Thallon Mole Group Pty Ltd v Morton; Morton v Thallon Mole Group Pty Ltd

The case of Thallon Mole Group Pty Ltd v Morton; Morton v Thallon Mole Group Pty Ltd involves a dispute between a residential construction company, Thallon Mole Group Pty Ltd, and the homeowner, Mrs Morton, over a residential construction contract. The homeowner terminated the contract for various breaches, and the construction company initiated proceedings to recover outstanding progress claims, the return of retention monies, and restitution based on quantum meruit. In turn, the homeowner counter-claimed for liquidated damages for delays and costs incurred in rectifying allegedly defective and omitted works. The primary judge found in favour of the homeowner, awarding $12,502.25. Both parties sought leave to appeal the primary judge's decision, advancing ten grounds of appeal.

The legal issues in this case primarily revolve around the primary judge's assessment of damages for the homeowner's rectification work, residual labour costs, and interest for certain rectification works. Additionally, the court considered the construction company's quantum meruit claim for variations to an agreed scope of works and deductions from the contract price for specified items. The primary judge's findings concerning the necessary and reasonable cost of the homeowner's rectification work, particularly regarding the installation of the upstairs timber flooring, were central to the appeal. The construction company contested the primary judge's conclusion that the method of installation was defective and argued that the homeowner was not entitled to the costs of rectifying the alleged defects.

The court found that the primary judge was correct in her assessment of the homeowner's entitlement to the cost of rectifying the timber flooring. The contract specified that the flooring should be installed in accordance with industry standards or the manufacturer's recommendations. The evidence indicated that the flooring was not installed according to these standards, as the construction company used beaded adhesive with secret nailing instead of a full bed of flooring adhesive. The expert evidence supported the primary judge's finding that the floor was not fixed in accordance with industry standards, and there was a material risk that it would become unsuitable for its intended purpose over time. Consequently, the homeowner was entitled to have the flooring replaced and installed in accordance with the contractual requirements. The court also rejected the construction company's argument that the homeowner's focus on the gapping between floorboards was misplaced, as the consequence of the method of installation was relevant.

In Appeal No 14740 of 2022, the court refused leave to appeal and ordered the parties to file written submissions in respect of costs, limited to three pages, within 14 days. In Appeal No 14793 of 2022, the court also refused leave to appeal and leave to file the notice of contention, and similarly ordered the parties to file written submissions in respect of costs, limited to three pages, within 14 days.