Steven v Rojas Constructions Pty Ltd; ACN 139 445 426 (Civil Jurisdiction) - [2024] ACAT 27

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

STEVEN v ROJAS CONSTRUCTIONS Pty Ltd

ACN 139 445 426 (Civil Jurisdiction) [2024] ACAT 27

XD 835/2023
Catchwords: CIVIL DISPUTE – claim for compensation for rectification of structural and non-structural defects to the house – statutory building warranty period – completion date – statutory warranty period has not expired for structural defects – statutory warranty period expired for non-structural defects – balance of probabilities – respondent is to pay compensation
Legislation cited: Building Act 2004 ss 67, 69, 85, 88
Building (General) Regulations 2008 s 38

Tribunal:Member P Hatami

Date of Orders:  13 March 2024
Date of Reasons for Decision:      28 March 2024
Date of Publication:  02 April 2024
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 835/2023

BETWEEN:

AMANDA LEIGH STEVEN
Applicant

AND:

ROJAS CONSTRUCTIONS PTY LTD
ACN 139 445 426
Respondent

TRIBUNAL:Member P Hatami

DATE:13 March 2024

CORRECTED ORDER

The Tribunal orders that:

The respondent pays the applicant $25,000.00 by way of compensation for rectification of structural defects to the property.
The respondent pays the applicant half of the ACAT Application fee of $635.00 – $317.50.
The respondent pays the applicant the claimed interest of $2,542.29.
The respondent is directed to pay the applicant ~~$27,859.79~~ within 30 days from the date of these orders.
………………………………..

Member P Hatami

REASONS FOR DECISION

The hearing took place on 22 February 2024. After hearing the parties’ submissions, the Tribunal reserved its decision.
The Tribunal delivered the decision in this matter orally on 13 March 2024. These are the Tribunal’s reasons for the orders.
In this decision, a reference to the ‘tribunal’ or ‘ACAT’ refers to the ACT Civil and Administrative Tribunal generally and a reference to the ‘Tribunal’ refers to the member who heard the matter.
At hearing, both parties attended in person and were self-represented. Rojas Constructions Pty Ltd was represented by Stephanie Paola Jiminez Tangarife the General Manager of Rojas Constructions Pty Ltd and Mauricio Alejandro Rojas Pineda – General Manager of Rojas Constructions Pty Ltd.

Background

Amanda Steven is the applicant. She bought a house and land package from the respondent, Rojas Constructions Pty Ltd. The parties entered an ACT Home Building Contract (the Contract) on 1 February 2016 for the build of the house Ms Steven intended to make her new home.
This dispute arises in relation to structural and non-structural defects alleged by the applicant in the construction of her home which she says were not remedied by Rojas Constructions Pty Ltd and remain subject to statutory warranties.
The applicant has submitted with her application a series of documents including email exchanges with the respondent in relation to 56 issues (defects) and a table dated 28 March 2017 prepared by the respondent where the 56 issues raised by the applicant and the action taken by the respondent are noted (Respondent’s Table).
The applicant submitted a report commissioned from Peak Consulting – Building Consultants and Building Investigations (Building Inspector’s Report) dated 11 July 2017 identifying 60 defects.
The applicant submitted a quotation to remedy “internaldefects and “external defects prepared by AWatson Industries totalling $51,270.00 dated 29 October 2018.
On 2 August 2023, the applicant lodged an application with ACAT seeking $25,000.00 in relation to four categories of breaches as outlined at paragraph 21 below, plus $635.00 filing fee and $10 search fees. The applicant also claims $2,542.29 interest accrued on this debt.
The applicant alleges that the respondent is liable for breaching the Contract as follows:
(a)Part 3 clause 27 – Maintenance Liability;
(b)The statutory building warranty;
(c)Part 1 clause N and Appendix A clause A17 – Liquidated Damages;
(d)Part 1 clause G – Practical Completion, and Part 1 clause E and Part 3 clause 15 (b) Delays, Extensions of Time.
The applicant says that she suffered post-traumatic stress and anxiety because of the issues surrounding the construction of her home and the alleged conduct of the respondent and their legal representatives, citing intimidation, threats, caveat over her property, delay tactics and unconscionable conduct.
The applicant outlines delays in completion of work to her property noting that the construction was finalised in 18 months instead of the nine-month estimate originally given by the respondent.
The respondent maintains that any defects raised by the applicant were remedied by the respondent and denies the existence of any defects that give rise to the respondent’s liability under the Contract.
The respondent Mauricio Rojas says in his witness statement of 16 February 2024 that:
3. From day 1 from this ACAT application Rojas Constructions’ position has been we do not believe ACAT should hear this dispute as part of the special provision for dealing with disputes stated on the contract signed by Mrs. Steven.
4.    In these proceedings, Mrs Stevens is asserting a monetary claim, contending that she is entitled to payment. However, she is currently beyond the stipulated time frame and lacks consistent evidence regarding the alleged defects. It has been over six years and any issues she is now raising may not be indicative of Rojas Constructions’ fault. We have diligently adhered to all contractual obligations as per our contract.
5.    Mrs Stevens has consistently exhibited assertive behaviour, attempting to sway situations in her Favour….
6.    From the beginning, Rojas Constructions has been committed to providing Mrs Steven with exceptional customer service, including proactively involving solicitors to address any potential legal concerns. We have promptly responded to Mrs. Steven’s requests, whether they originated from Mr Maurice Falcetta, myself as the director, or Mr Daniel Vallecilla, the former project coordinator at Rojas Constructions at the time of Mrs Steven’s house construction…
9. Mrs Stevens asserts that Rojas Constructions should provide financial compensation for defects identified by an external company. It’s essential to clarify that these identified defects primarily pertain to cosmetic issues or alternations to existing Prime Cost (PC) items some of which were provided by Mrs Stevens. According to statutory warranties, Rojas Constructions is not liable for these types of defects, and therefore, financial compensation for such matters should not be obligatory.
10. The quote provided by Mrs Stevens lacks substantial proof regarding why the alleged defect needs to be rectified.
11. Mrs Stevens claims financial strain resulting from a waterproofing issue that she addressed through her insurance. Typically, insurance companies assess claims thoroughly, and if they identify a construction-related defect, they would not activate the policy. Instead, they would direct Mrs Stevens to contact the relevant Construction Company for issue resolution. If the policy were activated, the insurance company would typically pursue Rojas Constructions for the incurred financial costs. In this case, no such contact or pursuit of financial costs by the insurance company has taken place, this indicates that the issue was not the builder’s fault.

16. Ms Jimenez in her witness statement provides that:

3. From day 1 from this ACAT application Rojas Constructions’ position has been we do not believe ACAT should hear this dispute as part of the special provision for dealing with disputes stated on the contract signed by Mrs Steven.
4.We have formally requested the discontinuation of the proceedings, adhering to the terms stipulated in the contract, Rojas Constructions engaged Solicitor Maurice Falcetta for this specific matter. His significant involvement dates back over six years ago when he played a crucial role in the initial proceedings agreements between Mrs Steven and Rojas Constructions.
5. Mrs Steven sent us a dispute notice, which according to the law, Rojas Constructions was not obligated to accept because she failed to deliver the dispute notice to the correct recipient. Additionally, Mrs Steven overlooked the fact that she submitted the dispute notice during the holiday period when the solicitor, Mr Falcetta, was on leave. Despite receiving an email notifying her of his absence, she insisted that we did not comply with the two-week timeframe specified in the contract, placing blame on Rojas Constructions. I believe it is reasonable to expect a delayed response when a person is on leave, and non-compliance during such periods should be considered accordingly.
6. Despite knowing in advance that Rojas Constructions, including myself and the director, would be on Christmas shutdown, Mrs Steven insisted on sending the dispute notice. She was aware of our shutdown period, as it had been mentioned during the previous mediation when the member inquired about our availability for the hearing. Mrs Steven’s fault lies in not notifying the correct recipients. Despite her non-compliance with the terms stated in the building contract, we decided to accept her dispute notice and arranged a meeting that suited both parties. Mrs Steven was firm on her availability, so I accommodated her even outside of business hours, multitasking with my kids in the background. Despite these efforts, Mrs Steven failed to show up to the online meeting or respond to the invitation if she was attending at all, leaving me waiting for 30 minutes with no response from her whatsoever only until nearly 7pm when she said to Mr Falcetta we were not present on the meeting, Mr Falcetta asks for another time to meet whish she refused.
7. I am currently not fully capable of dedicating my full attention to this case as my new baby is only five months old up to the date of this statement. Managing the demands of a newborn requires a significant amount of time, and despite this challenge, I am actively involved and trying to accommodate Mrs Steven’s requests. Unfortunately, I am not able to allocate much-needed time for myself or reduce my mental load. Every free moment that should be devoted to self-care is being spent on this case. The impact on my mental health is substantial due to postpartum hormones, caring for a new baby, sleep deprivation , and the responsibilities of managing life with two older kids….
8. I find it disheartening that we are in a position after several years since the handover of Mrs Steven’s property. Upon reviewing our records, it is evident that from the beginning, we made sincere attempts to address and resolve any potential or future issues. We even offered to purchase her property, but she declined this option and chose to proceed with the construction of her house. The current situation could have been easily avoided from the outset. Despite our continuous efforts, Mrs Steven seems determined to bring up issues and seek financial compensation from Rojas Constructions.

Completion timeline

The evidence submitted by the applicant shows that during construction she raised numerous structural and non-structural defects requiring remediation by the respondent Rojas Constructions Pty Ltd.
On 10 July 2017, Rojas Constructions Pty Ltd issued to the applicant a Certificate of Practical Completion with invoice of completion stage.
On 17 July 2017, the applicant disputed the respondent’s assertion of Practical Completion by sending an email to the respondent’s lawyer, Trinity Law, stating that Practical Completion had not been reached as several defects, which had previously been raised with the respondent, in the construction of the property remained.
In her email, the applicant cited the Building Inspector’s Report. She said that the report “raised numerous issues including some where the building code has not been met and many of extremely poor-quality finishes and non-completion".[1] The dispute was raised by the applicant within the timeframe of five working days as stipulated in the Contract.
[1] Email dated 17 July 2017 from the applicant to Ms Maurice Falcetta
On 25 July 2017, the applicant emailed the respondent’s lawyer a copy of the Building Inspector’s Report.
On 25 July 2017, the respondent’s lawyer, Maurice Sebastian Falcetta of Trinity Law, emailed the applicant with a Notice of Dispute. The basis for the Notice of Dispute was that the owner disputes Practical Completion.
On 26 July 2017, the applicant signed an application for Certificate of Occupancy.
On 30 July 2017, the applicant emailed the respondent in response to the Notice of Dispute emailed on 25 July 2017 and wrote:
I advise that under duress I accept that Practical Completion has been reached.... I also confirm that the Application for Certificate of Occupancy and Use was signed and submitted to Canberra Region Building Certifiers on 25 July 2017. In the interest of clarity, I confirm that this does not constitute a waiver in relation to the outstanding issues and claims under the Contract previously raised. I reserve all of my rights.[2]
[2] Email dated 30 July 2017 from the applicant to Ms Maurice Falcetta
On 3 August 2017, Access Canberra Building Services issued the Certificate of Occupancy and Use for the property. The applicant received handover and keys to the property on 14 August 2017.
On 13 November 2017, the applicant sent by email to the respondent a list of defects dated October 2017. She followed up this email on 27 May 2018 with a further list of defects.

Alleged defects and maintenance liability period

The contract made provision for a maintenance liability period of 90 days. The purpose of the maintenance liability period was to allow the applicant to live in the house for a short period of time, to notice any minor defects or omissions and to be able to provide the builder with a comprehensive list of items that needed to be resolved.
It should be noted that the maintenance liability period does not act as a limitation period. It simply provides a convenient mechanism for repairing minor issues detected by an owner in a short period, immediately after the build has been completed.
The builder continues to be liable for any defects or omissions that occur during the maintenance liability period and for the longer statutory warranties period specified by the Building Act 2004 and the Building (General) Regulation 2008.
According to the Maintenance Liability Period in the Contract, the respondent was required to rectify these issues within 15 days of being notified of the defects. Clause 27(e) of the Contract provides that where the builder fails to comply with its obligations to rectify the issues, the owner may engage others to rectify the minor omissions/defects and recover the reasonable actual cost from the builder. Actual cost is defined by the Contract as the “receipted cost from a supplier or subcontractor”, thereby the applicant would have been required to have the defects rectified and produce the receipts to be compensated under the Maintenance Liability Period.
As the applicant did not have the defects repaired during the stipulated timeframe, she cannot be successful in her claim under the Maintenance Liability Period provision of the Contract.

Statutory warranties

Statutory warranties under the Building Act 2004 and Building (General) Regulations 2008 provide a mechanism for addressing defects which occur during the stipulated timeframe.
The Contract entered into by the parties provides:
1. Standards of Construction
a) The Builder will carry out the Works shown on the Approved Plans and described in the Specifications and in the terms of this Contract in a proper and skilful manner.
b) The standards of construction required by the Act relating to buildings of the type covered in this Contract form part of this Contract and if inconsistent with this Contract the higher standard prevails.
(Emphasis added)
The statutory warranties are prescribed under section 88 of the Building Act 2004 and section 38 of the Building (General) Regulations 2008 as follows:
88 Statutory Warranties
(1)     By force of this section, every contract for the sale of a residential building, and every contract to carry out residential building work to which the builder is a party, is taken to contain a warranty under this section.
(2)     The builder warrants the following in relation to residential building work:
(a)that the work has been or will be carried out in accordance with this Act;
(b)that the work has been or will be carried out in a proper and skilful way and -
(i)in accordance with the approved plans;
...
(c)that good and proper materials for the work have been or will be used in carrying out the work;
...
(4)     The warranties end at the end of the period prescribed under the regulations after the completion day for the work.
(Emphasis added)
38 End of statutory warranties—Act, s 88 (4)
(1)     The period for the end of a warranty is—
(a)for residential building work in relation to a structural element of a building—6 years after the completion day for the work; or
(b)for residential building work in relation to a non-structural element of a building—2 years after the completion day for the work.
(2)     In this section:
non-structural element, of a building, means a component of the building that is not a structural element.
structural element, of a building, means—
(a)a load-bearing component of the building (whether internal or external) that is essential to the stability of the building or part of it; or
(b)a component (including weatherproofing) forming part of the external walls or roof of the building.
Sections 69 and 67 of the Building Act 2004 provides:
69 Certificate of Occupancy
(1)     The construction occupations registrar must issue a certificate of occupancy for building work that involves the erection or alteration of a building if, on application by the owner of the parcel of land where the building work was carried out, the registrar is satisfied that-
(a)the building work has been completed in accordance with the prescribed requirements for the building work; and
(b)the building as erected or as altered is fit for occupation and use as a building of the class stated in the approved plans for that building work.
67 Registrar may have regard to documents given
(1)     In working out whether building work has been completed in accordance with the prescribed requirements, the construction occupations registrar may have regard to certificates and other documents given to the registrar by a certifier under section 48.
(2)     To remove any doubt, this section does not limit the matters that the construction occupations registrar may reasonably have regard to.
Section 85 of the Building Act 2004 defines the meaning of completion day as follows:
85 Meaning of Completion Day for pt 6-
(1) In this part:
completion day for residential building work, means the day the work is completed or the day the contract relating to the work ends, whichever is the later.
(2) Without limiting subsection (1) the work is taken to have been completed no later than the day a certificate of occupancy (if any) is issued for the work.
(Emphasis added)
Thereby, in accordance with the legislative framework, Completion Day for residential building work is reached no later than the day a Certificate of Occupancy is issued. The construction occupations registrar may have regard to certificates and other documents provided by a certifier but is not limited to the certifier’s submissions and may reasonably have regard to other matters in reaching its decision prior to issuing a Certificate of Occupancy. Prior to issuing the Certificate of Occupancy, the construction occupations registrar must be satisfied that the building work has been completed in accordance with the prescribed requirements for the building work; and the building as erected or as altered is fit for occupation and use as a building of the class stated in the approved plans for that building work.

Because Completion Day was reached on 3 August 2017 when the Certificate of Occupancy was issued, and the applicant filed her application with the Tribunal less than six years from Completion Day on 2 August 2023, I find that the Statutory Warranty period for structural defects had not expired on the date of application and the applicant is entitled to claim damages for structural defects under the warranty.
The applicant is out of time to claim for non-structural defects under the Statutory Warranty.

Defects

In addition to the Building Inspector’s Report, after taking possession, the applicant brought several other issues to the respondent’s attention. These approaches by the applicant are relevant because they:
(a)identify significant defects and other issues relating to the property following completion of construction;
(b)demonstrate the applicant’s attempts to have the defects rectified; and
(c)demonstrate the respondent’s attitude towards having the defects rectified.
In August 2017, after moving into the property the applicant emailed the respondent’s solicitors stating that she had not been provided with keys to the garage internal access door nor manuals and warranties for the appliances, there were several electrical issues and the house had not been cleaned.
The respondent’s solicitor replied on the same day with details of an electrician who would attend the premises to rectify electrical issues.
On 17 August 2017, the applicant emailed the respondent’s solicitor attaching a photograph and asking for the plumber’s contact details urgently because the powder room toilet had had a significant leak.
The respondent’s solicitor responded on the same day with contact details of a plumber.
On the 22 August 2017, applicant emailed the respondent’s solicitors noting that the electrician had attended, and nine further electrical and plumbing issues had been identified which required attention.
There is an email exchange between the applicant and respondent on 13 November 2017 and 24 November 2017 where the applicant says she attached a list of defects noting that these defects are raised in addition to the defects noted in the Building Inspector’s Report provided to the respondent’s solicitor.
The respondent in his reply on 24 November 2017 states that “a lot of the items on this list has already been done. But we can do a double check anyways”.
There is no other evidence of attempts by the respondent to address the defects raised in the Building Inspector’s Report nor the additional defects the applicant identifies in her email. There is no evidence on file to indicate that the “double check” noted in the respondent’s email occurred. The respondent did not submit any information at hearing or in writing about any further attempts made to rectify the said defects.
On 27 May 2018, the applicant sent an email to the respondent “following up on the defects and maintenance list [she] sent through on 13 November 2017” where she lists 36 defects, and seeks the following payments within 30 days:
(a)Liquidated damages – $40,236.00
(b)Interest calculated on liquidated damages – $632,912.28
(c)Cost of building report – $880.00
(d)Refund for cornices – compensation for being charged more than she should have been and for being misled
(e)Other reimbursements, such as:
i.$130.00 – locksmith;
ii.$165.00 – plumber; and
iii.$1,485.00 – cleaning.
The applicant did not pursue this claim further and there does not appear to be a response to this claim from the respondent.
On 14 December 2018, the applicant sent a text message to the respondent as follows “Hi Mauricio, it’s Mandi Cousins[3] from [address redacted] I have just found the carpet near the internal lounge room walk to be soaking wet. It appears there is a roof leak. Can you please contact me as a matter of urgency and have someone attend in the next 2 days to repair, Thank you”. On 17 December 2018, the respondent replied as follows “Hi Mandy, [w]e had [s]evere weather on the last couple of days so that could be the problem. Regards”. There is no further contact from the respondent about this issue.
[3] The applicant’s name at the time of the Contract
In June 2020, the applicant made an insurance claim through her insurer following further water damage to her property and received $1,000 from the insurance company to cover the cost of carpet and curtains. The insurer noted in an email to the applicant on 7 July 2020 that:
Kingston’s report concludes that the water ingress into your home is being caused by a waterproofing failure, allowing water to enter through a wall to the inside of the house. It is recommended that you engage the appropriate specialist to investigate and repair this to prevent future similar occurrences. Also, failure to undertake the appropriate repairs may affect your policy renewal and/or future claims.
On 13 October 2020, the applicant obtained a quote for addressing the waterproofing failure from AWatson Industries for $1,501, which she accepted and proceeded to have the repairs carried out.
At hearing, the respondent appeared to have no recollection of receiving a communication from the applicant in relation to water leaking in her property. His initial position as submitted in his witness statement was that the applicant’s insurance company had paid for the repairs, had not pursued the respondent, ergo the issue was not related to construction of the property. When his attention was drawn to evidence submitted by the applicant and served on the respondent (prior to the respondent’s written response to the application) from the insurer stating that the water ingress resulted from waterproofing failure, his position changed to blaming the landscaping at the property for the issue noting that the respondent company was not engaged to carry out the landscaping.

The Building Inspector’s Report

At hearing, the Tribunal referred to the Building Inspector’s Report and invited the respondent to respond to the defects identified in the report. The Tribunal also referred to the quotation report supplied by Awatson Industries dated 29 October 2018 (the Quotation) which provides quotes for rectifying the defects to the property.
The respondent said that he had not seen either document though the Tribunal notes that these reports accompanied the applicant’s originating documents which were filed with the registry and served on the respondent. Noting that the respondent had been at times legally represented by Trinity Law, the Tribunal allowed for the possibility that the respondent had not received advice on this evidence from their solicitor. The Tribunal adjourned the hearing briefly to make copies of the Building Inspector’s Report and the Quotation and provided these to the respondent for ease of reference, noting that these documents were served on the respondent with the originating application. The Tribunal allowed the respondent a brief adjournment to review the documents.
After the adjournment, the Tribunal invited the respondent to comment on the defects identified in the Building Inspector’s Report. The respondent submitted that the builder who provided the Building Inspector’s Report appeared to be qualified but the respondent was unsure about the qualifications of the builder providing the Quotation. The respondent did not accept that either document could be relied upon to substantiate the alleged defects. His evidence in this regard was limited. He did not provide an explanation about the reason he alleged that the defects did not exist or that they had been remedied. He simply did not accept the evidence.
The Tribunal offered the respondent a one or two week-adjournment following the hearing to enable him to review this evidence more carefully, and to prepare a response to submit to the Tribunal. The respondent declined this offer stating that this exercise would be too time consuming, requiring him to compare the table prepared by the respondent dated 28 March 2017 with the material from the Building Inspector’s Report and the Quotation.
The Building Inspector’s Report identifies 60 defects requiring remediation. The consultant referred to the following reference standards:
(a)BCA 2016 Volume 2;
(b)Guide to Standards and Tolerances 2007;
(c)Australian Standards AS3727 - 1993 Guide to residential pavement;
(d)Australian Standard AS1562.1 - 1992 Design & Installation of metal roof & wall cladding (Part 1); and
(e)Australian Standard AS3958.1 -1991 Guide to installation of ceramic tiles.
The 60 defects identified by the report are both structural and non-structural. The inspector inspected the following areas:
(a)The interior of the residence;
(b)The exterior envelope of the residence, including surrounding paths and paving; and
(c)The roof top, including roof sheeting, capping and flashings.
The Tribunal accepts that the Building Inspector’s Report is credible and reliable on its face taking into consideration the builder’s qualifications and notes that the builder providing the Building Inspector’s Report is different to the builder providing the quotation for repairs, thereby no conflict of interest can be alleged in relation to the Building Inspector’s Report.
The respondent was unable to present any evidence to substantiate his claim that the defects identified in the Building Inspector’s Report are inaccurate or have been rectified since the report was produced.
The Tribunal compared the Building Inspector’s Report dated 11 July 2017 with the Respondent’s Table dated 28 March 2017. The Respondent’s Table identified several defects marked as completed or not requiring attention that were then identified as existing defects requiring remediation by the Building Inspector’s Report. The respondent was invited to provide a considered response to these discrepancies at hearing and was offered the opportunity to do so following the hearing, however as noted above, he believed the exercise to be too time consuming and thereby did not wish to engage.
The Tribunal prefers the Building Inspector’s Report as it post-dates the Respondent’s Table, is consistent with the issues raised by the applicant and consistent with the Quotation provided by AWatson Industries. The Tribunal thereby concludes that the defects identified by the building inspector persisted after the respondent says the issues were remedied.
Some of the structural defects noted are:
(a)The colourbond roof- the respondent in the Respondent’s Table provides that the damage to the roof sheeting does not affect the performance of the roof whereas the Building Inspector’s Report states – Excessive scratching to the roof sheeting and capping noticed in several areas primarily at the rear of the house and some sections towards the front, although various degrees of scratching can be noticed is several areas (Refer to Standards & Tolerances Guide 2007 – Part 6.03 Roof Cladding & Australian Standard AS1562.1- 1992 Design & Installation of metal roof & wall cladding. (part 1) – Since this will lead to corrosion if not addressed, consult with roof sheeting manufacturer to find a treatment that will not void the manufacturers warranty.
(b)The roof capping – the Respondent’s Table states that the uneven capping has been rectified whereas the Building Inspector’s Report states that the capping should be adjusted to eliminate gaps and oil canning.
(c)The driveway – while the Respondent’s Table provides that the driveway is repaired and up to standard, the Building Inspector’s Report states that defective concrete needs to be replaced with concrete that complies with the AS3727 and all the provisions of the Control & Isolation Joints.
(d)Floor tiling – tiling to living areas from entry into family room and kitchen 10.8m x7.4m, and has no visible expansion joints. Expansion joints are required at approx 4.5m or at locations where stress might reasonably be expected in floors that exceed 9m in length and are subject to sunlight. (Australian Standard AS3958.1-1991 Guide to installation of ceramic tiles). – This is considered defective and if tile popping or cracking results, it could be due to lack of control joints or expansion joints, and if such defects occur, this would be a valid claim under the 6-year statutory warranty period.
(e)Front porch – the Building Inspector’s Report states that there was no evidence of isolation joints to perimeter of concrete porch and junctions with surrounding walls and suggests to remove and replace defective concrete with concrete that complies with the AS3727 and the provisions of Control & Isolation joints.
There are many non-structural defects identified by the Building Inspector’s Report which will require remediation but cannot be addressed through this claim as the Statutory Warranty for non-structural defects has expired.
The applicant submitted a Quotation by Awatson Industries dated 29 October 2018. The Quotation provides a quote for $28,376 to remedy the “internal defects” and $22,894 to remedy the “external defects”. The defects identified in the Quotation are consistent with those identified in the Building Inspector’s Report.
To be successful in this application, the applicant must prove the following on the balance of the probabilities:
(a)There are structural defects to the construction of her home and:
(i)the defective work the applicant complains of was not carried out by the builder in accordance with the Act, or
(ii)the work has not been carried out in a proper and skilful way.
(b)The defect occurred within the prescribed period for the statutory warranty that is within six years of Completion Day for structural elements, or within two years of that date for non-structural elements.
I accept the applicant’s evidence that there were significant defects in the construction of her property. I find that the respondent did not carry out the construction in a proper and skilful way and I accept that the respondent showed limited interest in rectifying these defects and did not remedy many of the defects raised by the applicant throughout the course of their engagement. I also note that the respondent showed limited interest in engaging with the applicant’s evidence pertaining to the alleged defects even when encouraged at hearing by the Tribunal to do so.
The applicant filed this application with the Tribunal on 2 August 2023. Completion Day for her property was reached on 3 August 2017. The statutory warranty period for structural defects is six years following completion day. Thereby the structural defects to the property have been raised by the applicant within the statutory warranty period for structural defects. As noted already, she is out of time to obtain redress for the non-structural defects.
Because I am satisfied that the two elements have been proved by the applicant, the application is successful and the applicant is entitled to damages.
The purpose of damages is to place the person who suffered loss because of the breach in the same position, insofar as it is possible, as they would be in, had the breach not occurred.
Where the breach in question arises from defective or incomplete building works, the measure of damages is the cost of rectifying or completing the work.
The total quote in 2018 to repair the significant defects to the construction by the respondent was $51,270.00. Not all the defects identified in the Quotation are “structural defects”, but as noted above, many are. The cost of living generally has significantly increased post COVID19 as has the cost of construction. The availability of tradies to carry out construction work is another factor that will impact the cost of rectifying these defects.[4] I find therefore that it is more likely than not that the cost to the applicant to remedy the structural defects to her property will exceed the Quotation she received in 2018. I find that many of the defects identified as requiring rectification are structural defects and will cost more than $25,000.00 to remedy. Therefore, I find that the applicant should be awarded $25,000.00 to remedy the structural defects to her property and interest on this amount.
[4] Savannah Meacham, ‘Massive tradie shortage puts more pressure on Australian construction industry’, 9News (online, 10 August 2022) < >
Given that the Tribunal accepts that the costs to the applicant in addressing the defects to her property are likely to exceed $25,000.00, it is unnecessary to address her additional claim for liquidated damages.
………………………………..

Member P Hatami

Date of hearing:	22 February 2024
Applicant	In person
Respondent	In person