Brown v Havenfoot Pty Ltd trading as Ibis Pools & Anor [2019] QCAT 1

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Brown v Havenfoot Pty Ltd trading as Ibis Pools & Anor [2019] QCAT 1 PARTIES: PAUL DAVID BROWN (applicant) v HAVENFOOT PTY LTD trading as IBIS POOLS (first respondent) TAYLOR ASSOCIATES PTY LTD (second respondent) APPLICATION NO/S: BDL077-15 MATTER TYPE: Building matters DELIVERED ON: 2 January 2019 HEARING DATE: 17 November, 2016, 18 November 2016, 26 April 2017 and on the papers HEARD AT: Brisbane DECISION OF: Member Burke ORDERS: 1. The First Respondent and the Second Respondent make payment to the Applicant the sum of $52,120.00. 2. The First Respondent make payment to the Applicant the sum of $7,000.00 as damages for breach of contract. 3. The First Respondent and the Second Respondent are to deliver submissions to the tribunal in relation to each of their contribution to the said sum referred to in Order 1 on or before 18 January 2019. 4. The Applicant is to deliver submissions in reply regarding the proportion of contribution of each of the First Respondent and Second Respondent the sum referred to in Order 1 on or before 1 February 2019. 5. Submissions on costs to be delivered by all parties on or before 1 February 2019. CATCHWORDS: CONTRACTS – BUILDING AND ENGINEERING CONTRACTS – PERFORMANCE OF WORK – REMEDIES FOR BREACH OF CONTRACT – whether measure of damages replacement or rectification costs – -- 1 of 32 -- 2 whether rectification works necessary and reasonable course to adopt – joint experts PROFESSIONS AND TRADES – ENGINEERS – NEGLIGENCE – negligence of engineer – joint and several liability – contribution to damages Queensland Building and Construction Commission Act 1991 (Qld), s 77, s 168(1) Queensland Civil and Administrative Tribunal Act 2009 (Qld), Schedule 2, Schedule 1B section 4 Bellgrove v Eldridge (1954) 90 CLR 613, applied Kirby & Anor v Coote & Anor [2006] QCA 61 Robinson v Harman [1848] Eng R 135; (1848) 1 Exch. 850 Ruxley Electronics & Construction Co Ltd v Forsyth [1996] AC 344, considered Tabcorp Holdings Pty Ltd v Bowen Investments Pty Ltd [2009] HCA 8 Tranquility Pools & Spas Pty Limited v Huntsman Chemical Co Pty Limited [2011] NSWSC 75 Wheeler & Anor v Ecroplot Pty Ltd [2010] NSWCA 61 APPEARANCES & REPRESENTATION: Applicant: C L Ray, solicitor of McKay Solicitors First Respondent: Self-represented Second Respondent: P Chandra, Meridian Lawyers REASONS FOR DECISION [1] This application is to be determined by me as directed by the President of the Queensland Civil and Administrative Tribunal pursuant to s 168(1) of the Queensland Civil and Administrative Tribunal Act 2009 (‘the QCAT Act’) having regard to the decisions and records of proceedings of the Tribunal as previously constituted and delivered to me on 3 November 2018. [2] These proceedings involve a domestic building dispute as defined in Schedule 2 of the Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’) between the applicant, as a building owner, and the First Respondent, as a building contractor, relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work.1 1 ‘reviewable domestic work’ is defined in Schedule 2 of the QBCC Act as domestic building work under Schedule 1B, section 4 except that for applying Schedule 1B, section 4(8), the definition -- 2 of 32 -- 3 [3] The proceedings also involve a domestic building dispute as defined in Schedule 2 of the QBCC Act between the applicant, as a building owner, and the Second Respondent, as an engineer, relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work. [4] Domestic building work is defined in Schedule 1B section 4 of the QBCC Act and is stated to include the following: (3) Domestic building work includes – work (associated work) associated with the erection, construction, removal or resiting of a detached dwelling; and work (associated work) associated with the renovation, alteration, extension, improvement or repair of a home. (4) Without limiting subsection (3), associated work includes – (a) landscaping; and (b) paving; and (c) the erection or construction of a building or fixture associate with the detached dwelling or home. Examples of buildings and fixtures – Retaining structures, driveways, fencing, garages, carports, workshops, swimming pools and spas Application [5] Section 77 of the QBCC Act provides the Tribunal with jurisdiction to determine ‘building disputes’. [6] By application filed 4 May 2015, the Applicant seeks orders against the First Respondent and Second Respondent as follows: (a) replacement of incorrect colour and size of tiles laid by the pool builder and coping as per contract; (b) replacement of broken pool lighting cables due to movement of the pool; and (c) repair or replacement of the pool due to tilting of the pool structure. [7] The estimated cost for rectification or completion of the defective work as set out in the application is $66,700.00. [8] In submissions filed on behalf of the Applicant dated 2 December 2016, the Applicant amended its application to the sum of $124,000.53 on the basis that the First and Second Respondents were jointly and severally liable in that: excluded building work under the schedule is taken not to mean anything mentioned in paragraph (b), (c) or (d) of that definition. -- 3 of 32 -- 4 (a) the First Respondent failed to construct the pool at the property in accordance with: (i) the contract between the Applicant and the First Respondent (including design drawings); (ii) Form 15 Compliance Certificate; or (iii) good building principles; and (b) the Second Respondent failed to take steps that a prudent engineer ought to have taken and had those steps been taken by the Second Respondent the defect in the pool would have been avoided. [9] The First Respondent filed a defence on 10 June 2016 resisting the Applicant’s claim on the following bases: (a) the First Respondent laid the tiles in accordance with the Applicant’s direction and in accordance with the contract; (b) the First Respondent denies that the pool lighting cables have been broken as the works were certified as compliant in Form 17 Final Inspection Certificate issued 16 December 2011; (c) the First Respondent denies that the pool requires rectification, given: (i) the pool movement is within the tolerance prescribed by the Australian Standard AS2783; (ii) the pool is not considered to be defective; (iii) the structural integrity or performance of the pool is not adversely affected; and (iv) the pool does not constitute a health or safety issue. [10] The Second Respondent filed a defence on 29 June 2015 resisting the Applicant’s claim and requesting dismissal of the Applicant’s claim on the following bases: (a) neither the first or second orders sought by the Applicant are relevant to the Second Respondent; and (b) if the Second Respondent owed a duty of care to the Applicant, which is denied, the Second Respondent relies upon the scope of retainer with the First Respondent, the geotechnical report provided to the Second Respondent and the class M classification of the site by Soils Test Australia to assert that it did not breach its duty in the provision of engineering services as the Second Respondent acted in a way that (at the time the service was provided) was widely accepted by peer professional opinion by a significant number of respected practitioners in the field as competent professional practice. -- 4 of 32 -- 5 Background [11] The Applicant, Paul Brown (‘Brown’) is the owner of a home located at 547 Sunrise Road, Tinbeerwah which is a semi-rural area west of Noosa in Queensland (‘the property’). [12] The property was purchased in 2011 by Brown and his wife, with the expectation of constructing a pool and outdoor area to take advantage of the views from the home across the valley. The property is situated on the top of a hill with expansive views to the valley and beyond. [13] The pool is said to be a focal feature of the property in that it can be seen from every vantage point of the living areas of the house.2 [14] It is common ground that: (a) on 14 September 2011, Brown entered into a contract with Mr Crane (‘Crane’), on behalf of the First Respondent, Havenfoot Pty Ltd trading as Ibis Pools (‘Ibis Pools’), whereby Ibis Pools was to construct a reinforced concrete in-ground swimming pool at the property (‘the contract’);3 (b) the contract price for the contract works was $66,760.00; (c) the special conditions of the contract stated: Geotech and 6 piers included Start ASAP Finish 10 weeks to be advised;4 (d) the Second Respondent, Taylor & Associates Pty Ltd (‘Taylor’), provided design drawings numbers 697/9-1 and 697/9-2;5 (e) Taylor issued a Form 15 Compliance Certificate for Building Design or Specification dated 23 September 2011 in respect of the construction of the pool at the property which provided: Site inspection to confirm design criteria as detailed on drawings No’s 697/9 – 1 and 2 provided 450 dia mass concrete bored piers at not more than 2.0m centres are placed under the downslope wall to found into competent natural material;6 (f) the pool was constructed by Ibis Pools between 20 September 2011 and 12 December 2011. [15] On 16 December 2011, Shaun Stuart of Stuart Building Certification Service, issued a Form 17 Final Inspection Certificate. 2 Photographs attached as Annexure D to Exhibit 1. 3 Annexure A to Exhibit 1. 4 Annexure A to Exhibit 1. 5 Annexure B to Exhibit 1. 6 Annexure C to Exhibit 1. -- 5 of 32 -- 6 [16] In January 2014, Brown noticed that the pool was not level as a result of movement and tilting of the pool and thus he began to monitor the water levels of the pool. [17] In or about October 2014, Brown made a complaint to the Queensland Building and Construction Commission (‘QBCC’) regarding the alleged defective pool. [18] Since 2014, a number of experts have been engaged to consider the cause of the movement of the pool and have given advice on rectification methods. Evidence of the Applicant Mr Brown [19] Brown and his wife first met Crane, on behalf of Ibis Pools, in early September 2011. At an initial inspection of the property, Brown says that he discussed with Crane the slope of the steep gradient of the downhill slope where the pool was to be located and other issues including the soakage pits which run the length of one side of the home and extend to within five metres of the proposed site of the pool. The problem with roots and trees in the area was also discussed. [20] On 5 September 2011, Ibis Pools provided to Brown a quotation for the construction of the pool.7 [21] On 14 September 2011, Mr and Mrs Brown and Crane, on behalf of Ibis Pools, executed a contract for the construction of the pool in accordance with design drawings attached to the contract.8 [22] Brown always considered that any geotechnical reports required for the construction would be obtained by Ibis Pools. [23] Brown resided in Gladstone during construction so their monitoring of the construction was limited. [24] Brown was not aware of the engagement of the engineer by Ibis Pools and basically left any necessary applications or compliance with Council requirements to Ibis Pools. Brown did however receive the Form 15 Compliance Certificate from Ibis Pools on 23 September 2011. [25] Whilst the pool was being constructed between September 2011 and December 2011, Mr and Mrs Brown were happy with the construction except for an issue with the tiles used by Ibis Pools. [26] In the year after construction of the pool, Brown carried out works near the pool including the removal of a 20 to 30 metre tall gum tree which was situated about 2.5m from the end of the pool.9 Brown also installed a timber deck. [27] In about January 2014, Brown noticed that the pool was out of level and the tiles between the coping and the concourse had separated with the expansion joint increasing from 5mm to 14mm. Brown measured the pool level which was out of level by 34mm. 7 Exhibit 24. 8 Annexure A to Exhibit 1. 9 Annexure E to Exhibit 1. -- 6 of 32 -- 7 [28] On about 8 March 2014, Brown contacted Crane to advise him of the problem with the level of the pool and the tiling of the pool. [29] Brown gave evidence that on contacting Crane he was advised by Crane that it was his view and that of Mr Taylor, the engineer, that it was the timber deck which was pulling the pool down the slope. Crane advised Brown to prop the deck to alleviate the load of the deck from the pool. [30] Brown engaged a structural engineer, Mr Cox from COJE Consulting Engineers, to inspect the pool and to prepare a report regarding the cause of the movement. Mr Cox advised Brown in a report dated 14 April 2014 (‘the COJO report’) that the timber deck was not contributing to the problem and that the design provided by Taylor had in fact accommodated the weight of a cantilevered walkway on the downside slope of the pool with a much heavier weight than the deck.10 [31] On or about 20 October 2014, Brown lodged a complaint with the QBCC. A meeting was held on site on 20 January 2015, attended by Mr Ross Blumel on behalf of the QBCC, Brown and Crane. A report was prepared by the QBCC dated 20 January 2015.11 [32] After an initial misstatement of the tolerance level for pools in the QBCC report, Mr Stanfield of Engineering and Building Investigation Services (‘EBIS’) was commissioned to attend the property and determine the reason for the movement. 12 [33] Brown investigated the piers himself and manually excavated around 2 piers. Brown says he discovered that the piers were only 1.2m deep and that timber was embedded in the pier and protruding under the pool shell. It was also discovered that reinforcement was protruding from the side of the pier and other foreign material was present indicating that the piers had been founded in fill.13 [34] Brown contacted the QBCC and requested that a further report be prepared by EBIS. A supplementary report was provided to Brown on 23 July 2015.14 A further supplementary report was provided by EBIS on 20 October 2015.15 [35] Brown made an application to the tribunal based on the adverse findings in the EBIS reports. [36] Brown gave evidence that he believes that with respect to rectification, proposed method 4, being the removal and replacement of the pool, is the preferable option. Failing that, Brown was of the opinion that the extensive underpinning method 3 was his second choice provided the coping is levelled. [37] Brown gave evidence that only method 4 would provide to him what he says he paid for under the contract. Any other method of rectification would result in uncertainty as to any long term satisfaction with the pool both as a structure and aesthetically. 10 Report of COJO Consulting Engineers dated 14 April 2014 referred to at paragraph 7 Exhibit 16 11 Annexure G to Exhibit 21. 12 IBIS report dated 24 February 2015 Annexure G to Exhibit 1 and Exhibit 18. 13 Photo – Attachment H to Exhibit 1. 14 Annexure I to Exhibit 1. 15 Annexure J to Exhibit 1. -- 7 of 32 -- 8 Evidence of Mr Crane on behalf of the First Respondent [38] Crane is a director of Ibis Pools and was the person who entered into the contract with Brown on behalf of Ibis Pools. [39] Crane agreed in cross-examination that he had met with Brown on site prior to entering into the contract with Brown and that discussions had taken place regarding the gradient of the slope and the location of trees on the property. The issue of soakage pits was also discussed. [40] Crane agrees that it was the responsibility of Ibis Pools to obtain a geotechnical report as part of the contract works. Crane relied upon a geotechnical report prepared by Soil Testing Australia (‘STA’) dated 30 June 2006. No other geotechnical report was sought by Ibis Pools nor was one prepared for Brown’s property. The STA report relied upon was prepared before any construction on the property had taken place.. [41] Crane has conceded that the presence of uncontrolled fill on the property has the effect of changing the site classification of the property. [42] Despite conceding that the pool requires rectification, Crane does not concede that the piers for the pool were not founded in natural ground.16 Also, Crane does not concede that the pier excavations were clear of debris and that timber and steel items were found in and around the piers as installed. [43] Crane submits that if any rectification work is necessary then method 1, being the Uretek injection method, would be the most reasonable and effective method of rectification.17 [44] In relation to the alleged defective laying of the tiles, Crane says that he had a conversation with Brown regarding the change in tiles and admits that there was a conversation that there would be a two millimetre difference either side of the grout line in order to match the tiles to the existing tiles. Crane does not admit that the grout line is in fact 10mm but agrees that it would be noticeable. [45] In relation to the alleged failure of Ibis Pools to install the lighting cables within the conduit in the area under the tiling around the pool, Crane says that the conduit was laid outside the coping of the swimming pool and does not concede that there was any failure on behalf of Ibis Pools to correctly install the lighting for the pool.18 Evidence of Mr Taylor on behalf of the Second Respondent [46] Mr Taylor is a director of the Second Defendant, Taylor. [47] On 19 September 2011, Mr Taylor inspected the property with Crane to determine if a standard pool design would be adequate for the property. [48] On 23 September 2011, at the request of Ibis Pools, Taylor issued a Form 15 Compliance Certificate for Building Design or Specification for the Brown’s pool. 16 Annexure H to Exhibit 21. 17 Quotation from Uretek dated 18/8/2015 being Annexure I to Exhibit 21. 18 T2-34 – 2.37. -- 8 of 32 -- 9 [49] The Form 15 Compliance Certificate specifically stated: SITE INSPECTION TO CONFIRM DESIGN CRITERIA AS DETAILED ON DRAWINGS NO’S 697/9 – 1 and 2 PROVIDED 450 DIA.MASS CONCRETE BORED PIERS AT NOT MORE THAN 2.0M CENTRES ARE PLACED UNDER THE DOWNSLOPE WALL TO FOUND INTO COMPETENT NATUERAL MATERIAL [50] Further, drawing 697/9-1 issued by Taylor provided, amongst other general notes: 2. THIS POOL DESIGN IS NOT SUITABLE FOR CONSTRUCTION ON EXTREMELY REACTIVE CLAY SOILS, WHEN THERE ARE VARYING FOUNDATION CONDTIONS OVER THE POOL AREA, WHERE DISTURBED GROUND IS ENCOUNTERED OR ON POORLY COMPACTED FILL. CONTACT THE ENGINEER IF ANY OF THESE ARE PRESENT OVER THE POOL SITE. [51] No other site-specific design was considered necessary by Mr Taylor after inspection of the pool and no other inspections were requested of Mr Taylor during construction. [52] Upon being advised of the tilting problem with the pool on about 8 March 2014, Mr Taylor engaged Coffey Geotechnics Pty Ltd (‘Coffey’) to undertake an inspection of the property and to provide an assessment of the cause of the tilting. [53] Coffey provided a report date 14 July 2014 (‘the Coffey report’) which set out the site layout and detailed measurements of differential movements of approximately 15-25mm laterally across the pool and 10-15mm longitudinally over the length of the pool.19 The Coffey report noted that initial measurements by Brown indicated differential movements in the vicinity of 25-30mm. [54] The Coffey report concluded that: (a) the residual clay soils on site are likely to be moderately reactive; (b) the fill on site under the southern side of the pool and under the timber deck was regarded as uncontrolled fill and thus founding in such fill carries some risk of settlement and variable bearing capacity; (c) the design appears to be typical of the pool designs for similar situations and the pool is said to be supported by piles founded through the fill into the underlying weathered material; (d) there was no apparent geotechnical issue that would have suggested that this is a difficult site or that a detailed site specific pool design was required for this site; (e) several possible failure mechanisms were considered: (i) reactivity of the soil with moisture change; (ii) slope instability; 19 Annexure D to Exhibit 25. -- 9 of 32 -- 10 (iii) pile settlement; (iv) construction of the timber deck. [55] The Coffey report concluded: The cause of the pool movement is not far from clear. Several possible movement mechanisms are described above. At this stage, differential shrink swell movements appear the most feasible cause. Our inability to be more definitive is somewhat restricted by lack of data. For example, the level data available provides only the relative movement within the pool. We cannot be sure if the northern side has risen or the southern side has dropped. … While there is no obvious cause of the distress, there are a number of conclusions that can be made:  There are no obvious geotechnical hazards on the site and the design appears to be adequate for the observed geotechnical conditions;  Failure mechanisms cannot be determined with any confidence;  Monitoring may or may not assist in finding a cause but will certainly indicate if the differential movement has stabilised. [56] Following a site inspection by Taylor on 26 November 2014, a report was prepared by Mr Taylor which concluded:20 (a) investigations do not indicate a dominant cause for movement; (b) engineering opinions point to shrink/swell characteristic of the underlying foundation material; (c) it is recommended that the following mitigation steps be taken: (i) reseal the joint between the western pool coping and the abutting patio slab to prevent stormwater runoff entering the soil behind the wall; (ii) investigate the integrity of underground services adjacent to the pool e.g. stormwater drainage, water reticulation, sanitary plumbing including disposal areas; (iii) monitor for further movement with a level survey in late February. [57] Mr Taylor gave evidence that he was not aware that any of the recommended mitigation steps were carried out. [58] Mr Taylor relies upon the supplementary report prepared by EBIS dated 23 July 2015 which indicates:21 20 Annexure F to Exhibit 25. 21 Annexure G to Exhibit 25. -- 10 of 32 -- 11 (a) the piers have been founded into soft material with low bearing capacity which is likely to account for settlement; (b) the debris that was identified indicates that the pier holes were not sufficiently cleaned out prior to pouring of the concrete; (c) the pool design adheres to the specifications of AS2783 in terms of strength and serviceability; (d) the degree of movement that occurred across the pool is within the range of that expected for a ‘M’ class site as per the classification in the STA report; and (e) the builder be directed to undertake remedial work to stabilise the pool to prevent movement and remediate the out-of-level pool coping. [59] Mr Taylor also relies upon the further supplementary report provided by EBIS on 20 October 2015 in which it was determined:22 (a) the piers have been inspected and have not been founded into the natural soil as required due to the uncontrolled fill; (b) the piers were founded to depths just above the natural soil; (c) the amount of building debris and timber noted in the ground around the pool and projecting through the piers indicates that the fill material was not clean nor was it compacted to minimum requirements of the design; and (d) the base design requirements for site preparation in relation to site filling were not adhered to. [60] Mr Taylor’s main concern was that the design was not provided for piers to be founded on varying foundation conditions beneath the pool area. Evidence of Mr Huppert on behalf of the QBCC [61] Mr Huppert, an assessment officer with the QBCC, gave oral evidence during the hearing. [62] Mr Huppert explained that it was the QBCC’s position that in the event that the matter had not been referred to the tribunal, it would have issued a direction to rectify to Ibis Pools based on the defects identified in the EBIS report. [63] Mr Huppert confirmed that a direction would not have been issued to Taylor because it is not within the jurisdiction of the QBCC to issue a direction to rectify to an engineer. [64] Mr Huppert was not requested to comment on the defects alleged in relation to the construction of the pool 22 Annexure H to Exhibit 25. -- 11 of 32 -- 12 Expert Evidence [65] A number of reports have been commissioned by the QBCC and also on behalf of Brown. [66] In addition to the reports provided by two experts, oral evidence was provided at the hearing by three experts as a result of an experts conclave which was constituted pursuant to directions of the tribunal dated 16 March 2016. [67] In addition, Taylor relies upon the Coffey report. Reports from Hughes, Beale and Wright Pty Ltd [68] Mr Wright (‘Wright’), a director of Hughes, Beal & Wright Pty Ltd with more than 40 years experience in the fields of structural and geotechnical engineering, was engaged by the QBCC to prepare an expert report regarding the alleged defects with Brown’s swimming pool. [69] Wright’s first expert report was provided in 16 April 2016 (‘first Wright report’).23 [70] As part of the first Wright report, Wright considered each of the following reports and responded to the issues raised in each: (a) COJO report dated 14 April 2014; (b) Coffey and Partners report provided by Taylor Associates Pty Ltd; (c) Taylor Associates Pty Ltd report for Ibis Pools; (d) EBIS report for QBCC dated 24 February 2015; (e) EBIS report for QBCC dated 23 July 2015; and (f) EBIS report for QBCC dated 20 October 2015; [71] Wright reached the following conclusions: (a) the tilt of the pool having increased in 2014 appears to have receded by 2016; (b) the tilt of the pool is not inhibiting the functional use of the pool and is primarily cosmetic; (c) the tilt is resulting from a combination of settlement of loose fill beneath the pool structure and reactive clay movement due to fluctuations in subsoil moisture; (d) it cannot be assumed that the swimming pool is founded on stable material and it is not reasonable to assume that the impact of poor quality fill has played itself out; (e) two of the piers which were designed to support the down slope side of the pool have been exposed and are not founded in stable material; 23 Exhibit 16. -- 12 of 32 -- 13 (f) it is not unreasonable to assume that the case in (e) is the same for the other piers; (g) there is no indication of the installation of piers under the spa; (h) the swimming pool tilt is reducing and is thus prima facie evidence that the pool is approaching a stable state and is sufficiently level to be functional; (i) given the description of the fill material beneath the piers, there is no confidence that the pool is approaching or is at stable state; (j) it is recommended to improve stability that the pool be supported in foundations (underpinned) taken through the fill material and into the natural ground; (k) consideration to be given to the Taylor recommendation of support around the perimeter of the pool without disturbing the interior of the pool; and (l) the design for underpinning in drawings 2016-041 – 1 and 2 attached to the report provides details. [72] A further report dated 2 July 2016 (‘second Wright report’) was provided by Wright to address the evidence provided in statements by Mr Crane and Mr Taylor. 24 [73] Wright concluded that the distortion of the swimming pool is more the result of poor founding conditions rather than changes in the subsoil moisture conditions in the underlying reactive clay soil. Further, Wright was of the opinion that the Uretek method of rectification would not stabilise the subsoil or prevent further settlement. [74] A further report dated 5 September 2016 (‘third Wright report’) was provided by Wright addressing the proposed methods of rectification of the defective swimming pool and addressing the cost of rectification.25 Engineering & Building Investigation Services Report (‘EBIS report’) [75] A report dated 24 February 2015 was prepared by EBIS at the request of the QBCC.26 The purpose of the report was to assess the original design plans of the pool, to assess the cause of movement and further to make recommendations on any necessary remedial works to address the identified issues. [76] The authors of the EBIS report are Mr Don Stanfield and Mr David Turner of EBIS. Mr Stanfield (‘Stanfield’) is an experienced geotechnical and structural engineer who gave oral evidence at the hearing and who was a participant in the experts conclave directed by the tribunal. [77] Stanfield’s investigation of the site included shrink/swell and linear shrinkage test procedures including test-pits and penetrometer tests.27 The conclusion drawn by Stanfield was that the soil classification for the site at the time of construction of the 24 Exhibit 15. 25 Exhibit 17. 26 Exhibit 18; Appendix F to Exhibit 25. 27 Annexure D to Exhibit 18. -- 13 of 32 -- 14 pool was ‘E/P’ as opposed to the ‘M’ classification relied upon by Ibis Pools and Taylor. [78] Stanfield admitted in oral evidence that in the circumstances where there is more than one type of soil on the site the inferior classification is used. [79] After consideration of the reports supplied to EBIS from other sources and investigation and testing of the site, Stanfield reached the following conclusions: (a) the movement of the pool is likely to have occurred due to soil moisture related movement associated with shrink/swell movements of the high to extremely reactive clays. It is likely that the soil moisture levels are returning to normal after removal of the large tree on the eastern side of the pool and also rebound from the trees that covered the site prior to the development; (b) the movement of the pool appears to have improved and stabilised as indicated by the period of monitoring by Ibis Pools, Coffey Geotechnics and Taylor Associates. There is no cracking or leaking as a result of the movement; (c) EBIS agrees that resealing the joint between the pool coping an abutted patio pavers would be sufficient to fix the stepping and gapping which is evident; (d) as pool movement is resulting from clay swelling (and not construction) cosmetic works to remedy is warranted; and (e) the serviceability and structural adequacy of the pool have not been affected. [80] Stanfield recommended the following remedial works: (a) remove and relay coping tiles; (b) installation of the lateral control joint using a suitable flexible material such as marine grade sealant; (c) reworking of the weir between the spa and the pool; (d) inspections to be arrange with a design engineer; and (e) site to be re-visited. [81] New evidence was provided to Stanfield and a further investigation carried out on 20 July 2015. As a result, Stanfield’s conclusions regarding the effects of construction changed. [82] A further report was provided by Stanfield on 23 July 2015 which concluded:28 (a) the degree of movement that has occurred across the pool is within the range of that expected of an ‘M’ class site as per the site classification by STA therefore it is reasonable to agree that the site classification of ‘M’ could have been determined for this site 28 Annexure G to Exhibit 25. -- 14 of 32 -- 15 (b) there is no loss of serviceability or cracking of the pool; (c) the pool design adheres to AS2783; (d) there is evidence of inadequately founded piers and founding soils observed were not competent; (e) the pool builder should take the opportunity to investigate the construction of the footings of the pool; and (f) the builder should be directed to undertake remedial work to stabilise the pool to prevent further movement and remediate the out of level pool coping. [83] After a further investigation on 30 September 2015, Stanfield provided another supplementary report dated 20 October 2015 which concluded:29 (a) inspection of the piers and borehole investigations undertaken indicate that the piers have a depth of approximately 600mm into soft and silty sand and sandy clay which was very moist to wet with slight seepages. Pieces of timber and building debris were noted in the borehole; (b) the piers have not been founded into the natural soil as required due to the fill material being uncontrolled; (c) base design requirements for site preparation in relation to site filling were not adhered to; (d) minimal change in the differential movement was recorded with 34mm differential movement being recorded on 13 March 2014, reducing to 23- 27mm between 6 June 2018 and 16 October 2014 and further reducing to 13- 15mm between 24 February 2015 and 30 September 2015. This degree of variable movement indicates shrinking and swelling of clay soils around the footings that are associated with high to extremely high reactive sites; (e) EBIS is unable to determine what proportion of the movement has occurred due to shrink/swell movements of the soils on the northern side or the proportion of settlement of piers in the fill material on the southern side; and (f) there is no heaving or cracking of the pool and it is not leaking. [84] Stanfield recommended the following rectification works be carried out: (a) ground stabilisation using grout injection beneath the pool shell and the piers or underpinning the pool edge using reinforced concrete or mass concrete piers; and (b) further site inspection within 12 months including a level survey of the pool coping; and then (c) undertake cosmetic repairs to the coping and concourse tiling to provide a level wet edge at the spa/main pool. 29 Annexure H to Exhibit 25. -- 15 of 32 -- 16 Joint Experts Report dated 25 July 2016 (‘first joint experts report’) [85] In accordance with directions from the tribunal dated 16 March 2016, an experts conclave took place on 11 July 2016. The conclave was attended by Wright and Stanfield. [86] The experts conclave was based on the following premise: (a) both experts are of the opinion that the tilt in the pool was caused by the construction of the pool, in particular because the footings under the down slope wall were not founded into natural ground but rather into fill; and (b) both experts agree that the situation in (a) was unsatisfactory and that the piers should have been founded into natural ground. [87] A joint report was delivered addressing the following issues:30 (a) What was the pool designed for? (b) What is under the pool? (c) Is the design suitable for the conditions on site? (d) How is the problem to be rectified? [88] Both Wright and Stanfield agreed that the pool design required that the pool base be founded into natural soil or well-compacted fill. This did not occur. [89] Further, even if the extended wall footing detail on drawing 697/9-2 had been complied with, it would not have been appropriate for the site. Providing piers beneath the down slope wall was the appropriate means of support, however they were not effective in this case because they were not founded into natural ground. [90] The sole issue with the pool, as agreed to be the fact, was that the bored piers under the down slope wall are not founded into natural ground but rather into questionable fill material of unknown bearing capacity. [91] The experts agreed that the fill under the pool was poorly compacted and estimated that between half and two-thirds of the pool would have been excavated with its base on fill. [92] Whilst there was agreement that the piers were not founded into natural ground, the experts also agreed: (a) there were deficiencies in the Form 15 Compliance Certificate issued by Taylor as the design engineer should have specified how far piers were to penetrate into natural ground or nominate an allowable bearing capacity; (b) the clays in the soil were reasonably reactive and the removal of trees would affect the expansion of the clays; 30 Exhibit 13. -- 16 of 32 -- 17 (c) the pool appears to be performing remarkably well but it is not stable although there is no evidence of leaking or cracking; and (d) there is potential for pool movement due to reactive clay behaviour. [93] The experts did not agree on rectification resolutions. Whilst both agreed that remedial work was required, the reason for this was the uncertainty of the future stability of the pool. [94] Stanfield favoured the effective use of the Uretek grouting injection to arrest future consolidation of the fill. Wright favoured various levels of underpinning depending on the extent to which the pool floor was supported on natural ground. Joint Expert Report after Experts Conclave dated 21 October 2016 (‘second joint experts report’) [95] A further experts conclave took place on 21 October 2016 with a view to attempting to reach agreement in relation to the cause of the tilt of the pool and to consider remediation measures required to remedy the problem and various appropriate methods of rectification. The conclave was attended by Wright on behalf of Brown and Mr Campbell, of EBIS, on behalf of Ibis Pools (‘Campbell’). [96] A report was prepared addressing issues including the following:31 (a) Is the pool currently performing satisfactorily? (b) Will the pool perform satisfactorily for the remainder of its design life? (c) What are the options for rectification? (d) What is the most reasonable method of rectification? (e) Is the concourse paving performing satisfactorily at the junction with the pool coping? (f) Is the tiling of the concourse paving, with its increased grout joints, acceptable? [97] The experts agreed that: (a) the pool can be used for swimming and does not leak; (b) the pool is fit for the purpose in the sense that none of the identified issues are a safety problem or inhibit or present use of the pool; (c) there are no difficult maintenance issue due to distortion; (d) visually it is apparent that the pool is out of level; (e) it is impossible to tell easily which factor (soil reactivity or fill settlement) is contributing how much to the observed differential movement; 31 Exhibit 14. -- 17 of 32 -- 18 (f) the soil is not extremely reactive soil but is moderately reactive therefore the pool design is applicable to this site; (g) it is improbable that movement from changes in moisture content in reactive clay soil would have been prevented by correct installation of piers. Piers wee important in relation to the fill issue not subsoil reactivity; (h) a design engineer should have taken both issues into account. The Form 15 Compliance Certificate nominates competent natural material but the design engineer has not checked whether the piers were properly installed; (i) the design life of an in-ground pool is around 30 to 40 years. It is not possible to predict the life-expectancy of the subject pool because of the potential fill settlement issue. Given the debris in the poor quality fill material the settlement process could continue for up to 20 years; and (j) it is more than likely that the pool will continue to move or tilt. It is not unreasonable to rectify the pool. [98] Four methods of rectification were considered by Wright and Campbell with Campbell, from the Respondents’ perspective, preferring method 1 being the injection of polyurethane under the pool, followed by partial underpinning and lastly method 4 being replacement of the pool. [99] Wright, from the Applicant’s perspective, preferred extensive underpinning being method 3 or removal and replacement of the pool being method 4. [100] In reaching agreement, taking into account risks and cost issues, the experts agreed that method 2 which involves underpinning the fill side of the pool is the preferred method for rectification. This method was said to achieve the original intent of the design with limited disruption to the existing structures. [101] The experts reached agreement that the issues with regards the tiling were cosmetic except that the step between the concourse paving and the pool coping required removal and replacement due to the safety hazard resulting from the sharp edge between the two surfaces. [102] The experts formed the opinion that the grout joint width variation is a cosmetic issue which did not warrant rectification.32 Applicant’s Argument [103] Brown asserts that Ibis Pools breached the contract between Brown and Ibis Pools in that Ibis Pools did not carry out the Geotech (or similar investigation) as required by the contract. Had the Geotech report been carried out, the depth of fill would have been known to Ibis Pools and deeper piers would have been installed or an alternative design may have been appropriate. 32 Items F and G in Exhibit 14. -- 18 of 32 -- 19 [104] Further, it is submitted that had the Geotech report been carried out, the potential ‘P’ or ‘E’ classification would have been known to Ibis Pools and a design appropriate for such a site would have been relevant. [105] Brown submits that the STA report relied upon by Ibis Pools was not relevant to the proposed construction as it had been prepared five years before the proposed construction and contained a number of disclaimers including the following: The site classification is based upon the condition of the site at the time of the investigation and does not take into account any proposed earthworks or proposed site preparation details unless indicated. If any extensive cutting, cut/fill in or total filling is proposed, a reassessment of the site classification will be required. This report does not cover slope stability. If this is required, it is recommended that an independent test be carried out by a qualified Geotechnical Engineer specialising in this area. [106] It is submitted that the STA report should not have been relied upon for the design of the pool as: (a) the experts agree that it was not appropriate to rely upon the STA report for the construction of a pool;33 (b) the STA report was prepared prior to construction of the house which involved site preparation and cutting and filling enlivening the exclusion in section 6 of the STA report; and (c) the pool was constructed on a slope thereby enlivening the exclusion in section 6 of the STA report recommending that an independent test be obtained. [107] Crane conceded that the presence of uncontrolled fill would potentially affect the classification of the site. [108] Ibis Pools was in breach of contract in that it did not install 6 piers as required by the contract and the failure to do so was a contributing cause to the defect in the pool. It was conceded by Crane that only five piers had been installed. [109] Brown submits that the pool is not constructed in accordance with the design drawing in that: (a) foundation note 2 of drawing number 697/9-1 states that the pool design is not suitable for construction on extremely reactive clay site, where there are varying foundation conditions over the pool area and where disturbed ground is encountered or poorly compacted fill;34 and 33 Evidence of Mr Wright and Mr Stanfield. 34 Annexure B to Exhibit 1. -- 19 of 32 -- 20 (b) it is conceded by all that there is poorly compacted fill at the site, the soil is reactive and disturbed ground was to be encountered.35 [110] Further, Brown relies upon the non-compliance with the Form 15 Compliance Certificate in that the piers were not founded into competent natural material and the site was reactive.36 [111] Brown submits that the evidence confirms that the tilting of the pool has resulted from the failure of Ibis Pools to adequately found the piers and the installation of the piers into soil which was not competent.37 [112] Given that Ibis Pools concedes that rectification is necessary for the pool to be level and not tilting, Brown submits that the best method of rectification is replacement of the pool. [113] Brown asserts that he is entitled to the pool which he contracted to receive. Rectification other than replacement of the pool will not satisfy this expectation. [114] In relation to the defective tiling and broken pool lighting cables, Brown submits that: (a) the contract required the tiles around the pool area to match existing tiles in the patio area; (b) Ibis Pools failed to supply tiles around the pool area which matched the patio areas and the grouting to the tiles installed was poor workmanship;38 and (c) the contract provided for two Flash LED lights and transformers to be installed and whilst the required lighting was installed,39 Ibis Pools failed to lay the lighting cables within the conduit in the area under the tiling around the pool. As a result of the tilting and movement of the pool, the unprotected lighting cables have been damaged.40 [115] As a result of the performance of the defective work involving the tiles and the lighting cables, Brown submits that rectification work is required to remedy the defects. [116] With respect to the responsibility of the engineer who designed the pool, Brown submits that Taylor owed a duty of care to Brown to provide professional services as expected of a competent engineer. [117] Brown submits that Taylor breached its duty of care in that Taylor: (a) failed to specify within the Form 15 Compliance Certificate the depth to which the piers were to be founded; 35 Paragraphs 18,19 and 22 of Exhibit 14; Paragraph 27 of Exhibit 13; Annexure G to the EBIS report dated 24 February 2015 attached to Exhibit 18. 36 Paragraph 2 Exhibit 13. 37 Paragraph 7 of the EBIS report attached to Exhibit 18. 38 Exhibits 4, 5, 6 and 8. 39 Annexure A to Exhibit 1. 40 Exhibit 7 and 10. -- 20 of 32 -- 21 (b) failed to adequately or properly take into account the site conditions specific to Brown’s property; (c) failed to properly advise Ibis Pools regarding the site conditions which were evident on the property and relevant to a proper design; (d) relied upon the STA report which was out of date; (e) failed to issue a condition or direction which required the site to be examined before the pool was constructed; and (f) failed to take into account the following: (i) the presence of trees on the property; (ii) the slope of the site; (iii) the presence of uncontrolled/uncompacted fill; and (iv) the presence of septic systems/soakage pits at the property which may have affected the site classification. [118] Brown relies upon the evidence of the experts in their first joint experts report that there were deficiencies in the Form 15 Compliance Certificate issued by Taylor and that Taylor failed to specify the depth into natural ground which the piers should have been installed.41 [119] It is submitted by Brown that had Taylor taken the proper steps of a prudent engineer. the site problems encountered would have been discovered and an alternative pool design would have been considered and either constructed or a decision not to construct a pool may have been taken by Brown. In any event, Taylor’s failure to take the steps of a prudent engineer caused or contributed to the current defective pool. [120] Brown submits that of the four methods of rectification proposed, the removal and replacement of the pool, being method 4, is the only option which will place Brown in the position he would have been in had the contract been properly completed. It is proposed that this method is not only necessary but is a reasonable method of rectification as it is the only method of rectification which results in a level, structurally sound pool. Brown relies upon the decision of Lowik v Carl Linklater Pty Ltd [2010] QCAT 287 on the basis that replacement of the pool is the only feasible method of rectification. [121] Brown further submits that the tribunal should take into account: (a) Wright’s evidence that it is reasonable for a homeowner to expect that a pool be level; (b) the fact that any other method of rectification: (i) is uncertain as it involves unknown soil conditions; 41 Paragraphs 15 and 18 of Exhibit 13 -- 21 of 32 -- 22 (ii) does not fix the level of the pool; and (iii) will result in a diminution in the property’s value; (c) the experts’ evidence that the underpinning methods could result in the pool floor cracking over time if it is located on more than half of fill, a factor which is not known;42 and (d) the experts’ evidence that the pool may continue to show movement for the next 20 years. [122] In written submissions dated 2 December 2016, the solicitors for Brown submit that the views of Campbell should be discounted as Campbell has not attended the property whereas both Wright and Stanfield, having both attended the site, agree that removal and replacement of the pool is the surest solution. [123] Alternatively, Brown submits that method 3 should be considered by the tribunal but that method 1 should not even be considered given the clear and unambiguous evidence from Wright that it would be the least effective method and there could be no guarantee that the method would even work. Argument on behalf of the Respondents [124] Crane concedes that two of the five piers installed under the down slope wall of the pool have not been founded into competent natural material. Accordingly, Crane concedes that the pool is defective but says that the pool is structurally sound and is functioning so that the only remedy necessary is whatever is necessary to improve the aesthetics of the pool. [125] The argument relied upon by Taylor is that the standard pool design with the addition of piers into the down slope wall of the pool was adequate and that as the pool was not sited over the escarpment a specific design was not required. [126] Taylor submits that it acted in a manner expected of a prudent engineer both in inspecting the property and in producing a design which was adequate for the specific site. Inspection of the property was not required unless the builder contacted the engineer as a result of experiencing inconsistent soil conditions. As Ibis Pools did not contact the engineer to conduct a further inspection, there was no reason for Taylor to carry out a second inspection. Specifying the depth of embedment to the piers would not have resulted in a better outcome as the requirement of a competent natural material is a clear requirement on the Form 15 Compliance Certificate. [127] There is no issue between the experts that the design was not appropriate for the site. Taylor says that Wright agreed with this proposition and thus there is no basis for asserting that Taylor’s design was inadequate. [128] Mr Taylor’s evidence was that he relied upon the STA report regarding the soil classification as a guide only and therefore any criticism that the report was too old or irrelevant is not warranted. No request was made by Ibis Pools for Mr Taylor to 42 Exhibit 13 at paragraph 32. -- 22 of 32 -- 23 return to site to assess the soil conditions because it was concluded that the soil conditions were within normal range. [129] Taylor submits that there is no evidence that Taylor was negligent in producing an unsatisfactory design or that Mr Taylor acted in a manner other than as prudent and experienced engineer. There is no evidence that any act or omission by Taylor caused or contributed to the defect in the pool [130] The pool is structurally sound, serviceable and effective. Taylor submits that if any rectification work is required, the Uretek system would be effective. If the Uretek method is considered ineffective, method 2, being the partial underpinning of the pool would be the appropriate method of rectification. Causation [131] The case against Ibis Pools is founded in contract. [132] Brown alleges that Ibis Pools breached the express terms of the contract in that it: (a) failed to obtain a relevant Geotech report; and (b) failed to install 6 piers as required by the Form 15 Compliance Certificate. [133] Brown alleges that had the Geotech report been obtained, the depth of the fill would have been determined and the necessary required depth of the piers would have been ascertained. [134] There is no dispute that only 5 piers were installed. Crane admits this fact. [135] With regard to the obtaining of the geotechnical report, Crane also admits that he did not obtain a further geotechnical report but relied upon the STA report which was in existence prior to any construction being carried out on the site. [136] All of the experts agree that it would have been beneficial to obtain a further geotechnical report because of the complexity of the site and because the STA report relied upon does not address with any accuracy the thickness of the pool fill material. [137] I am satisfied relying upon the evidence of Wright, with which the other experts agree in the most part, that Ibis Pools should have installed 6 piers as required by the contract and further that it should have ensured that the piers were embedded into natural ground. [138] I am satisfied, based on the evidence of Wright, that the primary cause of the defect in the pool arises from its construction and that a small component is due to reactive soil movement. [139] The experts also agree that the builder should have asked the engineer to inspect the site prior to the concrete pour of the piers. Had this been done, a decision would have been made about the depth of the fill and the necessary depth of embedment of the piers. [140] Drawing 697/9-1 specifically states the pool design was not suitable for extremely reactive clay soils. After some disagreement between the experts, it was concluded -- 23 of 32 -- 24 that the soil the subject of the site was not extremely reactive clay but moderately reactive and therefore in the ‘M’ classification rather than in the ‘P’ or ‘E’ classification as initially considered by Stanfield. [141] Drawing 697/9-1 does however state that in the event of there being varying foundation conditions over the pool area or where disturbed ground is encountered or where there is poorly compacted fill, then the builder was required to contact the engineer. [142] These features of the soil were encountered by Ibis Pools but no effort was made to contact the engineer. In this respect, Ibis Pools failed to comply with the general note in the contract drawings. [143] I am satisfied that Ibis Pools should have asked the engineer to inspect the site prior to the concrete pour of the piers. Had this been done, the engineer would have been able to identify the depth of the fill and the extent of the depth for the piers. [144] Accordingly, I am satisfied that Ibis Pools was in breach of contract and was negligent in the construction of the pool in that: (a) it failed to install the number of piers required in the drawings; (b) it failed to ensure that the piers were adequately founded into the natural ground; (c) the soil into which the piers were embedded was not competent in that it was poorly compacted fill; (d) the soil into which the piers were embedded was not competent in that it consisted of timber and steel debris; (e) it failed to obtain a geotechnical report which was relevant to the site conditions; and (f) it failed to obtain advice from the engineer upon encountering foundation conditions which had the potential to affect the design parameters for the construction. [145] I am therefore satisfied that the construction of the pool was the primary cause of the tilt of the pool which is the major defect in the pool. [146] With regard to the other defects alleged by Brown, namely the defective tiles and lighting, I accept the evidence of Brown with respect to the extent of those defects. [147] I do not accept that the mismatched tiling work is purely aesthetic and I am satisfied that there was a conversation between Crane and Brown in which Crane assured Brown that the change in size of the tile would be negligible. I am satisfied that the varying size of the grout width to accommodate this problem is not acceptable and that Brown is entitled to have the tiles fixed. [148] With regard to the lighting, I accept the evidence of Brown that Ibis Pools did not lay the lighting cables within conduit in the area under the tiling and that once the pool started to move the unprotected lighting cables became damaged. -- 24 of 32 -- 25 [149] The case against Taylor asserts that Taylor was negligent in that at the time of preparing the design Taylor failed to take into account the reactivity of the soil and failed to instruct the builder as to the required depth of the piers into natural soil. In that respect the Form 15 Compliance Certificate was inadequate. [150] It is also alleged against Taylor that a prudent engineer would have inspected the site at the time of excavation of the soil and prior to installation of the piers. [151] Another factor which arose during the evidence of the experts was the concern that the drawings did not indicate the position of the piers nor did the Form 15 Compliance Certificate specify the depth of the piers. Both these factors should have been identified and it would be consistent with prudent practice to provide this information as part of a site specific design. The Form 15 Compliance Certificate is site specific and it is in this document one would expect such important details. [152] Wright also gave evidence that given the complexity of the site, it would have been expected that a prudent engineer would have inspected the site during the excavation stage of construction. [153] I am therefore satisfied that Taylor breached its duty of care owed to Brown in that: (a) it failed to specify in the Form 15 Compliance Certificate the depth to which the piers were to be founded; (b) it failed properly to consider all the conditions of the site including the presence of uncompacted/uncontrolled fill, the slope of the site, the vegetation on site, including trees near the pool area and the presence of septic systems and soakage pits at the property; (c) it failed to provide advice to the builder regarding the site conditions which were likely to be encountered; (d) it relied upon a Geotech report which was incomplete in that pages were missing from the report and which was not totally relevant to the construction site; (e) it failed to carry out an inspection of the excavated site prior to installation of the piers at which time an assessment of the depth of the controlled/uncompacted fill could have been ascertained; and (f) it failed to issue a direction to the builder to engage Taylor to inspect the site once the pool area had been excavated. [154] In written submissions dated 2 December 2016, the solicitors for Brown outline a number of concessions made by Mr Taylor during his oral evidence in relation to what would be regarded as best practice procedures of a competent prudent engineer. I am satisfied that the steps taken by Taylor fell short of what would be regarded as best practice procedures of a prudent engineer. Rectification [155] It follows from my conclusions above that the tilt of the pool and any other related defects around the pool require rectification. -- 25 of 32 -- 26 [156] There is little opposition to this conclusion from the Respondents. [157] Four methods of rectification have been explored by all the experts and considered by Brown, Crane and Taylor. [158] Those methods and their costings are set out below: (a) Method 1 – Uretek Injection This method provides for the treatment directly beneath the affected structure to confirm ground compaction and support and the raising of sunken sections towards levels in keeping with adjoining areas. This method does not allow for removal or reinstatement of the timber deck. The estimated cost is $13,640.00 plus GST being a total of $32,214.00 if the cost of the deck removal and replacement were to be included. (b) Method 2 – Underpinning This method involves the installation of underpins beneath the down slope of the swimming pool and four underpins through the floor of the swimming pool. The quotation from R&M Monteverde Pty Ltd for method 2 is $34,870.00 including GST. This method does not allow for the removal and reinstatement of the timber deck. Two quotations have been supplied for the estimated costs for the removal and replacement of the timber deck: (i) Quotation from The Flying Dutchman Qld in the sum of $17,250.00 including GST; (ii) Quotation from Decks of Noosa in the sum of $24,450 plus GST The total including the deck removal and replacement if $52,120.00 (c) Method 3 – extensive underpinning method involving underpinning through the middle of the pool in addition to on the downward slope This method is the same as for method 2 except that four additional underpins would be drilled thought the base of the pool. This may be necessary if more than half of the pool sits on fill material. The cost estimate for method 3 works is $67,000.00 (including GST and the removal and replacement of the deck) (d) Method 4 – removal and replacement of swimming pool This method appears to cover the removal and replacement of the swimming pool. The quotation relied upon includes associated works which do not seem to be required such as replacement of pumps, heaters, pipework and swimming pool tools. -- 26 of 32 -- 27 The quotation relied upon is from Swimming Pool & Landscape Construction in the sum of $112,775.45 plus GST being a total of $124,053.00 [159] Each of the methods was considered by Wright and Campbell in the second joint experts report dated 21 October 2016.43 [160] From the Respondents’ perspective, the preferred methods are method 1 firstly and alternatively method 2 with the least favourable method being method 4. The reason for the rejection of method 4 is the excessive cost. [161] Wright gave evidence that the Applicant would prefer either method 3 or method 4, with method 4 being the most favourable. In oral evidence, Wright was not opposed to method 2 as it does not involve some of the risks involved with method 3 but was dependent upon less than half of the pool being founded on fill. [162] Wright was opposed to method 1 as in his experience the injection of Uretek is more than likely to have the effect of moving the soil sideways rather than lifting the pool upwards. [163] Campbell was far more optimistic about the effectiveness of the Uretek injection method although he conceded there were potential problems with the method and it was not possible to estimate with any accuracy the costs involved. [164] Method 2, as favoured by Wright, involves drilling multiple holes close to the side of the pool down into the weathered rock material, installing a reinforcing cage into the hole and then concrete filling it. The pool is then jacked up off the top of the underpins. [165] Both experts agreed that the method would not necessarily level the pool but it would support the pool substantially in its current position. The rate of success of method 2 was considered to be good and it was determined that there were fewer unknown elements with method 2 compared with method 1. [166] With respect to method 3, both experts agreed that there was the possibility of the correction of the distortion of the pool compared with methods 1 and 2. [167] Campbell did not rate method 3 highly as he says that there is a substantial risk factor in that the levelling process could not be guaranteed and there was a risk of damage to the pool during this process. Damage to the pool shell would be a real risk with the result of little benefit. [168] Wright agreed with the risks involved in jacking causing cracking of the pool shell, however he favoured method 3 as it dealt with the uncertainty as to whether more than half of the pool is presently supported on fill material. [169] Method 4 would certainly be the most technically satisfactory method. In Wright’s opinion, even though the method would be the most favourable, the existing quotation from Pool Fab seemed excessive. 43 Exhibit 14. -- 27 of 32 -- 28 [170] Campbell agreed that the costs proposed were excessive. Given that the pool was performing and fit for its purpose, to demolish and replace the pool was not warranted. Further, Campbell was of the view that given that the experts had identified the possibility of movement could be partially or entirely due to the shrinking and swelling of the clay, a new pool is not going to necessarily change that factor. [171] Wright formed the view that the most ideal method would be method 4 which would be preferred if it could be done for the same cost as the underpinning. Wright conceded that the underpinning in method 2 is close to that which the pool designer envisaged when issuing the Form 15 Compliance Certificate. [172] The question must arise therefore whether the rectification work proposed by Brown, being the removal and replacement of the pool, is both necessary and reasonable in accordance with the principles enunciated in Bellgrove v Eldridge.44 [173] Damages for defective work are generally the amount necessary to make the work conform with what the contractor was required to provide under the contract and thus in accordance with the plans and specifications which formed part of it.45 The basic purpose of an award of damages is to restore the aggrieved party to the position which would have been obtained had the wrongful act not occurred. In the case of incomplete and defective work the usual remedy will be the cost of completing the building works in accordance with the building contract. [174] The qualification outlined by the High Court in Bellgrove v Eldridge is that, not only must the work to be undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt. The example which the Court gave of unreasonableness was where a contract called for the erection of a house with second hand bricks when the contractor had constructed the house of new bricks of first quality. In those circumstances, the owner would not be entitled to the cost of demolishing the walls and re-erecting them in second-hand bricks. [175] In assessing whether remedial work is both necessary and reasonable, the High Court went on to say:46 As to what remedial work is both ‘necessary’ and ‘reasonable’ in any particular case is a question to fact. But the question whether demolition and re-erection is a reasonable method of remedying defects does not arise when defective foundations seriously threaten the stability of a house and when the threat can be removed only by such a course. That work, in such circumstances, is obviously reasonable and in our opinion, may be undertaken at the expense of the builder. [176] As referred to by Keane JA (as he then was) in Kirby & Anor v Coote & Anor [2006] QCA 61 at [51], in terms of the reasons of the High Court in Bellgrove v Eldridge, it is important to take into account that in Kirby the learned trial judge was satisfied that partial underpinning would be a doubtful remedy, in the sense that it 44 (1954) 90 CLR 613. 45 Robinson v Harman [1848] Eng R 135. 46 (1954) 90 CLR 613, 618 - 619. -- 28 of 32 -- 29 would be unlikely to remove the threat to the stability of the building posed by the footings, even though they had not yet failed. [177] His Honour Keane JA went on to say:47 In speaking of the reluctance of the law to confine a plaintiff to a ‘doubtful remedy’, the High Court was contrasting the cases before it with a case where it is clear that expenditure imposed on the defendant is disproportionate to any benefit to the plaintiff in terms of the vindication of the plaintiff’s right to recover its actual loss from the defendant. In this case, the damages recovered by the respondents are not disproportionate to the benefit to the respondents in terms of the respondents’ entitlement to have a house structure which will be, as it should have been, free from risk to its stability so far as its foundations are concerned. It is only by this level of expenditure that the respondents can now achieve a structure which is as stable as it would have been had it not been for the negligence of the first appellant. [178] The House of Lords in Ruxley Electronics & Construction Ltd v Forsyth [1995] 3 All ER 268 considered the construction of a swimming pool which did not comply with the specifications. The brief facts of the case involved the construction of a swimming pool which according to the plans was to have a deep end of 7 foot 6 inches. The as-constructed pool had a depth of 6 foot 9 inches. The court focused on the reasonableness of the rectification work and found in the circumstances that the cost of rebuilding the pool was out of proportion to the benefit which would be obtained. Thus the court determined that the cost of rebuilding would not be the damages to be awarded but rather the correct measure of damages would be the difference in value (even if the difference in value were determined to be nil). The court held that the cost of rebuilding was wholly disproportionate with the benefit that would be obtained and as the difference in value was nil, awarded a nominal amount of damages for general inconvenience and disturbance. [179] In Tranquility Pools & Spas Pty Limited v Huntsman Chemical Co Pty Limited [2011] NSWSC 75, the court accepted the principles from the High Court’s decision in Tabcorp Holdings Pty Ltd v Brown Investment Pty Ltd [2009] HCA 8 that the test of ‘unreasonableness’ is only to be satisfied in ‘fairly exceptional circumstances’. It went on to consider the decision of Wheeler & Anor v Ecroplot Pty Ltd [2010] NSWCA 61 in which the court, whilst following Tabcorp, also stated that another example of ‘unreasonableness’ is a situation where the cost of the proposed rectification is out of all proportion to the benefit to be obtained.48 [180] In Tranquility Pools & Spas the court was to consider whether a product supplied by Huntsman was defective and thus the cause of problems affecting all pools manufactured using the product. On the facts before the court it was held that the replacement of the pools was the only practicable (albeit expensive) way to appropriately compensate the pool owners. The court stated that what was reasonable could only be determined in light of the particular facts. 47 [2006] QCA 61, [52] - [53]. 48 In Wheeler the court did not find that there was a radical disproportion nor any other factor which would lead to the conclusion that awarding rectification costs was unreasonable. An application for special leave to the High Court by Ecroplot Pty Ltd was subsequently refused. -- 29 of 32 -- 30 [181] Therefore, although the Ruxley test of ‘unreasonableness’ will be satisfied if the rectification costs are out of proportion to the benefit obtained, the decisions in Tabcorp Holdings, Wheeler and Tranquility Pools indicate that to the extent that such a test still applies, it will only be satisfied in fairly exceptional circumstances. [182] Defects which are purely aesthetic or which do not give rise to any lack of functionality in the building or structure are difficult to assess. In Hudson’s Building and Engineering Contracts,49 it is suggested that if it is disproportionate to require the builder to pay for the cost of curing the defect, then there may be little effect on the value of the building. [183] In Tranquility Pools, the court in referring to the Court of Appeal decision in Willshee v Westcourt Ltd [2009] WASCA 87 considered the question of aesthetics and stated: [594] The Court of Appeal observed inter alia as follows: … [67] In the present case, part of the reasoning relied upon by the trial judge was the proposition that Mr Willshee’s concern was primarily aesthetic, but it could not be said that his view of aesthetic desirability would necessarily be shared by others, and there was no term of the contract requiring a particular aesthetic standard to be achieved, nor any objective measure by which Mr Willshee’s views could be assessed. [68] The decision in Tabcorp establishes that this process of reasoning is erroneous. Although in the present case there was no express term of the contract relating to the aesthetic standard to be achieved by the limestone cladding, there was a term of the contract which required the limestone cladding to be of high quality. It was breach of that term which resulted in accelerated deterioration of the limestone surfaces which Mr Willshee did not regard as aesthetically pleasing. As the High Court points out in Tabcorp, the question of whether or not Mr Willshee’s views in this respect are idiosyncratic, or would be shared by others, is not to the point [16]. Mr Willshee entered into a contract which he considered served his interests, and he is entitled to the performance of that contract quite irrespective of the views which other people might form in relation to the advancement of those interests, such as views relating to the aesthetic appearance of the house. [69] In Tabcorp, the High Court also elucidated and explained the qualification of ‘unreasonableness’ established by the earlier decision Bellgrove. It established that this qualification is only to apply in ‘fairly exceptional circumstances … only … where the innocent party is ‘merely using a technical breach to secure an uncovenanted profit”…’ [17] (quoting from Radford v De Froberville [1977] 1 WLR 1262 (Oliver J). [70] Applying that test to the circumstances of the present case, it could not be said that WestCourt’s breach of contract was, in any sense ‘technical’. It was a serious and significant breach, which had a 49 Alfred A Hudson, Hudson’s Building and Engineering Contracts (Sweet & Maxwell, 13th ed, 2015). -- 30 of 32 -- 31 significant impact upon the rate at which the external cladding of the house weathered and deteriorated, and which has had a significant impact upon the appearance of the house. [71] Nor could it be reasonably concluded that Mr Willshee is pursuing his claim in order to secure a profit to which he has no entitlement under the building contract. Mr Willshee gave evidence in the strongest terms of his displeasure upon discovering that a significant part of the limestone used for the external cladding of his house was of inferior quality. That evidence was entirely plausible and reasonable, and was not rejected by the trial judge. WestCourt submits that the evidence does not sustain the conclusion that Mr Willshee will in fact use the damages awarded to undertake the relevant remedial work (appeal ts 47). However, there are passages in the evidence of Mr Willshee (see, for example, ts 272) which suggest that it is his intention to undertake the reconstruction work in the event that damages are awarded. In any event, the question of whether or not the work will in fact be undertaken is ‘quite immaterial’: Bellgrove (620) [184] In the present case, it is a question of considering which of the proposed methods is both necessary and reasonable to address the tilt of the pool. [185] I accept the evidence of all the experts that the functionality and stability of the pool is not affected by the present defects. I have formed the view that the defect is not necessarily confined to an aesthetic one but falls short of falling into the category of case such as those where the stability of the foundations of a house are compromised. Those cases are a unique category where there can be no doubt that the rectification work required, such as completion demolition and rebuilding, must be carried out despite any consideration of the cost factor. [186] In the present circumstances there is a method of rectification which is both acceptable and cost effective. In addition to this factor, I have taken into account the fact that even the demolition and replacement of the pool may not have relieved the owner from the risks of the present problem which exist because of the nature of the soil conditions on the site and the slope of the property. [187] In this regard, I am satisfied that the costs associated with method 2 will satisfactorily compensate Brown for the rectification work required so that the pool is compliant with that which he bargained to be provided. [188] In addition to the rectification of the tilt of the pool, I accept the evidence of Wright that the paving to the concourse is not relative to the pool coping and that it is necessary to remove and replace a section of the concourse slab adjacent to the pool with the new slab to be dowelled to the pool. [189] There seemed to be an agreed solution that rectification of the step could be achieved by widening the joint to a nominal width of 20mm and then grinding and filing the sharp edge and finishing with the application of an external grade sealant. No cost estimate was provided for this work. [190] In the absence of any contrary evidence, I accept that the cost of rectifying the defective tiling is $7,000.00 as proposed by Wright particularly as Wright confirmed that the defect, although cosmetic, was also a potential safety hazard. -- 31 of 32 -- 32 [191] No evidence was produced to support Brown’s claim in relation to the alleged damaged lighting cables. Accordingly, I am unable to assess if there is any further costs involved for this defect. Conclusions and Orders [192] Based on my findings above, I have concluded that both the builder, Ibis Pools, and the engineer, Taylor, are culpable for the rectification work required to remedy the tilting pool. [193] Given that the parties have not addressed the contribution of each to the damage which has been caused, I invite the parties to make submissions regarding their contribution to the rectification costs. [194] Accordingly, I make the following orders: (a) the First Respondent and Second Respondent are to make payment to the Applicant the sum of $52,120.00 as damages for breach of contract and/or negligence; (b) the First Respondent is to make payment to the Applicant the sum of $7,000.00 as damages for breach of contract; (c) the First Respondent and Second Respondent are to deliver submissions to the tribunal on or before 14 January 2019 addressing the proportion of each of their contribution to the sum referred to in (a) above; (d) by way of reply, the Applicant is to deliver submissions regarding the proportion of contribution by each of the First Respondent and Second Respondent to the sum referred to in (a) above on or before 28 January 2019; (e) Submissions as to costs of the proceedings are to be delivered on or before 28 January 2019 with the application for costs to be determined on the papers without an oral hearing. -- 32 of 32 --