IC and DL McKay v Johnstone[2015] QCAT 501

APPEARANCES:

REASONS FOR DECISION

1. [1]
   The applicant is a builder and he claims payment of an amount of $17,978.36 from the respondent homeowners.  The claim is comprised of a shortfall on the contract price ($3500) and adjustments for variations to the contract^[1] and adjustments for prime cost (PC) items ($14,478.36).
2. [2]
   In response, the owners say they owe nothing to the builder.  In fact, they say they are entitled to a credit. 
3. [3]
   As for the shortfall, the owners did not pay the sum of $3500 intentionally because it equates to their calculation of an amount representing an appropriate liquidated damages figure for late completion (70 days at $50 per day). 
4. [4]
   As to the claimed unpaid adjustments amount, they say the builder failed to document the variations, improperly recalculated the adjustments, included amounts that should have been part of the contract price and failed to give the owners credit for various savings created by them.  By way of counterclaim, they claim an amount from the builder.  They say that the builder should have appropriately documented any agreement with respect to variations and the owners would like a declaration or statement by the tribunal to that effect.
5. [5]
   As to the late completion, the builder says the owners interfered in the build, thereby causing delays and additional costs.  He also says the owners took early possession of the dwelling, contrary to the terms of the contract and contrary to law.
6. [6]
   The outcome of this case depends upon the tribunal’s determination as to the owners’ claim about liquidated damages and the competing claims about adjustments. 

The homeowners’ claim for liquidated damages (late completion)

7. [7]
   The issue here is whether the tribunal should allow a claim by the owners for liquidated damages for late completion.  Including provision for delays, the contract provided for a construction period of 230 days^[2].  
8. [8]
   The construction period does not commence from the date that the parties signed the contract.  It commences from the ‘date of commencement’.  Item 9 of the contract refers the reader to clause 8 to determine this ‘date of commencement’.  Clause 8 provides that the builder must commence works on site within 10 business days of receiving a number of specified items. 
9. [9]
   On the proper consideration of the evidence, the tribunal determines that the appropriate date of commencement in this instance was 7 February 2014.  During the course of exchange of material prior to and at the hearing, the builder effectively conceded the fact, despite acknowledging he did not ‘break the ground’ until 10 March 2014. 
10. [10]
    The next task is to determine the date for practical completion^[3]. 
11. [11]
    The date for practical completion is the date by which the builder ought to have practically completed the construction.
12. [12]
    Then, the tribunal must determine the date of actual practical completion, being the date that the builder did in fact reach the stage of practical completion.
13. [13]
    The person drafting the contract (presumably the builder) has done so poorly in this regard.  The standard contract makes provision for two, potentially competing, methods of determining the date for practical completion stage.  The date for practical completion can be determined by reference to a comparison between the dates and period specified in items 8 and 9 of the contract or by reference to a certain number of days from the date for commencement as specified in item 10 of the contract.  In this contract, the builder completed all items.  However, in this instance the items do not create an internal inconsistency.  On an objective reading of the contract, I find that the practical completion stage is 230 days after the date for commencement.   
14. [14]
    By establishing the date of commencement as 7 February 2014, by simple calculation, on its face, the date for practical completion was 25 September 2014.  That is, 230 days after 7 February 2014. 
15. [15]
    However, both parties suggest that the date for practical completion is subject to adjustment.  I will return to those respective arguments after determining the date of actual practical completion (emphasis added).
16. [16]
    I turn to the determination of the date of actual practical completion as a factual issue.
17. [17]
    In determining the point, the tribunal must consider the definition of ‘Practical Completion Stage’ in the contract^[4].  In short, the date of actual practical completion is when all statutory requirements, apart from minor omissions and defects, have been completed and the works are completed to the point where the dwelling is reasonably suitable for habitation. 
18. [18]
    On 11 November 2014, the Council completed a final inspection, declared the dwelling as habitable and issued a final certificate.  The tribunal finds that by presentation of the council certificate, the work had reached a stage where the builder had completed ‘all relevant statutory requirements’^[5].  However, the construction must also be at a stage where the dwelling is reasonably suitable for habitation. 
19. [19]
    Although there was an element of dispute between the parties, based on the written material provided to the tribunal prior to the hearing and the evidence presented at the hearing^[6], I am satisfied that the dwelling was suitable for habitation on 18 November 2014.  The house was not suitable to habitation on 11 November 2014 because, amongst other things, the builder had not completed the task of painting the interior of the dwelling.
20. [20]
    Therefore, the tribunal determines that the date of actual practical completion of the contract was 18 November 2014.
21. [21]
    By simple calculation, assuming that the date for practical completion was 25 September 2014, then the date of actual practical completion occurred 54 days after the due date. 
22. [22]
    However, as mentioned above, both parties suggest the tribunal should find that there are circumstances in this case that require an adjustment to the date for practical completion.  The effect of the submissions of the respective parties is that the difference between the date for practical completion and the date of actual practical completion is not 54 days. 
23. [23]
    The homeowners say that instead of 54 days, the appropriate figure is 70 days; and the builder says that instead of 54 days, the appropriate figure is 0 days.
24. [24]
    The homeowners say that I could find the construction was late by 70 days, rather than 54 days, because the builder had actually suffered only 2 days, of an allowance of 18 days, for inclement weather.   
25. [25]
    I reject the homeowners’ suggestion on this point.  The contract provides a mechanism for the contractor to seek to extend the construction period^[7].  The contract does not provide any mechanism for the owner to seek to reduce the construction period.
26. [26]
    The homeowners also raised concerns about the builder using certain ‘non-workdays’, as the term was defined in the contract, during the construction period.  Without determining whether the builder did use certain non-workdays for construction purposes, I am not prepared to alter my finding as to the date for practical completion in any event.
27. [27]
    The builder says I should excuse the delay altogether because he appropriately applied for two extensions^[8], with the combined effect of lawfully extending to the date of practical completion to 18 November 2014.  In essence, the builder says that the homeowners caused the delay.
28. [28]
    I reject the builder’s suggestion on this point.  Clause 15 of the contract provides that if the builder does claim an entitlement to an extension of time he must do so ‘within 10 business days from the day the delay ended’.  The tribunal finds that the builder did not comply with the time limitations imposed on him in the contract.  I am of the view that the builder cannot issue the notice retrospectively.
29. [29]
    One of the delays complained of occurred on the day after the date for practical completion.  The builder should have completed the construction by that time in any event. 
30. [30]
    The builder also says the tribunal should excuse his delay because the homeowners interfered with the building process, thereby taking possession.  The builder says that the owners’ direct and unhelpful intervention resulted in a considerable delay.  While he does not suggest this cost him any money (other than lost interest) as such, it is a reason why the handover was not on time.  The builder also says that the homeowners took early possession of the site.  I reject both suggestions.
31. [31]
    The builder complains that the homeowners were wrong in suspending the work at one stage^[9], albeit after the date of practical completion.  On carefully considering the evidence, I find that the homeowners were entitled to ask for the works to be suspended.  The builder had elected to take leave during this critical period.  Contrary to the representation he had made to the homeowners, he allowed a number of subcontractors to be on the site at the time when an installer was installing the floating timber floor.  The builder failed the homeowners in mismanaging the construction of the dwelling during this critical time.  He may have done so in an attempt to make up for lost time, but his failure to complete the construction to practical completion stage was largely because of his own actions throughout the build process.
32. [32]
    The homeowners kept a careful and detailed diary of events relevant to the construction of the dwelling.  The builder did not provide any such evidence nor did he substantially challenge the diary entries in any event.  On carefully considering the construction timeframes, it is clear that the builder had fallen behind.  This started when the builder did virtually nothing during the first month after the date of commencement of the construction.  It is clear he was always behind schedule. 
33. [33]
    Late in the piece, even after the date for practical completion, the builder attempted to make up for lost time.  After periods of apparent inactivity, and after the date for practical completion, the builder arranged for a number of sub-contractors to work at the home at the same time.  One of the contractors was the flooring installer, Mr Stephen Martin.  The homeowners expressed considerable concern about the situation because, in their view, other contractors may damage the floor.  They say, and I accept, that they discussed the timing and installation of the floor with the builder at an early stage and he agreed to arrange for the installation of the floor independently of the work of other contractors. 
34. [34]
    In my view, in these circumstances, the homeowners were within their rights to ask the flooring installer to stop work.  I accept that the homeowners’ motivation in making the request was to ensure other contractors did not damage the floor and I accept their actions in this regard. 
35. [35]
    In any event, I find that the homeowners did request, but did not cause, a cessation of work.  It was the builder.  Mr Martin gave evidence, by letter dated 3 March 2015, to that effect.  He said, ‘I am also lead to believe that the Builder and the Client were involved in some discussions via phone and for the sake of peace the Builder capitulated and reorganised his programming.  As a result I loaded all my equipment back on the truck and left the site’.  I find it was the builder, not the homeowners, who instructed the flooring contractor to leave the site.
36. [36]
    I find that the homeowners did not take ‘possession of the works’ as contemplated in clause 17.9 of the contract, which would otherwise have the effect of deeming the works to have reached the practical completion stage that time.
37. [37]
    In part, the builder suggests that did he not complete the construction in time because of the tardy work of one Daniel Harding, a kitchen contractor.  I did not need to determine the question of whether Mr Harding was or was not tardy because the submission is ill founded.  Even though the homeowners may have proposed Mr Harding as a contractor that does not mean that they bear obligation for his actions, or risk that they become responsible for any alleged delay on his part.  The builder may have sourced Mr Harding by way of referral from the homeowners but the fact remains that he was a subcontractor of the builder and as result it is the builder, and not the homeowners, who is responsible for the subcontractor’s actions.
38. [38]
    For these reasons, I reject the builder’s submission that he had appropriately applied for extensions to the date for practical completion.  I find that the builder did fail to bring the works to the practical completion stage by the due date and he is liable for liquidated damages as a result.
39. [39]
    In addition, at the hearing of this matter, under cross-examination, the builder did concede that he was over time.
40. [40]
    If the builder fails to bring the works to practical completion stage by the date for the practical completion stage, the builder must pay or allow to the owner, liquidated damages at the rate stated in Item 18 to the schedule of the contract^[10]. 
41. [41]
    The quantum of liquidated damages is determined by referring to:

    2. a)
       the period commencing from the date for practical completion stage and ending on the day the works reach practical completion stage, or the date the owner takes possession, whichever is earlier^[11]; and

    2. b)
       the daily rate specified in the contract^[12].
42. [42]
    As stated above, I find that the owners did not take possession prior to the date of practical completion. 
43. [43]
    I find that the date of actual practical completion was 54 days after the date for practical completion.
44. [44]
    In default of any amount to the contrary, the standard contract provides for liquidated damages at the rate of $50.00 per day. 
45. [45]
    I find that the homeowners are entitled to the sum of $2,700.00 for liquidated damages. 
46. [46]
    I find that the builder is entitled to the sum of $3,500.00 for a shortfall in the contract price. 
47. [47]
    Accordingly, subject to the issue of the competing claims about adjustments dealt with below, the homeowners must pay the builder the sum of $800.00.

Competing claims about variations and adjustments

48. [48]
    The builder claims an amount of $14,478.36 for unpaid adjustments for variations to the contract and adjustments for prime cost (PC) items.  This represents the total costs including in invoice #448, dated 18 November 2014.
49. [49]
    The builder bears the onus and burden of proof in this matter, to the civil standard.  The builder’s material is confusing and contradictory.  It is not particularly well set out.  The builder has included various items in invoice #448 that were also included in other invoices, namely invoice # 442 issued on 22 September 2015 and invoice # 445 issued on 12 November 2015.  In his written material, the builder explains why the same items were dealt with in successive invoices in this matter:

The first invoice $8337.26 was requested by owners & they were fully aware that this was just an update on how things were progressing with the extras they still had to pay for and wasn’t an invoice for payment (which they did not pay).  The second invoice for $12,358 was not correct and Malcolm Hull from Master Builders helped us (sic) the correct this & the result being the last invoice for $14,478.30, but of course, none of these accounts have been paid.  I am aware that I have not given any variation forms, as I always have a very honest and trusting relationship with house owners^[13].

50. [50]
    Under cross-examination at the hearing of this matter, the builder did concede that he did not provide any variation contracts.  He dismissed the need to do so on the basis that he had sent e-mails and ‘they were not big jobs’.  When put to him by one of the homeowners that they did not know the price (for example) of the tiles and asked why he did not tell them the cost, the builder said, ‘In hindsight, I should have done so’. 
51. [51]
    The builder's wife gave evidence.  She is responsible for the accounts of the business.  She generates the invoices.  She did not then, but does now; prepare documents regarding variations to the contract.
52. [52]
    During the hearing, and in much of the written material, the parties appear to consider that the tribunal should deal with the builder's claim for payment for various variations and the builder's claim for contract adjustments in the same manner. 
53. [53]
    At law, a claim for payment of a variation is a very different thing to a claim for payment of an adjustment.

Variations and adjustments

54. [54]
    The law deals differently with a claim by a builder for an amount for an unpaid variation to the contract (variations) than it does to a claim by a builder for an unpaid adjustment to a PC item (adjustments).
55. [55]
    In invoice #448, the builder claims, or allows a credit for, an amount for various items:

    2. a)
       Item 1 – Back landing

    2. b)
       Item 2 – Plumbing

    2. c)
       Item 3 – Tapware

    2. d)
       Item 4 – Water tank

    2. e)
       Item 5 – Piping

    2. f)
       Item 6 – Change of material under the house

    2. g)
       Item 7 – Wood heater

    2. h)
       Item 8 – Floating floor

    2. i)
       Item 9 – Lights

    2. j)
       Item 10 – Stove and oven

    2. k)
       Item 11 – Dishwasher

    2. l)
       Item 12 – Tiles
56. [56]
    The tribunal must identify which of the items are variations and which of the items are adjustments.

Variations

57. [57]
    Given that the parties signed the contract before 1 July 2015, The Domestic Building Contracts Act 2000 (Qld) (‘the Act’) regulates this agreement between the builder and the homeowners.
58. [58]
    The Act defines a variation of a domestic building contract as an addition of domestic building work to the subject work or an omission from the subject work^[14]. 
59. [59]
    To determine whether a particular item is a ‘variation’, the tribunal must first consider whether the work done is domestic building work and then to determine whether such work done, or to be done, is in addition to the ‘subject work’. 
60. [60]
    In the factual context of this case, the Act is instructive in that:

    2. a)
       ‘domestic building work’ includes ‘work associated with the renovation, alteration, extension, improvement or repair of a home’^[15], and

    2. b)
       ‘subject work’ means, ‘the domestic building work carried out, being carried out or to be carried out under the contract’^[16].
61. [61]
    The ‘subject work’ in this contract is determined primarily by reference to a single page document that forms part of the contract and is headed ‘Home Inclusions'.   In essence, it is a short form specification.  This document includes various items intended by the parties to form part of the scope of works of the contract.  It also includes a list of six items that are the Prime Cost (PC) items for the contract.  On its face, I find that building work not referred to in the contract is ‘an addition of domestic building work to the subject work’ – and is therefore a variation, as defined.
62. [62]
    I find the following items referred to in invoice #448 to be variations:

    2. a)
       Item 1 – Back landing

    2. b)
       Item 2 – Plumbing

    2. c)
       Item 4 – Water tank

    2. d)
       Item 5 – Piping

    2. e)
       Item 6 – Change of material under the house

    2. f)
       Item 11 – Dishwasher
63. [63]
    A building contractor must abide by the terms of the Act with respect to the way in which (in this case) he documents variations to the contract.
64. [64]
    At no time did the builder document any of the variations in a variation contract.
65. [65]
    The legislative requirements imposed upon a builder with respect to documenting variations to a domestic building contract are clear.  It is also clear that Parliament intended for building contractors to take their obligations seriously in this regard. 
66. [66]
    The builder must comply with the legislation.  The responsibility to adhere to the compliance issue is not incumbent upon the homeowners in any way. 
67. [67]
    A building contractor under a regulated contract must ensure any variation of the contract agreed to between the building contractor and building owner is put into written form:

2. (a)
   within the shortest practicable time; and

2. (b)
   for a variation consisting of an addition to the subject work—before any domestic building work the subject of the variation is carried out^[17].

68. [68]
    If the proposed variation consists of an addition to the subject work, the building contractor must also ensure that (in this case) he does not carry out any proposed variation until the parties have signed a variation document^[18].
69. [69]
    The ability of a builder attempting to recover an amount for a variation is severely limited by the terms of the Act.  The building contractor’s right to recover the amount of a variation sought by the building owner is restricted to situations where the contractor has complied with ss 79, 80, 82 and 83 or where the tribunal approves it on an application by the builder^[19].
70. [70]
    Section 84 (4) of the Act provides that the tribunal may approve the recovery of an amount by a building contractor for a variation only if the tribunal is satisfied that:

2. (a)
   either of the following applies-

2. (i)
   there are exceptional circumstances to warrant the conferring of an entitlement on the building contractor for recovery of an amount for the variation;

2. (ii)
   the building contractor would suffer unreasonable hardship by the operation of subsection (2)(a)^[20] or (3)(a)^[21]; and

2. (b)
   it would not be unfair to the building owner for the building contractor to recover an amount.

71. [71]
    The reason for imposing such strict obligations upon a builder to prepare a variation documents under a regulated contract, such as this, is to ensure that there is no dispute or confusion arising from variations to the contract. 
72. [72]
    The Act requires the variation document to be readily legible, describe the variation, state the reasons for the variation and state how the change in price is to be calculated^[22].
73. [73]
    The tribunal finds that the builder is non-compliant with the provisions of section 79 of the Act and (save for one claim) that the exceptions contained within that section do not apply.  The tribunal also finds that the builder is entitled to recover amounts, the subject of variations, only where there are exceptional circumstances or where the builder would suffer unreasonable hardship; and then only if it would not be unfair to the homeowners to pay certain amounts.
74. [74]
    The builder has failed to address this issue in that he has not made an application to the tribunal for recovery of the variation amounts based on exceptional circumstances or unreasonable hardship.  I am prepared to consider the question regardless.
75. [75]
    I respectfully adopt the comments of Member Allen in Withers v Urban Homes Pty Ltd^[23] :

The Tribunal notes that Urban Homes has not made an application for recovery of the variation amount on the basis of exceptional circumstances or unreasonable hardship. Having regard to the decision in Allaroo Homes which shows a strict approach in these matters it does not appear on its face that such a claim would have been successful.

76. [76]
    In Allaro Homes Cairns Pty v O'Reilly & Anor,^[24] Justice North concluded that the owners are not liable to pay the builder for the cost of variations even though the builder had incurred the costs, as there were no exceptional circumstances or unreasonable hardship.  Member Allen adopted a similar approach in Withers v Urban Homes Pty Ltd.
77. [77]
    In summary, with respect to a claim under the Act^[25] to claim an additional payment due to a variation successfully, the building contractor must issue a valid variation document, ensure the owner signs that variation document and provide the signed variation document to the owner. 
78. [78]
    In this case, the homeowners raised the issue with the Queensland Building and Construction Commission.  QBCC found the builder to have acted contrary to the terms of the legislation in that he failed to put variations in writing.  While QBCC elected to take no action to the offences ‘at this time’, it made clear if further offences are committed QBCC may take action for these offences^[26].
79. [79]
    The builder comes to the tribunal claiming an amount of money in circumstances where he bears the onus and burden of proof, he has provided a number of competing invoices and he has not complied with his statutory obligations with respect to documentation.
80. [80]
    It is irrelevant whether the homeowner's requested the work to be done, whether it was done or whether it was done to their satisfaction.  The builder simply did not comply with his clear statutory obligations and this precludes recovery in all but exceptional circumstances or unreasonable hardship.
81. [81]
    After a careful consideration of the evidence, I conclude that the only item that I should consider as in the category of ‘exceptional circumstance or unreasonable hardship’ relates to the dishwasher.  The homeowners could have acquired this item independently, but without prior approval chose to add it to the builder’s account.  It would not be unfair to the homeowners for the builder to recover this amount.  The builder is therefore entitled to the costs and margin associated with this item.  Accordingly, with respect to the issue of variations I allow the builder an amount of $765.28.  This amount includes goods and services tax and the builder’s margin of 20%.
82. [82]
    I have also considered whether there is any other basis upon which the tribunal could consider the builder’s claim for payment of money in relation to the other variations.  The only other basis upon which the builder could make a claim is quantum meruit.  However, a quantum meruit claim is not available in this case because the work constitutes a variation to a regulated contract^[27].

Adjustments

83. [83]
    I find the following items referred to in invoice #448 to be adjustments for a difference in price relating to Prime Cost (PC) items:

    2. a)
       Item 3 – Tapware

    2. b)
       Item 7 – Wood heater

    2. c)
       Item 8 – Floating floor

    2. d)
       Item 9 – Lights

    2. e)
       Item 10 – Stove and oven

    2. f)
       Item 12 – Tiles
84. [84]
    The method of determining an appropriate claim for an adjustment for an unpaid amount that relates to a PC item requires consideration of the contract itself. 
85. [85]
    In this instance, the contract provides that if the actual cost of a prime cost item is less than the amount allowed for that item, the builder is to deduct the difference from the contract price^[28].  Conversely, where the actual cost of the prime cost item exceeds the amount allowed for that item, the builder is to add the excess amount, plus the contractor’s margin, to the contract price^[29].

Item 3 – Tapware

86. [86]
    While they said the prices were not available to them in the show room, the homeowners chose the fittings that are included in the dwelling.  In those circumstances, they must pay any additional amount over and above the prime cost allowance.  However, the builder is inconsistent in the invoices he has presented to the owners.  Invoice #442 includes a claim for tapware at $1211.82.  I award that amount to the builder, together with GST ($121.18) and a builder's margin at the rate of 20% ($242.36).  From the total sum of $1575.36, I deduct the provisional cost allowance of $800 and award the builder the net sum of $775.36.

Item 7 – Wood heater

87. [87]
    A wood heater is included in the list of allowances for prime cost items on page 5 of the contract.  The prime cost allowed (GST inclusive) was $3500.00. 
88. [88]
    The cost of a wood heater was in fact $2,876.00 (inclusive of GST).   The cost of the installation of the wood heater was $880.00 (GST).  Therefore, the cost of acquiring and installing the wood heater was $3,956.00.  The cost of installing a heath, directly associated with a wood heater, was an additional amount of $259.00 (inclusive of GST).  The actual cost of acquiring and installing the heater with heath exceeded the prime cost allowance.  The excess is included in the claimed variation amount.
89. [89]
    A dispute arose as to whether the prime cost allowance caters only for the cost of the acquisition of the item or whether the parties intended the allowance to cater for both the cost of the acquisition of the item and the cost of installation of the item. 
90. [90]
    The evidence of the builder is that the parties intended the PC allowance for the wood heater to cover both the cost of the acquisition of the item and the cost of installing the item.  However, the builder conceded that is inconsistent with the way he dealt with other PC items in the contract.  For example, his intention with respect to the PC allowance for tiles, as reflected in the contract, was to provide for the actual cost of the tiles alone.  That is, the principal contract price includes the cost associated with laying the tiles. 
91. [91]
    At the hearing, the builder said that is not the case in relation to the wood heater PC item.  Therefore, he maintains that the position in relation to the wood heater is different to the position in relation to the tiles.  The reason for this is, says the builder, that he did not know what type of wood heater would be called for and therefore was not able to provide an indication of the cost associated with installing the item.
92. [92]
    The documentation does not support the builder's proposition.  On an objective examination of the documentation, I find that there is no good reason to categorise the wood heater PC item in any different manner to the categorisation of the other PC items.
93. [93]
    I allow the cost of the wood heater in the sum of $2,876.00, together with GST ($287.60) and builder’s margin at 20% ($575.20).  I do not allow the costs associated with the installation of the wood heater.  I do not allow the costs associated with the installation of the heath.
94. [94]
    From the total sum of $3,738.80, I deduct the provisional cost allowance of $3,500 and award the builder the net sum of $238.80.

Item 8 – Floating timber floor

95. [95]
    The contract provided for a prime cost for the floating timber floor at $27,000.00.  As the builder has not supported his claim for actual costs with appropriate evidence, I allow the actual cost, as conceded by the homeowners, in a total sum of $22,059.00.  Accordingly, I award the homeowners the net sum of $4,941.00.

Item 9 – Lighting

96. [96]
    Taking into account the builder’s margin and GST, the builder correctly asserts that the cost of lights exceeded the PC allowance in an amount of $452.73.  I award the builder of the net sum of $452.73.

 Item 10 – Stove and oven

97. [97]
    I am prepared to accept the builder’s allowance in favour of the homeowners.  Accordingly, I award the homeowners the net sum of $239.67.

Item 12 – Tiles

98. [98]
    The contract made allowance for the cost of tiles in the contract at $30 per square metre.  The actual cost of the wall tiles was in excess of this amount.  The wall tiles cost $35 per square metre.  Some tiles were at $37 per square metre.   The mosaic tiles cost $1561.01.  The floor tiles came in at $29 per square metre and that helped to bring the average cost of tiles back closer to the allowance but there was still an overrun on total cost. 
99. [99]
    In calculating the overall amount, the builder included an amount for GST and a builder’s margin of 20%. The excess is included in the claimed variation amount. 
100. [100]
     For the same reasons that I allowed the builder his claim with respect to tapware, I allow his claim with respect to the tiles.  I allow the builder the net sum of $2,088.12. 

The respondents’ counterclaims

101. [101]
     The homeowners claim a credit with respect to certain savings to the builder in relation to a number of other items. 
102. [102]
     These include savings to do with painting, kitchen cabinet work, roof supply/installation and fluorescent lights.
103. [103]
     The claimed savings relate to work the builder contracted to undertake, other than work the subject of provisional cost items.
104. [104]
     Respectfully, the claims are ill founded. 
105. [105]
     Other than items dealt with by provisional costs or provisional sums, the contract does not anticipate any form of adjustments.
106. [106]
     As I have already stated in this decision, the various subcontractors engaged in working on the site did so as subcontractors of the builder.  Accordingly, if there is any benefit derived through savings as a result, then those benefits remain with the builder.

Orders

107. [107]
     I order that the applicant builder pay to the respondent homeowners the sum of $60.38, calculated as follows: