The Stanley appeal shows that even where demolition is too extreme, homeowners may still be entitled to compensation for the real–world impact of defective building work.
Domestic building disputes often involve more than defective workmanship. They can raise difficult questions about what an owner was promised, what was actually built, and what remedy is fair when the completed work does not match the contract.
The recent Supreme Court of Victoria appeal in Stanley & Anor v EWH Construction West Pty Ltd [2025] VSC 699 provides important guidance for homeowners, builders and legal advisors dealing with domestic building defects, rectification claims, loss of amenity and practical inconvenience.
Note: Imran Fatah, Partner, and Olivia Terziovski, Managing Partner of Boutique Lawyers, acted for the Stanleys in this appeal. The case demonstrates the importance of carefully framing contractual rights, expert evidence and practical remedies in complex domestic building disputes.
Background to the Dispute
The Stanleys entered into a domestic building contract with EWH Construction West Pty Ltd for the construction of their home.
A key requirement was practical and specific: the Stanleys wanted to be able to reverse their caravan from the street, down the driveway, through the garage and into the backyard for storage.
That requirement was not merely a preference. It affected the way the Stanleys intended to use and enjoy their property. The contract plans contemplated a garage floor level at or near the level of the footpath, with a driveway that would not involve a significant rise or fall.
The completed works did not achieve that outcome. The garage floor and driveway levels meant the Stanleys could not use the property in the way that had been discussed, documented and contracted for.
The Central Issue: Must the House Be Demolished and Rebuilt?
The Stanleys argued that the proper rectification involved demolishing and rebuilding the house and garage so that the works conformed with the contract.
The difficulty was proportionality. The proposed demolition and rebuild works exceeded $650,000, despite there being no fundamental structural defect in the home.
The Supreme Court confirmed that while rectification costs are often the starting point in defective building work claims, they are not automatic. The proposed remedy must still be necessary and reasonable.
Key Finding: In practical terms, the Court accepted that the builder had not delivered what was required by the contract. However, it was not reasonable in the circumstances to compensate the Stanleys by reference to the full cost of demolishing and rebuilding the home.
What the Court Clarified
The appeal clarified several important points for domestic building disputes:
- Contractual promises matter. Builders cannot depart from signed contract plans or essential agreed requirements without proper contractual variation.
- Rectification damages are not automatic. Even where there is a breach, the cost of rectification must still be necessary, reasonable and proportionate.
- A homeowner is not left without a remedy simply because demolition and rebuilding is considered too extreme.
- Damages may include loss of amenity, physical inconvenience and practical impacts on the homeowner’s use and enjoyment of the property.
- The practical purpose of the contractual requirement is highly relevant, particularly where a defect affects a specific agreed use of the home.
Commentary from Boutique Lawyers
Olivia Terziovski, Managing Partner of Boutique Lawyers, said the decision is an important reminder that domestic building disputes require both legal precision and practical judgment.
“This case shows that building disputes are not just about whether there has been a breach. The real question is often what remedy is fair, reasonable and proportionate when the work delivered does not match what the homeowner was promised.”
Ms Terziovski said the decision also highlights the importance of understanding the homeowner’s practical use of the property.
“A defect may not always make a home structurally unsound, but it can still significantly affect how the homeowner lives in and uses the property. That is why evidence about the real–world impact of defective or non–compliant work is so important.”
Imran Fatah, Partner at Boutique Lawyers, said the appeal demonstrates the value of carefully prepared evidence and a measured litigation strategy.
“Successful building disputes require more than identifying a defect. They require a clear strategy around breach, causation, rectification options, proportionality and the practical consequences for the owner.”
Why This Matters for Homeowners
For homeowners, this decision is a reminder that building defects are not assessed in a vacuum.
A defect may not make a home structurally unsafe, but it may still have a significant impact on the owner’s use and enjoyment of the property.
Where a particular feature or function is important—for example, driveway access, garage clearance, drainage, retaining walls, accessibility, views, storage or future use—that requirement should be clearly documented before and during the contract process.
The stronger the documentary and expert evidence, the easier it is to prove that the issue is not merely cosmetic or minor, but a real contractual and practical failure.
Why This Matters for Builders
For builders, the decision is a warning that signed contract plans and agreed specifications must be treated seriously.
A seemingly small change in levels, siting or gradient can have major consequences if it affects the purpose for which the owner required the work.
Builders should ensure that any changes to plans, levels or functional requirements are properly documented, communicated and agreed in writing.
Informal assumptions, internal plan revisions or undocumented changes can create serious legal risk.
Practical Lessons from the Stanley Appeal
- Contract plans matter. Builders must build in accordance with the contract documents and agreed specifications.
- Functional requirements should be made clear. If a homeowner needs a particular outcome, such as caravan access, that requirement should be recorded clearly in writing.
- Rectification damages are not automatic. Even where there is a breach, demolition and rebuilding may be refused if the cost is unreasonable or disproportionate.
- Loss of amenity can be significant. Damages may reflect the practical impact of the defect on the homeowner’s day-to-day use and enjoyment of the property.
- Expert evidence remains critical. Building disputes often turn on expert evidence about the defect, rectification options, cost and the practical consequences of non-compliance.
A Measured Approach to Building Dispute Remedies
The Stanley appeal demonstrates the importance of balancing strict contractual rights with practical, proportionate remedies.
For homeowners, the decision confirms that they may still be entitled to meaningful compensation even where full demolition and rebuilding is not awarded.
For builders, it reinforces the importance of complying with contract plans and properly documenting any change to agreed requirements.
For legal advisors, the case is a useful reminder that successful building dispute strategy requires more than identifying a breach. It requires careful analysis of the contract, the evidence, the rectification options and the real-world impact on the owner.
Case Reference
Stanley & Anor v EWH Construction West Pty Ltd [2025] VSC 699
Court: Supreme Court of Victoria
Subject Matter: Domestic building contract dispute, rectification damages, loss of amenity, proportionality
Need Advice About a Domestic Building Dispute?
Boutique Lawyers specialises in building and construction law across Victoria.
Led by Olivia Terziovski, Managing Partner, and supported by an experienced building and construction law team including Imran Fatah, Partner, Boutique Lawyers assists homeowners, builders and industry professionals with complex domestic building disputes, defective works claims, VCAT proceedings and appeals.
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mail@boutiquelawyers.com.au
Disclaimer
This article is general information only and is not legal advice. It is not intended to provide advice about any specific building defect, domestic building contract, rectification claim, VCAT proceeding or court proceeding. Legal advice should be obtained based on the specific facts, documents, contract terms and evidence relevant to each matter.