Abrahams v Degan

[2009] NSWDC 315

CITATION:	Abrahams & Anor v Degan [2009] NSWDC 315
HEARING DATE(S):	26/5/09-29/5/09
JUDGMENT DATE:	5 June 2009
JURISDICTION:	Civil
JUDGMENT OF:	Elkaim SC DCJ
DECISION:	See paragraph 55
CATCHWORDS:	Statutory building warranties - Applicable limitation period
LEGISLATION CITED:	Home Building Act 1989 Home Building Regulations 1997 Limitation Act 1969
CASES CITED:	Owners Corporation SP64096 v D Olsen Constructions Pty Ltd (Home Building) 2008 NSWCTTT 1053 Owners Corporation SP66090 v Sydney Commercial Builders Pty Ltd and Anderson (Home Building) 2008 NSWCTTT 1096 Owners Corporation SP61404 v Vero Insurance Ltd (Home Building) 2008 NSWCTTT 996 Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253
PARTIES:	Alfred Abrahams and Betty Abrahams (Plaintiffs) Mehran Derakshan Degan (Defendant)
FILE NUMBER(S):	1276/08
COUNSEL:	M Dawson (Plaintiffs) J Oakley (Defendant)
SOLICITORS:	Vardanega Roberts (Plaintiffs) Baker McDonnell Solicitors (Defendant)

1. In 1999 and 2000 the defendant, as an owner-builder, constructed a large house on Sydney's north shore.

2. In May 2001 he sold it to Mr H and Ms Y. About a year later they sold the house to the plaintiffs. The plaintiffs found a number of defects in the property and made insurance claims. The insurance company, now called Vero, accepted most of the claims and arranged rectification of the defects. Vero, utilising its subrogation rights, now wants the money it spent on rectification from the defendant.

3. The plaintiffs have sued the defendant for breaches of statutory warranties imposed by the Home Building Act 1989 (the “HBA”). In the alternative, the plaintiffs allege the defendant was negligent.

4. The proceedings were commenced with the filing of a Statement of Claim on 2 April 2008. The defendant says the plaintiffs are out of time both under the HBA and in respect of their negligence action (Limitation Act 1969, Section 14).

5. The defendant had no particular building skills but engaged persons with the necessary qualifications to carry out the building work. He accepts, however, that he carried the overall responsibility for the work. He also accepts that, subject to the limitation point, that the warranties imposed by Section 18B of the HBA applied to him and also that the plaintiffs, as successors in title, were entitled to the benefit of the warranties (Section 18D).

6. By way of defence, in addition to the limitation points, the defendant alleges that the price paid by the plaintiffs was reduced to take the defects into account. Somewhat inconsistently, however, he also denies the existence of most of the defects

7. It is common ground that if the action was commenced within the period prescribed by the HBA then the negligence action would not need to be agitated as the compass of the alleged acts of negligence fall within the breaches of the statutory warranties.

The limitation arguments

8. Section 18E is as follows:-

“ 18E Proceedings for breach of warranties

(1) Proceedings for a breach of a statutory warranty must be commenced within 7 years after:

(a) the completion of the work to which it relates, or (b) if the work is not completed:


(i) the date for completion of the work specified or determined in accordance with the contract, or

(ii) if there is no such date, the date of the contract.



(2) The fact that a person entitled to the benefit of a statutory warranty specified in paragraph (a), (b), (c), (e) or (f) of section 18B has enforced the warranty in relation to a particular deficiency in the work does not prevent the person from enforcing the same warranty for a deficiency of a different kind in the work ( the other deficiency ) if:

(a) the other deficiency was in existence when the work to which the warranty relates was completed, and

(b) the person did not know, and could not reasonably be expected to have known, of the existence of the other deficiency when the warranty was previously enforced, and

(c) the proceedings to enforce the warranty in relation to the other deficiency are brought within the period referred to in subsection (1).”

9. The critical point in the opposing arguments is the resolution of when the work was completed. I note here that because the defendant was an owner-builder there was no building contract. The defendant says that the question of when work is completed is a factual issue to be decided on the particular facts of the case being heard. The defendant gave evidence that the final payment for any work was made in November 2000 but that this related to painting which had actually been done in June of the same year. He said that after June 2000 the only outstanding work was a sign for the pool fence, a cover for the pool pump and some work on the detention facility. The latter was certified as having been carried out on 8 September 2000 (Exhibit 8, Annexure MD10). Thus he said that by June 2000, and certainly by the end of that year, the work was complete. Accordingly, the action was commenced more than 7 years from completion and is out of time.

10. The defendant relies for its interpretation of Section 18E on two decisions of the Consumer, Trader and Tenancy Tribunal of NSW (the “CTTT”). These decisions are Owners Corporation SP64096 v D Olsen Constructions Pty Ltd (Home Building) 2008 NSWCTTT 1053 and Owners Corporation SP66090 v Sydney Commercial Builders Pty Ltd and Anderson (Home Building) 2008 NSWCTTT 1096.

11. In the first of these cases, Olsen, the Tribunal rejected the argument that completion meant “practical completion”. In the second decision the Tribunal followed the earlier decision and also rejected a submission that completion meant the date when a certificate of occupancy was issued. The senior member then went on to decide the matter on the basis of when “actual completion was achieved”.

12. The plaintiffs also rely on a decision of the CTTT, Owners Corporation SP61404 v Vero Insurance Ltd (Home Building) 2008 NSWCTTT 996. In this matter the Tribunal found that the date of completion was dictated by Regulation 48 of the Home Building Regulations 1997 which states:

“48 Period of cover

(1) For the purposes of determining the period of cover to be provided by an insurance contract in relation to residential building work, work is taken to be complete:



(a) on the date that the work is completed within the meaning of the contract under which the work was done, or

(b) if the contract does not provide for when work is completed or there is no contract, on the date of the final inspection of the work by the applicable council, or

(c) in any other case, on the latest date that the contractor attends the site to complete the work or hand over possession to the owner or if the contractor does not do so, on the latest date the contractor attends the site to carry out work.

(2) For the purposes of determining the period of cover to be provided by an insurance contract in relation to the supply of a kit home, the supply is taken to be complete:


(a) on the date that the supply is completed within the meaning of the contract under which the kit home is supplied, or

(b) in any other case, on the latest date that the contractor attends the site to complete the supply or hand over possession to the owner or if the contractor does not do so, on the latest date the contractor attends the site in relation to the supply.


(3) For the purposes of determining the period of cover to be provided by an insurance contract in relation to owner-builder work under an owner-builder permit, the work is taken to be complete:

(a) on the date of the final inspection of the work by the applicable council, or

(b) if there is no final inspection by the council, on the date that is 6 months after the issue of the permit for the owner-builder work.”

I note this regulation has since been repealed but it is accepted to have been in force at the relevant time.

13. The parties agreed that decisions of the CTTT were not binding on this Court but submitted that I should give them due weight in particular as issues of this nature are frequently dealt with in that jurisdiction. I do, of course, afford these decisions that weight.

14. The plaintiffs, relying on “the date of the final inspection of the work” as being determinative, say that this date is 18 June 2001 when the Ku-Ring-Gai Council issued a Compliance Certificate stating “all outstanding work complete. Final satisfactory.” (Exhibit B, page 3). The document also refers to the certificate as being “final”.

15. In my view, and I do not think it is disputed, the Compliance Certificate does reflect the final date of inspection. The defendant, however, says that Regulation 48 does not apply because, by its own terms, it refers to the determination of the “period of cover to be provided by an insurance contract …”. As there is no insurance contract in the present case it is submitted that the Regulation should not apply. The plaintiffs accept that there is no insurance contract but say that the scheme of the Act is such that no distinction should be drawn between the limitation period for a builder who is required to take out an insurance contract and an owner-builder who is equally liable under the same warranties notwithstanding that there is no insurance contract.

16. Although one must wonder why Regulation 48 is expressed to apply only to insurance contracts, it is my view that there is no logical reason why there should be a distinction with the owner-builder circumstance. It also seems to me that the wording of Regulation 48(1)(b) and (3)(b) suggests that the “date of the final inspection of the work” is to be read as the equivalent of “completion” where this term is provided for in the contract.

17. Accordingly, I am of the view that the applicable date is the “date of the final inspection of the work” and that this date is 18 June 2001. Thus the plaintiffs’ action is not barred by Section 18E of the HBA. It follows that I do not have to deal with the Limitation Act 1969 argument, nor the cause of action in negligence.

The reduced purchase price argument

18. I turn now to the defendant’s allegation that the plaintiffs, when purchasing the property, did so on the basis that the price was discounted by $90,000 to take into account the defects listed in a pre-inspection report. The high point of the allegation is expressed in Exhibit 1 where this note appears on page 2:

“The contract nominated sale amount was $1760000:00, however the claimant advised the property was originally listed for $1850000:00. He confirmed the sale price was negotiated down to the agreed amount after getting the report.”

The report referred to can only be the pre-inspection report (Exhibit 6).

19. I reject this defence for the following reasons:-

(a) The pre-inspection report does not list $90,000 worth of defects. It does mention some problems but these come nowhere near the extent of the defects alleged by the plaintiffs and, with some minor exceptions, they are not costed.

(b) Mr Abrahams, one of the plaintiffs, flatly denied that the report had been taken into account in the negotiation of the price. While his evidence on some matters may have been unreliable I have no reason to reject his adamant statement concerning this issue.

(c) There is an internal inconsistency in the defendant’s argument in that it largely denies the defects alleged by the plaintiffs exist at all.

The main issues

20. In my view, the outcome of this case lies in the resolution of the following issues:-

(a) Were there any defects in the building work such as to breach the statutory warranties?

(b) If there were, is the amount claimed for each item an appropriate measure of the damage?

21. The plaintiffs rely on assorted pieces of evidence to substantiate their claim. These include:-

(a) The reports of Mr Robert McDonald (Exhibits C and D).

(b) The report of Mr Paul Robinson (Exhibit B, page 59).

(c) The oral and documentary evidence of Mr Robert Perri, the builder who carried out the rectification work (Exhibits E, F and L).

22. The defendant primarily relies on the evidence of his expert, Mr Stephen Iskowicz. This expert prepared a useful Scott Schedule but unfortunately the plaintiffs did not proceed in the normal manner of making use of such a schedule.

23. The plaintiffs’ case was structured around proof of a number of items of work which are listed in a table in paragraph 6 of Mr Perri’s affidavit sworn 12 February 2009 (Exhibit F). The table lists the work allegedly done by Mr Perri (through his company) and the price paid. For convenience I have annexed a copy of this table to the judgment.

24. Other than as to the amount charged, the defendant conceded the following items: Items 8, 11, 13, 16, 21 and 27. The balance of the items may be broadly separated into two categories:-

(a) Those concerned with the waterproofing of the property. These are Items 9 and, on the second page of the table, Items 36 and 18. The amounts claimed for these items total $31,666.50.

(b) The balance of the items. I note Item 15 was not pressed.

The waterproofing items

25. These items primarily concern the alleged failure to insert damp proof courses (“DPCs”) or the deficient or ineffective insertion of DPCs. Mr McDonald and Mr Iskowicz were both comprehensively cross examined on their reports. They are both well qualified experts and there was nothing about the demeanour of either of them that would assist me in deciding between their views. I do, however, note this concern with Mr McDonald’s evidence. Besides the two expert reports that he prepared (Exhibits C and D) he had also in 2004 and 2005 prepared reports at the request of the insurer in its assessment of the claims against it. The expert reports later produced by Mr McDonald are, on one view, a justification of the views he expressed to the insurer when retained by it in a non-independent (for court purposes) reason. This particular point was not taken by the defendant, although he did challenge Mr McDonald’s expertise, but I nevertheless express some disquiet about Mr McDonald’s use as an independent expert. I also note I raised the matter with counsel in the course of discussion.

26. On the defendant’s side the difficulties with Mr Iskowicz’s report, and they are not of his doing, arise from the fact that he was not retained until the rectification work had been carried out. Accordingly, he did not see the property in its allegedly defective state. In addition, he did not examine areas of the property, in particular beneath the house, which may have assisted him in examining the work done. For example, he said that he simply looked in the cavity below the house but did not enter into it. He also described a diagram prepared by Mr McDonald (drawing 10.1 in Exhibit C) as inaccurate but did not say why this was the case. The area shown in the drawing is one that could only have been observed by entering the cavity.

27. I think the most comprehensive statement of Mr Iskowicz’s views on the waterproofing, and generally, are contained in Exhibit 5, his Reply to the Amended Scott Schedule. As I read this document, together with his oral evidence, his main points are as follows:-

(a) Any problems with the render below the DPC were present and acknowledged before the property was purchased.

(b) Any such damage did not compromise any structural item nor was there any moisture above the DPC.

(c) If there was any technical breach of any part of the Building Code of Australia (the “BCA”) the object of the relevant part was not offended because its prime purpose is to protect the habitable areas of the property and these were not at risk from the absence or inadequacies of a DPC.

28. Mr McDonald’s view was that there were clear breaches of the BCA, that in any event it should not be read as applicable only to habitable areas and there was evidence of simple failure to either insert a DPC or to allow the DPC to not follow the natural lie of the land. There was no dispute that the block had a slope in it.

29. One issue that arose through the evidence on waterproofing concerned the level of landscaping in the area surrounding the swimming pool and depicted, for example, in photographs 14 and 15 in Appendix S2 to Exhibit 4. It was suggested by the defendant that the landscaping had not been done by him so that he could not be responsible for the inappropriate DPC levels. I am satisfied on the basis of paragraph 3 of his second affidavit (Exhibit 9) that he did in fact put in the grassed area. If I am wrong on this, I do not think it matters much because the real problem with the DPC in the relevant wall is the failure for it to be stepped to match the changing level of the ground.

30. Mr Iskowicz made the point, in relation to the BCA, that the DPC requirements referred to timber floors and not to the kind of structure involved in this property which had a steel formwork floor base known as a Bondek. Mr Iskowicz was of the view that the BCA requirements did not apply to such a structure but were, rather, restricted to properties which had a timber flooring. I was provided with a copy of Part 3.4 of the BCA and also Part 2.2. In my view, Part 3.4 cannot be read as applying only to wooden floors. In respect of Part 2.2 I accept that the object of the Part is to “safeguard occupants from illness or injury” but it also has as an objective to “protect the building from damage” resulting from, inter alia, rising damp. I could not read Part 2.2 as excluding the need for an effective DPC because of the use of a Bondek frame.

31. As I have said above, Mr Iskowicz faced the difficult task of assessing the property after the work had been done and his report must be limited by this fact. In addition, as seen throughout Exhibit 5, he has concentrated to a large degree on what was apparently known to the purchasers as a result of the pre-inspection report. He also makes frequent reference to the LAC report (Exhibit 1) which was commissioned by the insurer and suggests, in some cases, a different view on various defects both as to their existence and extent.

32. I expressed a concern above about Mr McDonald’s independence in the matter. Despite this his oral evidence did not disclose any bias and he has the distinction of being the expert who seems to have made the most comprehensive study of the premises. In addition, his observations are supported by Mr Perri who carried out the rectification work. I am therefore of the view that the defects alleged in respect of waterproofing should be accepted. As to the precise amounts claimed I will return to a discussion of their applicability below.

The other items

33. Items 3(b), 3(c) and Variation 7 of 3(b) and 3(c) concern cracks to internal ceilings. Mr Perri said that he had to do this work twice as his first attempts at rectification failed and it was necessary for him to install a control joint. This is a classic example of the disadvantage faced by Mr Iskowicz because, the work having been completed, it could not be observed without cutting into the ceiling. Mr Perri rejected the notion that this extra work had been done at the request of the plaintiffs (as opposed to the insurer). He said it was necessary to re-do the ceiling because the cracks reappeared. There is no evidence to suggest that his original work was carried out incorrectly. Accordingly, I am of the view that the work was necessary and occurred as a result of a defect in the original construction. Photographs of the cracks can be seen on pages 64, 65 and 66 of Exhibit B and, together with the observations in Mr Robinson’s report (commencing at page 59 of Exhibit B), are clear evidence of defective construction.

34. Besides the evidence of Mr Perri the matters in Item 5 I think are dealt with by Mr Robinson in his report (Exhibit B page 69). Mr Iskowicz’s comments on this item mostly concern when it was discovered and the manner in which it was dealt with in the pre-inspection report and in Mr Robinson’s report. Mr Iskowicz also seems to suggest in Exhibit 5 that Mr Perri did not do the work as claimed. Mr Perri, however, says that he did do the work and I refer in particular to paragraphs 27 to 31 of Exhibit F. I also note that this work is part of the work connected to the rectification of the waterproofing defects at the property. I accept Mr Perri’s evidence that he did the work and allow this item.

35. Mr Perri dealt with Item 7 in his affidavit at paragraphs 30 to 34 inclusive (again Exhibit F). Mr Iskowicz seems to concede some area requiring rectification (Exhibit 5) although he suggests that Mr Perri carried out work well in excess of the scope of works which he was retained to conduct. This is a common theme in the criticisms by Mr Iskowicz and is inconsistent with the payment by Vero to Mr Perri for the works performed. I am satisfied in respect of this item, and generally, that Mr Perri acted in accordance with his instructions having given quotes for the work. I am also satisfied, in relation to Item 7, based on Mr Perri’s affidavit, that the work done was to remedy original defective construction.

36. In relation to Item 14 the criticism levelled by Mr Perri seems to revolve around the absence of control joints. Mr Iskowicz, in Exhibit 5, says that “imperfection in stone products is common” and that “control joints to the perimeter or intermediate section of the laid stone tiles is not required …”. He suggests that an incorrect standard has been applied. My view in relation to this item is that I have no reason to doubt Mr Iskowicz’s observation in relation to marble products, nor do I have reason to doubt the observations of Mr Perri. On this basis I cannot say that the plaintiffs have proved their case. Accordingly, I do not allow Item 14 on the basis that a breach of warranty has not been established.

37. Mr Perri deals with Item 17(a) in Exhibit F at paragraph 55. He makes the simple point that the weather strip was not working because it had been covered with render. He said this applied to most of the windows and it was necessary for him to remove the render in each case. Mr Iskowicz said, in effect, that this is a minor defect and there may be some duplication. He does seem to accept some element of a defect based on the LAC report. He certainly does not deny any need for rectification. Mr Perri also explained, under cross examination, that this work did not involve any duplication with the work carried out on the window sills. Accordingly Item 17(a) should be allowed.

38. Mr Perri said in respect of Item 18 that he could not recall it in particular but that based on documents it was necessary to do some work. I do not doubt that he did some work but I do not see his evidence as proving a breach of the statutory warranty. I do not allow Item 18.

39. Item 19 needs to be read with the variation to this item on the second page of the schedule. Mr Iskowicz deals with the tiling in Exhibit 5. The main point of issue seems to be that the work done was excessive. Mr Perri deals with his observations and the work he did in Exhibit F at paragraphs 59 to 61. As I read his affidavit, although all of the tiles did not require work, once some of the tiles were removed it was necessary to then replace all of the tiles because some had broken and others could not be matched with new tiles. The LAC report (Exhibit 1) does not deal with this issue. Mr Robinson (Exhibit E page 79 onwards) identifies some areas of defect but also says some of the tile problems are reflective of “fair wear and tear”. Mr Robinson also refers to the pre-inspection report (Exhibit 6) which states “the tiles to the pool surround have been poorly laid and are drummy. Cracking and lifting is to be expected.” I think the real issue in respect of the swimming pool tiles comes down to whether it was necessary, as a result of breaches of the statutory warranty, to replace all of the tiles as opposed to some of them. In my view the replacement of all of the tiles, based on the report of Mr Robinson and the pre-inspection report, was not necessary as a result of the limited defective work. It is difficult to be precise as to how much was a natural product of the defect. I think it is fair to allow half of the work as resulting from a breach of the statutory warranty.

40. The work identified under Item 20 does not seem to have been identified in the pre-inspection report but is covered by Mr Kavanagh in the LAC report. He identifies the problem as being caused by “poor quality tiles” and was of the view that the work was defective. I accept Item 20.

41. Mr Iskowicz’s criticisms in relation to Item 23 are mostly concerned with the extent of the work done. He makes no comment on whether the work that he accepts is necessary was other than as a result of an original defect. Mr Perri deals with the matter in Exhibit F from paragraph 66 and I am satisfied, on the basis of his evidence, that the work was necessary to rectify the original defect.

42. Item 25 concerns the cleaning out of weep holes which had been blocked, apparently with building debris. This defect was identified in the pre-inspection report. Although Mr Robinson does not classify the blocked weep holes as defective work he rather describes it as “incomplete work”. The failure to remove the building debris from the weep holes is as much a breach of the statutory warranty whether described as defective or incomplete work. The simple point is that it should have been done by the builder in order to allow the weep holes to do the work for which they were designed. Mr Robinson, in fact, says that “the owner builder has not complied with the BCA”. This item should be allowed.

43. There was a good deal of evidence in relation to Item 26 (which appears on both the first and second pages of the plaintiffs’ schedule). As I understood the evidence, efforts to repair the airconditioning were initially unsuccessful despite the advice of a number of experts. It was only at a later stage that a broken duct was discovered which led to at least a partial improvement in the system. The broken duct work is reflected in the claim for $3,207 on page 2 and I think should be allowed. I do not, however, think that the amount claimed on page 1, for Item 26, should be allowed because it does not reflect any defect in the system.

44. Although there are no item numbers, the first three matters on page 2 of the schedule are dealt with by Mr Perri in paragraph 12 of Exhibit F. In this paragraph he says little more than that he considered the work to be defective. These items do not seem to be included in any one of the pre-inspection report, the LAC report or Mr Robinson’s report. Although I have no doubt that defects were found by Mr Perri, absent their identification in the earlier reports I am not satisfied that this work can be attributed to the original construction or, in other words, that the defects are evidence of breach of the statutory warranties. Accordingly, I do not allow the first three items at the top of page 2 of the schedule.

45. Item 24 concerns the installation of weep holes above windows and doors. In Mr Perri’s opinion these should have been included, a view which is confirmed by the letter, in Exhibit B, from the Department of Infrastructure, Planning and Natural Resources to Mr and Mrs Abrahams dated 13 February 2004. In Mr Perri’s oral evidence there was some confusion on his part about whether some weep holes had been inserted or simply cleaned out. He was doing his best, I thought, to remember detail about work carried out over 3 years ago. The situation was also confused by the lack of clarity in some of the photographs referred to. On the basis of his affidavit evidence (Exhibit F, paragraphs 73 and 74) I am satisfied this work was done. This item will therefore be allowed.

46. The final item concerns Variation 6 on page 2 of the schedule in respect of balcony tiles. Although there is clear evidence of the work having been done I am not satisfied that the evidence supports a finding of defective workmanship in respect of these tiles and cannot identify an opinion on them in any of the CBS Consulting report (Exhibit 6), the LAC report or Mr Robinson’s opinion. Accordingly I do not allow this amount as a defect.

The measure of the amount to be allowed

47. Turning now to the monetary amount that should be awarded in respect of the items that I have allowed. The issue goes to whether the amount claimed by Mr Perri should be used or some other amount. Frequently the amounts claimed by Mr Perri are well in excess of the estimates put forward by Mr Robinson or Mr Iskowicz. For example, in respect of Item 3(b) the claim is for $2,145 but Mr Robinson suggested $445. In Item 5 the charge is $3,315 but Mr Robinson estimated $1,070. Perhaps the largest discrepancy is in Item 25 where the claim is for $6,155 but Mr Robinson estimated $560. I remind myself here that Mr Robinson’s report was tendered by the plaintiffs and forms an integral part of their case.

48. The defendant’s submission, if I understood it correctly, is that the measure should be the amounts estimated by the “inspectors” that went to look at the work before it was done (such Mr Robinson) or the amount suggested by Mr Iskowicz, if it is different.

49. The plaintiffs’ submission is that the amount allowed should be the cost of rectification where rectification has occurred. In Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253 Giles JA, with whom McColl JA and Campbell JA agreed, said, at paragraph 43:-

“In a contract for the performance of building work, the plaintiff can recover the cost of rectifying defective or incomplete work because, by receipt of the money in substitution for performance, it is given the means of putting itself in the position it would have been in had the contract been performed.”

The present action is for a breach of a statutory warranty rather than breach of contract. However, I think the measure of damage should be the same because the costs of rectification represent the plaintiffs’ expenditure in putting themselves in the position they would have been, but for the breaches.

50. However, Giles JA, in paragraph 45, went on to say that “…recovery according to the rectification measure is subject to the rectification work being necessary and reasonable.” It is implicit in this qualification, I think, that the charges for the work must also be “necessary and reasonable”.

51. As I have stated above, there are some examples in the present matter where the costs of rectification are significantly higher than the costs estimated by the various consultants who assessed the defective work. There is no evidence, however, from a builder saying that the amounts charged by Mr Perri were unreasonable and I note that Mr Perri’s charges were accepted after quotes were obtained from three builders. The inference is that the quotes were competitive. Mr Iskowicz does frequently challenge the amounts but he does so by reference to the predictions in the investigative reports rather than on the basis of a builder’s costing of the work done by Mr Perri.

52. I think the cost of rectification must be the correct measure but it must also be tempered by Giles JA’s qualification of reasonableness. It is almost impossible to state what the reasonable costs should be absent a report from a builder actually costing the work done by Mr Perri. On the other hand the very wide gap between Mr Robinson’s views and Mr Perri’s charges firmly leads me to a conclusion that the latter are frequently unreasonable. The only fair way I believe I can address this dilemma is to make an overall reduction of Mr Perri’s charges by an ‘across the board’ percentage. This may have the effect of reducing some charges which are reasonable, but I think by adopting a modest reduction of 25% (bearing in mind some charges are many times over the estimate), I am achieving an overall equitable adjustment.

53. My addition of the amounts that I have allowed from the plaintiffs’ schedule is $71,189.10. Reducing this figure by 25% produces a figure of $53,391.82.

54. The plaintiffs are entitled to interest on this amount. Interest is claimed from 18 September 2006, which is the date of the last invoice (Exhibit E, paragraph 50). I allow interest at 9% from 18 September 2006 to 5 June 2009. The interest figure is $13,022.26.

Orders

55. Accordingly, there will be judgment for the plaintiffs in the sum of $66,414.08.

56. Absent any special costs order that is sought, I order the defendant to pay the plaintiffs’ costs. I note that any costs order that I make will not affect any costs orders already made.