In the world of domestic building disputes, it’s often the seemingly small decisions, such as refusing access for rectification, ignoring a progress certificate, or overlooking a notice requirement, that end up steering the entire outcome. The recent VCAT decision in TCM Building Group Pty Ltd v Grossi [2025] VCAT 941 is a prime example; a case where the relationship between owner, builder, and architect slowly deteriorated until VCAT was left to untangle years of conflict, variations, repudiation, and a damaged birch tree.
This VCAT case from October 2025 involveed a big home renovation in Melbourne that went wrong between builder TCM Building Group and homeowners. The builder sued for unpaid bills, while the owners counterclaimed over poor work and delays. This decision is an important reminder of how strictly VCAT enforces contract mechanisms such as architect certifications, notice requirements, and access obligations. For builders and owners alike, the case highlights what happens when a party attempts to terminate a contract without following the agreed pathway.
Renovation Dreams Turn to Dispute
The parties entered into a $2.53 million ABIC Simple Works contract for the renovation and extension of the owner’s home. The contract conferred a central role on the architect as arbiter, including assessing work quality and certifying progress payments. By late 2017, disputes arose concerning defects, variations, delays and communication. In October 2017, the owner locked the builder out of the site, preventing completion of rectification works and further progress. Termination notices were subsequently exchanged. The architect issued 18 progress certificates, and while some of the total issued was paid, a significant amount was left outstanding.
The owners counterclaimed for defective and incomplete works and liquidated damages. They alleged an agreement, arising from an August 2017 discussion and email exchange, that no further payments would be made until defects were rectified. The Tribunal rejected this claim as vague and unsupported by clear evidence. The Tribunal also found that the owners failed to comply with the contract’s dispute notice requirement under clause A8, which required notice within 20 days, and were therefore precluded from disputing their obligation to pay the certified amounts.
Who Ended the Contract?
After moving back into the property, the owners granted the builder (TCM) only limited access to undertake rectification works, however then subsequently barred TCM from the site entirely, citing concerns with the architect and ongoing issues with the works. TCM responded by issuing notices and lawfully suspending works due to non-payment and lack of access. In February 2018, the owners alleged that TCM had repudiated the contract through delays, defects and suspensions. The Tribunal rejected this, finding that TCM remained willing and able to rectify defects but was prevented from doing so by the owners.
Instead, the Tribunal held that the owners repudiated the contract by denying site access and failing to pay certified amounts. TCM accepted that repudiation in March 2018, bringing the contract to an end. The Tribunal also noted that the owners had separately settled with the architect, who had been joined as a party to the proceedings.
Defects: What Was Wrong and Costs?
The owners alleged hundreds of defects, including paint cracking, flooring, cabinetry and waterproofing issues, and claimed over $500,000 in rectification costs based on third-party replacement works.
TCM accepted responsibility for some defects but argued that, following the owners’ repudiation, damages should be assessed by reference to what it would have cost TCM to rectify the works itself, rather than the higher costs of engaging new contractors. Applying the“necessary and reasonable” test[1], the Tribunal rejected excessive or wasteful remedies, such as full repainting for minor defects, and limited damages to the reasonable cost of rectifying proven defects only.
Takeaway
This case is a sharp reminder that repudiation has real financial consequences. Contract mechanisms, especially certification and notice requirements, are not optional, and that preventing a builder from accessing the site almost always backfires. It also reminds us that engaging constructively through architect-led dispute procedures can protect both parties.
For builders, the decision affirms the importance of maintaining clear documentation and relying on the contract framework when disputes arise. For owners, it emphasises that dissatisfaction alone doesn’t justify withholding payment or locking a builder out.
Please get in touch with Warlows Legal for any construction law queries you may have using the contact information below.
[1] Bellgrove v Eldridge [1954] HCA 36.
