Dwyer Corporation Pty Ltd t/as Dwyer Quality Homes v Dunne [2018] QCATA 112

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Dwyer Corporation Pty Ltd t/as Dwyer Quality Homes v Dunne [2018] QCATA 112 PARTIES: DWYER CORPORATION PTY LTD TRADING AS DWYER QUALITY HOMES (applicant) v BRUCE DUNNE (first respondent) HEIDI DUNNE (second respondent) APPLICATION NOS: APL278-17, APL027-18 ORIGINATING APPLICATION NO: BDL105-16 MATTER TYPE: Appeals DELIVERED ON: 10 August 2018 HEARING DATE: 5 March 2018 HEARD AT: Brisbane DECISION OF: Senior Member Brown Member Olding ORDERS: In APL278-17: 1. The application for leave to appeal is granted. 2. The appeal is allowed. 3. The decision of the Tribunal made on 2 Augus t 2017 is set aside. 4. In lieu, Dwyer Corporation Pty Ltd t/as Dwyer Quality Homes must pay to Bruce Dunne and Heidi Dunne the sum of $66,537.18 within 28 days of the date of this decision. 5. Dwyer Corporation Pty Ltd t/as Dwyer Quality Homes must file in the Tribunal two (2) copies and give to Bruce Dunne and Heidi Dunne one (1) copy of any submissions on costs, by: 4:00pm on 24 August 2018. 6. Bruce Dunne and Heidi Dunne must file in the Tribunal two (2) copies and give to Dwyer Corporation Pty Ltd t/as Dwyer Quality Homes -- 1 of 23 -- 2 one (1) copy of any submissions in response, by: 4:00pm on 7 September 2018. 7. Dwyer Corporation Pty Ltd t/as Dwyer Quality Homes must file in the Tribunal two (2) copies and give to Bruce Dunne and Heidi Dunne one (1) copy of any submissions in reply, by: 4:00pm on 21 September 2018. 8. Unless a party requests an oral hearing by 4:00pm on 21 September 2018 costs in APL278-17 will be decided on the papers and without an oral hearing. In APL027-18: 1. Dwyer Corporation Pty Ltd t/as Dwyer Quality Homes must file in the Tribunal two (2) copies and give to Bruce Dunne and Heidi Dunne one (1) copy of any further submissions including submissions on costs, by: 4:00pm on 24 August 2018. 2. Bruce Dunne and Heidi Dunne must file in the Tribunal two (2) copies and give to Dwyer Corporation Pty Ltd t/as Dwyer Quality Homes one (1) copy of any submissions in response, by: 4:00pm on 7 September 2018. 3. Dwyer Corporation Pty Ltd t/as Dwyer Quality Homes must file in the Tribunal two (2) copies and give to Bruce Dunne and Heidi Dunne one (1) copy of any submissions in reply, by: 4:00pm on 21 September 2018. 4. Unless a party requests an oral hearing by 4:00pm on 21 September 2018, the Application for leave to appeal or appeal, including the costs of the appeal, will be decided on the papers and without an oral hearing. CATCHWORDS: CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – GENERALLY – where contract provided for ‘full thirty year structural guarantee’ – where ‘guarantee’ construed as a structural warranty – whether failure of termite barrier covered by the structural warranty Building Act 1975 (Qld), s 30(1)(f) Building Code of Australia 2006, Vol 2, 1.1, O2.1(d), P2.1.1, 3.1 Domestic Building Contracts Act 2000 (Qld) (Repealed), Part 4 s 51(1) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142(3)(a)(iii), s 142(3)(b), s 147 -- 2 of 23 -- 3 Byrne v The Owners of Ceresa River Apartments Strata Plan 55597 [2016] WASC 153, cited Collector of Customs v Agfa Gevaert Ltd (1996) 186 CLR 389, cited Ericson v Queensland Building Services Authority [2013] QCA 391, cited Haritos v Commissioner of Taxation (2015) 233 FCR 315, cited Harrison v Meehan [2016] QCATA 197, cited Harrison & Anor v Meehan [2017] QCA 315, cited John Urquhart t/as Hart Renovations v Partington & Anor [2016] QCA 87, cited Mainieri & Anor v Cirillo (2014) 47 VR 127, cited Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, cited Oscar Chess Ltd v Williams [1957] 1 All ER 325 at 327, cited RCW Plumbing & Excavations v Camporeale Holdings Pty Ltd [2017] QCATA 48, cited Ryan v Worthington [2015] QCA 201, cited APPEARANCES & REPRESENTATION: Applicant: Mr A Collins of Counsel, instructed by Garland Waddington Respondent: Mr R Ensbey, Solicitor, Gadens REASONS FOR DECISION [1] Dwyer Corporation Pty Ltd trading as Dwyer Quality Homes (DQH), has applied for leave to appeal, and to appeal, a decision of a member of the Tribunal that DQH pay the sum of $71,217.12 to Bruce and Heidi Dunne, as damages for loss suffered consequent upon the failure of the termite barrier for a house constructed for them by DQH (‘the first appeal’). [2] DQH also seeks leave to appeal an associated costs decision (‘the second appeal’), but only if successful in the first appeal. The appeals are to be heard and decided together. Background [3] DQH constructed a house for the Dunnes pursuant to a residential building contract (the Contract) entered into on 26 February 2007, with construction being completed around December 2007. [4] The house suffered termite damage, the most significant damage becoming evident in 2014. [5] The Contract was in the form of the Master Builders Queensland Residential Build ing Contract RBC May 2005 and incorporated the RBC May 2005 General Conditions. -- 3 of 23 -- 4 [6] The General Conditions included clause 3.2, as follows: 3.2 Contract complete in itself The parties acknowledge that the terms of this Contract are set out in the Contract and shall not be altered, varied, suspended, deleted, or affected by reference to any prior representations, conditions or agreement, whether written or verbal. [7] ‘Contract’ in turn is defined in clause 1 of the General Conditions as: Contract – means these general conditions, the Schedule, the Plans, the Specifications, and any other documents annexed to, or incorporated by reference in, the Contract. [8] Under clause 2(a) of the General Conditions: (a) headings and explanatory notes contained in this Contract do not form part of and cannot be used in its interpretation. [9] The General Conditions also adopted1 the statutory warranties under Part 4 of the now-repealed Domestic Building Contracts Act 2000 (Qld), but by the time the Dunnes commenced proceedings against DQH, the time limit of 6 years and 6 months for commencing proceedings for breach of the statutory warranties had expired. This meant that proceedings could not be brought pursuant to the statute or the conditio n adopting the statutory warranties. [10] However, the Contract also included a special condition (Special Condition 3) in these terms: 3. House has a twenty six week defects liability period and a full thirty year structural guarantee. [11] Additionally, the Dunnes were given what the Member described as a ‘separate “guarantee” flyer described variously as a 30 year “structural guarantee” and a 30 year “structure guarantee”’ (the Flyer), which provided in part: 3. This guarantee covers only structural integrity of the footing slab design, and structural construction work by Dwyer Corporation Pty Ltd in the dwelling, but does not include timber shrinkage or movement, surface or shrinkage cracks in brickwork, concrete slabs, gyprock, cement, plaster or timber, movement, cracking or lifting of ceramic tiles, or any other matter whatsoever which in the opinion of Dwyer Corporation Pty Ltd is non-structural. [12] The Flyer was not signed on behalf of DQH, nor annexed to or referred to in the Contract. DQH’s practice was to provide it at the handover. The expressions ‘structural guarantee’, ‘structural construction work’ and ‘non-structural’ are not defined in the Flyer or in the Contract. 1 Clause 10.1. -- 4 of 23 -- 5 [13] In his reasons, the Member construed the ‘guarantee’ to be a warranty of the adequacy of DQH’s structural construction work, concluding that ‘DQH promised that it would hold good for 30 years’.2 [14] The Member also concluded that the termite barrier was structural in nature and therefore covered by the warranty; that the barrier had been breached; that the breach was caused by the failure of the barrier; and that the breach caused the termite damage. [15] Accordingly, the Member assessed damages for rectification of the barrier and the damage caused by the breach. Grounds of appeal [16] DHQ’s grounds of appeal in the Amended Application for leave to appeal or appeal3 are: 1. The learned Tribunal Member erred in fact and in law in finding that the document being ‘a 30 year structural guarantee’ (‘the guarantee’) constituted a warranty by the Appellant of the Appellant’s structural construction work (‘the work’) and that the work would hold good for 30 years when: (a) the said document was not executed or in a manner or form which made it referable to the property the subject of the proceeding; and (b) such a warranty could not be established as a matter of fact and/or law. 2. [Abandoned.] 3. The learned Tribunal Member erred in fact and in law in finding that there could be any liability of the Appellant for damage caused by termites to the property the subject of the proceeding at a time more than 6 years and 3 months after practical completion of the subject property. 4. The learned Tribunal Member erred in fact and law in finding that: (a) Volume 2 of the Building Code of Australia (‘BCA’) was applicable to a termite barrier; (b) a termite management system was an essential structural component in order to protect the primary building elements of the property; (c) the Appellant was, as part of its contractual or statutory obligations, required to install a termite management system as an essential structural component in order to protect the primary building elements of the house without which construction was prohibited; and (d) there existed a 30 year warranty which was applicable to the termite barrier. 5. Further in the alternative, the learned Tribunal Member erred in fact and law in awarding the sum of $47,058.12 for builder costs associated with Termseal Ura-Fen Treatment contrary to the evidence provided by Anthony Anderson. 2 Dunne v Dwyer Quality Homes [2017] QCAT 262 at [15]. 3 Amended Application for leave to appeal or appeal filed 18 January 2018. -- 5 of 23 -- 6 Nature of appeal [17] Under s 142 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act), an appeal to the appeal tribunal on a question of law generally may be made without leave, but an appeal on a question of fact, or a question of mixed law and fact, may only be made with leave of the appeal tribunal. [18] Apart from the requirement for leave, the distinction between questions of law and, in particular in this case, questions of mixed law and fact, is significant to the appeal tribunal’s role. Broadly speaking, in deciding an appeal on a question of law under s 146, the appeal tribunal must either confirm the decision or return the matter to the Tribunal for reconsideration, unless the appeal tribunal’s determination of the question of law is capable of resolving the matter as a whole in the applicant’s favour.4 By contrast, an appeal on a question of fact or a question of mixed law and fact under s 147 is decided by way of rehearing with or without the hearing of additiona l evidence as decided by the appeal tribunal. Question of law or fact or question of mixed law and fact? [19] Mr Collins, counsel for DQH, submitted that the grounds of appeal should be classified as raising questions of fact or mixed fact and law: (a) Ground 1: Mixed law and fact. (b) Ground 3: Mixed law and fact: effectively taken up in Ground 1. (c) Ground 4: Mixed law and fact. (d) Ground 5: Fact. [20] The distinction between questions of law and fact, and in particular the meaning of a question of mixed law and fact, are not always clear and the courts have not formulated satisfactory tests of universal application.5 It has been said that questions of law are about what is the correct legal test; questions of fact are about what actually took place; and questions about whether facts satisfy the legal test are questions of mixed law and fact.6 [21] Ground 5 clearly raises a question of fact about the amount of the damages assessed. The other grounds have at their heart the construction and application of the alleged warranty. [22] The Court of Appeal has confirmed that the proper construction of a contract is a question of law.7 However, it has also been held that, while determining how an instrument is to be construed involves a question of law, if the answer is that the words used are to be construed having regard to their ordinary (or technical, but non-legal) 4 Ericson v Queensland Building Services Authority [2013] QCA 391. 5 Haritos v Commissioner of Taxation (2015) 233 FCR 315 contains a detailed survey of the authorities. 6 For a recent example, see RCW Plumbing & Excavations v Camporeale Holdings Pty Ltd [2017] QCATA 48. 7 Ryan v Worthington [2015] QCA 201 at [12]. -- 6 of 23 -- 7 meaning, the determination of what their ordinary meaning is will be a question of fact.8 [23] The grounds of appeal raise issues regarding the construction of the words ‘guarantee’ and ‘structural’ in the Contract, or perhaps the composite expression ‘structura l guarantee’, and whether the Member erred in that regard by referring to the terms of the Flyer. Clearly there is a question or questions of law raised regarding these construction issues. [24] However, since we have also concluded that the expression ‘structural’ is to be construed in accordance with its ordinary meaning, determining that meaning may be a question of fact. In any case, Ground 4 in particular also alleges errors of fact, such as the finding that a termite management system is an essential structural component to protect the primary elements of a building. [25] Accordingly, and noting that counsel for DQH did not submit otherwise, we conclude that leave to appeal is required. Should leave to appeal be granted? [26] The issues to be considered in determining whether to grant leave to appeal are: Is there a reasonably arguable case of error in the primary decision? Is there a reasonable prospect that the applicant will obtain substantive relief? Is leave necessary to correct a substantial injustice to the applicant caused by some error? Is there a question of general importance upon which further argument, and a decision of the appeal tribunal, would be to the public advantage?9 [27] It may not be uncommon for issues regarding whether aspects of a building fall within the expression ‘structural’, or the meaning of the expression ‘guarantee’, to arise. However, these matters fall for consideration in the particular context of the special condition in this case and any conclusions of the appeal tribunal would not necessarily apply to other cases.10 Accordingly, we do not consider that there would be a public advantage in a grant of leave to appeal. [28] However, given that the Flyer was not signed, nor annexed to or referenced in the Contract, we consider that to the extent that the Member’s reasoning relied upon reference to the Flyer, there is a reasonably arguable case of error. As these reasons will reveal, there is also error in the Member’s calculation of the Dunnes’ entitleme nt 8 Byrne v The Owners of Ceresa River Apartments Strata Plan 55597 [2016] WASC 153. We have not located further authority for this proposition in the context of construction of contracts, but note that it is consistent with the longstanding approach to construction of statutes, which is supported by the highest authority: Collector of Customs v Agfa Gevaert Ltd (1996) 186 CLR 389. In Life Insurance Company of Australia Limited v Phillips (1925) 36 CLR 60, Isaacs J, in the context of construing a contract, held that ‘The meaning of the words I take to be a question of fact in all cases, whether we are dealing with a poem or a legal document. The effect of the words is a question of law.’ Although the High Court in Agfa appeared to be critical of this approach without resolving the issue. 9 See, for example, Harrison v Meehan [2016] QCATA 197. 10 For example, reference was made at the hearing to John Urquhart t/as Hart Renovations v Partington & Anor [2016] QCA 87, where the Court of Appeal considered the meaning of the expression ‘structural flooring is laid’. However, it is clear from the reasoning at [63] that the context of the expression in a definition of ‘enclosed stage’ was determinative, with the emphasis being found in that context to be upon the structural contribution of flooring to the enclosure of the building. Hence, the case is of no assistance in the current context. -- 7 of 23 -- 8 to damages. Having regard to this, the significant damages awarded, and the uncertainty surrounding the meaning of ‘structural’, we consider that this is an appropriate case for the grant of leave to appeal. Rehearing [29] We now proceed to decide the appeal by way of rehearing. It was held in Harrison & Anor v Meehan, and confirmed on appeal by the Court of Appeal,11 that: [20] . . . Appeals by way of rehearing involve a new determination of the rights and liabilities of the parties, rather than a mere correction of errors in the determination of the Tribunal below. [21] An appeal by way of rehearing under s 147 of the QCAT Act is not a rehearing de novo. The Appeal Tribunal must make its own determination on the material before the Tribunal below (supplemented, if necessary, by additional evidence if permitted under s 147(2)) with due respect for the findings of fact of the primary Tribunal, and due to consideration of the advantages enjoyed by it. [30] In Harrison, the appeal tribunal, in comments that on appeal were also specifica lly endorsed by the Court of Appeal, went on to say that in rehearing the matter: … we have adopted the learned member’s primary findings of fact other than where those findings have been challenged in these appeals or where there is some doubt as to the findings made.12 [31] In this appeal the Member’s findings that the termite barrier was breached; that the breach was caused by failure of the termite barrier; and that the breach caused the damage are not challenged. Consistent with the approach endorsed by the Court of Appeal, we adopt the Member’s findings on these matters. One of the grounds of appeal relied upon is that the Member erred in assessing the home owners’ entitleme nt to damages. We will address this ground of appeal in rehearing the matter. [32] The issues raised in the grounds of appeal relate primarily to the construction and application of the Contract. Before considering those issues, it is useful to set out the principles applicable to the construction of contracts. Principles relating to construction of contracts [33] It is common ground that the so-called objective approach to construction of contracts applies. That is to say, we are concerned to ascertain the intention of the parties manifested in their agreement, not their subjective intentions. [34] That objective intention is determined by reference to the contract, its context and purpose. The High Court has summarised the approach as follows: [46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the 11 [2016] QCATA 197, cited with approval on appeal in Harrison & Anor v Meehan [2017] QCA 315 at [50]. 12 [2016] QCATA 197 at [22], cited with approval on appeal in Harrison & Anor v Meehan [2017] QCA 315 at [50]. -- 8 of 23 -- 9 contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. [47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. [48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning. [49] However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. It may be necessary in determining the proper construction where there is a constructional choice . . . [50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectation.13 (footnotes omitted) Does the Contract contain a warranty? [35] DQH submitted that the Member, in concluding that the Contract contained a structural warranty, erred in relying upon the Flyer. [36] As noted, the Flyer was not signed by DQH but more importantly was neither annexed to nor referenced in the Contract. In those circumstances, having regard to General Condition 3.2 set out above, we accept, as DQH submitted, that the Flyer does not form part of the Contract. [37] However, that is not the end of the matter. We are left with construing Special Condition 3 of the contract that the house has ‘a full thirty year structural guarantee’. [38] It is uncontroversial that the common legal meaning of a guarantee is a collatera l contract by A to answer for the debt or default of B to the person, C, to whom the guarantee is given. [39] However, it is also a fundamental principle that a statement in any text, whether statutory, contractual or otherwise, must be construed in its context.14 Here, there is no third party involved in any contractual arrangements, just DQH and the Dunnes. In that context, it would be fanciful to suggest that the expression ‘full thirty year 13 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104. 14 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46]. -- 9 of 23 -- 10 guarantee’ was objectively intended to take the legal meaning set out in the previous paragraph. [40] We see no error in the Member’s conclusion that the expression is to be construed in its context as ‘intended to be a warranty by DQH of the adequacy of DQH’s structura l construction work and that DQH promised that it would hold good for 30 years.’15 The Member cited Oscar Chess Ltd v Williams in which Lord Denning stated: Everyone knows what a man means when he says, “I guarantee it”, or “I warrant it”, or I give you my word on it”. He means he binds himself to it. That is the meaning which it has borne in English law for three hundred years . . .16 [41] Even without the benefit of the decision in Oscar Chess Ltd, we would have reached the same view. This is the construction a reasonable businessperson would give Special Condition 3 in its context.17 Put another way, an intelligent bystander would reasonably conclude that a warranty was intended.18 Indeed, in our view, construed in context, Special Condition 3 is not reasonably open to any other construction. We conclude therefore that the Contract contains a warranty under which, as the Member found, DQH promised that structural work would hold good for 30 years. Meaning of full ‘structural’ warranty [42] We turn to consider the meaning of ‘structural’ in the expression ‘full thirty year structural guarantee’, in particular whether, properly construed, it extends to the termite barrier. The essential construction question is whether a ‘full . . . structural’ warranty covers a termite barrier where the barrier is necessary to protect structura l elements of a building. [43] We see no basis for concluding that ‘structural’ in this context has a technical legal meaning and therefore seek to determine its ordinary meaning construed in context. That context includes the composite expression in Special Condition 3: ‘full thirty year structural warranty’. The use of the word ‘full’ suggests that a restricted meaning was not intended. [44] The Member noted19 that the Macquarie Dictionary defines ‘structural’ as ‘of or relating to a structure; relating or essential to a structure’ and that ‘structure’ is defined as ‘mode of building, construction or organisation; arrangement of parts, elements or constituents . . . a complex system considered from the point of view of the whole rather than of any single part . . .’ . [45] The definition of ‘structure’ also includes ‘something built or constructed; a buildin g, bridge, dam, framework etc.’ On that basis, it could be said that ‘structural’ include s something relating to a building or framework. This does not comprehensively resolve the essential construction question, unless it could be said that ‘structural’ include s any part of a building, which would not be consistent with common understand ing that ‘structural’ does not include items that are, for instance, purely decorative and not functional. It would also leave the word ‘structural’ in ‘full thirty year structur a l 15 Dunne v Dwyer Quality Homes [2017] QCAT 262 at [15]. 16 [1957] 1 All ER 325 at 327, cited in BDL105-16 Reasons at [14]. 17 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [47]. 18 Mainieri & Anor v Cirillo (2014) 47 VR 127 at [23]. 19 Dunne v Dwyer Quality Homes [2017] QCAT 262 at [16]. -- 10 of 23 -- 11 guarantee’ little or no work to do since it would effectively mean a ‘guarantee’ of the whole of the building. [46] However, it is clear that ‘structural’ would at the least include fundamental elements necessary for the integrity of a building, such as load-bearing bearers and joists and frames. It was not disputed that termites may impact in the most adverse way on parts of a building that would, on any view, be regarded as structural. Does that mean that an effective termite barrier, where necessary because of local conditions and choice of construction materials to protect structural elements of a building, is also ‘structural’ in the context of a ‘full . . . structural’ warranty? Building Code of Australia requirements [47] The Member linked the references to ‘elements’ in the dictionary definition of ‘structure’ to the statutory context against which building work of this kind was carried out at the relevant time.20 In that regard, the Member noted that building work was required21 to comply with the Building Code of Australia (BCA).22 We consider that those requirements form part of the context that it is permissible to take into account in accordance with the principles applicable to the construction of contracts set out above. The BCA 2006 was in evidence in the proceeding below.23 [48] The BCA does not define ‘structural’. Although not referenced by the Member, we note that the expression ‘Structural adequacy’ is defined in the BCA as ‘in relation to an FRL [Fire Resistance Level], . . . the ability to maintain stability and adequate loadbearing capacity under AS 1530.4’; while ‘Structural member’ is defined as ‘a component or part of an assembly which provides vertical or lateral support to a building or structure’.24 Those definitions are broadly consistent with the concept of structural relating load-bearing and what may be referred to as the structural integr ity of a building. [49] However, as the Member noted, the BCA required a termite barrier to be installed in Queensland, unless the construction used steel, termite-resistant or termite-treated timber or other materials not susceptible to termites in the ‘primary building elements ’ of a building.25 [50] The applicable definition of ‘primary building elements’ was widely drawn, as follows: (a) a member of a building designed specially to take part of the building loads and includes roof, ceiling, floor, stairway or ramp and wall framing members including bracing members designed for the specific purpose of acting as a brace to those members; and 20 Dunne v Dwyer Quality Homes [2017] QCAT 262 at [20]. 21 Building Act 1975 (Qld), s 30(1)(f) (Reprint No. 6 as in force on 7 December 2006). 22 Since the Contract was executed on 26 February 2007 (according to the date on the schedule of Special Conditions), the relevant version is BCA 2006, with the Queensland variations. All references are to this version. 23 Exhibit 10 in BDL105-18, BCA, Vol Two. 24 BCA, Vol Two, 1.1.1. 25 Dunne v Dwyer Quality Homes [2017] QCAT 262 at [20]; BCA, Vol Two, 3.1.3. -- 11 of 23 -- 12 (b) door jambs, window frames and reveals, architraves and skirtings.26 [51] On this basis, the Member determined that a termite barrier itself, when required to be installed, ‘formed an essential component of the structural building work without which construction was prohibited’.27 [52] It is notable that the relevant performance requirements appear in Part 2.1 of the BCA, which is headed ‘Structure’. One of the stated objectives of Part 4 is to ‘reduce the likelihood of buildings being damaged by subterranean termites’.28 This is consistent with the view that, where a termite barrier is required to protect a building, it is correct to characterise the barrier as ‘structural’. [53] The BCA requirements cannot be determinative of the construction question with which we are faced. Nevertheless, the BCA requirements form part of the context against which the Contract is to be construed. Although not determinative, the statutory context as described by the Member is consistent with the broader view that a termite barrier, when required to protect structural components of a building, is an essential component of, in the sense that it is required to protect, structura l construction work. Relevance of the Flyer to the construction of the warranty [54] Although we have concluded that the Flyer did not form part of the Contract, we have considered whether we should have reference to the document as additional context against which the Contract must be construed. In so doing, we note it is accepted that the Flyer was given to the Dunnes at or around the time the Contract was executed. It is also clear that the term ‘structural’ is not ‘unambiguous or susceptible of only one meaning’.29 In those circumstances, we consider that it would be legitimate to take into account the Flyer if it could assist in construing Special Condition 3, not by way of incorporating it into the Contract or direct evidence of the Contract’s meaning, but rather as context for its construction. [55] The Flyer lists some exclusions which, at first glance, might be thought to suggest a less than ‘full’ structural warranty was intended or a narrower rather than broader construction should be preferred. However, reading down the otherwise unrestricted words of the Contract by reference to this extraneous evidence would be impermissible. And on closer examination, the exclusions may be seen to be in a different category to the termite barrier, as they relate to matters broadly outside DQH’s control and/or not going to the integrity of the fundamental elements of the building, such as shrinkage, movement, surface cracks and the like. [56] Accordingly, as it does not assist in resolving the construction question, we have no regard to the Flyer in construing Special Condition 3. [57] For the sake of completeness, we observe that Counsel for DQH noted the further exclusion in the Flyer for ‘any other matter whatsoever which in the opinion of Dwyer Corporation Pty Ltd is non-structural’. If it applied, it might be implied that application of this part of the Flyer would be conditioned on reasonableness on the 26 BCA, Vol Two, 3.1 27 Dunne v Dwyer Quality Homes [2017] QCAT 262 at [25]. 28 BCA, Vol Two, O2.1(d). 29 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [48]. -- 12 of 23 -- 13 part of DQH. But the difficulty is that it does not apply, for the reasons already stated, and application of any reasonableness condition would still beg the question regarding the intended meaning of ‘structural’ in the expression ‘non-structural’ and invite construction of it by reference to the foregoing exclusions which, as noted, do not assist in resolving the construction of Special Condition 3. ‘Set and forget’ argument [58] Counsel for DQH also submitted that, even accepting that the Contract contained a warranty, objectively it could not have been the intention of the parties that the Dunnes could ‘set and forget’. That is, that the warranty would endure for 30 years without the Dunnes carrying out monitoring and maintenance of the termite barrier. We acknowledge the force of this argument: 30 years is indeed a substantial period to warrant the effectiveness of a termite protection measure. [59] However, in that regard we note that the performance requirement under the BCA is that the risk of ‘primary building elements’ being damaged by termites must be adequately minimised by the use of a suitable termite management measure which must have ‘a design life of at least 50 years’ or be ‘easily and readily accessible for replenishment or replacement and is capable of being replenished or replaced’.30 [60] For completeness, we note that a ‘Building Newsflash’ issued by ‘Building Codes Queensland’ (apparently then part of the Department of Local Government, Planning Sport and Recreation) on 8 May 2006, summarises these BCA requirements, then notes: The purpose of the Queensland variation to the termite management provisions of the BCA is to ensure that a reasonable assurance, based on scientific data, is given by a system provider that there will be no loss of function of a termite management system over a design life of not less than 50 years. The legislation does not require, and it is unreasonable to expect, a system supplier to warranty (sic) their system for 50 years.31 [61] We have considered the comment that it would be unreasonable to expect a termite management system provider to warrant their system for 50 years. There are several points of note. First, this document was issued on 8 May 2006 after the BCA variatio n was made with effect from 1 May 2006; as such, its status, relevant to whether it could have a role to play as extraneous material in the interpretation of the variation, or the Contract, is unclear. Secondly, there is nothing to suggest that the Newsflash was known to the Dunnes. Thirdly, and in any case, the reference is to a warranty by the supplier of the system; here the issues arose not from the system itself but from the installation of the system as part of the building work. Fourthly, product informatio n from Alterm National Pty Ltd, the supplier of the termite barrier installed by DQH, indicated that the company in fact, subject to certain conditions, ‘warrants its products to have a minimum life expectancy and against undetected subterranean termite ingress through the product components for a period of 50 years’.32 30 BCA, Vol Two, P2.1.1. 31 Statement of John Spark filed 6 April 2017, Attachment PA16, page 3. 32 Exhibit 1, Attachment D (Alterm Training Manual), page 16. -- 13 of 23 -- 14 [62] Accordingly, we do not accept that objectively it could not reasonably have been intended that the 30 year warranty would cover the termite barrier though potentially subject to implied conditions relating to monitoring and maintenance. [63] In any case, the difficulty for DQH is that the evidence establishes that the termite barrier failed. There is no evidence that the failure of the termite barrier was due to lack of monitoring or maintenance. It was not argued on appeal that the damage did not result from the failure of the termite barrier, nor that failure to monitor for termite damage meant that the Dunnes had failed to discharge an obligation to mitigate their loss. Neither party sought to adduce further evidence on these matters at the hearing of the appeal. [64] Accordingly, even if the warranty was to be construed as conditioned upon reasonable monitoring and maintenance by the Dunnes, the damage is attributable to shortcomings in the installation of the termite barrier by DQH and not to lack of monitoring or maintenance. Conclusion on meaning of ‘full thirty year structural guarantee’ [65] Having regard to these matters, we consider that installation of a termite barrier, when such a barrier is required for protection of the integrity of a building, falls within a ‘full thirty year structural guarantee’. [66] This view is consistent with the reference to a ‘full’ structural warranty in the composite expression found in Special Condition 3. It is also broadly consistent with the BCA requirements, although we would reach the same conclusion without reference to those requirements. A narrower construction would mean that a builder who committed to a ‘full thirty year structural guarantee’ would not be liable for a shortcoming in construction of a residence that leads directly to serious damage to its structural elements. [67] Accordingly, we consider that the warranty contained in Special Condition 3 of the contract covered the failure of the barrier and the termite damage. Application of limitation period [68] One of the grounds of appeal raised by DQH is that the learned Member erred in finding that DQH could be liable for damage caused by termites to the subject property at a time more than 6 years and 3 months after the date of practical completion. In rehearing the matter, it is appropriate that we consider what the parties said about time limits in respect of the claim by the Dunnes. [69] At the outset, we observe that as there are no pleadings in the Tribunal; the issues for determination and the relevant questions of fact and law which the Tribunal is required to decide are identified in the application, the response and the parties’ statements of evidence. [70] The Dunnes’ Application for domestic building disputes33 does not specifically refer to, nor seek to rely upon, Special Condition 3 of the contract. The Dunnes refer to ‘4 known termite protective barrier breaches within the warranty period’. It is not readily 33 Application for domestic building disputes filed 29 April 2016. -- 14 of 23 -- 15 apparent whether this is a reference to the period within which application was required to be made to the Queensland Building and Construction Commission for a direction to rectify defective or incomplete work or a reference to the period within which a claim for a breach of statutory warranty was required to be made.34 [71] In its response, DQH asserts that the ‘construction is well out of builders warrantee (sic) period’.35 DQH says in its response: DQHs warrantee (sic) period is a generous one. As the house is well out of the 6 year 3 month major defect period and any major defect must be contained to any remedial work undertaken by DQH within the last 6 years and 3 months. [72] DQH’s response contains an ‘Events Log’ which notes the date 22 May 2014 as ‘Builders Warrantee (sic) Expiry Date’. [73] In their joint statement of evidence, the Dunnes refer to the building contract having a ‘30 year structural guarantee’.36 They say: The defective termite barrier has been an ongoing building defect discovered well within the warranty period. These current issues and this claim are related to the original complaint in 2012.’ [74] Again, it is unclear what ‘warranty period’ the Dunnes are referring to. However in a supplementary statement, the Dunnes say: We signed a Residential Building Contract with DQH on 26/02/07 (See Attachment H). The contract incorporated a “Masters (sic) Builders Residential Building Contract”, a “Residential Building Contract Appendix” and “Specifications and Special Conditions.” Under the heading “Special Conditions” paragraph 3 states: House has a twenty six week defects liability period and a full thirty year structural guarantee . The QBCC has classified this defective termite barrier as a “Category 1 building defect” (Attachment 1). The contract binds DQH to a 30 year structural guarantee of our house and under the terms of the contract is liable to rectify the faulty termite barrier and consequential damage.37 [75] DQH relied upon a statement by Mr John Spark, DQH’s construction manager.38 Mr Spark refers to Special Condition 3 of the contract and says: … there has been no accusation made to suggest, nor any evidence presented to support a notion that there is any structural failure of any part of the structure. I submit the tribunal applies no weight to the unsupported comment in Dunne’s statement referencing the 30 year structural guarantee.’ [76] Mr Spark makes numerous references in his statement to the expiration of DQH’s statutory warranty. His statement makes no other mention of Special Condition 3. 34 Queensland Building and Construction Commission Act 1991 (Qld), s 72A(4); Domestic Building Contracts Act 2000 (Qld), s 51(1). 35 Response filed 1 June 2016. 36 Exhibit 1 in BDL105-16, Statement of Bruce and Heidi Dunne dated 21 February 2017. 37 Ibid. 38 Statement of John Spark filed 6 April 2017. -- 15 of 23 -- 16 [77] Mr Dunne represented the homeowners and Mr Wayne Dwyer represented DQH at the hearing. After the evidence had concluded, the Member invited the parties to make closing submissions. The following exchange took place between the Member and Mr Dunne: Member: Well, before that I’ll just ask you – you might say you don’t understand, but what’s the basis of your claim? I know your complaint is about termite damage but in a legal sense what’s the basis of the claim? Mr Dunne: Yeah. There is a component of damage done by termites and so forth. The basis of the claim is that what we have paid for by way of a properly installed termite barrier has not happened, and there is a six year six month warranty period but we believe it’s an issue that – it’s been a latent issue from when the house was built and it certainly has been demonstrated that those failings and the barrier has failed, been poorly installed from day 1, and just because it’s (sic) run over time that – you know, it’s still an ongoing – it’s a problem that’s been from day 1. It’s been – so the basis of claim is that the agreement or contract hasn’t been satisfied. I’m not really up on the legal term or what needs to – but we had a contract with Mr Dwyer for him to supply a product, a properly installed product and we haven’t got that.39 [78] The Member invited Mr Dwyer to make to make his closing submissions : Mr Dwyer: I think the tribunal’s got to look very strongly at the warranty provisions, the statutory warranty provisions, that’s imposed by builders which are six years and six months which are fairly generous provisions in my opinion.40 There followed an exchange between the Member and Mr Dwyer: Member: All right. Now, just finally I think I should give you the option of saying something. I asked Mr Dunne the basis of claim. He effectively says it’s been a breach of contract. He said it hasn’t – what he bargained for hasn’t been supplied properly and it was a latent issue. What do you say? You’ve indicated that – you’ve mentioned the statutory warranty under the Domestic Building Contracts Act, six years and six months. Mr Dwyer: Yes. Member: But he seems to be indicating there’s a general requirement warranty guarantee representation or requirement as to skilful building work pursuant to contract. Do you want to say anything about that? Mr Dwyer: Well, only in layman’s terms, that the warranty period I believe is a significantly large enough one and it protects the owners, you know, for six years and six months. During that period when there was those problems with the termites we went out there and did the rectification work at our cost, but at some point that has to stop. We can’t, sort of, warranty the product forever and ever. I mean, no product is really warranted forever and ever, is it? Member: Yes, I’m not assuming any side. I’m just giving you the opportunity of saying something. 39 Transcript dated 23 June 2017, T2-84 lines 42-47, T2-85 lines 1-8. 40 Transcript dated 23 June 2017, T2-96 lines 17-19. -- 16 of 23 -- 17 Mr Dwyer: Yes. Member: The last matter I’ll raise with you, leaving aside the statutory warranty which appears in the statute, an Act of Parliament, and that’s what you’ve been referring to - - - Mr Dwyer: Yes. Member: - - - is there a warranty, a similar warranty, pursuant to the contract outside the warranty under the statute? Mr Dwyer: Not under the statute I don’t believe, no. Member: No, but outside the statute. Mr Dwyer: Outside the statute there’s an implied warranty I suppose, isn’t there? Member: I’m just giving you the opportunity of saying something about that. Mr Dwyer: Well, I don’t really know enough about it, only that if it’s outside that period I think the homeowner would have to prove some sort of negligence upon DQH before it enabled them to be able to make a claim even, and I don’t believe in this case DQH’s been negligent. We’ve engaged – as it’s set out in the statements, we’ve engaged licensed and accredited termite pest installers, it’s just that in this case the guy happens to have gone broke and then it rests upon DQH to, sort of, pick up the slack.41 [79] In the appeal, the focus of DQH was upon whether the contract included a structura l warranty as contended for by the Dunnes. DQH made no submissions as to the limitation period applicable to a claim by the homeowners for the breach by DQH of the structural warranty found in Special Condition 3. In its written submissions,42 DQH refers to the finding by the Member: If a warranty is breached the usual rule is that the other party is entitled to claim damages. The subject claim based on breach of contractual warranty is not out of time.43 [80] DQH submits: The learned Member then found the expiry of the statutory limitation periods has no bearing on the purported thirty-year extended warranty of structural integrity. Consequently, as there was a thirty year warranty, there was no prohibition by reason of any limitation period.44 [81] In making this submission, DQH referred to the following passages from the reasons: [26] Expiry of the 6 years and 6 months limitation to the DBC Act statutory warranties (adopted in the general conditions of the contract) and the 6 years and 3 months limitation under the QBCC Act rectification period for defective 41 Transcript dated 23 June 2017, T2-99 lines 26-47, T2-100 lines 1-27. 42 Applicant’s outline of submissions filed 15 November 2017 at [20]. 43 Dunne v Dwyer Quality Homes [2017] QCAT 262 at [27]. 44 Applicant’s outline of submissions filed 15 November 2017 at [20]. -- 17 of 23 -- 18 building work have no bearing on the 30 year extended contract warranty of structural integrity. [27] If a warranty is breached the usual rule is the other party is entitled to claim damages. The subject claim based on breach of contractual warranty is not out of time. [82] In its submissions in the appeal, DQH says that the Dunnes bring a claim for damages in respect of a building, construction of which finished in 2007, relating to matters pertaining to termite infestation between 2012 and 2014. DQH says that statutory warranties are imposed in a contract by legislation which limits the time after the building work was completed for which a claim may be made to 6 years and 3 months. DQH says that section 51 of the DBC Act required proceedings for breach of statutory warranty to be commenced within 6 years and 6 months after the work finished.45 [83] Under the heading ‘Claim out of time’ in its written submissions, DQH says that the Member found that the 30 year structural warranty: … transcended the period of six years and three months which is designated as the statutory warranty period under the applicable legislation. Indeed, the findings are the express warranty operated for 30 years.46 [84] In the submissions by DQH below, the potential for the application of the Limitation of Actions Act 1974 (Qld) (‘LAA’) was not raised. The learned Member made no findings as to the application of the LAA. This is unsurprising given that the issue was not raised by DQH or otherwise ventilated prior to or at the hearing. [85] The LAA is, with limited exceptions, procedural. It has the effect of barring the remedy but not extinguishing the right.47 As Lindgren J observed in Commonwealth v Mewett:48 The fact that proceedings have been commenced within a limitation period is not an element of the cause of action and so need not be pleaded by the plaintiff/applicant but must be pleaded by way of defence, and unless and until this happens the limitation has no effect… A court will not, of its own motion, refuse a remedy although the "lateness" of the commencement of proceedings is apparent. [86] The learned Member invited DQH to make submissions about whether there was a relevant contractual warranty separate to any statutory warranty. The submissions by DQH were limited to the possibility of an implied warranty and the submission that the Dunnes would otherwise be limited to a claim in negligence .49 These submissio ns were not further expanded upon at the hearing below nor in the appeal. [87] Under the Uniform Civil Procedure Rules 1999 (UCPR), a defence under the LAA must be specifically pleaded.50 The UCPR does not apply in the Tribunal and, as we have observed, there are no pleadings in the Tribunal. Nevertheless, in order to rely 45 Applicant’s outline of submissions filed 15 November 2017 at [27]-[28]. 46 Ibid, [31]. 47 Australian Iron and Steel Ltd v Hoogland (1962) 108 CLR 471. 48 (1995) 59 FCR 391. 49 Transcript dated 23 June 2017, T2-84 lines 42-47, T2-85 lines 1-8. 50 UCPR, rule 150(1)(c). -- 18 of 23 -- 19 upon a defence based upon the LAA a party in the Tribunal must, in our view, raise the application of the LAA sufficiently clearly to enable the other party to identify and address the issues relevant to any time limitation defence relied upon. [88] DQH raises as a ground of appeal that the Member erred in finding that DQH could be liable for damage caused by termites more than 6 years and 3 months after the date of practical completion. DQH’s written submissions do not meaningfully expand upon the ground of appeal, but it was clearly within the contemplation of DQH that this appeal might be decided by way of rehearing.51 As we have observed, DQH made no submissions regarding the application of the LAA to the claim for the breach by DQH of Special Condition 3 of the contract. The obligations imposed upon the Tribunal by section 28 and section 29 of the QCAT Act do not extend to the Tribunal being required to advise parties how to conduct their claim.52 If a limitation defence is not adequately raised, the Tribunal should not consider the matter of its own motion.53 [89] DQH’s submissions as to the effect of Special Condition 3 do not go beyond arguing that the Member erred in finding that the special condition was an ongoing warranty as to the structural soundness of the building. DQH’s submissions do not address the effect of Special Condition 3 in the event it was found to constitute a warranty as to the structural soundness of the building including the termite barrier. [90] Accordingly, we do not consider that DQH has raised a defence under the Limitation of Actions Act 1974 (Qld) relating to the enforceability of Special Condition 3. As such, it is unnecessary for us to consider further whether the claim by the Dunnes is out of time. The amount of damages assessed [91] Apart from the items mentioned in appeal ground 5, the assessment of the amount of damages has not been doubted. Subject to that exception, which we examine below, we adopt the Member’s calculation of damages. [92] The reasonable builder costs assessed by the Member for rectification of the termite barrier by injecting Termseal Ura-Fen foam included amounts for ‘Drill holes in each brick perpend’ ($3780.00) and ‘Render/paint’ ($2000). The Member described the latter as follows: The sum of $2000 has been allowed as an estimated reasonable cost for rendering and painting disturbed perpends and sundry external areas other than at the site of intrusive investigation requiring removal of brickwork which reinstatement costs are included in the further items of additional work below. [93] DQH submitted that: These amounts should not have been allowed. They were taken up in any event in the estimate for the Termseal Ura-Fen Treatment (Option 2) in the sum of 51 Amended Application for leave to appeal or appeal filed 18 January 2018 and the orders sought pursuant to QCAT Act, s 147(3). 52 Harrison and Anor v Meehan [2016] QCATA 197, affirmed in Harrison & Anor v Meehan [2017] QCA 315. 53 See for example Johnstone v Top End Cars & Commercials Pty Ltd [2014] NTSC 55. -- 19 of 23 -- 20 $6990.00 as attached to the statement of Anthony Anderson dated 29 March 2017. [94] The submission that these amounts ‘should not have been allowed’ was not developed significantly at the hearing. The Member allowed the amount of $6990.00 as the cost of the Termseal treatment, as well as various additional costs, of which those mentioned in Ground 5 form part. [95] The Dunnes’ written submissions on these matters went on to claim that an amount of $5000.00 for ‘difficult access site allowance’ should be included, stating that: 20. The learned Tribunal Member excluded the charge of $5000 for “Difficult Access” from the claim (Reasons – paragraph [57] of the Tribunal Member’s decision). This item was not contested and the applicant did not challenge Mr Lindsay’s allowance for difficult access, and there was no evidence adduced that access was not difficult. [96] The Member disallowed this claim on the basis that it was ‘unexplained’. The submissions offer this explanation: The property is rural, the house is perched on top of a hill with magnificent views. To access the house, all trades people and deliveries have to drive along several kilometres of unsealed flood prone roads, then drive up the 860mtr, step (sic), rocky driveway. Deliveries and trades people usually supply some materials. DQH’s quote had included the amount to cover all surcharges and issues with attending a difficult to access site. . . [97] However, that explanation was not before the Member and, as noted, neither party sought to adduce further evidence at the rehearing. We therefore disregard this explanation. [98] The remaining question is whether the estimate of Mr Lindsay should be accepted on the basis that it was not contested at the hearing. Ordinarily, the Tribunal will not reject uncontested evidence without good reason. [99] The amount of $5000.00 for difficult access was but one of a number of line items in Mr Lindsay’s quote for the rectification work. In an earlier quote, Mr Lindsay included $4500.00 for difficult access. [100] While examination of the transcript reveals that Mr Dwyer, who appeared at the hearing for DQH, did not specifically challenge this line item, he certainly sought to challenge the reasonableness of the quote. In those circumstances, and considering that DQH was not legally represented, we do not think this is a case where the evidence should be accepted as unchallenged. [101] The amount of $5000.00 is not insignificant both as an absolute amount and as a proportion of the rectification costs. We agree with the Member that, without explanation, the descriptor ‘Difficult Access’ does not provide a sufficient basis for a conclusion that this amount, or any other, is reasonable, especially when the earlier quote indicated an amount for the same item that was lower by a not insignifica nt margin. There is no indication that it has been calculated on a reasonable basis, such as by reference to the number of attendances and the surcharge to be expected for each attendance. Nor is there evidence of the nature of the ‘Difficult Access’ against which -- 20 of 23 -- 21 the Member, and now the appeal tribunal, could assess the reasonableness of the amount claimed. Even if, contrary to our conclusion above, it would be appropriate to consider the comments in the Dunnes’ submissions, there would remain insufficie nt detail to assess the validity of the estimate. [102] In any case, the Dunnes have not cross-appealed the Member’s decision and their submissions, while indicating that this amount should be allowed, do not seek an order increasing the amount of the damages awarded. [103] In dealing with the remaining issues raised in appeal ground 5 it is necessary to consider the evidence before the learned Member. [104] In evidence was a statement by Mr Anthony Anderson attaching a report dated 20 February 2017.54 Mr Anderson’s evidence was that there were two options to termite proof an already constructed brick veneer house without the need to remove the bricks. Also attached to Mr Anderson’s statement was a quote outlining these two options. Option 1 involved: a full timber pest inspection and report; drill, inject and patch all exterior concrete areas, including front and rear porch areas; application of Termidor product with 8 year warranty, based on annual inspection and conditions. Option 2 involved: a full timber pest inspection and report; rod injectio n to cavity of boron solution to dissolve any termite moulding; rod injection to cavity of Termseal Ura- Fen Major (Premium) Perimeter System utilising Alterm alloy stripping in place. The cost of option 1 was $3980.00 and the cost of option 2 was $6990.00. [105] Mr Anderson gave evidence regarding the method of application of option 2: Well, what we need to there is to first establish where the brick mortar perp is behind the render … on the first brick. Soon as we find that spot we’ll measure it out and go through the … mortar at the end of each brick … approximately every 300 millimetres and we’ll go in horizontally … just below the height of the Alterm aluminium. First of all, once we get the holes done right around the whole house every 300 mil, which would need to be able to have access to be able to do that on those front and rear patios and also anywhere else where there’s any obstacles in the way … First of all, once we’ve got all the holes established we’d be spraying into … the cavity a boron solution called Plasmite Timber and Masonry Insecticide … So we’d inject all that then we’ll come back in about two weeks after that and we’ll put a scope into all the holes and make sure there’s no obstructions in the cavity … and then we’ll start the injection process where we put the nozzle in there in every hole and it goes in like the expander foam type product you can buy in a can, similar to that.55 [106] Mr Anderson’s evidence in relation to option 2 makes it clear that the drilling of holes in the brickwork is necessary. It is clear from Mr Anderson’s evidence that the hole drilling process was required to be carried out only once at each point around the dwelling. The evidence supports the conclusion that the quote provided by Mr Anderson to perform option 2, referring as it does to ‘rod injection to cavity’, include s the drilling of holes into the brick work to enable the rod to be inserted. Accordingly we are satisfied that the learned Member erred in allowing $3780 for the costs of 54 Exhibit 8 in BDL105-16, Statement of Anthony Anderson dated 29 March 2017. 55 Transcript dated 23 June 2017, T2-31 lines 36-47 and T2-32 lines 1-11. -- 21 of 23 -- 22 drilling holes in each brick perpend as this amount is included in the amount of $6990 allowed by the learned Member for the Termseal treatment. [107] The statement by Mr Anderson, the quote attached to the statement and Mr Anderson’s oral evidence at the hearing make no mention of the cost of rendering and repainting the disturbed perp ends required as a result of the works in Option 2. Mr Anderson’s quote in relation to Option 1 specifically allows for drilling, injecting and patching all exterior concrete areas, including front and rear porch areas with patches to be colour matched. The quote in relation to Option 2 contains no similar allowance. [108] DQH did not submit that the Member’s explanation of the allowance of the amount of $2000 for rendering and painting was flawed, merely that it should not have been included; in effect that there would be double counting if the item was included. We are satisfied for the reasons set out that in allowing recovery of $2000 for rendering and painting there is no suggestion of double counting. [109] We find that the reasonable builder costs necessary to effect option 2 are: Removal of services $ 2,925.00 Remove concrete/sandstone and concrete front/rear $ 3,650.00 Reinstate concrete $ 3,875.00 Reinstate sandstone $ 2,940.00 Install tiling $ 1,235.00 Render/paint $ 2,000.00 Reinstate services $ 3,280.00 Machine hire $ 1,840.00 Remove waste and house clean $ 4,460.00 Supervision $ 5,640.00 Protect surfaces $ 1,280.00 Sub total $33,125.00 Builder’s margin at 15% $ 4,968.75 Sub-total $38,093.75 GST $ 3,809.38 QBCC Insurance $ 475.0556 Total $42,378.18 56 Including cost of rectifying internal penetrations. -- 22 of 23 -- 23 [110] The amounts allowed by the Member at [63] of the reasons, apart from those referred to above, are not otherwise challenged in this appeal. [111] We conclude that Mr and Mrs Dunne are entitled to recover from DQH the amount of $66,537.18, comprising $42,378.18 calculated as above and the additional amounts allowed by the Member at [63] of the reasons, and there will be a final decision in this amount. Determination of the second appeal and the issue of costs [112] DQH has also applied for leave57 to appeal the costs decision of 22 December 2017 but only if successful in the first appeal. DQH has been successful in the first appeal albeit on a limited basis. We will give the parties an opportunity to file submissio ns in the second appeal and unless either or both of the parties requests an oral hearing, the second appeal will be determined on the papers and without an oral hearing. [113] We will also make directions for the parties to file submissions in respect of the costs of the first appeal. 57 Leave is required to appeal a costs decision: QCAT Act, s 142(3)(a)(iii). -- 23 of 23 --