Metricon Homes Pty Ltd as trustee for Metricon Homes Unit Trust v Lipari - [2024] NSWSC 566

Supreme Court

New South Wales

Medium Neutral Citation: Metricon Homes Pty Ltd as trustee for Metricon Homes Unit Trust v Lipari [2024] NSWSC 566
Hearing dates: 8-11 April 2024
Date of orders: 16 May 2024
Decision date: 16 May 2024
Jurisdiction: Equity - Technology and Construction List
Before: Nixon J
Decision:
See [401]

Catchwords:
BUILDING & CONSTRUCTION – plaintiff constructed house for defendant – plaintiff sued defendant for unpaid balance of contract price – defendant claimed entitlement to set-off for defects and brought cross-claim against plaintiff and against structural engineer – whether defects established – extent of defects – consequences of defects – proper measure of damages
CONSUMER LAW – misleading or deceptive conduct – claim arose from communications concerning location of swimming pool - whether pleaded representations were made – whether representations were as to future matters or representations of opinion – whether representations were misleading – whether any loss or damage was suffered because of the representations

Legislation Cited:
Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, ss 4, 18
Design and Building Practitioners Act 2020 (NSW), s 37
Home Building Act 1989 (NSW), s 18B
State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (NSW), cl 3.29

Cases Cited:
Australian Competition and Consumer Commission v Woolworths Group Ltd (2020) 281 FCR 108; [2020] FCAFC 162
Awad v Twin Creeks Properties Pty Ltd [2012] NSWCA 200
Bateman v Slatyer (1987) 71 ALR 553
Bellgrove v Eldridge (1954) 90 CLR 613; [1954] HCA 36
Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2006] NSWCA 361
Building Insurers’ Guarantee Corporation v The Owners – Strata Plan No 57504 [2010] NSWCA 23
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54
Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184
Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39
Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658; [2019] NSWCA 307
Kirkby v Coote [2006] QCA 61
Lin v Zheng [2023] NSWCA 174
North East Equity Pty Ltd v Proud Nominees Pty Ltd [2012] FCAFC 1
Owners SP 92450 v JKN Para 1 Pty Ltd [2023] NSWCA 114
Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8
The Owners of Strata Plan No 97315 v Icon Co (NSW) Pty Ltd [2023] NSWCA 303
Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253

Category: Principal judgment
Parties: Metricon Homes Pty Ltd as trustee for Metricon Homes Unit Trust (Plaintiff/ First Cross-Defendant on First Cross-Claim/ Cross-Claimant on Second Cross-Claim)
Antonia Lipari (Defendant/ Cross-Claimant on First Cross-Claim)
Rafeletos Zanuttini Pty Ltd (Second Cross-Defendant on First Cross-Claim, Cross-Defendant on Second Cross-Claim)
Representation:
Counsel:
D Hume (Plaintiff/ First Cross-Defendant on First Cross Claim/ Cross-Claimant on Second Cross-Claim)
J O’Connor with D Thomas (Defendant/ Cross-Claimant on First Cross-Claim)
B Le Plastrier (Second Cross-Defendant on First Cross-Claim, Cross-Defendant on Second Cross-Claim)
Solicitors:
Salim Rutherford Lawyers (Plaintiff/ First Cross-Defendant on First Cross-Claim/ Cross-Claimant on Second Cross-Claim)
Barrak Lawyers (Defendant/ Cross-Claimant on First Cross-Claim)
Colin Biggers & Paisley Pty Ltd (Second Cross-Defendant on First Cross-Claim, Cross-Defendant on Second Cross-Claim)

File Number(s): 2021/95090
Publication restriction: Nil

JUDGMENT

In 2017 to 2018, the Plaintiff, Metricon Homes Pty Ltd as trustee for Metricon Homes Unit Trust (Metricon), constructed a house for the Defendant, Antonia Lipari, on a property in Leppington, New South Wales (the Property). Since completion, Mrs Lipari has lived in this home with her husband, Vincenzo Lipari.
Metricon has brought these proceedings against Mrs Lipari, claiming the unpaid balance of the contract price under the construction contract.
Mrs Lipari does not dispute that the balance of the contract price remains unpaid. However, she contends that she is entitled to set off her liability to pay this balance against Metricon’s liability to her in respect of the matters pleaded in the First Cross-Claim. Accordingly, the First Cross-Claim was the primary focus of evidence and argument at the hearing.
There are three main claims advanced by Mrs Lipari in the First Cross-Claim.
First, Mrs Lipari has brought a claim regarding the concrete slab which was designed by the Second Cross-Defendant, Rafeletos Zanuttini Pty Ltd (Zanuttini) and was laid by Metricon. Mrs Lipari alleges that the concrete slab did not comply with the requirements of the relevant Australian Standard, and seeks, as damages, the costs of demolishing and rebuilding her home. Metricon and Zanuttini accept that the concrete slab did not comply with the applicable Standard in certain respects, but dispute the majority of the defects alleged by Mrs Lipari and contend that it would not be reasonable to award damages on a “knock down and rebuild” basis. The principal issues to be determined in respect of this claim are therefore the extent of the defects in the slab, the consequences of such defects, and the proper measure of loss.
Secondly, and in the alternative to her claim for the costs of demolishing and rebuilding her home, Mrs Lipari claims against Metricon the costs of remedying various defects. Metricon accepts some, but not all, of these alleged defects, and there was agreement regarding the costs of rectifying a number of them. The remaining disputes concern only a small number of matters.
Thirdly, Mrs Lipari has brought a claim against Metricon regarding the location of a swimming pool which has been installed on the Property. She alleges that Metricon made misleading representations to her to the effect that it was not possible to install the swimming pool between the side of the house and the northern boundary of the Property, which led her to agree to the placement of the pool at the rear of her house, near the eastern boundary of the Property. She claims that she has suffered damages as a result, being the additional costs of placing the pool at the rear of the Property (due to the necessity to construct terracing in this area) and the loss in value of the Property consequent upon the location of the pool being farther away from the house.
In addition, Metricon has brought a cross-claim against Zanuttini, seeking contribution to any liability which Metricon may have to Mrs Lipari in respect of the concrete slab, on the basis that such liability results from Zanuttini’s defective structural design (the Second Cross-Claim). In closing submissions, Zanuttini accepted that if Mrs Lipari is successful in her claim against Metricon and Zanuttini in respect of defects in the concrete slab, then Zanuttini is liable for the whole of this loss.
I deal below with the following issues:

Metricon’s claim against Mrs Lipari for the outstanding amount due under their contract (Section A);

Mrs Lipari’s claim against Metricon and Zanuttini for defects in the concrete slab (Section B), including:

the respects in which the slab did not comply with the relevant Australian Standard;

the consequences of such non-compliance in terms of the strength, capacity and performance of the slab;

the proper measure of damages in respect of the concrete slab; and

Zanuttini’s liability to Metricon in respect of any such damage;

Mrs Lipari’s claim against Metricon for general defects (Section C); and

Mrs Lipari’s claim against Metricon regarding the location of the swimming pool (Section D);

A. METRICON’S CLAIM

The Contract

On 4 April 2017, Mrs Lipari entered into a contract with Metricon for the construction of a house on the Property (the Contract). The contract price was specified to be $509,902.
Clause 18 of the General Conditions of the Contract provided, relevantly, that any variation to the Contract must be in writing and signed by Metricon and Mrs Lipari, and that the price of a variation is due and payable at the next progress payment after it is carried out, unless a different time is agreed.
There were a number of subsequent variations to the Contract, some of which are referred to in Sections B to D of the judgment below.
Clause 17.2 of the General Conditions of the Contract provided that Mrs Lipari must pay the contract price progressively as claimed by the builder. Clauses 17.3 and 17.4 provided that Metricon must provide Mrs Lipari with a written claim for a progress payment for the completion of each of the stages of work described in Schedule 2, and that a progress claim is to state:

the amount claimed and not paid for the stage substantially completed;

the amount claimed and not paid for contract price adjustments;

the amount claimed and not paid for variations; and

the sum of the above amounts.

Clause 17.5 provided that Mrs Lipari must pay a progress claim within 5 working days of Metricon giving the claim.
Schedule 2 to the Contract set out the progress payments to be made in respect of six stages of the project. The last of these stages was “Completion”. Clause 17.6 of the General Conditions of Contract provided as follows:

“Other than in relation to the final progress claim:
…
(b) the owner has no right of set off.”

Clause 21 of the General Conditions of the Contract provided that Metricon must give Mrs Lipari a notice of practical completion at least 5 working days prior to “practical completion” being reached. “Practical completion” was defined as meaning “when the building works are complete except for minor omissions and defects that do not prevent the building works from being reasonably capable of being used for their usual purpose” (cl 1.1).
Clause 21 further provided that Mrs Lipari must meet Metricon on site for an inspection at the date and time stated in the notice of practical completion, or at another time agreed by the parties, and must either:

pay the amount of the final progress claim; or

if Mrs Lipari believed that the building works had not reached practical completion, give Metricon a written notice detailing anything to be done to reach practical completion.

Clause 33 of the General Conditions of the Contract provided as follows (bold in original):

“Clause 33. Interest on Late Payments
33.1 The builder may charge the owner interest at the rate stated in Item 12 of Schedule 1 from the day on which an amount falls due to be paid to the builder up to and including the day that amount is paid.”

Item 12 of Schedule 1 to the Contract specified that “Interest on late payment is: 12.00%”.

Practical Completion and Final Statement

On 4 May 2018, Mrs Lipari and Metricon signed a “Completion of Works” certificate, which set out a number of defects or incomplete works, each of which was said to have been “actioned”. This certificate stated that: “It is now agreed that the defects or incomplete works listed above have been completed”.
On 21 May 2018, an Interim Occupation Certificate was issued for the Property.
On 23 May 2018, Metricon issued an invoice to Mrs Lipari for the sum of $93,257.10. The invoice indicated that this amount was for work up to “Stage 06 COMPLETION”. The invoice also stated that the terms of payment were “Strictly 7 days”, and that: “In accordance with the Penalty Interest Clause of your building contract, all claims must be paid by the due date or penalty interest will apply”.
On 28 May 2018, Metricon issued a Notice of Practical Completion, which stated that the construction works at the Property were practically complete in accordance with clause 21 of the Contract as at 30 April 2018.
On the same date, Metricon issued a “Final Statement” to Mrs Lipari. This statement set out the contract price ($509,902), the total amount of variations ($41,711), the amount paid to date ($458,355.90), and the resultant balance, being $93,257.10.
The sum of $93,257.10 remains unpaid.

Issue – Extent of Any Set-Off

In closing submissions, Counsel for Mrs Lipari confirmed that there was no dispute that the final progress payment of $93,257.10 had not been paid.
However, Mrs Lipari contended, in answer to Metricon’s claim for this amount, that Metricon breached the Contract and the warranty in section 18B(1)(a) of the Home Building Act 1989 (NSW), as pleaded in the First Cross-Claim, and that she was entitled to set off against the outstanding balance of the contract price the loss and damage that she has suffered as a result of such breaches (see Technology and Construction List Response, [14]-[16]). The claims raised in the First Cross-Claim are considered in Sections B to D of these reasons for Judgment.
Metricon did not dispute Mrs Lipari’s entitlement to set off any such liability against the amount of the final payment. Further, Metricon accepted that some amounts were due to Mrs Lipari in respect of the defects pleaded in the First Cross-Claim. The key issues in dispute are the extent of the defects, and therefore the extent of the amount of Metricon’s liability.
Those matters need to be determined in order to determine whether, after Metricon’s liability for defects is set out against the outstanding balance of the contract sum, any part of that balance remains outstanding, and to determine any question of interest.

B. CLAIMS IN RESPECT OF CONCRETE SLAB

Mrs Lipari claims that there were defects in the concrete slab which was designed by Zanuttini and laid by Metricon. She has brought:

a claim against Metricon for damages for breach of clause 39.1(a) of the Contract, breach of the statutory warranty in section 18B(1)(a) of the Home Building Act 1989 (NSW) and breach of the duty of care owed by Metricon pursuant to section 37 of the Design and Building Practitioners Act 2020 (NSW) for having supplied a deficient or defective slab; and

a claim against Zanuttini for breach of the duty of care owed by Zanuttini pursuant to section 37 of the Design and Building Practitioners Act, for having negligently prepared engineering plans that resulted in defects in the slab.

Metricon and Zanuttini accept that there were defects in the slab and that each of them is liable to Mrs Lipari. There is, however, a substantial dispute between the parties both regarding the extent of the defects in the slab and regarding the proper measure of loss.

Factual Background

The Contract

Item 8 of the Contract, which appeared under the heading “Site & Connections – Standard”, was in the following terms:

“Concrete slab: Waffle pod construction up to Class ‘M’ classification, designed and certified by a qualified Engineer.”

Item 8 indicated that the cost of this “M” class slab was “included” in the Contract price.
Similarly, a document setting out “Standard Inclusions”, which was attached to the Contract, indicated that one of the standard inclusions in the Contract was as follows:

“Concrete slab to be ‘M’ classification constructed in accordance with AS 2870.1 -1996, designed and certified by a qualified Engineer.”

As at the time of entry into the Contract, the relevant form of the applicable standard was not as stated above, but rather was Australian Standard 2870-2011 “Residential slabs and footings” (AS 2870).
Despite an “M” class slab being one of the Standard Inclusions in the Contract price, the “Site Works” specified in the Contract included Item 17, which was as follows:

“Provide ‘H1’ class slab in lieu of standard ‘M’ class slab as per Structural Engineers requirements.”

The additional cost of an H1 slab (above the included cost of the M slab) was specified to be $5,850.

The reason that the Contract made provision for an “H1” class slab was because of an assumption made at the time of entry into the Contract regarding the applicable site classification. Item 13 of the Contract stated as follows:

“This Preliminary Contract is subject to receiving a Borehole Report (not available at time of Preliminary Estimate preparation).
* ‘H1’ site classification has been assumed, and any additional costs such as site classification, additional piering or rock excavation will be addressed by way of variation.”

AS 2870 explains that site classification is based on the expected ground surface movement and the depth to which this movement extends. AS 2870 identifies that an “H1” site classification is used for “Highly reactive clay sites, which may experience high ground movement from moisture changes”. In contrast, an “M” classification is used for “Moderately reactive clay or silt sites, which may experience moderate ground movement from moisture changes”.
The effect of Items 13 and 17 of the Contract is that, in advance of any borehole report being received, which was necessary to determine the site classification, the Contract assumed an “H1” classification, and on this basis provided for an additional cost for providing an “H1” class slab in lieu of the standard “M” class slab.
Clause 2 of the General Conditions of Contract required Metricon to “carry out and complete the building works in accordance with this contract”. A note alongside clause 2 stated: “Refer to Clause 39 for Statutory Warranties. Refer to Clause 40 for Mandatory Conditions.”
Clauses 39 and Clauses 40 of the General Conditions of the Contract provided as follows:

“Clause 39 Statutory Warranties
39.1 To the extent required by the Home Building Act, the builder warrants that:
(a)   the building works will be done with due care and skill and in accordance with the plans and the specifications attached to this contract;
(b)   all materials supplied by the builder will be good and suitable for the purpose for which they are used and that, unless otherwise stated in this contract, those materials will be new;
(c) the building works will be done in accordance with, and will comply with, the Home Building Act or any other law;
(d)   the building works will be done with due diligence and within the time stipulated in this contract, or if no time is stipulated, within a reasonable time;
(e)   if the building works consists of the construction of a dwelling, the making of alterations and additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the building works will result, to the extent of the building works conducted, in a dwelling that is reasonably fit for occupation as a dwelling; and
(f)   the building works and any materials used in doing the building works will be reasonably fit for the specified purpose or result, if the owner expressly makes known to the builder, or other person with express or apparent authority to enter into or vary contractual relationships on behalf of the builder, the particular purpose for which the building works are required or the result that the owner desires to be achieved, so as to show that the owner relies on the builder’s skill and judgment.

Clause 40 Mandatory Conditions
40.1 To the extent required by the Home Building Act and subject to clause 40.2, the building works will comply with:
(a) the Building Code of Australia (to the extent required under the Environmental Planning and Assessment Act 1979, including any regulation or other instrument made under the Act);
(b) all other relevant codes, standards and specifications that the building works are required to comply with under any law; and
(c) the conditions of any relevant development consent or complying development certificate.”

Borehole Report and Variation 9

On 13 April 2017, shortly after the execution of the Contract, Metricon requested that Zanuttini “order surveys and borehole” for the Property.
On 27 and 28 April 2017, Zanuttini provided the requested reports in relation to the Property. The first of these reports was entitled “Shrink Swell Test Results” and recorded that the Property had a site classification of “M”, rather than the “H1” classification which had been assumed in Item 13 of the Contract. It also indicated that bedrock was encountered at a depth of 1.1m.

Because the Property had an “M” classification, it was not necessary to install the “H1” class slab which had been provided for in the Contract at an additional cost.
Despite this, Mrs Lipari confirmed that she wanted to pay the additional money to obtain an “H1” class slab. She gave the following evidence in her affidavit regarding the reasons why she did so:

“I wanted an ‘H1’ slab upgrade because my husband and I insisted on having the maximum amount of capacity or strength in our slab because we wanted to rest assured that we would have no problems in the future.”

Mr Lipari also gave evidence regarding the choice of the “H1” slab, in the following terms:

“… my wife and I had selected a superior slab called an ‘H class’ slab at an additional cost of $5,000. We did this because we wanted a strong slab with no cracking in it for the long haul. This was our dream home for our retirement for the rest of our lives, and we didn’t want any problems. By paying more for the ‘H class’ slab, I understood that my wife and I were getting a stronger slab which should not crack.”

On 19 June 2017, Mrs Lipari signed Variation 9 to the Contract. Item 3 of Variation 9 deleted Item 13 of the Contract, which had referred to the Contract being subject to receiving a borehole survey. Item 6 of Variation 9 provided as follows:

“Owner has requested to maintain ‘H1’ class slab in lieu of standard ‘M’ class slab.”

Slab is designed and laid

On 22 June 2017, a Metricon representative sent an email to Zanuttini, requesting that Zanuttini prepare the “structural details” for the work to be performed on the Property.
In late June 2017, Zanuttini prepared structural designs for the concrete slab. These designs noted that the site classification was “M”. A further version of these designs was prepared in early July 2017.
On 27 July 2017, a Metricon representative sent an email to Zanuttini, requesting amended engineering for an urgent site start. The email specifically asked Zanuttini to note Item 6 of Variation 9 (which confirmed that an “H1” slab would be provided) and requested that: “All drawings are updated to R.L’s as per H1 slab thickness.”
Zanuttini subsequently prepared further versions of the plans for the concrete slab dated 28 July 2017 and 14 August 2017.
By around September 2017, the concrete slab had been laid. On 5 September 2017, Zanuttini issued a Structural Certification in relation to the Property, which stated as follows:

“This is to certify that an inspection of the slab reinforcement was undertaken at the above mentioned site prior to the placement of any concrete.
The slab has been constructed and the reinforcement placed based on the current engineers details and our approval.”

What were the Defects in the Slab?

Failure to supply H1 slab

Mrs Lipari’s “Statement of Issues for Determination” included the following matters:

Did Metricon agree to provide Lipari with an H1 class slab under the contract?

Was the slab provided an H1 class slab?

Metricon accepted that the Contract required the provision of an H1 class slab, and each of Metricon and Zanuttini accepted that an H1 class slab was not in fact provided, because the slab did not comply in certain respects with the requirements for an H1 class slab set out in AS 2870.
However, there was a substantial dispute between the parties regarding the extent of the non-compliances with AS 2870, and the significance of such non-compliances in terms of the strength, capacity and performance of the slab.
These matters were addressed by expert evidence. Each of the parties called an engineer: Mr Camenzuli was called by Mrs Lipari; Mr Keighran was called by Metricon; and Mr Hartcher was called by Zanuttini.
These experts met in conclave on two separate occasions: initially in June 2023 and again in March-April 2024. However, they were unable to agree on the terms of a joint report. Following the June 2023 conclave, Mr Hartcher and Mr Keighran prepared a joint report; and Mr Camenzuli prepared his own separate report. Following the March-April 2024 conclave, Mr Hartcher and Mr Keighran again prepared a joint report, and evidence was led in chief from Mr Camenzuli on his responses to that report. The three experts gave concurrent evidence at the hearing.
Before dealing with the specific issues raised in relation to the slab’s compliance with AS 2870, it is necessary to address a number of criticisms of Mr Camenzuli’s expert evidence, which were made by Zanuttini and Metricon. There were no submissions advanced by Mrs Lipari regarding the credit of the other two experts.

Mr Camenzuli’s evidence

I accept a number of the criticisms made by Metricon and Zanuttini regarding Mr Camenzuli’s evidence.
First, Mr Camenzuli’s oral evidence was, at times, discursive, repetitive and non-responsive, making it difficult to identify the opinions being advanced by him, the basis of those opinions, and whether those opinions were based on specialised knowledge.
An example is set out below. It is necessary to provide some background to place this evidence in context. The Contract between Mrs Lipari and Metricon annexed a CSIRO publication entitled “Foundation Maintenance and Footing Performance: A Homeowner’s Guide”. It included the following information on “Seasonal swelling and shrinkage of soil”:

“All clays react to the presence of water by slowly absorbing it, making the soil increase in volume (see table below). The degree of increase varies considerably between different clays, as does the degree of decrease during the subsequent drying out caused by fair weather periods. Because of the low absorption and expulsion rate, this phenomenon will not usually be noticeable unless there are prolonged rainy or dry periods, usually of weeks or months, depending on the land and soil characteristics.
The swelling of soil creates an upward force on the footings of the building, and shrinkage creates subsidence that takes away the support needed by the footing to retain equilibrium.”

In his report of July 2023, Mr Camenzuli had stated that “it is accurate to conclude that we have undergone a number of shrink and swell cycles over the last 5 years”. In their joint report, Mr Hartcher and Mr Keighran also referred to the “seasonal weather patterns and ground moisture fluctuations and cycles” which would have been completed in the six years since practical completion, and set out data from the Bureau of Meteorology (BOM) detailing the extreme weather that had been experienced in this period, concluding: “The periods of dry weather along with the periods of extremely wet weather experienced over the last 6 years as verified by the Bureau of Meteorology data, means that all expected soil swelling and shrinkage extremes that can be allowed for and are to be considered under AS 2870-2011 have already occurred”. On being taken to this evidence, Mr Camenzuli expressed the view, contrary to the opinion stated in his report, that there had in fact not been a single shrink and swell cycle in the past six years: “I don’t see how anyone can say ‘The cycles that we have experienced’ because we haven’t received one cycle of wetting and drying and wetting again”.

When Mr Camenzuli was asked whether he now said what was stated in his report was inaccurate, he responded as follows:

“LE PLASTRIER: So you’d say that it’s not accurate to conclude that we’ve undergone a number of shrink and swell cycles over the last five years?
WITNESS CAMENZULI: Okay, now, when you talk about that, you have to talk about the order of magnitude that we’re talking about. Now, the code says 95% of expected movement; it dwells on that. Now, the issue is that from day to day you have some moisture change. Yesterday, it didn’t rain. Today, it rained. There’s a moisture change.
But those moisture changes are not significant to be, you know, to use as a basis for determining, as a professional, ‘look, okay, the house is experienced the loading that is expected.’ I mean, Australia has drought, seven year droughts; we just went through one a few, a decade ago or something. Don’t hold me to it. I don’t work for BOM. But a while ago, there was a seven year drought. Now, I consider that a dry period, right. Now, we’re going through the wettest period in a long time.
I think three years ago was a wet period. So, you know, a drought. You go through a wet period. If we go through another drought, I say we’ve accomplished one major cycle. I mean, but every, in every cycle, you have harmonics; you have little cycles based on a large, if someone can see my finger, little cycles all on a major cycle. I’m talking about the major cycles. People prefer to talk about day to day changes as a cycle. I don’t.
LE PLASTRIER: So I’ll just ask the question again. Do you say that it’s not accurate to conclude that we have undergone a number of shrink and swell cycles?
WITNESS CAMENZULI: If we talk about a day to day cycle, yes, we’ve achieved that. If we talk about major seasonal things, the data provided by BOM provides the order of accuracy of what we’re talking about. They gave yearly averages. So I’m talking about yearly cycles. Now, not yearly cycles, but yearly periods. That data provided two wet period - two dry periods, three, three wet periods, and a near normal period. If we look at that data, my assessment is we haven’t completed a cycle because we haven’t went through a period of dry, you know, dry.”

It is difficult to identify from this response:

the basis on which Mr Camenzuli distinguishes between “little cycles” and “major cycles”, and his definition of each type of cycle;

the reason why Mr Camenzuli considers that, in the context of the shrinking and swelling of soil, it is appropriate to consider yearly or multi-year cycles, rather than seasonal cycles (particularly given the opinion which he previously expressed that there had been a number of cycles, which must have been based on seasonal cycles rather than yearly cycles, and the CSIRO publication quoted above in relation to “seasonal swelling”, which focuses on “rainy or dry periods, usually of weeks or months”); and

whether or not Mr Camenzuli’s opinions on these matters are based on specialised knowledge and, in particular, the extent to which Mr Camenzuli’s views on “cycles” and changes in moisture over time are based on his own observations of the weather, or BOM data, or a mixture of both.

Secondly, Mr Camenzuli had a tendency to use disparaging and dismissive language when responding to the opinions and reasoning of other experts. The use of such language detracted from, rather than strengthened, the opinions which Mr Camenzuli expressed. For example, he accused other experts of being “misleading”; of writing “fluff”; of behaving in a manner that was “very disappointing for an expert of his purported calibre”; of taking an approach which would be expected of “a novice … not a seasoned expert”; of being “non-sensical”; of being prone to “rant about irrelevant matters that obfuscate the underlying design flaws”; of being “unprofessional”; and of expressing views that are “blatantly incorrect, unfounded and embarrassing”. He even hinted at dishonesty, suggesting of one expert that it reflected “poorly on someone as experienced as [the expert] to err in such a simple task if it was unintentional” (emphasis added).
Mr Camenzuli was taken to a passage in one report where he had commented on the evidence of another expert, who had purported to express an opinion regarding a measurement based on a photograph. In that passage, Mr Camenzuli stated that to “claim to be able to determine the distance in the photograph is preposterous”, pointing to matters such as the “skew angle the picture was taken from” and “the distortion of the lens”. However, at a later point in the same report, Mr Camenzuli himself expressed a “strongly held view” regarding the measurement of a crack, which was based solely on a photograph, claiming that this involved “a well proven process”. He did not, in doing so, make any qualification about skew angles or lens distortion. It is difficult to see how a measurement based on a photograph is, when undertaken by another expert, “preposterous”, but when undertaken by Mr Camenzuli, a “well proven process” that can ground a “strongly held view”.
Thirdly, Mr Camenzuli referred in his evidence to other projects (often unspecified) in which he had encountered instances of defects in the work of Zanuttini and Metricon. He claimed to be aware of “a number of other cases currently going to Court” involving slabs engineered by Zanuttini, and of “many more jobs” where Metricon’s work was defective. For example, he claimed that he had “undertaken dozens of house inspections of Metricon homes” and had “found less than 10 to 15% of the roofs to be correctly secured”. It was not clear whether these matters were advanced to bolster his opinions, or matters which he took into account in forming his opinions, or were simply irrelevant asides.
I do not, however, accept Zanuttini’s submission that Mr Camenzuli is not a witness of credit. I formed the view that Mr Camenzuli sought to provide the Court with his honestly held opinions regarding the matters at issue in the proceedings, and sought to act as an expert assisting the Court on matters within his expertise rather than as an advocate. However, the manner in which he expressed his views, including his discursive answers and his tendency to dismiss opposing views, did make it difficult at times to determine the basis for his opinions and the basis on which he disagreed with the opinions expressed by the other experts.
Accordingly, I have taken Mr Camenzuli’s opinions into account when considering each of the defects in the slab as well as the consequences of those defects and have considered, when addressing those matters below, the substance of his opinions, the basis of those opinions and the weight to be afforded to those opinions in the light of the other expert and documentary evidence.

Specific instances of non-compliance with AS 2870?

The concurrent evidence of the experts proceeded by reference to a list of eleven alleged defects in the concrete slab. The list was as follows:

Drainage and waterproofing behind the central step;

Edge beam cover to bottom reinforcement;

Slab Mesh for Class H1;

Trimmer bars to re-entrant corners;

Piering to internal areas of the slab;

Lack of full continuity at the step;

Internal beams not being edge to edge;

Edge beam reinforcement not continuing 1m at re-entrant corners;

Step stem thickness;

Beam bottom reinforcement; and

Garage Edge Beam Depths.

It should be noted that two of these items (numbered 3 and 11) are respects in which the slab is alleged not to have met the requirements of an “H1” slab under AS 2870. In contrast, the remaining nine items are respects in which the slab is alleged not to have met the requirements common to all slabs under AS 2870.
Metricon and Zanuttini admitted the non-compliances raised by items 4, 8 and 11 above. That is, they accepted the following matters:

Item 4: Trimmer bars to re-entrant corners – that the design did not provide for three N-12 bars of 2 metres but instead for two N-12 bars of 1.5 metres, and therefore that the slab did not comply with clause 5.3.7 of AS 2870.

Item 8: Edge beam reinforcement not continuing 1m at re-entrant corners – that the design did not comply with the requirement in clause 5.3.8 of AS 2870 that “at a re-entrant corner where an external beam continues as an internal beam, the external beam details shall be continued for a length of 1m into the internal beam”.

Item 11: Garage Edge Beam Depths – that, in accordance with Figure 3.4 of AS 2870, beam depth should be 385 mm for an H1 site with articulated masonry veneer, but that the beam depth on the site was only 310 mm in some areas of the garage.

The remaining eight items, which were not agreed, are addressed in turn below.

Item 1: Drainage and waterproofing behind the central step

The concrete slab included a step. Mr Camenzuli expressed the opinion that it was necessary for the step in the slab to comply with the requirements set out in subparagraphs 6.4.4(c)(i) to (iv) of AS 2870, and that it failed to comply with the requirements of subparagraph (i) because there was no drainage or waterproofing behind the central step.
Mr Hartcher and Mr Keighran disputed the need for compliance with the requirements set out in clause 6.4.4(c) and disputed, in any case, that any non-compliance had been established.
Clause 6.4.4 of AS 2870 is in the following terms:

“6.4.4 Treatment of sloping sites
The treatment of slabs on cut-and-fill sloping sites shall comply with one of the following methods:
(a)    The site shall be cut and filled and the fill [see Figures 6.1(a) and 6.1(b)] shall continue past the edge of the building by at least 1 m and shall be retained or battered beyond this point by a slope protected from erosion and not steeper than 1:2. The interior of the slab shall be founded on compacted material satisfying the requirements of Clause 6.4.3(c). The edge beams shall be founded on natural soil or on controlled fill or may be supported by piers designed in accordance with engineering principles.
(b)    The site shall be cut and filled with fill material that satisfies the requirements of Clause 6.4.3(c) and the fill shall be retained at the edge in accordance with Clause 6.4.5 as shown in Figure 6.1(c).
(c)    The slab and beams may be stepped in combination with methods in Item (a) or (b) above and with Figure 6.1(c) to reduce the extent of excavation or fill. At a change in elevation, the step shall comply with the following:
(i)    The ground behind the step shall be drained to prevent moisture build-up and the face of the slab step against the soil shall be waterproofed.
(ii)    The edge rebate requirements of Clause 5.3.4 shall be incorporated in the construction.
(iii)    Steps in stiffened rafts, including waffle rafts, shall be designed to preserve the structural continuity of the footing system.
(iv)    Steps in slabs for Class A and Class S sites shall comply with Figure 6.2 where the height of the step is less than 1.2 m. The masonry retaining wall shown in Figure 6.2 shall comply with Clause 6.4.5(b). Steps in beams shall comply with the principles of Clause 5.4.3.

(d)    The site shall be cut and filled and, where the fill does not satisfy Clause 6.4.2, the slab shall be designed as pier-and-slab in accordance with the following:
(i)    The suspended slab shall be designed in accordance with AS 3600.
(ii)    On Class M, Class H1 or Class H2 sites, the strength and stiffness of the suspended slab shall be not less than required by Section 3.

Where the fill consists of reactive clay, the fill shall be placed in a moist condition to minimize subsequent reactive soil movements.
NOTE: On natural slopes greater than 1:8, benching and consideration of slope stability may be required.”

Each of the experts agreed that the site was a “cut-and-fill sloping site” and therefore clause 6.4.4 applied.
Mr Camenzuli focused on the language of cl 6.4.4(c), and in particular the words “The slab … may be stepped … . At a change in elevation, the step shall comply with the following [namely, subparagraphs (i)-(iv)]” (emphasis added). It was Mr Camenzuli’s opinion that where the option of a step was adopted (“may be stepped”), the requirements of subparagraph (i) had to be met (“the step shall comply”).
In contrast, Mr Hartcher and Mr Keighran focussed on the language of the chapeau to clause 6.4.4, which stated that the treatment of the slab “shall comply with one of the following methods”, that is, one of the methods set out in paragraphs (a), (b), (c) (d). They expressed the opinion that, in this case, the treatment of the slab in fact complied with each of paragraphs (a) and (d), and therefore the requirement specified in the chapeau of cl 6.4.4 was satisfied, and compliance with paragraph (c) was not required.

I consider that the better interpretation of clause 6.4.4 is the one advanced by Mr Hartcher and Mr Keighran. The opening words of clause 6.4.4 convey in clear terms that the treatment of slabs on cut-and-fill sloping sites must comply with “one of” the methods specified in paragraphs (a), (b), (c) and (d). Accordingly, if the treatment of a slab complies with the method specified in paragraph (a) or paragraph (d), it complies with the requirements of clause 6.4.4 irrespective of whether it also complies with the requirements of method specified in paragraph (c).
Mr Camenzuli suggested in his oral evidence that the requirements of the method specified in clause 6.4.4(a) had not been met because his “experience, and I like to be proven wrong, is that this site has what they call rolled fill, which is the use of the excavating material tracking the material into site”. However, I place little weight on this opinion. Mr Camenzuli had no personal knowledge of how the site was filled and did not point to any evidence to support his opinion that “rolled fill” rather than “controlled fill” was used on the site, other than generalised anecdotal evidence which could not be tested: “Now, my experience and I am happy for anyone to - from Metricon to correct me, but they do not control fill their sites, they roll fill their sites”. In fact, the “Field Investigation” report prepared by Zanuttini in respect of the Property in 2017 shows “controlled and compacted fill” at the site.
Further, neither Mr Hartcher nor Mr Keighran was challenged in cross-examination on the opinion, which each expressed, that the treatment of the slab did comply with clause 6.4.4(d). Instead, it was put to them that, even if this was the case, it was necessary for the treatment of the slab also to comply with cl 6.4.4(c):

“O’CONNOR: Mr Hartcher and Mr Keighran, you say, I think, that this site complies with A and D, that’s correct, in 6.4.4? That’s correct?
WITNESS HARTCHER: Yes, yes.
WITNESS KEIGHRAN: Yes, that’s correct.
O’CONNOR: Given that there’s a step in the slab, why wouldn’t the site have to comply with C?
WITNESS KEIGHRAN: Two things, first of all. On the structural drawings, it says that the, all the site filling beneath the slab should be treated in accordance with clause 6.4 of AS 2870, which means that it is compacted fill in accordance with those drawings. And, secondly, I think the intent of that aid, if, if the slab stepped further on, I still think the purpose of that is still met, sort of--
O’CONNOR: But I’m asking you to read the words of C. It says ‘the slab and beams may be stepped’--
WITNESS KEIGHRAN: Yes.
O’CONNOR: ‘In combination with items A or B above, and with figure 6.1C--
WITNESS KEIGHRAN: Yep.
O’CONNOR: ‘To reduce the extent of excavation or fill. At a change in elevation, the steps shall comply with the following.’
WITNESS KEIGHRAN: Yep.
O’CONNOR: So don’t you agree that if there’s a step, the code requires that it complies with this section C of 6.4.4?
WITNESS KEIGHRAN: No, I think that’s an option. But I think there’s also options A, B, C and D.
O’CONNOR: Do you agree the word ‘shall’ in the code indicates the code must be complied with?
WITNESS KEIGHRAN: ‘It shall comply with one of the following methods.’
O’CONNOR: No, where it says ‘C’, if you accept that there’s a step in this slab, which there is, where at C it says ‘a change in elevation, the steps shall comply’, do you agree that means ‘shall’ should be interpreted as ‘must comply’?
WITNESS KEIGHRAN: If you adopt that option, yes.”

The proposition put to Mr Keighran in this passage is to the effect that clause 6.4.4(c) requires that where either of the options in cl 6.4.4(a) or (b) is used, and in addition the slab is stepped, then the treatment of the slab must comply with the requirements of cl 6.4.4(a) (or (b)) and additionally, with the requirements of cl 6.4.4(c).
There are two problems with this proposition.
First, I consider that this interpretation is at odds with the opening words of clause 6.4.4. That clause requires compliance with only one of the options specified in paragraphs (a) to (d), rather than compliance with every one of those options which is applicable to a particular site.
Secondly, the opening words of clause 6.4.4(c) do not refer to the option in clause 6.4.4(d), but only to the options in paragraphs (a) and (b): “The slab and beams may be stepped in combination with methods in Item (a) or (b) above …”. It follows that, even if the interpretation for which Mrs Lipari contends is correct and there is a need to comply with the requirements of paragraph (c) whenever the option in paragraph (a) or (b) is adopted and the slab is stepped, there is no need to comply with the requirements of where the option in paragraph (d) is adopted and the slab is stepped (which, on the evidence of Mr Hartcher and Mr Keighran, was the case here).
In any case, I am not satisfied that it has been established that the slab failed to comply with the requirement in subparagraph 6.4.4(c)(i): “The Ground behind the step shall be drained to prevent moisture build-up and the face of the slab step against the soil shall be waterproofed”. Mr Keighran and Mr Hartcher pointed out that Zanuttini’s design provided for waterproofing, via a membrane, and there was no evidence that the slab, as installed, did not include the required drainage.
Ultimately, Mr Camenzuli’s opinion that the slab did not in fact comply with the requirement in subparagraph 6.4.4(c)(i) appeared to be based upon unspecified anecdotal evidence: “From my experience with Metricon houses in construction over several years, I have not found the drainage in this location to be specified or installed in the specified location”. I place little weight on that evidence.
For the reasons given above, this alleged defect has not been established.

Item 2: Edge Beam Cover to Bottom Reinforcement

Mr Camenzuli expressed the opinion that there was insufficient concrete cover for the reinforcement beams in the slab. His reasoning was as follows:

the engineering drawings prepared by Zanuttini indicated that the minimum concrete cover for the reinforcement beams was 65 mm where “poured on ground”;

the width of the 3L11TM reinforcement beams was 211 mm;

it followed that the concrete beams had to be a minimum width of 341 mm in order to provide the required cover (that is, the 211 mm width of the reinforcement beam, plus 65 mm on either side);

however, the width of the concrete beams specified on the engineering drawings was only 300 mm, resulting in a reduction in cover of around 20 mm on either side (that is, for a 211 mm reinforcement beam, there was approximately 45 mm of cover on either side).

Mr Camenzuli stated that: “Lack of concrete cover results in corrosion of the reinforcement and spalling (concrete cancer) issues, particularly in acid sulphate affected soils of this site”.
Mr Camenzuli did not suggest that this alleged defect led to non-compliance with any requirement set out in AS 2870, whether for an “H1” class slab or any other class of slab.
Mr Keighran and Mr Hartcher gave unchallenged evidence that where the concrete is in contact with a waffle pod, as was the case here, the exposure classification is “A1” (in accordance with Table 4.3 of AS 3600) and accordingly a 20 mm cover is specified to be used. That is, the design of the slab “allowed for greater than the required cover to each side”.
Mr Keighran and Mr Hartcher pointed out that, although the Zanuttini drawings referred to 65 mm cover, AS 2870 provided that, where (as here) the exposure classification for the shale soil is B1, the maximum required cover where the concrete is against the soil is 50 mm. That is, the figure in the Zanuttini drawings on which Mr Camenzuli relied “exceeds actual code requirements”.
Having regard to those matters, this alleged defect has not been established.

Item 3: Slab Mesh for Class H1

It is common ground that SL 82 mesh was used for the slab.
Clause 3.4.1 of AS 2870 states that:

“Waffle rafts shall be specified in accordance with Figure 3.4. Modifications to the details given in Figure 3.4 shall not be undertaken without engineering design in accordance with Section 4.”

Figure 3.4 of AS 2870 indicates that, for an “H1” class slab, where the type of construction is “Articulated masonry veneer” (which was the case here), SL82 is to be used for a slab less than 20 metres in length, and SL92 mesh is to be used for a slab between 20 metres and 30 metres. The same figure shows that, in the case of an “M” class slab, SL82 is to be used for a slab between 20 metres and 30 metres in length.
Mr Camenzuli expressed the view that there was non-compliance with the requirements of AS 2870 because the length of the slab was 27.59 metres, and therefore SL92 mesh was required for an “H1” class slab and was not used.
Mr Hartcher disagreed. His view was that there were in fact two separate slabs, which were joined by a 688 mm step. The basis of this view was as follows:

“8.11.   Camenzuli states that the overall dimensions of the slab are 27.59 by 18.33 metres. I do not agree that this assessment is correct. The structural designs show that there is an Internal/External deep beam running through the centre of the slab. The detail of this is provided on Sheet 2 on the structural drawings. In my opinion this sub-divides the slab into two sections. The larger of these sections is approximately 18 metres in length. Therefore, my engineering interpretation of the structure is that it is two slab sections with the larger being approximately 18.83 x 16.00 metres.
8.12.   I note that AS2870-2011 allows for engineering judgement when the specific structure does not comply exactly with the standard design. Therefore, my opinion is that the slab should be treated as having a longer dimension of 18.83 metres.
8.13   I agree that Figure 3.4 of AS2870-2011 is used to select reinforcement for the slabs. I note Camenzuli bases his selection of reinforcement on a slab length exceeding 20 metres and states that SL92 mesh is required for a Site Class H1 slab supporting an Articulated Masonry Veneer dwelling. As stated above, it is my opinion that effective slab length is 18.83 metres. For a slab length less than 20 metres, the slab reinforcement is required to be SL82. Refer to Appendix C for extracts from the standard.
8.14   For the above reason, it is my opinion that the slab reinforcement specified on the structural drawings is adequate and complies with the requirements of AS2870-2011.”

It should be noted that the above passage is a quotation from a report of Mr Wilcox, an engineering expert. Mr Wilcox was a member of the same firm as Mr Hartcher, and was engaged by Zanuttini to provide expert evidence in these proceedings. After preparing his report, he became unavailable to give evidence. Mr Hartcher put on a short report in which he confirmed that he had reviewed all of the material with which Mr Wilcox had been briefed, and agreed with the opinions expressed by him.
Mr Hartcher explained in his oral evidence that mesh in a slab is important for reducing shrinkage and providing strength. It was his opinion that, having regard to the requirements of AS 2870, where a waffle pod slab was less than 20 metres in length and had SL 82 mesh, it had sufficient capacity to cope with shrinkage and sufficient strength for a pod of that length. He also gave evidence that:

irrespective of whether the site classification was “M” or “H1”, a waffle pod slab which was less than 20 metres in length and which had SL 92 mesh would be over-engineered, because it is not necessary to use SL 92 mesh to cope with shrinkage and to give sufficient strength for a waffle pod slab of that length; and

if two 10 metre waffle pod slabs, each with SL 82 mesh, were laid on an H1 site, each of those slabs would be stronger than a single 20 metre waffle pod slab constructed with SL92 mesh.

Mr Hartcher expressed the opinion that the addition of the step which joined the two slabs, each of less than 20 metres, did not reduce the strength of either or impair the capacity of each to cope with shrinkage:

“LE PLASTRIER: Does the addition of the step reduce the strength of either of the waffle pod slabs or impair the ability of either of the waffle pod slabs to cope with shrinkage?
WITNESS HARTCHER: This step, no.
LE PLASTRIER: Is it the case that neither of the waffle pod slabs installed in this house relies upon the other in the scenario that you’ve spoken about?
WITNESS HARTCHER: That’s correct.
LE PLASTRIER: What impact on strength and shrinkage on each of the waffle pod slabs built at Ms Lipari’s home would there be if one of the waffle pod slabs was removed?
WITNESS HARTCHER: None. They could both work, you could remove either and they would still function.
LE PLASTRIER: Because there are two slabs and not one, is there any meaningful structural continuity between those two slabs at Mrs Lipari’s home?
WITNESS HARTCHER: No.
LE PLASTRIER: I want you to assume that Mr Camenzuli is correct and there is rather than two waffle pod slabs, only a single waffle pod slab. Are there any consequences of the use of SL82 mesh on that hypothetical slab?
WITNESS HARTCHER: In, in this project, there’s none that we’ve seen. There’s no cracking in the tiles, there’s no cracking in the masonry. There’s damage category zero.”

When asked for his view on Mr Hartcher’s opinion, Mr Camenzuli gave the following response (although the transcript records the following evidence as given by Mr Hartcher, that is plainly incorrect, as shown by the questions asked, and this has been corrected below):

“O’CONNOR: … Before I take you to the document, Mr Camenzuli, just very briefly, you’ve heard Mr Hartcher’s opinion in respect of one slab?
WITNESS [CAMENZULI]: Yes.
…
O’CONNOR: What do you say about that?
WITNESS [CAMENZULI]: I believe that’s a very simplistic view, and the code, 2870, in no place in the whole code does it give dispensation to omit the strength and stiffness continuity because they are at different levels. The code specifically says that where the slab and beams change level because of steps, you shall maintain the strength and stiffness across the step. Now, the code in several places, 3 or 4, accentuates the need to maintain strength and stiffness, you know. Continuity is expressed in multiple places.
To infer that, ‘Well, no, we can change that,’ is, is unfounded. Now, if for instance, and I’ll give you a very simplistic aspect of it. This is in the modelling because engineers from first principles model the, the failures, the failure modes and sort of base it all on that. Now the engineers, my colleagues here, are trying to stress shrinkage as an issue, and say that each individual slab will shrink independently of each other because there is this flexible stem in the middle that flexes and allows the two slabs to move without any undue strains occurring in the concrete. That’s great, but the problem with modelling is that you have to model the right model. You know, reality, it has to match the slab. Now if we - can I have that drawing please, the piers. Thank you. Okay, okay. This is, I’m referring to this diagram everyone. Okay.
Now something of interest, if, if the step was straight through the centre of the slab, and it had a very clear hinge line where the two can flex and everything, just like a door, if the hinges are in line, the door can swing. But if you put that hinge, if you put one hinge sort of even 5 millimetres out of alignment, the door becomes stiff. If you put it 2 or 3 metres out of alignment, you don’t swing that door. Now the slab has a protrusion in it of the butler’s pantry. Now that’s an area of about 3 metres in length protruding in, and that’s acting like a key. Often we call those things, we put them in driveways or whatever, we talk about dowels, and that prevents movement between the two surfaces of the driveway. We have a dowel in here which is 3 metres by 3 metres approximately extending, overlapping the slabs with a 688 high wall that’s acting as a sheer wall and preventing any relative movement between the two slabs.
And so even if we talk about, ignore the strengths and stiffness requirement of the codes, and I stand by that, the fact that you just got a crooked hinge - and sorry, I correct myself, you’ve got one, two, three, four, five, you’ve got five times five, two - 6 metre, you’ve got a length of 6 metres, if I can show everyone there, along the top wall of the butler’s pantry, and extends into the bedroom area, 6 metres of interconnecting 680 high millimetre sheer wall that bonds the two slabs together. Those slabs do not act independently, they are, they are locked in, and your model has to reflect that. You know, it’s very easy to make a simplistic diagram of two slabs and then a little bit of concrete in between. That isn’t the case. We’ve got a three dimensional model here, and that, you know, I would question whether anyone would doubt that those slabs are locked in.”

The views expressed by Mr Camenzuli in this passage regarding the “hinge line” had not been put forward in any of the four reports prepared by him for the purposes of these proceedings over the course of the past three years, and were only advanced for the first time towards the conclusion of the concurrent expert evidence. That was despite the “two slabs” issue having been raised by Mr Wilcox’s report in March 2022, and despite Mr Keighran having agreed with Mr Hartcher that “the slab could be considered to be two separate slabs with regards to shrinkage” and “with regards to strength” in their joint report of July 2023. Further, Mr Camenzuli’s opinions regarding the “hinge line” were not put to Mr Hartcher in cross-examination.
It is difficult to identify, from the long and discursive passage quoted above, Mr Camenzuli’s precise response to the propositions advanced in Mr Hartcher’s evidence, or the basis for Mr Camenzuli’s opinion. In particular, Mr Camenzuli:

makes reference to “multiple” statements in AS 2870, without engaging with their specific terms;

claims that there were various ways of “modelling” the slab, without providing details of what those models are, what their relative merits are, how those models might be applied, or what they might reveal;

gives generalised evidence about how door hinges work and why doors can become stiff, without explaining why those matters relating to a metal hinge connecting to a door to a doorframe are applicable to a concrete step connecting two slabs (or located in the middle of one slab);

states that in this case “you just got a crooked hinge”, without specifying the basis for that opinion or its implications, and in particular, in what respect(s) and to what degree the “hinge” is “crooked”; and

asserts that the slabs are “locked in” without reference to the engineering drawings and without explaining the significance of that description for the issues arising in this case (while at the same time doubting that anyone could disagree with his view).

I do not consider that this evidence provided a clear and cogent basis to reject the simple propositions advanced in Mr Hartcher’s evidence, namely, that neither slab relies on the other; that either could be removed without affecting the other; that there is not any meaningful structural continuity between them; and that the addition of the step which joins the two slabs does not impair the capacity of each to cope with shrinkage and does not impair the strength of each.
In his first report, Mr Keighran had expressed the view that the slab did not comply with AS 2870 because it did not have SL92 mesh. This implicitly involved Mr Keighran coming to view that there was a single slab over 20m. However, following the expert conclave, Mr Keighran modified this view. He stated in the joint report of April 2024 that: “it is a complex issue to determine if the slab can be deemed to be one slab or two slabs with regard to strength and no evidence has been provided to suggest that the slab has been analysed to determine this”. He was not challenged on these views in cross-examination and, in particular, it was not put to him that any analysis had been conducted which was relevant to this issue.

Further, Mr Keighran pointed out in the joint report and in his oral evidence that, even if there is assumed to be only one slab, the type of mesh required under AS 2870 is determined by the site classification; and that, for a site which was classified as “M” (as was the case here), the use of SL82 mesh for a slab up to 30m long complied with AS 2870. Mr Keighran was not challenged on this view.
Having regard to those matters, I am not satisfied that Mrs Lipari has established a non-compliance with AS 2870 by reason of the use of SL82 mesh. In any case, Mr Hartcher’s evidence that there had been no adverse consequences from the use of SL82 mesh was not challenged.

Item 5: Piering to internal areas of the slab

Mr Camenzuli expressed the view that the slab does not comply with clause 3.4.5(a) of AS 2870, which provides as follows:

“3.4.5 Piers
The waffle raft for a one-storey building for clad frame or masonry veneer on moderately or highly reactive sites may be supported on piers as follows without structural design of the waffle raft:
(a) Piers to be located on the intersection of every third internal beam.
…”

Metricon and Zanuttini accepted that the design did not include piers located on the intersection of every third internal beam.
However, this does not establish non-compliance with AS 2870. Clause 3.4.5 specifies that in the circumstances described, a waffle raft “may be supported on piers” in the manner set out in that clause (emphasis added). AS 2870 regularly uses the mandatory verbs “shall” and “must” when identifying a requirement with which it is necessary to comply. In that context, the use of the verb “may” is naturally read as indicating a step which is optional.
Mr Hartcher and Mr Keighran expressed the view that, in any case, the structure which was adopted was adequate in the circumstances:

“If the earthworks were completed as indicated on the drawings, then in most areas piers would not have been required. Even at the front of the building in the areas where the depths of the fill exceeds 300mm the slab is not spanning any more than 3,600mm x 3,600mm and accordingly a waffle raft slab is satisfactory as a suspended slab ‘without structural design’.
Based on the above, there is no requirement for additional piers under AS 2870.”

For those reasons, I am not satisfied that this alleged non-compliance with AS 2870 has been established.

Item 6: Lack of full continuity at the step and Item 7: Internal beams not being edge to edge

Items 6 and 7 are related and can be addressed together.
Mr Camenzuli expressed the view that the slab did not comply with the requirements of clause 6.4.4(c)(iii) of AS 2870 which states as follows:

“6.4.4 Treatment of sloping sites
The treatment of slabs on cut-and-fill sloping sites shall comply with one of the following methods:
…
(c) The slab and beams may be stepped in combination with methods in Item (a) or (b) above and with Figure 6.1(c) to reduce the extent of excavation or fill. At a change in elevation, the step shall comply with the following:
…
(iii) Steps in stiffened rafts, including waffle rafts, shall be designed to preserve the structural continuity of the footing system.”

In addition, Mr Camenzuli was of the view that the slab did not comply with clause 5.3.8 of AS 2870 which states, relevantly, as follows:

“5.3.8 Beam continuity in rafts
Where the raft design includes internal beams, the structural continuity of internal and external beams in stiffened rafts, including waffle rafts, shall be maintained in accordance with the following criteria.
Internal beams shall be continuous from edge to edge of the slab. Where beams are at different levels, as may occur in two-pour systems, special detailing is required to provide continuity.”

Mr Camenzuli stated that the engineering drawings prepared by Zanuttini showed that the beams are not continuous. In particular, at the step in the slab, in the area of the “butler’s pantry”, the beams in the higher part of the slab do not align with the beams in the lower part of the slab. Mr Camenzuli concluded that, as a result, the internal beams were not “continuous from edge to edge of the slab” as required by clause 5.3.8 (Item 7), and there was not “structural continuity” at the step as required by cl 6.4.4(c)(iii) (Item 6).
These alleged non-compliances are largely addressed by findings I have already made.
I do not consider that there was a need to comply with clause 6.4.4(c), for the reasons given in paragraphs 77-85 above.
Further, I have referred at paragraphs 99-106 above to Mr Hartcher’s evidence that there were two slabs joined by a step. Mr Hartcher expressed the view that the internal beams were “continuous from edge to edge” of each of the two slabs (as required by clause 5.3.8), and that there was no need for the beams to be continuous across both slabs.
Even if the slab in this case were treated as a single stepped slab, that would not mean that non-compliance with AS 2870 was established, for the following reasons.
First, in their joint report, Mr Hartcher and Mr Keighran expressed the opinion that AS 2870 is “ambiguous with regard to any requirement for continuity through a stepped slab”. In particular, although clause 5.3.8 states that a raft slab should be continuous (without any reference to site classification), Figure 6.2 shows that a step may be created using a masonry wall (for a class A or S site), which plainly could not provide continuity.
Secondly, clause 5.3.8 provides as follows: “Where beams are at different levels, as may occur in two-pour systems, special detailing is required to provide continuity”. Mr Keighran expressed the opinion that: “the step in the slab provides some sort of continuity, but no one has done any calculations to determine if that provides for continuity or not”. Further, Mr Hartcher and Mr Keighran stated in their joint report that: “The capacity of the step detail with regard to continuity could only be confirmed by a full structural analysis of the slab and there is no evidence that has been done”.
Thirdly, Mr Hartcher and Mr Keighran expressed the view in their joint report that the offsets in the beams on either side of the step were “minimal”. Again, the effect of this minimal offset “could only be determined by a detailed structure analysis of the slab and there is no evidence that this analysis has been completed”.
In the course of their cross-examination, neither Mr Hartcher nor Mr Keighran was challenged on those views regarding the continuity provided by the step, or regarding the need for analysis to determine this issue. In particular, it was not put to either of them that any such analysis had been done, let alone that there was any analysis which supported the conclusion that the step did not provide structural continuity.
For those reasons, I am not satisfied that any non-compliance has been established in respect of either Item 6 or Item 7.

Item 9: Step stem thickness

“Step stem thickness” refers to the thickness of the vertical wall of a step. According to the design prepared by Zanuttini, the thickness of the vertical wall of the slab’s step is 150 mm.
A step stem of this thickness complies with clause 3.4.2 of AS 2870, which provides as follows:

“The minimum stem width shall be 110 mm for clad frame and 150 mm for masonry construction.”

The build in this case was a “masonry construction”.
Mr Camenzuli did not dispute that there was compliance with clause 3.4.2 of AS 2870. Instead, he expressed the view that there was non-compliance with AS 2870 in three other respects.
First, he referred to Figure 6.2 in AS 2870. It is entitled “Slab Step Options on Class A or Class S Sites”, and shows a step stem thickness of 200 mm.
However, it is common ground that the Property was not a Class A or Class S site. Therefore, Figure 6.2 can have no application.
Secondly, Mr Camenzuli referred to clause 6.4.5(a) of AS 2870, which states as follows:

“6.4.5 Retention of fill under slabs for Classes A, S and M sites
At the edge of a slab (or at a step) where more than 0.45 m of fill is retained, one of the following edge treatments shall be used:
(a) The fill up to a height of 750 mm shall be retained by a deepened edge beam structurally continuous with the slab and of not less than 200 mm width. If the fill is greater than 0.75 m but not more than 1.2 m in depth, vertical reinforcement of centrally placed SL82 mesh shall be provided. Where the height exceeds 1.2 m, the edge beam shall be designed by engineering principles.”

This clause only applies “where more than 0.45 m of fill is retained” at the edge of a step. Mr Hartcher explained, by reference to a diagram that he prepared, that the amount of retained fill in this case was in fact 0.303 metres, and therefore that clause 6.4.5(a) did not apply.
When asked to comment on this evidence, Mr Camenzuli referred to Figure 6.2:

“O’CONNOR: I’m sorry, Mr Camenzuli, what’s your opinion on this discussion?
WITNESS CAMENZULI: The retained fill is the amount of filling that would not be retained, if you removed the slab. Now, if you look at dot figure 6.2, and I have to stress, and I should put backgrounds to this, that is, this is only on a class A or class S site. A class M or a class H would have more stringent requirements. So we’re talking about the minimum here. If you look at that diagram, 6.2, and if you, we’re looking at the left hand side one, it has a shaded area and it talks about fill.
Because that is the area of fill, level to the bottom of the slab, where if the slab was removed, that fill is no longer retained. So I propose that where, and following AS 2870, figure 6.2, that the retained fill is the area or that shaded, of the shaded section of the diagram, and that is the height of the, the height of the fill works out, coincidentally, to the height of the step and that’ll be the 688. Now, something, well, no, that’s answering your question.”

As already noted, Figure 6.2 was not applicable. Mr Camenzuli asserted, in the above passage, that the requirements for a class M or class H site would have been “more stringent” than the “minimum” requirements in Figure 6.2, but did not refer to any clause of AS 2870 which applied to class M or H sites as being the source of these “more stringent” requirements, let alone explain, by reference to the terms of any such clause, in what way the slab failed to comply with such requirements.

Thirdly, Mr Camenzuli referred to clause 5.3.4(f) of AS 2870, which states as follows:

“5.3.4 Edge rebates
Edge rebates for slab on ground, stiffened raft or waffle raft with masonry cavity or veneer construction shall comply with the following:
…
(f) Where the edge rebate depth is greater than 400 mm, the minimum stem width shall be 200 mm. The effect of the rebate shall be assessed in accordance with engineering principles.”

This clause applies only to edge rebates. Mr Hartcher gave unchallenged evidence that an edge rebate is the part of a slab, located at its edge, which is lower than the rest of the slab and upon which bricks are laid (as shown in Figure 5.2 of AS 2870). The step in the middle of the slab in this case is not an edge rebate and therefore this clause is inapplicable.
It follows that this non-compliance has also not been established.

Item 10: Beam bottom reinforcement

This item may be dealt with briefly.
The structural drawings specified two options for edge beam reinforcement, one of which was 3-L11TM. Mr Camenzuli accepted in his report that if the 3-L11TM option was used, then the requirements of Figure 3.34 in AS 2870 were satisfied.
Mr Rafeletos, who is a director of Zanuttini and a qualified engineer, gave unchallenged evidence that 3-L11TM was installed at external edge beams.
Therefore, compliance with AS 2870 has been established in respect of this item.

Conclusion on non-compliances

For the reasons given above, the only non-compliances which have been established are those which were conceded by Metricon and Zanuttini, namely:

that the design did not provide for three N-12 bars of 2 metres but instead for two N-12 bars of 1.5 metres, and therefore that clause 5.3.7 of AS 2870 was not met (Item 4);

that the design did not comply with the requirement in clause 5.3.8 of AS 2870 that “at a re-entrant corner where an external beam continues as an internal beam, the external beam details shall be continued for a length of 1m into the internal beam” (Item 8); and

that the design did not comply with Figure 3.4 in AS 2870 which required a beam depth of 385 mm for an H1 site with articulated masonry veneer, because the beam depth is only 310 mm in the garage (Item 11).

Consequences of non-compliance with AS 2870?

Mrs Lipari identified the following issue in her “Statement of Issues for Determination”:

“What is the nature and extent of the risk of any damage to be caused to the slab and house as a result of the found defects in, and/or contractual/ AS 2870 non-compliance of, the slab?”

Three preliminary points should be made.
First, although there was some evidence of cracking in the slab, this was not significant. Mr Keighran expressed the opinion, which was not challenged in cross-examination, that the cracks which had been observed in the slab were shrinkage cracks. Such shrinkage cracks commonly develop in the three to six hours during the plastic setting stage for concrete. AS 2870 recognises that shrinkage cracking “can be expected in concrete floors” (Appendix B). Although Mr Camenzuli suggested that the cracks were not plastic shrinkage cracks, this was based on an assumption that the cracks did not appear until a year after the slab was laid (which is when they were photographed by Mrs Lipari). However, the fact that they were photographed at this time does not mean that they were only became manifest at this time. In any case, the experts agreed that the cracks that had been observed fell into the “very slight” or “slight” category in AS 2870. Further, Mr Camenzuli acknowledged that the slab does not have “major structural cracking” and that “the currently observable level of cracking in the slab does not require rectification”.
Secondly, there is no evidence of any physical damage to Mrs Lipari’s house. Mr Camenzuli conceded in his reports that there “are no currently observable symptoms or consequences on site” of any reduction in the slab’s structural capacity. There was no challenge to Mr Keighran’s evidence that:

the tiles are level;

there are no cracks in the brickwork of the external walls;

there are no cracks in the cornices, the ceilings or the bulkhead (which is at the entrance);

there is one hairline crack in the wall on the southern side of the top of the opening to the pantry;

there is one hairline crack in the eastern wall of the pantry; and

there are hairline cracks in a single tile.

As regards the last item, there was no evidence as to whether the hairline cracks in the tile were caused by an issue with the slab, or by some force being applied from above (given that the only cracked tile was found on the garage floor). Mr Keighran was not challenged on his evidence that the hairline cracks which he observed fell within Category 0 (zero) in AS 2870, that is, within the category of “negligible” damage.

Thirdly, AS 2870 recognises that cracks are expected. Clause 1.3.1 states that where buildings are supported by footings designed and constructed in accordance with AS 2870 those buildings “are expected to experience usually no damage, a low incidence of damage category 1 and an occasional incident of damage category 2”. That is, buildings are expected to have a low incidence of “noticeable cracks” less than 1 mm in width (category 1), and an occasional incidence of “distinct cracks” less than 2 mm in width (category 2). Appendix B to AS 2870, which is headed “Foundation Performance and Maintenance”, recognises that some “minor cracking and movement will occur in a significant proportion of buildings”. It also acknowledges “that minor foundation movements occur on nearly all sites” and that “it is impracticable to design a footing system that will protect the building from movement under all circumstances”. Crack width “is used as the major criterion for damage assessment” and damage is only defined as “significant” where it is category 3 or worse. There is no evidence of any category 3 damage at the Property.
Mr Camenzuli used the term “damage” in a manner that was different to how it is defined in AS 2870. Instead of referring to “damage” as something which is physically manifested, he referred to “damage” in the sense of a deficiency in design or a reduction in capacity.
In his July 2023 report, Mr Camenzuli disagreed with the statement by Mr Keighran and Mr Hartcher that “there is no damage currently in the residence that would warrant structural repairs” on the basis that he disagreed with their interpretation of the word “damage”. He stated as follows:

“In this context the ‘damage’ is to the lost capacity and performance limits of the slab, as measured against the required compliance provisions of AS 2870.
I contend that there is significant damage to the house’s durability and serviceability capacity (that is the capacity specifically requested in the building contract – for the higher capacity H1 slab which was ordered). Such damage is directly related to the design and construction of the house.”

That is, it was Mr Camenzuli’s opinion that the existence of non-compliances with AS 2870 establishes the fact of damage, even if there is not shown to be any observable consequence of such non-compliance.
As shown in the following exchange, Mr Camenzuli considered that there was “damage” in the present case by reason of “damage to the design and lack of capacity” of the slab, despite accepting that there were no signs or symptoms of any reduction in the slab’s capacity:

“LE PLASTRIER: But there are no current observable symptoms or consequences of the reduced structural capacity of the slab, are there?
WITNESS CAMENZULI: You said “symptoms”, thank you.
LE PLASTRIER: Well, you said symptoms actually. This is a quote from you.
WITNESS CAMENZULI: Yes, yes, thank you. So you agree with me, great. The issue is that there are no symptoms, and I’ve said there are no symptoms of the damage. There is damage to the design and the lack of capacity, but I, I was not, except for a couple of cracks in the plasterboard and what have you that’s been acknowledged, the house is, sort of, not, showing no signs.”

Mr Camenzuli’s opinion was, in substance, that it can be assumed that the requirements of AS 2870 have been specified for a reason, and the number and combination of non-compliances in this case must mean that there is “damage” in the form of a reduction in the slab’s strength, capacity or performance. He considered that this reduction would lead to the “failure” of the slab, even if there was currently no sign or symptom to indicate that such failure would or might occur. He gave the following evidence (emphasis added):

“WITNESS CAMENZULI: Well, the - you, you can play around with words like ‘performance’. It definitely doesn’t have the capacity of a properly designed H1 slab. It doesn’t. And I don’t think it’s questioned. There are defects in it.
[He summarised here various non-compliances which he had identified]
So these items - and we’re not talking about one defect in a slab. We’re talking about multiple defects that compound. And if the compounding effect ‑ look, no plane falls out of the sky for one defect. No major catastrophe occurs for one defect. But when you start having multiples, surely they have some effect, otherwise the people that designed 2870 didn’t know what they were doing.
O’CONNOR: So those factors you just mentioned, the noncompliance factors, they’re the noncompliance factors with AS 2870 you were talking about?
WITNESS CAMENZULI: Yes, correct.

In any case, the basis for the opinions expressed by the “design team” is set out in the email from Mr Potter to Ms Tsai.
In particular, Mr Potter’s email identifies that the opinion regarding cost is based on the fact that there will need to be “a large amount of excavation on the side boundary” and the construction of “a large retaining wall” if the pool were to be located between the side of the house and the northern boundary. Those views are apparently based on the contour plan, since Mr Potter suggests that Ms Tsai should provide the contour plan to the client when explaining the position. Ms Tsai did so, and explained (accurately) that Metricon’s design team had reached the views which she was reporting to Mrs Lipari after viewing this contour plan.
Where section 4(1) of the Australian Consumer Law applies, there is an evidential burden, but not a legal burden, on the representor to adduce “some evidence … of reasonable grounds for making the representation”: North East Equity Pty Ltd v Proud Nominees Pty Ltd [2012] FCAFC 1 at [30]. What must be adduced is “evidence that tends to establish, or that admits of the inference that there were, reasonable grounds for making the representation”: Awad v Twin Creeks Properties Pty Ltd [2012] NSWCA 200 at [34] per Allsop P (Macfarlan JA and Sackville AJA agreeing). Once evidence is adduced by a representor in discharge of the evidential burden, the claimant “must satisfy the dispositive burden” of showing that the representor did not have reasonable grounds for making the representation: North East Equity v Proud Nominees at [30].
Even if, despite the views I have expressed above, the statements conveyed by Ms Tsai’s email were representations as to future matters within the meaning of section 4 of the Australian Consumer Law, I consider that, by reason of the matters in Mr Potter’s email, Metricon discharged the evidential burden of adducing “some evidence” of reasonable grounds for the representation, and in those circumstances Mrs Lipari had to “satisfy the dispositive burden” of establishing the absence of reasonable grounds.
That dispositive burden was not discharged by Mrs Lipari. Instead, the views expressed in Mr Potter’s email were supported by the expert evidence.
Mr Winton gave evidence, based on the contour levels shown in the Metricon plans, that in order for the pool to be placed next to the northern boundary, it would have been necessary to construct a retaining wall of around 2.3 metres in height. He stated that retaining walls of such a height would require a substantial footing, and that the engineering required to construct a retaining wall of this height in this location was “substantial” and “would involve the demolition of the existing retaining wall and taking into consideration impacts on the zone of influence from the adjoining property footings”.
Mr Camenzuli confirmed in cross-examination that it would have been necessary to construct a retaining wall built on the side of the house before a pool could be located there; that the excavation to get to the bottom of the pool cavity could have been more “more than a number of metres”; and that around 3.6 metres of excavation would have been needed to construct the pool on the side of the house.
Further, as I discuss below, when dealing with the issue of damage, there was no evidence to establish that the cost of locating the pool on the side of the house would have been lower than the cost of locating the pool at the rear.
Having regard to those matters, no claim for misleading or deceptive conduct is established in respect of the 8 June Representation.

9 June Representation

The 9 June Representation is pleaded in the following terms (SFACCS, [19A]):

“Mr Mezzagosto’s conversation with Lipari conveyed that it would not be possible to install the pool on the northern boundary of the property (the 9 June representation).”

The basis for this representation is Mrs Lipari’s evidence of her conversation with Mr Mezzagosto, which was in the following terms:

“[Mrs Lipari]: I got an email from Jenny saying we can’t build the pool at the northern side of the house where the sun is. We discussed and agreed that the pool is going on that side. Why can’t it be built there now?
[Mr Mezzagosto]: The pool won’t fit on the northern side of the house. The width is too small. It has to be built at the back of the house.”

The conversation in question occurred almost seven years ago. Mrs Lipari repeatedly stated in her evidence that she could not recall various details of her dealings with Metricon, by reason of the passage of time. She stated in response to various questions: “I can’t remember. It’s gone too far back”; “It’s been eight years and in that eight years there’s been a lot happening”; and “I can’t remember. It’s going back six [years] – this is back in 2017”.
It is not surprising that, as Mrs Lipari frankly acknowledged, she would struggle to recall specific events after a period of so many years.
In those circumstances, it is necessary to assess Mrs Lipari’s evidence of the 9 June representation in the context of the email communications which immediately preceded and succeeded the conversation, and other documentary evidence.
The conversation set out in Mrs Lipari’s affidavit commences with her referring to Ms Tsai’s email of 8 June 2017. Mrs Lipari indicated to Mr Mezzagosto that she understood Ms Tsai’s email to convey that “we can’t build the pool at the northern side”, asking Mr Mezzagosto “why can’t it be built there”, to which Mr Mezzagosto responded that it “won’t fit” (emphasis added).
That is, in Mrs Lipari’s recollection, Mr Mezzagosto essentially confirmed what she had already been told by Ms Tsai, namely, that the pool “can’t” be built on the northern boundary. However, the problem with this evidence is that Ms Tsai said no such thing. Ms Tsai had not told Mrs Lipari it was not possible to build the pool on the northern boundary. Instead, she had stated that it was “technically possible”, but not “cost effective” to put the pool in that location.
As noted above, Mrs Lipari forwarded Ms Tsai’s email to Mr Mezzagosto on the evening before she met him. It is likely that he would have read it before he met Mrs Lipari to discuss its contents. Further, it is likely that when they met on 9 June 2017, Mr Mezzagosto made comments to Mrs Lipari which were consistent with the comments that had been made by his colleague, Ms Tsai. That conclusion is consistent with the thrust of Mrs Lipari’s evidence, namely, that she asked him a question about the information contained in Ms Tsai’s email, and he responded by confirming and explaining what Ms Tsai had said.
That conclusion is also consistent with Mr Mezzagosto’s email of the following day, which was sent to Ms Tsai and copied to Mrs Lipari, in which he stated as follows (emphasis added):

“I have had Antonia [Lipari] in with regards to your email regarding the repositioning of the pool and have explained reasoning behind this. She has agreed to relocate the pool to where you have suggested ( area to be kept clear for services) but would like it positioned to the left side boundary to align with the existing out door area.”

This email, which is the closest contemporaneous record to the disputed conversation, establishes that the discussion with Mrs Lipari was “with regards to [Ms Tsai’s] email regarding the repositioning of the pool”, which Mrs Lipari had forwarded to Mr Mezzagosto. It also establishes that Mr Mezzagosto, during that conversation, “explained the reasoning behind this”. That is, he explained the reasoning behind the recommendation in the email, which had nothing to do with the width of the set-back from the northern boundary, but which was instead solely based on the significant works and costs required to place the pool on the northern boundary.
It follows that I consider it unlikely that Mr Mezzagosto said that the pool would not “fit” between the house and the northern boundary, or would have otherwise conveyed that it was not possible to put the pool in that location. It is inherently unlikely that he would have said something inconsistent with Ms Tsai’s email of the previous day. It is more likely that he said, consistently with Ms Tsai’s email, that it was not cost effective or feasible to put the pool there, even though it was “technically possible” to do so.
Further, as Metricon pointed out, Mr Mezzagosto’s comment that Mrs Lipari “has agreed to relocate the pool to where you have suggested” would not have made any sense if Mr Mezzagosto had said, and Mrs Lipari had believed, that it was impossible to place the pool on the northern boundary, because, in that situation, the question of whether or not Mrs Lipari agreed to move it would have been irrelevant. Instead, Mr Mezzagosto’s statement is consistent with a scenario in which Mrs Lipari had a choice – whether to proceed with the pool on the northern boundary as planned or, instead, to locate it in what had been described as a more cost-effective location – and agreeing to move the pool when this was explained to her (as subsequently confirmed by entry into Variation 9).
Mrs Lipari submitted that, in circumstances where Mr Mezzagosto was not called to give evidence, a Jones v Dunkel inference arises and the Court should more readily accept Mrs Lipari’s evidence of her conversation with him.
In response to this submission, Metricon pointed to evidence that attempts had been made to contact Mr Mezzagosto, and that he had stated in August 2020 that “he could not recall much about the project or the matters raised in Ms Lipari’s points of claim”. Further, as Metricon pointed out, Mrs Lipari’s Cross-Claim was only amended to add an allegation that Mr Mezzagosto had said it was impossible to place the pool on the northern boundary on the first day of the hearing. I have set out this amendment below in the form shown in the SFACCS (including mark-up), in order to expose the significant change made from the previous form of allegation:

“19 On or about 109 June 2017, in breach of clause 39.1(a) of the Contract and s18B(1)(a) HBA, Mr Frank Mezzagosto relied on the Original Building Plans (as amended by Item 13 in proposed Variation 9) to inform Lipari that the pool could not be constructed at the northern side of the house adjacent to the alfresco entertainment area ~~as had been agreed unless Lipari incurred additional costs~~ and, instead, had to be built at the elevated rear of the house ~~(the 10 June representations):~~
Particulars
Conversation between Mr Mezzagosto and Lipari on or about 109 June 2017 ~~and email sent by Mr Mezzagosto to Lipari and to Jenny Tsai of Metricon at 2:21pm on 10 June 2017)~~.

19A Mr Mezzagosto’s conversation with Lipari conveyed that it would not be possible to install the pool on the northern boundary of the property (the 9 June representation).”

That is, up until the first day of the hearing, it had been alleged, relying on the terms of Ms Tsai’s email of 8 June 2017 and Mr Mezzagosto’s email of 10 June 2017 (and without any reference to the conversation of 9 June 2017 set out in Mrs Lipari’s affidavit) that Mr Mezzagosto had represented, consistently with Ms Tsai’s email, that the pool could only be constructed between the side of the house and the northern boundary if Mrs Lipari “incurred additional costs” (described as the “10 June Representation”).
This “10 June representation”, which was subsequently abandoned, was not a representation to the effect that it was impossible to build the pool between the side of the house and the northern boundary of the Property. Instead, having regard to the form in which it was pleaded, this representation implicitly conveyed that it was possible to build the pool in this location, so long as additional costs were incurred. In that regard, it was consistent with the terms of Mr Mezzagosto’s email of 10 June 2017, and in particular his statement that he had explained the reasoning in Ms Tsai’s email of 8 June 2017 (which had stated that it was “technically possible” to build on the northern boundary but that this would require significant works and that it was more “cost effective” to locate the pool at the rear of the Property).
In circumstances where the “10 June Representation” was the only form of representation pleaded in respect of Mr Mezzagosto, where that form of representation was consistent with his email of 10 June 2017, and where the 10 June Representation was not said to arise from any conversation (disputed or otherwise), it is not surprising that Mr Mezzagosto was not called to give evidence. No adverse inference arises from Metricon’s failure to call Mr Mezzagosto to address a different case in respect of a “9 June Representation”, which was not pleaded until the first day of the trial, which was based on a conversation that had not previously been referred to in the pleading, and which was inconsistent with both the previously pleaded “10 June Representation” and with the contemporaneous emails.
For the reasons set out above, I find that the pleaded 9 June Representation was not made. Instead, it is likely that, when Mr Mezzagosto met with Mrs Lipari on 10 June 2017, he repeated and explained the statements made in Ms Tsai’s email.
It follows that I do not need to address the question of whether the 9 June Representation was misleading or deceptive. Accordingly, I make only some brief remarks on this issue.
According to Mr Camenzuli, it would have been necessary, in order for the pool to be installed between the side of the house and the northern boundary, for there to have been some two metres of excavation in the one metre adjacent to the northern boundary. Having regard to that evidence, Mrs Lipari did not, in her closing submissions in chief, explain how the pool could have been built on the northern boundary given that clause 3.29(1) of the SEPP provides that excavation within one metre of a boundary must not exceed more than one metre from existing ground level: cl 3.29(1).
After this issue was raised by Metricon in its closing submissions, Mrs Lipari, in reply, referred to an email from an officer of Camden Council to Local Pools dated 19 March 2018, which was not copied to Metricon, and which stated as follows:

“The retaining wall identified on the site plan is not existing or considered to be exempt development under the Exempt and Complying Code SEPP. As such the proposed retaining wall will need to be included on the current development application.”

Mrs Lipari suggested that this showed that the SEPP did not apply to “the building of the pool at the side of the house”. Instead, there was to be a “development application to the council, which would mean the SEPP wouldn’t apply”. However, the statements in the email concern the plan to construct the pool at the rear of the house, and the “retaining wall” which is referred to as not being “considered to be exempt development under the Exempt and Complying Code SEPP” was not the existing retaining wall which ran along the northern boundary, but rather was a different proposed retaining wall, which was intended to be constructed at the rear of the Property (and not on the boundary) as part of the works undertaken prior to installation of the pool. In any case, it is apparent, as shown on the face of the building plans, that Metricon understood, in first half of 2017, that the provisions of clause 3.29(1) of the SEPP would or might apply, and Mrs Lipari did not explore, or explain, why it was not reasonable for Metricon to be proceeding on that basis.
Mrs Lipari sought to side-step these “technical arguments” about whether the pool could be constructed between the side of the house and the northern boundary by relying on the Amended Building Plans to establish that this could have been done. As I have noted above, the Amended Building Plans had been prepared by Metricon in early 2017, and had moved the proposed location of the house in order to increase the space on the northern boundary so as to accommodate the proposed pool. The following submission was made:

“The plans are a technical document. You can see that they’ve clearly done a bit of work to amend those plans and to increase the left hand side setback so that the pool could be built there. Now, we’ve had a lot of technical arguments in this case about whether or not the pool could be built there. My submission is that those complex technical arguments ignore the fact that Metricon, which is an experienced builder, a large Australian builder, went through the process of being told by Mrs Lipari she wanted the pool on the side of the house, then went to the effort to change the plans.”

However, when the Amended Building Plans were prepared, a contour survey was not available. The original form of the Contract, as signed in April 2017, noted that the Amended Building Plans, which were attached, provided a preliminary siting only, which was subject to receiving a contour survey. The contour survey which was available in June 2017 showed that the contours which had been provided by the developer (and which had been shown on the Amended Building Plans) were inaccurate, and that the slope of the block was much steeper than had previously been understood. It was this information which led the Metricon design team to conclude that the location of the pool on the northern boundary was not feasible.
Given that is so, any views reached by the design team regarding the feasibility of a pool being built on the northern boundary, which were held at the time of preparing the Amended Building Plans in March 2017, cannot be used to prove that the views reached by the design team in June 2017 (following receipt and review of the contour plan) were not soundly based.
For those reasons, even if (contrary to my findings) the 9 June Representation had been made, I would not have been satisfied that Mrs Lipari had established the 9 June Representation was misleading or deceptive.
It follows that Mrs Lipari has not established that Metricon engaged in any of the pleaded misleading or deceptive conduct, and therefore has not established any contravention of section 18 of the Australian Consumer Law.

Did Mrs Lipari suffer loss and damage?

Because no contravention has been established, the question of causation and damage does not arise. Nonetheless, I have considered below whether, if misleading or deceptive conduct had been established, I would have been satisfied that Mrs Lipari had suffered “loss or damage because of the conduct” within the meaning of section 236 of the Australian Consumer Law.
Mrs Lipari pleaded that she relied “upon the 8 June representation and/or the 9 June representation” (SFACCS, [21]). However, there was plainly a tension in that position. In circumstances where Ms Tsai was said to have represented that it was technically possible, but not cost effective, to put the pool on the northern boundary, and Mr Mezzagosto was said to have represented that it was not possible to install the pool in that location, it is difficult to see how Mrs Lipari could have relied on both representations at the same time.
Mrs Lipari pleaded her case on reliance as follows (SFACCS, [21], with mark-up included to show the amendments to the pleading which were made on the opening day of the hearing):

“In reliance upon the 8 June ~~2017~~ representations and/or the 109 June ~~2017~~ representations, Lipari:
…
b. reluctantly agreed to the construction of the swimming pool at the rear of the house, as opposed to the northern side of the house, ~~to avoid incurring the significantly greater building costs she believed she would incur if the pool was constructed on the northern side of the house~~ because she understood that the swimming pool could not be installed on the northern boundary of the property, and thereby entered into Variation 9 which, inter alia, provided for the same.”

Significantly, Mrs Lipari did not claim that she was misled into believing that (as conveyed by the 8 June Representation) it was more cost effective to build the pool at the rear rather than at the side of the house, or that any such belief led her to agree to locate the pool at the rear of the Property. Such an allegation had been made in a previous version of the pleading, but was deleted in the SFACCS. Instead, Mrs Lipari claimed, in the version of the pleading which she took to trial, that she agreed to move the pool “because she understood that [it] could not be installed on the northern boundary of the property” (emphasis added). The source of this understanding was alleged to be the 9 June Representation, which has been addressed above.
It follows that irrespective of whether the 8 June Representation was misleading or deceptive, it could not have had any causative effect.
Counsel for Mrs Lipari confirmed in closing submissions that the essence of the misleading or deceptive conduct claim was that the 9 June Representation was misleading, and that Mrs Lipari relied on that representation in agreeing to move the pool and to accept Variation 9.
I have found that the pleaded 9 June Representation was not made. It follows that it could not have been relied upon. In any case, Mrs Lipari’s own (unchallenged) evidence that she was surprised to learn in September 2017 that the space at the side of the house was “too narrow” for a pool is inconsistent with her pleaded claim that she was told and believed in June 2017 that the pool “won’t fit” in that location because the “width is too small” (see paragraphs 304-306 above).
Further, if the issue of loss and damage had arisen for consideration, I would have concluded that loss had not been established, for the reasons set out below.
First, there was no clearly articulated counterfactual for assessing loss. There were two alternative plans prepared by Local Pools regarding the proposed location of the pool on the northern boundary, one dated March 2017 showing the pool level between the “al fresco” area and the northern boundary, and the other dated “September 2017” showing the pool between the side of the house (to the west of the “al fresco” area) and the northern boundary. The genesis of the “September 2017” plan was unclear, particularly since it is not attached to, or referred to in, any contemporaneous documents and it was (on its face) brought into existence after Mrs Lipari had agreed to locate the pool at the rear of the Property and had agreed to Variation 9, and after the concrete slab had been laid in the location specified in Variation 9. There was no evidence to support a conclusion that the “September 2017” plan represented the intentions of Mrs Lipari either as at September 2017 or as at any other date. Nonetheless, it was not clear whether Mrs Lipari’s case was that loss should be assessed on the basis that the pool was located in the position shown on the March 2017 plan or the “September 2017” plan.
Secondly, as regards Mrs Lipari’s claim for the difference between the (actual) costs of building the pool at the rear of the Property and the (counterfactual) costs of building the pool between the side of the house and the northern boundary of the Property, the evidence did not establish that those costs differed or by how much.
As regards the actual costs of building the pool at the rear of the Property, the only evidence of those costs was Mrs Lipari’s evidence that she had paid an amount of $149,400 in cash to Mr Halabi. There are no documents, such as a scope of work or an invoice, to support a conclusion that this amount represented the costs of the works which were necessary in order to install the pool. The relevant works were performed almost six years ago and, as already noted, Mrs Lipari has limited recollection of the events of this period. Mrs Lipari was able to produce bank statements showing that she made cash withdrawals totalling the amount of $149,400, but there is no documentary evidence (such as any email, text or receipt) showing to whom those amounts were paid and Mrs Lipari acknowledged in cross-examination that, during the relevant period, she was withdrawing cash “for a number of purposes”. Further, Mrs Lipari gave evidence in re-examination that Mr Halabi performed significant works besides the works required for the pool. For example, at the front of the house, Mr Halabi carried out excavation, and constructed a driveway and a retaining wall. He also performed excavation and constructed walls at the side of the house, as well as at the rear. There is no apportionment of, and no basis in the evidence to apportion, the total amount of cash paid to Mr Halabi between the works required for the installation of the pool at the rear of the Property and the other works which he performed. In those circumstances, the actual costs of the works required for the pool are unknown and are likely to have been considerably less than the amount of $149,400.
As regards the counterfactual costs of building the pool between the side of the house and the northern boundary of the Property, there is (as noted above) doubt about the location of the pool in the counterfactual, and Mrs Lipari did not lead any expert evidence regarding the costs that would have been incurred in installing the pool in any particular location on the northern boundary.
In order to determine the counterfactual costs, it would have been necessary to consider, in addition to a precise location for the pool, matters such as the relative level of the top of the pool and the amount of excavation required; and whether retaining walls would have been built, in what locations, how deep they would have been and how wide the footings would have been.
In addition, it would have been necessary to consider what would have happened at the rear of the Property in a counterfactual where the pool was not located there.
Mrs Lipari stated in her 4 April 2024 affidavit that “the backyard would have been a hill with grass and some shrubs and landscaping”. However, there was no explanation by Mrs Lipari as to what the “landscaping” would have been, which might provide a basis for costing the works that would have been performed at the rear of the Property in the counterfactual. Insofar as the “September 2017” plan is regarded as providing any evidence of Mrs Lipari’s intentions, it suggests that, in the event that a pool was placed at the side of the house on the northern boundary, there was an intention to build a substantial retaining wall at the rear of the Property. The “September 2017” plan shows a “Structural Ret[aining] Wall by Owner – to be Engineered Designed” running along, and parallel to, the rear of the house. The costs of building the retaining wall shown on the “September 2017” plan were not the subject of any evidence and are therefore unknown.
Mr Camenzuli purported to give some evidence of the net difference between the cost of building the pool on the northern boundary and the cost of building it to the rear of the Property, but his estimate did not have regard either to actual costs or counterfactual costs. An orthodox way to give such evidence would be to provide an opinion regarding the cost of building the pool in the counterfactual location, and the reasoning supporting this estimate; to compare this estimate with evidence (or assumptions) regarding the actual cost of building the pool at the rear of the Property; and thereby to determine the difference between the counterfactual cost and the actual cost, which represented Mrs Lipari’s loss. Mr Camenzuli did not proceed in that way. Instead, he made an estimate of the actual costs of building the pool at the rear of the Property, and disregarded altogether the counterfactual costs of the building the pool at the side of the house, on the basis that he considered it “irrelevant to know what the cost to construct the pool on the side of the house would have been”. He acknowledged in cross-examination that he had not worked out what retaining walls would need to be built if the pool had been built on the side of the house, or the costs of constructing those walls.
For those reasons, Mrs Lipari has not established that the costs which were incurred by her as a result of the pool being installed at the rear of the Property exceed the costs which would have been incurred if the pool had instead been installed between the side of the house and the northern boundary. This head of loss has therefore not been established.
Thirdly, there were likewise substantial difficulties with Mrs Lipari’s claim for the loss of value suffered by reason of the location of the pool at the rear of the Property. In support of this claim, Mrs Lipari relied on the opinion of a valuer, Mr Staltari, that the location of the pool to the rear had caused a decrease of $100,000 in the value of the Property. However, I consider that limited weight can be attached to that opinion by reason of the following matters:

Mr Staltari’s opinion regarding the current value of the Property was based on an assumption (which is incorrect) that the house had not been built in accordance with the approved plans, because the house was not correctly located on the Property;

Mr Staltari did not identify any specific location for the pool in the counterfactual (or address matters such as how many steps would be required to access the pool in the counterfactual);

Mr Staltari’s opinion as to the loss in value was based on a counterfactual where the rear of the Property would have consisted of terraces with stairs going up between them, and retaining walls. Mrs Lipari’s evidence is inconsistent with that counterfactual; and

Mr Staltari stated that his opinion as to value was formed having regard to sales within the surrounding area. However, none of the “comparable” sales to which Mr Staltari referred in his report was a sale of a property with a swimming pool (in any location).

In any case, any claim for loss based on a loss of value could only be established if Mrs Lipari established the costs in the counterfactual of placing the pool in a different location. It may be, for example, that the counterfactual which Mr Staltari appears to have had in mind (involving substantial works at the rear of the Property to construct terracing and stairs, as well as works at the side of the Property to construct a pool with “resort style landscaping”) would have required the incurring of costs which were in excess of those in fact incurred and which were greater than the posited increase in value. Because those counterfactual costs were unknown, it follows that, even if Mr Staltari’s opinion of the counterfactual value were accepted, loss would not have been established.

Conclusion

For those reasons, I reject Mrs Lipari’s claim for misleading or deceptive conduct against Metricon and her other claims regarding the location of the swimming pool.

Conclusion and Orders

For the reasons set out above:

Metricon has established its claim that Mrs Lipari has not paid the outstanding balance of the Contract price (namely, $93,257.10);

Mrs Lipari has established her claim against Metricon and Zanuttini regarding the concrete slab’s non-compliance with AS 2870, and is entitled to damages in the amount of $55,020.40, representing the sum paid by her in respect of the slab;

Mrs Lipari has established her claim against Metricon in respect of a number of general defects, and is entitled to damages in the amount of $54,845.00;

Mrs Lipari is entitled to set off, against her liability to Metricon in respect of the unpaid balance of the Contract price (paragraph (1) above), Metricon’s liability to her in respect of defects (paragraphs (2) and (3) above);

Metricon has established its cross-claim against Zanuttini, and is entitled to be indemnified by Zanuttini for any amount paid by Metricon to Mrs Lipari in respect of the liability in paragraph (2) above (including by way of the set-off referred to in paragraph (4) above); and

Mrs Lipari has failed to establish her claim for misleading or deceptive conduct against Metricon or her other claims regarding the location of the swimming pool.

The parties should confer regarding the appropriate form of orders to give effect to these reasons for judgment, including orders dealing with the quantification of interest and costs, insofar as those matters can be agreed. If those matters cannot be agreed, each party should provide its proposed form of orders, with a short submission limited to three pages, and should indicate whether they are content for the outstanding issues to be determined on the papers.
Accordingly, I make the following orders:

Direct that the parties provide to my Associate, by 5pm on 30 May 2024, short minutes of order to finalise these proceedings, including dealing with costs and the calculation of interest in the event those matters can be agreed; and

Direct that, in the event that the parties are unable to agree on such orders, each party:

serve and provide to my Associate, by 5pm on 30 May 2024, the form of orders which that party proposes, together with a written submission limited to three pages and any supporting evidence regarding issues of costs or interest; and

indicate whether that party seeks an oral hearing in respect of any outstanding issues and, if so, the reasons for doing so.

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Decision last updated: 16 May 2024

Medium Neutral Citation:	Metricon Homes Pty Ltd as trustee for Metricon Homes Unit Trust v Lipari [2024] NSWSC 566
Hearing dates:	8-11 April 2024
Date of orders:	16 May 2024
Decision date:	16 May 2024
Jurisdiction:	Equity - Technology and Construction List
Before:	Nixon J
Decision:	See [401]
Catchwords:	BUILDING & CONSTRUCTION – plaintiff constructed house for defendant – plaintiff sued defendant for unpaid balance of contract price – defendant claimed entitlement to set-off for defects and brought cross-claim against plaintiff and against structural engineer – whether defects established – extent of defects – consequences of defects – proper measure of damages CONSUMER LAW – misleading or deceptive conduct – claim arose from communications concerning location of swimming pool - whether pleaded representations were made – whether representations were as to future matters or representations of opinion – whether representations were misleading – whether any loss or damage was suffered because of the representations
Legislation Cited:	Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, ss 4, 18 Design and Building Practitioners Act 2020 (NSW), s 37 Home Building Act 1989 (NSW), s 18B State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (NSW), cl 3.29
Cases Cited:	Australian Competition and Consumer Commission v Woolworths Group Ltd (2020) 281 FCR 108; [2020] FCAFC 162 Awad v Twin Creeks Properties Pty Ltd [2012] NSWCA 200 Bateman v Slatyer (1987) 71 ALR 553 Bellgrove v Eldridge (1954) 90 CLR 613; [1954] HCA 36 Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2006] NSWCA 361 Building Insurers’ Guarantee Corporation v The Owners – Strata Plan No 57504 [2010] NSWCA 23 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658; [2019] NSWCA 307 Kirkby v Coote [2006] QCA 61 Lin v Zheng [2023] NSWCA 174 North East Equity Pty Ltd v Proud Nominees Pty Ltd [2012] FCAFC 1 Owners SP 92450 v JKN Para 1 Pty Ltd [2023] NSWCA 114 Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 The Owners of Strata Plan No 97315 v Icon Co (NSW) Pty Ltd [2023] NSWCA 303 Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253
Category:	Principal judgment
Parties:	Metricon Homes Pty Ltd as trustee for Metricon Homes Unit Trust (Plaintiff/ First Cross-Defendant on First Cross-Claim/ Cross-Claimant on Second Cross-Claim) Antonia Lipari (Defendant/ Cross-Claimant on First Cross-Claim) Rafeletos Zanuttini Pty Ltd (Second Cross-Defendant on First Cross-Claim, Cross-Defendant on Second Cross-Claim)
Representation:	Counsel: D Hume (Plaintiff/ First Cross-Defendant on First Cross Claim/ Cross-Claimant on Second Cross-Claim) J O’Connor with D Thomas (Defendant/ Cross-Claimant on First Cross-Claim) B Le Plastrier (Second Cross-Defendant on First Cross-Claim, Cross-Defendant on Second Cross-Claim) Solicitors: Salim Rutherford Lawyers (Plaintiff/ First Cross-Defendant on First Cross-Claim/ Cross-Claimant on Second Cross-Claim) Barrak Lawyers (Defendant/ Cross-Claimant on First Cross-Claim) Colin Biggers & Paisley Pty Ltd (Second Cross-Defendant on First Cross-Claim, Cross-Defendant on Second Cross-Claim)
File Number(s):	2021/95090
Publication restriction:	Nil