Buildling cost overruns due to Engineering mistakes

Discussion in 'Legal Issues' started by drfuzzy, 22nd Nov, 2017.

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  1. drfuzzy

    drfuzzy Well-Known Member

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    Location:
    Australia
    I have a fixed price contract with a builder for 2 high-end homes (ABIC contract). I have also engaged an architect and an engineer.

    The development is in Victoria and is suffering from many months of delays and cost overruns due to 2 sequential mistakes allegedly both entirely due to the engineer. These mistakes were identified during construction and combined have resulted in a 10-12 month delay.

    1) the structure did not meet Australian standards due to insufficient head heights/placement of beams
    2) footings to a load bearing wall were omitted.

    The builder is now asking for me to sign variations for:
    * cost increases to specific finishes, or acceptance of lesser materials
    * cost increases to structural materials

    I am also suffering from the holdings costs and the additional consultants required to sort out the mistakes.

    Total costs attributable to both mistakes exceed 6 figures.

    Two questions:
    1) how should I proceed from here?
    2) which (Victorian) lawyers would you recommend I speak to?

    Thank you for your thoughts and expertise in advance.
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Location:
    Sydney
    Seek legal advice. I suspect you will get the old explanation that cost v's benefit must be considered. Legal remedies can be expensive v's outcomes.

    Of course your builder is charging expensive variations. Thats how the building industry works.
    eg 10m3 of concrete in a quote may be $1k but $5k ++ as a variation. If you were to succeed in getting judgement the amount you receive may be a small part of actual additional costs. ie $1k not the $5k.

    I'm not quite sure how the engineer may be liable for
    The builder is now asking for me to sign variations for:
    * cost increases to specific finishes, or acceptance of lesser materials
    if you had agree to the specs rather than the materials costs. The design and structural defects another issue.
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    Your consultants may have screwed up but that's not the builder's fault. The builder may have screwed up and that's not your consultants' fault.

    Not being versed in Victorian building law or the Victorian Security of payment legislation, you will have some tight timeframes that you need to refute the variations (or your stuck with it).

    VCat may be the first port of call followed by a solicitor and a qs/contract administrator.