mr Coombes had not, however, featured in either of his previous written reports. Item 14 1. This item concerned weepholes. If these are clear, the perpends allow water to escape from the cavity. They are required in accordance with Australian Standards. They were not, however, provided to the window sill flashings of external windows for both dwellings. 2. Mr Coombes accepted that there was an absence of weepholes: his dispute was the degree to which they are absent. He did not consider that they were necessary at sill flashings. He also considered that AS 4773.2 was a more appropriate standard than AS 3700 and that the former (at cl 9.6.2.2) indicated that weepholes may be omitted at sill flashings. 3. In terms of its effect, Mr Shilson-Josling said that if water got in, it could create a structural issue. In relation to rectification, Mr Shilson-Josling accepted that it was possible to cut weepholes; albeit with difficulty, but it would still present the problem of needing to clean them. Mr Coombes said he thought it was common to install new weepholes. Item 15 1. Damp-proof coursing (DPC) prevents rising damp and moisture in the walls. Mr Shilson-Josling said he observed DPC around the ground floor levels of both dwellings, but it was generally set back from the external face of the external masonry leaf. 2. Some photos at 1.27 and 1.29 and 1.33 – 1.35 of Mr Shilson-Josling's report showed that the DPC did not cover the cavity in the relevant brick wall. Mr Shilson-Josling opined that it did not comply with Australian standards, requiring DPC to prevent upward movement of moisture through external walls and columns around the building. Mr Coombes agreed that at some locations there was an issue as to how far in the DPC had been applied. 3. It was suggested that the circumstance that Council had certified the properties as being fit for occupation indicated that there was not a problem. Mr Coombes acknowledged that the DPC might be set back more than it should have been but did not regard rising damp as a problem, or much of a problem, for a brick veneer property. He did not think it was necessary to replace the DPC. Item 16 1. The complaint here is that the pressure flashing used on a non-waterproof brickwork surface did not collect water from the wall and from the roof. The flashing did not prevent moisture entering into the building. Mr Shilson-Josling maintained that the flashings did not comply with the Australian standard. 2. Another complaint was the use of timber in the construction which was non-durable. 3. The suggested rectification works for these defects are linked to items 14 and 15. Mr Shilson-Josling recommenced provision of a cavity flashing extending beyond the external face of the masonry wall, above the roof line of the ground floor roofs, in conjunction with the provision of an overflashing extending over the existing apron flashing. Mr Shilson-Josling did not primarily recommend that this item (with items 14 and 15) should be rectified by taking down the brickwork. 4. Mr Coombes said in his report that weepholes had not been provided and that the cavity flashing did not extend to the outer edge of the brickwork. Nevertheless, at the time of his inspection, he saw no evidence of water penetration to the interior of the building and that the cavity flashings were functioning adequately. The building was functional. Mr Coombes agreed with Mr Shilson-Josling that pressure flashings were not as good as flashings to the walls. Item 17 1. An articulation joint is a vertical joint which allows masonry movement, so as to prevent cracking. An expansion joint also allows bricks to expand without pressing on each other. A control joint also facilitates movement. The home owner's primary complaint in relation to this item was that there were not enough control joints on the masonry walls. Another complaint was the location of the control joints: they were too far away from the corner of the building; in breach of the AS 3700. 2. Mr Coombes did not meaningfully address this issue in his report. When he gave his evidence, he said that control joints were more important for high-rise buildings; not for residential dwellings of the kind in issue in this proceeding. He saw no evidence of distress caused by the positioning of joints and the number of control joints and, therefore, his opinion was that there was no future structural integrity with the building. 3. Mr Shilson-Josling said that he would not recommend taking down the wall to rectify this particular defect, alone. The defect could be rectified in a piecemeal fashion consistently with what he said in his report (at [12.527]-[12.534]). Item 18 1. This topic will be returned to after item 22 has been considered. Item 19 1. The home owner's complaint here is that the rafters to the rear of both dwellings were not properly fixed: the metal brace was not effectively nailed on. Rather, screws were used and this circumstance was itself inappropriate as screws were usually only used for plasterboard and, even then, they were also improperly positioned. The framing brackets were not installed in accordance with the manufacturer's specifications, as set out in the engineering plan and BCA. Fasteners to the brackets were not in accordance with the manufacturer's specifications. 2. Mr Shilson-Josling accepted that the manufacturer's specifications were not subject of a certificate of conformity. It was put that this did not necessarily mean a breach of the BCA. Mr Shilson-Josling said that engineering certification was evidence of the suitability of a method for showing compliance to the BCA. 3. Mr Coombes agreed with Mr Shilson-Josling that the method for fixing the rafters and the use of the metal brackets was incorrect. 4. Mr Shilson-Josling's recommended rectification for this item included provision of fasteners to the framing brackets in accordance with the manufacturer's specifications and an engineer was required for consultation to confirm the design wind loads and construction required for the loads and to review the specification for the steel beam. 5. Mr Coombes ventured no different view in relation to the suggested rectification work in respect to this item. Item 20 1. This item concerns the spacing of the furring channels (on the basis of plasterboard material being used) on the ground floor rear patios on both dwellings. They were contrary to the Boral installation manual. 2. There was also a complaint about the use of materials - it should have been timber that was used. That being so, item 20 (below) would not require any further work. 3. Mr Shilson-Josling's recommended rectification works were to provide supports to ceiling lining. He noted that ceiling linings had been provided to the rear patios to both dwellings. When he gave evidence, Mr Shilson-Josling accepted that most of the plasterboard had been removed and, in its place, the material that had been used to replace it was not incorrect. He accepted that this particular complaint was predicated on the assumption that wrong material would be reapplied in circumstances when in fact, correct material had been reapplied. Item 21 1. Waterproofing involves placing a membrane on a surface, with the lips protruding upwards. In the case of both the subject dwellings, there were two upstairs bedrooms with ensuites and downstairs there was a bathroom and laundry. 2. Mr Shilson-Josling identified three alleged defects. The first concerned the perimeter flashing water stop. It was said that the water stops utilised were not effective and could end up causing cracking. The second concerned the water stops for the showers in the ensuite upstairs and the bathroom downstairs. The water stops were provided up to and above the screed beneath the tiles. Mr Shilson-Josling considered that water might migrate beneath the tiles beyond the shower recess. The water stop did not extend far enough over the screed. The third problem concerned the 'bond breaker'. A bond breaker allows waterproofing membrane to move slightly but not so much as to cause it to become bonded. Bond breakers were not installed in the downstairs bathrooms and laundries in both dwellings. 3. Mr Shilson-Josling said that if the Court was to find only one of the above complaints, the extent of the rectification work would be the same: if it was necessary to remove the tiles, it was also inevitable that there would be damage to the waterproof membrane. It was also put that if I were to find that item 23 represented a defect, the rectification works for that item would also necessitate the rectification works suggested for item 21. 4. Mr Coombes was shown one of Mr Shilson-Josling's photographs ([1.140]). He ascertained that waterproofing had been applied to the floor and a short way up the wall. But there was a lack of a bond breaker between the wall and the floor. Mr Coombes considered that the tiles would need more waterproofing done with the insertion of a bond breaker and that if this was done, he thought, it would not be necessary to rip up the floor. 5. Mr Coombes was also asked to look at photograph [1.143]. He identified a water stop at the end of the measuring tape. With reference to the photograph at [1.141], he considered that the water stop was level with the tiles, but not fixed to the floor. He was also referred to a photograph at [1.146]. Here, Mr Coombes considered, there was no bond breaker and no water stop. Nevertheless, he considered that both could be installed at this stage; although waterproofing would need to be reapplied. He characterised these complaints as amounting to 'incomplete' work. As to the corner of a bathroom depicted in photograph 1.140, [Mr Coombes] did not think that a perimeter-flashing stop should be installed at this stage so long as waterproofing had been done. 6. Mr Shilson-Josling clarified that his rectification works concerned the upstairs bathrooms (the bathrooms downstairs were not tiled). He accepted that his scope of rectification did not require the ripping up of the floors downstairs. He also agreed with the characterisation of the works as being 'incomplete', in respect to the bathrooms, and in respect to the laying of tiles. 7. Mr Shilson-Josling was challenged as to how representative his views about waterproofing were in relation to the bathrooms. He said that he found the defects in the doorway to each bathroom. Item 22 1. The complaints here concerned the tiled upper floor balcony at the front of each dwelling. The first complaint was that the cavity flashing did not extend out across all the brickwork and over the waterproof membrane. Mr Shilson-Josling was shown photographs [1.152] to [1.153] (pp 306-7) in his report. These showed the column on the front balcony to dwelling one. There was a rendered surface, with tiling, with no waterproofing up beyond the tile. Mr Shilson-Josling said that water could get in behind the tile and into the column, whereas it should be the case that water should hit the waterproofing. He was also shown photograph [1.154]. This was of the verandah to the second dwelling, where there was a dividing wall between both dwellings. There was no evidence of waterproofing extending beyond the tiles. The photograph at [1.155] of the skirting tile (the tile up against the wall, and not on the ground) indicated no flashing or waterproofing. The photograph at [1.158] showed the column on dwelling number one with no waterproofing beneath the tiles. The top of the sleeting waterproofed was not up to the wall or over the edge. Photograph [1.159] was of the rear of the balcony of dwelling one. This was unprotected so that if water was on the deck, it could go into the cavity and affect the non-durable timber surface. The photograph at [1.162] of a steel beam was found to have no evidence of waterproof membrane extending beyond the face of the beam. There was a non-compliance with AS 4654 for waterproofing membranes for external above-ground use. 2. Mr Shilson-Josling agreed that these defects could be rectified without knocking down walls. As to the photograph at [1.151], he agreed that one could remove the skirt tile and then extend the cavity flashing. Any knocking down of the wall could not be justified on the basis of these defects alone. 3. Mr Coombes did not disagree with what Mr Shilson-Josling had reported upon. He only indicated that when he saw the building all the external tiling work had been completed. Item 18 - summary 1. As indicated, this item was a composite global scope of works in relation to the brickworks generally and was referable to each of the items 6, 9-17 & 22. Mr Shilson-Josling was asked to deal with each item, and whether each of the items would warrant demolition or removal of walls. His evidence was: 1. (item 6) the chemical barrier would not require knocking down the wall. He acknowledged that this had not been addressed in his report and he had performed no empirical enquiries. 2. (item 9) the brickwork-staining was a cosmetic concern and would not justify knocking down; 3. (item 10) mortar-filling and cleaning was to address cosmetic defects; 4. (item 11) as to bed joints, although they were too thick, he could not say that there was a structural concern; rather than a cosmetic concern; 5. (item 12) as to perpends, his empirical assessment was that the level of misalignment was about 80%. On this matter, Mr Coombes disagreed. Although he accepted that the perpends did not comply with the standard, Mr Coombes considered that they did not justify knocking down the wall. 6. (item 13) as to the window-sills and thresholds, there was an easy remedial fix involving the removal of the windowsills and putting in weepholes. 7. (item 14) as to the weepholes, an invasive device could be used to cut in but there was a concern that they might hurt the flashing. Mr Shilson-Josling said he could not say whether or not a wall might be damaged through the use of this device. Mr Coombes said that these could be cut by using a wrecking chisel but acknowledged that one would have to be very careful: the degree of difficulty fell somewhere between the description 'straightforward' and 'complex'. 8. (item 15) as to the flashing and damp-proof coursing, Mr Shilson-Josling subsequently inspected the property when it was in a similar state and found no difference to the cavity and damp proof coursing. In other words, the issue had not been rectified, but yet the property had been sold. Mr Coombes said that he observed the property when it was completed. He looked at the flashing and damp-proof coursing and if there was any extension, the consequences were not such as to warrant repair. 9. (item 16) as to the cavity and roof flashings, the concern was to prevent moisture travelling down the wall. This could be repaired on a piecemeal basis. If this matter was the only concern it would not itself justify a knocking down of the wall. 10. (item 17) Mr Shilson-Josling could not opine on whether the positioning of the joints would pose any structural concern. He did say that, without control joints, there was a concern about cracking although that might be fixed on a piecemeal basis. Mr Coombes said that it could not be predicted when cracking would manifest itself. 11. (item 22) As to the external waterproofing, Mr Shilson-Josling accepted that removal of skirting tiles and the extension of waterproofing and flashings; could be all done without taking down the wall. A qualification was in relation to bedjoints and perpends. 1. I asked Mr Shilson-Josling (over the objection of the builder's counsel) whether any of the above items might, individually or in combination, favour removal of walls. Mr Shilson-Josling (correctly) interpreted my question as enquiring as to a hierarchy of importance of defects. He said that he thought that amongst all of these individual defects, those which were more likely to justify a removal of walls were the TMS, the waterproofing and the perpends and bedjoints. Mr Coombes opined that the only way to justify the demolition of walls was a total absence of flashing and barriers. Item 23 1. This item concerned the stone tiling to the bathrooms and ensuites. Mr Shilson-Josling identified three defects here. The first and second concerned the wrong type of tiles for the wall and the floor, respectively. The Inclusions and Finishing Schedule for the ensuite and main bathrooms prescribed wall and floor tiles in the dimensions 600 x 600mm whereas the tiles that were used were of 300 x 300mm dimensions. 2. The third concerned spot-staining. Spot staining relates to the glue on the tiling. Examples of these spots were those which appeared in the photographs 1.166 and 1.167. 3. An issue concerning the rectification of this particular problem, which is also relevant to the rectification of defects in item 21, was that to rip a tile off might affect the membrane. 4. Mr Shilson-Josling acknowledged that it was only the upstairs bathroom that had tiles fixed at the time of his inspection. When he referred, in his report, to tiling being incomplete in the bathroom, this was a reference to the downstairs bathroom. Otherwise his evidence was referable to the bathrooms upstairs. He said in his report that works had been undertaken and completed. Item 24 1. This item concerned the stone tiling to the verandas on the first floor of both dwellings. Mr Shilson-Josling said that the tile control joint functions to allow for movement without causing damage to the tiles. The photograph at [1.169] indicated that there were no movement joints on the floors. There was also an issue about the dual layer slip sheet. 2. A further concern was that tiles that were installed were not consistent with the guide for flooring (AS 3958). 3. Mr Shilson-Josling considered that the rectification for this item was tied to rectification of the external waterproofing (item 22). He said that if the Court was to accept the rectification of this item as he suggested, it would be necessary to rip off the tiles which may affect the membrane. 4. Mr Coombes did not provide much comment other than to say that when he arrived for his site inspection, he had been told that waterproofing and tiling had been replaced. When asked, specifically, about the control joints he said that they were normally placed at an interval of 6 m. He did not look for this because he had assumed that he did not need to after having been told that the tiling had been replaced. 5. He also said that having read passages of Mr Shilson-Josling's report [12.740] to [12.743], which identified the defects pertaining to this item, he generally agreed with Mr Shilson-Josling. 6. Mr Shilson-Josling was referred to 12.750 of his report, where he opined that the fixing of the tiles had not conformed with the manufacturer's specifications or industry standards. He accepted that this view was not backed by a certificate of conformity. Item 25 1. A joist is something that a floor sits on: being usually timber beams. 2. The complaints here were, first, that the steel beams were un-sized and that the floor joist was of a different type to the kind that was specified from the engineering drawings. In other words, the wrong types of beams were used. Mr Shilson-Josling's recommendation was for a structural engineer to assess the concern. It was put to Mr Shilson-Josling that he could not say whether the problem was that the beams were not compliant to specification; a proposition which I apprehended Mr Shilson-Josling accepted. Item 26 1. This item concerned the roof level of the verandah, but only in relation to dwelling two. Mr Shilson-Josling identified problems with flashings and roof 'capping'. 'Capping' covers the end of the roofing and sheds water on to the roof. Mr Shilson-Josling said that parapet cover flashing (which acts like a sort of hat) did not go low enough and did not prevent anti-capillary breaks (which stop water going back up). In some areas, flashing was not flush with the top of the roof. Mr Shilson-Josling's suggested rectification, being the provision and installation of parapet flashing, and an overflashing with anti-capillary breaks, was limited only to roof level. 2. Mr Coombes did not see the roof. He did not disagree with Mr Shilson-Josling. When he was shown a series of photographs obtained by Mr Shilson-Josling, he provided certain observations: 1. Photograph 1.174: a screw was missing 2. Photograph 1.175: no obvious defects 3. Photograph 1.176: apparently silicon was applied 4. Photograph 1.177: silicon was applied 5. Photograph 1.178: silicon was applied 6. Photograph 1.179: there was no obvious problem Item 27 1. This item concerns the internal stairs from the garage in respect to each dwelling. Mr Shilson-Josling identified that the 'riser' dimensions for heights were not consistent. This presented a possible trip hazard. He thought this was a non-compliance with the BCA and hence, not in accordance with a condition for developmental consent. 2. Mr Shilson-Josling noted that the works had been undertaken and completed in these areas. Item 28 1. This item concerns the timber in the roof void. This is a space between the actual ceiling and the roof cladding. It is not easy to access. Mr Shilson-Josling said that he obtained access through the ventilation duct. He identified a number of problems. There were the rafters underneath the roof; the underpurlin spans above the stair void were excessive; the method of face fixing rafters to the wall plate (by nails only and no proprietary anchoring system); and the method and extent of fixing wall plates to the brick wall. A problem with excessive spanning may be a sagging in the roof. 2. Mr Shilson-Josling said that the appropriate response was to engage an engineer. It was put that he could not say whether any breaches had any structural implications. Mr Shilson-Josling thought that they could have. By reference to the tables contained in AS 1684-2, relating to timber frame code, it would be possible to compare the spacing of the rafters to what the table provided, to determine whether the spanning had gone too far. He thought that the problems with the rafters and underperlins were structural and cited his own qualification as a licensed builder to express a view in this regard. He did not think that this matter was entirely one of a cosmetic concern. It was put to him that all that had occurred were bare breaches of the BCA with neither any cosmetic nor any structural effect. Mr Shilson-Josling disagreed with this. 3. Mr Coombes said that at the time of the final occupation, certifies would have to tick off whether the roof structure was non-compliance before a final occupation certificate was issued. Item 29 1. This item concerned glazing in the windows and doors. For Mr Shilson-Josling, compliance of glazing to BCA provisions was a safety issue. Mr Shilson-Josling said that he inspected labels on the glazing which were not as required by the BCA. He accepted that labels could be added at any time and it was put to him that this was only work that was incomplete. Mr Shilson-Josling said that he thought that the glazing was installed and he was in a position to characterise the matter as a defect but accepted that if it had been rectified before the date for completion of the contract, then at the point when he inspected (December 2016) it was incomplete. 2. Mr Coombes had not seen the glazing. He said that a private certifier would normally require glazing certificate from the manufacturer that the glazing was fit for purpose prior to the issue of a final occupation certificate. He said that there are two kinds of labels: one could be stuck on the glass and another could be embossed at the manufacturing process. 3. Mr Shilson-Josling's criticism was related to the latter. There was no embossed label. He said that if glass was of a nature that was specified in a construction contract, but not labelled, he regarded that as a defect. When asked what he would replace, he acknowledged that he had not recommended replacement. General 1. After evidence in relation to all of the individual items, Counsel for the builder asked Mr Shilson-Josling whether, as between his first (2 March 2017) and second (25 October 2017) reports he had ever been asked to provide a list of rectification methods that had been passed on to the builder. Mr Shilson-Josling said he had not. CONSIDERATION Credit 1. As indicated, the cross-examination of builder and homeowner was very brief. Cross-examination of the sub-contractors was virtually non-existent. The main battleground at trail was the evidence of the experts. Mr Rahme 1. The cross examination of Mr Rahme was brief; particularly when considering the voluminous nature of his affidavit evidence. I considered that Mr Rahme did try to give truthful evidence; although I think he was very conscious of the implications of his answers for his case. He was often quite exasperated at his inability, during his cross-examination, to provide explanations, and probably qualifications, which he wanted to give to his answers. He did, however, generally make concessions when appropriate. Mr El Baba 1. The cross-examination of Mr El Baba was also relatively brief. There were occasions during that cross-examination when I was less than impressed with Mr El Baba. It seemed to me that when difficult questions were asked, he was prone to being evasive. This was exemplified through his strange answer to the question as to why a contract for the sale of dwelling two, entered into in February 2018, had still not been completed 15 months' later. Mr El Baba had lived in Australia since 2008 but it struck me that on occasions during his evidence, he appeared to feign ignorance of what he was asked, in a fashion which, to my observation, was not attributable to any real difficulty in understanding what was being asked. I was also left unimpressed by the incomplete, or selective, production of documents he apparently supplied to his instructing solicitors in an informal response to a notice to produce served upon him. [4] 2. I therefore approach his evidence cautiously when considering the issues for the Court's determination. Mr Bejjani, Tawk, Tarabay, Gea, Semaan, Azzi 1. Either these witnesses were not required for cross-examination, or their cross-examination was too brief to admit of any submission as to the lack of credit of these witnesses. Statutory provisions and principles relating to claims for damages for breach of statutory warranties Summary of the statutory provisions 1. During the trial, Counsel for the home owner helpfully supplied a statement of the relevant provisions and principles supporting claims under the Act. Counsel for the builder accepted them as accurate. In summary, for the purpose of this proceeding, there is no dispute that: 1. the works carried out by the builder were 'residential building works' and that the Act applies; 2. the builder was licensed (and registered for GST) at all material times; 3. the written contract entered into between the parties complied with the requirements of the Act; 4. amongst the range of statutory warranties implied in the contract pursuant to section 18B(1) of the Act the material warranties in issue in this proceeding were that: 1. work will be done with due care and skill and in accordance with the plans and specifications set out in the contract (s 18B(1)(a)); 2. all materials supplied by the license holder will be good and suitable for the purpose for which they are used and, unless otherwise stated in the contract, those materials will be new (s 18B(1)(b)); 3. the work will be done in accordance with, and will comply with, this or any other law (s 18B(1)(c)); 1. these statutory warranties cannot be excluded by the contract; 2. the claim brought by the home owner was brought within time, irrespective of whether the defects complained of were "major" or "minor." 3. an 'order' under s 48MA of the Act should not be made. 4. the home owner bears the onus of establishing the presence of each defect. Agreed principles 1. Certain principles were also agreed: 1. the warranty in s 18B(1)(c) is not qualified by the independent warranty (in s 18B(1)(a)) to build in accordance with the plans and specifications set out in the contract (The Home Owners – Strata Plan No. 66375 v King [2018] NSWCA 170 per White JA at [409] (Ward JA agreeing at [325], [332]); 2. a failure to comply with an Australian Standard is an external standard to be considered in the Court's evaluation of whether the builder has complied with the warranty in s 18B(1)(a) (Wheeler v Ecroplot Pty Ltd [2010] NSWCA 61 at [10]). 3. the measure of damages recoverable by the home owner for rectification works is the amount required to give the home owner the equivalent of a building on land which is substantially in accordance with the contract. In practical terms, this is measured by the difference between the contract price and the cost of making the work substantially conform to the contract (Bellgrove v Elridge (1954) 90 CLR 613); 4. nevertheless the rectification work undertaken must be a reasonable course to adopt, as well as being necessary to produce conformity to the contract (Bellgrove at 618-9). It would only be in fairly exceptional circumstances that the standard of unreasonableness would be met (Tabcorp v Bowen Investments Pty Ltd (2009) 236 CLR 272 at [17]), such as where the home owner uses a technical breach to secure an uncoventanted profit, or where the cost of rectification is out of all proportion to the benefit to be obtained from the rectified work (Wheeler v Ecroplot at [81]). 5. Proof of actual costs that are incurred has been described as an 'impeccable' alternative method for calculating the costs of rectification (Hyder Consulting (Australia) Pty Ltd v Wilh Wilhemsen Agency Pty Ltd [2001] NSWCA 313 per Meagher JA at [19]; also Giles JA at [96]). Other principles regarding rectification 1. There are some other supplementary principles which potentially apply to this dispute on the scope of rectification of works. 2. A recurring aspect of the disputes between the experts is the proposition advanced by Mr Coombes that work was (only) 'incomplete' after the builder had been shut out of the site. This, as the evidence of the lay witnesses called for the builder indicates, was intended to provide a platform for the contention that at the point where the builder was shut out of possession of the site, such shortcomings as there were in the builder's performance of its obligations under the construction contract were properly to be characterised as 'incomplete', rather than 'defective'. 3. The distinction between work that was only 'incomplete' and work that was 'defective' was material, so Counsel for the home owner submitted, because unless a finding was made that there was "a defect", the home owner was not entitled to recover compensation. This much appears to be common ground. 4. The position here is complicated by the circumstance that the builder's services were terminated prior to the point of completion. In this situation, it is not unexpected that a builder will say that it would have gone on to rectify an incomplete work had not it been deprived of the opportunity to do so. Thus, the argument might run, if there was any lack of conformity with the contract at the point where the builder was shut out, it was only temporary, or at least should not be regarded as a final defect. 5. A similar argument was noted by Hammerschlag J in Home Owners of Strata Plan 80458 v TQM Design & Construct Pty Ltd [2018] NSWSC 1304 at [173]- [194]. There, His Honour alluded to a principle (the 'temporary disconformity theory'), said to be attributed to Lord Diplock (in dissent) in P & M Kaye Ltd v Hosier & Dickinson Ltd [1972] 1 All ER 121, which posited that where a builder under a building contract does defective work, no action for damages lies if the builder still has the opportunity to remedy it, which the builder can do at any time before it is to hand over the works, or during any defects liability period. Until such opportunity had passed, so the theory ran, the defective work was to be treated merely as a 'temporary disconformity' with, and not a breach of, the contract. Hammerschlag J rejected such principle, or rule of law, in this state. His Honour (at [190]) considered that such observations as were made by Lord Diplock did not purport to expound any principle but, in any event, were explicable on the issue of causation: that it would be unattractive to permit the home owner to sue the builder for damages for breach of an obligation to do non-defective work where the defective work had been remedied within a period provided for by the contract and no delay has been caused by the initial defective work. In this context, no damage would have been suffered as a consequence of the breach. His Honour also considered (at [194]) that if a contract required work to be done in a proper and workmanlike fashion and the builder did defective work, it was difficult to understand why, even if the work was later remedied, there was no initial breach. 6. I respectfully adopt this analysis. That is particularly so in circumstances where no point has been taken by the builder about the application of section 48MA of the Act (a mitigation point); or contention advanced that the home owner otherwise acted unreasonably when shutting the builder from the site (a mitigation point as well as, perhaps, a causation point) prior to completion of the construction contract. I think that a consequence of accepting the builder's contention is to effectively mandate that the builder in default must have the opportunity of rectifying defects even where an home owner has justifiably lost confidence in the builder's willingness or ability to do so, and terminated its services. 7. These views are, I believe, also consistent with what the Court of Appeal said in Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2005] NSWCA 248 per Ipp JA at [68]-[69] (with whom Hodgson JA and McColl JA agreed), to the effect that once a construction contract is terminated, for works that do not comply with what the contract stipulates, the home owner will have suffered compensable loss. 8. An important difference between Mr Shilson-Josling and Mr Coombes was the latter's contrast of work that was 'defective' and that which was 'incomplete'. I consider that Mr Coombes' view was similar to that which was considered, and rejected, by Hammerschlag J in the case just noted. I do not accept that in circumstances where a property under construction has been left by a builder, at a point where the builder's services are terminated prior to completion of the construction contract, in a state that prima facie does not comply with specifications or plans, or otherwise indicates a want of care and skill, label of 'incomplete(ness)' can be applied to the work if it is in reality defective. In contrast, Mr Shilson-Josling opined (with specific reference to brickwork), and I accept, more generally, that the requirements of Australian standards apply to builders' whose defective work is subsequently rectified by remedial builders. 9. Whether work is 'defective' or merely 'incomplete' is a question of fact. There is little assistance in the authorities, or to be gained from the authorities, because the circumstances will widely differ in every case. Counsel for the home owner submitted that the scope of the rectification work provided a clue as to whether work was defective: he said that as a rule of thumb, that if a work required demolition, it could confidently be concluded that it was defective. Mr Falletta, the builder's solicitor who appeared at the date for closing addresses, did not disagree with this submission. 10. In Pisano v Dandris [2014] NSWSC 1070 at [91], Hammerschlag J described the significance of the Building Code of Australia and Australian Standards in the following terms, which I respectfully adopt: "The Building Code is an instrument, produced by a board on behalf of the Federal and State and Territory governments, intended to achieve nationally consistent minimum necessary standards including for structural safety and amenity. It contains technical provisions for the design and construction of buildings and other structures. Australian Standards are published by a non-government standards organisation and are guidance documents to ensure quality over a wide spectrum of activities including construction and engineering." 1. As that description indicates, at least as a general proposition, I would not lightly regard demonstrable non-compliance with the BCA or the Australian standards as being trivial or insignificant. To the contrary, the terms of the warranty in s 18B tell against any such permissive approach. Analysis of builder's claims Quantum meruit 1. In his submissions, Counsel for the home owner argued that the following principles apply to such claims: 1. The task is not to assess damages for breach of contract, but to ascertain the 'fair and reasonable' compensation to the builder for the benefit of the services performed, accepted actually or constructively by the builder; 2. Although the enquiry is not primarily directed to the builder's costs of performing the work, the actual costs should not be ignored; 3. Any price agreed between the builder and home owner is evidence of value of the services, even where the services are not totally performed, but the agreed price is not determinative. The totality of the evidence must be considered, including whether or not there is evidence such as timesheets, diary notes, and independent expert evidence showing that the fair and reasonable value of the services provided to and accepted by the home owner; 4. The onus is on the builder to prove that the services were actually or constructively received by the home owner, and what is the fair and reasonable amount of compensation for the benefit of the services performed. 1. In his closing submissions, the builder's solicitor did not dispute the correctness of this statement of principles and I adopt them. 2. The quantum of this claim is modest. Mr Lee took the difference between the builder's contract price ($767,000) and the remedial builder's costs to complete the works ($226,500). This yielded the sum of $540,500 to represent the value of the works completed by the builder. The builder had already been paid $514,000. Therefore the balance due on this claim was $26,500. To this, Mr Lee added the sum of $6,000, representing the estimated costs of 'stair reimbursement'. This addition was made on the basis of Mr Rahme's evidence that the builder had spent $6,000 for the purchase of two stair structures which, in the events that occurred, were now redundant. 3. The home owner generally adopted the arithmetical basis for the calculation of this claim; although he disputed the quantum to a small degree. The home owner submitted that his liability was capped at $26,500. His more general objection was that the builder was required to, but did not establish two things: (a) that expenses had been incurred (and that this needed to be independently established by an expert) and (b) the amount claimed was fair and reasonable. In this, Counsel for the home owner referred me to authority of NCAT in Bajic v Paraskevopoulo, (New South Wales Civil & Administrative Tribunal, Senior Member Charles, 22 May 2018) at [176]-[177]. He submitted that Mr Lee was not provided with the builder's expenses, or even asked for his opinion as to the fairness and reasonableness of them. He submitted, further, that what was 'fair and reasonable' was an evaluative assessment requiring the Court to consider what actual benefit had been received. 4. Further and alternatively, the home owner says that having regard to the expenses asserted by Mr Rahme (at paragraph 50 of his affidavit), the claims in relation to items 8, 15 – 17 (incl) were not corroborated. The argument went on that because the quantum of those items exceeded the $26,500 cap, if his contention in respect to these items is accepted, that would lead to the result that the Court could not be satisfied that the claim was fair and reasonable. A further, subsidiary argument, is that the builder cannot claim for GST, on the basis that, being registered, he would obtain input tax credits. Some authorities were drawn to my attention relating to whether GST can be claimed in damages claims which, it was said, I should adopt by analogy. Once GST was removed, the claim would reduce by $16,093.59. 5. In his closing submissions for the builder, Mr Feletta submitted that the essential requirements for this claim in restitution – the performance of work, the expenditure of money and the provision of benefit (upon request) – were all proven. He submitted that the home owner never suggested that the work that was in fact performed was contrary to the home owner's expectations. He submitted that the home owner had never indicated that the claim was other than 'fair and reasonable'. 6. In my view, these submissions presented no real answer to the series of objections raised by the home owner. Whilst I am not convinced that it is incumbent upon a builder to require independent expert evidence to establish the fairness and reasonableness, I accept that, in the circumstances of this case, Mr Lee did not purport to opine on fairness and reasonableness and was not provided with the evidentiary material to do so. It seemed to me, with no disrespect to him, that he supplied 'back of the envelope' calculations, without the underlying primary material. Further, the builder's submissions neglect that it was the builder who carried the onus of establishing the fair and reasonable value of the works supplied. That is not established by any lack of objection by the home owner. 7. I accept the home owner's submission that the builder has not established that the work for which it had not already received payment was 'fair and reasonable'. That being so, this claim fails. Delay damages claim 1. I am not persuaded that the builder has established an entitlement to damages under this claim. At best, accepting at face value his affidavit evidence, it appears to be an unarticulated or internalised claim which surfaced only at about the time (November 2016) when the home owner began to manifest concerns about the progress or quality of the builder's works. 2. Counsel for the home owner submitted, initially, that the contract provided a need for the builder, in order to make such claim, to establish his "actual" costs. This the builder did not do. Counsel also said it was incumbent upon the builder to demonstrate how the $200 rate that was selected; such as establishing how many people were involved and the steps that were taken. Counsel for the home owner then submitted that there were additional problems with this claim. On the premise that the claim for delay concerned the period 6 August to 24 December 2015, the home owner submitted that the builder was not on site up to 24 November 2015 and other matters vital to the operation of the contract (such as the retention of home owners warranty insurance and the obtaining a construction certificate) had not yet occurred until after December 2015. This was, it was said, strong objective evidence that no work had occurred (or could have occurred) within this particular period. 3. Mr Feletta, solicitor for the builder, and who made the closing address on the builder's behalf, referred me to cl 11(a)(ii) and 11(f) of the contract as the source of the entitlement to claim delay damages during the period when construction works were suspended. But this occurred in a different period to the one that the home owner referred to. The suspension of the works occurred between December 2016 and March 2017. Mr Feletta noted that Mr Rahme's affidavit (at paragraph 34) contained multiple EOT claims; some of which co-incided with the period in which the works were suspended. There was no doubt, he added, that for this later period, the requirements (or pre-conditions) to a claim of this kind – the builder's obtaining home warranty's insurance and a construction certificate – were well and truly satisfied. This was one of Mr Feletta's answers to the home owner's arguments against delay damages being not established. 4. However, a problem for the builder was Mr Rahme's evidence which eschewed reliance on any other period other than 6 August to 24 December 2015. There would be no basis to find another period in which delay occurred. 5. Mr Feletta also submitted that, for the claim for delay damages, it is not necessary for the builder to prove work was being done. 6. Under cross-examination, Mr Rahme accepted, in evidence that the focus of this claim was the period before he went on to the site. The circumstances in which the claim for delay for damages was articulated suggests that it was pre-emptive. It was not conveyed to the builder until late November 2016. The size of it – 141 days (upon the stated premise for the period) – was a significant period that lapsed before the builder conveyed any concern about delay to the home owner. Whilst it is understandable that a builder may be pre-disposed to want to retain good relations with the home owner, I do not accept that Mr Rahme would have kept silent about, or concealed, a bona fide and genuine claim for that length of time. Further when challenged, Mr Rahme was unable to identify what works had been performed, or costs incurred, prior to his taking possession of the site. 7. I might have been disposed to accept, with the support of Mr Lee's evidence, Mr Rahme's evidence as to how the rate might have been calculated, Mr Rahme's selected figure of $200 per hour was not unreasonable. However, the builder has not answered the home owner's point that the contract stipulates that for this claim, proof is required of his actual costs incurred for each delay. On the premise that the claim is treated as referable only to the period when works were suspended, there was no evidence as to what the builder's actual costs were for this period. 8. After the trial concluded, I granted the builder further opportunity to submit how the claim would be quantified (and the home owner opportunity to respond to such submission). The Court was supplied a very detailed and extensive schedule prepared, on the assumption that all of the EOT claims were allowed. I agree with the home owner's submission that the schedule was not particularly useful: it amounted to a re-statement of what had previously been asserted in contentious correspondence prior to the commencement of the proceeding. It disregarded the effect of Mr Rahme's evidence, to the effect that the focus for this claim was only the first of the EOT claims. Further, there was no reconciliation between what appeared in the schedule and what was claimed in the builder's pleading ($32,020). 9. Accordingly, this claim also fails. Analysis of home owner's claim Whose expert evidence should be preferred? 1. I have no qualms about accepting the competence of either of Mr Shilson-Josling or Mr Coombes. Nevertheless, in a contest, I generally preferred the evidence of Mr Shilson-Josling. I thought he had a greater grasp of the detail of the disputed items in issue, whereas Mr Coombes tended to rely more upon his practical experience. That, in turn, led Mr Coombes to occasionally give evidence by bare assertion, rather than reasoned explanation. In fairness, Mr Coombes did not appear to have access to all of the relevant supporting documentation provided to Mr Shilson-Josling and, for many of the disputed items, partly as a product of the timing for his inspection, he had been unable to access relevant parts of the property. But where access was obtained by him, often he acknowledged that he did not conduct his own testing. I was also impressed by Mr Shilson-Josling's balance and restraint when he conceded, when giving evidence, that the scope of a large number of the rectification works would not require the demolition of walls. 2. These impressions of the manner and substance of their evidence reflected also my view as to the depth of analysis in their respective reports: Mr Shilson-Josling provided a great deal of evidence to support his findings; Mr Coombes report was brief, reactive and suffered from the comparative disadvantage of not receiving plans and other documentation provided to Mr Shilson-Josling. Overall, I considered that Mr Shilson-Josling was more thorough in his work. Where there was a conflict between them, I generally prefer the evidence of Mr Shilson-Josling. 3. A qualification to this preference is where the alleged defect is of an inherently cosmetic or sightly kind, rather than a matter affecting more structural or amenity considerations. Mr Coombes saw the subject property many months after Mr Shilson-Josling and it may be expected that, generally at least, he was in a better position to opine on the current (to the point of Mr Coombes' inspection) appearance of the works (as distinct from their structural integrity) in comparison to Mr Shilson-Josling. 4. In my consideration of the defects and rectification works (actual or proposed) I generally give primacy to the views of the experts over the opinions expressed by the builder and the home owner; although I have taken into account the subjective views of the builder and home owner as to what was complete, or needed to be completed; more as a check. Further, I also give primacy to the views of the experts (more particularly Mr Shilson-Josling) to those of the sub-contractors who, although somewhat more objective than Mr Rahme, have had a long-standing close association with him. General findings 1. Before I make findings about individual defects, it is appropriate for me to set out my views on the contentious questions of principle raised by the parties' closing written submissions and closing addresses. I do so to indicate the principal considerations I take into account in considering the parties' submissions in relation to the individual items of alleged defective work; as well as to spare myself the need to set out fully those considerations when expressing my views on individual items: as already noted, it is a 'given' that Mr Shilson-Josling has opined that an item is a defect, rather than incomplete. I give weight to that opinion without repeating it when I analyse each item. "Defective" or "incomplete" works 1. First, in the context here where the builder was shut out from the site prior to the contractual date for practical completion, and where the builder's expert (Mr Coombes) distinguishes works that were 'incomplete' from those which were 'defective', I consider that the practical test for whether an item of work could be property characterised as 'incomplete' as being whether, at the point where the builder was shut out, objectively speaking, it was unlikely that the builder would or could go back to the item in question to 'fix' it. I reject the builder's submission that the standard is to be exclusively determined by what the builder subjectively thinks is required or the contractual standard for 'practical completion' defined in the contract and/or his sub-contractors' willingness to perform such work free of further cost. That said, as occurred very often, where Mr Rahme stated his subjective view that an item of work was "completed," that was a useful indication from the builder, and might amount to an admission, that if the quality of the work did not meet the standards of the warranty, it should be regarded as a 'defect', rather than 'incomplete'. As will be seen, this point is made repeatedly through my analysis of individual items. Mitigation 1. Secondly, when considering the reasonableness of the home owner's costs of the works that actually were rectified, the builder cannot establish that the home owner acted unreasonably by arranging for another builder (Mr Yassine) to rectify some of the defects (items 1, 3-5, 19-29) without giving it, the builder, the opportunity to rectify. The builder did not generally plead any failure to mitigate. To the contrary, in its Defence to the home owner's claim, it agreed that the consideration referred to in section 48MA of the Act was inapplicable. Jones v Dunkel inference for failure to call Mr Yassine? 1. Thirdly, the builder urged the Court to draw a Jones v Dunkel inference against the home owner's omission to call Mr Yassine, the remedial builder, who purchased one of the two dwellings from the home owner. A cardinal requirement before this 'rule' can be invoked is that the party against whom the rule is invoked is required to explain or contradict something (Jones v Dunkel (1959) 101 CLR 298 at 321). In this case, the builder argues that Mr Yassine could have given evidence to show that (a) the scope and costs of his remedial works were reasonable and necessary (especially, in the absence of proof of accounts and receipts from Mr Yassine), or how he went about those works (such as what investigations he had deployed) and (b) his purchase of the dwelling was not at arm's length. However, in the circumstances that have occurred, I do not consider that these were matters for which it was necessary for the home owner to explain or contradict. 2. As to the former, Mr Lee, the builder's expert, accepted that the scope and costs of the remedial works were reasonable in order to quantify the builder's claim on the quantum meruit. The reasonableness of those costs was not established solely by reference to Mr Lee's view (though that view might reasonably have signified to the home owner that the issue was not a live one). The home owner put into evidence Mr Yassine's contract with Mr El Baba and a breakdown of the works he had performed. Further, the builder had it within its means to use court process to obtain the documentation of Mr Yassine that it says it required: if having resorted to it, it was dissatisfied with what was produced, it also had it within its means to seek orders to compel production where it could establish the inadequacy of the response. 3. As to the latter, concerning the circumstances of the purchase of one of the dwellings, it was not put to Mr El Baba that the sale to Mr Yassine was otherwise than at arm's length. I further note that, in response to the builder's point about not appreciating, at the time of Mr El Baba's cross-examination, that there may be some (indeterminate) scope for further inquiry into Mr El Baba's dealings with Mr Yassine, there was no further invocation of court process to compel production of documentation, nor an application for some adjournment to enable the builder's Counsel and legal representatives for further time to consider the full implications of the documents produced to the Court during Mr El Baba's cross-examination, before that had concluded. 4. There are other circumstances which would not lead me to draw the inference. First, in Mr El Baba's first affidavit, served in November 2017, documentation was exhibited which indicated the actual costs and the specific works that Mr Yassine agreed to undertake (as well as the contract for him to do so). It was open to the builder to invoke court processes to compel any additional primary source material it sought in order to test such evidence. It is true that the builder contended that it had tried to invoke such processes but was met with resistance from the home owner, however, the Court would expect that if the builder had a genuine complaint about the home owners lack of compliance with court process that was issued to it, then it would have exhausted all attempts to compel production. There is no material before me to suggest that it did so. Secondly, it was also open to the builder, through its counsel, to cross-examine Mr El Baba on his dealings with Mr Yassine, including the former's knowledge of the works that were requested, and other things that Mr El Baba did to facilitate the remedial works. There was, to be sure, some cross-examination, but not so much as to lay the foundation for an argument that there were unexplained matters which it would be expected that Mr Yassine would be called to give evidence about. Aspects of Bellgrove Principle 1. Fourthly, I consider that Bellgrove mandates that the practical measure for damages is the reasonable and necessary costs of rectification, in preference to the 'diminution in value' test that the builder apparently propounds. Bellgrove, and cases that have applied it, indicate that this is the prima facie measure of damages that corresponds to the general principles for damages for breach of contract, in the relevant (construction) context. I am not persuaded by the builder's submissions as to why a diminution in value approach is preferable in this particular case. One of the problems for the builder in its advocacy of this test is the absence of a firm evidentiary platform for it. Although there is evidence of a sale price for both dwellings, that is only part of the equation. There was no evidence that Mr El Baba made a profit on the sale. Indeed, it was not put to Mr El Baba that, overall, he was better off as a result of the sale. 2. I would add that even if a diminution in value test was applied, it would only apply to those items where defective works had not been rectified. There is, in my view, no reason why Bellgrove should not apply to the rectified works that have actually occurred. 3. Fifthly, the Bellgrove standard – as re-interpreted by the High Court more recently in Tabcorp – is fairly exacting against the builder. The qualification to recovery of reasonable (and necessary) rectification costs is not readily applied – it arises only in "fairly exceptional circumstances", such as where the home owner uses a technical breach to secure an uncovenanted profit. In this case, the suggestion by the builder, in some instances, was that the defective item did not compromise the structural integrity of the building and had only an aesthetic effect. However, the strictness of the test for when the qualification arises was illustrated in the decision of the Western Australian Court of Appeal's decision in Willshee v Westcourt Ltd [2009] WASCA 87. In that case, the home owner's contract with the builder provided for the use of high-quality limestone cladding to a house. Three and a half years later, the cladding began to crumble and it was discovered that the builder had used an inferior ('seconds') quality of limestone. The trial judge found that the structural integrity of the house was not in doubt and the home owner's complaint was centred only on the aesthetic quality of the limestone (a characteristic about which the contract was silent) and determined that it was unreasonable to remove all of the cladding to replace the blocks with the high quality blocks. The Western Australia Court of Appeal determined that, in the light of Tabcorp, the qualification to the Bellgrove principle did not arise – the breach was not merely 'technical' and the home owner was not seeking to extract an uncovenanted profit ([70]-[71]). The Court of Appeal then went on (at [72]) to say that the home owner's subjective intention may be relevant to whether the qualification to the rule in Bellgrove could arise, but it was incumbent upon the builder to establish that the home owner had no intention to use the damages awarded to undertake the rectification work. 4. As to the home owner's intention, I do not consider that it could be inferred that the home owner had no intention to rectify from the circumstance that he was reticent to have the builder return to the site. In this regard, I do not find that the builder was unwilling to return to the site. I consider that it is more probable than not that he was willing. This is supported by the letter from the builder's solicitor dated 20 March 2017 and, to some degree also (inferentially), the evidence from the sub-contractors indicates that they were willing to return, as well. But I find that the home owner wanted another builder to rectify the defective works and that the principal reason for this was that he had lost confidence in the incumbent builder. 5. Sixthly, I do not consider that the sale of both dwellings constitutes a supervening event which would bar the home owner from its claim for the costs for rectification of defects where those works had not yet been rectified. It is true that there are circumstances where the subsequent sale of a property with building defects may have this effect, however in such circumstances this is because of the additional finding that the home owner did not intend to rectify the defects before selling to the purchaser (Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253 at [61]-[63]). 6. I do not accept the builder's submission that this is the position in this case. Mr El Baba gave evidence, in his affidavit and also at trial, that he did intend to rectify the (remaining) defects but for the circumstances that he did not have (or ran out of) the money. He was challenged on this evidence under cross-examination but in this particular respect I considered that he was unshaken. The builder contends that it was only during the trial, and especially only when a notice to produce that it had issued to the home owner, that it had learned of various transactions between Mr El Baba and Mr Yassine. It says, in effect, that this may have been the 'tip of the iceberg' and that it had been deprived of the opportunity to obtain further evidence that would have enabled it to ascertain or probe whether there was some kind of collusive dealing between Mr Elba and Mr Yassine which might throw doubt upon Mr El Baba's evidence of his intention to rectify. But the Court will not conjecture as to what the evidence might have been had the builder fully exhausted its use of coercive processes to obtain evidence. It is true that the builder, on 20 March 2017, made offer to complete the works, which offer was rejected at the time by the home owner. I do not regard that circumstance as derogating from my view that the home owner did intend to rectify the works. 7. It also follows from this, that I do not accept the submission advanced behalf of the builder, that Mr El Baba's conduct was so distinguishable from the conduct of other home owners, in comparison to other cases where home owners invoke Bellgrove principles, as to render those principles inapplicable to the assessment of his claim for damages. Indeed, I am bound by the observations of Gibbs J (as his Honour then was) in Director of War Services Home v Harris (1968) Qd R 275 (at 278-279) [5] : "It is true that Bellgrove v Eldridge was not a case in which the building home owner had sold the building before bringing the action, but I am unable to see any reason why there should be a different measure of damages in such a case and nothing is said in Bellgrove v Eldridge to support any such distinction. When the builder, in breach of his contract, delivered to the building home owner a building that did not conform to the specifications, the home owner became entitled to recover damages according to the measure approved in Bellgrove v Eldridge. If the home owner subsequently sold the building, or gave it away to a third person, that would not affect his accrued right against the builder to damages according to the same measure. The owner of a defective building may decide to remedy the defects before he sells it so that he may obtain the highest possible price on the sale; he may sell subject to a condition that he will remedy the defects; or he may resolve to put the building in order after it has been sold because he feels morally, although he is not legally, bound to do so. These matters are nothing to do with the builder, whose liability to pay damages has already accrued." 1. Seventhly, following the last point, Counsel for the home owner indicated that the circumstance that a purchaser has subsequently purchased the subject properties does not provide any assurance to the home owner that he (and the builder) will not later be sued by the purchaser for defects. In response to this, the solicitor for the builder complained that there would be an unfairness in a monetary sum being awarded against the builder; only thereafter to be met with an additional claim by the purchaser. As a result of these submissions, following inquiry by the Court, Counsel for the home owner undertook to the Court, on the home owner's behalf, that in the future event that the home owner and builder were to be sued for damages by the purchaser, the home owner would not raise any abuse of process defence against the builder should the builder contend that such liability it has incurred should be adjusted in light of the purchaser's claim. 2. Eighthly, the closing addresses of the legal representatives for builder and home owner contained the following important concessions (respectively), in connection with the scope of works for remaining rectification: (a) that notwithstanding limitations in Mr Coombes' evidence in this regard, the builder is bound by the evidence that is before the Court (rather than what it might have been had Mr Coombes had equal or comparable opportunity as Mr Shilson-Josling had to examine it); and (b) there is no wholesale requirement for the demolition of the buildings. 3. As to the former, if there was any disadvantage to the builder (set against the timing of Mr Shilson-Josling's inspections) by Mr Coombes' inspecting the properties after many defects had already been rectified, then this was a matter to which the builder had (at least) contributed to. It had control of the site until 10 or 11 March 2017. Before then, it had been served with a breach notice (23 November 2016) and Mr Shilson-Josling had attended the site twice. As it was, it took a further 7 months before Mr Coombes came on site. 4. As to the latter, Counsel for the home owner said that in relation to the items of waterproofing and termite management, it would be sufficient to have the sectional removal of some part of the (especially lower) walls; (c) given the rectification works that have occurred to date, in relation to future rectification works, the relevant items are 2, 6 and 8-18. Defects & scope of rectified works 1. I will now make findings in relation to each item, and the related question of what (if any) was the appropriate scope for rectification of any defect, together. For reasons indicated later in the judgment, the costs claimed for rectification works are not considered in these reasons. As will become apparent, I consider that the real question in relation to many of the disputed items was the appropriate scope of rectification. 2. Item 1: subject to any variation, Mr Coombes accepted that the work here did not comply with the plans, and (implicitly) that this amounted to non-compliance with the warranty in s 18B(1)(a). The works have been completed. This makes the builder's work defective. I do not accept that there was any verbal variation in circumstances where the home owner incurred expenditure in restoring the front façade to be in accordance with the construction certificate plans. This, in my view, is conduct inconsistent with a variation (verbal or not). 3. In circumstances where there was no alternative recommended rectification work proposed by Mr Coombes, nor any reasoned objection by him to the rectification work suggested by Mr Shilson-Josling, I accept Mr Shilson-Josling's recommended rectification work for this item (referred to at paragraph 87 above). There was no suggestion that this expenditure was unreasonable or out of all proportion to the benefit he obtained. 4. Item 2: Mr Combes referred to the height of the bulkhead, but he did not dispute Mr Shilson-Josling's evidence that the width of the bulkhead was non-compliant with measurements on the plans. All the gyprock in the hallways had been installed and painted. That makes this item defective. 5. I accept Mr Shilson-Josling's suggested scope of the proposed rectification work (referred to at paragraph 87 above), involving testing of the pipework within the bulkhead and acoustic installation, but without the complete rebuild of the bulkhead, is reasonable and not disproportionate to the benefit of being obtained. 6. Item 3: I find that there was a non-compliance with the s 18B(a) warranty through the use of plasterboard material in various locations, contrary to the contract specifications. I did not understand Mr Coombes to seriously dispute this. I find that the use of plasterboard for external use also amounted to a non-compliance with the warranty in s 18B(1)(b). Plasterboard was shown to have been installed, and then subsequently removed. This work is therefore defective. 7. As to rectification, there was no suggestion that the rectification work method that was carried out was unreasonable; nor disproportionate to the benefit that was obtained. 8. Item 4: this item was not pressed. 9. Item 5: having viewed the photographs referred to, I find that the exposed concrete in the walls amounted to a non-compliance of the warranty that work be done with due and skill in s 18B(1)(a). That it occurred in more than one place fortified my conclusion. Mr Shilson-Josling also gave uncontradicted evidence that the works had not complied with specifications, and also breached the Australian Standard (AS 3740). The wall around the concrete has been constructed and painted with the gyprock set. This work was defective. 10. Mr Coombes did not contest Mr Shilson-Josling's recommended rectification works in respect to this item (referred to at paragraph 87 above). I accept that they were reasonable and necessary. 11. Item 6: I accept Mr Shilson-Josling's evidence, which was not seriously challenged by Mr Coombes, that the TMS was not performed in accordance with the contract specifications, and therefore amounted to non-compliance with the warranty implied by s 18B(1)(a) of the Act. I also find, having regard to the photographs and other commentary in his report, that in the circumstances that the TMS did not extend across or was set back from the brickwork external face of the walls, there was a want of due care and skill, so as to constitute a further breach of s 18B(1)(a). The TMS formed part of the brickwork that had been constructed in its entirety. This work is defective. 12. As to the appropriate scope for rectification, but for what I say about the appropriate scope of works for item 15 below, I would have considered that the more appropriate scope for rectification was the use of a composite system for physical and chemical barriers. Both experts considered this to be possible. The single use of chemical barriers, itself risky in certain areas of the property, would generally be cheaper (subject to the costs of more regular inspections), but would complement physical barriers. 13. However, since I have accepted the scope of the works suggested for item 15, I consider that the TMS should also be put in the state that the contract required it to be through the partial removal of some bricks to the TMS and for reinstallation. 14. Item 15: Mr Coombes agreed with Mr Shilson-Josling that, at some locations on the property, there was an issue as to how far in the DPC had been applied. His lack of concern about the possibility of rising damp was more attributable to the circumstance that this was a brick veneer property. This did not answer Mr Shilson-Josling's view, which I accept, that the DPC was improperly applied to the walls and did not conform to Australian Standards. That being so, I find that the home owner has made out a breach of s 18B(1)(c) and (a). The brick walls have been constructed in their entirety. I accept that this item is defective. 15. In respect to proposed rectification, I accept that the most appropriate scope of work would see the removal of sections of the masonry walls to facilitate access to the DPC and reinstallation. The home owner does not contend that a complete rebuild of the entire brickwork is necessary and I accept that this is the position. 16. Item 7: There was no real answer to Mr Shilson-Josling's evidence that the cracking on the unformed construction joint in the concrete slab was contrary to the specifications in the engineering plans and AS 3600, in non-compliance with the warranties implied by s 18B(1)(a) (and 18B(1)(c) of the Act). Mr Shilson-Josling and Mr Rahme both opine that these works were complete. The builder has not supplied any reasoned submission to the contrary, other than the builder's subjective characterisation of the works as incomplete. The works are defective. 17. As to rectification, the home owner relies upon Mr Shilson-Josling's modest suggestion that an engineer inspect the slab whilst the works for the TMS is carried out. It is not contended that there is a call for a complete rebuild of the slab. I accept that scope as reasonable. 18. Item 8: Mr Coombes did not dispute Mr Shilson-Josling's concerns that the brickworks and concrete slab elements extended beyond the easement line, contrary to the approved architectural drawings. In my view this amounts to a non-compliance with the s 18B(1)(a) warranty. Mr Shilson-Josling and Mr Rahme both opine that these works were complete. The works are defective. 19. On the issue of rectification, the stormwater pipe had been subsequently repositioned. Both experts agreed that it would be appropriate for a land surveyor to assess whether building finishes encroached on the easement. I accept that evidence. 20. Item 9: Partly by reason of the timing of his inspection, Mr Coombes was not in a position to dispute Mr Shilson-Josling's evidence that, at least at the time of the latter's inspection, there has been staining and marking on all faces of the masonry walls. When he inspected the walls there was no marking. This was in conflict with Mr Shilson-Josling's evidence of what the latter saw when he last inspected the property. Mr Shilson-Josling's photographs put the question of the existence of the staining and marking beyond doubt that there was a non-compliance with the Australian Standards and therefore a non-compliance with the warranty implied by s 18B(1)(c), if not also s 18B(1)(a). In respect to this item, however, I consider that the works were incomplete, rather than defective, since they could have been and were intended to be rectified by the builder at the point where it was shut out of the site. 21. If I am wrong on the last point, I would have accepted that the appropriate scope of rectification would be to ensure that the bricks are properly cleaned. 22. Item 10: Although I accept Mr Coombes' evidence that he saw (and believed) that there was no problem with the mortar filling and cleaning, Mr Shilson-Josling's report, and the photographs contained therein, do indicate the presence of 'honeycombing' in places in the mortar. I accept Mr Shilson-Josling's evidence that this was contrary to a condition in the development consent, and amounted to a non-compliance with the s 18B(1)(c) warranty. 23. I consider, though, that this work was incomplete, rather than defective, and could and would likely have been rectified by the builder at the point where it was shut out of the site. 24. Item 11: I accept Mr Shilson-Josling's essentially unchallenged evidence that what he saw in the variation of the thickness of the bedjoints, at various points along the external masonry walls, deviated, not insignificantly, from the tolerances permitted in the Australian Standards (AS 3700). To that extent, at least, there was a breach of the s 18B(1)(c) warranty. Further, Mr Coombes did not cavil with Mr Shilson-Josling's opinion concerning a lack of alignment across the openings. His only answer was that they were fit for purpose (and therefore compliant with the s 18B(1)(b) warranty). I consider that this amounted to a non-compliance with the s 18B(1)(a) warranty of due care and skill. 25. I do not think that at the point when the builder was shut out of the site, this work was left in a state where it was beyond the point where it could not and was not likely to have been rectified. I regard this item as incomplete. 26. Item 12: the issues associated with this item are materially similar to those affecting item 11: evidence of a lack of alignment and deviation from the specified thickness of the perpends. Again, I accept Mr Shilson-Josling's essentially unchallenged evidence in these respects and find that there was a breach of the warranties in s 18B(c) and 18B(a). 27. I find that the work was incomplete for the same reason as per item 11. 28. Item 13: Mr Combes did not dispute Mr Shilson-Josling's evidence about gaps between the window sills, cracking and some inconsistency, in terms of evenness, of surface; although he did say that cracks between the seal were explicable to shrinkage of mortar – a view he had not expressed in his written reports and which, I regard, as a view put forth belatedly with little conviction. I accept that evidence and find a breach of warranties in s 18B(1)(c) and 18B(a). 29. I find that the cracking, the extent of the gap between brick sill and aluminium window is indicative of work that is defective, rather than incomplete. 30. I accept Mr Shilson-Josling's view as to the recommended rectification work (summarised at paragraph 13 above), involving the removal of existing window sills and re-laying them, in conjunction with the weepholes at all window sill flashings. 31. Item 14: Mr Coombes agreed with Mr Shilson-Josling's evidence, in his report, about the missing weepholes in the brickwork. Although there was some dispute as to the applicable standard, I do not consider that this precludes my determination that at least one of the Australian Standards was not complied with; with the result that there was a non-compliance with s 18B(c). At any rate, there is little doubt, and I so find, that there was an absence of due care and skill in breach of the warranty in s 18B(1)(a). 32. Noting that the brickworks forming the walls has been completed, I find that this item of work is defective, rather than incomplete. 33. Rectification for this item is considered further below, in item 18. 34. Item 16: this is another instance where Mr Coombes agreed with Mr Shilson-Josling; in this instance, about the absence of weepholes being provided to allow water from the cavity flashing to escape and, further, that the cavity flashing did not extend to the outer edge of the brickwork. I accept Mr Shilson-Josling's opinion that this constituted a non-compliance with Australian Standards. I find that, in respect to this item, the home owner has made out a non-compliance with the warranties under ss 18B(1)(a) and (c). 35. I find that this work was defective, rather than incomplete for the same reason as for item 14. 36. The rectification for this work is included in item 18. 37. Item 17: Mr Shilson-Josling gave essentially uncontested opinion evidence that there were not enough control joints on the masonry walls and that the location of the control joints were too far away from the corner of the building. I find that this amounts to a failure to comply with the warranties under ss 18B(1)(a) and (c). 38. Noting that the brickworks forming the walls has been completed, I find that this item of work is defective, rather than incomplete. 39. As to rectification, in the absence of any contested opinion from Mr Coombes, I find that the appropriate rectification works were in accordance with Mr Shilson-Josling's recommendations at [12.527]-[12.534] of his report. 40. Item 18: this item is considered after item 22. 41. Item 19: I accept Mr Shilson-Josling's evidence – with which Mr Coombes agreed – that the method of fixing the rafters and the use of metal brackets was incorrect. I also accept Mr Shilson-Josling's evidence that framing brackets were not installed in accordance with the manufacturing specifications, as set out in the engineering plan and as required by the BCA. These items of work did not comply with the warranties under ss 18B(a) and (c) of the Act. The works purported to be complete. I find that they are defective. 42. As to the scope of the rectification, I accept Mr Shilson-Josling's uncontested opinion that fasteners should be provided to the framing brackets and an engineer consulted to confirm the design wind loads and construction required for the loads and also to review the specification for the steel beam. 43. Item 20: Mr Coombes did not (and was not really in a position to) dispute Mr Shilson-Josling's evidence that timber should have been used to line the rear patios and not plasterboard. This had subsequently been rectified. Nor did he cavil with Mr Shilson-Josling's evidence that the spacing of the furring channels was inappropriate, and did not conform to the manufacturer's installation manual. I find that there was a non-compliance with the s 18(a) warranty. I also find that the builder purported to have completed the works. They amount to defects. 44. As to rectification, there is no indication that the scope of the works that were actually deployed was unreasonable. I accept that what Mr Shilson-Josling proposed is appropriate. 45. Item 21: Mr Coombes did not dispute Mr Shilson-Josling's evidence of the omission, at various places, of bond breaker and water stop. He said very little in his report to contradict Mr Shilson-Josling's other criticisms of the internal waterproofing. I accept the latter's evidence about the defects of the ineffectiveness of the perimeter flashing water stops the water stops for the showers in the ensuites upstairs and omission to install bond breakers. I consider that these omissions, individually and collectively, constitute a breach of the warranties under s 18B(1)(a) (at least for negligence) and also s 18B(1)(b) of the Act. 46. Mr Rahme said that he thought the works were completed, and, in relation to the wet areas upstairs, tiling had occurred; after the waterproofing. I find that these works were defective and not incomplete. 47. I defer the scope of rectification works for this item until after I have addressed item 23. 48. Item 22: Mr Coombes did not disagree with Mr Shilson-Josling's findings in relation to this item. These included that there was: 1. Cavity flashing not extending out across the brickwork on the tiled upper floor balcony on the front of each dwelling; 2. No waterproofing beneath the tiles in dwelling one; 3. No waterproofing extending beyond the tiles on the verandah to the second dwelling; 4. a non-compliance with AS 4654 for waterproofing membranes for external above-ground use. 1. I accept that evidence and find that the builder did not comply with each of the warranties in s 18B(1)(a)-(c) (incl) in respect to these defects. The above matters, individually or collectively, are indicative of works that are defective and not merely incomplete. 2. On the question of rectification, see item 18 which I now immediately turn to 3. Item 18: This item was the composite global scope of works in relation to brickworks generally, and addressed rectification works for each of items 9 – 17 & 22. I have previously found that items 9, 10, 11 & 12 were 'incomplete'; not defective. I identified the balance of the items as defects. 4. Having heard the evidence of both experts, it seemed to me that there was a consensus that neither of them considered that any individual defect warranted the removal or demolition of the walls. I also considered that, although he scarcely mentioned them in his own report, Mr Coombes' suggestions for works, as they emerged when he gave evidence concurrently with Mr Shilson-Josling, did not meet with much disagreement from the latter. 5. I am also not persuaded that rectification of the individual defects would, collectively, warrant knocking down, or removal of the walls in their entirety. 6. For the individual items I have identified, in my view, the appropriate scope of works are as follows: 1. Item 13, 14 & 16: Mr Shilson-Josling opined, and I accept, that rectification of the defect relating to item 13 be undertaken at the same time as rectification of item 14. Rectification of the latter item, in turn, would be undertaken at the same time as item 16. Mr Shilson-Josling's suggested works for items 13 & 14, involving removal and re-laying of the existing window sills, in conjunction with the provision of weepholes, are appropriate. Further, and largely upon the basis of Mr Coombes' concession, referable to item 16, that weepholes had not been provided, and that pressure flashings were not as good as flashings to the wall, I find that rectification of this work is warranted as well. I do not, however, consider that it would be appropriate to knock down walls for the purpose of these rectifications. Mr Shilson-Josling did not raise this as his primary recommendation. In relation to item 16, I find that his primary recommendation, being to provide a cavity flashing extending beyond the face of the walls above the roof line of the ground floor roofs, to be in conjunction with the provision of an overflashing extending over the existing apron flashing, to be the appropriate scope of works in relation to this item. 2. Item 15: in circumstances where an occupation certificate had been issued in relation to both dwellings, and the home owner had sold both of them, I prefer the evidence of Mr Coombes that the defects relating to this item do not warrant removal of the masonry walls to provide a complete damp-proof course. 3. Item 17: I have addressed this at paragraph 281, above. 4. Item 22: I regard it as decisive that Mr Shilson-Josling accepted that the removal of skirting tiles and the extension of waterproofing and flashings can be done to the external walls without removal of the walls. Subject to that, I find that the balance of his recommended works is appropriate. 1. Item 23: Mr Coombes did not dispute Mr Shilson-Josling's findings that: 1. The wrong type of tiles for wall and floor were used for the ensuite and main bedrooms. This I consider was a breach of the s 18(1)(a) warranty for failure to comply with specifications; 2. There was spot staining on the tiling. This was a breach of the s 18(1)(a) warranty for want of due care and skill; 1. I consider that the erroneous choice of tiling (upstairs, but not downstairs) to be a defect; although, I would have regarded the staining on the tiling, by itself, as indicative of an item that was incomplete. 2. In relation to this item – and item 21, I accept Mr Shilson-Josling's evidence, which was primarily directed to the works upstairs and find that remedial works he had recommended (involving the removal of tiling to the affected floors and wall panels, provide waterproofing as required and install appropriate tiles) was appropriate. This did not require the ripping up of floors downstairs. 3. Item 24: Mr Coombes generally agreed with Mr Shilson-Josling's findings concerning: 1. an absence of movement joints on the floor. I find that this amounted to a non-compliance with the s 18B(1)(a) warranty, indicating a lack of compliance with contract specifications; 2. the installation of tiles not being consistent with the guidelines for flooring. I find that this also amounted to a non-compliance with the s 18B(1)(a) warranty indicating a want of due care and skill 1. Mr Rahme considered that the works were complete. I find that they were defective; and not incomplete. 2. As to rectification of this item, and also item 22, Mr Shilson-Josling considered that rectification for this item would be affected by my findings relating to the scope of works for item 22. An important feature of those earlier findings was that I did not consider that the removal of walls was justified. Otherwise, I accept Mr Shilson-Josling's suggestion for this item summarised at paragraph 87 above. 3. Item 25: Mr Shilson-Josling's view that the wrong type of beam was used was not disputed by Mr Coombes, although the former was challenged, in cross-examination on his view that the beams did not comply with the specification. It was not clear to me what the basis for such challenge was in circumstances where Mr Coombes had not advanced the view and Mr Shilson-Josling had referred, as the basis for his opinion in this regard, the content of the engineering drawings. At any rate, I accept Mr Shilson-Josling's view and find that the works for this item did not comply with the warranty in s 18(1)(a), for the failure to comply with specification. Although it is not necessary to so decide, I would also have been inclined to find a lack of compliance with the warranty in s 18(1)(b). 4. Mr Rahme's evidence confirmed that the garage ceiling was sheeted and, so far as he was concerned, complete. I consider that this item of work is defective. 5. As to rectification, I find that it would be appropriate for a structural engineer to assess the installation of steel beams and floor joists and to specify any further requirement for specification. However, Mr Shilson-Josling noted that works had been undertaken to the front verandahs. Even taking into account that circumstance, I remain of the view that an engineer should review the position, and provide such advice as is appropriate, as I have indicated. 6. Item 26: Mr Coombes agreed with many of the defects that Mr Shilson-Josling had identified with the flashings and roof capping on the roof level of the veranda on dwelling two. Mr Coombes did not have the same advantage of seeing the roof. The most he could do was comment on certain photographs appended to Mr Shilson-Josling's report. On the basis of Mr Shilson-Josling's opinion, which I accept, there was an absence of due care and skill in failing to take the necessary steps to make the flashing sit flush with the top of the roof and extend to the parapet cover flashing. 7. Mr Rahme considered that the roof was complete for being erected. I consider that that item was defective. 8. As to rectification, Mr Shilson-Josling was not challenged on his suggested rectification, comprising the provision and installation of parapet flashing that has a minimum 50mm downturn and anti-capillary breaks, providing an overflashing with anti-capillary breaks, re-aligning the flashings and re-making them so that all joints were lapped and sealed. I find that those recommended works are reasonable and appropriate. 9. Item 27: I accept Mr Shilson-Josling's evidence that the riser dimensions for heights on the internal stairs from the garage were inconsistent and not compliant with the BCA. I find that this defect amounts to a non-compliance with each of the warranties in s 18B(1)(a)-(c) inclusive. 10. Mr Rahme said that steps from the garage to the hallway were complete. The photos showed that the concrete stairs were completed. I consider that this item is a defect. 11. As to rectification works, Mr Combes did not disagree with Mr Shilson-Josling's recommendation to ensure stair riser and going dimensions were constant and the slope relationship quantity in accordance with the BCA. I so find that such recommendation should be implemented, and note that this defect had been subsequently rectified. 12. Item 28: Mr Coombes did not take issue with Mr Shilson-Josling's identified defects in relation to this item, comprising: 1. Rafters underneath the roof; 2. The erroneous method of face fixing rafters to the wall plate; 3. The erroneous method of fixing wall plates to the brick wall. 1. I am satisfied that these circumstances establish the builder's non-compliance with the statutory warranties in s 18B(1)(a) and (c) (as to the latter, the builder's Counsel appeared, by his questioning of Mr Shilson-Josling, to accept there were breaches of the BCA). 2. As with item 26, Mr Rahme considered that the roof was erected. There was also a safety question about the item. I consider that the item constitutes a defect. 3. As to rectification, I accept Mr Shilson-Josling's evidence that engagement of an engineer be undertaken to access and report upon the roof and ceiling framework. In forming this view, I accept his view that it cannot be discounted that there may be structural implications associated with the above defects. 4. Item 29: There was no dispute that the omission to affix labels on the glazing did not comply with BCA requirements. To this extent, there was a breach of the warranty in s 18B(1)(b) of the Act. 5. These doors were installed with glass and Mr Rahme opined that the works was incomplete. I consider that the works were defective and amounted to a defect. 6. I consider that such rectification as had occurred, involving the assessment by a glazier to assess the compliance of the glazing with the BCA provisions was reasonable and appropriate in relation to this defect, and note that this recommendation was subsequently implemented. Quantifying costs of rectification of works 1. In my view, it is appropriate for the general question of the quantification of costs rectification items be referred to a referee in accordance with the provisions of Division 3 of Part 20 of the Uniform Civil Procedure Rules. Counsel for each party did not object to this course when the suggestion was proffered during the trial. 2. My reasoning for this is that it became apparent during the trial that: 1. Evidence is appropriate for technical assessment: Such differences as have emerged in the reports of the quantity surveyors, at the level of detail, include (but are not limited to) the appropriate costs of labour for rectified works; the appropriate level of builder's margin, where supervision costs claimed were necessary, whether it would be appropriate, or even possible, in the circumstances to deploy mobile scaffolding works to rectify the works on the subject property. These are technical questions upon which the quantity surveyors currently offer very different views and upon which a referee would be more likely to render more accurate findings than the Court; 2. Evidence requires reconsideration: There were some important differences in principle, between the two quantity surveyors as to costs, based upon what findings I made as to the defects and the appropriate scope of the rectified works; which are likely to require reconsideration of their respective reports. The questions of costs of rectification, generally or even in relation to individual defects, may be seen as separable to the other issues determined by the Court in these reasons; and do not depend upon findings of credibility of the witnesses; 3. Some evidence is incomplete: The evidence of the builder's quantity surveyor, Mr Lee, is, incomplete and, in some respects not costed; pending such determination of the scope of the rectification works; and, further, he relied upon source material (apparently, from Rawlinson's Australian Construction handbook) not placed before the Court. Although on one view that simply goes to the weight to be placed upon existing views in this expert's report, a referee with technical expertise is likely to be able to form a more accurate view of Mr Lee's evidence in this regard; 4. I acknowledge that there will be some further delay, and expense, to the parties in implementing this procedure, but I also take into account that with the Court having made findings on the questions of defects and true scope of rectification works, the scope for long delay has been reduced and, further, consider that overall, the desirability in having qualified technicians arriving at a more accurate result than would otherwise be the case indicates that the interests of justice weigh in favour of the use of this procedure. 1. This course naturally does not preclude the parties from engaging consensually in other forms of alternative dispute resolution, principally mediation, on the quantification of costs of rectification works in the light of these findings should they wish to. Home owner's claim for overpayment to builder 1. The home owner's claim in this regard is for $29,961.36. It is substantially based (ironically) upon the evidence of the builder's quantity surveyor, reflecting the circumstance that he valued the cost of the works. The home owner's qualification to this evidence was to allow for a builder's margin of 20% and deducting the cost of any defects from the value of works carried out. 2. The difference between the contract price and the value of the works (with a 20% margin) was $483,928.64. The amount paid by the home owner was $513,890. 3. The builder did not make any submissions to the contrary on this topic. I accept the home owner's claim as it has been put. SUMMARY & ORDERS 1. For the above reasons, the Court has; 1. Rejected the builder's claims on quantum meruit and for delay damages; 2. Very substantially upheld the home owner's case on defects and the scope of actual and proposed rectification works and claim for overpayment to the builder. 1. I direct the defendant/cross-claimant to bring in short minutes to give effect to these reasons within 14 days. 2. In addition, and pursuant to r 20.14 of the UCPR, the general question of the cost of the rectification works for the defects I have found is referred to a referee. The parties should confer as to who is the appropriate referee, and pursuant to r 20.15, if not, upon an appropriate mechanism (such as a referral from someone nominated by a professional association) if they cannot agree. When the matter comes back to me, I will make the order for the appointment. 3. I direct the cross-claimant to serve upon the cross-defendant (and copy my Associate in to) a proposed order for reference within 14 days of these reasons. For that purpose, Form 2, District Court Forms may be used as a template, to be varied as appropriate; particularly in relation to the documentation to be supplied to the referee. The cross-defendant is to notify the cross-claimant (copying my Associate) to any objections to the terms of the proposed reference (and reasons for such objections) within a further 7 days. Thereafter, subject to the scope of any objections to the terms of the reference, I will make the order for reference in Chambers. 4. I would hope that the parties could agree upon short minutes so that orders can be made in chambers. If not, liberty to apply is granted on 3 days' notice, through notifying my Associate for a date to be fixed for any further hearing on orders. 5. Costs of the proceedings to date are reserved, pending the completion of the quantification exercise. ********** Endnotes 1. I have used here the item description adopted by Mr Lee in his 9 May 2018 report (Ex G) 2. Ex 3 3. Ex F 4. The builder's notice to produce and documents produced formally by the home owner in response to a call on that notice comprised Ex 7. 5. The observations were followed in Westpoint Management Ltd v Chocolate Factory [2007] NSWCA 253 at [49] and Scott Carver Pty Ltd v SAS Trustee Corporation [2003] NSWSC 1097 at [118] & [121]-[123] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 July 2019