Recently I was involved in a building dispute where provisional sum blew out from $5000 to $ 20,000 . Now that is a nasty surprise for any budget and my clients were very upset and this come on top of a broken relationship with the builder, mistrust and allegations of mistreatment. My clients accused the builder of disrespect.

Provisional sums are inclusions in the contract of sums of money when the exact cost cannot be determined at the time of contract and adjustment is made against actual costs, when the costs become known. Furthermore there is a warranty under Domestic Contracts Building Act 1995 against cost blowout.

Builder had claimed that costs of storm water drainage increased because the block could not be naturally drained and a new pipe had to be laid in the road to another pit in the road.

I had a good look at all documentation and found that all the information and levels were there(on planning permit drawings) for the builder to see at the time of pricing the job but he clearly did not or his estimator was incompetent.

My view then was that it was builder’s responsibility was to pay for any costs above $5000 because the liability for the costs of drainage was there right from the start.

The dispute could not be settled and went to VCAT mediation where it became a stalemate. I was confident he could win in a full hearing but then I became aware how ill my client has become over this and the degradation from the builder.

A deal was brokered where my clients walked away with a $5000 refund from the builder  a victory and a moral high ground. (It was still a $10,000 hit in the pocket+ the costs of my reports and attendance)