The Supreme Court of Victoria – Court of Appeal has upheld the Victoria Civil and Administrative Tribunal (VCAT) decision to award damages against the builder, Metricon, on the basis that the home built for the owner requires demolition and rebuilding.
The significant problem confronted by the builder was its failure to control the site drainage during construction which lead to abnormal moisture conditions which caused movement in the slab.
The decision is of significance for builders, engineers and other professionals involved in the Domestic building industry.
Metricon Homes V Softley (2016) VSCA 60 (6 April 2016)
- Metricon had sought leave to appeal against a decision of VCAT.
- The Tribunal had determined that Metricon was liable for faulty construction of the footing system of the house, constructed by Metricon, for Mr & Mrs Softley.
- The contention was that the footing system was defective, which caused damage to the structure and fabric of the house. The house was a brick veneer construction with a timber frame constructed on a waffle slab.
- The Tribunal found that Metricon was in breach of its contractual obligations in that it failed to prevent water gathering under the slab during construction. As a consequence, the accumulating water under the slab meant that the soil upon which the slab was constructed would continue to expand and contract causing the slab to heave resulting in structural damage to the home.
- Metricon argued that the Tribunal had erred in its determination; however the Court of Appeal upheld the VCAT decision and confirmed that the correct measure of damages to the owner was the cost of demolishing the house and reconstructing it.
- In 2008 the Softley’s proposed building on their land in Melton West.
- In February 2009 they entered into a Domestic Building Contract with Metricon for the construction of the home.
- Of significance is that Melton West, geologically, forms part of a large Basaltic Plain to the West and North West and the predominant soil is a reactive clay.
- The design provided by Metricon was for a traditional waffle slab.
- Soil testing indicated that the site was a highly reactive clay sub soil.
- Construction of the home commenced on 10 October 2009, completed in February 2010, with the owners taking possession on 10 March 2010
- Four months later cracks began appearing and continued throughout 2010.
- Expert opinions were obtained in relation to the problems. According to the expert engaged by the builder the slab had heaved causing external walls to lift, distorting the timber frame, and leading to cracking. Their expert found the heave was caused by the entry of water to the footing system causing underlying clay soils to swell.
- They found it probable that during the construction phase (and subsequently) water had flowed down the slope of the land, ponding under the slab, thus causing the problems.
- The footing system was constructed in accordance with Australian Standards AS2870-1996. The effect of the standard was that cracking could occur even where footing systems comply with the standard. However, in this case it was suspected that the site had experienced significant abnormal moisture conditions and remedial measures ought have been directed to minimise or eliminate that problem.
- The Tribunal upheld the owners claim that Metricon had breached its contractual duties and warranties in the construction of the slab, on the basis that there were abnormal water conditions at the time of construction and which where Metricon’s responsibility.
- The Tribunal noted the common practice of waffle slabs which substantially sit on the ground rather than being dug into the ground. The extensive use of voids in the construction means less concrete and minimising costs of excavation and is thus popular as an economic foundation solution, particularly in areas around Melton and other western suburbs, where highly reactive soils exist.
- Importantly the Tribunal found that the slab had not met the performance requirements of AS2870.
- Significantly, the Tribunal noted a number of causative factors that led to the difficulties including, the absence of temporary downpipes when the roof was installed; the builder took no steps to channel rain water away from the edge of the slab following the pouring of the slab; flexible fittings had not been applied to drainage pipes which allowed uncontrolled water penetration in and around the slab during construction. They found that adequate surface and sub-surface drainage should have been provided prior to the commencement of construction.
- All of those matters meant that there had been a departure from proper standards of workmanship in the construction and the breaches by Metricon meant they were responsible for the abnormal conditions which lead to the failure of the slab.
- The Appeal was essentially with respect to the damages awarded by the Tribunal (that the damages should allow for the costs demolition and reconstruction of the home). Metricon did not appeal the Tribunal findings in relation to liability or causation of the problem.
- Importantly, the Court of Appeal upheld the Tribunals determination that the likelihood was that their might be further movement in the slab in the future and thus the appropriate award of damages was to allow for demolition and reconstruction.
Lessons for building professionals
- Whilst the design of the slab may have been appropriate for the soil conditions there was failure by the builder to properly manage the construction site during construction particularly to ensure that water could not drain to the subsoils under the slab.
- Relatively straight forward and inexpensive processes ought have been undertaken to ensure that water could be properly drained away from the underside of the slab and its surrounds.
- If, as has occurred in this case, significant cracking and other structural damage to a home occurs then the risk is that a Tribunal or Court may determine that the appropriate measure of damages is not just the cost of patch up or rectification but potentially the cost of demolition and rebuilding.
- Building professionals must pay particular attention to the design of footings and ensure that the design is appropriate for the location and soil type and then ensure that during construction the management of water is properly addressed.
- Metricon were also involved in another defective slab construction (Hooper V Metricon Homes Pty Ltd (2014 VCAT 277)). In that case the Tribunal found that cracking in the home was excessive and was caused by an inconsistent and insufficiently compacted fill placed by Metricon under the slab. The Tribunal ordered demolition and rebuilding.