Dixonbuild Pty Ltd v Queensland Building and Construction Commission & Anor [2024] QCAT 168

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Dixonbuild Pty Ltd v QBCC & Anor [2024] QCAT 168 PARTIES: DIXONBUILD PTY LTD (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (first respondent) SCOTT NEWTON (second respondent) APPLICATION NO/S: GAR329-20 MATTER TYPE: General administrative review matters DELIVERED ON: 26 April 2024 HEARING DATE: 10 November 2023 and 21 March 2024 HEARD AT: Brisbane DECISION OF: Member Howe ORDERS: The Direction to Rectify issued 4 September 2020 is set aside. CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where the builder had constructed a dwelling but omitted work required under the contract to install gully traps in the yard – where the home was sold and the new home owner complained to the builder and the Queensland Building and Construction Commission about poor drainage affecting the building – where the builder then installed the gully traps – where the Queensland Building and Construction Commission issued a Direction to Rectify the defective installation of the gully traps – where the builder sought review of the decision to issue the Direction to Rectify – whether the installation of the gully traps was building work – where the gully traps were not connected to the building or to a drainage main and therefore not building work in respect of which a Direction to Rectify could issue Queensland Building and Construction Commission Act 1991 (Qld), Schedule 2 Queensland Building and Construction Commission Regulation 2018 (Qld), s 5, Schedule 1 s 2, s 11 -- 1 of 7 -- 2 Goldfield Projects Pty Ltd v QBCC [2016] QCAT 362 The Trustee for Hardev Property (Dev 10) Unit Trust v Palmgrove Holdings Pty Ltd & Ors [2019] QSC 208 APPEARANCES & REPRESENTATION: Applicant: C H Matthews instructed by CDI Lawyers First Respondent: R Ensbey, Gadens Lawyers Second Respondent: Self-represented REASONS FOR DECISION [1] On 5 November 2013 the applicant builder (‘Dixon’) was engaged by a landholder to build a dwelling at a property at Cedar Vale. The works were completed by 11 September 2014. [2] The second respondent Mr Newton purchased the property from the original landholder on 13 July 2017. [3] In May 2019 Mr Newton complained to Dixon about the slab and site drainage. On 19 May 2019 he made a complaint about defective building work to the first respondent (‘QBCC’). [4] The original construction contract called for the installation of four field gullies around the house. They had not been installed when the house was built. After Mr Newton complained to QBCC and before QBCC arranged a site inspection, Dixon sent out a plumber to install the field gullies. They were installed, with trenching, generally in the positions noted for them in the original construction plans. Mr Newton informed QBCC about that having been done. [5] On 7 June 2020 Mr Newton forwarded a list of 69 complaint items to QBCC. With respect to drainage, the complaints noted that drainage had finally been installed “as per plan”. [6] A QBCC building inspector, Mr Turkington, conducted an inspection of the property on 11 August 2020. Mr Turkington prepared a report on 27 August 2020 noting that with respect to the gully traps, the turf laid over excavated trenches between the recently installed gully traps had left the field gullies higher than the adjacent ground levels which prevented water flowing into the field gullies. Mr Turkington determined the field gully drainage work did not meet a reasonable standard of construction or finish expected of the holder of a competent contractor’s licence and the work required rectification. [7] On 4 September 2020, QBCC issued a Direction to Rectify (‘the DTR’) defective building work concerning the drainage work. On 4 September 2020 Dixon also filed an application in the Tribunal seeking review of the decision. [8] An initial issue for determination is whether the installation of the gully traps was building work in respect of which QBCC could issue the DTR. [9] Dixon says there are two bases upon which the work installing the gully traps was not building work as defined in the Queensland Building and Construction Commission Act 1991 (Qld) (‘the Act’). -- 2 of 7 -- 3 [10] First, by s 2 of Schedule 1 of the Queensland Building and Construction Commission Regulation 2018 (Qld) (‘the Regulation’), work of a value of $3,300 or less is not building work as defined in the Act. [11] Second, by Section 11 of Schedule 1 of the Regulation the work was drainage work which did not connect the drainage system to a building and main of the system and therefore not building work as defined in the Act. Value less than $3300 [12] Building work is defined in Schedule 2 of the Act: building work means— … (c) the provision of lighting, heating, ventilation, air conditioning, water supply, sewerage or drainage in connection with a building; … but does not include work of a kind excluded by regulation from the ambit of this definition. [13] Section 5 of the Regulation states that for Schedule 2 of the Act, definition building work, the work stated in Schedule 1 of the Regulation is not building work. [14] Schedule 1 s 2 of the Regulation excludes, from the definition of building work, work of a value of $3,300 or less. [15] On the morning of the first day of hearing on 10 November 2023 an affidavit sworn by Mr Bartholomaeus, a director of Dixon, was tendered exhibiting a purchase order/subcontract agreement between Dixon and a plumber, Mr Scully, engaging the latter to install the gully traps at the property. That was done by Mr Scully on about 20 May 2020. The total cost of the job noted in the purchase order/subcontract agreement was $500.50. [16] That evidence about Mr Scully’s charges for the work was new and took the respondents by surprise at hearing. The hearing was adjourned to enable QBCC to obtain instructions about it and to tender evidence if necessary concerning the value of the work. [17] The purchase order/subcontract agreement says nothing about the cost of trenching. The description of the work done for $500.50 is generally unclear. It states: DR – Stormwater – Extra For Stormwater $275 camera inspection required was not needed, p.o going towards field gullies for Scully to cover the rest of the cost. as agreed by Jackie & Ian/Anita F Travel Drainer – Extra Travel Allowance per Quote $180 Per Tim b urgent QBCC matter Attend site to pressure test property and provide report -- 3 of 7 -- 4 Labour + materials = $180 Plus GST Total Incl GST $500.50 [18] Apart from no mention of trenching, there is no mention of time taken to do the work, nor mention of an hourly rate. The purchase order suggests Mr Scully is to absorb “the rest of the cost”. [19] The amount claimed as the cost of the work was challenged on the first day of hearing, but despite that there was no additional statement of evidence provided by Mr Scully and he did not attend the adjourned hearing to explain the purchase order. [20] The QBCC inspector Mr Turkington says in a statement of evidence1 that using the Cordell cost estimator the reasonable value of the drainage work including excavation work was $4,059.20 exclusive of GST. He attaches a copy of his calculations to his statement of evidence. [21] I prefer the evidence as to true cost of the work estimated by Mr Turkington to the cost items noted in the purchase order/subcontract agreement as the reasonable cost of the job. [22] I determine the value of the gully trap work exceeded $3,300 and the exclusion to be found in s 2 of Schedule 1 of the Regulation does not apply. Drainage work not connecting a building to a main [23] Section 11 of Schedule 1 of the regulation provides: Work for water reticulation systems, sewerage systems or stormwater drains (1) Construction, extension, repair or replacement of a water reticulation system, sewerage system or stormwater drain, other than works connecting a particular building to a main of the system or drain. (2) In this section— building includes a proposed building [24] “Building” is defined in schedule 2 of the QBCC Act to mean: (a) generally, includes any fixed structure; or Examples of a fixed structure— • a fence other than a temporary fence • a water tank connected to the stormwater system for a building • an in-ground swimming pool or an above-ground pool fixed to the ground …. [25] Dixon says the purpose of the field gullies was to divert stormwater from the yard of the property, not the house. The field gullies are a stormwater drain. The field gullies are not connected to the dwelling. They are not connected to a stormwater main. The field gullies were not a mandatory requirement for the construction of the building pursuant to either the National Construction Code or any relevant Australian Standard. 1 Exhibit 11. -- 4 of 7 -- 5 [26] QBCC submits the installation of the gully traps was building work and the exclusion under s 11 of Schedule 1 of the Regulation does not apply because they provided drainage in connection with the building. Whilst the four field gullies were installed late after the initial construction of the building (some 6 years later) the work was done in the context of omitted work from the original construction and in accordance with the approved plans. In that context, the installation of the four field gullies amounts to drainage in connection with the building within the definition of building work in Schedule 2 of the QBCC Act. The words “in connection with” a building used in the Schedule 2 definition of building work should not be given a narrow meaning. [27] QBCC further submits that the engineer, Mr Williamson, from STA Consulting Engineers (‘STA’) referred to the absence of the four field gullies as a matter relevant to the structural stability of the building. [28] Dealing first with the engineer’s evidence, Mr Williamson in fact said good drainage around the building was important to maintain its structural stability, but not the presence of the field gullies to achieve that. [29] Mr Newton had made complaints about cracking and damage to the dwelling before the gully traps were installed. After he made complaint to Dixon in 2019, STA was engaged by Dixon to provide a report. STA had drawn the initial drainage plan at the time of construction of the house with the field gullies noted on the plan. The report considered the complaints made by Mr Newton but concluded the house slab was performing satisfactorily and no significant damage had occurred. [30] Indeed in a letter from Mr Williamson to Mr Bartholomaeus dated 13 September 2021 the engineer states the foundations were not reliant on the field gullies. He said: The supplied STA drainage plan (the Foundation Design Report) is a guide only, for the property owner…. The engineered foundation was not reliant on the placement of the suggested gully pits in the nominated areas, and therefore not detrimental to the foundations in their absence, providing measures are implemented to achieve compliance of 25 mm fall over first 1 metre from the building in low rainfall intensity areas or 50 mm fall over first 1 metre from the building and any other areas as per NCC clause 3.1.2.3... [31] Turning to the exclusion in s 11 of Schedule 1 of the Regulation, the provision specifically excludes from the definition of building work, work that is constructing, extending, repairing or replacing a water reticulation system, sewerage system or stormwater drain not connecting a building to a main of the system or drain. [32] Where the exclusion applies, a broad interpretation of building work as defined in Schedule 2 of the QBCC Act based on the context of the work in the course of completion of a building contract holds no sway. [33] The gully traps are not connected to the building, not connected to the building’s drainage system,2 nor to any other fixed structure, such as a water tank. There is no suggestion that the gully traps were ever intended to be connected to the building. The drainage plans from 2013 simply show the position of individual gully traps in the yard of the property without more. The water flows into the gully traps from the ground, not via downpipes from the roof of the building. 2 Ex 1 [75]. -- 5 of 7 -- 6 [34] The legislation seems clear. Work associated with installation of a water reticulation system, sewerage system or stormwater drain where there is no connection to a particular building or to a main of the system or drain is not building work as defined under the QBCC Act. [35] Even if the gully traps did connect to the building, they do not connect to any main of the system or drain. The word connect used in the phrase “connecting a particular building to a main” suggests a requirement of actual physical connection, not broad brush contextual connection absent physicality. [36] The word ‘main’ is defined in the online Macquarie Dictionary as “a principal pipe, wire, cable or duct in a system used to distribute water, gas, electricity, etc”. The words ‘the mains” is defined as “the principal distribution system for water, gas, electricity, etc.: turn the water off at the mains”. [37] In Goldfield Projects Pty Ltd v QBCC [2016] QCAT 362 Member Traves considered the connection requirement of s 11 of Schedule 1 of the Regulation a physical one: 24 In my view, the intention of the Act and Regulations was to exclude construction of the sewerage or drainage infrastructure but to include work involved in connecting the building to that infrastructure and any site work associated with that. [38] In The Trustee for Hardev Property (Dev 10) Unit Trust v Palmgrove Holdings Pty Ltd & Ors [2019] QSC 208 a contractor entered into a contract for the construction of a 23 lot subdivision. The contract concerned, amongst other things, the contractor’s provision of water and sewerage services to each lot. The developer contended that the work to be performed was building work as defined in Schedule 2 of the QBCC Act for which a licence was required, and the contractor had contravened section 42(1) of the Act by entering into the contract. [39] At the time of the contract the contractor had undertaken to provide branch connections which would make the relevant services available to proposed lots which had not at that time come into existence. A broad brush contextual relationship was rejected. Lyons SJA said: It is apparent that the sewer connection works and the water reticulation works would not be building work, unless, as a result of the extended definition of the term “building”, they are works connecting a particular proposed building to a main of the system. In my view, it cannot be said that the works connect a particular proposed building to the relevant main.3 … At the time of the contract between the parties, no proposed building was identified, and accordingly it cannot be said that the respondent undertook to do works to connect a particular proposed building to a main.4 [40] I find the absence of any physical connection of the gully traps to the building (or to any other structure), and further, the absence of a connection of the gully trap drainage system to any main, conclusive in the matter. 3 The Trustee for Hardev Property (Dev 10) Unit Trust v Palmgrove Holdings Pty Ltd & Ors [2019] QSC 208, [28]. 4 Ibid, [30]. -- 6 of 7 -- 7 [41] The work performed by Dixon installing the gully traps was not building work as defined by the Act. There was therefore no power in QBCC to issue the DTR of 4 September 2020. The DTR is set aside. -- 7 of 7 --