Cadence (90) Investments Pty Ltd v Aspire Constructions Pty Ltd; Aspire Constructions Pty Ltd v Cadence (90) Investments Pty Ltd

1. [1]

   These proceedings principally relate to claims for damages against a builder (Aspire Constructions Pty Ltd) and a sub-contractor (Univenta Pty Ltd). The plaintiff (Cadence (90) Investments Pty Ltd) claims that certain building works were defective in the construction of three buildings on land at 200 Bunkers Hill Road and 368D Bunkers Hill Road in Barrengarry NSW. The three buildings comprise the Main House (which was intended for use as a family residence), the 368D House (which was intended to be sold) and a Tourist Cabin (located at 200 Bunkers Hill Road, along with the Main House, and which was intended to be used for short-term rental accommodation) (collectively, the Buildings).

2. [2]

   Mr Garren Cronin is the sole director of Cadence. His profession is corporate advisory, in which he has over 25 years’ experience. For the last ten years or so, he has been the Managing Director of Cadence Advisory. Mr Cronin has a background in banking.

3. [3]

   As will emerge, Mr Cronin played a prominent role in developing and overseeing the building project. He was also extensively involved in finalising two expert witness reports on the geothermal systems by Cadence’s expert.

4. [4]

   Cadence is the corporate trustee of the Cronin family trust (the GDC Discretionary Trust).

5. [5]

   The third defendant is Mr Jake Kearns, who is the sole director and a shareholder of Aspire (the first defendant). The fourth defendant is Mr Dusan Trembuch, who is the sole director, general manager and shareholder of Univenta (the second defendant).

6. [6]

   Cadence’s claims for damages relate to what it says were defective works in relation to three broad aspects of the project, namely, in relation to the installation of geothermal heating and cooling systems in each of the Buildings, the design and construction of internal access roads, and various general building works.

7. [7]

   Cadence claims damages against Aspire for breach of the three Building Contracts, each dated 5 May 2020. Cadence’s claims may be summarised as follows:

8. [8]

   By reason of s 37 of the Design and Building Practitioners Act 2020 (NSW) (DBP Act), Cadence says that each of the defendants also owed it duties of care in relation to the work. Cadence says that those duties were breached and seeks:

9. [9]

   Cadence also claims that it is entitled to damages against Aspire for breaches of the statutory warranties in s 18B(1)(a), (b) and (e) of the Home Building Act 1989 (NSW) (HB Act).

10. [10]

    There are two further claims, namely:

11. [11]

    These reasons are structured in several Parts as follows:

12. [12]

    I have relied heavily on Cadence’s written opening and closing submissions for the purposes of Parts D to H below.

13. [13]

    As previously noted, each of the Building Contracts between Cadence and Aspire was entered into on 5 May 2020. Each was said to be a “Cost Plus (Residential) Contract” and was in the standard form provided by the Master Builders Association.

14. [14]

    Under cl 1(a), it was agreed that Aspire “will, subject to these Conditions and the contract work details in Schedule 3, execute and complete the works required by the contract”.

15. [15]

    Under cl 1(b), Aspire warranted that, in relation to any building works as defined in the HB Act, any residential building work as defined in that Act “will be done with due care and skill and in accordance with the plans and specifications set out in the contract” and all materials supplied by Aspire “will be good and suitable for the purpose for which they are used, and unless otherwise stated in the contract, those materials will be new”.

16. [16]

    Under cl 1(c)(ii), the parties agreed that any agreement to vary the Contract, or to vary the plans and specifications for work to be done under the Contract, must be in writing, signed by on or behalf of each party to the Contract.

17. [17]

    Clause 1(d) addressed the quality of construction (emphasis in original in all clauses):

18. [18]

    Clause 20 dealt with practical completion and stated as follows (emphasis in original in all clauses):

19. [19]

    Matters relating to the Defects Liability Period were dealt with in cl 22, which provided for Aspire to make good defects or faults which were attributable to its work or failure to do something at its own cost and within a reasonable time of receiving written notification by Cadence of any defects or faults arising out of workmanship or material provided by Aspire which are not in accordance with the Contract.

20. [20]

    The terms of cl 22 are set out at [489] in Part I below.

21. [21]

    Cadence was obliged by cl 22(d) to provide Aspire with access to carry out its obligations under cl 22 during normal working hours. Under cl 22(h), Cadence and Aspire agreed to work cooperatively and to utilise the Defects Liability Period as specified to identify and resolve issues covered by the clause.

22. [22]

    Each of the Building Contracts contained 20 Special Conditions. Special Condition 9 stated that Aspire would work diligently to complete the project involving the three buildings by 20 July 2021, i.e. within 16 months after commencement. As will emerge, this was not achieved.

23. [23]

    Special Condition 13 stated (without alteration):

24. [24]

    Apart from the reference to “pool”, each of the Building Contracts contained a provision in similar terms to that in paragraph (a) of Sch 3 of the Main House Building Contract, which described the works to be completed by Aspire as follows:

25. [25]

    The reference in paragraph (a) to the Drawings, Schedules and Specifications in paragraphs (b) and (c) of Sch 3 is important, as will be explained below.

26. [26]

    The Univenta sub-contract between Aspire and Univenta was executed on 29 April 2020. It is unnecessary to summarise all its clauses, which are in the form of a Master Builders Association Standard Trade Contract.

27. [27]

    The description of works in Sch 1 referred to Aspire’s “Scope of Works” dated 28 April 2020 and three quotes made by Univenta dated 24 April 2020. Notably, no express reference was made to the GXA Reports (see further below at [38]) or any design obligations. Nor was there any reference to any design obligations in the Scope of Works. The “Project Specific Works” included reference to Univenta supplying all plant, equipment, materials and supervision required to carry out inter alia the supply of all material and labour to install a geothermal heating system including in-slab hydronic heating, active heating/cooling via fan coil units, portable hot water and pool heating (at the Main House only) as referred to in the three specified Univenta quotes.

28. [28]

    Univenta emphasised that the task of design was not included in this description of the Project Specific Works.

29. [29]

    A geothermal system uses the geothermal heat capacity of the Earth to provide both heating and cooling. There are two key components to such a system. First, the use of a ground heat exchanger (GHX), which comprises a series of loops installed either underground or in water. Water is then introduced into the loops and exchanges heat with the ground or outside water. If the internal water is cooler than the surrounding earth or water, it will be heated. The obverse occurs when the internal water is hotter than the surrounding earth or external water. Secondly, the loops are connected to a heat pump and fan coil units (FCUs). In cooler seasons, the heat pump compresses the liquid from the GHX to increase its temperature and then transfers that heat to an airstream, which is distributed by the FCUs into parts of the building. In warmer seasons, the system runs in reverse with the heat pump drawing heat out of the air and transferring it to the ground loops where it is stored.

30. [30]

    Cadence seeks damages in respect of the geothermal systems installed in each of the Buildings. It claims that the systems are defective and that it had to spend substantial money rectifying the systems and achieving what it said was a sub-standard permanent solution. As will emerge, the rectification work included decoupling the cooling capacity of the geothermal systems and replacing them with conventional air-conditioning. There are key issues whether this was necessary and whether what Cadence did amounted to betterment rather than rectification.

31. [31]

    In support of its claims for damages, Cadence relied on the lay evidence of Mr Cronin and Mr Michael de Maio, who is the director of engineering for CWL Group (CWL). This was the firm retained by Cadence to carry out the rectification works of the geothermal systems.

32. [32]

    On geothermal issues, Cadence also placed heavy reliance upon the expert evidence of Dr Mirek Piechowski. Dr Piechowski provided four expert reports dated 19 August 2022, 5 March 2024, 24 March 2025 and 27 October 2025 respectively. Dr Piechowski also co-authored a Joint Report dated 30 October 2025, together with Dr Amir Kivi, the expert retained by the defendants. Dr Kivi provided expert reports dated 1 November 2024, 13 November 2024 and 7 October 2025.

33. [33]

    Dr Piechowski participated in a joint conclave with Dr Kivi. As will be further developed below, the defendants all contended that little, if any, weight should be given to Dr Piechowski’s evidence because they claimed that his evidence was not truly independent.

34. [34]

    In brief, Dr Piechowski gave evidence which supported Cadence’s claims concerning the geothermal systems, with particular reference to the following matters:

35. [35]

    In support of its claims regarding the geothermal systems, Cadence also relied on an expert report dated 12 March 2024 by Mr Christopher Daubney, a quantity surveyor. Mr Daubney participated in a joint report with Mr David Madden (an expert for the defendants). The Joint Report is dated 10 October 2025. Mr Daubney says that the reasonable costs of the geothermal rectification works was $1,107,166. It may be noted that Mr Madden was not asked to assess the rectification works which were actually carried out and instead priced an alternative scope of works in respect of the Main House only, as proposed by Dr Kivi. The pricing of those works was $95,675.69.

36. [36]

    Cadence also relied upon a report dated 19 July 2024 and an updated report dated 28 October 2025 by Mr Joshua Devitt, a property valuer. Mr Devitt opined that the market value of the 368D House as at February 2022 was $7.75 million and this figure dropped to $6.25 million as at 19 July 2024. In Mr Devitt’s updated report, provided shortly before the hearing commenced, the value dropped even further to $5.85 million.

37. [37]

    Descending now into more detail regarding the contractual arrangements relating to the geothermal works, it is appropriate to first address the Univenta sub-contract which pre-dated the Building Contracts (the contracts are also dealt with in Parts B and C above).

38. [38]

    The Univenta sub-contract, which was executed on 29 April 2020, post-dated two reports dated 24 March 2020 and 25 March 2020 by a company called GeoExchange Australia Pty Ltd (GXA). GXA was engaged by Aspire to design the geothermal system for each of the Buildings. The first GXA report dealt with the geothermal system for the Main House. The second GXA report dealt with the 368D House and a third report dealt with the Tourist Cabin (collectively, the GXA Reports).

39. [39]

    The GXA Reports provided for two scenarios for both the Main House and the 368D House. Scenario 1 involved a system that heated or cooled each house as a whole. In contrast, Scenario 2 was for a system that heated or cooled zones within each house separately. For the Tourist Cabin, the system designed by GXA was for the heating or cooling of the whole house. Univenta agreed that Scenario 1 was the scenario adopted for both the Main House and the 368D House. Ultimately, however, the parties appeared to agree that the distinction between the two scenarios was not decisive. As noted above, the geothermal systems were intended to supply heating, cooling, domestic hot water and, in addition, swimming pool heating for the Main House.

40. [40]

    The GXA Reports identified “design targets” for the geothermal systems, being to cool the Buildings to 24°C when the ambient temperature was 35°C, and to heat the Buildings to 21°C when the ambient temperature was −2°C. The targets were to be achieved within 4 hours of initiation of the system and are referred to in the evidence as “Effective Cooling” and “Effective Heating” respectively.

41. [41]

    The GXA Reports then contained:

42. [42]

    Each GXA Report contained the following disclaimers (emphasis added):

(a) The Geothermal Works

1. [43]

   Aspire provided the GXA Reports to Univenta for it to tender for the geothermal works. As noted above, Univenta issued three quotes on 24 April 2020 (with references “Q400 WPF26 F”, “Q401 WPF26 F” and “Q405”), which form part of the Univenta sub-contract. The quotes contain the following relevant statements:

2. [44]

   As noted above, on 29 April 2020, Aspire and Univenta entered into the Univenta sub-contract for a lump sum of $444,525.40.

3. [45]

   By reason of these matters relating to the geothermal works, Cadence contended that the geothermal works under the Univenta sub-contract relevantly included:

4. [46]

   Cadence acknowledged that the contractual obligations were between Aspire and Univenta, but also it relied on the duty of care imposed by s 37 of the DBP Act on Univenta and/or Mr Trembuch.

5. [47]

   Section 37 provides:

6. [48]

   “Construction work” is defined in s 3 of the DBP Act to mean:

7. [49]

   There is no dispute that:

8. [50]

   Cadence acknowledged that the duty of care owed to it by Univenta was affected by the terms of the Univenta sub-contract and it emphasised the following clauses:

9. [51]

   Cadence did not have a direct contractual relationship with Univenta. However, as set out above, it is common ground that Univenta nevertheless owed Cadence a duty to exercise reasonable care to avoid economic loss caused by defects in or related to the Buildings and arising from the Geothermal Works.

10. [52]

    Dr Piechowski opined that a specialist sub-contractor in the position of Univenta should have:

11. [53]

    Cadence alleged that Univenta did not take those steps and that the failure to do so was causative of the failure of the geothermal systems and the further issues referred to above. In Cadence’s submission, it followed that Univenta is liable to compensate it for the damages described above.

12. [54]

    In response, Univenta contended that it is not liable to pay damages to Cadence because:

13. [55]

    As to the first point, there is a contest on the evidence as to the extent to which those changes were causative of the under-performance of the geothermal systems. Cadence relied on Dr Piechowski's evidence that Univenta should have undertaken a review of the NatHERs Certificates, particularly in circumstances where its design departed from that in the GXA Reports.

14. [56]

    As to the second point, Cadence claimed that this is not an answer to the issue of whether there was a breach of duty or not; instead, it relates to whether Cadence has mitigated its loss. Cadence contended that Univenta had to demonstrate that Cadence did not act reasonably in this respect, bearing in mind that Univenta was not licensed to carry out the relevant building work until May 2023.

15. [57]

    Cadence also contended that it was not open to Univenta to seek to apportion any part of its liability to either Aspire or Mr Cronin, citing Pafburn Pty Ltd v Owners – Strata Plan No 84674 (2024) 421 ALJR 133; [2024] HCA 49. I understood this proposition not to be contested by either Univenta or Mr Trembuch.

16. [58]

    As noted above, it is common ground that:

17. [59]

    In those circumstances, Cadence contended that due skill and care required Mr Trembuch to take reasonable steps to cause Univenta to take the steps identified by Dr Piechowski, as outlined above.

(b) The Building Contracts between Cadence and Aspire

1. [60]

   As noted above, the three Building Contracts were all entered into on 5 May 2020.

2. [61]

   Under each of the Building Contracts, Aspire was required to build a new house “as per the Drawings, Schedules and Specifications”.

3. [62]

   The Drawings and Schedules did not identify the works to be carried out in respect of the geothermal systems. The Specifications provided that the Geothermal Works in relation to the geothermal systems were as follows:

4. [63]

   Although the Building Contracts do not expressly refer to either the GXA Reports or the Univenta sub-contract, Cadence contended that the works under the Building Contracts can only sensibly be understood as including the Geothermal Works as described above. This is because:

5. [64]

   Section 18B of the HB Act relevantly provides:

6. [65]

   It is common ground that the Building Contracts in respect of the Main House and 368D House were contracts to do “residential building work” within the meaning of the HB Act. That is not the case with the Tourist Cabin because it does not constitute a “dwelling”.

7. [66]

   Cadence contended that Aspire warranted to it that the works in respect of the Main House and 368D House (including the Geothermal Works) would be done with due skill and care by reason of s 18B(1)(a).

8. [67]

   In relation to the fitness for purpose warranty in s 18B(1)(b), Cadence contended that:

9. [68]

   The position in respect of the Tourist Cabin is different because, as noted above, it does not constitute a “dwelling” within the meaning of the HB Act. Cadence submitted, however, that terms to the same effect are, in any event, implied at common law in circumstances where the contracts are to perform work and provide materials.

10. [69]

    It is common ground that:

11. [70]

    There were two subsequent variations to the scope of works under the Univenta sub-contract and the Building Contracts:

12. [71]

    Construction commenced around June 2020 with the installation of sub-floor heating and cooling pipes in the slab of the Main House. Work commenced on installing the ground loop systems for the 368D House and Tourist Cabin in September 2020 and for the Main House in November 2020.

13. [72]

    In August 2021, work in the plant room of the 368D House commenced and the external and internal systems were connected. On 23 September 2021, Aspire gave notice that, in its opinion, Practical Completion of the works in respect of the 368D House had been achieved. Cadence disputed this because, inter alia, the geothermal system had not yet been commissioned.

14. [73]

    Mr Cronin described his on-site experience of the operation of the geothermal system at the 368D House in the period from November 2021 to January 2022. He said that the system:

15. [74]

    On 24 January 2022, Aspire gave a further notice that it considered the Main House had reached Practical Completion. Cadence disputed this in writing on the same day on the basis that, inter alia, there was “zero evidence” that the geothermal system was working to specification.

16. [75]

    Mr Cronin gave evidence as to his experience of how the geothermal systems performed at the Main House and Tourist Cabin based on his on-site experience in December 2021. Those observations are also recorded in contemporaneous communications. As with the 368D House, Mr Cronin said that the system did not cool the Buildings effectively, was energy inefficient, regularly tripped and was not able to be operated effectively.

17. [76]

    Univenta issued a commissioning report in respect of the Main House on 10 February 2022 (Commissioning Report). It relevantly stated that:

18. [77]

    In relation to the window glazing issue, Univenta made the following points:

19. [78]

    By February 2022, Cadence and Aspire had fallen into dispute in relation to, inter alia, the alleged defects relating to the geothermal systems and Cadence had failed to reimburse Aspire for the payment of several invoices from sub-contractors. This resulted in Aspire suspending the works under the Building Contracts and Cadence issuing a notice of dispute. The differences were unable to be resolved and, on 29 April 2022, Cadence issued a notice of termination. On 19 May 2022, Aspire advised Cadence that the notice of termination was a wrongful repudiation of the Building Contracts and that it accepted that repudiation and terminated the contracts.

20. [79]

    There is no issue that the Building Contracts were in fact terminated. It is also common ground that both parties have their accrued rights in respect of the other including, relevantly, Cadence’s causes of action for defects in the works under the Building Contracts which arise at the time of the breach (being when the defective work was performed). These are addressed in the next section.

(c) Claim against Aspire: breach of the fitness for purpose warranty

1. [80]

   Dr Piechowski opined in his August 2022 Report that the geothermal systems as installed were incapable of achieving Effective Cooling and Effective Heating. In summary, Dr Piechowski said that the principal factors which contributed to the geothermal systems not delivering the required performance were:

2. [81]

   Cadence claimed that initially, Dr Kivi accepted that the geothermal systems did not have the required capacity to achieve Effective Heating and Effective Cooling at each of the Buildings, but attributed this to changes in the properties of the windows and walls from those assumed in the GXA Report. He opined that, had those design inputs remained unchanged, the systems installed by Univenta would have been sufficient to meet the GXA performance requirements. Dr Kivi also opined that the geothermal systems had the required capacity to achieve Effective Heating and Effective Cooling at each of the as-built Buildings.

3. [82]

   In Cadence’s submission, while that issue may be relevant to the position as against Univenta, it does not provide an answer to the breach of warranty claim as against Aspire. In short:

4. [83]

   Cadence contended that there were further aspects of the Geothermal Works which were not fit for purpose. These are set out in detail in Annexure C to Dr Piechowski’s March 2025 Report. In summary:

5. [84]

   Cadence claims that Dr Kivi agreed that it was necessary to rectify the ductwork but otherwise did not engage with the above defects in any substantive way.

6. [85]

   Cadence contended that:

7. [86]

   Cadence contended the general rule is that the measure of damages recoverable by a building owner for breach is:

8. [87]

   On 3 August 2022, Cadence engaged a new builder, Horizon, to, inter alia, engage all necessary consultants and contractors to complete the building works or rectify the alleged defects at each of the three Buildings and, in particular, to oversee the management and completion of rectifying the geothermal systems.

9. [88]

   On 24 October 2022, Cadence entered into a contract with Horizon. The work under that contract was described as “Geothermal system rectification works at Main House, Tourist Cabin and the 368D House, having regard and in response to Dr Piechowski’s Report dated 19 August 2022, including make good works, plus additional downpipe to roof 368D House and defect works not completed by Aspire Constructions”. On 28 October 2022, Horizon engaged CWL to rectify the geothermal systems in accordance with CWL’s recommendations.

10. [89]

    Cadence contended that it was not feasible to rectify the Geothermal Works by, in effect, ripping up that which had already been installed as this would have involved demolishing the Buildings and disturbing some of the surrounding landscaping. Mr de Maio from CWL gave evidence that:

11. [90]

    Windows were tinted and eaves vents and roof vents installed to reduce the thermal load on the system as part of the rectification works.

12. [91]

    This “hybrid” solution required more power with the consequence that the solar panel system and battery storage at the off-grid properties of the Main House and Tourist Cabin were upgraded.

13. [92]

    Further problems emerged during the course of rectification works in relation to the HUFH system. In particular, it was found that insulation on the edges of the slabs had not been installed by Aspire and there were issues with the way in which the HUFH loops had been installed, causing material performance issues with the heating. Ultimately, new larger powered circulation pumps were installed at each of the Buildings to improve the dispersion of the heat through the HUFH system.

14. [93]

    As set out above, Mr Daubney assessed the reasonable cost of these rectification works in the total sum of $1,107,166, comprised of:

15. [94]

    In addition, Cadence paid:

16. [95]

    Cadence contended that the “hybrid system” it installed as part of the rectification has left it with an inferior alternative to that which Cadence reasonably expected Aspire to deliver; namely, a premium, high‑performance, and energy‑efficient pure geothermal system designed to complement the remote and off‑grid power arrangements of the Main House and Tourist Cabin and hybrid power set up at 368D House.

17. [96]

    The issue of what were appropriate rectification works in respect of the geothermal systems is hotly contested. The experts disagree. On the one hand, Dr Piechowski opined that the rectification works which were in fact carried out were reasonable. On the other hand, Dr Kivi considered that much of the work relating to the Main House was not necessary to achieve performance and indeed constituted a “major mistake”. In Dr Kivi’s opinion, to rectify any defects (assuming they existed), he would have replaced the ductwork, installed retractable shades on the outside of each of the Buildings, and installed a 15kW air-to-water heat pump. Mr Madden on behalf of the defendants has quantified the cost of carrying out those narrower rectification works to the Main House in the sum of $95,675.69.

18. [97]

    I do not read Dr Kivi’s evidence on this matter as an acknowledgment by him that the Geothermal Works were in fact defective. Rather, his evidence regarding rectification work has to be read in the light of the following extracts from his first expert report:

19. [98]

    Cadence placed the 368D House on the market in November 2021. Despite interest in the property, including a signed contract at $9 million which did not formally exchange, Cadence ultimately withdrew the property from the market in February 2022. It said that this was because of the severity of the defects which had emerged at that time in relation to the geothermal system.

20. [99]

    Practical completion of the rectification works at the 368D House was achieved on 13 October 2023.

21. [100]

    Mr Cronin deposed that Cadence incurred holding costs in the extended period relating to the 368D House totalling $763,544.

22. [101]

    The 368D House remained unsold at the time of the hearing and continued to be listed for sale.

23. [102]

    Mr Devitt opined that, in February 2022, there had been multiple interest rate cuts at this time and market conditions for rural lifestyle properties were strong. He said that the market began to turn towards the end of 2022 as interest rates and inflation increased, and this continued into 2023 and 2024.

24. [103]

    As noted above, Mr Devitt valued the 368D House as at February 2022 in the amount of $7.75 million and in the lesser amount of $5.85 million as at the date of the trial. These valuations were not challenged.

25. [104]

    Cadence contended that the defects in the geothermal system caused it to lose the opportunity to sell the 368D House in beneficial market conditions in February 2022 and, having regard to the interest shown in that property and the market conditions at the time, that opportunity was one of substance.

26. [105]

    As to damages, Cadence contended that the proper measure of damages is:

(d) Claim against Aspire: breach of the due care and skill warranty or breach of duty of care

1. [106]

   As noted above, Cadence put its case against Aspire in the alternative on the basis of a failure to exercise due care and skill which constituted a breach of either the implied warranty to that effect, or the duty imposed by s 37 of the DBP Act.

2. [107]

   Cadence relied on Dr Piechowski’s evidence which, in summary, is that a reasonable builder in Aspire’s position should have:

3. [108]

   Cadence further contended that:

(e) Cadence’s claim against Mr Kearns for breach of the duty of care

1. [109]

   Mr Kearns was the sole director and shareholder of Aspire. As noted above, it is common ground that:

2. [110]

   In those circumstances, Cadence contended that exercising due skill and care required Mr Kearns to take reasonable steps to cause Aspire to take the steps outlined above.

3. [111]

   Cadence contended that it is entitled to recover the same damages against Mr Kearns personally because he breached his duty of care.

4. [112]

   Prior to the building works, 200 Bunkers Hill Road was accessed only by internal gravel and dirt roads. The areas where the Main House and Tourist Cabin were to be built were undeveloped paddocks and new internal roads needed to be built to traverse them.

5. [113]

   Cadence claimed that Aspire was obliged under the Building Contracts to design and construct the permanent internal access roads, including the associated stormwater drainage systems extending from Bunkers Hill Road to both the Main House and Tourist Cabin. It emphasises that, in any event, Aspire did in fact undertake these works and is consequently liable for their deficiencies.

6. [114]

   Significantly, no civil geotechnical/engineering plans were obtained by anyone prior to constructing the internal access roads. However, there were Landscape Plans.

7. [115]

   It is common ground that there were substantial problems with the internal access roads, including some parts of the lower side road collapsing, extensive tension cracking, detachment of the spray seal from the road base and inadequately designed and constructed stormwater drainage systems.

8. [116]

   Cadence also claimed that the works did not comply with relevant conditions under the Development Approval and related documentation, including conditions relating to access by the NSW Rural Fire Service.

9. [117]

   The Development Approval contained conditions that had to be complied with before a construction certificate could be issued, including Conditions 24 and 28 which related to access road design and stormwater drainage design respectively:

10. [118]

    These two conditions were affected by other conditions, including Condition 26 which required the driveway to be designed with a four metre wide gravel pavement inclusive of one metre shoulders and associated drainage and required that the design be in accordance with Council’s Engineering Design Specifications section D2.04. Condition 29 dealt with geotechnical engineering design and certification and required that “[d]esign plans and certification prepared by a qualified Geotechnical Engineering [sic] must be provided prior to the issue of the Construction Certificate” and must address, inter alia, surface and sub-surface water management. It also required that all retaining walls be designed to meet long-term serviceability requirements and be provided with an effective drainage system.

11. [119]

    Furthermore, in March 2022, when the parties were in dispute and prior to the Building Contracts being terminated, substantial damage was done to the internal access road by an extraordinary rainfall event. There was also significant rain in the region earlier that year.

12. [120]

    Cadence’s evidence on this subject was given by Mr Cronin and Mr Jones, a Senior Civil/Structural Engineer at MI Engineers, who prepared a report relating to the rectification works. The parties, Cadence and Aspire, also relied upon expert evidence by their respective expert witnesses, Mr Rian Vleggaar, whose report is dated 5 March 2024, and Mr Simon Fagg, who prepared a report dated 18 October 2024. The two experts produced a Joint Report dated 22 September 2025 (Vleggaar/Fagg Joint Report) and gave evidence in the conclave.

13. [121]

    The relevant condition describing the work to be completed by Aspire in paragraph (a) of Sch 3 of each of the Building Contracts required Aspire to complete “internal road asphalt” as per the Drawings, Schedules and Specifications as set out in paragraphs (b)-(c) of Sch 3 of the Building Contracts.

14. [122]

    One of the Drawings specified in paragraph (c) of Sch 3 was a “Site plan” dated 20 April 2020 prepared by Cadence’s architect, Design Group Studio. The Site plan was identified as having the number A1.01. It is unclear whether a copy of this Site plan was included in the evidence. The Court was not taken to a copy of that document by any party.

15. [123]

    It should be noted, however, that that Site plan may be different from the plan which formed part of the Development Approval dated 1 April 2020 in relation to the Main House. The “Overall Site Plan (Main Residence)” referred to in Part A of the Development Approval (which identifies the conditions of the approval) is a plan dated 16 January 2020 by Design Studio Group and is described as Drawing No DA1.00 Revision: C. To add to the confusion, there is a document in evidence, prepared by Design Studio Group, which is described as an “Overall Site Plan (main residence)”. It is dated January 2020, revision A, but also contains a reference to a revision date of 23 April 2020 (which post-dates the date of the Development Approval, being 1 April 2020). This Overall Site Plan depicts the vehicle driveway to and beyond the proposed Main House up to the proposed Tourist Cabin. The document contains the following notes, which plainly refer to the proposed internal access roads:

16. [124]

    The Court was not assisted by the parties in trying to identify in the evidence, which exceeded more than 17,000 pages, which particular version of Design Group Studio’s site plan was the relevant version for the purposes of Cadence’s claim in respect of the internal access roads. Naturally, Cadence bore the onus of proof in making good its claims on this topic.

17. [125]

    The confusion described above was compounded by the fact that in the Joint Report of Mr Vleggaar and Mr Fagg dated 22 September 2025, the experts were asked to respond to a question about whether Aspire was responsible for completing any remaining design elements for the road and stormwater damage following from what is described as the “Overall Site Plan DA1.00 dated 234 April [sic] 2020 prepared by the Design Studio Group”. This plainly contained a typographical error. Later in that Joint Report, the experts answered that question with reference to what they identified as “Overall Site Plan DA1.00 dated 24 April 2020”. There does not appear to be a copy of that particular Overall Site Plan in the voluminous evidence. The Court has assumed that the correct version is that which bears a revised date of 23 April 2020 in circumstances where that pre-dates the dates of the Building Contracts. The state of the evidence is such that the Court cannot determine whether there are any material differences between that document and the “Overall Site Plan (Main Residence)” referred to in the Development Approval.

18. [126]

    Cadence claimed damages for the cost of rectifying numerous general building defects. The claims against Aspire are made under the Building Contracts and/or the statutory duties under the DBP Act, or against both Aspire and Mr Kearns for breach of warranties in the HB Act. Cadence annexed to its post-hearing closing written submissions an updated Scott Schedule. With reference to each item, the Schedule identified the particular defect, the risk of harm, the response by Aspire and Mr Kearns, references to the parties’ respective expert evidence on general building defects and references to the quantum expert evidence.

19. [127]

    Earlier, in his closing oral address, Mr Kearns had handed up a revised aide memoire which was designed to address each item of the general building defects as identified in the Joint Expert Report prepared by Mr Matthew Crosby and Mr George Nikolas (Crosby/Nikolas Joint Report). The aide memoire identified the items which were accepted by Aspire and Mr Kearns as defective, items which were disputed, items which Aspire claimed were incomplete works rather than defective, and items which were no longer pressed by Cadence. The revised aide memoire reflected the fact that, during the course of the hearing, Cadence had abandoned several items. As will shortly emerge, however, Cadence sought leave to resurrect some of those items when it provided its closing written submissions after the hearing had completed and after the defendants had provided their oral closing submissions. I will address this below.

20. [128]

    It is convenient to address the relevant items concerning general building defects by reference to the broad categories used in Cadence’s written closing submissions.

(a) Internal doors ($179,321)

1. [129]

   Cadence’s claims concerning internal doors are identified in items 65, 73, 165, 312 and 353 in both the revised Scott Schedule and the Crosby/Nikolas Joint Report.

2. [130]

   The principal difference between the experts relates to the proper meaning of the door schedule drawings prepared by Cadence’s architect, Design Studio Group. Those drawings show internal doors with the figure of 900mm underneath (see the drawing at [466] of Part I below). The issue on which the experts disagreed is whether the figure of 900mm represents the opening before a door jamb is fitted or represents the width of the opening including the jamb. Mr Crosby opined that the drawings depicted the width of the door itself, not the opening, and that it would be a matter for the framing company to allow for the jamb. In contrast, Mr Nikolas opined that the 900mm figure included both the door and the jamb, such that a door which was 820mm wide was compliant because the remaining 80mm allowed for the door jamb. He said that all the doors met that standard, apart from three in the Tourist Cabin.

3. [131]

   When asked whether there was a building practice in respect of this issue, Mr Nikolas said that, typically, door schedules show the size of the opening into which both the door and door jamb fit. In contrast, Mr Crosby gave the following evidence on business practice:

4. [132]

   It seems remarkable that there is no generally agreed building practice in relation to this matter, which must frequently arise.

(b) Tennis court drainage ($73,171)

1. [133]

   Relying on the expert evidence of Mr Crosby, Cadence contended that the tennis court, being next to an elevated catchment area, was required to be protected from ponding pursuant to the National Construction Code and Australian Standard 2870, but the installed drainage system did not do so adequately.

2. [134]

   In the absence of any contradicting evidence, Cadence claimed that Aspire’s work was not only in breach of the Building Contracts, but was also not in accordance with the warranties in ss 18B(1)(a) and (e) of the HB Act. This is because the work was not carried out with due care and skill and/or was not reasonably fit for purpose.

3. [135]

   In its updated Scott Schedule, Cadence contended that the drainage in and around the perimeter of the tennis court and retaining wall was defective because it failed to divert water away from the tennis court. In its opening written submissions, Cadence referred to Mr Cronin’s evidence of water pooling around the tennis court. It also relied upon Mr Crosby’s supplementary report dated 10 April 2025 and the claim in item 220 of the updated Scott Schedule. Mr Crosby reproduced photographs of the tennis court area which appeared in Mr Cronin’s first affidavit and showed extensive pooling around the western and northern parts of the tennis court. Many of the photographs were taken in the first quarter of 2022, when there was usually significant rainfall in the area.

4. [136]

   The cost of rectification works in relation to the tennis court drainage was $73,371, with Cadence relying on the evidence of both Mr Cronin and Mr Daubney.

5. [137]

   Cadence’s claim relating to tennis court drainage was not addressed by Mr Nikolas in his expert report dated 20 September 2024. It appears that this may be because Aspire and Mr Kearns did not appreciate at the time that the claim was still pressed. The issue was, however, dealt with at some length by Mr Crosby in his supplementary expert report dated 10 April 2025. The updated Scott Schedule, which includes reference to item 220, simply records the response by Aspire and Mr Kearns and, understandably, there is no reference to any expert evidence by Mr Nikolas. Nor is item 220 specifically addressed in the revised aide memoire handed up by Mr Kearns.

6. [138]

   In its closing written submissions (which were provided after the defendants had completed their closing oral submissions), Cadence simply stated that it relied upon its opening submissions in relation to the tennis court drainage defect.

7. [139]

   Aspire and Mr Kearns denied that there was any defect. They contended that run-off was managed by a swale which directed all water along the surface and did so effectively. This claim was not supported by the photographs referred to above, noting however that some were taken around the time of the exceptional rain event in March 2022.

8. [140]

   In their written response to Cadence’s closing written submissions, Aspire and Mr Kearns stated at [51] that they had reasonably assumed that Cadence did not press this item because of the evidence given on day two of the trial about the lack of stormwater engineering drawings. It was then noted that the tennis court is situated in a way which means that it received significant additional water runoff from the incomplete road and that there was no formal stormwater design at the time of the alleged defect and water pooling. Aspire and Mr Kearns added that Cadence should not succeed on this claim given the lack of stormwater engineering plans and the fact that Mr Cronin was content to rely on Mrs Catherine Lewis’s Landscape Plans rather than obtain proper stormwater plans and designs. They contended that this is reflected in Mr Cronin’s email dated 8 April 2020 to Shoalhaven City Council in which he sought to have particular conditions, inter alia, relating to stormwater, removed from the Development Approval. This email was sent one week after Cadence was informed of the Development Approval. The conditions relating to stormwater drainage are described at [117] of Part E above.

(c) Cobblestone driveways/crazy paving ($57,218)

1. [141]

   It was not easy to follow Cadence’s case in relation to these matters. The case was not presented consistently as I will now demonstrate.

2. [142]

   In Cadence’s opening written submissions, the items which it said were the subject of its complaint about defective cobblestone driveways were identified in items 3, 35, 85, 142, 217, 230, 242 and 261 in the Crosby/Nikolas Joint Report. It submitted that the experts were agreed that items 3, 85 and 242 were defective and that they also agreed that items 35, 142, 217, 230 and 261 were incomplete but they disagreed as to whether that incompleteness means that the works are defective.

3. [143]

   In oral address, Mr Lyons confirmed that the only items pressed by Cadence in respect of general building defects were those identified in its opening written submissions.

4. [144]

   As noted above, in addition to preparing the Crosby/Nikolas Joint Report, in the course of the hearing the experts gave further oral evidence in the conclave and were cross-examined.

5. [145]

   Cadence’s case relating to these matters then changed in its written closing submissions (which were provided after the trial and oral closing addresses by the defendants). It referred to the items identified in its written opening submissions (save that it said it made a claim in relation to item 262 when in fact it was 261). Cadence then added that it did not press its claims for items 3, 35, 85, 142, 217, 242 and 262 (sic). It then said that the claimed amount of $57,218 related in fact to items 75, 230 and 240 (which relate to the cobblestone driveways and crazy paving issues in the Main House and the Tourist Cabin). It stated that notwithstanding that it had previously indicated that it was not pressing item 240 (which related to crazy paving), this was incorrect. It then sought leave to press both items 75 and 240. It contended that these changes should cause no prejudice because the items were addressed in the Crosby/Nikolas Joint Report and are similar in kind to other items identified in Cadence’s opening written submissions.

6. [146]

   Cadence submitted that the experts agreed that item 75 (which related to concrete slurry on cobblestones at the Tourist Cabin) was a defect. It submitted that items 230 and 240 (which related to slurry splatter on cobblestones at the Main House and crazy paving at the Main House respectively) were incomplete, but they disagreed as to whether the incomplete nature of those works constituted a defect.

7. [147]

   Cadence contended that in circumstances where Aspire asserted that the Main House building works had been completed and had not made any claim in its amended cross-claim concerning outstanding costs relating to its initial crazy paving sub-contractor (Rich Earth) or original cobblestone sub-contractor (MLT), the Court should infer that the original works relating to the crazy paving and cobblestone driveways had been completed and that such works were subsequently claimed by Aspire and paid for by Cadence.

8. [148]

   In response to Aspire’s position that it was prepared to rectify items 75, 230 and 240 but discovered on inspection that the work had been completed by others, Cadence acknowledged that some of the defective work had already been rectified when Aspire offered to undertake some minor works. But because Aspire’s offer was made seven months after it left the site on 14 February 2022, Cadence said that it was not unreasonable for it to have had the defects rectified.

(d) Roof ventilation & leaks ($51,537)

1. [149]

   Cadence’s claim concerning the roof flashing and ventilation are addressed in items AD-4 and AD-5 of the updated Scott Schedule. The defect the subject of AD-4 is that the Main House roof had a leak causing damage to the roof rafters and ceiling and that the leak was caused by an 8mm gap between the aluminium roof flashing on the facia on the eastern side of the house near the roof valley. AD-5 relates to the absence of a passive ventilation system resulting in condensation in the roof cavity of the Main House.

2. [150]

   Cadence contended that neither Aspire nor Mr Kearns contradicted Mr Crosby’s evidence that, contrary to the National Construction Code:

3. [151]

   Cadence relied on Mr Cronin’s evidence of roof leaking and mould at the Main House. It also relied on Mr Crosby’s estimates of the costs of rectification, being the sum of $21,060.40 in respect of flashing and $30,476.71 in respect of passive ventilation. Presumably, these figures are derived from the Trade Summary in Mr Crosby’s Supplementary Report with Costs dated 10 April 2025. The raw figures stated there (without contingency, preliminaries, builders’ overhead and profit and GST) concerning costs of rectification in respect of “Roof repair” and “Roof Ventilation” are $12,932 and $18,714.02 respectively. When those additional matters are also taken into account, however, the total estimate in respect of the roof rectification is $21,060.40, which is the amount claimed by Cadence.

4. [152]

   Cadence also relied upon Mr Crosby’s Supplementary Report with Costs dated 10 April 2025 in respect of its claim concerning AD-4. Mr Crosby said that during his inspection at the site, he had noted a gap in the roof flashings in the Main House at each of the internal mitred roof bar flashings and he included some photographs he took during his inspection. Mr Crosby noted that section P2.2.2 of the National Construction Code required a roof system to be weatherproof and to prevent water entry into the dwelling. He identified the following rectification works to address the defects:

5. [153]

   Mr Crosby added that these rectification works should be applied to all internal mitre joints of the roof systems in all three Buildings.

6. [154]

   In their written response to Cadence’s closing written submissions, Aspire and Mr Kearns accepted liability in respect of roof leaks but only in the amount of $356. They submitted that the passive ventilation claim in the amount of $33,476.71 should be struck out on the basis that it related to additional works requested by Mr Cronin and was not shown anywhere in the Building Contracts or relevant plans. They contended that these extra works were requested to increase geothermal system performance and that Dr Kivi opined that the work was not necessary.

7. [155]

   Mr Lyons confirmed in his opening oral address that as part of the rectification works, roof eaves and vents had been installed so that hot air could escape.

8. [156]

   Reference was also made to Mr Thompson’s cross-examination of Mr David Moses from Horizon (who were engaged by Cadence to undertake the rectification works, which involved engaging a sub-contractor, CWL, to rectify the geothermal systems). Mr Moses confirmed that the roof vents were installed as part of the rectification work so as to reduce the amount of heating in the ceiling. Although Mr Moses said that after the rectification works were performed, testing was done to determine whether heat in the building was reduced, he could not recall who did that testing.

9. [157]

   Mr Kearns said that he had been unable to find any evidence of such testing in the Court Book. Mr Kearns further submitted that the issues relating to roof leaks had not been raised in the conclave “because the claim could not withstand basic scrutiny”. Mr Kearns then referred to the following evidence as demonstrating that the alleged roof leaks were a minor matter:

(e) Microcement ($48,239)

1. [158]

   In its opening written submissions, Cadence claimed damages in respect of what it said was defective microcement work as identified in items 11, 103, 111, 114, 116, 267, 269, 273, 274, 276 and 278 of the Joint Report.

2. [159]

   In his opening oral address, Mr Lyon confirmed that Cadence was only pressing those items concerning general building defects which were identified in the opening written submissions. Cadence informed the Court and Mr Kearns that it was not pressing items 22, 23, 24, 33, 97, 246, 264 and 265. Unsurprisingly, therefore, the revised aide-memoire which Mr Kearns handed up in Court towards the end of the trial referred to these items as “Not pressed”.

3. [160]

   Cadence’s position then took an unexpected and belated turn. In its written closing submissions, which were provided after the hearing had ended and after the defendants’ closing oral addresses, it stated that the items which it told the Court and Mr Kearns it was no longer pressing were in fact now pressed. It sought leave to press those items. Although Cadence accepted that this development was “unfortunate”, it said that it did not apprehend any prejudice to the affected defendants because the relevant items were addressed in the Crosby/Nikolas Joint Report and relate to similar defects and issues to items identified in the opening written submissions. It added that Mr Kearns had cross-examined Mr Crosby on the underlying issues.

4. [161]

   Cadence submitted that in the Crosby/Nikolas Joint Report:

5. [162]

   In relation to (a) immediately above, the experts agreed in the Crosby/Nikolas Joint Report that these works were incomplete. Mr Crosby's evidence was that water entry, cracking and blistering to the surface of the microcement had been identified in the photos provided and that "[w]ater can enter through the cracking and cause the product to flake, powder and blister, resulting in degrading and failure of the system". Cadence submitted that the microcement works were defective because it was cracking, flaking, drummy, and/or discoloured.

6. [163]

   Furthermore, Cadence emphasised that Aspire had already claimed and been paid 100% of the original costs relating to its microcement sub-contractor, Architectural Venetian Plaster & Microcement (AVP), for the works at the Main House and 368D House and therefore it could not be said that the microcement works were incomplete at the Main House and the 368D House. As for the Tourist Cabin, all but $1,701 had been claimed by Aspire for the microcement works. If the Court was to find that the microcement work at the Tourist Cabin was incomplete rather than defective, Cadence acknowledged that an amount of $1,701 should be deducted from its claim.

7. [164]

   In relation to (b) immediately above, Cadence contended that Aspire failed to complete these works and that Horizon’s sub-contractor, Xray Render, inspected the microcement works on 27 December 2022 and identified that the works were defective because the wrong materials had been used and there was poor preparation of concrete below the microcement.

8. [165]

   Aspire and Mr Kearns opposed Cadence obtaining leave to resurrect items 22, 23, 24, 33, 97, 246 and 265. They also objected to Cadence’s contention that Mr Kearns had cross-examined Mr Crosby on the underlying microcement issues. They explained that this was because Mr Crosby had confirmed that he had not inspected the microcement defects which meant that there could be no meaningful cross-examination of him by Mr Kearns except on the distinction between incomplete and defective works. Finally, Aspire and Mr Kearns submitted that the Court should not rely on Mr Crosby’s assessment of the relevant microcement items because they represented not his opinion but that of Mr Cronin.

9. [166]

   In his closing oral address, Mr Kearns emphasised that of the original 86 items in the Scott Schedule, 41 were not pressed. Mr Kearns also said that Aspire had in fact directed its then sub-contractor (AVP) to finish the microcement work “but he hadn’t quite got there”. Mr Kearns acknowledged that in respect of Aspire’s payment to AVP for microcementing, Aspire had “jumped the gun” and overpaid him because he never actually did the work. He added, however, Cadence did not give Aspire the chance for AVP to complete the microcementing work.

(f) General power outlets ($16,127.58)

1. [167]

   In its opening written submissions, Cadence contended that Aspire installed surface-mounted general power outlets (GPOs) in locations where the Building Contract plans specified recessed floor GPOs. It also contended that the GPOs as installed were not compliant with the National Construction Code.

2. [168]

   Mr Crosby and Mr Nikolas agreed that the GPOs had not been installed in accordance with the plans and specifications, but Mr Nikolas stated that the as-built location of the GPOs was the result of a variation, a proposition which Cadence contested.

3. [169]

   In its closing written submissions, Cadence noted that its claim concerning GPOs also related to item 309, which has been addressed by the experts. Item 309 related to what was described in the updated Scott Schedule as “[s]elected electric floor box to living room NE corner not installed. A black substitute floor mounted firring had been installed instead”. In the Crosby/Nikolas Joint Report, in addressing item 309, the experts referred to item 307, which related to what was described as “[i]ncorrect electrical floor box has been installed to Living room”. Cadence did not develop its case in relation to either items 307 or 309.

4. [170]

   In their written response to Cadence’s closing written submissions, Aspire and Mr Kearns acknowledged that item 309 was “synonymous” with items 72 and 307. They added, however, that the GPOs were not referred to in any of the plans mentioned in Mr Crosby’s report and that they were installed as variations. They contended that there was no defect at all; it was merely that the location and types of GPOs had been changed in accordance with Mr Cronin’s direction. They also pointed to the fact that under cross-examination, Mr Crosby said that he had been told there was a variation relating to the location of the GPOs but that he had not been provided with any such variation.

(g) Cracked highlight glass windows ($15,591.73)

1. [171]

   Cadence contended that highlight glass panels at the Main House and 368D House cracked due to Aspire’s failure to allow for adequate thermal expansion gaps during installation, resulting in pressure cracking. These matters are items AD-1 to AD-3 of the Crosby/Nikolas Joint Report.

2. [172]

   The experts agreed that the cracked highlight glass panels are a defect, but Mr Nikolas stated that Aspire offered to rectify the defect. This is borne out by a letter dated 16 April 2024 where Aspire offered to return to rectify specific cracked glass defects as identified in Mr Crosby’s report dated 12 March 2024. That offer was declined by Cadence. Mr Cronin said that although Aspire was notified of the cracked highlight glass at both buildings on 4 October 2023, Aspire did not agree to fix the defects until approximately 6 months later, in April 2024. By that time, Horizon and their sub-contractor, Vision Glass, had incurred costs and ordered the replacement glass.

3. [173]

   In their written closing submissions in response, Aspire and Mr Kearns accepted that the cracked highlight glass windows were a defect, but they challenged the amount claimed. They said that it included an excessive amount for labour and that a significant portion of those labour costs were wasted because Cadence used a contractor who was unfamiliar with the installation method and the specific angles originally installed by Aspire. They indicated that they would accept liability in the amount of $7,500.

(h) Exposed pipes & cables ($7,267)

1. [174]

   Cadence did not press this claim.

(i) Gutter ($6,926.81)

1. [175]

   Cadence did not press this claim.

(j) Roof dektites and vents ($6,102)

1. [176]

   Cadence contended that the roof dektites (which are used to seal vent pipe penetrations) and associated roof vents were defective because they failed to comply with the bushfire rating requirements imposed by the NSW Rural Fire Service under the conditions of the Development Approval. The matters are dealt with as items 41 and 122 of the Crosby/Nikolas Joint Report, where the experts agreed that the works were defective and within the scope of the rectification work.

2. [177]

   Aspire and Mr Kearns agreed that this constituted a defect for which they are liable in the amount of $6,102.

(k) DBP Act claim

1. [178]

   In addition to its contractual claims, Cadence submitted that Aspire and Mr Kearns are also each liable to compensate it for damages for breaches of their respective duties of care under s 37 of the DBP Act in relation to the general building defects.

2. [179]

   In their written response, Aspire and Mr Kearns contended that Cadence had failed to provide any expert evidence in support of this claim. They said that the Court had to be satisfied that they had acted in a way “which failed to take a reasonable precaution which ultimately cause Cadence to suffer loss”. They added that Cadence had not adduced any evidence of what Aspire and Mr Kearns did not do in respect of each alleged building defect. They contended that even where they accepted liability for breach of the Building Contracts in relation to general building defects, this did not mean that they should also be found to have breached s 37 of the DBP Act because their admissions are confined to admitting the existence of the relevant defects and not any admission of a failure to take reasonable care.

3. [180]

   These claims are the subject of items 22 and 23 of the original agreed statement of issues. Cadence paid the sum of $193,765.50 to Aspire on an interim basis pursuant to the statutory adjudication process under the Building & Construction Industry Security of Payment Act 1999 (NSW) (the SOP Act).

4. [181]

   The Court is empowered to make such orders as it considers appropriate for restitution of any amount so paid: SOP Act, s 32.

5. [182]

   Cadence alleged that $82,855 of the money paid in accordance with the adjudication determination was not properly payable because:

6. [183]

   In his affidavit dated 16 October 2024, Mr Kearns explained why he believed that Aspire was entitled to claim the increased insurance premiums when the Building Contracts were terminated. He explained that Aspire was required to notify its insurer (HBCF) that the project had completed, which he did by way of a telephone call around 3 May 2022 when he told Aspire’s insurance broker (Master Builders Queensland) (MBQ) that the Building Contracts had been terminated. He explained how he provided MBQ with a statutory declaration concerning the total amount paid for the building works. He later provided additional information to MBQ clarifying the amounts claimed by Aspire and excluding amounts paid by Cadence directly to sub-contractors and suppliers. He also provided MBQ a revised statutory declaration dated 17 June 2022.

7. [184]

   There is a contest between the evidence of Mr Cronin and that of Mr Kearns in respect of the $49,335.25 claimed concerning Special Condition 13. In its closing submissions, Cadence confirmed that it did not ask the Court to make findings in relation to each of the disputed items concerning Special Condition 13 but said that the issue should be resolved on the basis of whether the Court preferred the evidence of Mr Cronin or Mr Kearns in this respect.

8. [185]

   I do not accept Cadence’s submission that Aspire had no accrued right to recover the insurance premiums incurred after the Building Contracts were terminated. When the Building Contracts were terminated, Aspire had accrued rights and obligations to advise the insurer of the total amounts claimed by and paid to Aspire under the Building Contracts. These amounts were then used by the insurer to calculate the final insurance premiums. This calculation resulted in an increase in those premiums, which Aspire now seeks to recover from Cadence. Although the calculation was done post-termination of the Building Contracts, it plainly related to Aspire’s accrued rights and obligations under the insurance contract as at the date that the Building Contracts were terminated. Accordingly, I find that there was no overpayment in respect of this item.

9. [186]

   As to the claim of overpayment in respect of items affected by Special Condition 13, Cadence relied on Mr Cronin’s evidence in his third affidavit, particularly at [186]. Many of the disputed items addressed by Mr Cronin were for notably modest amounts, such as the item regarding cleaning slurry from cobblestones ($145.45); cleaning pavers ($78.55); and an amount of $440 regarding a claim for eight hours’ work by an Aspire apprentice. Mr Cronin’s evidence on these items was in response to Annexure A of Mr Kearns’ affidavit dated 16 October 2024. In that annexure, Mr Kearns’ commented on each of the items which Cadence claimed it had overpaid under the adjudication determination.

10. [187]

    In their written response, Aspire and Mr Kearns emphasised that the only evidence supporting Cadence’s overpayment case is that given by Mr Cronin and, in particular, his assertions that he thought work which Aspire charged for was rectification work. Aspire and Mr Kearns emphasised that this evidence was unsupported by any document or other independent evidence and they emphasised that none of Cadence’s experts had addressed the issue. Accordingly, they submitted that Cadence had failed to discharge its onus of proof.

11. [188]

    I accept those submissions. As noted above, Cadence did not request the Court to make findings in relation to each item the subject of these claims but invited the Court to do so on the basis of whether the evidence of Mr Cronin or Mr Kearns was preferred. I have explained below why I strongly prefer Mr Kearns’ evidence on any issue where there is a conflict between his evidence and that of Mr Cronin.

12. [189]

    For these reasons, Cadence’s claims of overpayment are rejected.

13. [190]

    Aspire claimed $151,255.16 for money said to be owing under the Building Contracts for works performed by it and a further $44,545.45 for the unpaid portion of an amount which it claimed is due relating to the fixed builder’s margin. These claims are the subject of items 24 and 25 of the original agreed statement of issues.

14. [191]

    Aspire’s claim for damages in the amount of $151,255.16 relates to sub-contractor invoices paid by Aspire. There are 11 invoices, including 4 invoices from Univenta concerning installation of the geothermal system, which total approximately $100,000.

15. [192]

    It will be necessary to descend into some detail in determining Aspire’s cross-claim. As will emerge from the following analysis, both parties pitched their submissions on the cross-claim at a high level of generality. This presented the Court with some difficulty in determining the individual claims. This uncertainty was compounded by the difficulty of ascertaining whether any of the items the subject of the cross-claim were addressed in the Crosby/Nikolas Joint Report.

16. [193]

    I shall first describe the composition of the $151,255.16 figure claimed by Aspire before summarising and addressing the parties’ submissions. I will separately address Aspire’s claim in the amount of $44,545.45 for the unpaid portion of its fixed builder’s margin.

(a) The $151,255.16 figure

1. [194]

   Aspire seeks to recover sub-contractor invoice amounts totalling $151,255.16 from Cadence pursuant to Sch 1, Pt 1, para (d) of the Building Contracts, which provides (emphasis in original):

2. [195]

   In Mr Cronin’s second affidavit dated 29 May 2024, he sets out a breakdown of the constituent amounts which add up to the $151,255 figure claimed by Aspire from Cadence:

3. [196]

   The claimed amounts in the above table are also referred to in Mr Kearn’s first affidavit dated 5 March 2024. Those amounts are referable to invoices issued by sub-contractors to Aspire which Aspire has paid, which I will now describe.

4. [197]

   The body of the Stuart Bramley Electrical invoice, which is dated 24 January 2022 and was paid on 1 February 2022, is now reproduced:

5. [198]

   The invoice relates to electrical works carried out at both the Main House and at the 368D House. The $3,162.23 figure is inclusive of GST and is said by Mr Kearns to relate to “the release of retention moneys in respect of 368D”. Exclusive of GST, the figure is $2,874.55 which aligns with the amount in Mr Cronin’s table.

6. [199]

   The body of the Ison & Co invoice, which was dated 14 December 2021 and paid on 1 February 2022, is extracted below:

7. [200]

   The invoice relates to cement supplied for works carried out on the internal access roads as well as for sand and cement bedding for the Main House and Tourist Cabin cobblestone driveways. The figures in the invoice, which add together to $1,807.20, are inclusive of GST. Exclusive of GST, the figure is $1,642.90 which aligns with the amount in Mr Cronin’s table. As will emerge, half the cement was used at Mr Cronin’s instruction to rectify defective road works which added significantly to the cost.

8. [201]

   The AVP amounts are reflected in an invoice dated 7 October 2021, the body of which is set out below:

9. [202]

   By an invoice dated 9 December 2022 from Aspire to Cadence, Aspire sought reimbursement of Aspire’s payment of the amounts of $2,850 and $3,600 to AVP, producing a total of $6,450. The first item is described as “Repair BBQ rectifications, prime, microcement and seal using I-Stone” at the 368D House. The second item is described as relating to “Repair BBQ rectifications, prime, microcement and seal using I-Stone” at the Main House. In his evidence, Mr Kearns frankly stated that he “[could not] recall the specific detail about this work”, but they appear to relate to the microcement works which are dealt with in item 11 of the Crosby/Nikolas Joint Report.

10. [203]

    The body of the Avijohn Contracting invoice, which was dated 28 February 2022 and paid on 7 September 2022, is set out below:

11. [204]

    The invoice relates to the internal access roads. The figures in the invoice, which add together to $26,777.64, are exclusive of GST. This amount aligns with the amount in Mr Cronin’s table.

12. [205]

    The body of the Rural Bitumen Services invoice, which is dated 8 February 2022 and was paid on 7 September 2022, is set out below:

13. [206]

    This invoice also relates to internal access roads. This figure which is exclusive of GST aligns with the amount in Mr Cronin’s table.

14. [207]

    The works covered by the Avijohn Contracting and Rural Bitumen Services invoices appear to be dealt with in the following table in the Vleggaar/Fagg Joint Report:

15. [208]

    The body of the Univenta invoices, which are dated 29 December 2021, 10 January 2022, 2 February 2022 and 14 March 2022, add up to an amount of $100,821.87 exclusive of GST, and were paid by Aspire between 28 June 2022 and 4 July 2022, are set out below:

    1. (1)

       INV-000524:

    2. (2)

       INV-000526:

    3. (3)

       INV-000527:

    4. (4)

       INV-000540:

16. [209]

    The four invoices all relate to installation of the geothermal systems across all three properties. The subtotals in the above invoices align with the amounts in Mr Cronin’s table.

17. [210]

    The body of the Highland Cabinetry invoice, which is dated 12 August 2022 and was paid by Aspire on 7 September 2022, is set out below:

18. [211]

    The $4,716.80 figure is inclusive of GST and is said by Mr Kearns to relate to “the release of retention moneys in respect of 368D”. Exclusive of GST, the figure is $4,288 which aligns with the amount in Mr Cronin’s table.

19. [212]

    It is convenient to first deal with the 4 Univenta invoices. Cadence contended that it is not liable under Sch 1, Pt 1, para (d) of the Building Contracts to reimburse Aspire the invoiced amount of $100,821.87 that Aspire paid to Univenta because:

    1. (1)

       the sub-contractor costs which Aspire can recoup from Cadence under para (d) extend only to those costs which Aspire has “a legal liability to pay”; and

    2. (2)

       the $100,821 that Aspire paid to Univenta was not an amount that Aspire was legally liable to pay, because:

20. [213]

    Section 10(1)(a) of the HB Act provides:

21. [214]

    Section 4(2) of the HB Act provides:

22. [215]

    Cadence’s first proposition relating to para (d) is erroneous. It involves putting a gloss on that paragraph in the Building Contracts. That paragraph, construed from the perspective of a reasonable businessperson, requires Cadence to reimburse Aspire for the costs it incurs in hiring sub-contractors to perform aspects of the work that Cadence has engaged Aspire to do. Contrary to Cadence’s submission, para (d) does not contemplate any requirement for Aspire to be “legally liable” to pay an invoice before the costs particularised in that invoice fall to be reimbursed by Cadence. To read in such a requirement would be contrary to the express words of the paragraph, which contemplate that sub-contractor costs which fall within the ambit of Cadence’s reimbursement obligation are those which are “conclusively evidenced by an invoice or statement of costs” from the sub-contractor.

23. [216]

    Because the first proposition is wrong, and in view of Univenta’s invoices set out above which “conclusively evidence” the cost of work carried out by Univenta, Cadence’s contention that it is not liable to pay the sum of those invoices (i.e. $100,821.86) under para (d) must be rejected. It is therefore unnecessary to consider at any length the correctness of Cadence’s second proposition set out above. Briefly, however, the proposition is based on a false predicate. The relevant statutory provisions affect the rights and obligations between Aspire and Univenta and not Aspire and Cadence. In the circumstances of the present matter, if Univenta was not licensed to perform the Geothermal Works, it would be precluded from obtaining damages or enforcing any other remedy relating to a breach of contract by Aspire. I do not accept that the statutory provisions have the wider operation and effect as claimed by Cadence.

24. [217]

    Cadence further submitted that the balance of the sum claimed under Aspire’s cross-claim ($94,978.75, being $195,800.61 less $100,821.86) is set off by previous sums paid by Cadence to Aspire exceeding that balance which were also not “properly payable”, because like the $100,821.86 paid, they too were in respect of Univenta’s works under an unenforceable contract. However, this submission must also be rejected because, for the reasons set out above, whether the invoiced amounts paid by Aspire to Univenta were “properly payable” or not has no bearing on Aspire’s ability to recover those amounts from Cadence pursuant to Sch 1, Pt 1, para (d) of the Building Contracts.

25. [218]

    Cadence also submits that it has no liability to pay the $151,255.16 in sub-contractor costs because those costs are in respect of defect rectification work and the responsibility to pay those costs rests on Aspire under Special Condition 13 of the Building Contract. That Special Condition provides:

26. [219]

    Cadence relied on Mr Cronin’s evidence where he asserted that each of the invoices set out in his table extracted above relate to rectification work:

27. [220]

    It is necessary to now descend into some detail concerning the invoices the subject of the cross-claim in the order in which they appear in the table set out at [195] above.

28. [221]

    As noted above, this invoice relates to electrical work at both the Main House and the 368D House. Most of the invoice relates to the 368D House. Relying on Mr Cronin’s second affidavit, Cadence contends that Aspire was not entitled to be reimbursed for paying this invoice because the sub-contractor had not completed the electrical works at the 368D House, free of defects, when Aspire demanded that Cadence reimburse it for paying the invoice.

29. [222]

    In contrast, Mr Kearns said at [145]-[150] of his first affidavit that the sub-contractor’s invoice dated 24 January 2022 included a claim for the release of “retention moneys” in respect of the 368D House. Mr Kearns deposed that he was not aware of any reason at the time why the sub-contractor was not entitled to be paid and therefore the invoice was paid by Aspire on 1 February 2022.

30. [223]

    The Court was not taken to any corroborating evidence which identified any defect in the electrical works the subject of this claim. To the extent that there is a conflict in the evidence of Mr Cronin and Mr Kearns on that issue, I prefer Mr Kearns’ evidence which is to the effect that he was not aware of any defect when the sub-contractor’s invoice was paid.

31. [224]

    Accordingly, Cadence is liable to reimburse Aspire in the total amount of $2,874.55 excluding GST for the payment of this invoice.

32. [225]

    As noted above, this invoice relates to cement supplied for works carried out on the internal access roads and also for sand and cement bedding for the Main House and Tourist Cabin cobblestone driveways. Cadence submitted that it was not liable to reimburse Aspire for paying this invoice because the work relates to the rectification of the defective road works at the Main House (see [17] of Mr Cronin’s second affidavit). Other evidence, which I prefer, establishes that the invoice relates to the supply of 3 pallets of 20kg bags of general-purpose cement, half of which was used on the internal access road and the other half used for sand and cement bedding for the cobblestone driveway at the Main House and Tourist Cabin (see Mr Wright’s affidavit at [74]-[79]).

33. [226]

    While I accept that the cement was used for the purpose of rectification of defective works on the internal access road from the shed to the Tourist Cabin, the evidence establishes that this was done at Mr Cronin’s personal instruction and was not necessary to rectify the soft-spots on this section of the road. This is discussed at greater length below under items (4)-(5). Accordingly, I find that Cadence is liable to reimburse Aspire in the amount of $826.50 excluding GST.

34. [227]

    I also consider that Cadence should additionally reimburse Aspire the same amount, reflecting the fact that half of the cement which was used in the cobblestone driveways is evidently unrelated to defect rectification. It is notable that Mr Cronin’s evidence relating to this particular invoice does not address the use of some of the cement in cobblestone driveways. The evidence is unclear as to whether there is any overlap between this invoice and Cadence’s claim relating to the cobblestone driveway and crazy paving in Part F of these reasons.

35. [228]

    Accordingly, Cadence is liable to reimburse Aspire in the total amount of $1,642.90 excluding GST for the payment of this invoice.

36. [229]

    As noted above, this item appears to relate to microcement works which are discussed in the Nikolas/Crosby Joint Report relating to item 11. In his 12 March 2024 report, Mr Crosby said that item 11 was a defect because in rectifying the work of another sub-contractor, AVP used a product called I-Stone which is designed solely for internal use, which led to water entry, cracking and blistering to the surface of the microcement. Mr Nikolas disagreed that the work was a defect, opining that it was incomplete work because no final coat had been applied. In the Crosby/Nikolas Joint Report, the experts agreed that the relevant works were incomplete work.

37. [230]

    Consistently with my findings at [518]-[523] of Part I, I find that the works were incomplete and not defective works as claimed by Cadence. Accordingly, Special Condition 13, which assigns responsibility of defect rectification work to Aspire, does not apply and I find that Cadence is liable to pay Aspire the amount of $6,450.

38. [231]

    As noted above, this invoice relates to the internal access roads. Cadence claimed that Aspire was not entitled to be reimbursed for it having paid the Avijohn invoice because those works were incomplete and defective road work.

39. [232]

    As also noted above, there is no dispute that Aspire was responsible for asphalting. It engaged Avijohn as the sub-contractor to do that work, although no sub-contract was actually signed. There is no dispute that Aspire paid Avijohn’s invoice which related to the supply and laying of hot mix and asphalt for the driveway at the 368D House, which linked the front entrance gate to the house garage, standalone garage and a car bay area (see Mr Wright’s first affidavit at [83]-[87]).

40. [233]

    If this invoice relates to costs incurred for rectification of the internal access roads, Aspire would be precluded by Special Condition 13 from recovering its payment from Cadence. But the position is not so straightforward. This is because the Vleggaar/Fagg Joint Report describes this item relating to pavement reconstruction and AC10 surfacing as involving both rectification and new works. The agreed position of those experts is that replacement of the removed road base and primer seal did amount to rectification, which attracts Special Condition 13. But the experts also agreed that the “AC10 Surfacing was new works as this work had not been completed at the time of the purported Aspire suspension notice or subsequent termination of the contract by Cadence”. The new work is not caught by Special Condition 13.

41. [234]

    I see no reason to not accept that agreed position. Accordingly, Special Condition 13 applies to that part of the payment which relates to defective works but Aspire is entitled to be reimbursed for the balance of its payment to Avijohn. By my calculation, this amounts to $21,812.64 excluding GST.

42. [235]

    As noted above, this invoice relates to the sub-contractor supplying and placing primer seal on the internal access road on 31 January 2022. Cadence claims that Aspire is not entitled to be reimbursed for paying this invoice because it relates to the rectification of defective road works (see Mr Cronin’s second affidavit at [18]). I accept that if the evidence established that the primer seal which was placed on that part of the internal access road from the site shed to the Tourist Cabin was simply related to Aspire rectifying defective road works for which it had accepted responsibility, the amount would not be recoverable because of Special Condition 13.

43. [236]

    But the evidence is not so clear. Mr Cronin received an email dated 15 February 2022 from Aspire which includes reference to this invoice. The relevant parts of the email are as follows (emphasis added):

44. [237]

    Although the email refers to invoices “relating to the roadworks repairs”, it is also notable that it refers to instructions having been given on site to rip up all the road so as to mix cement with the consequence that sealant needed to be applied to the entire length of the road from the shed to the Tourist Cabin and not just cover the soft-spots.

45. [238]

    It is evident that the reference in the email dated 15 February 2022 to an invoice from Isons (cement) in the amount of $1,807.20 is item (2) dealt with above. Half the cement was used after the entire length of the road from the shed to the Tourist Cabin was ripped up and cement applied, together with the sealant. This was evidently done at Mr Cronin’s specific instruction given on site. The rectification works went beyond simply repairing 4 soft spots as proposed by Aspire.

46. [239]

    Some further light is cast upon this topic by the following extracts from a letter dated 10 March 2022 which Aspire’s then solicitor sent to Cadence:

47. [240]

    It may reasonably be inferred from these extracts that Aspire was willing to bear the cost of rectifying soft-spots on the road which it had arranged to be sealed on 17 November 2021, shortly before heavy rainfall.

48. [241]

    It is evident, however, that the entire length of the road was resealed at Mr Cronin’s instruction because he wanted the entire length to be ripped up and cement applied.

49. [242]

    As best I understand this material, Aspire paid Rural Bitumen’s invoice in the total amount of $9,240 (which includes GST) and was willing to give Cadence a credit in the amount of $4,851 to reflect that part of Rural Bitumen’s invoice which related solely to the cost of rectifying the roadworks defect for which Aspire accepted responsibility. In these circumstances, I do not consider that Aspire is entitled to recover that amount from Cadence after Aspire paid Rural Bitumen’s invoice. Having regard, however, to Mr Cronin’s instruction that the entire length of the road should be ripped up so as to apply cement and then totally resealed, Aspire is entitled to be reimbursed an amount reflecting the balance of its payment to Rural Bitumen, which excluding GST, amounts to a figure of $3,990.

50. [243]

    The 4 Univenta invoices relate to the installation of the geothermal systems rather than the cost of rectifying any defect in those systems. It follows that Aspire is entitled to be reimbursed the sum of the Univenta invoices totalling $100,821.87 excluding GST.

51. [244]

    As noted above, this item relates to joinery at the 368D House and relates to the release of retention monies. Aspire only claims an amount relating to the 368D House. In his second affidavit, Mr Cronin said that Aspire was not entitled to be reimbursed for what he described as “defective joinery” at the 368D House and Main House studies because rectification works at both those places was carried out by Highland on or around 11 May 2023 under the management of Horizon.

52. [245]

    It does not appear that this item was addressed by the experts. Nor was the Court taken to any evidence which supported Mr Cronin’s claim that there was defective joinery in the 368D House study to which this item evidently relates.

53. [246]

    Mr Kearns said in his first affidavit that he was not aware of any reason at the time why Highland Cabinetry was not entitled to be paid its invoice and that Aspire paid it on 7 September 2022. I accept that evidence.

54. [247]

    I am not satisfied that this item relates to rectification of defective work so as to preclude Aspire from being reimbursed by Cadence under Special Condition 13. Accordingly, I find that Cadence is obliged to reimburse Aspire $4,288.

55. [248]

    Adding all the relevant sums together, I find that Cadence is obliged to pay Aspire $141,879.96 in respect of its cross-claim.

(b) The claim for $44,545.45 for builder’s margin

1. [249]

   In Mr Cronin’s second affidavit dated 29 May 2024, he asserted that the separate $44,545.45 figure claimed in the cross-claim refers to “the balance of the 10% builder's fee / margin for the Main House, 368D House or Tourist Cabin” exclusive of GST.

2. [250]

   Special Condition 4 of the Building Contracts provides:

3. [251]

   The fixed builder’s margin exclusive of GST is $445,454.54. 10% of that figure is $44,545.45. Aspire claims this amount from Cadence, stating that “under Special Condition 13 [sic] [noting that this reference should be to Special Condition 4], the amount functioned as a form of security; a retention-like mechanism to ensure that Aspire returned to address any legitimate defects raised during the defect liability period”.

4. [252]

   Under Special Condition 4, Aspire only accrues an entitlement to the 10% balance of the fixed builder’s margin when the stipulated condition has been satisfied: namely, the completion of rectification works relating to all defects identified during the Defect Liability Period after Practical Completion.

5. [253]

   Although this condition was not in fact satisfied, the gravamen of Aspire’s argument is that the condition should be taken to have been satisfied (such that it is entitled to the 10% balance of the builder’s margin) because:

   1. (1)

      “Aspire was prevented from returning to site to complete remaining defect works because the plaintiff denied or restricted access or replaced the works such as is the case with the microcement”;

   2. (2)

      that conduct amounted to “a breach of the statutory duty imposed by s 18BA of the Home Building Act, which requires a homeowner to allow the builder reasonable access to rectify defects”;

   3. (3)

      “A party cannot rely on its own breach to defeat the builder’s contractual entitlement”; and

   4. (4)

      “Aspire did rectify the legitimate defects it was permitted to address”.

6. [254]

   In its submissions, Aspire did not refer to the evidence relating to its contention that it was prevented by Cadence from returning to site to complete defect rectification works. However, there is some correspondence in evidence which is relevant to this issue.

7. [255]

   For example, in a letter dated 14 June 2022 to Aspire’s solicitors, Cadence’s solicitors stated:

8. [256]

   Aspire’s solicitors responded to this letter on 23 June 2022 as follows:

9. [257]

   The contemplated site inspection did not occur until 4 and 5 August 2022.

10. [258]

    On 20 September 2022, Aspire’s solicitors sent Cadence’s solicitors a proposal for Aspire to attend the site to undertake some minor works in relation to a list of around 130 alleged defects. This proposal was accepted by Cadence through its solicitors on 22 September 2022, although it indicated that Cadence had already procured the rectification of various defects “since Aspire walked off site on 14 February 2022”.

11. [259]

    After further correspondence between the parties’ solicitors as to the scope of defect rectification works that would be performed by Aspire, Cadence’s solicitors confirmed on 30 October 2022 that Cadence was “prepared to grant immediate access to the site to [Aspire] to complete the general building defect works at the Barrengarry Project”. Those works, the details of which are unclear, were commenced by Aspire on 31 October 2022 and completed by 9 December 2022, save for various items that other contractors were carrying out and one item that Aspire contended was not defective.

12. [260]

    The parties later engaged in correspondence about the rectification of cracked highlight glass. In a letter dated 16 April 2024 from Aspire’s solicitors to Cadence’s solicitors, Aspire offered to rectify specific cracked highlight glass as had been identified in Mr Crosby’s expert report. Cadence’s solicitors responded on 17 April 2024 stating that:

13. [261]

    This position was again confirmed on 19 April 2024 by Cadence’s solicitors. Aspire’s solicitors responded on 22 April 2024 by email, stating:

14. [262]

    Despite raising the issue numerous times in inter partes correspondence, Aspire did not plead any breach of s 18BA of the HB Act or reliance on the prevention principle in its Amended Technology and Construction List Cross-Claim Statement. Those issues were not ventilated until Aspire raised them in its written response to Cadence’s closing submissions, which were provided to the Court on 24 November 2025 after the trial had already concluded.

15. [263]

    I accept Cadence’s submission that the final instalment of the builder’s margin was only payable upon completion of the rectification of all defects that are identified during the defect period after Practical Completion, and that because those works were not completed, Aspire had not accrued a right to the amount.

16. [264]

    Further, Aspire pleaded that Cadence had repudiated the Building Contracts and that Aspire had suffered loss or damage reflecting the 10% balance of the builder’s margin. Aspire sought damages in that amount.

17. [265]

    Aspire alleges in its written response to Cadence’s closing submissions at [53] that the purported termination of the Building Contracts by Cadence on 29 April 2022 “was unlawful and constituted a wrongful repudiation, which Aspire accepted in its legal team’s letter of 19 May 2022”. That letter is set out below at [493] in Part I of these reasons. The letter stated that Aspire’s solicitors would provide “further detail” about why Aspire considered that Cadence had repudiated the Building Contracts.

18. [266]

    The Court was not taken to any evidence which established that “further detail” was in fact given in any subsequent correspondence between Aspire and Cadence.

19. [267]

    The only explanation as to why Aspire considered Cadence’s purported termination to be a repudiation is at [C.499] of Aspire’s Amended Technology and Construction List Cross-Claim Statement, where Aspire asserts in its particulars that:

20. [268]

    These matters were not elaborated upon in Aspire’s submissions. Mr Kearns only made the following bare assertion in oral address:

21. [269]

    The issue of whether Cadence had repudiated the Building Contracts was not included in the original agreed statement of real issues for determination and the Court was not invited in Aspire’s written or oral submissions to determine the issue.

22. [270]

    I do not consider that Aspire has established on the evidence that Cadence “evinced an intention to no longer be bound by the contract or stated that it intends to fulfil the contract only in a manner substantially inconsistent with its obligations and in no other way”: Galafassi v Kelly (2014) 87 NSWLR 119 at [62] (Gleeson JA, Bathurst CJ and Ward JA agreeing). Aspire has not demonstrated that Cadence’s purported termination of the Building Contracts was repudiatory and that it is entitled to damages in the sum of $44,545.45. As Cadence submitted, that amount was only “payable in consideration for the delivery of a service (defect rectification) which was [ultimately] not provided by [Aspire] and was instead provided by others”.

23. [271]

    For these reasons, I reject Aspire’s claim in the amount of $44,545.45.

(a) The lay and expert evidence

1. [272]

   It is necessary to address the parties’ submissions concerning the credibility and reliability of the lay evidence given by Mr Cronin, Mr Kearns and Mr Trembuch before turning to address some serious issues raised by the defendants concerning the weight to be given to the expert evidence of Dr Piechowski on geothermal issues.

2. [273]

   Mr Cronin provided three affidavits dated 4 October 2023, 29 May 2024 and 4 March 2025. He was subjected to a lengthy cross-examination by both Mr Kearns and Mr Thompson. In broad terms, Mr Cronin gave evidence of the following matters:

3. [274]

   Mr Cronin was not an impressive witness. I found many of his answers under cross-examination to be unresponsive or self-serving. He struck me as a controlling and dominating person. This is confirmed in many of the emails or conversations he had with people such as Mr Kearns and Dr Piechowski, as well as by his demeanour in the witness box. It is notable that Mr de Maio (who was called by Cadence in its case) said that he found Mr Cronin to be “very demanding”. Mr Lyons of counsel (who appeared for Cadence) acknowledged in oral address that Mr Cronin was “very hands-on with a range of matters” but then added, by way of submission, that Mr Cronin relied on others for matters relating to the design of the geothermal systems.

4. [275]

   Given Mr Cronin’s forceful and demanding personality, it is perhaps unsurprising that Cadence has used nine different law firms in the course of the present proceeding.

5. [276]

   In due course, I will explain why I find Mr Cronin adopted an inappropriate role in securing multiple changes to Dr Piechowski’s first and second expert reports, including on several quite technical issues. The nature and extent of Mr Cronin’s involvement in Dr Piechowski’s report raised some serious issues concerning the weight which the Court should give to Dr Piechowski’s opinions. These matters relating to Dr Piechowski’s expert evidence are elaborated on below.

6. [277]

   Returning now to why I did not find Mr Cronin to be a reliable witness, a leading example of his non-responsiveness relates to a series of relevant questions he was asked under cross-examination by Mr Kearns regarding the internal access roads issue. Mr Cronin was asked several times whether he would have acted upon advice from Mr Kearns, if it had been given, that engineering plans should be obtained for the proper construction of the internal access roads. Mr Cronin repeatedly avoided directly answering that question, protesting personally (even though Cadence was well represented by Mr Lyons of counsel) that it was hypothetical. It was only after the Court intervened and directed Mr Cronin to answer the question (which was clearly relevant to causation) that he gave a responsive answer:

7. [278]

   Another example of Mr Cronin’s unreliability as a witness relates to his evidence concerning the use of a remote-control app known as the CUE(KNX) app. Mr Thompson put to Mr Cronin in cross-examination that Univenta had explained to him that they were just using the CUE(KNX) app to fine-tune the system and that it would ultimately be integrated into the Control4 home automation system. Mr Cronin flatly denied that proposition notwithstanding an email dated 16 December 2021 from Mr Klintfalt to Mr Cronin in which Mr Klintfalt tried to explain to Mr Cronin that the geothermal system was not faulty and Mr Cronin needed to spend more time to familiarise himself with the system. The email to Mr Cronin included the following statements (emphasis added):

8. [279]

   The following exchange occurred between Mr Thompson and Mr Cronin when he was cross-examined about this email:

9. [280]

   Despite Mr Cronin’s insistence that there was actual evidence that the app was one that Univenta “use by design”, at no point did he or his Counsel point to any such evidence. Nor was there any evidence to contradict Univenta’s stated intention to integrate the CUE (KNX) app with the Control4 automation system after the geothermal system was tested and fine-tuned and the protocol issue was resolved.

10. [281]

    Mr Cronin’s denial that the app was to be used for testing and fine-tuning is inconsistent with Mr Trembuch’s evidence, which I strongly prefer. At [153] and [154] of his affidavit dated 25 October 2024, Mr Trembuch said:

11. [282]

    I also accept Mr Trembuch’s evidence that Univenta’s testing and commissioning of the three geothermal systems was conducted in accordance with standard processes and that all aspects of the systems performed as designed except for the following three issues:

12. [283]

    I find that Mr Cronin’s dissatisfaction with the geothermal systems as built was due in large part to unrealistic expectations on his part as to how quickly the systems would provide cooling. This was tellingly demonstrated when Mr Cronin acknowledged under cross-examination that he expected temperatures of 19-21°C to be reached at the Main House within 1 hour. He acknowledged that this expectation was based on his personal experience of the operation of a conventional air-conditioning system at his Mosman home. Nothing in the GXA Reports supported this expectation

13. [284]

    My reluctance to accept Mr Cronin’s evidence unless, for example, it is supported by contemporaneous documentary evidence or evidence by an impartial witness also stems in part from his response under cross-examination to various questions put to him by Mr Kearns regarding his volatile character and overbearing conduct. When Mr Kearns put to Mr Cronin that he had yelled or screamed at Mr Kearns on-site in front of staff or sub-contractors, Mr Cronin answered “Probably, yep”. When it was then put to Mr Cronin that he had become so angry on one occasion that he slammed his fist on a wall, damaging the wall, Mr Cronin said that he was not aware of that incident. Mr Cronin said that he did not remember hitting the wall. Mr Kearns then read to Mr Cronin the following diary note written by an electrician who was on-site when the relevant event occurred:

14. [285]

    When Mr Kearns asked Mr Cronin whether this prompted his memory of the incident he responded: “Possibly. Yeah, yep”. Only then did Mr Cronin say that he now remembered getting angry to the point where he punched the wall.

15. [286]

    The electrician’s diary note was tendered without objection and became Exhibit 4 in the proceeding.

16. [287]

    I find it remarkable that Mr Cronin had no recollection of this significant incident prior to the diary note being shown to him in the witness box. The event also leaves little doubt that Mr Cronin had a controlling, dominating and, at times, aggressive manner.

17. [288]

    I am reluctant to accept Mr Cronin’s evidence unless it is supported by other corroborating probative evidence, is against interest or is consistent with the apparent logic of events.

18. [289]

    I have no hesitation in saying that, where there is a conflict in the evidence of Mr Cronin and Mr Kearns, I prefer Mr Kearn’s evidence. He struck me as a truthful and responsive witness. He frequently made concessions which were against interest. This was illustrated several times when he candidly accepted liability for many individual items, including the need to sandbag the internal access road prior to the major weather event in March 2022 and notwithstanding that, at that time, Aspire was no longer active on the building site. He also accepted liability for several individual items which Cadence claimed to be general building defects. At various times, Mr Kearns candidly acknowledged that there were deficiencies in some of Aspire’s systems and processes, including in checking whether its sub-contractors were licensed and also in checking any changes in the SHGC values of the windows. He struck me as a sincere and genuine person who was intent upon assisting the Court to the best of his ability. Mr Kearns did not hesitate to say when he had only a poor recollection of particular events. Mr Kearns was an impressive witness whose credibility and reliability I do not doubt.

19. [290]

    The same may be said about Mr Trembuch. It was apparent that English is his second language and that he sometimes struggled linguistically. He swore an affidavit dated 25 October 2024. He has more than 15 years’ experience in the geothermal heating, ventilation and air conditioning industry and specialises in geothermal systems. He was subjected to a lengthy cross-examination by Mr Lyons. He impressed me as a truthful, reliable and responsive witness.

20. [291]

    I accept Mr Trembuch’s evidence that it was only during the commissioning process towards the end of 2021 that Univenta was first made aware of the glazing issue and the changes to the windows in the Building which resulted in more thermal energy entering the Buildings than had been detailed in the GXA Report. I also accept his evidence that Univenta’s testing and commissioning of each of the three installed geothermal systems revealed that the systems were performing as designed except for the three issues identified in [282] above. Where there is any tension between the evidence of Mr Cronin and Mr Trembuch, I have no hesitation in preferring Mr Trembuch’s account. This includes, but is not limited to, their differing accounts relating to the CUE(KNX) app and its integration into the Control4 automated system.

21. [292]

    Univenta and Mr Trembuch contended that Dr Piechowski’s first expert report should be given “very little, if any, weight” because it did not reflect his independent opinion in circumstances where, on several occasions, he adopted or acquiesced in the views of other people, including Mr Cronin, without disclosing the involvement of those people. Dr Piechowski’s second report was challenged on the basis that Dr Piechowski was biased because he opined on the reasonableness of the rectification works carried out under a scope of works drafted, in part, by himself, a fact which he failed to disclose in his second report.

22. [293]

    These challenges to the weight to be given to Dr Piechowski’s evidence were supported by Aspire and Mr Kearns.

23. [294]

    Mr Thompson, who appeared for Univenta and Mr Trembuch, submitted that these matters necessarily tainted Dr Piechowski’s third report because it was presented in reply to Dr Kivi and adopted Dr Piechowski’s earlier reports. As to the fourth report, Mr Thompson submitted that the Court need not make any findings about it in terms of Dr Piechowski’s credit because it at least addressed the relevant question regarding the performance of the geothermal system, a question which was also squarely addressed by Dr Kivi.

24. [295]

    Mr Thompson was granted leave to cross-examine Dr Piechowski on these matters before he participated in a joint conclave with Dr Kivi.

25. [296]

    For reasons which I will shortly develop, I find that there are some serious issues concerning Dr Piechowski’s independence. The better view is that these matters go to the weight to be given to his expert evidence, as opposed to its admissibility (see, for example, Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153 at [200]ff per Ipp JA, with whom Beazley and Giles JJA agreed; Ananda Marga Pracaraka Samgha Ltd v Tomar (No 4) (2012) 202 FCR 564; [2012] FCA 385 at [35] per Dodds-Streeton J; ACCC v Snowdale Holdings Pty Ltd (2016) 339 ALR 445; [2016] FCA 541 at [382]-[413] per Siopis J; Rush v Nationwide News Pty Ltd (No 5) [2018] FCA 1622 at [35]-[36] per Wigney J and McNickle v Huntsman Chemical Company Australia Pty Ltd (Evidentiary Ruling) [2023] FCA 1268 per Lee J).

26. [297]

    I will explain that, while I do not accept that Dr Piechowski’s first report should be given absolutely no weight at all, I consider that his evidence needs to be assessed with elevated caution because I have strong concerns that Dr Piechowski has not acted as the Court expects from an independent expert witness. I have concluded that significant parts of Dr Piechowski’s first report should be given only very limited weight, particularly when that evidence is contrasted with that of Dr Kivi.

27. [298]

    I will also explain why Dr Piechowski’s second and subsequent reports should be given little weight (noting, however, the exception relating to his fourth report as outlined above).

28. [299]

    Having regard to the reservations concerning Dr Piechowski’s evidence, where there is a disagreement between him and Dr Kivi, I prefer Dr Kivi’s opinion, including in the Joint Report. This preference is also based in some instances on additional considerations concerning the contrast in the evidence of Dr Piechowski and Dr Kivi.

29. [300]

    It is convenient to address Dr Piechowski’s first report dated 19 August 2022 before turning to his second, third and fourth reports dated 5 March 2024, 24 March 2025 and 27 October 2025 respectively.

30. [301]

    For reasons which will be developed, I am comfortably satisfied that the evidence demonstrates that Dr Piechowski acquiesced in or adopted comments by Mr Cronin in respect of several significant parts of this report, but did not disclose the nature and extent of Mr Cronin’s involvement in its preparation and finalisation. Mr Cronin was extensively involved in reviewing and editing several iterations of the first report. Dr Piechowski permitted Mr Cronin to edit and mark-up at least one draft of that report. In other instances, Dr Piechowski simply adopted verbatim wording suggested by Mr Cronin, including on technical issues which are the provenance of the expert and not a lay person such as Mr Cronin.

31. [302]

    Moreover, as Dr Piechowski acknowledged in cross-examination, nowhere in his first report did he disclose the nature and extent of Mr Cronin’s involvement in its production. Nor did he disclose the nature and extent of the effect on him of the opinions of a building consultant (believed to be Mr de Maio) who was retained by Mr Cronin to review and comment on a draft of Dr Piechowski’s first report. Mr de Maio works for a competitor of Univenta and his company (CWL) was retained by Cadence to carry out rectification works concerning the geothermal systems.

32. [303]

    I do not accept Dr Piechowski’s claim that he was simply informed by Mr Cronin’s comments and observations and was not influenced by them. This claim is contradicted by the fact that, for example, Dr Piechowski was content to adopt verbatim wording suggested by Mr Cronin in respect of some important parts of his first report. Dr Piechowski also changed his draft to reflect comments by Mr Cronin, not merely of an editorial nature, but on significant technical matters for which Dr Piechowski professed considerable expertise.

33. [304]

    I reject Cadence’s claim that the communications which passed between Mr Cronin and Dr Piechowski simply reflect the fact that they were generated in the course of seeking to resolve a series of “real world” problems. Cadence claimed that these problems were created by Aspire suspending its work in mid-February 2022, when there was a pressing need to finalise both the 368D House so that it could be sold and the Tourist Cabin so it could be rented to assist in meeting Cadence’s debt obligations. I consider that the communications are consistent with Mr Cronin’s controlling and domineering character.

34. [305]

    In addition, I consider that the weight to be attached to Dr Piechowski’s first report is detrimentally affected by evidence which indicates that it was prepared, in part, with a view to justifying a particular scope of works for rectification which Mr Cronin had in mind and where Dr Piechowski had some personal involvement. This involvement pre-dated Dr Piechowski’s first report. Mr Cronin applied substantial pressure on Dr Piechowski to produce a report which would support that scope of works. Moreover, in early June 2022 (i.e. prior to the first report being finalised), Mr Cronin emailed Dr Piechowski emphasising the importance of Dr Piechowski providing recommendations concerning rectification of the geothermal system, including recommendations concerning its removal, as part of the proposed rectification. Mr Cronin instructed Dr Piechowski to explain in his report why the geothermal system needed to be replaced, which was Mr Cronin’s fervent personal desire at the time. Mr Cronin then effectively held out an inducement to Dr Piechowski by highlighting that he could step in as a consultant to review the implementation of a new and effective design for a geothermal system. Mr Cronin explicitly encouraged Dr Piechowski to provide a scope of works for rectification which could provide a basis for Cadence to tender the rectification work.

35. [306]

    Dr Piechowski’s failure to disclose the nature and extent of the involvement of both Mr Cronin and the building consultant in the first report is a significant departure from the obligations imposed by the Expert Witness Code of Conduct (see Sch 7 of the UCPR). Clauses 3(1)(e) and (h) state:

36. [307]

    It should be noted that not all versions of the first report, which underwent numerous iterations, were adduced in evidence.

37. [308]

    Dr Piechowski was engaged as an expert by Cadence’s then solicitors on 25 March 2022. He was asked to undertake the following tasks:

38. [309]

    I will now summarise various documents which were put to Dr Piechowski in cross-examination by Mr Thompson prior to the conclave by the experts. The documents were produced by Cadence pursuant to a call made by Univenta and Mr Trembuch on the second day of the trial and prior to the conclave with Dr Kivi. They include correspondence passing between Dr Piechowski and Mr Cronin relating to the first report. The documents were produced in two tranches: the first being a set of non-confidential documents and the second (comprising a total of 14 documents) being released later after claims of legal professional privilege were belatedly withdrawn. This second tranche of documents became Exhibit 15 in the proceeding. It is these documents which were primarily relied upon by Mr Thompson in questioning the weight to be given to Dr Piechowski’s evidence.

39. [310]

    It is evident that, by 30 May 2022, Dr Piechowski’s first report had undergone eight iterations. This particular version of the draft was provided by Dr Piechowski following a detailed email he received from Mr Cronin on 27 May 2022 at 6:39am. Mr Cronin told Dr Piechowski that he had “shared” Dr Piechowski’s “incomplete draft report” with a building consultant who had previously dealt with geothermal systems. As noted above, although the evidence is somewhat uncertain, it appears that the building consultant was Mr de Maio. In his email to Dr Piechowski, Mr Cronin set out lengthy comments from the building consultant and Mr Cronin added his own highlighting in yellow to some parts of those comments. Mr Cronin asked Dr Piechowski to “consider and respond to” the building consultant’s comments and added that there “looks to be some more content for your report too”. The building consultant’s feedback, together with Mr Cronin’s yellow highlighting (noting that Mr Cronin denied any personal expertise with geothermal systems), was as follows (highlighting in original now reproduced in red):

40. [311]

    Later, on 27 May 2022 at 10:23am, Mr Cronin received an email from Mr Richard Jefford (who had been selected by Dr Piechowski to visit and inspect the building sites on his behalf so as to avoid the need for Dr Piechowski personally to attend the sites). Mr Jefford provided Mr Cronin with additional comments to those of the building consultant, as is reflected in the writing coloured blue which Mr Jefford added to the yellow highlighted version (highlighting in original now reproduced in red):

41. [312]

    Later that same day, Mr Cronin responded to Mr Jefford by email. He thanked him for his comments and added that there “is some good content for [Dr Piechowski] to refine in his report”. Dr Piechowski was copied in on this email. Plainly, Mr Cronin intended that Dr Piechowski would be influenced by those comments.

42. [313]

    On 31 May 2022 at 6:32am, Dr Piechowski sent Mr Cronin and Mr Jefford revised version 8 of his draft report (a copy was also sent to Cadence’s then solicitor).

43. [314]

    On 1 June 2022 at 7:50pm, Dr Piechowski sent the solicitor a copy of what he described as the “final draft” of his report, copying in both Mr Cronin and Mr Jefford.

44. [315]

    Assuming that this is a reference to version 8 of the draft report dated 30 May 2022, it is notable that nowhere in Dr Piechowski’s discussion of the defects of the geothermal system in relation to either the Main House or the 368D House is there reference to any concern he had at that time regarding the length or size of the pipes in the ground loops. That is to be contrasted with the prominence subsequently given to those matters in Dr Piechowski’s final first expert report after Mr Cronin repeatedly drew his attention to the importance Mr Cronin personally attached to those matters.

45. [316]

    On 3 June 2022, Mr Cronin sent an email to Dr Piechowski (copying Cadence’s then solicitor) concerning what was described as “Barrengarry Project: #7 Scope of Works”. This confirms that Dr Piechowski was involved in the development of a scope of works for rectification prior to him finalising his first report. Mr Cronin wrote that it was important for Dr Piechowski and not Mr Jefford “to address in a standalone document Scope of Work #7”. Mr Cronin then set out item 7 of the scope of works dated 25 March 2022, which detailed his solicitor’s instructions to Dr Piechowski to prepare an expert report (see at [308] above). After setting out the wording of item 7 in italics, Mr Cronin then provided the following additional comments or instructions to Dr Piechowski:

46. [317]

    This email indicates that Mr Cronin took it upon himself to direct Dr Piechowski as to what he needed to do in response to item 7 of the scope of works which described his retainer. Mr Cronin was not content to leave this task to his then solicitor. This is consistent with the evidence which overwhelmingly indicates that Mr Cronin has a controlling and domineering character. Dr Piechowski was asked to produce a standalone document to be used as the scope of works in obtaining tenders from sub-contractors for the rectification works. He was told that he would be able to be a consultant in reviewing the implementation of a new geothermal system.

47. [318]

    None of these significant matters were disclosed by Dr Piechowski in his first report.

48. [319]

    On 3 June 2022 at 8:00pm, Mr Cronin emailed Dr Piechowski, copying in the solicitor and Mr Jefford. Mr Cronin reiterated that he had “just had the building consultant review the report”. He added that the consultant had picked up what Mr Cronin described as a “key issue”, namely that “the undersized pump is accepted, but you appear to have overstated the impact of the FCU capacity limitation” (emphasis in original). Mr Cronin asked Dr Piechowski to “review and comment”. Again, this demonstrates Mr Cronin’s preparedness to take a prominent role on technical issues and in guiding the focus and content of Dr Piechowski’s expert report.

49. [320]

    Mr Cronin set out in his email extracts from the building consultant’s review of the draft report (which presumably refers to Mr de Maio). The extracts are different from the comments which were passed earlier to Dr Piechowski on 27 May 2022. Mr Cronin emphasised some of that material (which is quintessentially of a technical nature) by yellow highlighting as follows (highlighting in original now reproduced in red):

50. [321]

    The following day, on 4 June 2022, Dr Piechowski responded to Mr Cronin stating that “it’s a correct observation”. He said that he had amended the relevant sections of his draft report. Dr Piechowski told Mr Cronin that he had “reasons to believe that the same FCU serving Living+Dining in Main House is also supposed to be serving Foyer”.

51. [322]

    Later that same day, Mr Cronin sent the following two emails to Dr Piechowski, copying in the solicitor and Mr Jefford (emphasis added, noting also that the evidence did not include a copy of the “updated version” referred to):

52. [323]

    This email is significant. It states unambiguously that Mr Cronin wanted to change some of the language in the draft report to reflect his belief that the percentages are much lower at the FCU level. He foreshadowed that he would provide further comments later that day. The evidence is unclear whether Mr Cronin did in fact provide additional comments, either orally or in writing.

53. [324]

    Approximately 3 hours later at 6:15pm on 5 June 2022, Dr Piechowski sent Mr Cronin what he described as the “updated Final draft”. He added that he and Mr Jefford would review and issue the scope of work for the remedial work the following morning. This again confirms that Dr Piechowski personally was involved in preparing the scope of work concerning rectification, together with Mr Jefford, prior to Dr Piechowski finalising the first report.

54. [325]

    On 6 June 2022, Dr Piechowski sent to Cadence’s then solicitor (copying in Mr Cronin and Mr Jefford), a draft scope of work and costing prepared by Mr Jefford.

55. [326]

    On 6 June 2022 at 7:25pm, the solicitor emailed Dr Piechowski, copying Mr Cronin, stating that, as Cadence’s independent expert, he needed “to properly determine the Defect Rectification Scope of Works necessary and that which falls out of your Report”. Dr Piechowski was told that there was a need clearly to document why he considered it necessary to remove heat pumps and the like, so the process could be justified and only relevant “mitigants” were employed. The solicitor also added that Dr Piechowski’s “Defect Rectification Scope of Works” could also be used to tender the work to short-list contractors in respect of the rectification works.

56. [327]

    The following day, 7 June 2022, Dr Piechowski emailed the solicitor, providing an updated scope of works which included relevant references to the draft expert report.

57. [328]

    On 8 June 2022, Mr Cronin sent an email to Dr Piechowski, copying in Cadence’s then solicitor. Mr Cronin provided the following comments on item 19 of the then existing draft scope of works, including providing suggested wording (without alteration):

58. [329]

    On the same day, 8 June 2022 at 1:12pm, Dr Piechowski sent an email to Mr Cronin copying in the solicitor. He attached a document headed “22139 -200 bunkers hill road remediation scope of work rev06.1.xlsx”. Dr Piechowski said that this version contained the modifications as suggested (presumably by Mr Cronin). Again, this confirms Dr Piechowski’s significant involvement in the development of a scope of works for rectification prior to him finalising his first report.

59. [330]

    Item 19 of that document, which related to the installation of a new 315 L DHW tank, contained the following information under the heading “Expert Report Reference”:

60. [331]

    It is notable that the penultimate sentence adopts verbatim Mr Cronin’s suggested wording in his email dated 8 June 2022. Mr Cronin’s comment that the Tourist Cabin DHW as installed does not work is also repeated verbatim in the final sentence.

61. [332]

    Although this relates to the draft scope of works and not directly to the first report, it demonstrates Dr Piechowski’s willingness to adopt wording suggested by Mr Cronin. I do not accept Dr Piechowski’s oral evidence that adopting the language of a third party is a different thing from adopting that person’s opinion, particularly where technical issues are concerned and the language is supplied by a lay person.

62. [333]

    On 8 June 2022, by an email sent at 8:17am by Mr Cronin to Dr Piechowski copying in the solicitor, Mr Cronin provided what he described as “suggested comments” for Dr Piechowski’s consideration. It appears that the comments were directed to version 12 of the draft first expert report. Mr Cronin said that it was important that once the legal practitioners had collated comments on the report, the references to version 12 be removed. A copy of version 12 was not included in the evidence, but the email demonstrates Mr Cronin’s ongoing and deep involvement in finalising Dr Piechowski’s first report.

63. [334]

    On 6 July 2022, the solicitor emailed Dr Piechowski, copying Mr Cronin, referring to input which had been received from Cadence’s then barrister regarding Dr Piechowski’s draft report. The solicitor provided an updated draft report which was said to address some of the barrister’s concerns. The solicitor said that he had “obviously left your analysis in tact and in respect of that, we have instead included a list of questions to enable us to link source images and figures to key parts of the text and reference where materials have been sourced from”. He added that these matters appeared in comments or were embedded in the text of the revised draft. The solicitor asked Dr Piechowski to carefully review the attached amended draft report and address the queries and issues raised therein and let the solicitor know if he had any other comments. This email indicates that the solicitor was appropriately sensitive to the roles of a party’s legal advisor and an independent expert. It is regrettable that Mr Cronin did not have a similar appreciation of the different role of a party to litigation and an independent expert.

64. [335]

    As noted above, version 8 of the draft report did not contain any discussion by Dr Piechowski of the adequacy of the ground loops or pipes at either the Main House or the 368D House. It is evident from the following summary of email exchanges between Mr Cronin and Dr Piechowski in the period on and from 8 June 2022 that Mr Cronin applied considerable pressure on Dr Piechowski to address this issue, which ultimately led to some significant and lengthy amendments being made before the report was finalised.

65. [336]

    On 8 July 2022 at 10:11am, Mr Cronin sent an email to Dr Piechowski stating that he thought that Dr Piechowski had “missed a key issue with the Ground Loops at each Dwelling”. Mr Cronin set out a table comparing various components of the Horizontal Ground Heat Exchanger design at the Main House, with reference to the GXA Report and the Univenta Quote. This table was adopted by Dr Piechowski and was included as Table 2 in [4.1.2] of his final first report. The only change was to replace the question mark relating to pipe spacing in the Univenta Quote with a figure of “<300mm”. Again, this indicates Mr Cronin’s determination to influence Dr Piechowski on technical issues and Dr Piechowski’s willingness to adopt Mr Cronin’s wording.

66. [337]

    This is reinforced by the additional detailed observations made by Mr Cronin on technical issues on the second page of his 8 July 2022 email:

67. [338]

    Also on 8 July 2022, Mr Cronin sent another email to Dr Piechowski (copying in the then solicitor) under the subject heading “Barrengarry Project - Geothermal Systems Expert Report”. Mr Cronin said that although the GXA Report had made clear that there should have been 9 FCUs to allow for zoning, Univenta proposed 4 FCUs and installed only 2. Mr Cronin added that this “should also be called out as Aspire and Univent [sic] clearly ignored the GXA Report”.

68. [339]

    Later, on 8 July 2022, Mr Cronin sent an email, presumably to Dr Piechowski because it is part of a chain of emails, with the following text:

69. [340]

    Dr Piechowski was asked by Mr Cronin on 11 July 2022 whether he had had a chance to review Mr Cronin’s 8 July 2022 email. Dr Piechowski replied on the same day and told Mr Cronin that he would review his comment regarding the ground loop and come back to him two days later.

70. [341]

    On 13 July 2022 at 9:05pm, Mr Cronin emailed Dr Piechowski (copying in the solicitor) and asked whether Dr Piechowski had had a chance to review the ground loop and pipe layout issue. He added that the GXA Report “clearly shows 6 x 530 = 3,180 l/m of ground pipe at Main House alone” and that it was important to get Dr Piechowski’s expert report sorted in order to finalise the “legal statement of claim” which Mr Cronin was hoping to file that week.

71. [342]

    Early the next day on 14 July 2022 at 7:22am, Dr Piechowski responded to Mr Cronin by email, copying in the solicitor. He wrote:

72. [343]

    On 18 July 2022, Dr Piechowski responded to the solicitor (and also apparently to Mr Cronin based on the email chain). Dr Piechowski said that he had reviewed and updated his report “as per your questions and comments”. He attached two copies of the report which he hoped would assist with the review. He said that revised version 15 included the solicitor’s original comments and Dr Piechowski’s edits. He said that the version marked version 16 was a clean version of version 15 with all tracing of edits and highlights removed. Dr Piechowski added that he believed that he had addressed all of the solicitor’s comments and invited any additional comments.

73. [344]

    On the same day, approximately 30 minutes after the time of Dr Piechowski’s email, Mr Cronin sent an email to Dr Piechowski in which he said:

74. [345]

    The evidence is unclear as to whether Mr Cronin provided any suggestions comments or mark-ups for Dr Piechowski to consider on 18 July 2022, but it appears from the terms of an email dated 19 July 2025 that Mr Cronin had a discussion with Dr Piechowski the previous day.

75. [346]

    Thus, on 19 July 2025, Mr Cronin sent a further email to Dr Piechowski in the following terms (emphasis in original):

76. [347]

    It is notable that this email further demonstrates Mr Cronin’s keenness to become involved in technical issues, including conducting his own desktop research, which was passed on to Dr Piechowski and to apply considerable pressure on Dr Piechowski to adopt Mr Cronin’s position on these issues.

77. [348]

    On 22 July 2022, Dr Piechowski emailed both Mr Cronin and the solicitor stating that he had updated references to ground loop design and installation, referring to Table 1 and [1.2.1], [4.1.22], [4.2.24] and [5.1.5] of the then draft report. He added that, unless there were other edits regarding formal requirements, Dr Piechowski considered that this concluded the report stage. A copy of the draft report as at 22 July 2022 was not adduced in evidence.

78. [349]

    Thirty minutes later, Mr Cronin sent an email to Dr Piechowski, copying in the solicitor, in which he made the following observations on what are quintessentially technical issues arising from what Dr Piechowski regarded to be effectively the final version of his report:

79. [350]

    Approximately an hour later, Dr Piechowski responded to Mr Cronin, copying in the solicitor. Dr Piechowski wrote:

80. [351]

    This is to be contrasted with what ultimately appeared in the final report approximately one month later at [4.3.25]–[4.3.29]:

81. [352]

    It is also evident that Mr Cronin was personally involved in providing an updated version of the expert report to Dr Piechowski on 24 July 2022 because Mr Cronin asked Dr Piechowski in an email dated 25 July 2022 whether he had received “the updated Expert Report from us yesterday?”. This email was also copied to the solicitor. Mr Cronin added that the updated report had “lots of hours of work cleaning up links and formatting etc”. This demonstrates Mr Cronin’s heavy, direct and ongoing personal involvement in finalising the first report.

82. [353]

    Later, on 25 July 2022, Dr Piechowski sent Mr Cronin and the solicitor an updated report (a copy of which was not adduced in evidence). Mr Cronin responded by an email, copying in the solicitor, saying that he had no further comments and he asked the solicitor to forward the draft report to Cadence’s barrister.

83. [354]

    Dr Piechowski’s first expert report is dated 19 August 2022. It is important to note the following features which are relevant to the challenge to Dr Piechowski’s independence:

84. [355]

    Dr Piechowski confirmed in cross-examination that he provided consulting services to Mr Cronin after he had completed his first expert report and that the services related to the scope of rectification and the rectification works. He confirmed that he was paid an hourly rate of $300 per hour for those services.

85. [356]

    In my view, the issue whether or not an expert has provided truly independent opinions to the Court falls to be determined not simply by the subjective views of the expert, but by an objective assessment of the relevant surrounding circumstances. Dr Piechowski’s view that his first expert report truly reflects his independent opinions is not consistent with the matters emphasised above regarding its evolution and development, with particular reference to the pronounced personal involvement by Mr Cronin and the repeated pressure applied by him to have Dr Piechowski change the draft report so as to reflect Mr Cronin’s comments, including on many matters of technical significance.

86. [357]

    An objective evaluation of the evidence does not support Dr Piechowski’s subjective views regarding his independence.

87. [358]

    When it was put to Dr Piechowski in cross-examination that his report had relied on input from other people apart from Mr Jefford, including Mr Cronin, he agreed but then added that he did not “understand input as telling me what to write”.

88. [359]

    Later in his cross-examination, Dr Piechowski said that the final version of his report was “my report” and that he took input from various people but made his own conclusions. I accept that in some instances Dr Piechowski took on board the comments and input by Mr Cronin and/or the building consultant (presumably Mr de Maio) but proceeded to conduct his own analysis in response to the issues raised by them. A good example is Dr Piechowski’s response to the observations of Mr Cronin and the building consultant regarding the way he calculated flow rates in concluding that the water pump was undersized for the FCUs (see at [4.3.7] of the final report):

89. [360]

    Later in his cross-examination, when it was put to Dr Piechowski that he had adopted Mr Cronin’s language in item 19 of the scope of works, he said that “adopting the language and adopting opinion are two different things”.

90. [361]

    It is well to set out the following exchange between Mr Thompson and Dr Piechowski:

91. [362]

    Examples of Dr Piechowski asserting his own independent opinion are to be contrasted with the numerous instances outlined above which indicate a preparedness on his part to acquiesce to, or fully adopt, the views of Mr Cronin on quintessentially technical issues and not merely editorial comments.

92. [363]

    I respectfully adopt the following observations by Brooking J in Phosphate Co-Operative Co of Australia Ltd v Shears (No 3) [1989] VR 665 at 681, which, in my view, apply not only to independent experts in company cases but also in building and contractual disputes of the kind here:

93. [364]

    I do not accept Dr Piechowski's claim that he only took into account the input and comments of other persons in order to clarify or make clearer his own opinions. It is clear that Dr Piechowski's adoption of many comments and observations by Mr Cronin and the building consultant went well beyond merely clarifying Dr Piechowski's own opinion.

94. [365]

    For all these reasons, and not without some hesitation because of the significance for Cadence’s case and Dr Piechowski personally, I accept that only limited weight should be given to the views expressed by Dr Piechowski in his first report and to other parts of his written and oral evidence which relate to that report. I strongly prefer Dr Kivi’s evidence.

95. [366]

    By a letter dated 4 March 2024, Cadence’s then solicitors retained Dr Piechowski to provide a second report. Dr Piechowski was asked to answer the following questions:

96. [367]

    Dr Piechowski’s second report is dated 5 March 2024. It is reasonable to infer that Dr Piechowski was working on his second report well before 4 March 2024, as he could not possibly have finalised such a detailed report in 24 hours.

97. [368]

    It is also evident from the documents in Exhibit 15 that Dr Piechowski was asked by Mr Cronin in early 2023 to review and provide comments on material which Univenta had provided in respect of its payment claim under the SOP Act. Dr Piechowski provided his comments on 20 January 2023, which Mr Cronin acknowledged later that day.

98. [369]

    There was a video conference attended by at least Dr Piechowski and Mr Cronin on 25 May 2023, as referred to in Mr Cronin’s email dated 2 July 2023. Mr Cronin asked for any further thoughts Dr Piechowski had on issues such as “GHX and in-slab piping: HUFH installation practices – single meander floor circuit design, 200mm pipe spacing, piping close to slab edging, long HUFH piping lengths”, which he described as “fundamental and permanent”.

99. [370]

    By an email dated 7 July 2023, Mr Cronin informed Dr Piechowski that he had engaged new lawyers and that they would be contacting Dr Piechowski directly “about preparing a supplementary report to bring everything together after the rectification work programme etc”. Mr Cronin added:

100. [371]

     Dr Piechowski’s ongoing exchanges with Mr Cronin are further reflected in the following emails dated 23 and 29 August 2023, which Mr Cronin sent to Dr Piechowski, copying in Cadence’s new solicitors (emphasis in original):

101. [372]

     Under cross-examination by Mr Thompson, Dr Piechowski acknowledged that he had had input into the scope of works for rectification prior to him finalising his second report.

102. [373]

     Dr Piechowski also acknowledged that he did not disclose the nature and extent of his involvement in this matter, as is reflected in the following extracts from the transcript:

103. [374]

     Dr Piechowski’s failure to disclose in his second report the nature and extent of his contribution to the development of a scope of works concerning rectification of the three properties reflects poorly on his understanding of the obligations of an independent expert. It is beyond argument that he was obliged, as an independent expert, to disclose in his second report, which related to the reasonableness of the rectification scope of works, that he personally had had significant involvement in the development of that scope of works prior to finalising his second report.

104. [375]

     For these reasons, I give little weight to Dr Piechowski’s second report and to his subsequent reports or evidence to the extent that they relate to his second report.

(b) Resolution of the remaining issues to be determined

1. [376]

   The Court was informed at the beginning of the seven day trial that the parties had all agreed a document entitled “Statement of the real issues for determination”. Twenty-five separate issues were identified in that document. At the commencement of the trial, the Court encouraged the parties to structure their closing submissions with reference to those 25 agreed issues. No party objected to that course at that time.

2. [377]

   At the commencement of his closing oral address for Univenta and Mr Trembuch, Mr Thompson said, however, that he had “requested a narrower list of real issues in dispute” in relation to his clients. He then handed up an aide-memoire regarding geothermal performance which identified seven issues for determination concerning his clients. Those issues were expressed in different terms to the previous agreed statement. The new document dealt separately with what was described as the “primary case” against the Univenta defendants and the “secondary case” against them. Broadly, the distinction between the two cases reflects the difference between assessing whether the Peak Heating and Cooling Loads met the requirements in the GXA Reports (GXA Performance Requirements), as opposed to whether the installed systems met the Peak Heating and Cooling Loads of the As-Built Performance Requirements.

3. [378]

   I did not understand Cadence or the other defendants to object to this changed approach in identifying the real issues for determination relating to Cadence and the Univenta defendants. Regrettably, however, Cadence’s closing written submissions (which were provided after the hearing had finished), did not reflect either the narrower list of issues in dispute between it and the Univenta defendants, nor the 25 issues originally agreed between all the parties. This added considerably more (avoidable) complexity to the Court’s task, particularly in circumstances where, as known to Cadence, the Aspire defendants had provided their closing oral submissions consistently with the original agreed statement of issues.

4. [379]

   It is convenient first to address the issues between Cadence and the Univenta defendants, adopting the structure proposed by Mr Thompson.

(c) Primary case against the Univenta Defendants

1. [380]

   For the following reasons, I answer this question in the affirmative.

2. [381]

   The Univenta defendants submitted that, if the Court preferred Dr Kivi’s evidence over that of Dr Piechowski, it was unnecessary for the Court to make factual findings about the technical details of the geothermal system. That is because Dr Kivi was clear that the installed geothermal systems met the Peak Heating and Cooling Loads specified in the GXA Reports. In the Joint Report, I found Dr Kivi gave cogent explanations for why he concluded that the installed geothermal systems in all three Buildings met the Peak Heating and Peak Cooling Loads set out in the GXA Report.

3. [382]

   I accept those submissions. I prefer Dr Kivi’s evidence to that of Dr Piechowski for reasons given both above and below.

4. [383]

   I understood the experts ultimately to agree that the ground loops were sufficient to meet the cooling demands in respect of both the specifications in the GXA Reports and also in the Buildings as-built. But to the extent that this understanding is incorrect, I prefer the evidence of Dr Kivi over that of Dr Piechowski that the installed geothermal systems meet the Peak Heating and Cooling Loads identified in the GXA Reports.

5. [384]

   I also reject Dr Piechowski’s evidence, as stated in the Joint Report, that the geothermal system installed at the Tourist Cabin was not fit for purpose because it did not comply with the GXA Reports and the dam located nearby was unsuitable “because of the uncontrolled and varying water level in the dam”. Rather, I prefer Mr Trembuch’s evidence on this topic. This was to the effect that Univenta recommended to Aspire that the dam size be increased and he also discussed that topic with GXA. Mr Trembuch added that, while he recognised that the fluctuating water was important, he was assured by Aspire that water would never drop below a particular point because it would be pumped from a top pond into the smaller dam. I accept that evidence.

6. [385]

   The only remaining dispute between the experts is whether the systems met the Peak Heating Loads. The focus of disagreement between them on this issue is related to the lowest temperature which the ground loop and heat pump system could operate. Dr Piechowski acknowledged that, although technically, the systems could work down to −10°C, he used a figure of −5°C, being a more conservative approach which he believed appropriate for a new system. Based on this approach, I understood Dr Piechowski to opine that the ground loop was defective if it dropped below 0°C. This is because, on his view, a new system should sit within the “nominal envelope” without pushing the equipment to the extreme of its practical operation. In other words, new systems should not be pushed to its operational limit when it is first designed and installed, which “is incorrect … let alone good design practice”.

7. [386]

   The difficulty I have with Dr Piechowski’s approach is that, as Univenta pointed out, it has no support in any industry standard. I accept Univenta’s submission that this is a case of Dr Piechowski adopting a “philosophical approach of conservative design parameters”. I prefer Dr Kivi’s approach. It is supported by Exhibit 10, which is the manufacturer’s (i.e. Stiebel Eltron) specification for heat pumps and acknowledges that the heat pumps can be operated successfully with an entering water temperature as low as -10°C (see Exhibit 10).

8. [387]

   Dr Kivi’s opinions were formed on the basis of recognised industry standards and other authoritative industry material. For example, his modelling was based on standards approved by the American Society of Heating, Refrigerating and Air-Conditioning Engineers, a publication which Dr Kivi described several times as “the bible of mechanical engineers”, and which Dr Piechowski acknowledged was an appropriate authority. Dr Kivi also applied the National Construction Code schedule for modelling Peak Heating and Cooling Loads, as well as the standard suggested by the International Ground Source Heat Pump Association regarding the use of geotechnical reports in modelling the ground loop.

9. [388]

   I also accept the Univenta defendants’ submission in closing address that the question whether or not the geothermal systems complied with Scenario 1 or Scenario 2 is no longer a real debate. That is because the experts ultimately agreed that, for the purpose of Peak Heating and Cooling demand, the Main House operated by reference to zones. Both experts regarded the geothermal system at the Main House as effectively operating under Scenario 1. The difference between them is that Dr Piechowski opined that the system should be operating at all times to maintain a constant temperature in that Building so that, for example, people would be comfortable at say 2am if they wanted to watch movies. Thus, Dr Piechowski believed that the geothermal system at the Main House should be running at all times so as to maintain constant conditioning across the whole Main House. This is to be contrasted with Dr Kivi’s approach, which relies upon an industry standard and which I prefer. I also consider that it accords with basic common sense regarding residential living.

10. [389]

    Mr Thompson handed up an aide-memoire which helpfully summarised the evidence given by Dr Piechowski and Dr Kivi in the Joint Report regarding the Peak Heating and Cooling capacities of the installed geothermal systems in respect of all three Buildings when measured against the loads specified in the GXA Reports:

11. [390]

    Mr Thompson’s submissions in respect of this aide-memoire may be summarised as follows:

12. [391]

    I accept Mr Thompson’s submissions relating to the aide-memoire. I prefer Dr Kivi’s approach and analysis to that of Dr Piechowski. Separate from my concerns regarding Dr Piechowski’s independence as an expert witness, I am not persuaded that his more conservative design approach is to be preferred to that of Dr Kivi.

13. [392]

    As to Dr Piechowski’s opinion that a discount of 15% should be applied for damaged or broken ducts, I was not taken to any other evidence which supported such a discount. There were other difficulties with Dr Piechowski’s discount. Under cross-examination by Mr Kearns, Dr Piechowski acknowledged that one of the photos he relied upon as showing damaged ducts had nothing to do with the heating and cooling system. He also frankly acknowledged that he had relied on other photos and things he was told by Mr Jefford concerning the extent of damage to the air ducts. Mr Jefford was not called as a witness in the proceeding but I accept that he did at least visit the sites. That is not the case with Dr Piechowski. It is to be recalled that Dr Piechowski never personally visited the sites at any time, including when the air ducts would have been exposed. He was fully dependent on photographs and what others told him about the ducts. I find his evidence on this topic unconvincing.

14. [393]

    As noted above, Cadence also seeks damages for Univenta’s failure to integrate the CUE (KNX) app with the Control4 system. Mr Cronin gave detailed evidence of his dissatisfaction with Univenta’s obligation to fully integrate the geothermal controllers into the Control4 home automation system at each of the three Buildings. He said that, despite multiple attempts over more than six months, Univenta failed to integrate any of the controllers into the home automation systems and he described at some length correspondence and conversations relating to this issue. Mr Cronin said that he never received any satisfactory response from Aspire or Univenta as to why the controllers would not be integrated into the Control4 automation system consistently with the three quotes provided by Univenta which referred to the matter.

15. [394]

    I do not accept Mr Cronin’s claim that he received no satisfactory explanation on this matter. I prefer Mr Trembuch’s evidence on this issue. Under cross-examination, Mr Trembuch said that he tried to explain to Mr Cronin that when everything was sorted Univenta intended to integrate the app into the Control4 automated system. Mr Trembuch then gave the following evidence, which I accept:

16. [395]

    I accept Mr Trembuch’s evidence that it was his intention to integrate the CUE (KNX) app into the Control4 system in due course but this would involve some technical adjustments. In particular, after learning that the Siemens protocol did not integrate automatically with the Control4 system, Mr Trembuch said that a specific router would be used to provide a solution and “translate the Siemens language” into the Control4 system. In the events that occurred, however, Cadence prevented Univenta from making those adjustments upon termination of the Building Contracts.

17. [396]

    In those circumstances, I reject Cadence’s claims in respect of this matter.

18. [397]

    Strictly speaking, having regard to my affirmative answer to issue 1 this issue does not arise. For completeness, however, I can indicate that I would have answered issue 2 in the negative.

19. [398]

    First, while I accept that Mr Trembuch accepted in cross-examination that he had not modelled the ground loop systems before their installation there is no persuasive evidence that, if he had done so, a different outcome would have been achieved.

20. [399]

    Secondly, I do not accept Cadence’s claim that Univenta and/or Mr Trembuch breached their duty of care by not checking with GXA before they changed several aspects of the ground loops, including their length and location. As noted above, I found Mr Trembuch to be a truthful and reliable witness. I also accept Mr Trembuch’s evidence that he discussed with both GXA and Aspire Univenta’s recommendation to change the ground loop for the Tourist Cabin geothermal system from a horizontal ground loop to an in-water ground loop. I also accept Mr Trembuch’s evidence that he spoke with GXA regarding the proposal to change the length of the ground loop as well as its “horseshoe” design.

21. [400]

    Finally, I reject Cadence’s claim that the Univenta defendants breached their duty of care in not acting on the updated NatHERS Certificates in respect of glazing requirements. Mr Trembuch freely acknowledged that glazing was a very important factor in modelling the thermal requirements of the properties, not the least because of the extensive windows in the Buildings. But Univenta reasonably relied upon relevant information in the GXA Reports in its design of the geothermal systems.

22. [401]

    Again, although this issue does not strictly arise, for completeness I can indicate why I would also answer this issue in the negative.

23. [402]

    First, as Mr Thompson correctly submitted, Cadence did not attempt to link a particular defect to a particular scope of work. Its fundamental case was that rectification required a decoupling of the cooling part of the geothermal systems and the installation of hybrid systems, using conventional air-conditioned cooling.

24. [403]

    Secondly, as noted above, Cadence relied heavily on Dr Piechowski’s second report in support of its claim that the geothermal rectification works carried out by it were reasonable. For reasons given above, I give scant weight to that report.

25. [404]

    Thirdly, I prefer Dr Kivi’s evidence which was that the decoupling of the geothermal cooling was unnecessary and constituted “a major mistake”. Dr Kivi explained that the consequence of this decoupling was to “eliminate access to the superior efficiency of the existing geothermal system in cooling mode and diminish the effectiveness of geothermal heating by preventing the reinjection of heat into the geothermal ground for winter heating purposes” and it would also increase reliance of generator power.

26. [405]

    Finally, the unreasonableness of Cadence’s claim for rectification costs is also demonstrated by the fact that it still claims in the amount of $104,000 for tinting the windows to reduce the SHGC value, despite the fact that Dr Piechowski ultimately accepted that the ground loops were sufficient for cooling and that the heating worked in all three Buildings.

(d) Secondary case against the Univenta Defendants

1. [406]

   It is convenient to deal with these three issues together. The first is premised on the proposition that Univenta or Mr Trembuch should have known that the choice of windows changed at Mr Cronin’s insistence, which had significant implications for their SHGC values. It is undisputed that when Univenta was contracted to build and install geothermal systems which met the specifications in the GXA Reports, the reports it was provided identified a SHGC value of 0.25. It was not until much later that the SHGC value increased to more than 0.5 in the updated NatHERS Certificates after the choice of windows had changed. When it was put to Mr Trembuch in cross-examination that he should have taken further steps to obtain information regarding the SHGC values, he denied any requirement to do so because he relied upon GXA’s thermal modelling. I accept that evidence.

2. [407]

   In any event, as Mr Thompson pointed out in closing address, if in fact Mr Trembuch had reviewed the window specifications dated 22 July 2020, each of the windows specified under the notes had a SHGC value of 0.25. Accordingly, this would not have made any difference. I also accept that, because the windows made up a very large part of each of the three Buildings, the change in the SHGC values brought about by different windows being installed was significant. I also find that no one told Univenta or Mr Trembuch about these significant changes. I do not accept Cadence’s submission that Univenta and Mr Trembuch should have made further enquiries to ascertain whether the window specifications referred to in the GXA Reports had changed. I find that they were reasonably entitled to rely on the information in the GXA Reports.

3. [408]

   Finally, I accept the following submissions by Mr Thompson:

4. [409]

   As to issue 5, its resolution again turns on whether the Court prefers the evidence of Dr Kivi over that of Dr Piechowski. For reasons given elsewhere, I strongly prefer Dr Kivi’s evidence. It demonstrates that the geothermal systems which were installed at the three properties meet the “as-built” Peak Heating and Cooling Loads, as explained by Dr Kivi in his Supplementary Report dated 7 October 2025. Dr Kivi provided detailed calculations which support his opinion that the as-built geothermal ground loop met the performance criteria set out in the GXA Reports and had enough capacity to the GXA Heating and Cooling Loads. Dr Kivi explained that the internal heating and cooling distribution remained the same under both Scenario 1 and Scenario 2. In the executive summary to his Supplementary Report, Dr Kivi made the following observations, which I accept:

5. [410]

   I accept Mr Thompson’s submission that Dr Kivi’s evidence also demonstrated that the geothermal systems are capable of meeting the daytime “as-built” Peak Cooling Load in both the 368D House and the Tourist Cabin. The geothermal system installed at the Main House failed to reach the “as-built” Peak Cooling Load for 11 hours in a year, representing only 0.4% of total daytime cooling hours. Dr Kivi also found that for the “as-built” Peak Cooling Load for the nighttime only failed for 28 hours in a year, representing 1% of total nighttime cooling hours at the Main House and the Tourist Cabin, and 0.7% of total nighttime cooling hours at the 368D House. I also accept the Univenta defendants’ submission that these constitute “minimal departures” from the Peak Cooling Load, which fall far short of establishing that the as-built geothermal systems were so defective as to justify rectification works which cost in excess of $1 million. As Mr Thompson submitted, the “evidence isn’t that the systems don’t cool or heat the properties just that they miss the ‘peak’ heating and cooling loads for less than 1% of the year against the ‘as-built’ standard”.

6. [411]

   As noted above, Mr Cronin gave evidence of his experience of the geothermal systems as-built failing and not meeting his expectations in various respects. To the extent that Mr Cronin’s evidence conflicts with that of Dr Kivi, I strongly prefer the latter for reasons explained elsewhere. Moreover, as the Univenta defendants pointed out, Mr Cronin’s evidence related to a period before the Univenta defendants were given an opportunity to commission the system. Furthermore, Mr Cronin’s evidence does not reflect the true capacity of the geothermal systems because he never operated those systems with the floor slabs in cooling mode or with a chilled water temperature set to 6°C, as discussed by Dr Kivi. Finally, I refer to my finding above that Mr Cronin had unrealistic and unfounded expectations regarding the performance of the geothermal systems based on his experience of a very different system operating at his Mosman residence.

7. [412]

   Issue 7 is predicated on Cadence succeeding on issues 4-6. Since it has failed to do so, issue 7 does not strictly arise. For completeness, however, I would also answer issue 7 in the negative, for similar reasons given above in respect of issue 3.

8. [413]

   Finally, for the sake of completeness, I am satisfied that the rectification works which were carried out, so as to decouple the cooling components constituted betterment and was not truly rectification, having regard to Dr Kivi’s evidence which I accept. I do not accept Dr Piechowski’s evidence that these rectification works were reasonable for the reasons given above.

(e) Remaining issues concerning geothermal claims

1. [414]

   Having addressed and determined the relevant issues against the Univenta defendants concerning the geothermal claims, I shall now turn to address and determine the remaining issues which affect Aspire and Mr Kearns, adopting the structure of the original agreed statement of issues to be determined, as modified by Univenta. There is a substantial overlap between the claims made against the Univenta defendants and the Aspire defendants. Mr Kearns made clear that he and Aspire relied upon Mr Thompson’s cross-examination and submissions in relation to those claims.

2. [415]

   It is convenient to deal with these two issues together. Both issues are effectively raised by issue 1 in the primary case against the Univenta defendants.

3. [416]

   I repeat and adopt my answer to that issue.

4. [417]

   I did not understand Cadence in its post-hearing written submissions to address these issues independently of more general issues regarding whether the geothermal systems met either the GXA Performance Requirements or the As-Built Performance Requirements.

5. [418]

   These issues overlap with issue 1 in the primary case against the Univenta defendants and issues 4 and 5 of the secondary case against the Univenta defendants. Accordingly, I repeat and adopt my answers to those issues above.

6. [419]

   It is convenient to address these matters collectively.

7. [420]

   Cadence submitted that if the Court accepted Dr Piechowski’s opinion that the geothermal systems installed at each Building did not satisfy the GXA Performance Requirements relating to Peak Heating and Peak Cooling targets and loads, it necessarily followed that Aspire had breached its statutory warranty of fitness for purpose.

8. [421]

   That contention must fail because, as explained above, I do not accept Dr Piechowski’s opinion on that matter. Rather, I have a strong preference for Dr Kivi’s evidence. Acceptance of Dr Kivi’s opinion that the geothermal systems installed at each of the Buildings adequately complied with the GXA Reports and As-Built Performance Requirements is a sufficient answer to Cadence’s individual complaints that, for example, materially smaller GHXs were installed, the ground loop installed in the Tourist Cabin dam was a material departure from the GXA Reports. Fewer FCUs were installed than prescribed in the GXA Reports and Aspire failed to provide insulation on the edge of the slab.

9. [422]

   In its closing written submissions, Cadence also relied upon parts of Mr Kearns’ evidence under cross-examination where he acknowledged some shortcomings concerning Aspire’s actions and processes. In particular, Cadence drew attention to Mr Kearns’ answer to various questions regarding his awareness of the fact that Univenta had departed from some aspects of the designs in the GXA Reports. Cadence referred to the following extracts from Mr Kearns’ cross-examination:

10. [423]

    I regard this evidence as constituting an admission by Mr Kearns that Aspire ought to have obtained advice from an independent engineer, such as GXA, in relation to the design changes proposed and implemented by Univenta.

11. [424]

    Later in his cross-examination, when Mr Kearns was asked whether he should have engaged GXA or a consultant like it to assist with supervising installation of the geothermal system, he said that he thought that he should have. He gave a similar answer when asked whether he should have engaged someone like GXA to help assess whether the geothermal systems had been commissioned appropriately. Significantly, however, Mr Kearns then added that although he had not advised Mr Cronin to approve such engagements, he considered that, based on experience, such approval “probably wouldn’t have been available”. I accept that evidence. Thus, the admissions are not determinative because Cadence has failed to establish causation.

12. [425]

    As noted above, Mr Kearns also candidly accepted in cross-examination that he ought to have told both GXA and Univenta that there was uncertainty about what windows would be used. But that admission does not assist Cadence’s claim under s 37 of the DBP Act having regard to its failure to establish that the geothermal systems did not meet the GXA Performance Requirements for reasons given above. There is also the problem of causation.

13. [426]

    Similarly, Aspire’s failure to engage an independent engineer to review shop drawings and the works installed by Univenta does not mean that Cadence should succeed in its s 37 claims against Aspire and Mr Kearns.

14. [427]

    See my answers to issue 5 above.

15. [428]

    Strictly speaking, these issues do not arise because of Cadence’s failure to succeed on issues upon which questions of loss and damage are predicated. In view of my unqualified acceptance of Dr Kivi's evidence and my rejection of Dr Piechowski's evidence to the contrary regarding the issue of whether there were defects in the geothermal systems, I find that the geothermal systems complied with both the GXA Performance Requirements and the As-Built Performance Requirements. On this basis, no defects have been established. For completeness, however, I shall briefly indicate my findings on these issues.

16. [429]

    Again, assuming contrary to the above conclusion that the geothermal systems did not meet the GXA Performance Requirements or the As-Built Requirements, I would have found that Aspire and Mr Kearns were responsible for those breaches and not Univenta (save in respect of the failure to install slab edge insulation because I accept Mr Kearns’ evidence that he told Univenta that Aspire could not provide such insulation). As noted elsewhere, Mr Kearns ultimately accepted that he ought to have been more vigilant in informing Univenta of the changes in the window glazing. This is reflected in the following extracts from Mr Kearn’s cross-examination with particular reference to his assumption that the NatHERS Certificate would be updated to match whatever was in the window schedule when, in fact, that did not occur:

17. [430]

    As to issue 12(b), Cadence’s primary claim for damages for rectification of the geothermal systems totalled $1,185,500. That figure relates to the performance of the systems as a whole, as opposed to any particular individual issue. I make a firm finding that, even if I am wrong in acting upon Dr Kivi’s evidence that the extent of the rectification works was totally excessive. I would not have awarded anywhere near that quantum of damages, but the permutations are too numerous to be more definitive without a clear identification of any individual defective elements in the systems. All the more so in view of Dr Piechowski changing his opinions about the performance of the systems generally while still adhering to his original view that the rectification works were reasonable.

18. [431]

    In its closing written submissions, Cadence advances an alternative claim in the amount of $25,500 which it attributes to Dr Kivi in the Joint Report as reasonable rectification costs relating to any failure to meet the GXA Performance Requirements. To reiterate, Dr Kivi’s firm opinion, which I accept, is that there are no defects and consequently no rectification is required. The figure relied upon by Cadence relates to Dr Kivi’s estimate of reasonable rectification costs in the event that Cadence established the alleged defects. As Univenta pointed out in its closing submissions in response:

19. [432]

    I accept those submissions.

20. [433]

    As to issue 12(c), I have explained why I consider that the rectification works concerning the geothermal systems were unreasonable and constituted betterment, with particular reference to the decoupling of the cooling components. Again, I strongly prefer the evidence of Dr Kivi and I reject Dr Piechowski’s opinions on the matter.

21. [434]

    Finally, there is issue 12(d). Cadence claimed that it should be compensated for the loss of the opportunity to sell the 368D House in February 2022. That House was placed on the market in November 2021 and a contract was signed in the amount of $9 million but contracts for the sale of the land did not exchange. The property was withdrawn from the market in February 2022 and practical completion of the defect rectification work at the 368D House did not occur until 13 October 2023.

22. [435]

    As noted above, Mr Devitt gave uncontradicted valuation evidence which valued the 368D House as at February 2022 in the amount of $7.75 million and in the amount of $5.85 million as at the date of the trial. If necessary, I would have accepted that evidence, which was unchallenged.

23. [436]

    Assuming, contrary to the above, that I had found that the defects in the geothermal systems caused Cadence to lose the opportunity to sell the 368D House in beneficial market conditions, I would have found that Cadence was entitled to damages representing the difference between market value as at February 2022 and as at the date of the trial plus some of the additional holding costs, which, according to Mr Cronin, totalled $763,544. That figure primarily comprises interest payments of $577,133. If necessary, I would not have awarded the total figure claimed by Cadence for holding costs related to the period November 2021 to 13 October 2023, taking into account the limitations applying to the external access roads from March 2022 to early February 2024. These restrictions would necessarily have affected the capacity of any prospective buyers to inspect any of the Buildings. These restrictions were unrelated to any defects in the Geothermal Works at the 368D House.

24. [437]

    I consider that a discount should be applied to reflect the inherent uncertainties of Cadence being able to realise the opportunity to sell the 368D House in February 2022. In the circumstances, and noting that the signed contract in the amount of $9 million did not exchange, I would apply a discount of 50%. This higher figure also reflects the up-market qualities of the 368D House and its remote location, factors which are likely to affect the likely sale process period.

25. [438]

    Dealing with these issues collectively, as noted above, the defendants all accepted that apportionment was not available.

(f) The internal access road claim

1. [439]

   It is convenient to deal with all these issues collectively.

2. [440]

   It is common ground that detailed engineering plans were not obtained prior to the work carried out by Aspire and others relating to the internal access roads in the period prior to the Building Contracts being terminated. As will emerge, Mr Cronin ultimately accepted that it was Cadence’s responsibility to obtain such plans.

3. [441]

   I reject any contention that Aspire had a contractual obligation to obtain such plans arising from the obligation imposed by the Development Approval for all works to be carried out consistently with the conditions of that Development Approval. I accept Mr Kearn’s submission that that obligation cannot be read in isolation from the scope of works under the Building Contracts. As noted above, it was relevantly stated there that the works to be completed by Aspire, including the internal road asphalt, were to be completed as per the specified Drawings, Schedules and Specifications. No detailed engineering plans were included in the documents identifying Aspire’s work. Moreover, although under cl 1(d) of the Building Contracts, all work was required to comply inter alia with the conditions of any relevant development consent, it was stated in cl 1(d)(ii) that the builder was not liable for a failure to comply with that requirement if the failure related solely to a design of all specifications prepared by or on behalf of the Owner and not on behalf of the Builder.

4. [442]

   The Building Contracts stated in paragraph (b) of Sch 3 that “site access roads” were excluded from the building works. Cadence submitted that this refers to the preliminary works undertaken by Selby Earthmoving prior to Aspire commencing the building works and that Aspire retained responsibility for completing the permanent and upgraded internal access road. Aspire claimed that its obligations were limited to the mere application of asphalt to pre-formed internal roads. Cadence emphasised, however, that in fact Aspire undertook substantially more work than that, including installing drainage systems and engaging RVC as a sub-contractor to undertake works such as road widening, shaping the base layer of the road and installing stormwater drains. The works undertaken by RVC were claimed by Aspire and paid for by Cadence.

5. [443]

   The evidence comfortably establishes that, independently of the proper construction of the Building Contracts regarding Aspire’s obligations, it did in fact do far more than simply asphalt parts of the internal access roads. These actions, which are referred to immediately above, are set out in some detail in Mr Cronin’s affidavit dated 4 March 2025 and are supported by contemporaneous documentation, including the video which is described at [452] below.

6. [444]

   The experts also agreed that:

7. [445]

   Cadence claimed that Aspire’s failure to obtain design plans from a civil engineer and geotechnical engineer constituted a breach of Aspire’s warranty of due care and skill under the Building Contracts as well as a breach of its duty of care under s 37 of the DBP Act. The latter claim is also brought against Mr Kearns personally.

8. [446]

   In my view, there is a significant issue of causation of loss in respect of the internal access roads. It relates to the counterfactual question whether, if it had been advised to do so, Cadence would have obtained appropriate engineering plans so that the internal access roads were designed and constructed in accordance with the Development Approval and did not need to be reconstructed. For the following reasons, I am not satisfied that Cadence has established causation and I consider that this is fatal to its claim.

9. [447]

   First, Mr Cronin ultimately agreed (and in my view correctly) in his oral evidence that Cadence was responsible for obtaining engineering drawings in relation to the internal access road, as is reflected in the following extract from his cross-examination by Mr Kearns:

10. [448]

    Later in his cross-examination, Mr Cronin confirmed this evidence:

11. [449]

    Secondly, and perhaps even more significantly, Mr Cronin ultimately also agreed in his oral evidence that he probably would not have acted upon any advice from Mr Kearns to obtain such engineering plans. I accept that evidence, which was given against interest.

12. [450]

    Cadence submitted that, despite this acknowledgement by Mr Cronin, the Court should find that the cost of reconstructing the road was in fact causally related to the alleged breaches because:

13. [451]

    I will explain below at [459] why I do not accept these submissions.

14. [452]

    Both Cadence and Aspire claimed that a video sent by Mr Kearns to Mr Cronin on 3 June 2021 supported their respective positions regarding the internal access road. Extracts from the video were set out in Mr Cronin’s first affidavit and a full transcript of the video was included in the evidence, which is now reproduced below:

15. [453]

    Cadence relied upon this video as demonstrating that Mr Kearns assumed responsibility for the design and installation of the internal access road. It also relied on Mr Cronin’s affidavit evidence of his recollection of a conversation he had with Mr Kearns the following day, i.e. 3 June 2021:

16. [454]

    Cadence submitted that this material demonstrated that Aspire proposed to cut corners and apply quicker and cheaper solutions to complete the internal access road, in contrast with Mr Cronin’s position. I do not accept that submission. It is inconsistent with Mr Cronin’s ultimate acknowledgement that it was Cadence’s responsibility to obtain engineering drawings for the internal access roads, and also his ultimate acceptance of the proposition that, if he had been advised to do so, he probably would not have paid to obtain detailed engineering plans.

17. [455]

    The total cost of rectification in relation to the internal access roads was $1,193,188.

18. [456]

    Cadence seeks damages totalling $450,389, which is broken up into various detailed categories. Cadence presses its claim in relation to loss of rent for the Tourist Cabin and it also seeks $10,000 on the basis that Aspire acknowledged that the cost of the work to remove the landslide debris and remediate the area was in the order of $5,000 to $10,000.

19. [457]

    The detailed categories comprising Cadence’s claim for damages in the amount of $450,389 are as follows:

20. [458]

    Cadence has established to my satisfaction that some of the internal access road works were defective as alleged by it. As noted above, however, there is a central issue of causation which Cadence needs to establish in order to recover damages from either Aspire or Mr Kearns personally. As noted above, Mr Cronin confirmed in cross-examination that Cadence was responsible for obtaining appropriate engineering plans in relation to the internal access road. He also ultimately agreed in cross-examination that he probably would not have acted on any advice from Mr Kearns to obtain proper engineering plans so that the internal access roads conformed with relevant conditions in the Development Approval and Australian Standards. I accept that evidence, which is fatal to Cadence’s case in respect of this claim.

21. [459]

    I reject Mr Lyons’ submission (see at [450] above) that this acknowledgment by Mr Cronin is not fatal to the issue of causation. In particular, I respond to the three matters raised by Mr Lyons as follows:

22. [460]

    Turning now to the quantum of damages relating to the internal access roads rectification works (and assuming that I am wrong on causation), I would have preferred Mr Fagg’s evidence that Cadence’s decision to implement a fully engineered design in 2024 following the March 2022 deluge represented the new scope of works and not merely rectification. Cadence would be entitled to the cost of the replacement of three culvert pipes as stated by Mr Fagg, but as noted above at [457(h)], this claim was not pressed.

23. [461]

    For all these reasons, Cadence’s claim for damages in respect of the internal access road fails, save for an amount of $10,000 which Aspire accepts represents the costs of work to remove the landslide debris and remediate the area following the deluge in March 2022 and in circumstances where it accepts that it should have taken appropriate steps to protect the area from flooding.

24. [462]

    Finally, in the event that I am wrong in concluding that neither Aspire nor Mr Kearns has any liability to pay Cadence damages in respect of the internal access roads, there is issue 17(b) as to whether that breach caused Cadence to lose rental income in respect of the Tourist Cabin. Cadence contended that it would be entitled to recover damages for loss of rent during the period May 2022 to February 2025, which Mr Craig McIntosh assessed to be a figure of $203,351. Cadence contended that, in the absence of a completed and safe internal access road to the Tourist Cabin, that Building could not be occupied or rented for holiday accommodation as intended. Cadence acknowledged that, on the hypothesis that the internal access road would have been built properly in the first instance, it was appropriate to apply a conservative estimate of 9 months for that to occur on the counterfactual, pointing to the fact that that was the period taken by Jirgens Civil to remove Aspire’s defective work and rectify it.

25. [463]

    I would not have accepted those contentions. They fail to take into account the fact that, following the March 2022 deluge, Bunkers Hills Road (which provided the only external access road to the sites) was severely damaged and Shoalhaven City Council imposed strict temporary disaster load and access limits. Parts of the external road were closed to all traffic, while other parts were limited to 3-5 tonnes and confined to access by residents only. These significant limitations remained in place until the end of January 2024. It was not until November 2024 when the Council publicly announced completion of the road works, which it said took 144 days. In these circumstances, I would have accepted the submission by the Aspire defendants that the commencement date of assessing the loss of rent would be from 1 February 2024 to the time when the Tourist Cabin was first rented out, being 27 February 2025. Allowance would also need to be made for how long the works would have taken on the counterfactual, for which I would use a figure of 9 months, which is consistent with Cadence’s position.

(g) The general building defects claim

1. [464]

   It is convenient to deal with these issues collectively, with reference to the broad categories used in Cadence’s written closing submissions as referred to in Part F above.

2. [465]

   As noted above, Cadence submitted that the door schedules should be read literally as applying to doors, not the wider openings into which the doors were to be fitted. It claimed that this is confirmed by the “NOTE” regarding each door in the architect’s door drawings. For example, the description in the door schedule includes the following statements in respect of one door:

3. [466]

   Cadence emphasised that this describes the door, not the opening. One difficulty with this argument is that the drawing shows a width of 900mm and the lines on the drawing appear on their face to be directed to the width of the door itself as well as the jambs, as is shown in the following extract:

4. [467]

   This is a point which Mr Nikolas made in the conclave. He explained how he had used general software to superimpose upon the architect’s drawings the alignments of the door itself and the door jamb. He said that this indicated that the alignment was to the outside edge of the door jamb. Accordingly, doors with a width of approximately 820mm were compliant. Mr Crosby said that this analysis did not affect his opinion because “the measurements are just taken off a general software, not an actual measuring or specific software for measuring data in that case”.

5. [468]

   I prefer Mr Nikolas’ evidence, which at least provides some objective corroboration for his description of the general building practice. I reject Cadence’s criticism that Mr Nikolas’ evidence should not be accepted because it relied on general software in analysing the drawings in the door schedules. The software used by Mr Nikolas, whatever its technical limitations, confirms what is evident to the naked eye, namely that the 900mm includes the door jamb. Accordingly, I reject Cadence’s claims in relation to internal doors, except for three doors in the Tourist Cabin (see further below).

6. [469]

   For completeness, I should also indicate that I do not accept Aspire’s contention in closing address that Mr Cronin had waived Cadence’s rights under the Tourist Cabin Building Contract in respect of the three doors. I accept Cadence’s submission that waiver requires an unequivocal decision by a party, communicated to the other party, not to insist upon a right or not to exercise a power (see Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2022) 277 CLR 445; [2022] HCA 38).

7. [470]

   I also accept Cadence’s submission that the mere approval of a trade quotation cannot be construed as an unequivocal decision by Cadence to accept door widths that were not in accordance with the door schedule.

8. [471]

   Mr Crosby estimated the cost of rectification of all the doors in the sum of $179,321. The total cost for replacing the 5 defective doors for the Tourist Cabin (excluding contingency, preliminaries, overheads and profit, insurance and GST) is $18,968.04, which is $3,793.61 per door. I accept Mr Nikolas’ evidence that 3 of the doors in the Tourist Cabin were 50mm narrower than specified in the door schedule, a position which was agreed by Mr Crosby according to the Joint Report. Accordingly, the amount that Aspire is liable to pay in damages in respect of these three particular internal doors in the Tourist Cabin is $3,793.61 x 3 (i.e. $11,380.83) plus contingency, preliminaries, builders’ overhead and profit, insurance and GST. This amounts to $18,534.25.

9. [472]

   In essence, Aspire and Mr Kearns denied that they had any liability for any works relating to tennis court drainage because there was no causal link between any such defects and Cadence’s loss, as measured by its costs of the relevant rectification works. Echoing their position regarding the internal access roads, they contended that Mr Cronin would not have obtained detailed engineering plans for stormwater drainage even if he had been advised to do so. Rather, Mr Cronin was content to rely upon Mrs Lewis’s various Landscape Plans, which only dealt with stormwater drainage around the tennis court at a very general level. For the following reasons, those submissions are accepted.

10. [473]

    It is necessary first to say something more about Mrs Lewis’s various Landscape Plans, even though, curiously, the Court was not taken to any of them specifically. The evidence included several such plans in relation to the Main House. They included a Landscape Plan dated 7 November 2019 for the Main House. It depicted the tennis court in the south-west area of the Main House. It depicted stone retaining walls with a maximum height of 0.9m around the perimeter of the tennis court. It also depicted a grassed drainage diversion swale to the west of the tennis court and extending in both a northerly and southerly direction.

11. [474]

    The evidence also included an Earthworks Concept Plan dated 23 December 2019, prepared by Mrs Lewis, in relation to the Main House. It depicted similar stone retaining walls and a grassed drainage diversion swale, as well as indicating areas of proposed cut and fill in and around the tennis court. Both these plans were included in the Construction Certificate issued on 29 April 2020. Both plans are also referred to in Part A of the Development Approval dated 1 April 2020.

12. [475]

    In his first affidavit, Mr Cronin addressed what he described as “future defect rectification works – tennis court drainage”. It is evident from [450] of that affidavit that no rectification works had been commenced in respect of the tennis court drainage issue as at the date of that affidavit, being 4 October 2023. Mr Cronin set out numerous exchanges he had with Aspire from around October 2021 regarding Mr Cronin’s concerns that excessive water was pooling behind the western and northern sides of the then recently constructed tennis court. He also pointed to [238] of the General Building Defect Report (Main House), prepared by Cadence’s architect (Design Studio Group) and dated 21 May 2022 in respect of this matter. That report stated that there did not appear to be effective drainage to the western side of the tennis court and that there was insufficient subsoil drainage to the western side of the tennis court, with the result that water was not draining properly and that water was pooling along the length of the court.

13. [476]

    In his Supplementary Report dated 10 April 2025, Mr Crosby opined that the drainage works in the vicinity of the tennis court were deficient and in breach of the National Construction Code and relevant Australian Standards. He relied heavily on photographs of the area which were annexed to Mr Cronin’s affidavit, including photographs taken in the period from January to March 2022, which were times of exceptional rainfall events in the region. Mr Crosby concluded that, based on his review of the evidence, the construction of the drainage systems in and around the perimeter of the drainage court “did not adequately divert water that flowed down from the catchment area to the water retention area (dam)”.

14. [477]

    Aspire and Mr Kearns contended that Cadence was responsible for the stormwater design and that, in relation to both the internal access road and the tennis court, it had failed to establish any defective work, particularly in circumstances where Mr Crosby was not a qualified expert in hydraulic engineering.

15. [478]

    Even if the drainage works around the perimeter of the tennis court were defective in the ways identified by Mr Cronin (putting to one side any issue regarding his qualifications concerning hydrology), there is a fundamental issue of causation which is not dissimilar to that relating to the internal access road. As has already been emphasised, in April 2020, shortly after the Development Approval was confirmed, Mr Cronin asked Shoalhaven City Council to remove Condition 28 from the Development Approval. As noted above, that condition related to the design of stormwater drainage and stated that major and minor drainage systems had to be designed by a qualified practising engineer in accordance with specified Council Engineering Design Specifications. In his email, Mr Cronin explained that this condition should be removed for various reasons, including that engaging another consultant “to prepare another expensive report is way over the top”, that the building was not on steep terrain, the proposed works did not involve removing trees or vegetation, and perhaps most significantly:

16. [479]

    Presumably, the reference to the Landscape Plans is to those drawn up by Mrs Lewis, which are summarised above.

17. [480]

    In the events that occurred, the Council declined to remove either of the two conditions sought by Mr Cronin (the other condition related to the internal access road design). The critical point, however, is that Mr Cronin was clearly content to rely upon Mrs Lewis’s Landscape Plans in respect of stormwater drainage design affecting not only the internal roads, but also the tennis court because he had a strong belief that they were adequate for the task and Cadence should not be required to obtain additional engineering plans. Mr Cronin was cross-examined regarding his email to Shoalhaven City Council and on his reliance on Mrs Lewis’s Landscape Plans, including in relation to stormwater drainage generally. His evidence did not derogate from the clear message in his 8 April 2020 email which recorded his view that the existing Landscape Plans were adequate.

18. [481]

    Cadence adduced no evidence which indicated that it proceeded to obtain engineering plans for stormwater drainage or that the stormwater drainage adjacent to the tennis court was not installed by Aspire in accordance with Mrs Lewis’s Landscape Plans. Assuming that he was qualified to do so, Mr Crosby’s expert evidence is silent on that issue. It is also notable that there is no reference at all in his reports to Mrs Lewis’s Landscape Plans, notwithstanding that Mr Cronin strongly believed that they were adequate for the purposes of stormwater drainage design, as is reflected in his email dated 8 April 2020 to Shoalhaven City Council.

19. [482]

    For the purposes of the counterfactual, I am comfortably satisfied that, even if Mr Cronin had been advised to obtain more detailed engineering plans relating to tennis court drainage prior to the Building Contracts being terminated, he would not have acted on that advice and would have continued to regard Mrs Lewis’s Landscape Plans as adequate for that purpose.

20. [483]

    For these reasons, I reject Cadence’s claim in respect of tennis court drainage.

21. [484]

    Cadence’s claims in relation to these items are described at [141]-[148] of Part F above.

22. [485]

    In their written response to Cadence’s closing written submissions, Aspire and Mr Kearns acknowledged that there was a link between items 75, 230 and 240. But they opposed Cadence having leave to resurrect items 75 and 240 because Mr Kearns had not pressed his questioning of the experts on item 75 following Mr Lyons’ confirmation that Cadence did not press that particular item. The transcript supports Mr Kearns in this respect. Given that clear prejudice and the link between items 75 and 240, I decline to grant leave to Cadence to resurrect those items.

23. [486]

    The only remaining item is item 230 for which Cadence does not require leave, despite it being linked to items 75 and 240. As noted above, item 230 relates to slurry splatter on cobblestones at the Main House. The core issue is whether the work, which is incomplete work, also amounts to a defect.

24. [487]

    Mr Crosby maintained that although the work was incomplete work, it constituted a defect under the Building Contracts. Mr Nikolas agreed that the work was incomplete but said that it was not a defect. The resolution of this disagreement turns on the proper construction of the Building Contracts. The following statement appeared on page 1 of the Building Contracts for the Main House:

25. [488]

    Clause 20, which related to the concept of Practical Completion, is set out at [18] in Part B above.

26. [489]

    Clause 22 related to the “Defects Liability Period”. It stated:

27. [490]

    As noted in the Joint Report, item 230 was identified in the document dated 21 May 2022 prepared by Design Studio Group on behalf of Cadence and titled “Internal & External Defects/Incomplete Works Inspection: Main House”. The matter was described in that report as “Slurry splatter on cobblestones. Incomplete – works not carried out with due care and skill”.

28. [491]

    As noted above, on 29 April 2022 Cadence (acting through its then solicitor) gave notice under both cl 29 of the Building Contracts and the common law that it terminated the Building Contracts. An annexure to that document referred to incomplete works regarding the cobblestone driveway at both the Main House and the Tourist Cabin. Cadence’s solicitor’s letter stated that one of Aspire’s invoices included labour charges “which also relate to the rectification of the cobblestone defects (high pressure cleaning of the excess grout and cement slurry), which again has not been deducted from the Builder’s labour claims”. The letter refers to a timesheet entry having been provided by Aspire on 21 December 2021 which contained timesheet labour entries by Chris Smith for what was described as “Power wash cobble stone”. This related to the removal of cement slurry and excess grout. Cadence complained that those labour charges had not been deducted from Aspire’s cost of labour claim relating to its notice of suspension.

29. [492]

    Cadence provided Aspire with a list of defects in respect of each of the properties in the form of a description of defects dated 21 May 2022 prepared by Design Studio Group. It included an item in respect of the Main House External described as “Slurry splatter on cobblestones. Incomplete – works not carried out with due care and skill”. It also included items relating to “Poorly finished cobblestones” and “Minor cracking to crazy pave adjacent to dining room window”.

30. [493]

    On 19 May 2022, Aspire’s solicitor wrote to Cadence’s solicitor stating that:

31. [494]

    By a letter dated 25 May 2022, Aspire’s solicitor wrote to Cadence’s solicitor noting that Aspire’s building consultant had planned to access the sites on 25 and 26 May 2022 but access had been refused in an email dated 23 May 2022 from Cadence’s solicitor. Aspire’s solicitor suggested alternative dates for an inspection of the alleged defective works so that Aspire could identify the works it was required to rectify.

32. [495]

    The parties remained in dispute concerning the issue of access. In a letter dated 14 June 2022 from Cadence’s then solicitor, it was stated that Aspire’s position was that it would not undertake any works to correct defects until all outstanding invoices were paid. The letter stated that Cadence would grant access to the site if that condition was removed. A copy of the letter dated 21 May 2022 from Design Studios Group identifying defects was attached.

33. [496]

    There was more correspondence between the lawyers regarding Aspire’s access to the site to rectify defects, including a letter from its solicitor dated 23 June 2022. The correspondence is described in Mr Kearns’ affidavit dated 5 March 2024.

34. [497]

    By a letter dated 27 June 2022, Cadence’s solicitor said that Cadence had “lost all confidence in Aspire and its contractor’s [sic] capabilities to remedy or rectify the geothermal systems given the extensive issues that have been identified since Aspire walked from site [sic] on 14 February 2022”. The letter added that Cadence was “not prepared to allow Aspire and its consultant unsupervised access to any of its properties given the breakdown of trust in your client”. The letter stated, however, that Mr Cronin would be available on 28 and 29 June 2022 for Aspire and its consultant to inspect the relevant works.

35. [498]

    It is not disputed that Aspire carried out some rectification works at the sites during the period 31 October 2022 to 9 December 2022. Not all the defects then alleged by Cadence were rectified by Aspire because Aspire took the view that some were not genuine defects.

36. [499]

    In their written response to Cadence’s closing written submissions, Aspire and Mr Kearns contended that Aspire offered to undertake some works in relation to inter alia item 230, with a view to attempting to narrow the parties’ dispute. They said that this would have involved Aspire’s foreman, Mr Aaron Wright supervising a sub-contractor who would clean the slurry at the sub-contractor’s expense and at no cost to Cadence, involving 3-4 hours of time. This would be charged to Aspire at a cost of $88 plus GST per hour, giving a total amount of $387.20.

37. [500]

    The resolution of item 230 turns on the distinction between defects and incomplete works, an issue which I will now address.

38. [501]

    In Damien Cremean, Michael Whitten and Michael Sharkey, Brooking on Building Contracts (LexisNexis Butterworths, 6th ed, 2020) at [10.1], it is stated that (emphasis added):

39. [502]

    This passage was recently referred to approvingly by Rees J in Schmuelly v Elrob Construction Group Pty Ltd (No 3) [2025] NSWSC 118 at [91].

40. [503]

    Similarly, Halsbury’s Law of Australia, 65 – Building and Construction at [65-1495] states (emphasis added):

41. [504]

    An owner must give a builder a reasonable opportunity to rectify any defects. As Ball J (as his Honour then was) explained in Owners – Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067 at [44]:

42. [505]

    A building contract may also set out an agreed procedure by which defects are to be made good. In the present case, such a procedure is contained in cl 22 of the Building Contracts, the terms of which are set out at [489] above.

43. [506]

    In view of the timing of the termination of the Building Contracts and the dispute between Cadence and Aspire as to whether Practical Completion had in fact been achieved, it is difficult to see how cl 22 was engaged. It is unnecessary, however, to resolve that issue in circumstances where, independently of cl 22, the common law obliged Cadence to give Aspire a reasonable opportunity to rectify any defects, as was the case in Schmuelly. As Rees J explained there at [92] (emphasis added):

44. [507]

    Cadence’s expert, Mr Crosby, opined that incomplete work is “a defect under the Building Contracts because the partially completed work had not achieved the contractual standard” (emphasis added). In the joint conclave, he added that this is especially so “if [incomplete work has] been invoiced for as completed works”.

45. [508]

    Aspire and Mr Kearns’ expert, Mr Nikolas, opined that “defective work relates to work completed in full with a defect” and that “work that still needs to be completed under the Contract, i.e., incomplete work, is not defined as defective work”. He disagreed with Mr Crosby’s definition because of the circumstances in which the Building Contracts had been initially suspended by Aspire and then subsequently terminated, resulting in Aspire not being able to complete the outstanding work items. Mr Nikolas opined that “[defective work] is typically faulty or not as its intended purpose or use is not fulfilled, hasn’t been completed to the requirements”. I agree.

46. [509]

    There seems to be little authority on the distinction between incomplete work and defective work. The parties did not draw the Court’s attention to any authority. The distinction is discussed, however, in Betta Build Group Pty Ltd v El Baba [2019] NSWDC 331. There, it was common ground that “[t]he distinction between work that was only ‘incomplete’ and work that was ‘defective’ was material … because unless a finding was made that there was ‘a defect’, the home owner was not entitled to recover compensation”: at [198]. Abadee DCJ went on to observe at [203]-[204]:

47. [510]

    Item 230 relates to slurry splatter on cobblestones at the Main House. I accept that the work was incomplete. I also find, however, that Cadence did not give Aspire a reasonable opportunity to complete the works as it was required to do at common law even if cl 22 was not engaged. Aspire offered to attend to the matter but then discovered that Cadence had itself arranged for the original sub-contractor, MLT1 Australia, to rectify the work.

48. [511]

    Accordingly, I reject Cadence’s claim in respect of item 230.

49. [512]

    For completeness, I consider that the rectification costs in respect of item 230 are also unclear and uncertain. The updated Scott Schedule groups together items 75, 230 and 240 and provides an amount of $57,218.77, which reflects Mr Daubney’s evidence. The difficulty, however, is that figure relates to item 75 (concrete slurry on cobblestones at Tourist Cabin), item 230 (slurry splatter on cobblestones at Main House) and item 240 (defective finish to crazy pave entry control joint at Main House). The evidence does not clearly identify the cost of rectification in respect of item 230 alone. In those circumstances, if I had upheld Cadence’s claim in respect of item 230, I would have adopted Mr Kearns’ estimate of $387.20 (see at [499] above).

50. [513]

    Cadence’s claims and Aspire’s response in respect of these items are outlined at [149]-[157] in Part F above.

51. [514]

    It is convenient first to deal with the issue of leaks. Mr Cronin’s evidence regarding this subject is corroborated by Mr Crosby’s Supplementary Report, where he opined that the defective works causing the leaks were non-compliant with the National Construction Code. I accept that evidence.

52. [515]

    As Cadence emphasised, Mr Nikolas did not give any evidence disputing these matters, nor did Aspire adduce any evidence contradicting Mr Crosby’s estimate of the rectification costs, being in total $21,060.40 (including contingency fees, preliminaries, overhead and profit and GST).

53. [516]

    As noted above, Aspire contended that the issue of roof leaks was not raised in the conclave or at trial because it described the claim as lacking basic scrutiny. I do not accept those submissions. In fact, the issue was raised at trial and was explicitly addressed in Cadence’s opening written submissions at [4.2.4]. The Court was not taken to any evidence which contradicts Mr Crosby’s evidence that the work was defective or to his estimate of the costs of rectification. I find that Aspire is liable to pay Cadence damages in the amount of $21,060.40.

54. [517]

    I find, however, that Cadence is not entitled to recover the costs of rectification for installing new eaves or vents. I accept Dr Kivi’s evidence given in his First Report dated 1 November 2024 that it was “a major error” to install new eaves because, although this would improve cooling, it would “reduce passive heating and increase active heating demand and electricity demand in the cold seasons when solar PV power is scare”. In his opening address, Mr Lyons properly acknowledged that Dr Kivi believed that the installation of roof eaves and vents was “a significant mistake”.

55. [518]

    Cadence’s claims in respect of these items, together with Aspire’s response, are described at [158]-[166] of Part F above.

56. [519]

    As noted above, Cadence requires leave to raise items 22, 23, 24, 33, 97, 246, 264 and 265, which were previously abandoned. Aspire opposed leave being granted on the basis that it would be prejudiced because the items which were previously abandoned were not then pursued by Mr Kearns in cross-examination. I accept that submission. I refuse Cadence leave to revive the abandoned items.

57. [520]

    The remaining items concerning microcement are items 11, 103, 111, 114, 116, 267, 269, 273, 274, 276 and 278.

58. [521]

    I understand that resolution of these items turns on the distinction between incomplete works and defective works. The distinction is discussed at [500]ff above, where it is noted that the experts, Mr Crosby and Mr Nikolas, took different views regarding the meaning of those concepts.

59. [522]

    Having regard to the discussion above of that distinction, I consider that the remaining items the subject of claims regarding microcement were incomplete but not defective works. That is essentially because Aspire was not given an adequate opportunity to complete the relevant work as required under common law. I accept Mr Kearns’ evidence that he directed Aspire’s sub-contractor AVP, to finish the microcementing but Cadence did not allow that work to proceed and instead it engaged another contractor to do the work (see [166] of the Part F above).

60. [523]

    There is an additional difficulty with Cadence’s claims. It relates to the fact that its total claim in relation to microcement items was said to be $48,239. It appears that that figure included the items which Cadence then abandoned and unsuccessfully sought leave to revive. Accordingly, if Cadence had enjoyed some success with any of the remaining items concerning microcement, it is difficult to see how the Court could arrive at any meaningful quantum of damages given the state of the evidence and Cadence’s onus.

61. [524]

    Cadence’s claims in respect of these items, together with Aspire’s response, are summarised at [167]-[170] in Part F above.

62. [525]

    Cadence has failed to discharge its onus in respect of its claim regarding GPOs. I accept Aspire’s submission that the location and types of GPOs were changed as a result of a variation and there is no defect. As noted above, Mr Crosby confirmed under cross-examination that he had been told there was a variation relating to the location of the GPOs, but he had not seen any such variation in writing.

63. [526]

    Cadence’s claims in respect of this subject, together with Aspire’s response, are summarised at [171]-[173] in Part F above.

64. [527]

    As noted above, Aspire and Mr Kearns accepted that the cracked highlight glass windows amounted to a defect, but they sought to reduce their liability to an amount of $7,500 because they submitted that the claimed amount of $15,591.73 was excessive and inflated. The difficulty with this response is that it is not supported by any cogent evidence which contradicts the evidence adduced by Cadence.

65. [528]

    In these circumstances, I find that Aspire is liable to pay Cadence damages in the amount of $15,591.73 for this item.

66. [529]

    As noted above, Cadence did not press this claim.

67. [530]

    As noted above, Cadence did not press this claim.

68. [531]

    As noted at [177] above, Aspire accepted liability in the amount of $6,102.

69. [532]

    Cadence’s claims against Aspire and Mr Kearns in respect of this matter, together with their response, are summarised at [178]-[179] in Part F above.

70. [533]

    Cadence has failed to adduce evidence to support its claims relying on alleged breaches of the DBP Act by Aspire or Mr Kearns. I do not consider that Mr Crosby’s evidence to the effect that Aspire and Mr Kearns should have supervised the relevant works more carefully suffices in this regard. There is no specific evidence connecting any particular breach of duty to individual building defects.

71. [534]

    As noted above, Mr Kearns has candidly accepted liability in respect of some of the general building defects claim but that does not mean that liability necessarily follows under the DBP Act. That is because Mr Kearns’ admissions go to the fact of the existence of relevant defects and do not extend to any concession regarding breach of duty under the DBP Act.

(h) The overpayment claim

1. [535]

   I have addressed and answered these issues in Part G above.

(i) The cross-claim

1. [536]

   I have addressed and answered these issues in Part H above.

2. [537]

   I will direct the parties to seek to agree short minutes of order which give effect to these reasons, including drawing attention to any arithmetical corrections to monetary figures to take into account, for example, GST.

3. [538]

   To assist this task, my broad conclusions regarding the amended summons and the amended cross-summons are as follows:

4. [539]

   The parties should also seek to agree costs. With a view to minimising further costs and to assist the parties, my preliminary views on costs are as follows:

5. [540]

   If the parties are unable to agree short minutes of order within 21 days hereof, within that time, each should file and serve their individual proposed short minutes of order together with a brief written submission not exceeding 5 pages and any supporting evidence.

6. [541]

   It is proposed that final orders will be made on the papers and without a further oral hearing unless a party provides good reasons why there should be a further oral hearing.

7. [542]

   There will be a grant of liberty to apply on giving 48 hours’ notice.