Manolakis & Manolakis v Galaxy Homes Pty Ltd No. DCCIV-01-290

MANOLAKIS & MANOLAKIS -v- GALAXY HOMES PTY LTD
[2003] SADC 80
Judge Anderson
Civil

On 19 November 1998 the Plaintiffs entered into a building contract with the Defendant for the construction of a domestic residence at 7 Darcy Court, Paradise. The building contract provided, inter alia, that construction work would commence on 19 March 1999 and be completed by 19 September 1999. Construction occurred within this time frame and the Plaintiffs moved into their house in early October 1999.
The building specification included particular selections which the Plaintiffs had made within the terms of the building contract. Amongst the exterior selections in this category was the selection of “modular” bricks, coloured “Barcelona” with natural mortar.
These proceedings arise from an alleged failure by the Defendant to provide natural coloured mortar in compliance with the relevant Australian Standard and to otherwise, in less significant terms, fail to properly complete the contract. In them, the Plaintiffs’ claim is for breach of contract, breach of statutory warranty and negligence.
The remedies sought by the Plaintiffs are for an order pursuant to Section 37 of the Building Work Contractors Act 1995 (“the Act”) which is in these terms:
“37.(1)      This section applies to –
(a) domestic building work contract or subcontract for the performance of domestic building work (whether entered into before or after the commencement of this section); and
(b)domestic building work (whether commenced before or after the commencement of this section).
(2)     A party to a domestic building work contact or a person entitled to the benefit of a statutory warranty may apply to the Magistrates Court for the determination of a dispute arising out of the contract or the performance of the building work to which the warranty relates.
(3)     An application may not be made under subsection (2) in respect of a dispute arising out of a domestic building work contract unless the dispute involves some question of whether building work has been performed in accordance with the contract.
(4)     If an application is made under subsection (2) in respect of a dispute arising out of a domestic building work contract, application may be made to the Magistrates Court for the determination of a dispute arising out of a subcontract for the performance of any of the building work, but only if it involves some question of whether building work has been performed in accordance with the subcontract.
(5)     If the Magistrates Court joins proceedings on an application under subsection (4) with proceedings relating to the domestic building work contract, it must ensure that the hearing and determination of any question as to the performance of work under the domestic building work contract is not unduly delayed.
(6)     If, on an application under this section, the Magistrates Court is satisfied that there has been any breach or, or failure to perform or fulfil, a contract or warranty to which the proceedings relate, the Court may, subject to this section, make one or more of the following orders:
(a)to the extent to which it is satisfied that it is practicable for the breach or failure to be remedied by the performance of building work – an order requiring the performance of remedial work;
(b)an order requiring the payment of an amount due under the contract or an order requiring the payment of an amount by way of compensation for the breach.
(7)     An order made against a person under subsection (6)(a) may –
(a)require the person to perform remedial work specified in the order within the time specified; or
(b)if the Magistrates Court is of the opinion that the person is not likely to perform the remedial work properly – require the person to employ at the person’s own expense a licensed building work contractor to perform remedial work specified in the order within the time specified.
(8)     If the Magistrates Court orders a person to perform remedial work, or to cause remedial work to be performed, it may further order the person to provide to the Court, within a specified time after completion of the work, a certificate of a person holding qualifications specified in the order certifying that the remedial work has been performed properly in accordance with the order.
(9)     If a person fails to perform remedial work, or to cause remedial work to be performed, in accordance with an order of the Magistrates Court (or an order of the Commercial Tribunal under Part 5 of the repealed Act)-
(a)the person is guilty of an offence and liable to a penalty not exceeding a fine of $10,000; and
(b)the Court may, on application, order the person to pay to the applicant such amount by way of compensation as the Court thinks just.”
Section 40(2) of the Act gives like jurisdiction to this Court. In the alternative the Plaintiffs seek damages for breach of contract and/or in negligence.
Damages are claimed, inter alia, for the cost of demolishing and rebuilding the brickwork of the house and for the stress and inconvenience sustained by the Plaintiffs over time and until such remedial work is carried out.
The Defendant has denied liability in relation to all or any of these heads of claim.
There are other more minor items the subject of claim by the Plaintiffs. They are:
(a)     the re‑alignment of internal stud walls;
(b)     an unrepaired chip in the front panel of the breakfast bar;
(c)     the cost of relocation to enable the work to be done;
(d)     the GST component of landscaping not done.
These items are not as significant and I shall return to them subsequently. Items (a) and (b) are not in dispute except as to cost. Items (c) and (d) are dependent upon findings to be made.
It is my intention to describe in narrative style the happenings relative to the Plaintiffs’ claim. Unless I indicate to the contrary, I am here concerned with what flows from complaints about the mortar and its composition and, therefore, durability and suitability.
The Building Specification provides, in Clause 12.5, the following:
“Mortar and Jointing
Mortar shall comply with Clause 2.2 and Table 2.1 of AS 3700.
Joint tolerances shall not be outside the provision of Table 8.1 or AS 3700.”
It was common ground that the appropriate Australian Standard (“AS”) - 3700 was that entitled “1988” as the Building Specification used was printed in 1997 and that AS was then operative. Further Australian Standards were fixed in 1998 and 2001.
The complaint in the pleadings is based upon alleged non-compliance with this specification as to mortar. There is no complaint as to joint tolerances even though they have been subject to adverse comment in the evidence because of their variability and untidy appearance.
Clause 2-2-1 of AS 3700 – 1988 sets out the requirements for mortar. It is required that the mortar produced in accordance with this Standard have the following characteristics:
“(a)Adequate workability to permit the masonry units to be properly placed.
(b) Appropriate durability in the specific local environmental conditions.
(c)The ability, when tested ..... to impart to the masonry built with it the compressive strength and the flexural tensile strength that are required, being not less than 0.20 MPa, for mortars of M2, M3 and M4 classification.”
All three requirements are to be fulfilled for compliance.
Here (a) is not in issue and (c) has been the subject of passing interest only and does not underpin any of the Plaintiffs’ complaints. It has relevance to the Defence.
It is not in dispute that the Defendant took control of the site in Darcy Street in March 1999. Mr Pearce was contracted to do the brickwork once the slab had been completed. Bricks, sand, cement and lime were delivered to the site by mid‑April 1999. The job card kept by the Defendant shows that brickwork was 100% complete by 30 April 1999. This accords with Mr Pearce’s account to the Defendant which is dated 5 May 1999.
The first complaint about the mortar related to its varying colour. Mr Manolakis said in evidence that he told the Defendant’s site supervisor, Mr Signore, about the colour variation and blotchiness when they met on site. This meeting was because of Mr Manolakis’s concern about the different colours in the mortar. Mr Signore agreed that this complaint was made on either the first or second day after commencement of the brickwork and his inspection was at that time.
Mr Signore said in evidence that he inspected the work which had been done at that time “and it didn’t look quite right” (T361) He said that he spoke to the bricklayer, Mr Pearce, and inspected the sand and cement. He said that he reiterated what he had earlier told the bricklayer – that it was to be a “good strong mix” (T361).
He acknowledged that there were more, similar complaints during construction and agreed that he again checked with the bricklayer to make sure that the mortar mix was correct. In cross-examination he agreed that his consistent instruction to the bricklayer was for a 3 sand : 1 cement mortar mix.
Mr Signore also acknowledged in cross-examination that the mortar on the first day or two of bricklaying was the worst. This was on the southern wall. Even though he suspected the mix and reiterated his instructions to Mr Pearce, he did not pass his concerns onto the Plaintiffs, but said that he did to his supervisor, Mr Gelios. However, he did not ask that the initially erected brickwork be pulled down and rebuilt. There is no doubt from his evidence that immediately he saw the mortar he suspected that it was the colour it was because of the weakness of the mix. That was why he checked the sand and the cement and gave further instructions to Mr Pearce and did so again, subsequently.
Mr Gelios had no memory or note of any concern felt by Mr Signore about the mortar being passed onto him by Mr Signore at their regular Friday meetings. It was at this meeting that Mr Signore, as supervisor of up to 20 current home building sites, would report to Mr Gelios, the Defendant’s construction manager, about progress in relation to each of them.
Mr Gelios kept a card index system for each job. He noted progress. He said that if progress was hindered he would have made a note. There is no note on the job card.
I accept that Mr Signore told Mr Gelios about the problem. The absence of a note by Mr Gelios is explained by there being no decision to demolish and rebuild thereby delaying progress. It is likely that no action was taken in the hope that the mortar would dry after winter to be satisfactory, as was suggested by Mr Signore in his evidence and that it would look alright notwithstanding his initial concerns about the mix.
Mr Manolakis wrote to the Defendant about the colour of the mortar on 7 June 1999. By that time he had again spoken to Mr Signore and to Mr Gelios. In evidence Mr Manolakis said that he wrote because when he telephoned on several occasions and spoke to either of these persons nothing was done about the mortar. At that time Mr Manolakis said he was concerned only about the colour of the mortar.
In his letter of 7 June 1999 addressed to Mr Eden, who is the principal of the Defendant, Mr Manolakis, inter alia, identified the differing colour of the mortar as not acceptable. A letter from the Defendant, dated 15 July 1999 and addressed to the Plaintiffs, spoke only of final inspection and settlement. There was no reference to the letter of 7 June 1999. However, by that time Mr Gelios had engaged the services of Mr Taggart, Chartered Professional Engineer, as an independent expert as to the quality and colour of the brickwork mortar of the Plaintiff’s house.
His report is dated 14 July 1999. It contains the following:
“OBSERVATIONS
An inspection of the brickwork of this brick veneer home revealed the following:
·The mortar is a strong mix sufficient to provide structural adequacy and durability to the brickwork throughout the service life of the house.
·The mortar is not a uniform colour throughout the construction. I cannot be unequivocal as to the reason for the colour variation but suggest that efflorescing salts are partially responsible. There is also evidence of batching inconsistencies in the mixing of mortar and/or variations in the materials from which the mortar was batched. Finally, there appears to be some effect from the tooling process used to compact and finish the surface of the joints.” (exhibit P4 index 11)
To repair these defects Mr Taggart suggested that the brickwork be acid cleaned. If this was not successful he suggested recolouring by the “Nawkaw” method. A further alternative was to rake and repoint the mortar joints. He acknowledged in his report that this was a usually employed method when there are also potential durability problems with the existing mortar. He did not indicate whether he had enquired about the source of the sand and cement. The evidence shows that they were on site from the outset of construction.
In cross-examination Mr Taggart said that he had tested the surface strength of the mortar joints by use of a car key scratch test so as to support his opinion that the mortar mix was sufficient to provide structural adequacy. In addition, he relied upon his long experience in the industry.
At the inspection of the house on 22 July 1999 by Mr Signore in the presence of the Plaintiffs amongst the many items then noted for rectification were the colour of the mortar and a chip to the breakfast bar.
These items had still not been attended to by the time of the final inspection prior to occupancy on 17 September 1999.
Mr Eden wrote to the Plaintiffs on 24 September 1999, inter alia, confirming the following:
“1.The brickwork needs to be steam cleaned in preparation for the contractor from Sydney (we expect him this coming week). (The evidence established that this was the “Nawkaw” contractor.)
2.Your mortar joints will be treated in accordance with the report prepared by Roger Taggart by the Sydney contractor that he recommended.” (exhibit P3)
Notwithstanding the equivocation in the evidence of Mr Gelios on the topic of the mortar repair, I am satisfied that there was no doubt in the mind of Mr Eden that he had both instructed Mr Gelios to proceed as Mr Taggard had recommended and had approved the cost thereof. There is no possibility flowing from the letter of 24 September 1999 that the Plaintiffs were to do something further to advise of their consent to this proposal. I accept the evidence of Mr Manolakis that he was, as a consequence of this letter, waiting for the work to be done. There is no substance to any suggestion that somehow, via Mrs Manolakis, Mr Gelios thought that there was equivocation by the Plaintiffs on the topic. It is far more likely that Mr Gelios was happy to avoid the expense or somehow otherwise amortise the cost of the recommended repair work by delaying implementation of Mr Taggart’s recommendation as approved by Mr Eden. To the extent that Mr Eden said he thought that his letter required something more of the Plaintiffs before the work was done, he is being disingenuous.
It was when Mr Manolakis was told by Mr Eden that Galaxy thought the Plaintiffs no longer required the mortar fixed that he first took legal advice.
By letter of 28 March 2000 the Plaintiffs’ then solicitors wrote to the Defendant seeking a commitment to complete the remedial work referred to in its letter of 14 September 1999. Despite a telephone reply undertaking a formal response to that letter no reply was received and proceedings pursuant to Section 37 of the Act were commenced in the Adelaide Magistrates Court on 5 May 2000.
A directions hearing on 16 May 2000 was adjourned to enable rectification work, as agreed, to be undertaken within 30 days. Both Mr Manolakis and Mr Gelios were present. This work was detailed in a letter from the Plaintiffs’ solicitor to the Defendant of 19 May 2000. Only two items of five in that letter were attended to and they are not here relevant.
On 24 May 2000 the Defendant wrote to the bricklayer, Mr Pearce, again seeking the urgent commencement of remedial work “as per Rogger (sic) Taggart & Associates Pty Ltd’s report” (exhibit P3). No preference amongst the options referred to by Mr Taggart was indicated. Nothing ensued.
A further hearing on 29 June 2000 was adjourned when Mr Gelios did not attend. The Court on that day appointed its expert, Mr Robinson, to inspect and report. Prior to that inspection, steam cleaning of the bricks had occurred on 6 June 2000 (exhibit P23).
Mr Manolakis and Mr Gelios attended Court on 2 August 2000. By that time Mr Manolakis has arranged for an Amdel Report on the mortar. He told the Court of this and provided Mr Gelios with a copy of the report when he received it a few days later.
Mr Gelios is unable to recall if he then visited the house. Mr Manolakis said he did. I accept his evidence in this regard. Mr Manolakis said that Mr Gelios visited to inspect the mortar and, having seen it, said words to the effect that “this has got to come down” and “we’ll put a claim into our Insurance as soon as possible” (T49). Mr Gelios denied that he had said words to this effect.
However, such a claim was received by the Defendant’s insurers on 24 August 2000. In this claim, which was preceded by contact between Mr Gelios and the insurer, Mr Gelios declared that the particulars provided to the issues are “a true and faithful account of the loss” pursuant to the provisions of the Oaths Act 1960.
Clause (g) of Part 1 of the claim form describes the cause as “faulty work by bricklayer contractors”; clause (f) of that part describes the nature of the damage as “brickwork mortar faulty” (exhibit P24).
I find it unlikely that such a claim, completed by Mr Gelios, would be so expressed without him personally having inspected the site and formed an opinion.
This claim was refused by the insurer by letter to the Defendant of 6 October 2000 (D11). By then Mr Gelios was aware that the insurance claim was unlikely to be met.
The claim in the Adelaide Magistrates Court was, on 7 November 2000, set for trial on 5 March 2001. At a further hearing on 9 February 2001 the Plaintiff intimated that he was changing solicitors and that the claim would now exceed the jurisdiction. One week later it was transferred to this Court and thereafter directions were given to bring the matter to trial.
The Plaintiffs’ solicitor engaged Mr Jankovic to prepare a report on the best option to repair the brickwork. His final report seems to be in two parts dated 1 December 2000 as to description and 9 January 2001 as to the costing of alternative repair options (exhibit D8).
This report was delivered to the Plaintiffs and then returned by them to its author. There is no satisfactory explanation for this action, but shortly thereafter, on 7 February 2001, Mr Manolakis obtained two further quite general quotations to demolish and replace the brickwork of the house. These, inferentially, because of their quantum, led to the transfer of proceedings to this court and likely the return of Mr Jankovic’s report.
Mr Manolakis said in evidence that he initially sought a report from Amdel because of his concern that the mortar was breaking off and because of his lay observation that it showed signs of being soft.
That report (exhibit P4 index 1), dated 1 August 2000, and the evidence of Mr Lackey, indicates that mortar was taken from 40 locations chosen at random from the exposed brick elevations of the house. The fourth elevation has a stone facing. A sample totalling 140 grams of mortar was collected and analysed in accordance with the Australian Standard - AS 3700 - 1998. As will be seen, this was in fact the wrong Standard, but nothing turns on that fact.
It is of some significance that throughout this whole sad saga this was the only random sampling of mortar taken and tested. Not only was the Defendant content to satisfy itself with an analysis of mortar subsequently taken from below two window sills only by Mr Taggart, it never sought the opportunity to separately analyse part of the Amdel sample nor to obtain its own random sample to test.

The 2000 Amdel report concluded that the volume ratios which comprised the mortar were 1 part cement; 1.4‑2.4 parts lime; 14.5–16.5 parts sand. This was against the requirement for mortar in AS 3700 – 1998 for a house constructed at the Plaintiffs’ address of 1:2:9 (cement : lime : sand). It is not in dispute that the appropriate mortar type for the Plaintiffs’ location was M₂ and that Table 2.1 of the 1988 AS sets out the Mortar Classification for that type.
In addition, the AS requires that when testing the chemical content of mortar that “The proportion by mass of calcium oxide in the sample obtained from such testing shall be not less than 80% of that which should be obtained in a mortar of exactly the specified mix proportions” [AS 3700 – 1988 8:4:6].
This mortar sample was well below that range.
When recalculations were made by Amdel in April 2001 (exhibit P4 index 2) in accordance with the correct AS, the result was the same whether the mix was 1:2:9 or 1:3:12 (cement : lime : sand) as required by Table 2.1. Chemical analysis of the mortar did not comply with that AS showing a calcium oxide content of only 61% as against the requirement of not less than 80%.
Thus, Amdel concluded that the tested mortar did not fall within the acceptable range of composition for the M₂ mix as the mix was too lean, i.e. there is too much sand for the amount of cement and lime.
Interestingly, an Amdel analysis of mortar provided to it by Mr Taggart in May 2001, from the sites of the successful flexual strength test, was also outside 80% of the expected value – albeit by a smaller margin.
When the Amdel analyses are compared with the report of Mr Taggart of 14 July 1999, it becomes clear that a broad based scientific analysis is being compared with a somewhat cursory inspection which seemed to be based upon nothing other than observations backed by experience. In evidence Mr Taggart did little to dispel this impression.
At about this time Mr Robinson also completed his report. Mr Robinson has gathered significant expertise in this area since the 1950’s. That expertise was not in issue.
His report, dated 28 July 2000, referred to “patchy” mortar joints and “amateur” tooling. He reported that he “probed with a screwdriver and found the mortar sandy and softer than [he] would expect had it been mixed in a proper manner”. Consequently, he indicated “grave doubts” about the strength of the mortar (exhibit P4 index 10).
This conclusion concurs with the early view of Mr Signore when he inspected the initial brickwork at the request of Mr Manolakis and the opinion Mr Gelios expressed when he inspected the site prior to making his insurance claim. It should not be overlooked that these two men were very experienced in this field.
It is quite different from what Mr Taggart reported a mere two weeks earlier when he described the mortar as “a strong mix”.
When Mr Robinson made his inspection, the Amdel report was not in existence. He concluded, unlike Mr Taggart, that the brickwork had not been laid in a proper and workmanlike manner.
2001 arrived and no effect had been given to Mr Eden’s letter of 24 September 1999 and the legal proceedings were well underway.
A further report from Mr Taggart in January 2001 (exhibit P4 index 12) tested the bond strength of the mortar and concluded that it was well in excess of the required AS [Clause 2.2.1(c)]. This test was conducted on three bricks below window sills on the north and south elevations of the house.
In this report Mr Taggart again expressed the opinion that the mortar was “reasonably hard and based on scratch resistance is not consistent with the Amdel test” (of 1 August 2000).
Mr Taggart sent pieces of mortar from the two sites tested to the Brick & Mortar Research Laboratory for chemical analysis. The results of this analysis, by report dated 1 February 2001, and included in the January 2001 report, show that the volume composition of the tested mortar was 1 cement : 0.1‑1.1 lime : 5.6‑7.6 sand. This analysis places the mortar within the AS requirement of 1:2:9 and so differs from the Amdel reports.
At a later time, after Mr Taggart had obtained the test results from Amdel, he asked the Brick & Mortar Research Laboratory to comment on the variance in the results of the mortar tested. There is no helpful conclusion in this analysis with reference only to such a variance being unusual when well proven testing procedures are used. The suggestion to test the original Amdel sample is made, but as I have mentioned, was not taken up by Mr Taggart or the Defendant (exhibit P4 index 14).
The Plaintiffs requested a report from Mr Belperio of Messrs Connell Wagner, Engineers. He first inspected the Plaintiffs’ home on 15 September 2000. Inter alia, he was to report on the adequacy of Mr Taggart’s site testing of the mortar and the variability of the mortar strength. This report is dated October 2001 and was prepared after further site visits in 2001.
Mr Belperio concluded, in relation to durability as required in Clause 2.2.1 of AS 3700 - 1988, accepting the Amdel reports and preferring them because of the range of mortar locations tested, that; “The lack of cement in the mortar affects the ability of the mortar to resist the actions of weather.” He, like Mr Robinson, referred to the ease with which mortar may be removed by a key. He concluded that in its present state, “degradation of the mortar will continue to occur, most likely resulting in localised failure in the masonry during the service life of the structure, and a reduction in the strength of the mortar as the degradation occurs” (exhibit P4 index 4).
Thus, notwithstanding his acceptance of the individual bond strength tests performed by Mr Taggart, Mr Belperio concluded that, over time, as the mortar lacks durability there are long term risks to the bond strength.
Mr Belperio and Mr Taggart gave evidence in support of their reports. Criticism was made of Mr Belperio’s comparative lack of experience. Reliance was placed upon Mr Taggart’s many years of experience relating to mortar. I accept each as able to make expert comment in this matter.
Subsequent testing during the trial by Mr Goldfinch in accord with AS 3700 - 2001 was, in my opinion, inconclusive. It was a test designed for un‑tooled surfaces being applied to the tooled mortar joints of the Plaintiffs’ home. Where it tested an un‑tooled joint, the AS was not achieved.
I prefer the evidence and opinion of Mr Belperio to that of Mr Taggart for several reasons.
Mr Taggart failed to test the mortar other than in a most superficial way when he first inspected it. On his second visit he took mortar from two sites only. I formed the opinion that he was determined to not concede under any circumstances - that he thought the weight of experience should carry the day. He clearly declined to take the opportunity to re‑test the Amdel sample when it was suggested to him by the Brick & Mortar Research Laboratory.
The Amdel test was broadly based. The conclusions upon analysis accord with those of Mr Belperio and Mr McDonald, upon physical inspection.
There is support for this conclusion in the behaviour of Mr Signore with the bricklayer when the complaint about the colour of the mortar was first made. There is further support in Mr Gelios’s reaction in August 2000 when, almost immediately after inspection, he lodged a claim with his insurer based upon what he therein described as faulty brickwork mortar.
I conclude that the Plaintiffs have established to the necessary degree that the brickwork mortar does not comply with the appropriate AS either as to composition or durability. I prefer and accept the Amdel analysis and conclusion as I prefer and accept the evidence and opinion of Mr Belperio and Mr McDonald. The consequence of that conclusion is that the Defendant is in breach of a clause of its contract with the Plaintiffs. Clause 2 of that contract provides:
“2.    Our Main Obligations
         2.1    We will do the work for you at the site.
         2.2    We will do it properly and skilfully.
         2.3    We will do it as required by the engineer and by any statute.
2.4    We will use good and proper materials.”
There is at least a breach of Clause 2.2 and 2.4 of the contract established. In addition, it follows from my conclusion that a breach of Section 37 of the Act is also established.
It was not in dispute that any available remedy established would, at least as to the brickwork, be similar irrespective of its basis in law.
What then should occur? The alternatives suggested in the evidence are either raking and repointing the mortar joints or demolishing the existing brickwork and rebuilding. Any lesser alternative is entirely without merit in view of my findings as to the mortar mix and its durability.
Mr Taggart was of the opinion that raking and repointing would be sufficient. Of course, this opinion was against his view that the mortar was durable in any event.
Both Mr McDonald and Mr Belperio were of the view firstly, that there was a limited life to raking and repointing and, perhaps more importantly, because of the uncertainty of the durability of the mortar, it would eventually weaken over the years when, if anything, the reverse should occur were it to be of correct composition.
A quotation for raking and repointing from an expert tradesman (exhibit P19) indicates that the work will be satisfactory and will ensure that the repointed and re‑tooled surface will repel moisture and thus ensure the durability of the existing but weak mortar. However, his work has a guarantee for 10 years only.
As Mr McDonald inferred in his report, and as Mr Belperio said in evidence, the Plaintiffs’ house has an expected lifespan of many years in excess of that.
For this reason alone, I am of the opinion that the raking and repointing option is not a true alternative to demolition and rebuilding. It will not give to the Plaintiffs what they contracted for with the Defendant - namely, a house with mortar meeting the specifications included in the contract conditions which, by implication, will last the life of the house. I find, therefore, that the appropriate way in which the Plaintiffs may be put in the position that they expected to be in pursuant to their contract with the Defendant is by having the brickwork of the house demolished and replaced.
Is such a course reasonable?
Whether it is reasonable to remove and replace the brickwork is a question of fact. Without the benefit of any thorough analysis of the mortar and whilst rejecting the Amdel analysis out of hand, Mr Taggart said that this was not necessary based on nothing more than his observations and experience. I have already rejected such a cursory view.
Mr Robinson rejected raking and re‑pointing for the reason to which I have referred - it has a limited guarantee when what was contracted for was “brickwork that has been laid in a proper and tradesman‑like manner with jointing that will last virtually for a life time” (exhibit P4 index 10).
Mr Jankovic, in his report accepts that the Amdel report is such that the mortar does not fall within the acceptable range of composition for a M₂ mix. He there speaks of removal and replacement. In evidence he allowed for raking and re‑pointing, but deferred to the engineer’s report and the Amdel analysis.
In any event, I have expressed my view of the shortcomings of raking and re‑pointing in this matter. I have accepted Mr Belperio’s expressed view that there exists a very real question about durability because of the mortar mix and the patchiness of the joint finish.
As I have said, it is notable that the Goldfinch test, conducted mid‑trial, in accordance with the 2001 AS, revealed weak mortar where the joint finish was incomplete. The evidence of Mr Belperio, which I accept, is that there are many such sites on the elevations of the house.
The appropriate test as to the proper course in these circumstances is to be found in Bellgrove v Eldridge (1953) 90 CLR 613. At p617 the Court identified it in these words:
“The measure of damages recoverable by the building owner for the breach of a building contract is ..... the difference between the contract price of the works ..... contracted for and the cost of making the work ..... conform to the contract .....”
The qualification to that test identified by the Court at p618:
“is that not only must the work undertaken be necessary to produce conformity, but that also it must be a reasonable course to adopt”
Later, at p619, the Court said:
“As to what remedial work is both “necessary” and “reasonable” ..... is a question of fact.”
That was a case where there had been found to be defective foundations affecting the stability of the house. It was held that the threat to the structure could only be removed by demolition and re‑erection.
In this case, for the reasons which I have given, I find that it is necessary to remove and replace the relevant brickwork and that it is reasonable so to do based upon the weakness of the mortar and the consequential threats to its durability and thus the stability of the house over the longer term.
In this matter, having regard to the time passed since the parties entered into the contract in March 1999, and the steady decline in their relationship over that period, and, in particular, since occupation was taken, it would, in my opinion, be inflammatory to formulate any order which required the parties to remain in contact past the conclusion of these proceedings when another course is available.
That course is to assess the Plaintiffs’ damages for breach of the contract in the usual way by assessing what sum is to be awarded by way of damages which will place the Plaintiffs in the position they expected to be in were it not for the breach of contract.
The evidence establishes that the samples which formed the basis of the Amdel test were taken from the three elevations of the house and the northern wall of the garage. No samples were taken from the eastern façade of the house which has a stone facing and thus the mortar of that elevation is not exposed.
Whilst the evidence at trial concentrated upon the elevations of the house proper, the northern wall of the garage was not abandoned by the Plaintiffs. It was, as I have said, referred to by Mr Lackey in relation to the Amdel report. It was, at least by inference, included in the report of Mr Robinson and mentioned by him in his evidence. Similarly, I take this wall to be also included in the conclusions reached by Mr Belperio (exhibit P4 index 4 section 6).
Mr Jankovic referred to the poor quality of the brickwork in his report. When discussing appropriate alternative remedies, he, for reasons which are not clear or well based, distinguishes between the northern wall of the garage and the other elevations of the house. In my opinion, there is no basis for so doing.
In my opinion, the conclusions reached as to the mortar composition are equally applicable to the northern wall of the garage. It also should be demolished and replaced.
Mr Deans and Mr Jankovic gave evidence of the cost of demolition and rebuilding except that Mr Jankovic did not include any costing in relation to the garage wall.
I prefer the estimate of Mr Deans. In my view, his approach to the costing of this work was more considered and inclusive. In any event, after the conclusion of addresses, I have been provided, by consent, with an agreed Schedule of Comparison between the estimates given in evidence for this work on the elevations of the house proper by these witnesses. It recalculates the initial estimate of Mr Deans after he had made certain concessions in cross-examination. I accept this recalculation and assess the cost of reconstructing the brickwork elevations of the Plaintiffs’ home, excluding the northern garage wall, at $21,249.36. This is based on the cost as estimated by Mr Deans in July 2001 (exhibit P4 tab 3 and exhibit P14) and should be increased by 5% to allow for inflation from that time until trial. The figure then becomes $22,311.83.
The cost for the northern wall of the garage is set out in Mr Deans’s further detailed estimate (exhibit P14). I accept that estimate and assess the cost of so doing (in July 2001) in the sum of $4,394.50. For like reason, this figure is to be increased by 5% to bring it to trial. It is therefore $4,614.23.
The provisions of Section 37 of the Act allow for an order that any necessary remedial work may be undertaken by the contractor found to be in breach. An alternative to such an order is provided in Section 6(b) of the Act where the “payment of an amount by way of compensation for the breach” is contemplated. Such an award would be calculated as for a breach of contract.
Paragraph 21.7 of the amended Statement of Claim pleads:
“The Plaintiffs have suffered stress and inconvenience and will continue to do so until such time as the remedial work is performed.”
The Defendant has denied that such a claim is within the recognised exceptions such as to allow recovery of damages for personal injury consequent upon breach of contract.
To the extent that this submission treats the clearly established distress of the Plaintiffs as flowing solely from the anxiety of being involved in litigation, I agree (Perry v Sidney Phillips & Son [1982] 1 WLR 1297). However, I am not persuaded that that is the sole, or indeed principal cause of the Plaintiffs’ stress and anxiety in this matter.
It is necessary to consider when it is that damages for physical injury and mental distress may be recovered for breach of contract. The general principle that such damages are not recoverable was set out in Baltic Shipping Company v Dillon (1992) 176 CLR 345.
At page 365 Mason CJ said:
“..... matter of ordinary experience it is evident that, while the innocent party to a contract will generally be disappointed if the defendant does not perform the contract, the innocent party’s disappointment and distress are seldom so significant as to attract an award of damages on that score. For that reason, if no other, it is preferable to adopt the rule that damages for disappointment and distress are not recoverable unless they proceed from physical inconvenience caused by the breach or unless the contract is one the object of which is to provide enjoyment, relaxation or freedom from molestation.”
At page 394 McHugh J set out the test in this way:
“Under the common law, damages are not recoverable for distress or disappointment arising from a breach of contract unless the distress or disappointment arises from breach of an express or implied term that the promisor will provide the promisee with pleasure, enjoyment or personal protection or unless the distress of disappointment is consequent upon the suffering of physical injury or physical inconvenience.”
In discussing the exception to this rule, at page 405 the learned Judge said:
“..... damages must also be recoverable for distress or disappointment consequent upon the suffering of physical inconvenience as the consequence of a breach of contract. Furthermore, because damages for personal injury may be recovered in an action for breach of contract (65) and because psychiatric illness constitutes personal injury (66), damages for mental distress associated with a psychiatric illness or physical injury must also be recoverable in an action for breach of contract.
In the result, the Court ..... should recognize that damages for distress or disappointment are recoverable in an action for breach of contract if it arises from breach of an express or implied term that the promisor will provide the promisee with pleasure or enjoyment or personal protection or if it is consequent upon the suffering of physical injury or physical inconvenience.
(65)Woolworths Ltd. v. Crotty (1942), 66 C.L.R. 603; Cullen v. Trappell (1980), 146 C.L.R. 1.
(66) Mount Isa Mines Ltd. v. Pusey (1970), 125 C.L.R. 383.”
The male Plaintiff consulted his general practitioner on 29 September 2000, about one year after he had taken possession of the house and occupied it with his family.

By this time he was aware, not only of his initial concerns regarding mortar colour which he identified to Mr Signore in April 1999, but that a proper analysis of the mortar by Amdel had produced the conclusions which have been earlier set out. He had received the letter of 24 September 1999 from Mr Eden and seen that the principal undertaking therein had not been honoured. In addition, he had Mr Robinson’s report. He had also given Mr Gelios a copy of the Amdel report and, as I have found, was aware that Mr Gelios had visited, inspected the brickwork, commented adversely about it and indicated that it would be removed and replaced and that there existed insurance in that regard.
In those circumstances there existed on 29 September 2000 a clear link between the agitation, family conflict and marriage problems which he reported to Dr Alvaro and his anxiety flowing from his dealings with the Defendant which was not in any way connected to the litigation which had then not proceeded in any substantial manner.
When he saw his general practitioner again on 27 April 2001 and continued to report anxiety and intra‑family difficulties, he was diagnosed as suffering from depression and medication was prescribed.
In the opinion of Dr Alvaro, Mr Manolakis continued to suffer from a depressive illness in October 2001 as he remained stressed and anxious with lack of concentration and poor sleep which was not alleviated by medication. Family difficulties continued. He expressed the view that his symptoms and illness were directly related to his concerns about the condition of his house.
Mrs Manolakis consulted Dr Alvaro on this topic for the first time on 27 April 2001. She reported agitation, decreased motivation and libido. She was in a like position when she saw him on 16 October 2001.
It was the opinion of Dr Alvaro that she also suffered from a depressive illness brought on as a direct consequence of ongoing stress associated with conflict with the Defendant.
Neither Plaintiff had previously consulted Dr Alvaro, who had been their general practitioner since September 1993 with such symptoms (exhibit P4 index 5-9).
Each Plaintiff consulted Dr Blakemore, Psychiatrist, in April 2001 for the purpose of these proceedings.
Mr Manolakis reported to him that he could not get the difficulties with his house and the Defendant out of his head. He reported difficulty with sleep, panic attacks at times and difficulties in his relationship with his wife and children, none of which existed before this difficulty began. He reported, as he did in evidence, that he had developed a habit of scratching - his face, neck, head and his thighs until they bleed. He reported that this habit began in late 2000.
Dr Blakemore diagnosed that Mr Manolakis was suffering from an adjustment disorder with depressed mood which would continue until the present litigation was finalised. I have taken this opinion to mean until there is an end to his relationship with the Defendant and Mr Manolakis is in a position to remedy the defects in his house. I would expect these symptoms to abate noticeably from the time of delivery of these reasons.
Mrs Manolakis described the difficulties which had arisen from the work of the Defendant and its reaction to herself and her husband. She told Dr Blakemore that, as a consequence of the anxiety and tension, she and her husband argued whereas previously they did not and her relationship with her children was not what it was. The state of the finished house and its unfinished surrounds upset her and the children and their upset compounded hers. She also had difficulty sleeping and worries that the distraction has affected her concentration. Consequently, she is unhappy and goes away from the house frequently so as to forget her concerns. She confirmed what her husband had said about the diminished state of their sexual relationship.
Dr Blakemore thought Mrs Manolakis to be depressed and that her depression was exacerbated by that of her husband which had similar cause. She also, in his opinion, would recover completely when the stresses involving relations with the Defendant ceased. As with her husband, that will occur with the finality of this action.
Both the physical and psychiatric illnesses suffered by the Plaintiffs are, I find from the medical evidence, directly caused by the failure of the Defendant to comply with the terms of the contract. It was reasonably foreseeable that to breach a contract which was to provide the Plaintiffs with a new home would result in the infliction of personal (including psychiatric) injury. This would come from the distress or anxiety which the Defendant knew or ought to have known would flow from the failure to provide a house with sound, durable walls able to last their normal and expected span of years without concern.
The personal injuries of the Plaintiffs in these circumstances sound in damages. It has not been made out that any such award should be of an aggravated nature.
The Plaintiffs’ concerns have been gradually increasing since their letter was sent to the Defendant in June 1999. It has been incremental as the difficulties have become more obvious and the Defendant’s inaction hardened to delay and then denial.
I assess damages in this regard in a broad brush fashion bearing in mind that Mr Manolakis seems to have manifested his illness earlier and in a more severe physical fashion that has his wife. As I have intimated, there is no basis for any future award.
I assess damages for Mr Manolakis in the sum of $7,500 and for Mrs Manolakis in the sum of $5,000.
There is no doubt that the Defendant had a duty of care towards the Plaintiffs pursuant to the terms of the contract. That duty was to ensure that all terms of the contract were fulfilled.
Since Mr Signore became aware of concerns as to the colour of the mortar at the commencement of the bricklaying, the Defendant, through him, had a duty to ensure that the mortar complied with the specifications. That at this time such concerns related to colour only and not durability is of no impact.
Similarly, Mr Gelios had a like duty when he became aware, as I have found he did, of concerns about the mortar colour and so also the mortar composition.
To do nothing to ensure that the mortar complied with the specification is a breach of that duty.
It was reasonably foreseeable that if the house was not built according to the specification, and so in breach of the Defendant’s duty to the Plaintiffs, that the Plaintiffs may sustain personal injuries as I have described. In my opinion, the injuries to them were the reasonably foreseeable result of the Defendant’s breach of duty and thus negligence. Damages for this negligence will not be different from those flowing from the breach of contract.
I turn to consider the other items referred to in the Statement of Claim.
The Defendant accepts the stud walls are to be re‑aligned and says the reasonable cost is as in 1999. However, there is no sound basis to depart from Mr Deans’s estimate on this topic. The cost is not able to be reduced on the basis that the Plaintiffs earlier failed to point out to the Defendant the Defendant’s own error. I assess this cost at $6,571.00 after an adjustment for inflation.
There is also the issue of the lack of some control joints in the eastern elevation. This also was not the subject of dispute and I allow $340.00 as at trial for the cost of implementation based upon the estimate of Mr Jankovic in his report.
The unrepaired chip in the front panel of the breakfast bar was mentioned and recorded at each inspection by the Defendant. It is common ground that it has not yet been repaired. No direct evidence of the cost of repair was called, but it is a small item and it is not inappropriate to take a broad brush approach. This is likely to be less expensive than the cost of calling the necessary evidence. I allow $250.00.
There is a need for the Plaintiffs and their family to move from the premises whilst remedial work is undertaken. To the extent that it was suggested that they could remain, I reject that suggestion as lacking in commonsense.
There is some evidence as to the cost of alternative accommodation. The work should be completed in approximately seven days. I allow for unforeseen contingencies and expect the house to be unoccupied for 10 days. The evidence lacks some specificity on this topic, but using it as a base, I allow $1,000.00 in this regard.
The Plaintiffs have sought compensation in the form of the GST now due on the cost of paving, establishing a pergola and landscaping.
Mr Manolakis said that it was his original intention to complete this work within six months of occupancy after allowing the house to settle for a period. I take it that this would have allowed for the establishment of those features prior to the winter of 2000. If this had been done, no GST would be payable.
This evidence does not fit well with what occurred. There was no knowledge of weak mortar until the Amdel report of August 2000 and there was no suggestion of demolition and rebuilding until Mr Gelios said so shortly after he received a copy of that report. I am not satisfied that a failure to do this work prior to July 2000 was caused by any act or omission by the Defendant.
The Defendant is critical of the Plaintiffs for failing to pave and for failing to accept the report of Mr Jankovic so as to allow the matter to proceed to trial in the Magistrates Court on 5 March 2001.
It has not been shown that any of the faulty work by the Defendant has in any way been affected by the failure to pave and landscape. There is therefore no basis upon which to reduce the calculated damages in this regard.
In my opinion, the actions of the Plaintiffs in removing their action to this Court have been shown to be well founded. Generally, I have not preferred Mr Jankovic’s costing estimates and the damages assessed clearly exceed the lower jurisdiction.
I assess the Plaintiffs’ damages in the sum of $47,587.06. I set out hereunder a summary of the damages awarded. I shall hear counsel as to costs and interest and the entry of judgment.
Reconstruct three house elevations (excluding eastern)          $ 22,311.83
         Reconstruct garage northern wall  $    4,614.23
         Re-establish internal stud walls  $    6,571.00
         Complete control joints to eastern elevation  $       340.00
         Repair breakfast bar  $       250.00
         Accommodation  $    1,000.00
         Mr Manolakis’s personal injury  $    7,500.00
         Mrs Manolakis’s personal injury  $    5,000.00
$ 47,587.06

[2003] SADC 80

26 May 2003