Body Corporate for Cornerstone Apartments on Gordon v Queensland Building and Construction Commission [2020] QCAT 230

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Body Corporate for Cornerstone Apartments on Gordon v Queensland Building and Construction Commission [2020] QCAT 230 PARTIES: BODY CORPORATE FOR CORNERSTONE APARTMENTS ON GORDON CTS 44108 (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (respondent) APPLICATION NO/S: GAR304-18 MATTER TYPE: General administrative review matters DELIVERED ON: 17 June 2020 HEARING DATE: 25 October 2019 HEARD AT: Brisbane DECISION OF: Member LeMass ORDERS: The Complaint made by the Applicant on 3 April 2018 has been brought within the time allowed under the Queensland Building and Construction Commission Act 1991 (Qld). The decision dated 3 August 2018 made by the Commission is set aside, and substituted with a decision to give a direction to rectify to the licensee, Charlie Woodward Builder Pty Ltd, for the following items: (a) Item 3 of the Complaint: The installation of the stormwater system to the podium level at the rear of the building adjacent the fire stairs was inadequate in preventing excess surface water from entering the fire stairs, and not in accordance with the BCA 2012, Volume 1, FP1.3, and AS 3500.3 – 2003, Clause 5.3.3.4, which has led to a dangerous or unhealthy condition for the occupants of the dwelling. (b) Item 6 of the Complaint: The installation of the stormwater discharge pit in the front -- 1 of 12 -- 2 raised garden bed at the left hand side of the driveway was not of a suitable trade quality, and not in accordance with AS 3500.2 – 2003, Clause 7.3.2.1, as its installation has led to significant amounts of water leaking from the pit into the surrounding drainage system, which was being cycled back into the pit, causing the system to become overwhelmed in periods of heavy rainfall, which has led to a dangerous or unhealthy condition, and a loss of amenity for the occupants of the building. (c) Item 15 of the Complaint: The installation of the tiling to the balcony of Unit 18 was not in accordance with the BCA 2012, Volume 1, FP1.3, and AS 3958.1, Appendix D, as the lack of fall to drainage outlets has allowed excess water to pond, creating a dangerous or unhealthy condition for the occupant. If either party wishes to seek costs: (a) The party seeking costs is to file in the Tribunal and give to the other party a clear description of the costs and orders sought, and submissions in support, by 4:00pm on 3 July 2020. (b) The other party is to file in the Tribunal and give to the other party submissions in reply by 4:00pm on 17 July 2020. The issue of costs will be determined on the papers not before 17 July 2020. CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where complaint by homeowner that building work defective – whether it is unfair in the circumstances to require rectification Queensland Building and Construction Commission Act 1991 (Qld) s 72, s 86, s 87, Schedule 2. APPEARANCES & REPRESENTATION: Applicant: M Campbell, instructed by Crouch and Lyndon Lawyers Respondent: S.E Seefeld of counsel -- 2 of 12 -- 3 REASONS FOR DECISION On 3 August 2018 the Queensland Building and Construction Commission (“QBCC”) made a decision (the “Decision”) not to issue a direction to rectify to Charlie Woodward Builder Pty Ltd (the “Builder”) pursuant to Section 72 of the Queensland Building and Construction Commission Act 1991 (Qld) (“QBCC Act”) for property situated at Greenslopes in the state of Queensland (“the property”). The Applicant Body Corporate for Cornerstone apartments on Gordon CTS 44108 seeks a review of the decision pursuant to sections 86(1)(e) and 87 of the QBCC Act. The Applicant seeks to set aside the decision not to an issue a direction to rectify to the Builder pursuant to section 24 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”).1 Section 20(1) of the QCAT Act provides that the purpose of a review is to produce a correct and preferable decision. Section 20(2) of the QCAT Act provides that the tribunal must hear and decide a review of a reviewable decision by way of fresh hearing on the merits. Section 24(1) of the QCAT Act provides: (1) In a proceeding for a review of a reviewable decision, the tribunal may— (a) confirm or amend the decision; or (b) set aside the decision and substitute its own decision; or (c) set aside the decision and return the matter for reconsideration to the decision-maker for the decision, with the directions the tribunal considers appropriate. [5] Section 24(2) of the QCAT Act provides: (2) The tribunal’s decision under subsection (1)(a) or (b) for a reviewable decision— (a) is taken to be a decision of the decision-maker for the reviewable decision except for the tribunal’s review jurisdiction or an appeal under part 8; and (b) subject to any contrary order of the tribunal, has effect from when the reviewable decision takes or took effect. Power to direct rectification [6] Section 72 of the QBCC Act provides relevantly: 72 Power to require rectification of building work and remediation of consequential damage (1) This section applies if the commission is of the opinion that— (a) building work is defective or incomplete; or 1 Section 86(1)(e) of the QBCC Act provides that a decision of the QBCC not to give a direction to rectify is a reviewable decision. Section 87 of the QBCC Act provides that a person affected by a reviewable decision may apply to the tribunal for a review of the decision. -- 3 of 12 -- 4 (b) consequential damage has been caused by, or as a consequence of, carrying out building work. … (5) The commission is not required to give the direction if the commission is satisfied that, in the circumstances, it would be unfair to the person to give the direction. [7] The Commission also has published Policy concerning guidelines for rectification matters.2 The Tribunal [8] The tribunal stands in the shoes of the QBCC for the exercise of its discretion with respect to the Policy above and the Objects as follows: 3 Objects of Act The objects of this Act are— (a) to regulate the building industry— (i) to ensure the maintenance of proper standards in the industry; and (ii) to achieve a reasonable balance between the interests of building contractors and consumers; and (b) to provide remedies for defective building work. Issues for determination [9] The parties agree in an application for review of a decision not to issue a direction to rectify under section 72 of the QBCC Act the following matters must be determined by the tribunal: (a) is the building work defective; (b) is the Builder responsible for the building work; (c) is it fair in all the circumstances, for the tribunal standing in the shoes of the QBCC to exercise the discretion to issue the direction to rectify to the Builder. [10] It is conceded on behalf of the QBCC that all the work under consideration is building work and further that the builder is responsible for the building work under review.3 Factual background [11] The building was constructed by the Builder commencing in 2012 and practical completion reached on or about 13 January 2013. 2 Structural defective building work means defective building work (other than residential construction work causing subsidence) that is faulty or unsatisfactory because it does one or more of the following: adversely affects the structural performance of a building; adversely affects the health or safety of persons residing in or occupying a building; adversely affects the functional use of a building; allows water penetration into a building. 3 See paragraph 15, 16 Respondent’s Submissions. -- 4 of 12 -- 5 [12] The applicant began to notice defects and from time to time, the builder returned to attend to various issues including tiling. [13] Significant defects complained of included water pooling on unit 18 balcony and subsequently entering lower units. This was partially attended to in 2013. Other defects concerned stormwater and extensive basement flooding in 2014 and 2015 for which the Builder attempted final remedies in 2016 and ultimately the applicant by correspondence of 12 May 2017 advised: there are a number of issues regarding drainage and water issues after heavy rain, from behind and under retaining walls creating water issues in the car park, walkways and common areas … there seems to be issues with waterproofing across the entire building. Can you please respond to the concerns raised above. Please be advised the committee are reviewing their options to pursue this matter further…, indicating the applicant's intention of bringing these proceedings. [14] Thereafter the applicant has pursued various reports as to the cause of the defects and ultimately obtained a report from Mr Hebron on 25th October 2017, Mr Boyle 18 March 19 and Mr Theslow 24 October 19 and upon which they now rely. [15] On 4 April 2018, a complaint was made to the QBCC by the applicant and for Ms Wiles owner of unit 18. [16] The property was inspected by Mr Whitecross on behalf of the QBCC on 30 July 2018. [17] On 3 August 2018 QBCC made the decision not to issue the Builder with a Direction, which is the decision currently under review. [18] On 5 September 2018 the applicant filed this application for review. Understanding [19] For consistency I will adopt the parties’ descriptions of the various issues and physical location of drainage as submitted by them and as follows:4 Item Location Description 1 Basement Carpark Water leaks in the basement adjacent to electrical and communications cupboard 2 Fire Escape Stairwell Water leaks into the fire escape stairwell 3 Ground Floor – site drainage and storm water Water down rear stairs into basement 4 Paragraph 16 Applicant’s submissions. -- 5 of 12 -- 6 4 Ground Floor – tiled walkways External tiles lifting and cracking on the path on the west and south of the building 6 Front driveway – fences, walls and retaining walls Water leaking from the expansion joint in the retaining walls of front garden bed 11 Ground Floor – paving Paving slabs near clothes area subsiding 13 Ground Floor – site drainage and storm water Reduction in storm water drainage points 14 Ground floor basement and external common room – hydraulic issue Insufficient/non- compliant hydraulic services 15 Unit 18 Balcony Lack of fall on balcony causing water ponding and slip/safety issue. The stormwater pit immediately beside the water tank at the rear of the Property (Water Tank Pit); The stormwater pit beside the driveway at the front of the Property which has three (3) outflows running to the street (Driveway Pit); The stormwater pit in the garden behind the retaining wall at the front of the Property which has an inflow from the basement pumps and an outflow to the Driveway Pit (Garden Pit).5 Examination and Findings for each issue in order of the table above 1. Water leaks in the basement adjacent to electrical and communications cupboard [20] The expert opinion with respect to this matter remains inconclusive. Mr Hebron only suggests further investigation.6 [21] The submissions of the applicant concur that: the expert's, despite being unable to reach a conclusion.7 [22] The issue is indeed a serious one, a safety hazard and a building defect. However, given that its cause is unknown and evidence only speculative as to whether the builder is responsible for this defect it is impossible for me in the circumstances to 5 Paragraph 18 a, b, c Respondent’s submissions. 6 Section 5.1. Statement Hebron. 7 Paragraph 22 Applicant’s Submissions. -- 6 of 12 -- 7 find as a matter of fact that there is any liability with the builder and it would be unfair to make a direction to rectify. 2. Water leaks into the fire escape stairwell [23] For clarity this is the issue in the fire stairs between the first floor and the ground floor as there was some confusion at hearing. [24] I am satisfied upon the evidence that it is succinctly dealt with in the submissions for the respondent and I quote as follows: the oral evidence for this item is at Pages 64 to 72 of the transcript this complaint item was considered by each of The Experts in oral evidence. It was generally agreed that there should not be water ingress to that stair, but it was unclear what the cause of that water ingress might be. Mr Hebron stated that more investigation would be required to determine the cause.8 [25] In the absence of such explanation, it would be unfair to make a direction to rectify to the Builder. 3. Water down rear stairs into basement [26] This complaint concerns water pooling at the rear of the building and near the ground floor lift and which in times of high intensity rain events flows down the rear stairs, which form part of the fire egress and into the basement. The area is best understood by reference to page 32 of the Hebron report. [27] The ability of water to enter the fire egress stairs and the basement is a building defect. It was not controversial that the area as built was not as designed because a large, 300 by 300 drain had been omitted from the area where the water now pools, again see page 32 of Mr Hebron's report. [28] With respect to this issue Mr Boyle in his report at page 15 shows a photograph of the stairs with heavy calcium stains caused by: continual water flow down the fire escape stairs to the car park. The original stormwater design shows a drainage pit at the top of the stairs that would have alleviated this problem. [29] The omission of this grated drain is referred to in both the Hebron report and the H design report:9 This is not only potentially a health and safety issue but also questions the capacity of the stormwater installation of this building.10 [30] I note that Mr Hebron at paragraph 5.2 suggests an economical solution by the provision of a strip drain in this area which he thinks may alleviate the problem. [31] This is a serious defect, it has been caused by the omission of a substantial drain during construction and has resulted in potential health and safety consequences. 8 Paragraph 28 Respondent’s submissions. 9 Page 32 Hebron report. 10 Page 15 Boyle report. -- 7 of 12 -- 8 [32] Where a fundamental design drainage element has been omitted during construction and is so proximate to the problem, I am not convinced that other issues such as maintenance or later certification make any difference to my conclusions. In the face of clear evidence of water ingress, it is fair to ask the Builder to rectify this issue. 4. External tiles lifting and cracking on the path on the west and south of the building [33] This issue has been rectified. 6. Water leaking from the expansion joint in the retaining walls of front garden bed [34] In my opinion this issue is not well defined and I will expand its reference. [35] This issue concerns the flooding of the basement occurring on two occasions prior to hearing, and I am advised, once after hearing. [36] The building could not be constructed without the provision of a car park below the level of natural ground. Of necessity, the design needs to take account of the natural tendency of water to enter the basement from the stairs, the driveway, or other stormwater. Of importance is the co-location of the lift wells and other infrastructure in this area. [37] In early 2014 and again in 2015 following significant rain events the basement flooded, and the lifts were inundated to such an extent that they required substantial replacement. [38] There are two basement pump stations designed to remove this water; it occurred that one was overwhelmed and stopped. When the second cut in it was unable to deal with the volume of water required. The stormwater is pumped to each of the “pits” intended to gain sufficient height to flow to the road. However, the flooding is exacerbated due to the failure of the “driveway pit” and/or the “garden pit” and with significant consequences. [39] The evidence of Ms Wiles, chairman of the body corporate was that the lifts were unavailable on the first occasion for a period of 14 weeks which she remembers because she had just had a back operation and had to carry her groceries upstairs to the top floor. She stated that on the second occasion when the lift infrastructure again required substantial works, that ‘the insurance company was not very happy’. [40] The Builder returned to the property in 2016 to address the problem. He raised the height of the garden pit by some 300 mm, leaving that pit still compromised by holes and gaps allowing water to enter the retaining wall cavity and from there to the basement. [41] This remained an unsatisfactory solution as the body corporate continued to complain about ongoing flooding issues and foreshadowed litigation on 12 May 2017.11 Why does the basement flood [42] The early findings of Greg Ford Plumbing12 show the problem clearly: 11 See ibid, paragraph 12. 12 Page 50 Mr Hebron’s report. -- 8 of 12 -- 9 We have uncovered a stormwater pit in the garden bed behind the retaining wall. the 100mm PVC pressure line from the pumps in the holding tanks runs to this pit with a 100mm PVC outlet running from the pit to the 300 mm stormwater line. We ran the pumps and found water pouring out from where the pipes enter and exit the pit. There is also a hole cut in the base of the pit where water simply drains away to an Aggie line which comes out at the grated channel at the entrance to the garage area and then back to the holding tank. NB [if] the pipework in and out of the pit along with the hole in it's [sic] back were sealed this would result in the pit overflowing causing similar problems as now experienced. [43] Ms Wiles produced a video showing water pouring out from this wall in 2019 and remarked that residents sand bag the lift area in rain events. I note as a fact that flooding again occurred in December 2019. [44] The matter is referenced by the hydraulic report:13 furthermore of particular concern from the same report a portion of the discharge from the basement pump well is circulating from the pump well to the pit behind the Northern retaining wall and then back to the pump will [sic] via a hole in the bottom of the pit … the volume of water would be of major concern in the event of a power outage and subsequent pump failure … it should be noted that the current installation is totally unsatisfactory and is contrary to any plumbing/ engineering practice and requires major rectification works as a matter of priority. [45] The Respondent’s submissions are:14 it is far from clear that there is even a problem with flooding in this part of the property any longer, the last reported flood was in 2015 and no report of problems since the rise was installed in December 2016. The construction of the riser to the driveway pit has alleviated the problems at the front of the property The events of December 2019 [46] The applicant has provided additional submissions and additional evidence with respect to occurrences of basement flooding post hearing, particularly: in the rain event on Friday 13th December 2019; a the lift shaft has flooded such that the hydraulic system has been unable to cope with the flooding and pump the water out. The lift is now unable to be operated and will remain out of operation for at least 2 months. This poses a loss of amenity for tenants who may not be able to use stairs and rely on the lift to access their individual property. [47] That the basement and lifts have now flooded for a third occasion, is a fact which is a relevant consideration and one which largely puts paid to the respondent's submissions that basement hydraulic plumbing has been fixed. 13 Page 33 item 26 Mr Hebron’s report. 14 Paragraph 60 onwards Mr Hebron’s report. -- 9 of 12 -- 10 [48] No matter the severity of the rain event this is a fundamental system which must be failsafe and it is not. [49] So to the extent that I am informed as to the fact of flood I am going to take notice of that. [50] This defect fails every test prescribed by the QBCC Policy.15 [51] A direction to rectify should issue. 11. Paving slabs near clothes area subsiding & 13. Reduction in storm water drainage points [52] The applicant fails upon both issues to reach the necessary threshold of certainty of causation to satisfy the tribunal on balance that it would be fair in all the circumstances to require the builder to rectify. [53] Both Mr Hebron and Mr Boyle are inconclusive as to the causation of these issues. [54] The holding tanks in this area have been blocked from the date of construction. However, whether this or some other factor, including owner maintenance, failure to properly compact the soil or other matter, caused this is insufficiently clear. [55] No order to rectify should be issued. 14. Insufficient/non-compliant hydraulic services [56] Whilst it is clear that there is extensive non-compliance with Australian construction standards in almost every element of the hydraulics, it is also apparent that despite this there is little evidence of any practical detriment caused by such non-compliance and despite this the system largely functions as intended. I accept the respondent's position as set out in paragraph 68 of its submissions. 15. Lack of fall on balcony causing water ponding and slip/safety issue. [57] No order to rectify should be issued. [58] This is the balcony belonging to Ms Wiles the chairman of the body corporate. [59] This balcony does not simply fall to an edge, but has a ‘curb’ (see paragraph 62) which prevents water leaving other than at designed exits. It is like a pool. [60] It is partially without a roof. [61] It is uncontroversial between the experts that this balcony has insufficient fall, both with respect to the relevant standard and the practical ability to exit rainwater falling upon it. [62] Ms Wiles has provided her statement that the balcony initially flooded in November 2012 and the Builder agreed to fix it. [63] The Builder attended in mid-2013 and removed the tiles. Ms Wiles says he was to install a strip drain but rather he has installed small holes in the corners of the balcony. Ms Wiles says that water does not flow toward these holes. 15 See footnote 4. -- 10 of 12 -- 11 [64] The balcony flooded again in 2017 which was the subject of a complaint to the QBCC and ultimately of this Application. Ms Wiles attaches a number of photographs to her statement which are instructive. [65] Mr Boyle’s report at page 14 shows a photograph of the upstand at the end of the balcony and the small drainage hole about which he says as follows: The balcony has been constructed with almost no fall and in some cases with a slight back fall towards the two sliding doors to enter the unit, I took several measurements with a 2 m long spirit level and have viewed photographs of water ponding in this area. There is also only a minor step up into the unit of approximately 10 mm. The balcony is enclosed with a curb as shown in this photograph … I believe there is insufficient fall on this tiled balcony, insufficient drainage opportunity and insufficient step up into the unit. In addition to this in periods of rain and after the rain has stopped because the levels are so flat there is a considerable health and safety risk to users of the balcony when it is in such a condition. [66] The failure to construct an open balcony with sufficient drainage and fall to allow for the egress of all stormwater is a building defect which could result in flooding of the unit and create a health and safety issue. [67] It was a problem at the time of construction, it was one that the builder visited and failed to remedy and has been an issue ever since. It is fair in the circumstances that a direction to rectify is given to the Builder. Orders 1. The Complaint made by the Applicant on 3 April 2018 has been brought within the time allowed under the Queensland Building and Construction Commission Act 1991 (Qld). 2. The decision dated 3 August 2018 made by the Commission is set aside, and substituted with a decision to give a direction to rectify to the licensee, Charlie Woodward Builder Pty Ltd, for the following items: (a) Item 3 of the Complaint: The installation of the stormwater system to the podium level at the rear of the building adjacent the fire stairs was inadequate in preventing excess surface water from entering the fire stairs, and not in accordance with the BCA 2012, Volume 1, FP1.3, and AS 3500.3 – 2003, Clause 5.3.3.4, which has led to a dangerous or unhealthy condition for the occupants of the dwelling. (b) Item 6 of the Complaint: The installation of the stormwater discharge pit in the front raised garden bed at the left hand side of the driveway was not of a suitable trade quality, and not in accordance with AS 3500.2 – 2003, Clause 7.3.2.1, as its installation has led to significant amounts of water leaking from the pit into the surrounding drainage system, which was being cycled back into the pit, causing the system to become overwhelmed in periods of heavy rainfall, which has led to a dangerous or unhealthy condition, and a loss of amenity for the occupants of the building. -- 11 of 12 -- 12 (c) Item 15 of the Complaint: The installation of the tiling to the balcony of Unit 18 was not in accordance with the BCA 2012, Volume 1, FP1.3, and AS 3958.1, Appendix D, as the lack of fall to drainage outlets has allowed excess water to pond, creating a dangerous or unhealthy condition for the occupant. 3. If either party wishes to seek costs: (a) The party seeking costs is to file in the Tribunal and give to the other party a clear description of the costs and orders sought, and submissions in support, by 4:00pm on 3 July 2020. (b) The other party is to file in the Tribunal and give to the other party submissions in reply by 4:00pm on 17 July 2020. 4. The issue of costs will be determined on the papers not before 17 July 2020. -- 12 of 12 --