Chelbrooke Homes Pty Ltd v Queensland Building and Construction Commission [2022] QCAT 83

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Chelbrooke Homes Pty Ltd v Queensland Building and Construction Commission [2022] QCAT 83 PARTIES: CHELBROOKE HOMES PTY LTD (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (respondent) APPLICATION NO/S: GAR024-18 MATTER TYPE: General administrative review matters DELIVERED ON: 24 February 2022 HEARING DATE: 11 September 2019 HEARD AT: Brisbane DECISION OF: Member Gunn ORDERS: 1. The decision of the Queensland Building and Construction Commission to issue Direction to Rectify No 0251530 is varied as follows: a. Item 1 of the Direction to Rectify No 0251530 made 18 December 2017, ie the minor cracking in the concrete path is not defective and does not require rectification, is confirmed. b. Items 2, 3 and 4 of the Direction to Rectify No 0251530 made 18 December 2017, ie Item 2 the fall away of the slab, Item 3 the inconsistent colour and texture of the slab and Item 4 the lack of articulation/isolation of penetrations, are set aside as these Items are not defects and do not require rectification. CATCHWORDS: BUILDING DISPUTE – DIRECTIONS TO RECTIFY – where direction was made that licensee rectify defective building work pursuant to s 72 of the Queensland Building and Construction Commission Act 1991 (Qld) – where directions to rectify are set aside. Building Act 1975 (Qld), s 5(1)(b) Queensland Building and Construction Commission Act -- 1 of 9 -- 2 1991 (Qld), s 71J, s 72(1), s 72(3), s 72(5) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 19, s 20, s 24 Holtman v Sampson [1985] 2 Qd R 472 Jackson and Evans v Queensland Building and Construction Commission [2016] QCAT 434 Jespersen v Queensland Building and Construction Commission [2017] QCAT 459 Kitchen Plus (Nerang) Pty Ltd v Queensland Building and Construction Commission [2014] QCAT 084 Landscaping Qld Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 130 Pappas v Queensland Building Services Authority [2002] QDC 290 Peter Whalley Homes Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 454 Q M Properties Pty Ltd v Belscorp Pty Ltd [2019] QCA 138 APPEARANCES & REPRESENTATION: Applicant: Self represented Respondent: D McNulty REASONS FOR DECISION Background [1] On 28 April 2015, Mr and Mrs James (“the property owners”) entered into a contract with the Applicant for the construction of a new single storey home in Brisbane (“the property”). [2] Construction of the home commenced on 23 July 2015. [3] On 26 February 2016, the property owners contacted the Applicant via phone call to relay their concerns regarding cracking in the concrete paving that had just been poured. The Applicant requested the concrete supplier, Nucon Concrete, to conduct an inspection of the works and provide their findings. [4] On 16 March 2016, the property owners again raised the issue of the cracking in the concrete driveway and paths during the Practical Completion Inspection. However, this was not deemed to be a defect and was not noted on the Defects Document. [5] On 22 March 2016, a Form 21 – Final Inspection Certificate was signed by the building certifier. The property owners accepted handover of the home on 1 April 2016 without the cracking being noted as a defect. -- 2 of 9 -- 3 [6] On 5 December 2016, a Residential and Commercial Construction Work Complaint Form (“the original complaint”) was received by the Queensland Building and Construction Commission (“the Commission”) from the property owners. This complaint comprised of 1 item being described as concreting cracking from the day it was poured. This was first noticed by the property owners on 25 February 2015. [7] On 21 February 2017, an inspection of the property was conducted by Mr Robert Murphy on behalf of the Commission. From this, the first Inspection Report dated 21 February 2017 was produced. The report found that the dwelling did not comply with the Building Code of Australia – Volume 2, Australian Standard 3727 – Guide to Residential Pavements. This was because of: a) a lack of articulation between the concrete and slab penetrations resulting in undue stress and cracking; b) insufficient fall away from the dwelling which could result in surface water affecting building elements; and c) inconsistent colour and texture of the exposed aggregate surface, presenting an unacceptable finish. [8] On 14 March 2017, the Commission notified the Applicant of their decision (“the original decision”) to request rectification by the Applicant of these defects. The property owners informed the Commission on the 11 April 2017 that they had not heard from the Applicant within 28 days. [9] As a result, on 20 April 2017, the Commission issued Direction to Rectify and/or Complete No. 0101949 to the Applicant in relation to these defects. [10] On 17 May 2017, the Commission received an application for internal review of this decision from the Applicant. Internal Review Officer, Leean Tyler, conducted the review. In reaching her decision, Ms Tyler relied on the inspection report produced by Senior Technical Review Officer, Mr Steve Noble. [11] Ms Tyler informed the Applicant of her internal review decision on 18 December 2017. Her decision, based on the findings of Mr Noble’s report, was that: a) There were minor and infrequent cracks of up to 1mm in size in the concrete paths. This fell within the tolerance allowed by the Australian Standard 3727. She did not direct the Applicant to undertake any rectification. b) The fall ratio of the path was marginal at less than 25mm and was near level in some areas. This was not in compliance with the National Construction Code 2015 Volume 2, Part 3.1.2.3. She directed that the Applicant rectify this item. c) The exposed concrete to the rear of the dwelling lacked uniformity and was distinctly dissimilar to adjoining areas. The Standards and Tolerances Guide provides that paving finish is defective if it is inconsistent in appearance within 12 months of completion. She directed that the Applicant rectify this item. -- 3 of 9 -- 4 d) There had been no isolation/articulation installed to the stormwater drainage systems that penetrated the slab. There were shrinkage cracks observed around the perimeter of this pit. She directed that the Applicant rectify this item. On 10 January 2018, the Applicant applied to this Tribunal for External Review of the direction to rectify. Evidence before the Tribunal [12] The Applicant relies on an expert report produced by Eric Fox of EFC Consulting Engineers dated 15 March 2018. They also rely on a supplementary report by the same expert dated 13 November 2018, produced in response to the Commission’s expert report and with the benefit of a site inspection. [13] The Commission relies on an expert report produced by Adam Buckley of NJA Consulting dated 24 October 2018. This report was produced on the basis of a site inspection. [14] On 14 February 2019, the two experts attended a conclave and produced a joint report which was also presented to the Tribunal. The review [15] In accordance with section 19 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) the Tribunal must exercise its review jurisdiction in accordance with both the QCAT Act and the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’). [16] By section 20 of the QCAT Act, the Tribunal must make its decision by way of a fresh hearing, with the purpose being to reach the correct and preferable decision. [17] By section 24 of the QCAT Act, the Tribunal can make orders that upon review: (a) The decision is confirmed; or (b) The decision is set aside and substituted for the Tribunal’s own decision; or (c) The decision is set aside and the matter returned to the Commission to reconsider the decision with directions the Tribunal considers appropriate. [18] In deciding upon this review, the Tribunal operates within the same legislative regime as the Commission did, being Part 6 Division 2 of the QBCC Act. [19] In accordance with section 72 of the QBCC Act, the Commission is empowered to issue directions to rectify work it views as defective or incomplete. Nothing in this section requires a request made pursuant to section 71J to result in an order for rectification of defective work. [20] Defective, in relation to building work, is defined in Schedule 2 of the QBCC Act as including faulty or unsatisfactory works. [21] Section 72(3) of the QBCC Act requires that the Commission take into consideration all circumstances it considers reasonably relevant when deciding whether to give a direction. -- 4 of 9 -- 5 [22] Section 72(5) of the QBCC Act provides that the Commission is not required to give a direction to rectify if it is satisfied that, in the circumstances, it would be unfair to the person subject to the order. The alleged defects Cracking in the slab – Item 1 [23] The Commission decided in both its original decision and upon internal review not to issue a direction to rectify the cracks that had appeared in the concrete paths. The cracks were small and fell within the 1.5mm permitted in the Australian Standard 3727. This part of the decision was not in dispute between the parties. This was the sole original complaint to the Commission by the property owners. [24] I confirm the Commission’s decision not to order rectification in relation to this category being item 1 – the cracking in the slab. [25] This was not the end of the matter for the Applicant builder. The Commission raised three further matters as a result of their officers’ attendance at the property in relation to the investigation of the cracks complained of in the slab. It is of note that these further matters were not initially complained of by the property owners. Fall away of the slab from the house – Item 2 [26] The Commission submitted that the construction of the slab at the rear of the house departed from the engineering plan, the site plan, and a number of industry standards. On these bases, they alleged that the fall away of the slab was defective. [27] At the hearing, it was common ground between the two experts,1 that the departure from the engineer’s plan was necessary due to the later inclusion of a retaining wall, 1.8m from the residence. The Tribunal heard that strict compliance with the original specification, once the retaining wall was added, would have resulted in a slab that was unattractive and less serviceable2 and importantly, very difficult to traverse.3 Mr Fox also noted that the slab now had to drain away from the retaining wall as well as the house, otherwise the wall would be weakened. [28] It was submitted by the respondent that Mr Buckley said that this was reasonably defective building work4 the departure from building standards rendered the work defective. The installation did not comply with Australian Standard 2870 or the National Construction Code which both require 50mm falls in the first metre.5 There is also non-compliance with CSIRO publication BTF18-2011, which requires 1:60 falls away from the building6. [29] These standards are relevant in determining what constitutes a defect. In the QBCC Rectification of Building Work Policy, defective building work is said to include 1 Mr Fox for the Applicant builder and Mr Buckley for the Respondent Commission. 2 Report (supplementary) of Mr Eric Fox dated 13 November 2018, p 10. 3 Ibid p 14. 4 Report of Mr Buckley dated 24 October 2018, p 15. 5 Building Code of Australia - Volume 2, Part 3.1.2.3 – Site Preparation; Australian Standards - AS2870-2011 – Clause 5.2.1. cited by Mr Buckley, pp 6, 8. 6 Report of Mr Buckley dated 24 October 2018, p 15. -- 5 of 9 -- 6 work that does not comply with the Australian standards or the National Construction Code.7 [30] However, as testified by Mr Fox, for the Applicant, the Building Code of Australia is a performance-based code. It is possible to meet the performance requirements without following the Deemed-to-Satisfy provisions of the code.8 [31] In this instance, the relevant requirement would be that the slab as built, conveys water to an appropriate outfall and avoids surface water damaging the building.9 The evidence presented from both experts suggests that the slab does drain, albeit slowly but effectively, when tested with a garden hose. I note that the greater the volume of water, the faster the slab will drain. [32] It was agreed between the experts that if there was a sealant over the joint as per the engineer’s design the amount of water able to infiltrate beside the foundations would be negligible.10 [33] Mr Fox also noted that long term ponding would leave a dirty residue that would be visible after it has dried. He did not see any residue during his inspection, supporting the notion that any ponding had been temporary. 11 I infer that the drainage performance of the slab is satisfactory, and thus not defective. [34] For these reasons, I find that the slab as constructed has met the performance requirements in regard to drainage. I therefore do not believe the fall away from the house constitutes a defect. I set aside the order for rectification of this item. Inconsistent colour and texture ie variability of finish of slab – Item 3 [35] The Commission submitted that variability in the distribution of exposed aggregate in the apron slab was a defect requiring rectification. Evidence of variability of exposure, of the aggregate contained in the concrete of the slab was given by the experts. I understand that the aggregate is exposed when the cement between pieces of aggregate in the concrete of the slab is partially washed away to expose the aggregate contained within. [36] On this issue, the experts agreed that the surface was indeed variable. What was not agreed upon as between the experts, was whether this finish was of a standard which would be reasonably expected a competent contractor. [37] Mr Fox gave evidence that the variability in distribution of exposed aggregate was above average. 12 However, the slabs in question were relatively small, being located between the house and retaining wall. In his view, this makes it more difficult to control slab finishing, and greater variability is not unexpected13. In this instance, a 7 Queensland Building and Construction Commission, Rectification of Building Work Policy (20 June 2014) s 5 cited by Mr Buckley at p 15. 8 Building Act 1975 (Qld) s 5(4)(b). 9 Building Code of Australia – Volume 2, Part 2.2.1 – Drainage Performance Standards. 10 Joint Expert Report (Messrs Buckley and Fox) dated 14 February 2019, p 2. 11 Report (supplementary) of Mr Eric Fox dated 13 November 2018, p 14 and reiterated at the Hearing by Mr Fox. 12 Ibid p 11. 13 Ibid p 14. -- 6 of 9 -- 7 competent contractor may have had difficulties producing an even surface. Therefore, he did not believe rectification is required.14 [38] Mr Buckley characterised the variation as excessive. He did not agree that the finish is of a standard that would be expected by a reasonably competent contractor15. In support of this view, he provided to the Tribunal a selection of images of Mount Cotton driveways obtained through Google Street View. These showed a relatively consistent level of aggregate exposure. He also provided images of an adjacent section of pavement at the property, which had been constructed at a later date by a different contractor, which also had a uniform appearance. Mr Buckley concluded that this slab is of insufficient standard and requires rectification.16 [39] It is well established that, where experts differ, the Tribunal must apply its own logic and common sense. In the case of Holtman v Sampson17 the Queensland Court of Appeal held: The primary duty of a Tribunal is to find ultimate facts, and so far as is reasonably possible to do so, to look not merely to the expertise of the expert witnesses, but to examine the substance of the opinion expressed; and in doing so, the Tribunal may not accept the opinion of an expert witness, and in cases where the experts differ, the Tribunal will apply logic and common sense to the best of its ability in deciding which view is to be preferred or which parts of the evidence are to be accepted.18 [40] This common-sense approach has since been upheld in a number of more recent decisions.19 [41] I therefore take the view that the evidence regarding neighbouring driveways is not particularly helpful to the Tribunal. These images depict wide driveways with plenty of space around them. This contrasts with the apron slab in question which is located in a confined space at the back of the property. I prefer the evidence of Mr Fox in this respect that the amount of variability is not a defect and thus does not require rectification. [42] I am not persuaded on the evidence before me that the finish as completed represents defective work. In circumstances where the experts disagreed, I had to rely on the photographs provided by the parties, and evidence given. While there was some variance, it is not so variable as to support a finding of defective work. [43] However, even if I were to find that the slab was defective, I am not required to give a direction to rectify if I am satisfied that, in the circumstances, it would be unfair to the person to give the direction.20 14 Joint Expert Report (Messrs Buckley and Fox) dated 14 February 2019, p 2. 15 Ibid p 2. 16 Ibid p 2. 17 [1985] 2 Qd R 472. 18 Ibid p 474, cited in Peter Whalley Homes Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 454, [103]. 19 Q M Properties Pty Ltd v Belscorp Pty Ltd [2019] QCA 138, [154]; Pappas v Queensland Building Services Authority [2002] QDC 290 cited in Peter Whalley Homes Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 454, [104]. 20 Queensland Building and Construction Commission Act 1991 (Qld) s 72(5). -- 7 of 9 -- 8 [44] It is true that one of the reasons that the Commission issues rectification orders is to uphold industry standards.21 Nevertheless, these standards cannot overshadow the need for proper deliberation of all factors by the Tribunal, including the question of unfairness.22 Were this the case, the unfairness discretion would never have been included in the QBCC Act.23 [45] In order to assess unfairness, the Tribunal must take into consideration all circumstances it believes are reasonably relevant.24 The fact that I do not specifically refer to a consideration in this decision does not mean that I have not had regard to it. [46] The experts agreed that the only feasible method of rectification would be the removal and replacement of the slab. They also noted that the slab may need to be constructed in stages to achieve the necessary standard of finish, which would only increase the cost of rectification.25 [47] In similar matters, the Tribunal has refused to order the reconstruction of a large area of slab to correct minor flaws, as the expense is unfair to the builder.26 The same consideration applies here. I infer that it would also cause significant disruption to the property owners. No evidence was adduced that the property owners sought the rectification of the finish of the slab. [48] I have also considered the nature of the material in question. The exposure of aggregate by removing some of the cement, carries with it the risk of heterogenous or different sized, coloured and shaped aggregate being used, and different amounts of aggregate being exposed. In this circumstance, it is very possible that rectification of part of the slab will still result in a variation as between the existing slab and any newly rectified part. [49] I also consider that exposed aggregate slabs do by their nature change in colour as they weather and age. Dirt accretes, mould grows, and pavements discolour. I note that traffic over the exposed aggregate by humans, animals and vehicles will all be part of the continual, temporal erosion of the amount of cement. Such is the nature of an exposed aggregate path or driveway. [50] I consider that exposed aggregate slabs serve practical as well as aesthetic purposes. They serve to reduce slippage on the slab surface or to conceal dirt or other marks. The slab as constructed still adequately serves these purposes, which also weighs against a rectification order. [51] I also note that this issue was not the subject of the complaint by the property owners. While this does not preclude the making of an order for rectification, it is perhaps indicative that the inconsistency does not indicate a defect as such and a need to rectify. There is also an element of unfairness in the Applicant not having been giving notice of the alleged variability being a defect earlier. 21 Peter Whalley Homes Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 454, [109]. 22 Jackson and Evans v Queensland Building and Construction Commission [2016] QCAT 434, [49]. 23 Kitchen Plus (Nerang) Pty Ltd v Queensland Building and Construction Commission [2014] QCAT 084, [24]. 24 Queensland Building and Construction Commission Act 1991 (Qld) s 72(3). 25 Joint Expert Report (Messrs Buckley and Fox) dated 14 February 2019, p 2. 26 Jespersen v Queensland Building and Construction Commission [2017] QCAT 459, [56]. -- 8 of 9 -- 9 [52] It is therefore clear to me that the uneven appearance of the finish is not a defect. The Tribunal has previously refused to order the rectification in similar circumstances.27 I therefore set aside the order made for rectification of the slab finish. Lack of articulation/Isolation –item Four [53] In the initial report by Mr Murphy, the Commission considered the lack of isolation between the apron slab and both the downpipes and drainage pits to be defective and ordered rectification. Ms Tyler agreed with and upheld the making of this order to rectify in her internal review decision. [54] In the joint expert report, however, it was agreed that the slab penetrations were in fact constructed in accordance with the engineer’s design. 28 Flexible subsurface joints had in fact been inserted underneath the slab. These were not visible from the surface and had been missed in previous inspections. As a result, the parties through their experts’ concurrence now agree that the slab penetrations as constructed are not defective.29 [55] Having the benefit of this expert evidence, the correct and preferable decision is to not require rectification. [56] I therefore set aside the Commission’s decision to order for rectification in relation to this alleged lack of articulation being item 4. Orders [57] I order that the decision of the Queensland Building and Construction Commission to issue Direction to Rectify No 0251530 is varied as follows: a. Item 1 of the Direction to Rectify No 0251530 made 18 December 2017, ie the minor cracking in the concrete path is not defective and does not require rectification, is confirmed. b. Items 2, 3 and 4 of the Direction to Rectify No 0251530 made 18 December 2017, ie Item 2 the fall away of the slab, Item 3 the inconsistent colour and texture of the slab and Item 4 the lack of articulation/isolation of penetrations, are set aside as these Items are not defects and do not require rectification. 27 Landscaping Qld Pty Ltd v Queensland Building and Construction Commission [2020] QCAT 130, [43]. 28 Joint Expert Report (Messrs Buckley and Fox) dated 14 February 2019, p 2. 29 Ibid, p 2. -- 9 of 9 --