New Zealand Law
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This is a Consumer Guarantees Act issue, and you are entitled to get what you contracted for, which is the 600 mm, which would have been easier and from your description, the correct size. So in any Consumer Guarantee Act issue, you are entitled to get bak to what was in the contract, so they must either fix the job and take the tiles down to install the proper size, or you can refuse to pay. In addition if the quote included the ensuite then they are stuck with this. If they think this was a mistake then they must seek a variation of the contract and you can accept or reject this. I suggest you should find an independent tiler to give an opinion about this work, and then approach your contractor and ask for repairs/replacement to the correct tiles.
Frankly this looks as though you need to get another more professional tiling contractor and a building expert to look at the job, because it may be so incompetently installed that you may be at risk of having to pull this all out and start again. That is certainly what you want, and I agree with you. It is always best to start with an expert opinion however, from a master builder and a tiling expert to look at the work done and explain the faults. You certainly should not be paying anything in the meantime. If this is seriously defective, then you may be looking at seeking a full refund, together with the costs of replacing the defective work. Under the Consumer Guarantees Act you are entitled to get work of the appropriate standard, and bathrooms can be particularly tricky, because if they leak, this can cause serious damage to the rest of the house. So things like waterproofing, correct installation of the tiles and properly installed plumbing according to good tradesmen like standards must be checked.
If the wrong size has caused the problem, then they cannot claim there is some leeway. But tiles come in distinct sizes, and you are entitled to get what you ordered. The Consumer Guarantees Act talks about things being fit for purpose and doesn't say anywhere that near enough in size, as this contractor claims, is permissible. The tiles should be what you ordered