Within three months large cracks had opened in plasterboards, cornices were separating from bowing ceilings, and skirting boards were coming off. "Slab heave" is thought to have affected thousands of new homes in Melbourne's outer north-west, where volatile soil movements cause walls to crack, doors and windows to jam, and floors to tilt. Among them was Mr Softley and his wife Shelley's home in Long Tree Drive, which lifted 44 millimetres at one end, 16 millimetres at the other. An engineer's report found the lifting distorted their home's timber frame. In one part of the house near the toilet and laundry, the brickwork cracked so badly eight metres of it needs replacing. Instead of replacing it, the Victorian Civil and Administrative Tribunal on Thursday ordered builder Metricon to knock down the home they built for the Softleys, and build a new one.

Metricon, which in part tried to blame the shifting slab on two pebble gardens in the house's front yard, will also have to pay the Softleys' rent while their home is rebuilt. Metricon chief executive Mario Biasin says the company is disappointed by the tribunal's ruling, and is considering a Supreme Court appeal. Ms Softley says Metricon had tried to help them in the early stages of their legal battle. "But they kept trying to shift the blame onto us." For four years, she says, the cracking and shifting had meant doors and windows repeatedly wouldn't shut. "Currently our sliding doors won't close." It feels fantastic that they have acknowledged that we were not going crazy. Shelley Softley

It is the second time Metricon has been ordered to rebuild a faulty house. In April, Graham Hooper won the cost of replacing his Tarneit house. Metricon in that case also argued problems with the house's slab were due to Mr Hooper's garden landscaping. Metricon appealed that ruling and is awaiting a decision. Lawyers Slater and Gordon acted for the Softleys. Associate Robert Auricchio says the decision is important for others whose new homes have been affected by slab heave. These residents are, he says, "literally watching their homes cracking and falling apart around them". The law firm has been contacted by more than 100 other home owners in conditions similar to the Softleys'. Mr Auricchio says there needs to be a dedicated taskforce to look at slab heave. "And the industry must fund an independent dispute resolution scheme so that difficult and complex and very costly legal proceedings can be avoided."

For Shelley Softley, Thursday's ruling mostly came as a relief. "It feels fantastic that they have acknowledged that we were not going crazy." Thousands of homes in city-fringe estates may be similarly affected, in a trend being blamed on "waffle slab" foundations. Waffle slabs "float" on top of compacted ground and are cheaper and quicker to build than traditional footings. But often they sit on top of highly reactive clay soils that can move dramatically.